Ryder System, Inc. Morgan Stanley's 14th Annual Laguna Conference

All right. Thank you for having me.

Yeah. Well, we've done a lot to transform our business, as you said, and we've had seven consecutive quarters of earnings growth. Really, we've done that by consistent execution on our balanced growth strategy, which we've been talking about for quite a few years. It's great to see now how that strategy has demonstrated that we have a very resilient business model that has been able to perform well during the last few years of this freight downturn.

So, what we've done is really we've created a structural change in the business, and we think it's provided the right foundation, a solid foundation with good quality contracts that's really going to lead us into the next phase of this market and the recovery when it comes. We've all been anxiously awaiting.

Yep. But we've done that by de-risking the model.

We've done that by enhancing the returns and the cash flows of the business, and by shifting the mix of the business to be more of an asset-light business model. Those three things have resulted in what we've seen here over the last few years with our earnings growth and being able to weather the downturn- Yep and still generate 18% return on equity for our business portfolio.

So we're really excited about what it's done, but we're more excited about what's to come, right?

Yep. And what's next. We're just waiting for the growth in the business with the market returning, as well as getting some of the transactional businesses to generate earnings the way that they used to.

Our focus right now is on executing relentlessly, is what we're focused on. We're focused on innovating and investing in growth, and then obviously growing the contractual parts of the business. We're going to do that through operational excellence with all the capabilities that we've added to our business model. With all the acquisitions on the supply chain side, we have a nice suite of end-to-end capabilities to offer our customers to fit any transportation or logistics need that they may have.

We are investing in technology, to innovate, to be customer-focused technology, and making sure that our customers have ability to proactively look at their supply chains and really gain a competitive advantage in the market, and then growing that contractual business. We have put out there that we think, with the market recovering, we expect to have at least $250 million of additional earnings from the transactional parts of the business.

Yep. That's primarily going to be on the used truck sales side, as well as the rental demand coming back.

The other piece is just growing the contractual parts of the business.