Question-and-Answer Session
Operator
(Operator instructions). Your first question today is from David Ross – Stifel Nicolaus & Co.
David Ross – Stifel Nicolaus & Co.
First question is on dedicate, Greg, I guess it was a little bit worse than we had expected on the revenue side. What was I guess the reason the customers did not renew? Was it customer bankruptcies? Was the dedicated operation not what they needed at this time? Could you talk a little bit more about that?
Greg Swienton
I think that you did see the earnings declines, I mean the revenue decline, but we had an earnings increase by 4% so that continues to increase. I would say that perhaps in the cases of some lost business, apart from the lost volume from the customers we retained, you have a pretty competitive environment out there. And with truckload and LTL with a lot of capacity, you can expect that there is a lot more competition and a lot more rate issues and some of that business we're not retaining. John Williford if you would want to add anything, you can.
John Williford
The only thing to add to that is the – like in prior quarters, the customers we lost tended to be customers with lower operating margins than average and so in the fight in the re-bids on these customers, we weren’t as aggressive. We certainly weren’t willing to go into a loss on these customers and those are the accounts we’ve tended to lose.
David Ross – Stifel Nicolaus & Co.
And then on the supply chain side, you mentioned diversifying away from auto. Currently I guess you have high tech telecom and consumers as the other sectors. Are you just beefing up efforts in those areas or are you branching out to new verticals?
Greg Swienton
We are branching out to more verticals and we’d like to have a greater presence in those, which I think is the right way to diversify. And John, if you would like to add anything?
John Williford
We’re starting a retail CPG vertical and that’s where CRSA acquisition fits in. You can see the guy we hired in Asia comes out of that industry segment and we expect to hire someone to lead this vertical in the next couple months. And yes, you’re right, we are beefing up our – adding energy into coming out with new products in the existing verticals that we have that are all ready pretty strong like high tech and aerospace.
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