Mullen Group Ltd. — Call Transcript 2026

Thank you for standing by. This is the conference operator. Welcome to the Mullen Group Ltd. 2026 First Quarter Earnings Conference Call and Webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After this presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Murray Mullen, Chair and Senior Executive Officer. Please go ahead. Yeah. Welcome, everyone, to Mullen Group's quarterly conference call this morning. We released our first quarter interim report. That's a nice 53-page document full of details, numbers, analysis prepared by our team, headed up by Carson Urlacher and Nik Woodworth. This document contains updated information, is available on SEDAR+ and on our website at www.mullen-group.com. I'll remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties. As such, actual results may differ materially. Further information identifying the risks, uncertainties and assumptions can be found in the disclosure documents. This morning, I'm joined here in Okotoks by the senior team. It's an expanded senior team, and I want to welcome Lee Hellyer, who's now our Senior Commercial Officer and has joined the executive team at Mullen Group. In addition, I have Richard Maloney in his expanded role as now President and Senior Operating Officer. Richard. Carson Urlacher, Senior Financial Officer, and Joanna Scott, Senior Corporate Officer. That's the senior executive that we have here at Mullen Group. My name is Murray Mullen, and I am the Chair and Senior Executive Officer. This morning, we're going to follow the similar format as last conference call we held, and that's all in an effort to make this call as meaningful and productive for everyone as possible. Carson and I do not have prepared remarks for today's call. These can be found in the MD&A, the press release and the financial statements. Anyone that's on the line today can use any of their AI tools to query anything. We'll head straight to the Q&A session. There are probably going to be lots of questions about the quarter, most likely about where we see the economy, the state of the consumer, fuel prices, the freight markets and of course, those often talked about nation building projects. I like the fact that we generated record revenues and solid profitability, even during a period of basically no economic growth. I'd suggest to you this bodes well very well when the economic conditions improve. Until then, we will keep a keen eye on costs. We're going to focus on margin over market share, and we're going to look for quality companies to join our network of 44 independently managed business units. Now I see many of you already joined the queue, so I will now ask the operator to open the lines. Operator? Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Kevin Chiang from CIBC. Please go ahead. Hey. Good morning, everybody, and thanks for taking my question. Congratulations, Richard, on the expanded responsibilities here. Yeah. Well deserved. Maybe if I could just focus on the L&W segment. It looks like it put up the best organic growth that we've seen in quite some time, and I know there's some optimism south of the border in terms of what we're seeing in the broader freight economy. Just wondering what you're seeing in the L&W space here, just given the organic growth rate you printed in the first quarter, and if there's anything you'd point to in terms of driving that tailwind and maybe stuff that could have been transient in the quarter or maybe stuff that might be more structural that you would expect as we get through the remainder of 2026 here? Yeah. That's a good observation, Kevin. I think the majority of it was probably driven by the performance in the month of March. Carson, it was a decently strong March. I can't tell you, Kev, whether that was because everybody was at quarter end and those kind of things. March was a pretty good month for L&W. Everybody performed reasonably well. Yeah. Had a couple of real stars that continued to do well. Gleason Group. Yep comes to mind, and some others. I think what that reiterates, Kev, is that's the general economy. Mm-hmm ... is our L&W side. If the economy gets a little bit of a momentum to it, I think our business and our L&W segment is nicely positioned to capitalize on that. That's a little bit different than the LTL side that still seems to be stuck in neutral. We did okay, but as you could see, if you're not doing acquisitions, really, it's still very difficult to grow. Mm-hmm. That's what we see. Maybe just on the LTL side, maybe if I could follow up on your answer there, just the momentum you saw in March in L&W as that carried on through the first few weeks here in April. Just on LTL, I guess some of that organic growth rate that you saw, or negative organic growth rate you saw, it seems like you were demarketing some businesses. Is there a way to quantify maybe how much that weighed on the first quarter growth rate? Carson? Yeah. I would say that, Kevin, with respect to the same-store sales being down in LTL, a large portion of that would be with respect to demarketing some customers. Got you. The other issue that we also saw in LTL in the first quarter, and this was really in the month of January, was some very inclement weather, especially down east. Right. Yeah. Which virtually, we had a couple operating days where we had trucks that barely left the yard. That was kind of a headwind early on in the quarter that kind of righted itself in March. That impacts two of our larger business units. Right. Our Gardewine Group and APPS Group, which have a pretty significant footprint back in the east, so they got hit. Right in January, February. Mm-hmm. Decent margins, but we got hit with weather. We don't like to make excuses too often, but that's a reality in that we just- Mm-hmm didn't have any work days, so you can't move freight if the trucks are stopped and people can't get to work. No, it seems like it was winter everywhere by my observation. Just on L&W, just the April trends, has that momentum carried forward from what you saw in March there? Not to the same degree, Kevin. I think what we're watching very carefully was March strong because of a quarter end and everybody tries to- Right. get their inventories moving quarter end. What we're unsure of is whether it was that. There's no doubt that the situation in Iran and the spike in fuel prices has just caused people to take a little bit of a pause, I would suggest. Right. We have to watch that, and I've commented on that. Let's watch that carefully. I think it's going to take a little bit of time for people to adjust to that. We're fortunate in Canada that we have our own energy supplies, so maybe price went up a bit, but we have it. Many parts of the world do not have it. Right. I think let's just see how it plays out. April is not as strong as March. We didn't expect that, but because it's the end of the quarter. Let's see what happens here is whether that momentum builds up through the quarter. I think it will. Right That's a personal observation. That's helpful. Maybe just last one for me, maybe a bigger picture question. I'm sure you've seen all the headlines around AI disruption potentially hitting the brokerage business. Just wondering, from where you're sitting, what implications you think this might have for your U.S. operations, whether it's Holistic or the recently acquired Cole Group, opportunity, threat, maybe what you're seeing on the ground as we see some of the headlines here. Thank you for taking my question. Richard oversees both Cole and Holistic. We're building all the AI tools into our Silver Express platform at Holistic, which is Holistic. It's a bit of a software tech play and a freight forwarding, because we provide the technology to a bunch of agents, right? Mm-hmm. We haven't seen any disruption. In fact, what we think will be the AI tools that our team is implementing into this, I think, is going to help them gain market share, Rich. That's just my- Right. Yeah, absolutely. Hi, Kev, it's Richard. Hey, how you doing? I'll talk quickly about the U.S. and what we're doing there, maybe more broadly on AI for Mullen Group. Down in the States, we have two business units. They have their own separate operating systems with teams that are working and supporting that from an IT infrastructure perspective. I can tell you that both of them are working on how AI is going to help and support the build-out to technology, specifically to Holistic. We are working diligently on that with our director of IT on that. We met with them earlier this week and discussed that with them and just on the helping of coding and doing things like that. We're not like others or a hyperscaler. Every time we have an idea about AI, we do a press release. I can tell you they're very diligently working on many fronts, both at Holistic and Cole US. Up here in Canada, we have a very similar initiative underway within our LTL space, looking at how LTL will make us better. It's like everybody else. You have some wins, some losses, but you learn along the way, and you make it better, and the real focus is how to enhance load factor. We have a team. We did a presentation to our board yesterday, and we are certainly moving in the right direction on that. It's not an event. It's a journey, and it takes time to do, and you'll have to stay with it. We are working full frontal on that one as well, on AI. Yeah, I would say this, too, Kev. I think if you haven't built the AI tools into your technology platform and your service offerings to your customer, I think anybody will be at risk, whether you're a 3PL or an asset-based carrier. Right. We're just embracing it, and we're building all of that intellectual capital and know-how into our businesses, including specifically in the U.S. I don't think it's going to hurt them. We hope it's an enabler, but we're going all in. We have to change. We have to adapt. We have to make sure we're ready for the future. That's what we do in our business here, is we make sure our business units are prepared for the next five years, not the last five. The last five are over. That's very helpful. Congrats on a solid start to the year here, despite all the weather issues. Thank you, guys. Thanks, Kevin Chiang. The next question comes from Konark Gupta from Scotiabank. Please go ahead. Morning, everyone. Maybe just first question, in the absence of a filip in March. Murray, I think in the press release and the documents that you guys talked about, the capacity is coming out of the system gradually. I think it's more of a U.S. trend than Canada seems, correct me if I'm wrong, and the demand seems stable, but the rates have yet to move up. I'm just wondering, when you talk about March being strong, and I think everybody's kind of talking about how the spot rates are continuing to move up. Just curious, what are you seeing in the pricing environment for you guys? I mean, organically, obviously your margins were not expanding in Q1 yet. But I'm wondering if there's expansion opportunity down the road. Curious your thoughts on pricing and margin. I think, once again, that's a pretty good observation is that, Konark, the US market. I think everybody needs to differentiate the US market from the Canadian marketplace, and you're spot on. They're tightening quite rapidly as they implement English proficiency rules and remove certain carriers, drivers off from having a CDL, which takes capacity out of the system because you don't have the drivers. U.S. is tightening. That also translates into the cross-border market tightening. Any freight that's moving cross-border, that's tightening. The Canadian market, it's not tightening, but the regulations and the safety standards and the government is really enforcing things a lot more diligently than what they've done for quite some time. That's not getting rid of capacity, but it's forcing some discipline in those that didn't follow the rules quite as much. that will help pricing and take the pressure off, Konark, in the Canadian market. If you get any demand push, any, like we saw in March, it'll be okay. If you get demand push in the U.S. with a reduction in supply, boy, that could be an outsize in terms of the rates. That's how we see it. Okay. That makes sense. The other side of the coin, I guess is, if the U.S. administration keeps pushing out these drivers from the pool, and I think the numbers are quite staggering if you look in some of the studies. Would you expect or would you see some sort of wage inflation, or maybe not so much given your drivers are still sticky? I mean, you don't have any retention issues. What do you think about the wage inflation potential here? Well, that will not impact our U.S. operations because we don't have. Our business really isn't company truck fleet operations. It's all 3PL and the use of owner-operators on cross-border. They will benefit if the rates go up because they're generally, they get paid a percentage of the transaction. I don't think it'll impact us from that standpoint. We don't see any wage inflation in Canada right now at all until you see a demand push. If you see a demand push, which may or may not come, I'll let you opine about that, but I'm not too worried about the wage thing, to be honest with you. Now, if I'm a U.S. carrier, you're going to see some stress points there, but those costs are going to be passed into the rates. I think the rates have to go up before anybody moves on wages. The spot market's moved, but the contract market has been a bit stubborn. I'd challenge anybody to go ask Amazon or Walmart or Costco for a rate increase. They're just not embracing that at the moment. Yeah. Thanks. Maybe last one for me before I turn over. On M&A, I think you made a note in the MD&A talking about your increased reliance, I guess, on M&A, until you see structural organic tailwind. When you're looking into M&A, and I know you guys have done recently some tuck-ins in the S&I segment. Are you pivoting to S&I now, given structurally maybe higher oil price, at least for some time, or the Canadian nation-building focus in Western Canada? Any thoughts on where would you like to spend the incremental dollar here with respect to your segments? Well, I think it's evident. We did two acquisitions in the first quarter, and both of them were in the S&I segment, and specifically tied to energy. I would tell you our basic thesis here as a senior group is that I doubt if you're going to get any or we doubt that you're going to get much economic stimulus going on in Canada unless we really get on these nation-building projects and start creating great jobs and get capital flowing again. We're buying the thesis that is being messaged by the governments that nation-building projects are going to go ahead. We're positioning as if it's going to. The timing of it is a little less certain to us. Canada needs to get its act together in the world scene and start making our vast resources available to the world that need it. We can't just hog the puck and say, "No, you can't have access to it." They need it. We're buying that thesis. The timing, it's Canada. You got a lot of issues you got to work through. I think longer term, that's a real growth potential. We want to make sure we're well positioned. We haven't invested in the energy sector for- Over 10 years. Basically, we really de-invested for 10 years. Yeah. Over the last bit, we've just been adding really good companies into our network that do okay in this market. If the capital flows back into that sector, they will do outstanding. Konark, I think it's important to point out those acquisitions we did. One was Black Label Transport right in the Clearwater play. The other one is water management tied to upstream fracking and so on. Now, those were all done and closed prior to the war starting and the spike in commodity prices. That would suggest or should suggest to everybody that, again, we're looking at where the puck will be going. These were done prior to all these elevation in commodity prices. Whether they stick or not, who knows? I'm not smart enough to figure that out. Murray just said it. At some point, Canada's going to have to say, "We got to do something here." I think this solidifies ourselves in some key plays. Yeah. These are really good acquisitions that are doing well in this current market. If there's any growth in the capital that goes into the energy space, they'll do better than just good. They'll do very good. That's our thesis. We've de-risked it because they're great companies. We'll continue to look at those kind of opportunities, Konark, when we see them come up. That's what we do. There's acquisitions available everywhere. We're one of the few companies that can do them. As I say, we got to look through the rock pile and look and find these gems. We don't need to just grow to grow. We need to grow by adding value, whether that's a consolidation play in a market so we can reduce costs or just get great quality companies. That really hasn't changed in our acquisition strategy. It's in our DNA in this organization. Okay. No, I appreciate the time. Thank you. Thank you. Thanks a lot. The next question comes from Cameron Doerksen from National Bank Financial. Please go ahead. Yeah, thanks. Good morning. Just kind of following up on, I guess, sort of the commentary around the nation-building opportunities that might be out there. I'm just wondering if you were actually having any specific discussions with some customers on potential opportunities, or is it all still sort of more theoretical at this point? Just trying to gauge, I guess maybe the timing of when some of these things might move forward, and are we at that stage yet where some of your customers might be actually doing some planning? Cameron, I would love to be able to say that in Canada, we're having constructive discussions, and everybody's excited. Everybody's still sitting on their hands and waiting for, I guess, the governments to say, "Let's go," rather than, "Let's talk." In fact, I was going to open this call with a song about what we need is a little more, a lot more. A lot less talk, a lot more action. I think Canadians are begging for it, but it still seems to be in the consultation phase. I don't know how much longer we have to consult, but that's outside of our pay grade, and we're not in charge of that file. I can tell you that we're having active discussions on a major energy project in Alaska. Alaska LNG, Richard, is the project and the team. We're actively engaged with the customers on that, and we're at the bidding table, and it appears that that project may go before the projects in Canada. We will participate if we're fortunate to get the bid for- Still in the bidding process. We're having active discussions with the customer out there on that. Not in Canada. We all sit around and we say, "When are we going to go? When's it going to happen? How much talk are we going to have?" That's the frustrating part for Canadians and for good jobs in Canada. What can I tell you? We're waiting. We're waiting for the capital. You've heard of the meeting that's being convened four or five months from now in Toronto, and not sure what they're intending to do there, but a lot of these projects that are in play have been approved at some point or other. I know, Joanna, at one point, you worked for the law firm that actually went through a pipeline that was going to get approved to the West Coast. It's been done. When that money starts coming back, private capital, which we have not heard, and we're waiting to see what happens on that. As it stands today, it's kind of a hurry up and wait. We've been accused of being pessimistic. We're not optimistic. I think we're realistic. We'll go to where the nations are building for now. That's the commentary on the Alaska LNG. We're looking hard at that. Okay. No, that's great. At least there's some projects moving forward, whether they're in Canada or not. That's good to hear. Maybe just a second question just on, I guess, sort of the financial targets that you put out earlier this year, the CAD 2.3 billion-CAD 2.4 billion in revenue and CAD 365 million in EBITDA. Are you still, I guess, comfortable with that? And is there, I guess, any changes on how you're going to get there, if you are still comfortable, at least by segment, from what you originally expected? Carson, I'll defer that to you. Okay. I'll make a final comment on that. Sure. No change to the guide right now, Cameron. As we're coming out of the first quarter, I would say, by segment, everything is largely in line with what we articulated back at the beginning of the year. I would say no material changes to the guide that we kicked out in January. If March holds, and we continue on that trend, I don't see any. Yeah, if the March trend was sustained. Right We'd be above. We would. I think the other thing is, Cam, is that we didn't plan any nation-building projects in our plan, in our budget for this year. If those start to go, that's on top of what we said we would do. That doesn't include any acquisitions. No additional acquisitions. We've got a couple things that we're going to maybe go ahead and beat that, but that's not built into the plan that we put forward. Yeah. We just said, look. Lean toward it. This is what we think our existing business will do, and so far, we're on track for it. Okay. No, that's great to hear. I'll pass the line. Thanks very much. Thank you, Cam. Thank you. The next question comes from Benoit Poirier from Desjardins. Please go ahead. Hey, good morning, everyone, and congrats, Richard, for your new role. Thank you. Yeah. Talking about the opportunity in Alaska, the LNG project, could you maybe provide more color about the potential size of this opportunity? And is it your understanding that there's a limited number of companies that could handle such a project? The project itself, Benoit, is that project in Alaska, probably bigger than all the nation-building projects that have been announced in Canada. It's upwards of $40 billion. How much are we going to carve out of that? We will be specifically. Right now, we're at the table on the hauling of pipe for the 800, I think it's 800. 800 mi. 800 mi from Cook Inlet down to Anchorage. That will be a big LNG project. It's pretty sizable. We're going to be in the final bidding phase here in the next couple of days. It appears that it's got all of the presidential support, and I think they're waiting for the Governor of Alaska and a couple of other things. That one's probably got the best chance of going in the short term. If we get past and we get chosen as the bidder with our partner, then we'll come out with more firm numbers. Just suffice to say, this is not just $2 million. This is pretty big. Okay. It's kind of sensitive right now, so we'll just. I don't know. I can tell you, we've got a great partner up in Alaska. We've done business with them for 20 years. There's a short deck of how many suppliers can do this project, and we're one of them. That's really great color, Murray. Regarding the S&I segment, with the increase in oil prices, have you already started to see a pickup in drilling and other activity from customers? Are customers beginning to try and lock up capacity for the months ahead? No. It's so new, right? Everybody sees the price increase, but most of our customers, the oil and gas companies, are just saying, "Look, we don't know if it's going to be for how long." They haven't made capital commitments yet, Benoit. I haven't seen it yet. We channel check, we talk, but we haven't seen that translate into any increased demand for drilling or for other services. By the way, you still need to have the pipelines built, whether it's for LNG or if it's crude oil. Otherwise there's no sense adding capacity. We don't need any more natural gas unless we get an export customer. It hasn't changed yet. One data point, Benoit, is that the active rig count is still below what it was last year. Yeah. No. Okay. Great caller. On the M&A, you made some comments before, but any thoughts on the current landscape and what about the deals that are crossing your desk these days? What segments are seeing the most seller activity, and have you seen any change in seller expectation given the encouraging signs we see across the industry? Oh, yeah, that one's all over the map. I can tell you that the industry is, and our peers are. Everybody's waiting for that inflection point, and we talked about whether March is going to be sustained or not. If it is, then I think that would be really supportive for the whole industry. There's no doubt about it. On the M&A front, once again, we're just being very selective as to which ones fit into ourselves. You've got to be a self-managed business unit. You've got to be profitable. You've got to be well run to be added into our group. We're being very selective, but that hasn't changed, Benoit. We've never changed that. Okay. We'll continue to do M&A. Which ones will we do it in? It depends on what segment. We're happy to do it in any one of the segments, but it has to be the right opportunity. I see. We love all four segments the same. If we can find a great LTL company, we're going to put it in. S&I, our door is open, and we talk to a lot of people all the time. Okay. Just on the CapEx side, it seems to come a little bit lighter in Q1 at CAD 12 million, but Class 8 orders in the U.S. are starting to inflect. Any thoughts on the need or timing to replenish your fleet? We don't think so. We think we're on target for that. That was a steady as she goes kind of a capital CapEx budget. Yeah. I think what the senior team is talking about here is that I think we're going to know this next quarter. We'll see whether the Canadian economy continues to build momentum. Benoit, if it does, I wouldn't be surprised if we don't up our CapEx for the last half of the year. I need to see the Canadian economy being sustainable. We're just on standby. So far, that was a little bit of timing as to when we order and those kind of things. We're still on target for our CapEx for this year. No reason. Okay. We'll have more to say on that in our next quarterly call because we will know whether the Canadian economy is catching a little bit of a bid here in the second quarter. Okay. Maybe last one for me, very quickly. You mentioned, Murray, that the LTL still stuck in neutral. What are kind of the key indicators that you're looking at? We've seen capacity tightening in the TL, so is it kind of the signs that you're looking at expecting that the natural LTL volume will flow back to the LTL market that could provide some help? We tell all our business units is that, "Look, you can't wait. We'd love to see a nice demand push come, but realistically there, Benoit, we're really working hard on operational efficiency being the best in the markets that our business units are at, and trying to gain market share through efficiency and as we say, new AI tools. Yeah. That's one. Technology. Yeah. We're working really hard with our business units to make sure that they're gaining market share. If they gain market share, it's because they're the best in the market. We can't rely that the marketplace is going to get significantly better in the short term, in our view. It's still a good business, Benoit. Like LTL is one of our core businesses. I don't see huge growth, but there's huge opportunity to run more efficient businesses, and that's what we're focused on. That's great. Thank you very much. Great call. Thank you very much. Thank you. The next question comes from Tim James from TD Securities. Please go ahead. Morning, Tim. Good morning. Thank you very much for your time today. My first question, we touched earlier on the demarketing of customers noted in a couple of segments. I'm just wondering if it's unusually significant, the demarketing that's sort of been going on since the start of the new year. Is this kind of normal conditions that we would have seen last year or would see on a normal run rate basis? I think most of the demarketing really happened last year, Tim, and it just showed up in the quarter. Yeah. Like last year in the energy space, in the production services, we had some big oil companies that wanted us to do it for free, and we said the capital. Demarketing in the quarter four of last year, so they don't show up now. That capital is too expensive to replace. Like you're asking us to do it for nothing, like give it to somebody else. Really it just showed up on a YoY comparison basis. I don't think we really demarketed too much in the quarter per se. Correct. We did. We had that prior year then. Yeah. Prior year demarketing. Yeah. The comps are favorable. There was maybe one, I think, our Hi-Way 9, we demarketed some truckload. A little bit. A couple in the LTL space we did. Again, just unrealistic. Pricing. expectations, and then a couple in the oil patch. You backfilled it, and isn't it interesting along the way, maybe your margins improve a little bit too. Yeah. It wasn't significant, but it- We did do a little bit in ContainerWorld where anything to do with freight forwarding coming across the ocean. The beverage business has got very competitive and some of the product that's coming in from overseas, they wanted you to do it for nothing. Well, we're not doing it for nothing. We demarketed a little bit there. Right. We're happy to give all of the underperforming customers and load nobody pays to our competitor. Go for it. We don't care. Okay, the pace of demarketing then really is slowed down this year. Yes. This one will primarily be a 2025 issue. Okay. That's helpful. For sure. I was actually going to ask you touched on it, the ContainerWorld, there was some weakness called out in the quarter. Is that primarily what we're talking about is some of the ocean freight? Like, I'm just wondering what- Yeah. ContainerWorld weakness is. It's about imports coming in, and. Okay. I think it's a combination of really there's been this buy Canadian push, which has been really helpful for Canadian producers of wines, of spirits, of beer at the expense of foreign buyers, whether it's U.S. or international buyers. We're busier with some of our local customers, but not so much with the foreign customers. Just as consumers have really gone to buy Canadian and they're very price sensitive today. It's expensive to bring stuff in from across the ocean. I think it's working overall, not bad, but it changes your supply chain, and we have to adapt to that. Okay. That's helpful. Just returning to the strength that you saw in March, and I don't want to beat this one up too much, and I know it's difficult for you to have a lot of confidence in sort of what the implications are from the March strength. Is one possibility that it was kind of catch up from earlier in the quarter, and so by the time we get to Q2, we might think of Q1 overall as a bit of a better indicator, or do you feel fairly confident that March strength was more of an indicator of an actual step up in business conditions overall? I would have said it probably would have been a better indicator. Once the things happened over in the Middle East and kind of the disruption in the energy markets that could have an impact around on economic activity, I think people are sitting on their hands a little bit. The people just don't know how it's going to play out. Uncertainty is not good for capital allocation and for people getting aggressive. We're just going to wait and see to see how that plays itself out. It might push off that economic growth a little bit as people just take a pause here to see what's going on. That's what we sense, but we were very optimistic going in. This fuel thing scares people. I don't know if it's headlines or if it's whatever, but people are quite concerned about it. That's what we're hearing. Okay. My last question. I can't tell you. I'll be honest with you, Tim. I cannot tell you whether what we're hearing is the excuse or the reason. I think there's two different outcomes here. At the end of the day, it doesn't matter. If they cut back, either as a consumption or in being aggressive on bringing in inventories or in capital deployment, you're going to have the same result. It slows down a little bit. I see a little bit of a pause, but I think the long-term trend is going to be more March-like. Boy, I'll tell you, if we get a bunch of Marches for the rest of this year, we're going to do very well. Okay, that's helpful. My last question, just around fuel and fuel surcharge revenue. Is it reasonable to assume that when we get into Q2, just because of the timing of the increase in fuel prices, that there's a bit more weight there on earnings or drag because of the time lag between fuel surcharge revenue and the expenses? Would it be a bit more of a headwind in Q2 even relative to Q1? We talk about that here all the time, because fuel is our second biggest expense after labor. We're on top of it. I think our business units did a pretty good job of mitigating that rapid rise. It wasn't that fuel went up, it's that it spiked up, and then you're behind the curve on that. Carson, you did some really deep analysis on this. What did we find? Yeah. You have to take a look at what the fuel surcharge program is. It's been going on for, obviously, decades. Really the program is set up to reimburse transport companies for the excess cost. Really, it's a cost recovery program. The most recent guide that I can give to you is to look back at our 2022 results. In 2022, obviously, we knew that fuel prices spiked due to the conflict in Ukraine with Russia. Normally, our fuel surcharge revenue hovers around CAD 50 million a quarter. Well, back in 2022, that jumped. That spiked up to about CAD 70 million in fuel surcharge revenue per quarter. Up quite significantly. If you look at the timing, it was almost identical. Both conflicts happened in the month of February. We saw this little bit of a lag because of fuel surcharge lagging. It didn't really impact our first quarter results significantly. As you look towards the remainder of the year, our fuel as a percentage of revenue went from about 7% at the beginning of the year, which is where it is right now. 7% as a percentage of revenue is what I'm referring to. By the end of the year, it was up at about 10%. It would not surprise us if that trend holds, because in a cost recovery mode, if you're increasing the numerator, which is fuel expense, at the same time you're increasing the denominator, which is fuel surcharge revenue, you're recovering the absolute dollar. As a percentage of revenue, it goes up. That's the trend that we're seeing. Just to put some numbers to you, in March of 2022, we did about CAD 19 million of fuel surcharge revenue in that month. In March of this year, we did about CAD 22 million. We're a bigger company now than we were four years ago. I would suspect that our new trend is not CAD 50 million a quarter in fuel surcharge revenue. It's going to be north of that all things considered, if the conflict continues in the Middle East. I think the other thing that I'll comment about fuel surcharge, Tim, is that fuel surcharge is in response to a fuel price increase. It's not in anticipation of a fuel price increase. We're always behind the curve on that. Unless the fuel price continues to go up in March, it should be neutral- Yeah In the second quarter. Correct. Okay. That's very helpful. Thank you very much. Thank you. Once again, if you have a question, please press star one. The next question comes from Walter Spracklin from RBC. Please go ahead. Yeah. Thanks very much. Good afternoon, everyone. Or good morning. Afternoon, everyone. Just focusing on your outlook for this year and coming back to that question you got there and just comparing it to where we were three months ago when you set your outlook. I guess I can understand you don't put in the nation building, you don't put in the acquisitions, you don't put in Alaska. Just looking at your commentary, I think clearly you're saying that the outlook is better now than it was then. In your press release, you pointed to market conditions showing signs of improvement, demand holding steady, supply tightening. It seems that, and we're hearing all of the same things from your counterparts north and south of the border. If there is a better top line emerging here, just curious why you wouldn't see that coming through in the bottom line? I don't know if you're suggesting it might be a structural or capacity issue, or is it just caution right now at this point? Again, looking back three months ago, I think things seem a lot better now than they were then. Just pressing you a little bit on why you wouldn't change your guidance here for the full year. Probably because of the spike in fuel and the impact that it might have on the economy, and business and consumer psyche. That's probably the number one reason, Walter. That we're just, "Let's just wait and see." We don't want to get ahead of our skis on that. Sure. That's something that we hadn't anticipated three months ago. I don't think anybody did. Nobody knows what that ultimate outcome will end up being in terms of their. I think structurally it was getting a little bit better. Now I think people are taking a bit of a pause. Let's see what happens in the second quarter, then we can talk about the last half of the year. So far, we came out of the first quarter spot on with what we anticipated. March was very nice. Let's see if March continues on. I hope it does, but I have to hedge it by being upfront on the spike in fuel could impact consumer psyche. Okay. Then when you look at your M&A strategy and you kind of peek over to the truckload sector, you see a lot more, certainly a bigger rebound going on there. Some of the demand characteristics look a bit better as well. I know when you focus and zero in on Canada only, there's certainly not as many opportunities specifically in LTL out there. Or are there? Are there enough that you don't need to go to truckload? Or when you peek over there and you see what you're seeing in truckload, does that entice you at all, Murray, to go into that segment at all in Canada? Just curious on how you're looking at that. Zero chance that we'll go into truckload in Canada. It's not an investable business. It's a job, Walter, but it's not an investable business from a return on capital basis. Okay. We'll focus on where it's a little more difficult, where it's these gems that we talk about. We don't go after the rock pile, we go after the gems. We look at where there's opportunity to generate free cash. You've got to be very thoughtful, and I can just tell you, truckload's not where it's at. Now, you might consider the cross-border as a little different animal now, and we've got to think that one through, because that market's going to tighten significantly. Any demand push when the U.S. drivers are not going to be readily available to come to Canada, that one could be interesting. We'll watch that one carefully, the cross-border movement. Okay. That's great. I appreciate your time. On the long haul, Walter, we love intermodal long term. Mm-hmm. Yes. Okay. That's great. Thanks very much for the time. Excellent. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mr. Mullen for closing remarks. Thanks for joining us, folks. It's been a full morning already. Everybody's busy. Thanks for everything. We had a pretty good quarter. We were working hard to make sure that we continue to produce great results, and we look forward to chatting with you at the end of second quarter. Thank you for joining us. This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.

Speaker 7: Thank you for standing by. This is the conference operator. Welcome to the Mullen Group Ltd. 2026 First Quarter Earnings Conference Call and Webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After this presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mr. Murray Mullen, Chair and Senior Executive Officer. Please go ahead. Thank you for standing by. thank you for standing by This is the conference operator. this is the conference operator Welcome to the Mullen Group Ltd. 2026 First Quarter Earnings Conference Call and Webcast. welcome to the mullen group ltd 2026 first quarter earnings conference call and webcast As a reminder, all participants are in a listen-only mode and the conference is being recorded. as a reminder all participants are in a listen-only mode and the conference is being recorded After this presentation, there will be an opportunity to ask questions. after this presentation there will be an opportunity to ask questions To join the question queue, you may press star then one on your telephone keypad. to join the question queue you may press star then one on your telephone keypad Should you need assistance during the conference call, you may signal an operator by pressing star then zero. should you need assistance during the conference call you may signal an operator by pressing star then zero I would now like to turn the conference over to Mr. Murray Mullen, Chair and Senior Executive Officer. i would now like to turn the conference over to mr murray mullen chair and senior executive officer Please go ahead. please go ahead

Speaker 6: Yeah. Welcome, everyone, to Mullen Group's quarterly conference call this morning. We released our first quarter interim report. That's a nice 53-page document full of details, numbers, analysis prepared by our team, headed up by Carson Urlacher and Nik Woodworth. This document contains updated information, is available on SEDAR+ and on our website at www.mullen-group.com. I'll remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties. As such, actual results may differ materially. Further information identifying the risks, uncertainties and assumptions can be found in the disclosure documents. This morning, I'm joined here in Okotoks by the senior team. It's an expanded senior team, and I want to welcome Lee Hellyer, who's now our Senior Commercial Officer and has joined the executive team at Mullen Group. Yeah. yeah Welcome, everyone, to Mullen Group's quarterly conference call this morning. welcome everyone to mullen group's quarterly conference call this morning We released our first quarter interim report. we released our first quarter interim report That's a nice 53-page document full of details, numbers, analysis prepared by our team, headed up by Carson Urlacher and Nik Woodworth. that's a nice 53-page document full of details numbers analysis prepared by our team headed up by carson urlacher and nik woodworth This document contains updated information, is available on SEDAR+ and on our website at www.mullen-group.com. this document contains updated information is available on sedar+ and on our website at www.mullen-group.com I'll remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties. i'll remind everyone that today's presentation and commentary contain forward-looking statements that are based upon current expectations and are subject to a number of risks and uncertainties As such, actual results may differ materially. as such actual results may differ materially Further information identifying the risks, uncertainties and assumptions can be found in the disclosure documents. further information identifying the risks uncertainties and assumptions can be found in the disclosure documents This morning, I'm joined here in Okotoks by the senior team. this morning i'm joined here in okotoks by the senior team It's an expanded senior team, and I want to welcome Lee Hellyer, who's now our Senior Commercial Officer and has joined the executive team at Mullen Group. it's an expanded senior team and i want to welcome lee hellyer who's now our senior commercial officer and has joined the executive team at mullen group In addition, I have Richard Maloney in his expanded role as now President and Senior Operating Officer. Richard. Carson Urlacher, Senior Financial Officer, and Joanna Scott, Senior Corporate Officer. That's the senior executive that we have here at Mullen Group. My name is Murray Mullen, and I am the Chair and Senior Executive Officer. This morning, we're going to follow the similar format as last conference call we held, and that's all in an effort to make this call as meaningful and productive for everyone as possible. Carson and I do not have prepared remarks for today's call. These can be found in the MD&A, the press release and the financial statements. Anyone that's on the line today can use any of their AI tools to query anything. We'll head straight to the Q&A session. In addition, I have Richard Maloney in his expanded role as now President and Senior Operating Officer. in addition i have richard maloney in his expanded role as now president and senior operating officer Richard. richard Carson Urlacher, Senior Financial Officer, and Joanna Scott, Senior Corporate Officer. carson urlacher senior financial officer and joanna scott senior corporate officer That's the senior executive that we have here at Mullen Group. that's the senior executive that we have here at mullen group My name is Murray Mullen, and I am the Chair and Senior Executive Officer. my name is murray mullen and i am the chair and senior executive officer This morning, we're going to follow the similar format as last conference call we held, and that's all in an effort to make this call as meaningful and productive for everyone as possible. this morning we're going to follow the similar format as last conference call we held and that's all in an effort to make this call as meaningful and productive for everyone as possible Carson and I do not have prepared remarks for today's call. carson and i do not have prepared remarks for today's call These can be found in the MD&A, the press release and the financial statements. these can be found in the md&a the press release and the financial statements Anyone that's on the line today can use any of their AI tools to query anything. anyone that's on the line today can use any of their ai tools to query anything We'll head straight to the Q&A session. we'll head straight to the q&a session There are probably going to be lots of questions about the quarter, most likely about where we see the economy, the state of the consumer, fuel prices, the freight markets and of course, those often talked about nation building projects. I like the fact that we generated record revenues and solid profitability, even during a period of basically no economic growth. I'd suggest to you this bodes well very well when the economic conditions improve. Until then, we will keep a keen eye on costs. We're going to focus on margin over market share, and we're going to look for quality companies to join our network of 44 independently managed business units. Now I see many of you already joined the queue, so I will now ask the operator to open the lines. Operator? There are probably going to be lots of questions about the quarter, most likely about where we see the economy, the state of the consumer, fuel prices, the freight markets and of course, those often talked about nation building projects. there are probably going to be lots of questions about the quarter most likely about where we see the economy the state of the consumer fuel prices the freight markets and of course those often talked about nation building projects I like the fact that we generated record revenues and solid profitability, even during a period of basically no economic growth. i like the fact that we generated record revenues and solid profitability even during a period of basically no economic growth I'd suggest to you this bodes well very well when the economic conditions improve. i'd suggest to you this bodes well very well when the economic conditions improve Until then, we will keep a keen eye on costs. until then we will keep a keen eye on costs We're going to focus on margin over market share, and we're going to look for quality companies to join our network of 44 independently managed business units. we're going to focus on margin over market share and we're going to look for quality companies to join our network of 44 independently managed business units Now I see many of you already joined the queue, so I will now ask the operator to open the lines. now i see many of you already joined the queue so i will now ask the operator to open the lines Operator? operator

Speaker 7: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Kevin Chiang from CIBC. Please go ahead. Thank you. thank you We will now begin the question and answer session. we will now begin the question and answer session To join the question queue, you may press star then one on your telephone keypad. to join the question queue you may press star then one on your telephone keypad You will hear a tone acknowledging your request. you will hear a tone acknowledging your request If you are using a speakerphone, please pick up your handset before pressing any keys. if you are using a speakerphone please pick up your handset before pressing any keys To withdraw your question, please press star then two. to withdraw your question please press star then two The first question comes from Kevin Chiang from CIBC. the first question comes from kevin chiang from cibc Please go ahead. please go ahead

Speaker 4: Hey. Good morning, everybody, and thanks for taking my question. Congratulations, Richard, on the expanded responsibilities here. Hey. hey Good morning, everybody, and thanks for taking my question. good morning everybody and thanks for taking my question Congratulations, Richard, on the expanded responsibilities here. congratulations richard on the expanded responsibilities here

Speaker 6: Yeah. Yeah. yeah

Speaker 4: Well deserved. Maybe if I could just focus on the L&W segment. It looks like it put up the best organic growth that we've seen in quite some time, and I know there's some optimism south of the border in terms of what we're seeing in the broader freight economy. Just wondering what you're seeing in the L&W space here, just given the organic growth rate you printed in the first quarter, and if there's anything you'd point to in terms of driving that tailwind and maybe stuff that could have been transient in the quarter or maybe stuff that might be more structural that you would expect as we get through the remainder of 2026 here? Well deserved. well deserved Maybe if I could just focus on the L&W segment. maybe if i could just focus on the l&w segment It looks like it put up the best organic growth that we've seen in quite some time, and I know there's some optimism south of the border in terms of what we're seeing in the broader freight economy. it looks like it put up the best organic growth that we've seen in quite some time and i know there's some optimism south of the border in terms of what we're seeing in the broader freight economy Just wondering what you're seeing in the L&W space here, just given the organic growth rate you printed in the first quarter, and if there's anything you'd point to in terms of driving that tailwind and maybe stuff that could have been transient in the quarter or maybe stuff that might be more structural that you would expect as we get through the remainder of 2026 here? just wondering what you're seeing in the l&w space here just given the organic growth rate you printed in the first quarter and if there's anything you'd point to in terms of driving that tailwind and maybe stuff that could have been transient in the quarter or maybe stuff that might be more structural that you would expect as we get through the remainder of 2026 here

Speaker 6: Yeah. That's a good observation, Kevin. I think the majority of it was probably driven by the performance in the month of March. Carson, it was a decently strong March. I can't tell you, Kev, whether that was because everybody was at quarter end and those kind of things. March was a pretty good month for L&W. Everybody performed reasonably well. Yeah. yeah That's a good observation, Kevin. that's a good observation kevin I think the majority of it was probably driven by the performance in the month of March. i think the majority of it was probably driven by the performance in the month of march Carson, it was a decently strong March. carson it was a decently strong march I can't tell you, Kev, whether that was because everybody was at quarter end and those kind of things. i can't tell you kev whether that was because everybody was at quarter end and those kind of things March was a pretty good month for L&W. march was a pretty good month for l&w Everybody performed reasonably well. everybody performed reasonably well

Speaker 4: Yeah. Yeah. yeah

Speaker 6: Had a couple of real stars that continued to do well. Gleason Group. Had a couple of real stars that continued to do well. had a couple of real stars that continued to do well Gleason Group. gleason group

Speaker 4: Yep Yep yep

Speaker 6: comes to mind, and some others. I think what that reiterates, Kev, is that's the general economy. comes to mind, and some others. comes to mind and some others I think what that reiterates, Kev, is that's the general economy. i think what that reiterates kev is that's the general economy

Speaker 4: Mm-hmm Mm-hmm mm-hmm

Speaker 6: ... is our L&W side. If the economy gets a little bit of a momentum to it, I think our business and our L&W segment is nicely positioned to capitalize on that. That's a little bit different than the LTL side that still seems to be stuck in neutral. We did okay, but as you could see, if you're not doing acquisitions, really, it's still very difficult to grow. ... is our L&W side. is our l&w side If the economy gets a little bit of a momentum to it, I think our business and our L&W segment is nicely positioned to capitalize on that. if the economy gets a little bit of a momentum to it i think our business and our l&w segment is nicely positioned to capitalize on that That's a little bit different than the LTL side that still seems to be stuck in neutral. that's a little bit different than the ltl side that still seems to be stuck in neutral We did okay, but as you could see, if you're not doing acquisitions, really, it's still very difficult to grow. we did okay but as you could see if you're not doing acquisitions really it's still very difficult to grow

Speaker 4: Mm-hmm. Mm-hmm. mm-hmm

Speaker 6: That's what we see. That's what we see. that's what we see

Speaker 4: Maybe just on the LTL side, maybe if I could follow up on your answer there, just the momentum you saw in March in L&W as that carried on through the first few weeks here in April. Just on LTL, I guess some of that organic growth rate that you saw, or negative organic growth rate you saw, it seems like you were demarketing some businesses. Is there a way to quantify maybe how much that weighed on the first quarter growth rate? Maybe just on the LTL side, maybe if I could follow up on your answer there, just the momentum you saw in March in L&W as that carried on through the first few weeks here in April. maybe just on the ltl side maybe if i could follow up on your answer there just the momentum you saw in march in l&w as that carried on through the first few weeks here in april Just on LTL, I guess some of that organic growth rate that you saw, or negative organic growth rate you saw, it seems like you were demarketing some businesses. just on ltl i guess some of that organic growth rate that you saw or negative organic growth rate you saw it seems like you were demarketing some businesses Is there a way to quantify maybe how much that weighed on the first quarter growth rate? is there a way to quantify maybe how much that weighed on the first quarter growth rate

Speaker 6: Carson? Carson? carson

Speaker 3: Yeah. I would say that, Kevin, with respect to the same-store sales being down in LTL, a large portion of that would be with respect to demarketing some customers. Yeah. yeah I would say that, Kevin, with respect to the same-store sales being down in LTL, a large portion of that would be with respect to demarketing some customers. i would say that kevin with respect to the same-store sales being down in ltl a large portion of that would be with respect to demarketing some customers

Speaker 4: Got you. Got you. got you

Speaker 3: The other issue that we also saw in LTL in the first quarter, and this was really in the month of January, was some very inclement weather, especially down east. The other issue that we also saw in LTL in the first quarter, and this was really in the month of January, was some very inclement weather, especially down east. the other issue that we also saw in ltl in the first quarter and this was really in the month of january was some very inclement weather especially down east

Speaker 4: Right. Yeah. Right. right Yeah. yeah

Speaker 3: Which virtually, we had a couple operating days where we had trucks that barely left the yard. That was kind of a headwind early on in the quarter that kind of righted itself in March. Which virtually, we had a couple operating days where we had trucks that barely left the yard. which virtually we had a couple operating days where we had trucks that barely left the yard That was kind of a headwind early on in the quarter that kind of righted itself in March. that was kind of a headwind early on in the quarter that kind of righted itself in march

Speaker 6: That impacts two of our larger business units. That impacts two of our larger business units. that impacts two of our larger business units

Speaker 4: Right. Right. right

Speaker 6: Our Gardewine Group and APPS Group, which have a pretty significant footprint back in the east, so they got hit. Our Gardewine Group and APPS Group, which have a pretty significant footprint back in the east, so they got hit. our gardewine group and apps group which have a pretty significant footprint back in the east so they got hit

Speaker 4: Right Right right

Speaker 6: in January, February. in January, February. in january february

Speaker 4: Mm-hmm. Mm-hmm. mm-hmm

Speaker 6: Decent margins, but we got hit with weather. We don't like to make excuses too often, but that's a reality in that we just- Decent margins, but we got hit with weather. decent margins but we got hit with weather We don't like to make excuses too often, but that's a reality in that we just- we don't like to make excuses too often but that's a reality in that we just-

Speaker 4: Mm-hmm Mm-hmm mm-hmm

Speaker 6: didn't have any work days, so you can't move freight if the trucks are stopped and people can't get to work. didn't have any work days, so you can't move freight if the trucks are stopped and people can't get to work. didn't have any work days so you can't move freight if the trucks are stopped and people can't get to work

Speaker 4: No, it seems like it was winter everywhere by my observation. Just on L&W, just the April trends, has that momentum carried forward from what you saw in March there? No, it seems like it was winter everywhere by my observation. no it seems like it was winter everywhere by my observation Just on L&W, just the April trends, has that momentum carried forward from what you saw in March there? just on l&w just the april trends has that momentum carried forward from what you saw in march there

Speaker 6: Not to the same degree, Kevin. I think what we're watching very carefully was March strong because of a quarter end and everybody tries to- Not to the same degree, Kevin. not to the same degree kevin I think what we're watching very carefully was March strong because of a quarter end and everybody tries to- i think what we're watching very carefully was march strong because of a quarter end and everybody tries to-

Speaker 4: Right. Right. right

Speaker 6: get their inventories moving quarter end. What we're unsure of is whether it was that. There's no doubt that the situation in Iran and the spike in fuel prices has just caused people to take a little bit of a pause, I would suggest. get their inventories moving quarter end. get their inventories moving quarter end What we're unsure of is whether it was that. what we're unsure of is whether it was that There's no doubt that the situation in Iran and the spike in fuel prices has just caused people to take a little bit of a pause, I would suggest. there's no doubt that the situation in iran and the spike in fuel prices has just caused people to take a little bit of a pause i would suggest

Speaker 4: Right. Right. right

Speaker 6: We have to watch that, and I've commented on that. Let's watch that carefully. I think it's going to take a little bit of time for people to adjust to that. We're fortunate in Canada that we have our own energy supplies, so maybe price went up a bit, but we have it. Many parts of the world do not have it. We have to watch that, and I've commented on that. we have to watch that and i've commented on that Let's watch that carefully. let's watch that carefully I think it's going to take a little bit of time for people to adjust to that. i think it's going to take a little bit of time for people to adjust to that We're fortunate in Canada that we have our own energy supplies, so maybe price went up a bit, but we have it. we're fortunate in canada that we have our own energy supplies so maybe price went up a bit but we have it Many parts of the world do not have it. many parts of the world do not have it

Speaker 4: Right. Right. right

Speaker 6: I think let's just see how it plays out. April is not as strong as March. We didn't expect that, but because it's the end of the quarter. Let's see what happens here is whether that momentum builds up through the quarter. I think it will. I think let's just see how it plays out. i think let's just see how it plays out April is not as strong as March. april is not as strong as march We didn't expect that, but because it's the end of the quarter. we didn't expect that but because it's the end of the quarter Let's see what happens here is whether that momentum builds up through the quarter. let's see what happens here is whether that momentum builds up through the quarter I think it will. i think it will

Speaker 4: Right Right right

Speaker 6: That's a personal observation. That's a personal observation. that's a personal observation

Speaker 4: That's helpful. Maybe just last one for me, maybe a bigger picture question. I'm sure you've seen all the headlines around AI disruption potentially hitting the brokerage business. Just wondering, from where you're sitting, what implications you think this might have for your U.S. operations, whether it's Holistic or the recently acquired Cole Group, opportunity, threat, maybe what you're seeing on the ground as we see some of the headlines here. Thank you for taking my question. That's helpful. that's helpful Maybe just last one for me, maybe a bigger picture question. maybe just last one for me maybe a bigger picture question I'm sure you've seen all the headlines around AI disruption potentially hitting the brokerage business. i'm sure you've seen all the headlines around ai disruption potentially hitting the brokerage business Just wondering, from where you're sitting, what implications you think this might have for your U.S. operations, whether it's Holistic or the recently acquired Cole Group, opportunity, threat, maybe what you're seeing on the ground as we see some of the headlines here. just wondering from where you're sitting what implications you think this might have for your u.s operations whether it's holistic or the recently acquired cole group opportunity threat maybe what you're seeing on the ground as we see some of the headlines here Thank you for taking my question. thank you for taking my question

Speaker 6: Richard oversees both Cole and Holistic. We're building all the AI tools into our Silver Express platform at Holistic, which is Holistic. It's a bit of a software tech play and a freight forwarding, because we provide the technology to a bunch of agents, right? Richard oversees both Cole and Holistic. richard oversees both cole and holistic We're building all the AI tools into our Silver Express platform at Holistic, which is Holistic. we're building all the ai tools into our silver express platform at holistic which is holistic It's a bit of a software tech play and a freight forwarding, because we provide the technology to a bunch of agents, right? it's a bit of a software tech play and a freight forwarding because we provide the technology to a bunch of agents right

Speaker 4: Mm-hmm. Mm-hmm. mm-hmm

Speaker 6: We haven't seen any disruption. In fact, what we think will be the AI tools that our team is implementing into this, I think, is going to help them gain market share, Rich. That's just my- We haven't seen any disruption. we haven't seen any disruption In fact, what we think will be the AI tools that our team is implementing into this, I think, is going to help them gain market share, Rich. in fact what we think will be the ai tools that our team is implementing into this i think is going to help them gain market share rich That's just my- that's just my-

Speaker 4: Right. Right. right

Speaker 8: Yeah, absolutely. Hi, Kev, it's Richard. Yeah, absolutely. yeah absolutely Hi, Kev, it's Richard. hi kev it's richard

Speaker 4: Hey, how you doing? Hey, how you doing? hey how you doing

Speaker 8: I'll talk quickly about the U.S. and what we're doing there, maybe more broadly on AI for Mullen Group. Down in the States, we have two business units. They have their own separate operating systems with teams that are working and supporting that from an IT infrastructure perspective. I can tell you that both of them are working on how AI is going to help and support the build-out to technology, specifically to Holistic. We are working diligently on that with our director of IT on that. We met with them earlier this week and discussed that with them and just on the helping of coding and doing things like that. We're not like others or a hyperscaler. Every time we have an idea about AI, we do a press release. I'll talk quickly about the U.S. and what we're doing there, maybe more broadly on AI for Mullen Group. i'll talk quickly about the u.s and what we're doing there maybe more broadly on ai for mullen group Down in the States, we have two business units. down in the states we have two business units They have their own separate operating systems with teams that are working and supporting that from an IT infrastructure perspective. they have their own separate operating systems with teams that are working and supporting that from an it infrastructure perspective I can tell you that both of them are working on how AI is going to help and support the build-out to technology, specifically to Holistic. i can tell you that both of them are working on how ai is going to help and support the build-out to technology specifically to holistic We are working diligently on that with our director of IT on that. we are working diligently on that with our director of it on that We met with them earlier this week and discussed that with them and just on the helping of coding and doing things like that. we met with them earlier this week and discussed that with them and just on the helping of coding and doing things like that We're not like others or a hyperscaler. we're not like others or a hyperscaler Every time we have an idea about AI, we do a press release. every time we have an idea about ai we do a press release I can tell you they're very diligently working on many fronts, both at Holistic and Cole US. Up here in Canada, we have a very similar initiative underway within our LTL space, looking at how LTL will make us better. It's like everybody else. You have some wins, some losses, but you learn along the way, and you make it better, and the real focus is how to enhance load factor. We have a team. We did a presentation to our board yesterday, and we are certainly moving in the right direction on that. It's not an event. It's a journey, and it takes time to do, and you'll have to stay with it. We are working full frontal on that one as well, on AI. I can tell you they're very diligently working on many fronts, both at Holistic and Cole US. i can tell you they're very diligently working on many fronts both at holistic and cole us Up here in Canada, we have a very similar initiative underway within our LTL space, looking at how LTL will make us better. up here in canada we have a very similar initiative underway within our ltl space looking at how ltl will make us better It's like everybody else. it's like everybody else You have some wins, some losses, but you learn along the way, and you make it better, and the real focus is how to enhance load factor. you have some wins some losses but you learn along the way and you make it better and the real focus is how to enhance load factor We have a team. we have a team We did a presentation to our board yesterday, and we are certainly moving in the right direction on that. we did a presentation to our board yesterday and we are certainly moving in the right direction on that It's not an event. it's not an event It's a journey, and it takes time to do, and you'll have to stay with it. it's a journey and it takes time to do and you'll have to stay with it We are working full frontal on that one as well, on AI. we are working full frontal on that one as well on ai

Speaker 6: Yeah, I would say this, too, Kev. I think if you haven't built the AI tools into your technology platform and your service offerings to your customer, I think anybody will be at risk, whether you're a 3PL or an asset-based carrier. Yeah, I would say this, too, Kev. yeah i would say this too kev I think if you haven't built the AI tools into your technology platform and your service offerings to your customer, I think anybody will be at risk, whether you're a 3PL or an asset-based carrier. i think if you haven't built the ai tools into your technology platform and your service offerings to your customer i think anybody will be at risk whether you're a 3pl or an asset-based carrier

Speaker 4: Right. Right. right

Speaker 6: We're just embracing it, and we're building all of that intellectual capital and know-how into our businesses, including specifically in the U.S. I don't think it's going to hurt them. We hope it's an enabler, but we're going all in. We have to change. We have to adapt. We have to make sure we're ready for the future. That's what we do in our business here, is we make sure our business units are prepared for the next five years, not the last five. The last five are over. We're just embracing it, and we're building all of that intellectual capital and know-how into our businesses, including specifically in the U.S. we're just embracing it and we're building all of that intellectual capital and know-how into our businesses including specifically in the u.s I don't think it's going to hurt them. i don't think it's going to hurt them We hope it's an enabler, but we're going all in. we hope it's an enabler but we're going all in We have to change. we have to change We have to adapt. we have to adapt We have to make sure we're ready for the future. we have to make sure we're ready for the future That's what we do in our business here, is we make sure our business units are prepared for the next five years, not the last five. that's what we do in our business here is we make sure our business units are prepared for the next five years not the last five The last five are over. the last five are over

Speaker 4: That's very helpful. Congrats on a solid start to the year here, despite all the weather issues. Thank you, guys. That's very helpful. that's very helpful Congrats on a solid start to the year here, despite all the weather issues. congrats on a solid start to the year here despite all the weather issues Thank you, guys. thank you guys

Speaker 6: Thanks, Kevin Chiang. Thanks, Kevin Chiang. thanks kevin chiang

Speaker 7: The next question comes from Konark Gupta from Scotiabank. Please go ahead. The next question comes from Konark Gupta from Scotiabank. the next question comes from konark gupta from scotiabank Please go ahead. please go ahead

Speaker 5: Morning, everyone. Maybe just first question, in the absence of a filip in March. Murray, I think in the press release and the documents that you guys talked about, the capacity is coming out of the system gradually. I think it's more of a U.S. trend than Canada seems, correct me if I'm wrong, and the demand seems stable, but the rates have yet to move up. I'm just wondering, when you talk about March being strong, and I think everybody's kind of talking about how the spot rates are continuing to move up. Just curious, what are you seeing in the pricing environment for you guys? I mean, organically, obviously your margins were not expanding in Q1 yet. But I'm wondering if there's expansion opportunity down the road. Curious your thoughts on pricing and margin. Morning, everyone. morning everyone Maybe just first question, in the absence of a filip in March. maybe just first question in the absence of a filip in march Murray, I think in the press release and the documents that you guys talked about, the capacity is coming out of the system gradually. murray i think in the press release and the documents that you guys talked about the capacity is coming out of the system gradually I think it's more of a U.S. trend than Canada seems, correct me if I'm wrong, and the demand seems stable, but the rates have yet to move up. i think it's more of a u.s trend than canada seems correct me if i'm wrong and the demand seems stable but the rates have yet to move up I'm just wondering, when you talk about March being strong, and I think everybody's kind of talking about how the spot rates are continuing to move up. i'm just wondering when you talk about march being strong and i think everybody's kind of talking about how the spot rates are continuing to move up Just curious, what are you seeing in the pricing environment for you guys? just curious what are you seeing in the pricing environment for you guys I mean, organically, obviously your margins were not expanding in Q1 yet. i mean organically obviously your margins were not expanding in q1 yet But I'm wondering if there's expansion opportunity down the road. but i'm wondering if there's expansion opportunity down the road Curious your thoughts on pricing and margin. curious your thoughts on pricing and margin

Speaker 6: I think, once again, that's a pretty good observation is that, Konark, the US market. I think everybody needs to differentiate the US market from the Canadian marketplace, and you're spot on. They're tightening quite rapidly as they implement English proficiency rules and remove certain carriers, drivers off from having a CDL, which takes capacity out of the system because you don't have the drivers. U.S. is tightening. That also translates into the cross-border market tightening. Any freight that's moving cross-border, that's tightening. The Canadian market, it's not tightening, but the regulations and the safety standards and the government is really enforcing things a lot more diligently than what they've done for quite some time. That's not getting rid of capacity, but it's forcing some discipline in those that didn't follow the rules quite as much. I think, once again, that's a pretty good observation is that, Konark, the US market. i think once again that's a pretty good observation is that konark the us market I think everybody needs to differentiate the US market from the Canadian marketplace, and you're spot on. i think everybody needs to differentiate the us market from the canadian marketplace and you're spot on They're tightening quite rapidly as they implement English proficiency rules and remove certain carriers, drivers off from having a CDL, which takes capacity out of the system because you don't have the drivers. they're tightening quite rapidly as they implement english proficiency rules and remove certain carriers drivers off from having a cdl which takes capacity out of the system because you don't have the drivers U.S. is tightening. u.s is tightening That also translates into the cross-border market tightening. that also translates into the cross-border market tightening Any freight that's moving cross-border, that's tightening. any freight that's moving cross-border that's tightening The Canadian market, it's not tightening, but the regulations and the safety standards and the government is really enforcing things a lot more diligently than what they've done for quite some time. the canadian market it's not tightening but the regulations and the safety standards and the government is really enforcing things a lot more diligently than what they've done for quite some time That's not getting rid of capacity, but it's forcing some discipline in those that didn't follow the rules quite as much. that's not getting rid of capacity but it's forcing some discipline in those that didn't follow the rules quite as much that will help pricing and take the pressure off, Konark, in the Canadian market. If you get any demand push, any, like we saw in March, it'll be okay. If you get demand push in the U.S. with a reduction in supply, boy, that could be an outsize in terms of the rates. That's how we see it. that will help pricing and take the pressure off, Konark, in the Canadian market. that will help pricing and take the pressure off konark in the canadian market If you get any demand push, any, like we saw in March, it'll be okay. if you get any demand push any like we saw in march it'll be okay If you get demand push in the U.S. with a reduction in supply, boy, that could be an outsize in terms of the rates. if you get demand push in the u.s with a reduction in supply boy that could be an outsize in terms of the rates That's how we see it. that's how we see it

Speaker 5: Okay. That makes sense. The other side of the coin, I guess is, if the U.S. administration keeps pushing out these drivers from the pool, and I think the numbers are quite staggering if you look in some of the studies. Would you expect or would you see some sort of wage inflation, or maybe not so much given your drivers are still sticky? I mean, you don't have any retention issues. What do you think about the wage inflation potential here? Okay. okay That makes sense. that makes sense The other side of the coin, I guess is, if the U.S. administration keeps pushing out these drivers from the pool, and I think the numbers are quite staggering if you look in some of the studies. the other side of the coin i guess is if the u.s administration keeps pushing out these drivers from the pool and i think the numbers are quite staggering if you look in some of the studies Would you expect or would you see some sort of wage inflation, or maybe not so much given your drivers are still sticky? would you expect or would you see some sort of wage inflation or maybe not so much given your drivers are still sticky I mean, you don't have any retention issues. i mean you don't have any retention issues What do you think about the wage inflation potential here? what do you think about the wage inflation potential here

Speaker 6: Well, that will not impact our U.S. operations because we don't have. Our business really isn't company truck fleet operations. It's all 3PL and the use of owner-operators on cross-border. They will benefit if the rates go up because they're generally, they get paid a percentage of the transaction. I don't think it'll impact us from that standpoint. We don't see any wage inflation in Canada right now at all until you see a demand push. If you see a demand push, which may or may not come, I'll let you opine about that, but I'm not too worried about the wage thing, to be honest with you. Now, if I'm a U.S. carrier, you're going to see some stress points there, but those costs are going to be passed into the rates. Well, that will not impact our U.S. operations because we don't have. well that will not impact our u.s operations because we don't have Our business really isn't company truck fleet operations. our business really isn't company truck fleet operations It's all 3PL and the use of owner-operators on cross-border. it's all 3pl and the use of owner-operators on cross-border They will benefit if the rates go up because they're generally, they get paid a percentage of the transaction. they will benefit if the rates go up because they're generally they get paid a percentage of the transaction I don't think it'll impact us from that standpoint. i don't think it'll impact us from that standpoint We don't see any wage inflation in Canada right now at all until you see a demand push. we don't see any wage inflation in canada right now at all until you see a demand push If you see a demand push, which may or may not come, I'll let you opine about that, but I'm not too worried about the wage thing, to be honest with you. if you see a demand push which may or may not come i'll let you opine about that but i'm not too worried about the wage thing to be honest with you Now, if I'm a U.S. carrier, you're going to see some stress points there, but those costs are going to be passed into the rates. now if i'm a u.s carrier you're going to see some stress points there but those costs are going to be passed into the rates I think the rates have to go up before anybody moves on wages. The spot market's moved, but the contract market has been a bit stubborn. I'd challenge anybody to go ask Amazon or Walmart or Costco for a rate increase. They're just not embracing that at the moment. I think the rates have to go up before anybody moves on wages. i think the rates have to go up before anybody moves on wages The spot market's moved, but the contract market has been a bit stubborn. the spot market's moved but the contract market has been a bit stubborn I'd challenge anybody to go ask Amazon or Walmart or Costco for a rate increase. i'd challenge anybody to go ask amazon or walmart or costco for a rate increase They're just not embracing that at the moment. they're just not embracing that at the moment

Speaker 5: Yeah. Thanks. Maybe last one for me before I turn over. On M&A, I think you made a note in the MD&A talking about your increased reliance, I guess, on M&A, until you see structural organic tailwind. When you're looking into M&A, and I know you guys have done recently some tuck-ins in the S&I segment. Are you pivoting to S&I now, given structurally maybe higher oil price, at least for some time, or the Canadian nation-building focus in Western Canada? Any thoughts on where would you like to spend the incremental dollar here with respect to your segments? Yeah. yeah Thanks. thanks Maybe last one for me before I turn over. maybe last one for me before i turn over On M&A, I think you made a note in the MD&A talking about your increased reliance, I guess, on M&A, until you see structural organic tailwind. on m&a i think you made a note in the md&a talking about your increased reliance i guess on m&a until you see structural organic tailwind When you're looking into M&A, and I know you guys have done recently some tuck-ins in the S&I segment. when you're looking into m&a and i know you guys have done recently some tuck-ins in the s&i segment Are you pivoting to S&I now, given structurally maybe higher oil price, at least for some time, or the Canadian nation-building focus in Western Canada? are you pivoting to s&i now given structurally maybe higher oil price at least for some time or the canadian nation-building focus in western canada Any thoughts on where would you like to spend the incremental dollar here with respect to your segments? any thoughts on where would you like to spend the incremental dollar here with respect to your segments

Speaker 6: Well, I think it's evident. We did two acquisitions in the first quarter, and both of them were in the S&I segment, and specifically tied to energy. I would tell you our basic thesis here as a senior group is that I doubt if you're going to get any or we doubt that you're going to get much economic stimulus going on in Canada unless we really get on these nation-building projects and start creating great jobs and get capital flowing again. We're buying the thesis that is being messaged by the governments that nation-building projects are going to go ahead. We're positioning as if it's going to. The timing of it is a little less certain to us. Canada needs to get its act together in the world scene and start making our vast resources available to the world that need it. Well, I think it's evident. well i think it's evident We did two acquisitions in the first quarter, and both of them were in the S&I segment, and specifically tied to energy. we did two acquisitions in the first quarter and both of them were in the s&i segment and specifically tied to energy I would tell you our basic thesis here as a senior group is that I doubt if you're going to get any or we doubt that you're going to get much economic stimulus going on in Canada unless we really get on these nation-building projects and start creating great jobs and get capital flowing again. i would tell you our basic thesis here as a senior group is that i doubt if you're going to get any or we doubt that you're going to get much economic stimulus going on in canada unless we really get on these nation-building projects and start creating great jobs and get capital flowing again We're buying the thesis that is being messaged by the governments that nation-building projects are going to go ahead. we're buying the thesis that is being messaged by the governments that nation-building projects are going to go ahead We're positioning as if it's going to. we're positioning as if it's going to The timing of it is a little less certain to us. the timing of it is a little less certain to us Canada needs to get its act together in the world scene and start making our vast resources available to the world that need it. canada needs to get its act together in the world scene and start making our vast resources available to the world that need it We can't just hog the puck and say, "No, you can't have access to it." They need it. We're buying that thesis. The timing, it's Canada. You got a lot of issues you got to work through. I think longer term, that's a real growth potential. We want to make sure we're well positioned. We haven't invested in the energy sector for- We can't just hog the puck and say, "No, you can't have access to it." They need it. we can't just hog the puck and say "no you can't have access to it." they need it We're buying that thesis. we're buying that thesis The timing, it's Canada. the timing it's canada You got a lot of issues you got to work through. you got a lot of issues you got to work through I think longer term, that's a real growth potential. i think longer term that's a real growth potential We want to make sure we're well positioned. we want to make sure we're well positioned We haven't invested in the energy sector for- we haven't invested in the energy sector for-

Speaker 8: Over 10 years. Over 10 years. over 10 years

Speaker 6: Basically, we really de-invested for 10 years. Basically, we really de-invested for 10 years. basically we really de-invested for 10 years

Speaker 8: Yeah. Yeah. yeah

Speaker 6: Over the last bit, we've just been adding really good companies into our network that do okay in this market. If the capital flows back into that sector, they will do outstanding. Over the last bit, we've just been adding really good companies into our network that do okay in this market. over the last bit we've just been adding really good companies into our network that do okay in this market If the capital flows back into that sector, they will do outstanding. if the capital flows back into that sector they will do outstanding

Speaker 8: Konark, I think it's important to point out those acquisitions we did. One was Black Label Transport right in the Clearwater play. The other one is water management tied to upstream fracking and so on. Now, those were all done and closed prior to the war starting and the spike in commodity prices. That would suggest or should suggest to everybody that, again, we're looking at where the puck will be going. These were done prior to all these elevation in commodity prices. Whether they stick or not, who knows? I'm not smart enough to figure that out. Murray just said it. At some point, Canada's going to have to say, "We got to do something here." I think this solidifies ourselves in some key plays. Konark, I think it's important to point out those acquisitions we did. konark i think it's important to point out those acquisitions we did One was Black Label Transport right in the Clearwater play. one was black label transport right in the clearwater play The other one is water management tied to upstream fracking and so on. the other one is water management tied to upstream fracking and so on Now, those were all done and closed prior to the war starting and the spike in commodity prices. now those were all done and closed prior to the war starting and the spike in commodity prices That would suggest or should suggest to everybody that, again, we're looking at where the puck will be going. that would suggest or should suggest to everybody that again we're looking at where the puck will be going These were done prior to all these elevation in commodity prices. these were done prior to all these elevation in commodity prices Whether they stick or not, who knows? whether they stick or not who knows I'm not smart enough to figure that out. i'm not smart enough to figure that out Murray just said it. murray just said it At some point, Canada's going to have to say, "We got to do something here." I think this solidifies ourselves in some key plays. at some point canada's going to have to say "we got to do something here." i think this solidifies ourselves in some key plays

Speaker 6: Yeah. These are really good acquisitions that are doing well in this current market. If there's any growth in the capital that goes into the energy space, they'll do better than just good. They'll do very good. That's our thesis. We've de-risked it because they're great companies. We'll continue to look at those kind of opportunities, Konark, when we see them come up. That's what we do. There's acquisitions available everywhere. We're one of the few companies that can do them. As I say, we got to look through the rock pile and look and find these gems. We don't need to just grow to grow. We need to grow by adding value, whether that's a consolidation play in a market so we can reduce costs or just get great quality companies. That really hasn't changed in our acquisition strategy. Yeah. yeah These are really good acquisitions that are doing well in this current market. these are really good acquisitions that are doing well in this current market If there's any growth in the capital that goes into the energy space, they'll do better than just good. if there's any growth in the capital that goes into the energy space they'll do better than just good They'll do very good. they'll do very good That's our thesis. that's our thesis We've de-risked it because they're great companies. we've de-risked it because they're great companies We'll continue to look at those kind of opportunities, Konark, when we see them come up. we'll continue to look at those kind of opportunities konark when we see them come up That's what we do. that's what we do There's acquisitions available everywhere. there's acquisitions available everywhere We're one of the few companies that can do them. we're one of the few companies that can do them As I say, we got to look through the rock pile and look and find these gems. as i say we got to look through the rock pile and look and find these gems We don't need to just grow to grow. we don't need to just grow to grow We need to grow by adding value, whether that's a consolidation play in a market so we can reduce costs or just get great quality companies. we need to grow by adding value whether that's a consolidation play in a market so we can reduce costs or just get great quality companies That really hasn't changed in our acquisition strategy. that really hasn't changed in our acquisition strategy It's in our DNA in this organization. It's in our DNA in this organization. it's in our dna in this organization

Speaker 5: Okay. No, I appreciate the time. Thank you. Okay. okay No, I appreciate the time. no i appreciate the time Thank you. thank you

Speaker 6: Thank you. Thank you. thank you

Speaker 5: Thanks a lot. Thanks a lot. thanks a lot

Speaker 7: The next question comes from Cameron Doerksen from National Bank Financial. Please go ahead. The next question comes from Cameron Doerksen from National Bank Financial. the next question comes from cameron doerksen from national bank financial Please go ahead. please go ahead

Speaker 2: Yeah, thanks. Good morning. Just kind of following up on, I guess, sort of the commentary around the nation-building opportunities that might be out there. I'm just wondering if you were actually having any specific discussions with some customers on potential opportunities, or is it all still sort of more theoretical at this point? Just trying to gauge, I guess maybe the timing of when some of these things might move forward, and are we at that stage yet where some of your customers might be actually doing some planning? Yeah, thanks. yeah thanks Good morning. good morning Just kind of following up on, I guess, sort of the commentary around the nation-building opportunities that might be out there. just kind of following up on i guess sort of the commentary around the nation-building opportunities that might be out there I'm just wondering if you were actually having any specific discussions with some customers on potential opportunities, or is it all still sort of more theoretical at this point? i'm just wondering if you were actually having any specific discussions with some customers on potential opportunities or is it all still sort of more theoretical at this point Just trying to gauge, I guess maybe the timing of when some of these things might move forward, and are we at that stage yet where some of your customers might be actually doing some planning? just trying to gauge i guess maybe the timing of when some of these things might move forward and are we at that stage yet where some of your customers might be actually doing some planning

Speaker 6: Cameron, I would love to be able to say that in Canada, we're having constructive discussions, and everybody's excited. Everybody's still sitting on their hands and waiting for, I guess, the governments to say, "Let's go," rather than, "Let's talk." In fact, I was going to open this call with a song about what we need is a little more, a lot more. A lot less talk, a lot more action. I think Canadians are begging for it, but it still seems to be in the consultation phase. I don't know how much longer we have to consult, but that's outside of our pay grade, and we're not in charge of that file. I can tell you that we're having active discussions on a major energy project in Alaska. Alaska LNG, Richard, is the project and the team. Cameron, I would love to be able to say that in Canada, we're having constructive discussions, and everybody's excited. cameron i would love to be able to say that in canada we're having constructive discussions and everybody's excited Everybody's still sitting on their hands and waiting for, I guess, the governments to say, "Let's go," rather than, "Let's talk." In fact, I was going to open this call with a song about what we need is a little more, a lot more. everybody's still sitting on their hands and waiting for i guess the governments to say "let's go," rather than "let's talk." in fact i was going to open this call with a song about what we need is a little more a lot more A lot less talk, a lot more action. a lot less talk a lot more action I think Canadians are begging for it, but it still seems to be in the consultation phase. i think canadians are begging for it but it still seems to be in the consultation phase I don't know how much longer we have to consult, but that's outside of our pay grade, and we're not in charge of that file. i don't know how much longer we have to consult but that's outside of our pay grade and we're not in charge of that file I can tell you that we're having active discussions on a major energy project in Alaska. i can tell you that we're having active discussions on a major energy project in alaska Alaska LNG, Richard, is the project and the team. alaska lng richard is the project and the team We're actively engaged with the customers on that, and we're at the bidding table, and it appears that that project may go before the projects in Canada. We will participate if we're fortunate to get the bid for- We're actively engaged with the customers on that, and we're at the bidding table, and it appears that that project may go before the projects in Canada. we're actively engaged with the customers on that and we're at the bidding table and it appears that that project may go before the projects in canada We will participate if we're fortunate to get the bid for- we will participate if we're fortunate to get the bid for-

Speaker 8: Still in the bidding process. Still in the bidding process. still in the bidding process

Speaker 6: We're having active discussions with the customer out there on that. Not in Canada. We all sit around and we say, "When are we going to go? When's it going to happen? How much talk are we going to have?" That's the frustrating part for Canadians and for good jobs in Canada. What can I tell you? We're waiting. We're having active discussions with the customer out there on that. we're having active discussions with the customer out there on that Not in Canada. We all sit around and we say, "When are we going to go? not in canada. we all sit around and we say "when are we going to go When's it going to happen? when's it going to happen How much talk are we going to have?" That's the frustrating part for Canadians and for good jobs in Canada. how much talk are we going to have?" that's the frustrating part for canadians and for good jobs in canada What can I tell you? what can i tell you We're waiting. we're waiting

Speaker 8: We're waiting for the capital. You've heard of the meeting that's being convened four or five months from now in Toronto, and not sure what they're intending to do there, but a lot of these projects that are in play have been approved at some point or other. I know, Joanna, at one point, you worked for the law firm that actually went through a pipeline that was going to get approved to the West Coast. It's been done. When that money starts coming back, private capital, which we have not heard, and we're waiting to see what happens on that. As it stands today, it's kind of a hurry up and wait. We've been accused of being pessimistic. We're not optimistic. I think we're realistic. We'll go to where the nations are building for now. That's the commentary on the Alaska LNG. We're waiting for the capital. we're waiting for the capital You've heard of the meeting that's being convened four or five months from now in Toronto, and not sure what they're intending to do there, but a lot of these projects that are in play have been approved at some point or other. you've heard of the meeting that's being convened four or five months from now in toronto and not sure what they're intending to do there but a lot of these projects that are in play have been approved at some point or other I know, Joanna, at one point, you worked for the law firm that actually went through a pipeline that was going to get approved to the West Coast. i know joanna at one point you worked for the law firm that actually went through a pipeline that was going to get approved to the west coast It's been done. it's been done When that money starts coming back, private capital, which we have not heard, and we're waiting to see what happens on that. when that money starts coming back private capital which we have not heard and we're waiting to see what happens on that As it stands today, it's kind of a hurry up and wait. as it stands today it's kind of a hurry up and wait We've been accused of being pessimistic. we've been accused of being pessimistic We're not optimistic. we're not optimistic I think we're realistic. i think we're realistic We'll go to where the nations are building for now. we'll go to where the nations are building for now That's the commentary on the Alaska LNG. that's the commentary on the alaska lng We're looking hard at that. We're looking hard at that. we're looking hard at that

Speaker 2: Okay. No, that's great. At least there's some projects moving forward, whether they're in Canada or not. That's good to hear. Maybe just a second question just on, I guess, sort of the financial targets that you put out earlier this year, the CAD 2.3 billion-CAD 2.4 billion in revenue and CAD 365 million in EBITDA. Are you still, I guess, comfortable with that? And is there, I guess, any changes on how you're going to get there, if you are still comfortable, at least by segment, from what you originally expected? Okay. okay No, that's great. no that's great At least there's some projects moving forward, whether they're in Canada or not. at least there's some projects moving forward whether they're in canada or not That's good to hear. that's good to hear Maybe just a second question just on, I guess, sort of the financial targets that you put out earlier this year, the CAD 2.3 billion-CAD 2.4 billion in revenue and CAD 365 million in EBITDA. maybe just a second question just on i guess sort of the financial targets that you put out earlier this year the cad 2.3 billion-cad 2.4 billion in revenue and cad 365 million in ebitda Are you still, I guess, comfortable with that? are you still i guess comfortable with that And is there, I guess, any changes on how you're going to get there, if you are still comfortable, at least by segment, from what you originally expected? and is there i guess any changes on how you're going to get there if you are still comfortable at least by segment from what you originally expected

Speaker 6: Carson, I'll defer that to you. Carson, I'll defer that to you. carson i'll defer that to you

Speaker 3: Okay. Okay. okay

Speaker 6: I'll make a final comment on that. I'll make a final comment on that. i'll make a final comment on that

Speaker 3: Sure. No change to the guide right now, Cameron. As we're coming out of the first quarter, I would say, by segment, everything is largely in line with what we articulated back at the beginning of the year. I would say no material changes to the guide that we kicked out in January. If March holds, and we continue on that trend, I don't see any. Sure. sure No change to the guide right now, Cameron. no change to the guide right now cameron As we're coming out of the first quarter, I would say, by segment, everything is largely in line with what we articulated back at the beginning of the year. as we're coming out of the first quarter i would say by segment everything is largely in line with what we articulated back at the beginning of the year I would say no material changes to the guide that we kicked out in January. i would say no material changes to the guide that we kicked out in january If March holds, and we continue on that trend, I don't see any. if march holds and we continue on that trend i don't see any

Speaker 6: Yeah, if the March trend was sustained. Yeah, if the March trend was sustained. yeah if the march trend was sustained

Speaker 3: Right Right right

Speaker 6: We'd be above. We'd be above. we'd be above

Speaker 3: We would. We would. we would

Speaker 6: I think the other thing is, Cam, is that we didn't plan any nation-building projects in our plan, in our budget for this year. If those start to go, that's on top of what we said we would do. I think the other thing is, Cam, is that we didn't plan any nation-building projects in our plan, in our budget for this year. i think the other thing is cam is that we didn't plan any nation-building projects in our plan in our budget for this year If those start to go, that's on top of what we said we would do. if those start to go that's on top of what we said we would do

Speaker 3: That doesn't include any acquisitions. That doesn't include any acquisitions. that doesn't include any acquisitions

Speaker 6: No additional acquisitions. We've got a couple things that we're going to maybe go ahead and beat that, but that's not built into the plan that we put forward. No additional acquisitions. no additional acquisitions We've got a couple things that we're going to maybe go ahead and beat that, but that's not built into the plan that we put forward. we've got a couple things that we're going to maybe go ahead and beat that but that's not built into the plan that we put forward

Speaker 3: Yeah. Yeah. yeah

Speaker 6: We just said, look. We just said, look. we just said look

Speaker 3: Lean toward it. Lean toward it. lean toward it

Speaker 6: This is what we think our existing business will do, and so far, we're on track for it. This is what we think our existing business will do, and so far, we're on track for it. this is what we think our existing business will do and so far we're on track for it

Speaker 2: Okay. No, that's great to hear. I'll pass the line. Thanks very much. Okay. okay No, that's great to hear. no that's great to hear I'll pass the line. i'll pass the line Thanks very much. thanks very much

Speaker 6: Thank you, Cam. Thank you, Cam. thank you cam

Speaker 2: Thank you. Thank you. thank you

Speaker 7: The next question comes from Benoit Poirier from Desjardins. Please go ahead. The next question comes from Benoit Poirier from Desjardins. the next question comes from benoit poirier from desjardins Please go ahead. please go ahead

Speaker 1: Hey, good morning, everyone, and congrats, Richard, for your new role. Hey, good morning, everyone, and congrats, Richard, for your new role. hey good morning everyone and congrats richard for your new role

Speaker 8: Thank you. Thank you. thank you

Speaker 1: Yeah. Talking about the opportunity in Alaska, the LNG project, could you maybe provide more color about the potential size of this opportunity? And is it your understanding that there's a limited number of companies that could handle such a project? Yeah. yeah Talking about the opportunity in Alaska, the LNG project, could you maybe provide more color about the potential size of this opportunity? talking about the opportunity in alaska the lng project could you maybe provide more color about the potential size of this opportunity And is it your understanding that there's a limited number of companies that could handle such a project? and is it your understanding that there's a limited number of companies that could handle such a project

Speaker 6: The project itself, Benoit, is that project in Alaska, probably bigger than all the nation-building projects that have been announced in Canada. It's upwards of $40 billion. How much are we going to carve out of that? We will be specifically. Right now, we're at the table on the hauling of pipe for the 800, I think it's 800. The project itself, Benoit, is that project in Alaska, probably bigger than all the nation-building projects that have been announced in Canada. the project itself benoit is that project in alaska probably bigger than all the nation-building projects that have been announced in canada It's upwards of $40 billion. it's upwards of $40 billion How much are we going to carve out of that? how much are we going to carve out of that We will be specifically. we will be specifically Right now, we're at the table on the hauling of pipe for the 800, I think it's 800. right now we're at the table on the hauling of pipe for the 800 i think it's 800

Speaker 8: 800 mi. 800 mi. 800 mi

Speaker 6: 800 mi from Cook Inlet down to Anchorage. That will be a big LNG project. It's pretty sizable. We're going to be in the final bidding phase here in the next couple of days. It appears that it's got all of the presidential support, and I think they're waiting for the Governor of Alaska and a couple of other things. That one's probably got the best chance of going in the short term. If we get past and we get chosen as the bidder with our partner, then we'll come out with more firm numbers. Just suffice to say, this is not just $2 million. This is pretty big. 800 mi from Cook Inlet down to Anchorage. 800 mi from cook inlet down to anchorage That will be a big LNG project. that will be a big lng project It's pretty sizable. it's pretty sizable We're going to be in the final bidding phase here in the next couple of days. we're going to be in the final bidding phase here in the next couple of days It appears that it's got all of the presidential support, and I think they're waiting for the Governor of Alaska and a couple of other things. it appears that it's got all of the presidential support and i think they're waiting for the governor of alaska and a couple of other things That one's probably got the best chance of going in the short term. that one's probably got the best chance of going in the short term If we get past and we get chosen as the bidder with our partner, then we'll come out with more firm numbers. if we get past and we get chosen as the bidder with our partner then we'll come out with more firm numbers Just suffice to say, this is not just $2 million. just suffice to say this is not just $2 million This is pretty big. this is pretty big

Speaker 1: Okay. Okay. okay

Speaker 6: It's kind of sensitive right now, so we'll just. I don't know. I can tell you, we've got a great partner up in Alaska. We've done business with them for 20 years. There's a short deck of how many suppliers can do this project, and we're one of them. It's kind of sensitive right now, so we'll just. it's kind of sensitive right now so we'll just I don't know. i don't know I can tell you, we've got a great partner up in Alaska. i can tell you we've got a great partner up in alaska We've done business with them for 20 years. we've done business with them for 20 years There's a short deck of how many suppliers can do this project, and we're one of them. there's a short deck of how many suppliers can do this project and we're one of them

Speaker 1: That's really great color, Murray. Regarding the S&I segment, with the increase in oil prices, have you already started to see a pickup in drilling and other activity from customers? Are customers beginning to try and lock up capacity for the months ahead? That's really great color, Murray. that's really great color murray Regarding the S&I segment, with the increase in oil prices, have you already started to see a pickup in drilling and other activity from customers? regarding the s&i segment with the increase in oil prices have you already started to see a pickup in drilling and other activity from customers Are customers beginning to try and lock up capacity for the months ahead? are customers beginning to try and lock up capacity for the months ahead

Speaker 6: No. It's so new, right? Everybody sees the price increase, but most of our customers, the oil and gas companies, are just saying, "Look, we don't know if it's going to be for how long." They haven't made capital commitments yet, Benoit. I haven't seen it yet. We channel check, we talk, but we haven't seen that translate into any increased demand for drilling or for other services. By the way, you still need to have the pipelines built, whether it's for LNG or if it's crude oil. Otherwise there's no sense adding capacity. We don't need any more natural gas unless we get an export customer. It hasn't changed yet. No. no It's so new, right? it's so new right Everybody sees the price increase, but most of our customers, the oil and gas companies, are just saying, "Look, we don't know if it's going to be for how long." They haven't made capital commitments yet, Benoit. everybody sees the price increase but most of our customers the oil and gas companies are just saying "look we don't know if it's going to be for how long." they haven't made capital commitments yet benoit I haven't seen it yet. i haven't seen it yet We channel check, we talk, but we haven't seen that translate into any increased demand for drilling or for other services. we channel check we talk but we haven't seen that translate into any increased demand for drilling or for other services By the way, you still need to have the pipelines built, whether it's for LNG or if it's crude oil. by the way you still need to have the pipelines built whether it's for lng or if it's crude oil Otherwise there's no sense adding capacity. otherwise there's no sense adding capacity We don't need any more natural gas unless we get an export customer. we don't need any more natural gas unless we get an export customer It hasn't changed yet. it hasn't changed yet

Speaker 3: One data point, Benoit, is that the active rig count is still below what it was last year. One data point, Benoit, is that the active rig count is still below what it was last year. one data point benoit is that the active rig count is still below what it was last year

Speaker 6: Yeah. Yeah. yeah

Speaker 1: No. No. no Okay. Great caller. On the M&A, you made some comments before, but any thoughts on the current landscape and what about the deals that are crossing your desk these days? What segments are seeing the most seller activity, and have you seen any change in seller expectation given the encouraging signs we see across the industry? Okay. okay Great caller. great caller On the M&A, you made some comments before, but any thoughts on the current landscape and what about the deals that are crossing your desk these days? on the m&a you made some comments before but any thoughts on the current landscape and what about the deals that are crossing your desk these days What segments are seeing the most seller activity, and have you seen any change in seller expectation given the encouraging signs we see across the industry? what segments are seeing the most seller activity and have you seen any change in seller expectation given the encouraging signs we see across the industry

Speaker 6: Oh, yeah, that one's all over the map. I can tell you that the industry is, and our peers are. Everybody's waiting for that inflection point, and we talked about whether March is going to be sustained or not. If it is, then I think that would be really supportive for the whole industry. There's no doubt about it. On the M&A front, once again, we're just being very selective as to which ones fit into ourselves. You've got to be a self-managed business unit. You've got to be profitable. You've got to be well run to be added into our group. We're being very selective, but that hasn't changed, Benoit. We've never changed that. Oh, yeah, that one's all over the map. oh yeah that one's all over the map I can tell you that the industry is, and our peers are. i can tell you that the industry is and our peers are Everybody's waiting for that inflection point, and we talked about whether March is going to be sustained or not. everybody's waiting for that inflection point and we talked about whether march is going to be sustained or not If it is, then I think that would be really supportive for the whole industry. if it is then i think that would be really supportive for the whole industry There's no doubt about it. there's no doubt about it On the M&A front, once again, we're just being very selective as to which ones fit into ourselves. on the m&a front once again we're just being very selective as to which ones fit into ourselves You've got to be a self-managed business unit. you've got to be a self-managed business unit You've got to be profitable. you've got to be profitable You've got to be well run to be added into our group. you've got to be well run to be added into our group We're being very selective, but that hasn't changed, Benoit. we're being very selective but that hasn't changed benoit We've never changed that. we've never changed that

Speaker 1: Okay. Okay. okay

Speaker 6: We'll continue to do M&A. Which ones will we do it in? It depends on what segment. We're happy to do it in any one of the segments, but it has to be the right opportunity. We'll continue to do M&A. we'll continue to do m&a Which ones will we do it in? which ones will we do it in It depends on what segment. it depends on what segment We're happy to do it in any one of the segments, but it has to be the right opportunity. we're happy to do it in any one of the segments but it has to be the right opportunity

Speaker 1: I see. I see. i see

Speaker 6: We love all four segments the same. If we can find a great LTL company, we're going to put it in. S&I, our door is open, and we talk to a lot of people all the time. We love all four segments the same. we love all four segments the same If we can find a great LTL company, we're going to put it in. if we can find a great ltl company we're going to put it in S&I, our door is open, and we talk to a lot of people all the time. s&i our door is open and we talk to a lot of people all the time

Speaker 1: Okay. Just on the CapEx side, it seems to come a little bit lighter in Q1 at CAD 12 million, but Class 8 orders in the U.S. are starting to inflect. Any thoughts on the need or timing to replenish your fleet? Okay. okay Just on the CapEx side, it seems to come a little bit lighter in Q1 at CAD 12 million, but Class 8 orders in the U.S. are starting to inflect. just on the capex side it seems to come a little bit lighter in q1 at cad 12 million but class 8 orders in the u.s are starting to inflect Any thoughts on the need or timing to replenish your fleet? any thoughts on the need or timing to replenish your fleet

Speaker 6: We don't think so. We think we're on target for that. That was a steady as she goes kind of a capital CapEx budget. We don't think so. we don't think so We think we're on target for that. we think we're on target for that That was a steady as she goes kind of a capital CapEx budget. that was a steady as she goes kind of a capital capex budget

Speaker 1: Yeah. Yeah. yeah

Speaker 6: I think what the senior team is talking about here is that I think we're going to know this next quarter. We'll see whether the Canadian economy continues to build momentum. Benoit, if it does, I wouldn't be surprised if we don't up our CapEx for the last half of the year. I need to see the Canadian economy being sustainable. We're just on standby. So far, that was a little bit of timing as to when we order and those kind of things. We're still on target for our CapEx for this year. No reason. I think what the senior team is talking about here is that I think we're going to know this next quarter. i think what the senior team is talking about here is that i think we're going to know this next quarter We'll see whether the Canadian economy continues to build momentum. we'll see whether the canadian economy continues to build momentum Benoit, if it does, I wouldn't be surprised if we don't up our CapEx for the last half of the year. benoit if it does i wouldn't be surprised if we don't up our capex for the last half of the year I need to see the Canadian economy being sustainable. i need to see the canadian economy being sustainable We're just on standby. we're just on standby So far, that was a little bit of timing as to when we order and those kind of things. so far that was a little bit of timing as to when we order and those kind of things We're still on target for our CapEx for this year. we're still on target for our capex for this year No reason. no reason

Speaker 1: Okay. Okay. okay

Speaker 6: We'll have more to say on that in our next quarterly call because we will know whether the Canadian economy is catching a little bit of a bid here in the second quarter. We'll have more to say on that in our next quarterly call because we will know whether the Canadian economy is catching a little bit of a bid here in the second quarter. we'll have more to say on that in our next quarterly call because we will know whether the canadian economy is catching a little bit of a bid here in the second quarter

Speaker 1: Okay. Maybe last one for me, very quickly. You mentioned, Murray, that the LTL still stuck in neutral. What are kind of the key indicators that you're looking at? We've seen capacity tightening in the TL, so is it kind of the signs that you're looking at expecting that the natural LTL volume will flow back to the LTL market that could provide some help? Okay. okay Maybe last one for me, very quickly. maybe last one for me very quickly You mentioned, Murray, that the LTL still stuck in neutral. you mentioned murray that the ltl still stuck in neutral What are kind of the key indicators that you're looking at? what are kind of the key indicators that you're looking at We've seen capacity tightening in the TL, so is it kind of the signs that you're looking at expecting that the natural LTL volume will flow back to the LTL market that could provide some help? we've seen capacity tightening in the tl so is it kind of the signs that you're looking at expecting that the natural ltl volume will flow back to the ltl market that could provide some help

Speaker 6: We tell all our business units is that, "Look, you can't wait. We'd love to see a nice demand push come, but realistically there, Benoit, we're really working hard on operational efficiency being the best in the markets that our business units are at, and trying to gain market share through efficiency and as we say, new AI tools. We tell all our business units is that, "Look, you can't wait. we tell all our business units is that "look you can't wait We'd love to see a nice demand push come, but realistically there, Benoit, we're really working hard on operational efficiency being the best in the markets that our business units are at, and trying to gain market share through efficiency and as we say, new AI tools. we'd love to see a nice demand push come but realistically there benoit we're really working hard on operational efficiency being the best in the markets that our business units are at and trying to gain market share through efficiency and as we say new ai tools

Speaker 1: Yeah. Yeah. yeah

Speaker 6: That's one. That's one. that's one

Speaker 1: Technology. Technology. technology

Speaker 6: Yeah. We're working really hard with our business units to make sure that they're gaining market share. If they gain market share, it's because they're the best in the market. We can't rely that the marketplace is going to get significantly better in the short term, in our view. It's still a good business, Benoit. Like LTL is one of our core businesses. I don't see huge growth, but there's huge opportunity to run more efficient businesses, and that's what we're focused on. Yeah. yeah We're working really hard with our business units to make sure that they're gaining market share. we're working really hard with our business units to make sure that they're gaining market share If they gain market share, it's because they're the best in the market. if they gain market share it's because they're the best in the market We can't rely that the marketplace is going to get significantly better in the short term, in our view. we can't rely that the marketplace is going to get significantly better in the short term in our view It's still a good business, Benoit. it's still a good business benoit Like LTL is one of our core businesses. like ltl is one of our core businesses I don't see huge growth, but there's huge opportunity to run more efficient businesses, and that's what we're focused on. i don't see huge growth but there's huge opportunity to run more efficient businesses and that's what we're focused on

Speaker 1: That's great. Thank you very much. Great call. That's great. that's great Thank you very much. thank you very much Great call. great call

Speaker 6: Thank you very much. Thank you very much. thank you very much

Speaker 8: Thank you. Thank you. thank you

Speaker 7: The next question comes from Tim James from TD Securities. Please go ahead. The next question comes from Tim James from TD Securities. the next question comes from tim james from td securities Please go ahead. please go ahead

Speaker 6: Morning, Tim. Morning, Tim. morning tim

Speaker 9: Good morning. Thank you very much for your time today. My first question, we touched earlier on the demarketing of customers noted in a couple of segments. I'm just wondering if it's unusually significant, the demarketing that's sort of been going on since the start of the new year. Is this kind of normal conditions that we would have seen last year or would see on a normal run rate basis? Good morning. good morning Thank you very much for your time today. thank you very much for your time today My first question, we touched earlier on the demarketing of customers noted in a couple of segments. my first question we touched earlier on the demarketing of customers noted in a couple of segments I'm just wondering if it's unusually significant, the demarketing that's sort of been going on since the start of the new year. i'm just wondering if it's unusually significant the demarketing that's sort of been going on since the start of the new year Is this kind of normal conditions that we would have seen last year or would see on a normal run rate basis? is this kind of normal conditions that we would have seen last year or would see on a normal run rate basis

Speaker 6: I think most of the demarketing really happened last year, Tim, and it just showed up in the quarter. I think most of the demarketing really happened last year, Tim, and it just showed up in the quarter. i think most of the demarketing really happened last year tim and it just showed up in the quarter

Speaker 9: Yeah. Yeah. yeah

Speaker 6: Like last year in the energy space, in the production services, we had some big oil companies that wanted us to do it for free, and we said the capital. Like last year in the energy space, in the production services, we had some big oil companies that wanted us to do it for free, and we said the capital. like last year in the energy space in the production services we had some big oil companies that wanted us to do it for free and we said the capital

Speaker 3: Demarketing in the quarter four of last year, so they don't show up now. Demarketing in the quarter four of last year, so they don't show up now. demarketing in the quarter four of last year so they don't show up now

Speaker 6: That capital is too expensive to replace. Like you're asking us to do it for nothing, like give it to somebody else. Really it just showed up on a YoY comparison basis. I don't think we really demarketed too much in the quarter per se. That capital is too expensive to replace. that capital is too expensive to replace Like you're asking us to do it for nothing, like give it to somebody else. like you're asking us to do it for nothing like give it to somebody else Really it just showed up on a YoY comparison basis. really it just showed up on a yoy comparison basis I don't think we really demarketed too much in the quarter per se. i don't think we really demarketed too much in the quarter per se

Speaker 3: Correct. Correct. correct

Speaker 6: We did. We did. we did

Speaker 3: We had that prior year then. We had that prior year then. we had that prior year then

Speaker 6: Yeah. Prior year demarketing. Yeah. yeah Prior year demarketing. prior year demarketing

Speaker 3: Yeah. The comps are favorable. Yeah. yeah The comps are favorable. the comps are favorable

Speaker 6: There was maybe one, I think, our Hi-Way 9, we demarketed some truckload. There was maybe one, I think, our Hi-Way 9, we demarketed some truckload. there was maybe one i think our hi-way 9 we demarketed some truckload

Speaker 3: A little bit. A couple in the LTL space we did. Again, just unrealistic. A little bit. a little bit A couple in the LTL space we did. a couple in the ltl space we did Again, just unrealistic. again just unrealistic

Speaker 6: Pricing. Pricing. pricing

Speaker 3: expectations, and then a couple in the oil patch. You backfilled it, and isn't it interesting along the way, maybe your margins improve a little bit too. Yeah. It wasn't significant, but it- expectations, and then a couple in the oil patch. expectations and then a couple in the oil patch You backfilled it, and isn't it interesting along the way, maybe your margins improve a little bit too. you backfilled it and isn't it interesting along the way maybe your margins improve a little bit too Yeah. yeah It wasn't significant, but it- it wasn't significant but it-

Speaker 6: We did do a little bit in ContainerWorld where anything to do with freight forwarding coming across the ocean. The beverage business has got very competitive and some of the product that's coming in from overseas, they wanted you to do it for nothing. Well, we're not doing it for nothing. We demarketed a little bit there. We did do a little bit in ContainerWorld where anything to do with freight forwarding coming across the ocean. we did do a little bit in containerworld where anything to do with freight forwarding coming across the ocean The beverage business has got very competitive and some of the product that's coming in from overseas, they wanted you to do it for nothing. the beverage business has got very competitive and some of the product that's coming in from overseas they wanted you to do it for nothing Well, we're not doing it for nothing. well we're not doing it for nothing We demarketed a little bit there. we demarketed a little bit there

Speaker 3: Right. Right. right

Speaker 6: We're happy to give all of the underperforming customers and load nobody pays to our competitor. Go for it. We don't care. We're happy to give all of the underperforming customers and load nobody pays to our competitor. we're happy to give all of the underperforming customers and load nobody pays to our competitor Go for it. go for it We don't care. we don't care

Speaker 9: Okay, the pace of demarketing then really is slowed down this year. Okay, the pace of demarketing then really is slowed down this year. okay the pace of demarketing then really is slowed down this year

Speaker 6: Yes. Yes. yes

Speaker 9: This one will primarily be a 2025 issue. Okay. That's helpful. This one will primarily be a 2025 issue. this one will primarily be a 2025 issue Okay. okay That's helpful. that's helpful

Speaker 3: For sure. For sure. for sure

Speaker 9: I was actually going to ask you touched on it, the ContainerWorld, there was some weakness called out in the quarter. Is that primarily what we're talking about is some of the ocean freight? Like, I'm just wondering what- I was actually going to ask you touched on it, the ContainerWorld, there was some weakness called out in the quarter. i was actually going to ask you touched on it the containerworld there was some weakness called out in the quarter Is that primarily what we're talking about is some of the ocean freight? is that primarily what we're talking about is some of the ocean freight Like, I'm just wondering what- like i'm just wondering what-

Speaker 6: Yeah. Yeah. yeah

Speaker 9: ContainerWorld weakness is. ContainerWorld weakness is. containerworld weakness is

Speaker 6: It's about imports coming in, and. It's about imports coming in, and. it's about imports coming in and

Speaker 9: Okay. Okay. okay

Speaker 6: I think it's a combination of really there's been this buy Canadian push, which has been really helpful for Canadian producers of wines, of spirits, of beer at the expense of foreign buyers, whether it's U.S. or international buyers. We're busier with some of our local customers, but not so much with the foreign customers. Just as consumers have really gone to buy Canadian and they're very price sensitive today. It's expensive to bring stuff in from across the ocean. I think it's working overall, not bad, but it changes your supply chain, and we have to adapt to that. I think it's a combination of really there's been this buy Canadian push, which has been really helpful for Canadian producers of wines, of spirits, of beer at the expense of foreign buyers, whether it's U.S. or international buyers. i think it's a combination of really there's been this buy canadian push which has been really helpful for canadian producers of wines of spirits of beer at the expense of foreign buyers whether it's u.s or international buyers We're busier with some of our local customers, but not so much with the foreign customers. we're busier with some of our local customers but not so much with the foreign customers Just as consumers have really gone to buy Canadian and they're very price sensitive today. just as consumers have really gone to buy canadian and they're very price sensitive today It's expensive to bring stuff in from across the ocean. it's expensive to bring stuff in from across the ocean I think it's working overall, not bad, but it changes your supply chain, and we have to adapt to that. i think it's working overall not bad but it changes your supply chain and we have to adapt to that

Speaker 9: Okay. That's helpful. Just returning to the strength that you saw in March, and I don't want to beat this one up too much, and I know it's difficult for you to have a lot of confidence in sort of what the implications are from the March strength. Is one possibility that it was kind of catch up from earlier in the quarter, and so by the time we get to Q2, we might think of Q1 overall as a bit of a better indicator, or do you feel fairly confident that March strength was more of an indicator of an actual step up in business conditions overall? Okay. okay That's helpful. that's helpful Just returning to the strength that you saw in March, and I don't want to beat this one up too much, and I know it's difficult for you to have a lot of confidence in sort of what the implications are from the March strength. just returning to the strength that you saw in march and i don't want to beat this one up too much and i know it's difficult for you to have a lot of confidence in sort of what the implications are from the march strength Is one possibility that it was kind of catch up from earlier in the quarter, and so by the time we get to Q2, we might think of Q1 overall as a bit of a better indicator, or do you feel fairly confident that March strength was more of an indicator of an actual step up in business conditions overall? is one possibility that it was kind of catch up from earlier in the quarter and so by the time we get to q2 we might think of q1 overall as a bit of a better indicator or do you feel fairly confident that march strength was more of an indicator of an actual step up in business conditions overall

Speaker 6: I would have said it probably would have been a better indicator. Once the things happened over in the Middle East and kind of the disruption in the energy markets that could have an impact around on economic activity, I think people are sitting on their hands a little bit. The people just don't know how it's going to play out. Uncertainty is not good for capital allocation and for people getting aggressive. We're just going to wait and see to see how that plays itself out. It might push off that economic growth a little bit as people just take a pause here to see what's going on. That's what we sense, but we were very optimistic going in. This fuel thing scares people. I don't know if it's headlines or if it's whatever, but people are quite concerned about it. I would have said it probably would have been a better indicator. i would have said it probably would have been a better indicator Once the things happened over in the Middle East and kind of the disruption in the energy markets that could have an impact around on economic activity, I think people are sitting on their hands a little bit. once the things happened over in the middle east and kind of the disruption in the energy markets that could have an impact around on economic activity i think people are sitting on their hands a little bit The people just don't know how it's going to play out. the people just don't know how it's going to play out Uncertainty is not good for capital allocation and for people getting aggressive. uncertainty is not good for capital allocation and for people getting aggressive We're just going to wait and see to see how that plays itself out. we're just going to wait and see to see how that plays itself out It might push off that economic growth a little bit as people just take a pause here to see what's going on. it might push off that economic growth a little bit as people just take a pause here to see what's going on That's what we sense, but we were very optimistic going in. that's what we sense but we were very optimistic going in This fuel thing scares people. this fuel thing scares people I don't know if it's headlines or if it's whatever, but people are quite concerned about it. i don't know if it's headlines or if it's whatever but people are quite concerned about it That's what we're hearing. That's what we're hearing. that's what we're hearing

Speaker 9: Okay. My last question. Okay. okay My last question. my last question

Speaker 6: I can't tell you. I'll be honest with you, Tim. I cannot tell you whether what we're hearing is the excuse or the reason. I think there's two different outcomes here. At the end of the day, it doesn't matter. If they cut back, either as a consumption or in being aggressive on bringing in inventories or in capital deployment, you're going to have the same result. It slows down a little bit. I see a little bit of a pause, but I think the long-term trend is going to be more March-like. Boy, I'll tell you, if we get a bunch of Marches for the rest of this year, we're going to do very well. I can't tell you. i can't tell you I'll be honest with you, Tim. i'll be honest with you tim I cannot tell you whether what we're hearing is the excuse or the reason. i cannot tell you whether what we're hearing is the excuse or the reason I think there's two different outcomes here. i think there's two different outcomes here At the end of the day, it doesn't matter. at the end of the day it doesn't matter If they cut back, either as a consumption or in being aggressive on bringing in inventories or in capital deployment, you're going to have the same result. if they cut back either as a consumption or in being aggressive on bringing in inventories or in capital deployment you're going to have the same result It slows down a little bit. it slows down a little bit I see a little bit of a pause, but I think the long-term trend is going to be more March-like. i see a little bit of a pause but i think the long-term trend is going to be more march-like Boy, I'll tell you, if we get a bunch of Marches for the rest of this year, we're going to do very well. boy i'll tell you if we get a bunch of marches for the rest of this year we're going to do very well

Speaker 9: Okay, that's helpful. My last question, just around fuel and fuel surcharge revenue. Is it reasonable to assume that when we get into Q2, just because of the timing of the increase in fuel prices, that there's a bit more weight there on earnings or drag because of the time lag between fuel surcharge revenue and the expenses? Would it be a bit more of a headwind in Q2 even relative to Q1? Okay, that's helpful. okay that's helpful My last question, just around fuel and fuel surcharge revenue. my last question just around fuel and fuel surcharge revenue Is it reasonable to assume that when we get into Q2, just because of the timing of the increase in fuel prices, that there's a bit more weight there on earnings or drag because of the time lag between fuel surcharge revenue and the expenses? is it reasonable to assume that when we get into q2 just because of the timing of the increase in fuel prices that there's a bit more weight there on earnings or drag because of the time lag between fuel surcharge revenue and the expenses Would it be a bit more of a headwind in Q2 even relative to Q1? would it be a bit more of a headwind in q2 even relative to q1

Speaker 6: We talk about that here all the time, because fuel is our second biggest expense after labor. We're on top of it. I think our business units did a pretty good job of mitigating that rapid rise. It wasn't that fuel went up, it's that it spiked up, and then you're behind the curve on that. Carson, you did some really deep analysis on this. What did we find? We talk about that here all the time, because fuel is our second biggest expense after labor. we talk about that here all the time because fuel is our second biggest expense after labor We're on top of it. we're on top of it I think our business units did a pretty good job of mitigating that rapid rise. i think our business units did a pretty good job of mitigating that rapid rise It wasn't that fuel went up, it's that it spiked up, and then you're behind the curve on that. it wasn't that fuel went up it's that it spiked up and then you're behind the curve on that Carson, you did some really deep analysis on this. carson you did some really deep analysis on this What did we find? what did we find

Speaker 3: Yeah. You have to take a look at what the fuel surcharge program is. It's been going on for, obviously, decades. Really the program is set up to reimburse transport companies for the excess cost. Really, it's a cost recovery program. The most recent guide that I can give to you is to look back at our 2022 results. In 2022, obviously, we knew that fuel prices spiked due to the conflict in Ukraine with Russia. Normally, our fuel surcharge revenue hovers around CAD 50 million a quarter. Well, back in 2022, that jumped. That spiked up to about CAD 70 million in fuel surcharge revenue per quarter. Up quite significantly. If you look at the timing, it was almost identical. Both conflicts happened in the month of February. We saw this little bit of a lag because of fuel surcharge lagging. Yeah. yeah You have to take a look at what the fuel surcharge program is. you have to take a look at what the fuel surcharge program is It's been going on for, obviously, decades. it's been going on for obviously decades Really the program is set up to reimburse transport companies for the excess cost. really the program is set up to reimburse transport companies for the excess cost Really, it's a cost recovery program. really it's a cost recovery program The most recent guide that I can give to you is to look back at our 2022 results. the most recent guide that i can give to you is to look back at our 2022 results In 2022, obviously, we knew that fuel prices spiked due to the conflict in Ukraine with Russia. in 2022 obviously we knew that fuel prices spiked due to the conflict in ukraine with russia Normally, our fuel surcharge revenue hovers around CAD 50 million a quarter. normally our fuel surcharge revenue hovers around cad 50 million a quarter Well, back in 2022, that jumped. well back in 2022 that jumped That spiked up to about CAD 70 million in fuel surcharge revenue per quarter. that spiked up to about cad 70 million in fuel surcharge revenue per quarter Up quite significantly. up quite significantly If you look at the timing, it was almost identical. if you look at the timing it was almost identical Both conflicts happened in the month of February. both conflicts happened in the month of february We saw this little bit of a lag because of fuel surcharge lagging. we saw this little bit of a lag because of fuel surcharge lagging It didn't really impact our first quarter results significantly. As you look towards the remainder of the year, our fuel as a percentage of revenue went from about 7% at the beginning of the year, which is where it is right now. 7% as a percentage of revenue is what I'm referring to. By the end of the year, it was up at about 10%. It would not surprise us if that trend holds, because in a cost recovery mode, if you're increasing the numerator, which is fuel expense, at the same time you're increasing the denominator, which is fuel surcharge revenue, you're recovering the absolute dollar. As a percentage of revenue, it goes up. That's the trend that we're seeing. It didn't really impact our first quarter results significantly. it didn't really impact our first quarter results significantly As you look towards the remainder of the year, our fuel as a percentage of revenue went from about 7% at the beginning of the year, which is where it is right now. 7% as a percentage of revenue is what I'm referring to. as you look towards the remainder of the year our fuel as a percentage of revenue went from about 7% at the beginning of the year which is where it is right now 7% as a percentage of revenue is what i'm referring to By the end of the year, it was up at about 10%. by the end of the year it was up at about 10% It would not surprise us if that trend holds, because in a cost recovery mode, if you're increasing the numerator, which is fuel expense, at the same time you're increasing the denominator, which is fuel surcharge revenue, you're recovering the absolute dollar. it would not surprise us if that trend holds because in a cost recovery mode if you're increasing the numerator which is fuel expense at the same time you're increasing the denominator which is fuel surcharge revenue you're recovering the absolute dollar As a percentage of revenue, it goes up. as a percentage of revenue it goes up That's the trend that we're seeing. that's the trend that we're seeing Just to put some numbers to you, in March of 2022, we did about CAD 19 million of fuel surcharge revenue in that month. In March of this year, we did about CAD 22 million. We're a bigger company now than we were four years ago. I would suspect that our new trend is not CAD 50 million a quarter in fuel surcharge revenue. It's going to be north of that all things considered, if the conflict continues in the Middle East. Just to put some numbers to you, in March of 2022, we did about CAD 19 million of fuel surcharge revenue in that month. just to put some numbers to you in march of 2022 we did about cad 19 million of fuel surcharge revenue in that month In March of this year, we did about CAD 22 million. in march of this year we did about cad 22 million We're a bigger company now than we were four years ago. we're a bigger company now than we were four years ago I would suspect that our new trend is not CAD 50 million a quarter in fuel surcharge revenue. i would suspect that our new trend is not cad 50 million a quarter in fuel surcharge revenue It's going to be north of that all things considered, if the conflict continues in the Middle East. it's going to be north of that all things considered if the conflict continues in the middle east

Speaker 6: I think the other thing that I'll comment about fuel surcharge, Tim, is that fuel surcharge is in response to a fuel price increase. It's not in anticipation of a fuel price increase. We're always behind the curve on that. Unless the fuel price continues to go up in March, it should be neutral- I think the other thing that I'll comment about fuel surcharge, Tim, is that fuel surcharge is in response to a fuel price increase. i think the other thing that i'll comment about fuel surcharge tim is that fuel surcharge is in response to a fuel price increase It's not in anticipation of a fuel price increase. it's not in anticipation of a fuel price increase We're always behind the curve on that. we're always behind the curve on that Unless the fuel price continues to go up in March, it should be neutral- unless the fuel price continues to go up in march it should be neutral-

Speaker 3: Yeah Yeah yeah

Speaker 6: In the second quarter. In the second quarter. in the second quarter

Speaker 3: Correct. Correct. correct

Speaker 9: Okay. That's very helpful. Thank you very much. Okay. okay That's very helpful. that's very helpful Thank you very much. thank you very much

Speaker 6: Thank you. Thank you. thank you

Speaker 7: Once again, if you have a question, please press star one. The next question comes from Walter Spracklin from RBC. Please go ahead. Once again, if you have a question, please press star one. once again if you have a question please press star one The next question comes from Walter Spracklin from RBC. the next question comes from walter spracklin from rbc Please go ahead. please go ahead

Speaker 10: Yeah. Thanks very much. Good afternoon, everyone. Or good morning. Afternoon, everyone. Just focusing on your outlook for this year and coming back to that question you got there and just comparing it to where we were three months ago when you set your outlook. I guess I can understand you don't put in the nation building, you don't put in the acquisitions, you don't put in Alaska. Just looking at your commentary, I think clearly you're saying that the outlook is better now than it was then. In your press release, you pointed to market conditions showing signs of improvement, demand holding steady, supply tightening. It seems that, and we're hearing all of the same things from your counterparts north and south of the border. Yeah. yeah Thanks very much. thanks very much Good afternoon, everyone. good afternoon everyone Or good morning. or good morning Afternoon, everyone. afternoon everyone Just focusing on your outlook for this year and coming back to that question you got there and just comparing it to where we were three months ago when you set your outlook. just focusing on your outlook for this year and coming back to that question you got there and just comparing it to where we were three months ago when you set your outlook I guess I can understand you don't put in the nation building, you don't put in the acquisitions, you don't put in Alaska. i guess i can understand you don't put in the nation building you don't put in the acquisitions you don't put in alaska Just looking at your commentary, I think clearly you're saying that the outlook is better now than it was then. just looking at your commentary i think clearly you're saying that the outlook is better now than it was then In your press release, you pointed to market conditions showing signs of improvement, demand holding steady, supply tightening. in your press release you pointed to market conditions showing signs of improvement demand holding steady supply tightening It seems that, and we're hearing all of the same things from your counterparts north and south of the border. it seems that and we're hearing all of the same things from your counterparts north and south of the border If there is a better top line emerging here, just curious why you wouldn't see that coming through in the bottom line? I don't know if you're suggesting it might be a structural or capacity issue, or is it just caution right now at this point? Again, looking back three months ago, I think things seem a lot better now than they were then. Just pressing you a little bit on why you wouldn't change your guidance here for the full year. If there is a better top line emerging here, just curious why you wouldn't see that coming through in the bottom line? if there is a better top line emerging here just curious why you wouldn't see that coming through in the bottom line I don't know if you're suggesting it might be a structural or capacity issue, or is it just caution right now at this point? i don't know if you're suggesting it might be a structural or capacity issue or is it just caution right now at this point Again, looking back three months ago, I think things seem a lot better now than they were then. again looking back three months ago i think things seem a lot better now than they were then Just pressing you a little bit on why you wouldn't change your guidance here for the full year. just pressing you a little bit on why you wouldn't change your guidance here for the full year

Speaker 6: Probably because of the spike in fuel and the impact that it might have on the economy, and business and consumer psyche. That's probably the number one reason, Walter. That we're just, "Let's just wait and see." We don't want to get ahead of our skis on that. Probably because of the spike in fuel and the impact that it might have on the economy, and business and consumer psyche. probably because of the spike in fuel and the impact that it might have on the economy and business and consumer psyche That's probably the number one reason, Walter. that's probably the number one reason walter That we're just, "Let's just wait and see." We don't want to get ahead of our skis on that. that we're just "let's just wait and see." we don't want to get ahead of our skis on that

Speaker 10: Sure. Sure. sure

Speaker 6: That's something that we hadn't anticipated three months ago. I don't think anybody did. Nobody knows what that ultimate outcome will end up being in terms of their. I think structurally it was getting a little bit better. Now I think people are taking a bit of a pause. Let's see what happens in the second quarter, then we can talk about the last half of the year. So far, we came out of the first quarter spot on with what we anticipated. March was very nice. Let's see if March continues on. I hope it does, but I have to hedge it by being upfront on the spike in fuel could impact consumer psyche. That's something that we hadn't anticipated three months ago. that's something that we hadn't anticipated three months ago I don't think anybody did. i don't think anybody did Nobody knows what that ultimate outcome will end up being in terms of their. nobody knows what that ultimate outcome will end up being in terms of their I think structurally it was getting a little bit better. i think structurally it was getting a little bit better Now I think people are taking a bit of a pause. now i think people are taking a bit of a pause Let's see what happens in the second quarter, then we can talk about the last half of the year. let's see what happens in the second quarter then we can talk about the last half of the year So far, we came out of the first quarter spot on with what we anticipated. so far we came out of the first quarter spot on with what we anticipated March was very nice. march was very nice Let's see if March continues on. let's see if march continues on I hope it does, but I have to hedge it by being upfront on the spike in fuel could impact consumer psyche. i hope it does but i have to hedge it by being upfront on the spike in fuel could impact consumer psyche

Speaker 10: Okay. Then when you look at your M&A strategy and you kind of peek over to the truckload sector, you see a lot more, certainly a bigger rebound going on there. Some of the demand characteristics look a bit better as well. I know when you focus and zero in on Canada only, there's certainly not as many opportunities specifically in LTL out there. Or are there? Are there enough that you don't need to go to truckload? Or when you peek over there and you see what you're seeing in truckload, does that entice you at all, Murray, to go into that segment at all in Canada? Just curious on how you're looking at that. Okay. okay Then when you look at your M&A strategy and you kind of peek over to the truckload sector, you see a lot more, certainly a bigger rebound going on there. then when you look at your m&a strategy and you kind of peek over to the truckload sector you see a lot more certainly a bigger rebound going on there Some of the demand characteristics look a bit better as well. some of the demand characteristics look a bit better as well I know when you focus and zero in on Canada only, there's certainly not as many opportunities specifically in LTL out there. i know when you focus and zero in on canada only there's certainly not as many opportunities specifically in ltl out there Or are there? or are there Are there enough that you don't need to go to truckload? are there enough that you don't need to go to truckload Or when you peek over there and you see what you're seeing in truckload, does that entice you at all, Murray, to go into that segment at all in Canada? or when you peek over there and you see what you're seeing in truckload does that entice you at all murray to go into that segment at all in canada Just curious on how you're looking at that. just curious on how you're looking at that

Speaker 6: Zero chance that we'll go into truckload in Canada. It's not an investable business. It's a job, Walter, but it's not an investable business from a return on capital basis. Zero chance that we'll go into truckload in Canada. zero chance that we'll go into truckload in canada It's not an investable business. it's not an investable business It's a job, Walter, but it's not an investable business from a return on capital basis. it's a job walter but it's not an investable business from a return on capital basis

Speaker 10: Okay. Okay. okay

Speaker 6: We'll focus on where it's a little more difficult, where it's these gems that we talk about. We don't go after the rock pile, we go after the gems. We look at where there's opportunity to generate free cash. You've got to be very thoughtful, and I can just tell you, truckload's not where it's at. Now, you might consider the cross-border as a little different animal now, and we've got to think that one through, because that market's going to tighten significantly. Any demand push when the U.S. drivers are not going to be readily available to come to Canada, that one could be interesting. We'll watch that one carefully, the cross-border movement. We'll focus on where it's a little more difficult, where it's these gems that we talk about. we'll focus on where it's a little more difficult where it's these gems that we talk about We don't go after the rock pile, we go after the gems. we don't go after the rock pile we go after the gems We look at where there's opportunity to generate free cash. we look at where there's opportunity to generate free cash You've got to be very thoughtful, and I can just tell you, truckload's not where it's at. you've got to be very thoughtful and i can just tell you truckload's not where it's at Now, you might consider the cross-border as a little different animal now, and we've got to think that one through, because that market's going to tighten significantly. now you might consider the cross-border as a little different animal now and we've got to think that one through because that market's going to tighten significantly Any demand push when the U.S. drivers are not going to be readily available to come to Canada, that one could be interesting. any demand push when the u.s drivers are not going to be readily available to come to canada that one could be interesting We'll watch that one carefully, the cross-border movement. we'll watch that one carefully the cross-border movement

Speaker 10: Okay. That's great. I appreciate your time. Okay. okay That's great. that's great I appreciate your time. i appreciate your time

Speaker 6: On the long haul, Walter, we love intermodal long term. On the long haul, Walter, we love intermodal long term. on the long haul walter we love intermodal long term

Speaker 10: Mm-hmm. Mm-hmm. mm-hmm

Speaker 6: Yes. Yes. yes

Speaker 10: Okay. That's great. Thanks very much for the time. Okay. okay That's great. that's great Thanks very much for the time. thanks very much for the time

Speaker 6: Excellent. Excellent. excellent

Speaker 10: Thank you. Thank you. thank you

Speaker 7: This concludes our question and answer session. I would like to turn the conference back over to Mr. Mullen for closing remarks. This concludes our question and answer session. this concludes our question and answer session I would like to turn the conference back over to Mr. Mullen for closing remarks. i would like to turn the conference back over to mr mullen for closing remarks

Speaker 6: Thanks for joining us, folks. It's been a full morning already. Everybody's busy. Thanks for everything. We had a pretty good quarter. We were working hard to make sure that we continue to produce great results, and we look forward to chatting with you at the end of second quarter. Thank you for joining us. Thanks for joining us, folks. thanks for joining us folks It's been a full morning already. it's been a full morning already Everybody's busy. everybody's busy Thanks for everything. thanks for everything We had a pretty good quarter. we had a pretty good quarter We were working hard to make sure that we continue to produce great results, and we look forward to chatting with you at the end of second quarter. we were working hard to make sure that we continue to produce great results and we look forward to chatting with you at the end of second quarter Thank you for joining us. thank you for joining us

Speaker 7: This concludes today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day. This concludes today's conference call. this concludes today's conference call You may now disconnect your lines. you may now disconnect your lines Thank you for participating, and have a pleasant day. thank you for participating and have a pleasant day