Knight Transportation Inc. (NYSE:KNX) Q1 2018 Earnings Conference Call Transcript
Apr 25, 2018 • 04:30 pm ET
We have a question that comes from the line of Tom Wadewitz from UBS. Your line is open.
Yes good afternoon, Kevin and Dave, Adam. Let's see. I guess, I'm wondering if you can offer some thoughts on the mix that you had in the quarter, and kind of how the pricing may change as a function of seasonality you had. You had a lot of trucks and legacy Knight in the spot market I think in fourth quarter, you may get over 20%. What's that kind of similar? And maybe if you can offer a thought on where Swift was? And then just how you might see that changing if you look at the second quarter being seasonally stronger, would you kind of put more in spot? And may be give more of a kicker in your pricing from the amount you have in spot?
David A. Jackson
Okay. Thanks, Tom, for the question. This is Dave, I'll take a run at that. Yes, we estimate back in the fourth quarter, as you alluded to, that Knight was probably in that 20-something percentage of our business was in the noncontract market. And we would -- we estimate that likewise in the first quarter, we were somewhere in that 20% to 25% range in terms of what was noncontract versus what was maybe more of a contractual nature. Our best estimates at this point at Swift was that Swift was probably closer to the 10% to 12% range. But we'll get more and more refined in how we look and measure those things. I would say that just as it didn't change dramatically from one quarter to the next as we look to the second quarter, we don't expect dramatic change in terms of the percentage of our fleet that has that kind of exposure. Of course, we're going through a bid season right now, and it's -- as we recently, just a minute ago, alluded to the upper single digits to low double digits that we're seeing on -- from an increased perspective there, that's encouraging to us. And so we're not in a -- you shouldn't expect us to try and make dramatic shifts or swings in kind of the composition of how that works.
Okay. So we should anchor to your comments on contract rate to kind of figure out the contour of how your rates coming in are going to come in
overall in second quarter or third quarter?
David A. Jackson
I think that's fair to look at. But the piece of that makes these comparisons a little bit tricky is the noncontract market a year ago was at a discount. Arguably a double-digit discount. So if you found yourself short loads last year in the first quarter, you were scraping and willing to sometimes move things at unsustainable rates. And you fast-forward, and now you look at that noncontract market at a very healthy premium, and so it makes it a bit exaggerated here in these first few quarters while we