Dive Brief:

• Schneider plans to invest in trailing equipment to support its power-only and intermodal offerings, CFO Stephen Bruffett said on an earnings call Thursday. 
• Power-only offerings also have stability in the market and may be even more attractive to carriers if the freight market were to decline, CEO Mark Rourke said on the call. "Just like brokerage, in general, is pretty resilient through the cycles — I think this has the opportunity to do the same," he said.
• Power-only contributed to Schneider's logistics revenues, which increased 46% in Q4 2021, compared to the same period in 2020. It marks the first time in company history that logistics finished the quarter as the segment with the highest revenue, even surpassing TL, Rourke said.

Dive Insight:

For some of the largest fleets, power-only services have become the trendy way to flex capacity. Usage surged, by some accounts, to a 41-year high once the initial pandemic-driven lockdowns ended and demand for trucking skyrocketed.

Rourke said power-only has allowed his company to work with a different type of carrier than is typical. Schneider usually likes to use larger asset providers within its brokerage. But power-only reaches smaller firms who don't necessarily have trailers.

The service is alluring to small carriers having trouble procuring trailers and provides greater access to different types of freight, according to Rourke.

"That's why I think we have a growth opportunity: because we're playing in a different pool of the carrier community," he said.

Schneider's logistics arm reached 50,000 approved carriers in Q4, which presents almost 40% growth compared to the same quarter last year. Officials credited that to FreightPower, the company's digital brokerage platform.

Put simply, power-only connects large shippers with small carriers who otherwise might not have access to each other, he added. Large shippers are interested in such an offering because they already have drop-and-hook capabilities and are pursuing the type of efficiency power-only provides.

And that's a message Rourke has been relaying for months.

During Stephens' annual conference in December, he noted shippers only see that the orange Schneider box is at their dock. With capacity so tight, customers are less concerned with who is actually hauling it, what the price point is, what service is like or if they have a box available to load.

The carrier has actually been using power-only as a " testing bed for technology," Rourke said in December. On Thursday, Rourke explained that shippers receive tracking information, and Schneider uses decision science to offer up pricing and coverage options.

"That's why I think it [has] such great adoption ... because we're making it easy," he said.