Saia (SAIA) 31 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Richard O'Dell	President and Chief Executive Officer
Frederick Holzgrefe	President and Chief Operating Officer
Rob Chambers	Chief Financial Officer
Todd Fowler	KeyBanc Capital Markets
Amit Mehrotra	Deutsche Bank
Matt Brooklier	Buckingham Research
Stephanie Benjamin	SunTrust
Jason Seidl	Cowen and Company
David Ross	Stifel
Ravi Shanker	Morgan Stanley
Tyler Brown	Raymond James
Scott Group	Wolfe Research

Call transcript

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Operator

Good morning, and welcome to the Saia Incorporated Second Quarter 2019 Conference Call. My name is Diana and I'll be your conference operator today. This call is being recorded and will be available for replay beginning today, through Wednesday August 28. Replay instructions can be found in today's press release. This conference call may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. risks and call statements facts that to number statements made might are looking actual a this and on are of forward all differ that other be subject results This may uncertainties materially. and not historical today's results to our on to more differ. release filings factors that most exact on the press risk SEC could for refer Please recent information cause actual

Please over go start, At sir. Mr. like to conference the would the Officer, Company I the Rick turn O'Dell. ahead Executive Chief to

Richard O'Dell

Well were Holzgrefe, good you revenue, income, the second Financial to for and thank any and for joining not second record the call Chief us. quarter, on morning and pleased and Officer but With numbers today our in operating Operating only operating our report I'm me our history. for records are Chief earnings Chambers quarter ratio quarter These Fritz per Rob Officer. share. President

with X.X% This Second operating XX.X% quarter million. began we've up is grew was incremental $XX.X XXXX. ratio, posted revenue million margin to of Northeast the our income to in expansion our we best XX.X operating XX.X% since and May $XXX.X

I'd Diluted a regard break nearly grew per to to we're seeing and XX% what to volumes to earnings a pricing. take little of minute down $X.XX. and growth share revenue with the like give color terms in

a increase the tonnage. revenue in in X.X% by per by fueled average was activity renewal Contractual in growth remain X.X% quarter. offset revenue decline X.X% positive The second X.X% hundredweight, and

yield consecutive of year-over-year marked improvement. XX also our quarter quarter Second overall

weight shipment row. in X.X% though quarterly third us to fell of decline by X.X%, of a we in grew demand the a terms In overall shipments steady activity, did per see our decline as

month. on is that each Positive note, each was quarter month and improved it throughout absolute a less basis, the negative second decline the shipment year-over-year an sequentially on way

$XXX.XX. and XXXX the as So quarter the follows. second comparisons of to decline this rose wait our X% for LTL second compared revenue for a quarter are shipments from record the shipment, Despite year, to

of to from Purchased haul utilization increased XXXX, in were markets. compared line improvement newer coming and onsite with density capacity our transportation XX.X% some miles better miles of in total XX.X% the

a an in by reduced yields. revenue improved as improved transportation costs percent improvement and from purchase load benefiting X.X% Linehaul average, of higher

of length XXX miles Our ago. a expanded slightly haul to from XXX miles year

improved Cargo benchmarks. from quality us Continuous was last efforts X.XX%. claims training of ratio are perform year's X.XX% consistently against to enabling our

six per stops measures opening and productivity hour Dock the city bills do productivity the headwind a year-over-year past will create year. newer effectively over The despite improve by of and measured terminals another per hour prohibits density these and optimal time. bit productivity, relatively to in flat [ph] were lower of a as terminals

to results I'm the to financial Rob our a over that, go review turn little and call in going ahead more detail. With to Chambers

Rob Chambers

Rick. Thanks And good morning everyone.

mentioned, to revenue total of generated quarter, of in in and $XXX.X As million second Rick quarter second $XXX.X we million XXXX, increase. the X.X% the compared

shipment. shipment and X.X% a in offset by decline a benefited Revenue per in from X.X% yield, weight X.X% increase LTL growth

revenue year. basis. year-over-year modest on with the a key from to A X.X% up the prior surcharge results a which Fuel items benefit comparison quarter second expense impacted few revenue

second benefit employee average X% last quarter, salaries, costs of higher in increase increase benefits an our to in and account million impact quarter. throughout the care X.X% Our X.X% approximate wages and $XXX.X of wage an rose the the average July, reflecting health

as ago. revenue haul expense miles year. a to of XX.X% X% -- more miles Purchased of as flat well purchased revenue trends The due as rate transportation last versus experienced total Salaries, of the purchase Rick as year. a was to revenue million wages quarter percent truckload the is this reduction in compared stable was compared and year lower environment XX.X% a benefits X.X% were in at last $XX.X of line we of essentially percent and quarter mentioned, a year to as revenue

Fuel diesel were a X% quarter to in year X% average the ago. prices by quarter throughout the expense national down as X.X% declined versus the

from also We improved our newer a more X.X%. gallon continued efficient to by benefit per miles and fleet

quarter versus year. severity Claims year-over-year Cargo and insurance XX.X% to the essentially with flat expense shipments prior to related expense in $XX.X year. despite million increase being the in by claims the increased the of prior was jump handled accidents most the versus

amortization reflects continued and to XX.X% real by and grew investment expense our $XX.X and Depreciation million equipment technology. in estate,

revenue X.X% year. X.X% revenue, of of As depreciation amortization percentage last and to a compared was

$XX.X Operating XXX income operating by basis a quarter million XX.X. to points the of second in XX.X% earned to The $XX.X improved year-over-year ratio record rose million to compared XXXX.

XX, capital total million debt debt-to-total June was At the $XXX.X June capital net $XXX XX.X% to was total of Net This compares of debt total XX, XXXX. XX.X%. XXXX million. and debt at

to million compares Net This million net of of half acquired expenditures capital including capital leases. equipment expenditures first with capital in the the $XXX.X in XXXX in $XXX.X were half first XXXX.

between XXXX, improvement million and and estate, our capital In projects, expenditures in to including million fleet forecasted continued in investments investments are real $XXX net be technology. $XXX infrastructure terminal

Now, for I'd call the Fritz over like to some closing turn comments. to

Frederick Holzgrefe

results. moving. this shipments a results second Thanks of stopped with celebrating very than lot We Rob. can't spend never of we really those handle We customers and a XX,XXX past we time find, for shipments quarter. in pleased more business the record day the But our

first three year, new we terminals built In the the in the northeast. the half

for plenty continue to in northeast the a gives replaced U.S. in of a direct of remaining Harrisburg with We capacity also facility, which facility our coverage lease of we build May owned as market Pennsylvania XXXX opened growth the us larger

we terminal in schedule in where markets are terminal openings simply terminal are second planning the have second half also the of our will opening planned, markets six current We're an our outgrown with continue in three northeast. We'll the these to terminals new aggressive additional half. be relocate five these in – in the These capacity.

quarter. plant opening costs third with schedule. opportunities opening the get schedule pace presented pleased the our While of allows actually also We're and to aggressive this that us ahead themselves very this opening forward into offers

XX of new three we've year the in open and northeast less the May a new finish than openings began of since in As our total XXXX, terminals opened in with of planned today, to years. terminals XX

I organic This open since enjoyed it off posted Saia up incremental to Before we margin incremental for like the on the efforts. questions, XX.X% quarter. I'd best kicked by the we our expansion margin second comment in is

view the inherent a operating glimpse the as in think do line, it's While it business XX.X% such that ours. we do not a of leverage finish the as gives I important network

leverage those build our as we expected and fixed in ahead states to I'd geographic to go essentially fixed coverage call over Operator? for the more sought of evidence revenue that network seeing open cost the like With comments, of we costs. questions. certain expanded We're four up

Operator

our Scott Go Instructions] Group Research. from first [Operator take question Wolfe you. We'll from ahead. Mr. Thank

Unidentified Analyst

good Scott. month Hey on quarter? the Rob morning tonnage It's second Could guys. shipment us trends walk you by for sequential through in and your

RobChambers

up in problem. were we May, the X.X% no tons and June, and shipments day per start If were day X.X%. was per And if down In positive, we in down per April, X.X%. shipments up Sure, with look, turned up X.X% the shipments per in X.X% day X.X% April. the was tonnage year-over-year. deck they Tonnage were up

and again, day, up for the tonnage per total the the quarter And that X.X%. down so X.X% for shipments

Unidentified Analyst

preliminary both July, number and have you for do And how tonnage a shipments trending? are

Rob Chambers

the seeing positive -- with We're and in about we're seeing up July trends X.X%. shipments Yes. up X.X% tonnage

Unidentified Analyst

sequential trends Then about talked XQ to Fritz, historically XQ. this or Rick margin you guys have

coming terminal additional I of sequential openings. trend how kind out thinking in called second be quarter? You XX just was of the we off the should about the curious

Richard O'Dell

you week July. know increases the affective As in wage our first

same of occurred decline, at year. historically, had and are there's three deterioration been mean XX so that's end of basis actually some our looking I So I -- thing impact, an in XXX opening some sequentially at about basis we're terminals point with the more September, think a very points. we this of obviously the

Unidentified Analyst

how think love achieved incrementals a we'd we guess about out possibility you something, this given that I on that? the to then we XX event, be be which to award the possibility a perspective or out as get could to Is thinking in that quarter. a as XXXX, the that sub is of XXXX should your second getting And look we

Richard O'Dell

the at our expand most -- our fixed I from company, things in And that becoming we obviously doing you cost our accelerate we've our it's goal. the mean probably think that's Northeast certainly and know [ph] plan. We're positive. benefits leverage, above of are looking and expansion at stated actually going positive way trends initial the Yes, as we're some some We're facilities seeing the available. with

certainly it's to continue we environment I positive, which So think a and assuming we external fully stays possibility. the execute expect well and

Unidentified Analyst

a And could just in through think two sub get for possibility do we I clarification, you that XXXX? years XX -- it's

Richard O'Dell

Yes.

Unidentified Analyst

Appreciate the back time. I'll queue. the hop in

Richard O'Dell

thanks. right All

Operator

from next from question Fowler take We'll Mr. Markets. our KeyBanc Todd Capital

Todd Fowler

Great. follow remarks morning thinking things, just the the everyone. margins. quarter. the your the Good comments Do you Fritz, prepared at couple about of at you're pricing going on of guess up Is to think on I about expansion function the end a you to incremental that that a that's that XX%. got more else with -- of on? environment where something is the there where or you're at Northeast the second

longer and be that do we variability But run about there'd you think we rate the right think incremental quarter-to-quarter. kind for margin what's term the incremental the then, how margins when And of expect the should obviously business?

Frederick Holzgrefe

as that quite of All from into Todd, is I our of we sort and those and I were production the favorable. be with geography, I pricing frankly combined you think in expansion was right. element legacy kind that. this would those I where where our with northeast mean look further we we be, would our that think mean penetrating likely from I are So kind there, that invest about grow incrementals things as of those future favorable what if out think QX, start efficiencies pointed

terminals as incrementals, drag or starts time continue face But Rick be so but for it's of have X. of challenged And also I July investing term, to stuff short QX in up and step to we'll a the going the we to that's going described that a push is think bit sort us, to to in that that little QX for the bit. to some a of new better wait

we of over kind of nothing QX I part that's business I us, time. ends that you'll to to that for think where process, happened continue to new But continue That's think the I time, is the a improve. incrementals what historically. think take I up that. see that's over but expect quarter. happening Now improve don't would see was certainly end, good can that

Todd Fowler

say pull to you to expansion. when question going helps. And the you a That some what comment the had just accelerating understand anticipated, mapped forward, in opportunity in the plant, Okay. relative out? initially sooner about the the there terminals Northeast more more about what made talking terminals doing And is in accelerating you than last that I Rick, response to you are plans or Northeast you're you

Richard O'Dell

mean, strategy. I executing on obviously our we're well

think that I second opening half. open We've to So six three we've to secondarily, more process. you we're opened we've now then, want continue said already historically the going that terminals. to And six started and four in

I'm So prior execution with we're to terminals. and comments well compared commenting more open going terminal our to availability

Todd Fowler

at And allocated fully is Northeast this profitable point a the on basis?

Richard O'Dell

modestly. Yes,

Todd Fowler

okay. Okay,

Frederick Holzgrefe

business. during past, the this as mind keep is pointed network out But in we

So of throughout the elements throughout of network. that our profitability surface

operations So it more efficient. makes other

Todd Fowler

some surrounding what geographies commenting is I and the from of And the the benefit you're flow northeast, to think Right. getting right? on Fritz, might in be there out kind

Frederick Holzgrefe

Exactly.

Todd Fowler

mean the just for me. last one I good. Okay,

of contract on know did, I you'd the environments in environment. you you the yield pricing Thanks. number if if expect if that, general you then renewal around want but the quarter you apologize the put could your to and here the some some You heard share commentary we've a rest LTL Rick for kind thoughts gave of if and year? just what comments,

Richard O'Dell

Yes, to and were to contract very a continue X.X be see renewals in. we operating stable environment

a still cost had been little the anticipated, been we been but so see it's pricing amount lot and the environment good. We environment's a but remains Times The weaker has yes bit than fair yes. a availability, stable. inflation pricing driver environment -- of of So

Todd Fowler

Okay. Thanks Nice for the time. results today.

Richard O'Dell

Thank you.

Operator

Mr. Amit Bank. from our take question next Deutsche from Mehrotra We'll

Amit Mehrotra

the nine some to the an Thanks wonder guys. to just more of those at want that issue. about of to effect network just on the Fritz, the loss It the helps you this are the for about kind from of talked you kind again my better efficiency of ask OR very to OR question was benefits come or attributable did making on on the legacy terminals of Northeast elements. guess the eighty would I in system. results. context, help going the great first wanted runway whole expansion relative decide that I to the having that kind record know and just traction expansion even the two I that Congrats OR. operator. the from gaining in It's that terminals I slightly see. corporate us performance kind -- you to profitable? quarter. Did kind XX think of just OR. have Hi more

Frederick Holzgrefe

be Amit, good you. with thank a [Indiscernible] question. of board So across improvement. honest It to was kind It's the

That's to you've extra this think be saw to you you that infrastructure. if leveraging so part across like all about the in in incremental of ride shipment that the up place and carried northeast. an that make of pick And to pickup performance going a is is Dallas, efficiencies benefits We a the out regions. not Dallas, got extra

Amit Mehrotra

Okay, follow that and that's one that’s stats, related pretty, we're per sizable seeing just are to very as just kind a more corresponds shipment, the And pretty up then, volumes. reduction in helpful. nicely, e-commerce more also weight a the operating shipments of up on but

OR that the can per little impact of does tough impact put you about so second, is being how talk just kind because well. strong side a that helpful just shipment bit what's down, now in performance up it's then, subway driving and think shipment very I of the talk per be and down, dynamic environment as that you shipments one, because So just that rate about would renewals, right weight kind contract OR an the from a that for if profitability to in of shipments

Frederick Holzgrefe

you a related I activity I Sure. same shipment to e-commerce headwind, admit the execute mean mean you continue of amount make are resources shipments, of deliveries a that sort would that for just of much as clearly I bit spending lower us, wafer those that's to we're of growth. right.

kind quarter. So in our were that is so reflected a headwind we in ended it it was up is and with numbers where in but we're we the pleased results, the

Amit Mehrotra

incremental Right. it guess shipment per way, down the if mean even more asking margins is headwind a of on resources would specifically, maybe does so not talk when the wafer are shipment to the can from I'm but when to to I about, that you right kind in hush the just of way do go to I XX% growth the question keep about because perspective? the right weight going shipment, XX% do you you think shipments though basically it But comps think or headwind mean, despite have up, continues -- even forward, that I

Richard O'Dell

about to achieve incremental on going incremental, patterns very Right. think focused I to so we change So those way the as think over have forward, time. obviously to our driving efficiencies shipping we're those drive

trend has all the our to model productivity adjust be do per sort of So, able continues that. that where shipment if you to weight have our have we

we think ship continue of in advantage grow efficiencies, think items I continue is I QX of because trend a that that's continue a a and the be of challenge. the economic to to wait challenge a we that and ranges as where but will can sort we've it a is that simply, a kind but to out of pointed operating our as kind take forward, bit So, certainly out going reasonable of QX, hopefully headwind we where of going for been, in sort the we've that of drive improving incremental environment

Amit Mehrotra

about was the to sequential, XX that is points quarter mean the the I -- extraordinarily And deterioration number because historically weather. key given the because better think you two weak of right the way basis you points just think said was first

higher second So just than it basis bit quarter given still point little the that? strong the number XX think right is should was, a that situation be to how about

Richard O'Dell

but not a QX end get be would there the terminal some of of of QX of that those happening to about erosion openings the are going the talked for right quarter, that. revenue benefit an we we're the Yes, of pulling because towards bit to

have that your getting a We ahead in sense invest of to yet staff. of on drivers

workers trained, leadership get businesses did to develop a internal. some some incremental time -- quarter, that them going you that in if revenue efficient that's not very on of the out get takes for place. dock You is Even work that of But be little bit efficiencies a in too. new to

drag. that's that's the So

about to XX talked of point QX to we XXX erosion So QX. basis sort in

Amit Mehrotra

questions. everybody Okay, my again. excellent. Thanks answering for Congrats

Operator

from next our Jack [Indiscernible] from take question We'll Mr. Students.

Unidentified Analyst

so much morning. the for Thanks guys. time. Good Hey

OR the of of the to is three you're in third moment back that bring sense. saying makes for about the a correctly, like mean, fourth we terminals quarter if looks going got more hearing we've plan what I on cadence I'm And if just So you could. a the quarter. lot to line

-- terminals late third sense? about cadence past getting to you'll XQ, do or leverage we given if the sort we you XQ. should XQ year So think to about bringing some think that normal to in you XQ XQ those able to mean, seasonality think quarter, get I question move of into be on makes that you're those XQ through the the into on XQ quarter as the

Richard O'Dell

from QX impact the I probably think, to of because you're be to normal should I think it that. QX considered seasonality going have simply

little say into holiday, is Yes, trends is QX quarter. based Christmas it's this As like a macro and you impactful on challenged know, looks for holidays where fourth to bit probably with role the us. period often Thanksgiving and early

of advances of might and be the typically quarter as maybe a that'll shipments update give and given know you headed. tonnage we trends of indication kind some some So, where is this bigger during

Unidentified Analyst

Okay.

up carriers to just whether not certain that other places just carriers smaller given where lot guess of opportunities the if elsewhere right look a as there are on some sense. guys tuck do the be I are expansion of that feeling you'd or there's I mean, out And to at may opportunities in there just you I but then perhaps? plans, in are right your curious places northeast you build out some some in now that Now out I M&A sort makes the Northeast, inorganic following the private network, across it's guess there seeing think now, pain scale are like there feeling some

Richard O'Dell

closely. certainly as potential eye think sorts We not if in And our their are certainly estate opportunities are business that maybe But know that an things. keep assets. it's available by execution, creates on also, no opening you there such that on business of real playing adjusted I the as part opportunity of pretty by people and partly also – have driven for tuck taxes the availability some some partly frankly OR then but numbers, small

that I help. So think all those things

Frederick Holzgrefe

I a come would say we're in pursue position sheet, with other a available. opportunities to strong balance would that

Unidentified Analyst

Absolutely. Absolutely, right.

Okay question, over. I'll last hand it

inflection tonnage quoted it's together? right, tonnage day mean basis, my day a per hold easier Just, reach encouraging Q&A that could to third you July numbers that the sort the the is pretty tonnage are on of quarter. just considering the per when third a of if your trends a quarter an see through move at opinion that I it perspective, as point positive substantially number from by we lot get comps beginning front, a the pretty is comp, you on still tough

Richard O'Dell

people I I environment, we've with pleased we're as sort right now, are trends We'll vacation so Obviously, numbers choppy. know a in be the and of and on we're be are for you -- develop. holiday seen or bit could they August dependent a what of think see sort August the that it's the think macro that is far a period period so July. how September can

develops. So that we'll look to see how

Unidentified Analyst

Thanks again guys. time Okay. the for

Richard O'Dell

Thank you.

Operator

We'll Research. take next question our from Buckingham from Matt Mr. Brooklier

Matt Brooklier

Hey, thanks. Good morning.

a quarter. from -- relative end improvement was in the you of performance little that factors but carriers what's think could trying account of June more came in of was more I'm So additional toughest heard your share terminals give pick tonnage from if couple called and that's little a if of the there. the of the towards filed that a part maybe a XQ of any some function quarter peers you get large assuming, potentially month a try that up more a wins, July. the couple line, in your to during a color June bit XQ other there's on just that I maybe terms color We've little there and of tonnage saw for did get number a bit of bit bankruptcy, the are color you to

Richard O'Dell

because I of Rick. opened A our Yes, northeast, is come growth mean from that we expansion large Northeast this the that years comment to to it's you and three terminals when you from for when from portion see continues growth strategy. not I just our two would business instance. to ago new the terminals. opened just and we've

we've we expansion a the historically, participant as week there. gains over executed an seen share the a market five period as So as year mature as we've

as And carriers. maybe to amongst to and terminals more as you adjacent becomes you [ph] attractive coverage also open was current three more our business then and are our other their that piecemeal somebody northeast know

business you where and and of grow from time moving you Fritz good incremental and again, handle purchase provide we load as a re benefit opportunity -- operating we've good seen to that to And business, from fair geography, the then the amount So income, have to optimize time lot a had line then our network. may production, seen of that. transportation obviously then, us we've legacy, and and over your some on is use haul average the over commented

fair also years. amount couple been last terminals the is that seeing over of have there maturity benefit the open -- from So of there's a of

Matt Brooklier

Okay.

I of know kind Northeast. have guess you sounds in in expansion it the all-encompassing terms you So of more

terminal picking up additional of second there. the that growing been a Three a is. terminals to and target something. four seem a obviously in new locations. or just And with the terminals completely then six and the intention to share, is are I outside three all of those You've then, smaller out geography, terminal and be which want those swapping of clarify larger the half, you

Richard O'Dell

of the so terminal And half, also second in end the as in the northeast. actually we're we and new to terminals five additional of are got well. second half the we're that we planned six quoted, then day six openings five relocate of Yes, the going the the them then them new of markets at in in are an four markets,

Matt Brooklier

it. incremental. All Okay. Got That's right. Helpful color, appreciate time. the

Richard O'Dell

you. Thank

Operator

our next from is Stephanie Miss take We'll question from Benjamin SunTrust.

Stephanie Benjamin

I into follow markets the of up. the afternoon. then this and and particular then any good up growth really you wanted can where to just July. point throughout saw quick pockets on the on kind or just Were previously have a to I you we industries strength there the questions he And quarter Hi, had saw volume improve? improvement of follow

Richard O'Dell

for the that individual earlier grow. Yes isn't so really there is and would I a I the say out execute than to us broad Stephanie, highlight tough other based for it's say Northeast continue to I really commented would industries. because just us improvement pretty say call

that based think out I broad call either so it's And by region. into industry us pretty for or with sizeable

Frederick Holzgrefe

got a some also including obviously would that that and successful we marketing of cart for company markets in us, ratio. I specific legacy programs comment have that are very good claims have been Yes, execution

has solid. really been service Our

as well. execute So well positioned the I to think we've marketplace just ourselves in

Stephanie Benjamin

the XQ there kind kind is kind more in it points the maybe of And XXXX, color than that those a terminal generate little about, XXX to expansions higher performance been just we basis basis accelerate XXX call XXX call you I we levers call improvement full into a strong wanted [Indiscernible] last decision helpful. or a some that where XQ of bips I could bit move after XXX about to as of see it the Is the year then weather the to that of turn Thanks. OR some of points. weaker kind this at or disruption scale kind be would efficiency of expectations on after think of to helpful? greater and driven had that's that it point And improvement Great. said of to of for higher

Richard O'Dell

say the would that still into in call. we're last range I we described that

see interesting so to thing kind But We'll how of characterization. the we we I is able develops year, end to identify and openings think we see quarter this that I [Indiscernible]. we're this think – appropriate QX term value. been for adjusted we've that’s comfortable think lead of that's third these at firm’s I that longer buy, stage the the still will that where think maybe investment towards to base, an that but

Stephanie Benjamin

so thanks Great, much.

Richard O'Dell

Thank you.

Operator

We'll take from question and our next from Company. Cowen Jason Seidl

Jason Seidl

providers looking just Now to supply your a good hear alright. guys, peak heard morning. upcoming chain. thoughts. How capacity love about I sort Hey do thanks, would operator, the the you we've of lot different if throughout of go season, at mixed expectations you from will

Richard O'Dell

as bit that into think little months. we the I a cascaded future easier go

the same far let's a feel that have we develops. And about I conversations okay the customers you So, general our been beyond environment was how we see pretty economic with that good. see guess factor, data it. And see

Jason Seidl

fair back is the rates, X.X%? about period, think an to of renewal And history How gives longer-term a contract though fantastic. getting in decade it if because obviously X.X% over long average enough. us we a Okay, the you should go LTL

is in step rate? to going we we should forward, about expect that in time point think that a down how there should where So,

Richard O'Dell

some forever. longer-term and planning, of not within step I are and currently assuming customers appropriately when be would so, is our over not our those going do to increases forecast it think there down compensated But portfolio through we're we we're would that right. types customers, going I think able it's time to of cost. that Yes, being are to achieve

And continue that now. and so, those as then we comes it to -- address we're up doing we'll obviously

that they're whatever. where seeing not where properly X% customers a we're some and increase or are compensated have We being

when So, and to you that's X.X% trying not average a X.X%, mandate we're increase. just not saying

on our how within it's operating depends portfolio customer's the network. It and

Jason Seidl

think conceptually I about early a makes sense. lot CapEx that Now, but net XXXX? know for it's we should of how

Robert Chambers

So, end and we sort year between XXX. this somewhere expect would XXX of of sort to

maybe it's of investment I It's what there, upon like next kind end. that. looks macro out think XX, year, something the the XXX+ closer are XX, depended are that for environment opportunities like what probably view our of the all when

big Because maintaining age really of of fleet investment sort and as know, spending such. is you buckets

So, I range we that environment, where kind is change the there but may now were we've number that of of been. change right sort in think

Jason Seidl

That's color. good a

Richard O'Dell

really to actually and facilities larger Yes, markets adding as a it's or continue out you a it's especially and important to to type comment acquiring even and rightful your built I operation. coveted of have a also expensive very we grow get some break-bulk our now network, would too, facility build if just to you large have particularly growth

I generate impact historically, ahead our door didn’t network look capacity direct our out we have or to we at count build sub-optimally the you capacity. and constraints and backlogs think have it you of our as then would growth And from may need sometimes or run freight margins you as Kansas

of making on very we're those investments focused our growth. strategically ahead So,

Jason Seidl

always. sense. Now, appreciate Listen gentlemen, that makes I time as the

Richard O'Dell

Thanks.

Operator

We'll next David Mr. from question take our Ross Stifel. from

David Ross

much the something than a at is question follow-up guys average. guess asking Jason's there? market on way. you is different Why I contract that to case, that much it wanted or there on renewals I that is were the The higher going X.X% on is else below

Robert Chambers

versus it, our to that some service position for investments We've of network. look and in lot mean, the compensated see. that. similar offering quality of to the I be we're obviously I a our and made a company kind ratio I I and our of execute expect in right. think properly run competitors operating part that's there mean, a out you apparently of at Well, of

So, for its yield there, best-in-class look properly have a some power and our of out good offering product your operators if product that. as our or and be think against compensated quality expand with and of you GAAP expect at a claims a part the we to network and I on ratio, you broader execute and

marketplace obviously a We're executing that customer-by-customer pricing discipline in on the basis.

David Ross

typically into And that yield. for there's wait shipment goes that accounts because in there nothing for

and shipment versus giving that for So, is a the ago are shipments even correct? the weight like-for-like they on year year if basis lighter is X.X%, customers same up you the this

Robert Chambers

bit a an of is odd it right. metric, Well,

renewal, when business have you is have. is up saying And that saying in we base we're X.X% increase now. basically the a across what you're you're that currently of on the you based of got at time, days point business come average looking what So, for we on that

fairness, business goes In right, away, some of the right.

also We gain have price new lanes and as take than may you shopper they well. and may lanes renewal away

we executing it why how I correlation that customer internally you a a look that's operates. the is how but at we well don’t I So, against perfect see to mean are think matric see

which don’t you mix the it changes all keep business or change, your Again, time. always may over

so its saying So, think that. on it's I we our hey in of actually what's going execution more indicative marketplace than a the on of retained XXX%

David Ross

do shipment, weight much to drop X% how the e-commerce? then, And per you of in attribute that actually

Robert Chambers

look, say business. would the And I that's broker across total

mean us a to that it's at But last exactly this the evident we of be compared would year-over-year, industrial e-commerce were and that activity year. be macro shipments the to obviously sort environment related. I sliver look way would for if tough you it that year in that So, identify higher that be

got other That's business. year-over-year the if of ticking probably that and the data's biggest that where of elements that has the It's related e-commerce which look trends is more say a more probably and industrial away. that are at and driver it's you about

David Ross

you, very Thank Excellent. much.

Richard O'Dell

David. Thanks,

Operator

question our from Mr. take Ravi Shanker We'll from Morgan next Stanley.

Ravi Shanker

just had your couple follow-ups recent I of commentary. to Thanks. of some

it e-commerce versus ship e-commerce on can be traditional what us industrial that our but overall that I of quantify the freight of would heavy you of quote-and-quote your the of of e-commerce kind from to year-over-year that Just kind volumes usually? percentage help today hard out you How said the understand side, you much guys decline. just think came

Richard O'Dell

maybe I think but related In that's X% that sort you. ago, statistic e-commerce business. X%; somewhere we X%, of looked at encompassing not was probably that or can residential would give prepped or argue I of A this of all in up to range. number maybe sort year that appointment just is

of as the But too. I the Ravi, impacting supply mean chain know, is that you rest really e-commerce

elements be could businesses other to or a will provider. that our mile impacting move distributor last D.C. So, from of a freight

of I that's the So, sort that think of the but focus as kind trend. a residential sub-step

Ravi Shanker

it. Got

going portion your think it or expect I don’t of five be you be huge be? So, I not XX% years' business that could X% like to to to mean X% it's and in time

Richard O'Dell

No.

Robert Chambers

No.

Ravi Shanker

it. Okay, got

Robert Chambers

following Yes, alright. the It XX% be actually residential now.

Ravi Shanker

of Okay, kind to e-commerce, alluring that and does is that that's kind think just to is say or that’s confirm also, what here just fine. you also understood. when business, And that, strictly BXC of you're BXB I

Richard O'Dell

differences around supply point my chain. in the the That's

could is being The it be simply e-commerce by could residential described So, be us the chain BXB activity. how is right. it BXC, influenced that I supply for but

Robert Chambers

was a packages, them if the higher into mile to first mile is in them lane a as certain used in down final on those warehouse or final right. amount that And like we delivering alright. of delivering business breaking a be taking to those and provider you're retailer, carrier generally to would Yes, take the the smaller average or

people stores. the suppose to be to they're trying customer, to more shopping tend fragmented because are to get I I more retail going to close online

Ravi Shanker

side prepared about remarks, 'XX? tax the how And going you're Can a tax incremental you just, kind cost and on 'XX elaborate much say on exactly your finally be you kind in an of headwind more but bit little spending being call Understood. spoke a that of and spend let's forward. in could what just and

Robert Chambers

our if going So, third the at quarter terminal. I we're as would, open I kind just say, commentary of the was to where

sort they long-term sure any we staff get got the make trained, the them got that level staff such can at we we're got level, service that at be on. productivity operating at so clearly to started provide the appropriate we So, that going to that get terminal that in of are to to place be means going focused operate the them we

kind probably we be quarter. a up shown drive incremental quarter third on translate quarter time. over second we've the of that can But the we the but as So, more just into that and drag the XX% margins completed, time that over little bit on

Richard O'Dell

part. markets some a point XXXX build find pipeline this to remaining open tend terminal for some in facilities targeted have those, of also to be in be having openings -- I to those mean available we we'll we and And to we time but the the we're think smaller markets have more most able not they at that to close

were build geography. closed of those we instances our we would probably and on have have open already to the that expanded So, land in going have XXXX had and don’t any in we

We capacity. expanding our some are own of great

to in a So, what give be XXXX. headwinds of on we're a we're those position not potentially might precise just the in not timing kind

Ravi Shanker

thank you. Understood,

Operator

next Tyler from We'll take from our Brown question Mr. Raymond James.

Tyler Brown

morning, good guys. Hi,

Richard O'Dell

Hi.

Robert Chambers

Hi.

Tyler Brown

Hi.

don’t me footprint picture quick you're greenfield like what's addition plan, a Just but some growing your actually know terminals I I terminal swaps, color on you to clarification big sounds in to any want numbers additional not it have north year? the physical going is because and give this some you but east got door

Robert Chambers

offline, We'll that have we you get to right don’t that have here.

Richard O'Dell

hunch My it's bit, is though. quite Okay. a

Robert Chambers

Correct.

Tyler Brown

sixth okay. then, year, but or missed And leased? be owned those Yes, if it I sorry additional on the this terminals will

Richard O'Dell

to going are be Those mostly one owned. leased,

Tyler Brown

longer-term? terms strategically you but picture you is big guys would be versus how longer-term like this and do Okay. a that of maybe, question where about to think And in then leased owned

Richard O'Dell

for that very us, strategic us to also, so assets hasn’t on reasons. own can that do but focused on our if we're we And mean provides I front changed we advantage we for will a that, certainly on, we access that. market, take That's to the want of that couple lease Tyler of

kind regard we you market we gets the lease it that through as and a property access we as earlier, the later that into to are we we found would market of purchase. Sometimes could able described

of around that. kind the So, that's methodology

reach that know leased access in to us market. greater assets the of than the fact there don’t other that to I that got So, I a that percentage is to say

and road right we Those could assets to we think down now we But where we own if I these the actually generally prefer buy sell strategic. were available; long-term think that’s strategic can. conceivably

Tyler Brown

appreciate it, I That’s it. Okay.

Operator

next We'll our from take Research. from Wolfe question Scott Group

Scott Group

average corporate Clearly should broke average. Saia bit than north you today even, it's thanks how guys, the follow-up. for about but profitable overall Longer-term east quite lower relative the the east, OR Hey the as think margins the north we a right for overall. average market to the consolidated margins in build the density just it

east curious expensive Clearly the to average? can more you be it And region north but as to is if corporate the think I'm a profitable just operate.

Richard O'Dell

very expensive up expect are right that is would now in end where east. you're it market a operate. going to we to And the not over right time I north where we're is

that that those good understanding it So, is of even job do for a and that that identifying in freight cost important that importantly drivers ideal pricing makes more market. we

time terms you passes won't a between same where say although we and probably structure freight or margin lot freight outbound better that exits markets closely that into of or suspect inbound per have and market. market your and think how country can would through get of if in a more cost spread over the have IO the you I in comes the the more balanced the be say that center to market

OR for or lowest but right from to where we we the now. be us levels think now reason levels to impediment where a get of right higher would say be that won't I probably improved So, an I getting don’t it I are see are should

Robert Chambers

are, that market competitors of we if also our as where you in Yes. comment have we place at don’t look I just some terminals the immature there, many there there. pretty would we're as

run us longer it pedal So, run. in

So, efficiencies. some there in more are gain gain you the marketplace opportunity clearly some as density to operating

have there And We over to gain I not you price And as think you some there improve quite good should some as leverage too. and there. pricing you're gain but maturity brand frankly, able there should efficiencies, player time, some jumping we the your in well. longer as incremental strengthens we're be

Scott Group

an overall, should Saia it market? we this to you a incremental average but margin makes a should business Yes, noted below about I mean, as obviously or can of you It average sense. best be think the it as build to good average can't that get for footprint. OR the guys an very get kind

Richard O'Dell

wrapped up a an is of states Well, I mean continue surround XX this revenue we that incremental and markets. be expansion, this to company because north remember going add of it's I infrastructure penetrate this other an when we're east public across to leveraging

a markets just to think longer-term or it to be those in in absolutely I a drag start north to don’t average to that up in but be through get have markets more better freight it drive I the those more benefits network those So, able other it company bigger that's and vent mature benefits freight should more see east.

I the So, win/win for all it's us. think way around a

Scott Group

sense. Makes

Robert Chambers

all home an And will your across opportunities leverage direction across to those. it rest comment it to some flows I if business, opportunity you incremental longer line re-optimize network to and the your network gets have you and grow Even it. more flows of load have

regional I cost just network. So, entire in but profitability cost mean of allocating it's

see some a is that rest of that necessarily of there really are that portion that where efficiency you're going east freight your the to operating gaining that So, ratio. benefitting and you're your north not

to going it rest see that of some network. you the you're of across see But may your

Scott Group

the Thanks footprints. geographic for with guys. clears That's a for of that it seen fair. they've that And That some competitors expanded me. definitely we've your follow-up, lot up

Richard O'Dell

thanks. Great,

Operator

remark. concludes closing turn question answer this any That you back the conference and for today's to additional session. I At will time

Richard O'Dell

appreciate I'll to you. we Great. interest talk for in your it. Thank you, Saia,

Operator

Thank your you, for call. today's concludes participation. This

You may now disconnect.

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