HUBG
#We, of course, don't really divulge that information.
But you can see from the way that truckload pricing was down and assume that overall, the intermodal pricing was down approximately the same.
I'll address the intermodal; I'll let Don address the truck brokerage.
But no, we are not seeing the type of tightness that we in fact had forecast for this peak season.
We did not see it in October.
We don't believe we are going to see it in November, December either.
We do think, again, that it will be an extended peak, as some of our customers ship deeper into peak season.
But we really don't forecast that we are going to see a real tightness during this peak shipping from an intermodal perspective.
And Don, from truck.
No, truck is fluid.
There was some tightness in the Southeast with the impact of the hurricane.
The only slightly tight market now is the West Coast.
But it's just slight.
It's nothing like it normally is.
So trucks are fluid.
That's a really good question.
We have gotten better.
I do think there's still a substantial room for improvement.
If it was when the Cubs beat the Indians tonight, I'd say we are in the middle of the fifth, maybe.
So there is still is room.
I think we did pick, in all candor, some of the really low-hanging fruit that was ---+ but there still is more.
And with some of the systems we are implementing, I do think that we'll be able to achieve those over time.
I think you'll see some improvement in 2017, yes.
But I do think that it's going to be something that is not just for next year.
It's going to go into 2018 and 2019.
Okay, that's a good question.
And really, we were focused on this as we went through the first few months of this year and we saw that if in fact we continued and just try to protect margin that we could shrink in double-digit numbers.
We chose that as a bad decision and so we became focused on being more cost competitive.
I think the criteria as we look at it is there's certain markets where we have either an inherent advantage or is very, very favorable within the US.
And so we focus very much on those.
And we also focus on the longer-term relationship clients that we have versus the transactional clients who will switch for a buck.
So we very much worked with them to make sure that we could get to the cost levels that they required in the markets that we were hoping to gain their business, and were able to execute on that strategy.
So while our gross margin is down, I think that if you look at our network today, it's better than when we started the year from a balance perspective.
And I think that we have also further engaged those clients that we see as long-term customers that we want to continue to grow with.
Yes, if I'll add to it, too, I think it was a disciplined approach by customer.
And what that customer contributed to our network, how they offered us across on our service lines.
And also we were disciplined in not going to the market in some markets where it just didn't make any sense to us.
So I think it's positioned well.
Inasmuch as current capacity, pricing, etc.
.
Of course, we don't really want to go into what the specific market areas are.
Because each carrier, whether any of the bimodals, we all have slightly different networks.
So I'd really prefer not to go into the geographic regions that we feel as though we have an advantage or is really desirable.
You know, we haven't done the budget for next year yet.
So I'll give you more guidance on that during our fourth-quarter earnings call.
You know, obviously, forecasts are just that.
They are forecasts.
They are inherently flawed.
And in particular, we have won several customers that are ---+ I wouldn't say relatively new to us, but are growing quite rapidly that I think that had forecasted some numbers that were just off a bit.
And as Don had said, some of the logistics was more so instead of actually just missing the forecast, it was delaying the actual onboarding.
So these aren't lost business.
It's more so that we've had delays.
There has been some forecasting which has probably not 100% accurate, but that's something we usually try to build in with various clients.
Because we know nothing is going to be perfect for forecasting.
Our first use of cash for this year and next year would be acquisitions.
And that's what we and our Board think is best.
We'll also talk to our Board about share repurchases at our meeting in November if for some reason we don't come up with an acquisition.
But we are confident that we'll be able to find something, hopefully within the next year.
And in terms of what our capital expenditures are, we are planning that now for next year.
And so we'll give you more color on that during our fourth-quarter earnings call.
From an acquisition perspective, we have been ---+ as you know, Geoff DeMartino came on as our Vice President of Corporate Development.
We've been very active in looking at a variety of acquisition opportunities that would allow us to continue to diversify our product mix.
We haven't landed on anything yet, but in all candor, I think when we started this process in February, I didn't think we'd have anything done by now.
I think that we have been successful inasmuch we've looked at a variety of different businesses, and it's enabled us to talk even more thoroughly about what is the best fit for Hub going forward.
So we are moving forward.
As <UNK> said, that's going to be our number one choice for use of cash in the coming years.
But also we'll certainly consider stock repurchases and discuss that with the Board.
As Don mentioned, the logistics pipeline is pretty strong.
So that would be potential upside for next year because hopefully we would onboard accounts near the end of this year and that would flow into next year.
So that will certainly help.
And the recent logistics accounts that we are onboarding in the third quarter and that we onboarded in the second quarter will be good to have in 2017 since we've had pretty strong growth in logistics.
And truck brokerage has really done an amazing job of growing margin and growing with new customers and existing customers and providing the value-added services.
So that, too, is more upside.
Because of our diversified business model, we think we'll be able to offset some of the compression in intermodal.
It is.
It is, yes.
That's a really good question, <UNK>.
We are not asset adverse, obviously.
We have 32,000 containers.
We've got 1,200 Company truck drivers.
And so we do believe that in certain cases, asset ownership is required to participate in the business.
As we've talked in the past with our customer surveys show, that has been the number one area that our clients would like for Hub to provide additional services.
So we find it very attractive.
We find some of the demographics as far as being able to supply truck drivers on constant routes is very attractive.
And as you had said, there's several of our large competitors that in fact, their dedicated was really the highlight of their quarter.
And we think that dedicated trucking will continue to grow.
And so we are ---+ we remain very interested in that.
We are also very interested in our non-asset-based businesses.
If you look at our truck brokerage business and the way that that has been able to grow, it really is a very bright spot for us.
And there could be certain acquisitions within that market which would be quite attractive for us and allow us to continue to leverage that growth through 2017 and beyond.
And the same holds true for our outsourced logistics business, Unyson, which again is experiencing double-digit growth.
We see the demand being there and there's a lot of room for that business to grow.
So it could be different industry verticals that could be interesting acquisition targets.
There's really a variety.
So we are not necessarily biased against anyone.
It's depending upon the assets we need to deploy.
We like dedicated, but we also like the non-asset-based businesses as well.
So we've got a broad swatch of industries to look at and individual companies as well.
You know, I think that we'll see it quicker than normal.
We are always a little bit slower, but I don't think it's going to be quarters.
I think it will be months that once we begin to see the pricing change ---+ we never price as high during the peak markets and we never price as low during the markets such as we are in today.
But I do think that we'll be very quick on it.
I think that the other intermodal providers are also very focused.
I'm hoping they are very focused on price increases and what we may be able to do if in fact we see some type of tightening in capacity.
Yes, if I could add to that, I think you'll see it.
Because the length of haul in that local east market, you'll see that quickly.
And that will be the growth vehicle to get the prices.
Again, thank you for joining us for our third-quarter earnings call.
As always, <UNK>, Don, and I are available if in fact you have further questions.
Thank you again.
