Jordan Alliger

Confirmed the third quarter framework is normalized for the property gain and quantified it at 150 to 200 basis points off the 70.1% base.

Adam confirmed excess capacity still above 35% but framed it as opportunity for operating leverage as sequential volumes improve.

Adam directly guided to 300-350bps OR improvement Q1 to Q2, consistent with 10-year average, noting it would be fourth straight quarter meeting or beating normal sequential change.

Adam highlighted weight per shipment as key recovery indicator: rose from ~1,450 lbs in Sep/Oct to 1,489 in November and 1,520 in December, both above seasonal norms. January at 1,492 lbs in line with seasonality. ISM turning positive viewed as encouraging.

Adam noted tax bill and interest rate cuts as positives but trade clarity still needed. Expects spring 2026 as earliest realistic inflection. Year-over-year declines may continue through Q1 2026.

Adam framed Q3 revenue range: down ~4% at flat per day, down ~1.5% at full seasonality. July outperforming normal sequential trend (down 2% vs usual 3% decline from June).

Adam guided ~100bp OR improvement Q1-to-Q2 if revenue per day stays flat with April trend, implying about $1.4B Q2 revenue. Normal 300-350bp improvement requires ~8% revenue growth.

Adam gave specific OR guidance: flat to up 50bp vs normal 100-150bp sequential increase, helped by insurance normalization.

Carere credited profitable market share across all four key verticals plus AI/data center wins from APAC, noting some inventory restocking too.

Carere identified ground commercial growth drivers: automotive vertical, weekend coverage expansion for commercial use, data center parcel demand, and continued SMB market share opportunity. Field sales team increasingly focused on ground commercial products.

Dietrich declined to specify single drivers, noting stronger revenue and better cost environment would push toward the top. Comfortable with assumptions and focused on maximizing within the range.

Dietrich clarified the EPS range depends on multiple variables including global trade evolution, industrial economy health, U.S. domestic demand, and B2B vertical traction, not simply revenue level.

Subramaniam highlighted growth from Vietnam, Asia to Europe, Latin America inbound, and India. FedEx's global scale means minimal network changes needed. Carere noted continuation of post-COVID regionalization trend.

Subramaniam expressed confidence in margin expansion potential but did not provide specific targets, noting 90% of LTL revenue is B2B-linked and positioned for recovery when industrial economy turns.

Raj provided specifics on 200 stations optimized, 130 in Canada, 10% P&D cost reduction in fully rolled out markets, and targeting 250 by end of FY25.

Tome gave the automation percentage and cost-per-piece delta; Dykes added a 50 to 100 bps RPP-CPP spread as the forward margin algorithm.

Carol said APAC margin down 500bps is temporary from tariff impacts. Trade lanes normalizing as tariffs adjust. Also investing in premium European commercial volume and moving away from low-margin e-commerce.

Carol cited stabilizing small package market, improving manufacturing outlook, and favorable year-over-year comparisons from exiting Amazon and Chinese e-commerce volume. Brian highlighted healthcare and automotive wins showing up in network. Carol detailed RFID SmartPackage initiative: all U.S. package cars RFID-enabled, 5,500 UPS stores processing 1.3M packages daily with RFID labeling, Q4 domestic business wins 25% higher than prior year.

Brian acknowledged some permanent trade lane shifts until new equilibrium settles. Kate highlighted 16 of top 20 non-U.S. export lanes growing, with strong Asia-to-Asia and Asia-to-Europe flows. International SMBs growing 9% in many regions.

Carol confirmed air-freight tailwind scenario is possible but peak plans not yet submitted. Better visibility expected by end of Q3.

Carol cited U.S. small package market at low single-digit growth, international TAM of $99 billion growing mid-single digits, healthcare at $18 billion growing high single digits.

Carol confirmed SurePost insourcing was driven by USPS service deterioration and cost increases, not Amazon backfill. Nando added multi-day matching capability smooths dispatch.

Brad Hicks pointed to a record dedicated pipeline and long sales cycle without a specific EBIT number; Spencer said peak shape mirrors 2025.

Nick Hobbs said ICS volume up 10% against a market down 3-5%, with direct expense down 1%. Platform, technology, and people leveraging well. Customer retention strong with excellent brand reputation for operational excellence.

Spencer distinguished ocean peak (already passed) from inland peak (holiday-driven, on schedule). Noted last year's comps were artificially inflated by East Coast strike concerns driving 20% higher West Coast port volumes. Expects tough comps through March 2026.

Spencer described highly varied customer expectations for peak: some expect similar size, others extended or uneven. Implemented early surcharge programs to be prepared for any scenario.

Darren Field said direct customer feedback on pull-forward remains limited, though some Mexico pull-forward occurred. Spencer noted customers are finding efficiencies through highway-to-intermodal conversion.

Brad Delco declined to break down the sequential decline by segment. Reiterated that pricing for H1 2025 is already set and bid season work will be reflected in Q3 exit rate.

Mary Claire outlined three Howard Street opportunities: new Southeast-to-Northeast lanes, improved Chicago-Baltimore service, and efficient West Coast double-stack through to Baltimore. Noted it typically takes a couple bid cycles to fully ramp.

Steve effectively deflected by saying he has not had competitive positioning discussions with customers in his brief tenure, offering no further detail on the merger implications.

Kevin said potential upside comes from existing projects ramping faster if demand supports it. Metal production timing from tariffs could be very favorable but rules need to be set for real acceleration.

Sean identified cost efficiency initiatives, PS&O discipline, and volume upside from trucking cycle turn and industrial development ramp as key levers to reach the upper end of guidance range.

Vena pointed to a 58% operating ratio ex-noise; Rocker said pricing follows the service value proposition.

Jim emphasized the 2M carload growth target is conservative, translating to roughly 38,000 weekly carloads or about 10-15 additional daily trains on a network running 2,000+ movements. Eric noted this represents only a 6% increase in combined operating inventory with ample buffer capacity.

Jim declined to discuss any STB engagement, reiterating that the press release contained all information they would share.

Jennifer cautioned against focusing on one commodity line, while Jim expressed bullishness on domestic intermodal but declined to forecast H2 offsets.