RXO, Inc. Jefferies Global Industrials Conference 2026

Sure. Thanks for having us, Steph. This morning, we put out a release where we provided a positive update on our brokerage business based on the trends that we're seeing quarter to date, and if you break it down across both gross profit per load and truckload volume. From a gross profit per load standpoint, our expectation on earnings in August was that gross profit per load would decline throughout the quarter. In fact, we're seeing the exact opposite. In the month of August, we saw gross profit per load increase by more than 10% when compared to July, and that's a function of a few different things. Number one, spot continues to remain robust for RXO, now at about 50% of the mix despite soft freight market conditions, which speaks to the ability to capture incremental spots, projects, and mini bids across the company.

We're also seeing us procure transportation quite effectively, which is helping us in terms of buy rates throughout the quarter to date. We're also just seeing continued momentum in the business with respect to capitalizing on those opportunities. You put all that together, we're seeing strong improvement on gross profit per load. Despite soft freight market conditions, we're still seeing truckload volume up low to mid-single digits year-on-year for the quarter, which is in line with our expectations during earnings last month. I know there's been a lot of concern in the industry just based on Cass Freight Index, overall spot rates weakening over the last six weeks. Despite that, I think it's a testament to the pipeline that we see in the company, the opportunities that we're executing on. It's the investment thesis of RXO. We're taking share. We're doing it profitably.

We're growing gross profit per load, and those are all above expectations that we outlined during last quarter earnings.

Sure. $35 million to $45 million of adjusted EBITDA was the outlook for Q3. From a gross profit per load standpoint, we had talked about our expectation for gross profit per load to decline from July through September. To reiterate what I just said with respect to the trends that we've seen in the first two months of the quarter, not only did they not decline, they increased by over 10% sequentially from July to August. The one other factor that I forgot to mention prior was that we're continuing to phase in new contract rates. Those higher contract rates, we expect, will be a tailwind throughout the remainder of this year into 2027 as well.

I'd say the first thing is you have to realize that not everybody is starting from the same starting point. When you look at the tower of insurance that we've got, it already runs up to $100 million. That is similar to what you would see in most large asset-based carriers. There's only one other brokerage out there that I'm aware of that has the similar type coverage. A lot of other top five, top 10 brokers are going to have a long way to go just to be able to catch up to the same coverage that we have at RXO. The second thing that I'd say is when you start to look at our rating and what we're hearing from our insurance providers is that we have less claims, less accidents than what you even see in the asset-based world.

When you look at our vetting process, that's something that has differentiated us for a long time. We built the business on just-in-time shipments. We built it on high cargo value shipments. When you look at how you vet carriers there, that you have to be differentiated in the quality of carriers that you're using. For us, our insurance providers have told us, "You have less claims. You have less accidents," especially whenever you look at it per 100 million miles than what is going on in the industry. The feedback that we've got right now is that we are going to do considerably better than what is out there in market.

Sure, I could start. So, agreed. I think it is important. I think the administration understands that ultimately having a nationwide standard makes a ton of sense. To your point, Steph, 92% of carriers remain unrated. I think having the resources and dedication to put something like that in place makes a ton of sense. But I think it is also important to realize that at RXO, that is not something that we are just waiting for it to happen. We need to make sure that we are proactively making sure that we have got the right carrier base, incredibly strict vetting compliance from a standard standpoint. What it takes to haul a load for RXO is a lot, and we put in limitations in terms of, you start a carrier authority, you cannot drive and haul a load for RXO within the first 90 days.

That first load that gets booked needs to be vetted by a human. We then leverage other third-party platforms as well to help in terms of carrier onboarding and vetting. So I think it is a pretty robust process that we have in place. No doubt about it, we would, of course, support nationwide standards. But I also think the administration and DOT, FMCSA very much understands that having free, frictionless trade across all contiguous 48 states is something that is necessary for the U.S. economy. It is not just a brokerage issue. It is a broader transportation issue.