Schneider National (SNDR) 16th Annual Wells Fargo Industrials & Materials Conference summary

Market overview and demand trends

• Demand has remained generally stable, with some pockets of strength, particularly as production picks up.

• Capacity is exiting the market rapidly, especially among carriers not adhering to regulations, contributing to tighter conditions.

• Key demand drivers like housing and automotive remain subdued due to higher interest rates, while industrial activity shows some improvement.

• Shippers who previously secured lower rates are now facing double-digit increases as contracts renew.

• Spot market opportunities are increasing, but sustainable pricing recovery will require multiple allocation events.

Operational performance and productivity

• Dedicated business remains stable due to multi-year contracts, with focus on productivity and revenue per truck per week.

• Network segment saw a 7% increase in revenue per truck per week in Q1, driven mainly by improved utilization.

• Productivity gains allow for higher driver pay and better retention, supporting a hire-to-retire approach.

• Asset efficiency and cost control are central, with ongoing multi-year programs targeting non-driver headcount and third-party spend.

• $40 million in cost savings achieved last year, with similar targets for this year and a focus on sustainable reductions.

Regulatory and legal impacts

• Increased regulatory scrutiny and the Montgomery case are prompting shippers and brokers to prioritize safety and insurance coverage.

• Carrier vetting has become more stringent, reducing the number of approved carriers from 60,000 to under 14,000.

• Brokers and insurance carriers are expected to become more selective, likely accelerating industry consolidation.

• The number of brokers surged post-COVID but is now declining, with further consolidation expected due to regulatory and competitive pressures.

• AI is being used to improve efficiency, but effectiveness and deep industry knowledge are seen as critical for long-term success.