Saia (SAIA) 31 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Douglas Col	Treasurer
Richard O'Dell	President & CEO
Rob Chambers	CFO
Frederick Holzgrefe	President & COO
Todd Fowler	KeyBanc Capital Markets
Scott Group	Wolfe Research
Amit Mehrotra	Deutsche Bank
Stephanie Benjamin	SunTrust
Jason Seidl	Cowen & Company
Jack Atkins	Stephens Inc.
David Ross	Stifel
Matt Brooklier	Buckingham Research
Ravi Shanker	Morgan Stanley
Tyler Brown	Raymond James

Call transcript

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Operator

Good day, and welcome to the SAIA Third Quarter 2019 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Douglas Col, SAIA's Treasurer. Please go ahead, sir.

Douglas Col

Thanks. to quarter welcome conference and morning SAIA's XXXX third call. Good

call I'd begin facts made to make results this conference Litigation statements Reform our forward-looking Private we and be are XXXX. and differ are call historical subject risks to of actual to like the not number SEC forward-looking contain filings meaning refer and uncertainties, within prepared a Please This on for and Act regard release more that Before might factors Securities with differ. actual our may all could remarks, risk to recent other to materially. on the that results forward-looking comments a of press information statements. These that of today's may statements exact few cause the most statements

the I over Officer, O'Dell. turn With Chief that the now Executive commerce said, company's Rick call will to

Richard O'Dell

Doug. you, Thank

on Chief the today me Holzgrefe, and Frederick Chief Officer. are our Officer; Chambers, Operating Joining Financial President and call our Rob

Third tied share of month of SAIA OR team. record opened any terminals last entire of of million; income and and three is per any third that these another a we which in efforts record for record record second quarter include The the the the earnings of was revenue quarter fact the a in relocated $X.XX. quarter in in record results operating $XXX million; were which also quarter of million, quarter achieved the all result of operating quarter $XX.X and third we've ratio had for lowest $XX.X third results quarter; quarter and

we're shipment tonnage on costs quarter, year-over-year shipment and decline, at weight lose revenue continue come see for up don't the challenges per reflected in year-over-year to revenue and on weight yield recent the be grew of continued challenge. environment every was we shipment may softening financial results XXth was per quarter continuing yield Shipments The shipment rate. with and you but a a quarter front of necessarily per improvement. X.X% weight case, workday in this because consecutive hundred out Weight that X.X% success surveys manufacturing piece X% the improvement same encouraged indicates our quarter. the per our workday in our per a being and the and That

yield challenges industry on and the inflationary and front and the has meet other these front, on items. insurance cost cost our unique auto improvement labor Our we must liability to continue

and the detail spike Our more expectations. contributed self-insured Both XX.X Rob in prepared negative quarter, operating despite unexpected ratio in weight in the half will little from variance impacts we the to second health to achieved care saw costs and a in shipment. was in those per remarks. the the quarter continues decline cover prior of his

over existing turn SAIA for supporting both I proposition value enhances new a all I opportunity markets form pleased growth XXXX, of of growth the long-term customers. Rob providing and am Northeast. our I and in with and to service a customers coverage our for above gains, new share offering seamless obviously geographic greater of is rate. market These and the provide with our expansion it execution and we've to terminals Before financial May are of pace markets, Since into how discussion results, say to would opened and new the XX like

I'm third the look for a now call quarter. at to closer to Rob turn the going over

Rob Chambers

Thanks, Rick.

rose year-over-year. wages the third million, the in to operating implemented SAIA's July, effects across to quarter, of item, and prior surcharge increase the the quarter operating I'd quarter of few mentioned the the wage costs which in increase million averaged a benefits of record particular items company. X.X% revenue by that A the to income approximate this follows: As XX.X% to an expense approximately shipments, the the points Also, million positive like point and health expectations. basis yield. a the record grew self-insurance year-over-year rose combination XX.X, impacted in our care $XXX.X ratio our in XX expense salaries, $XXX.X year. key million. Rick by a reflecting and rose we workforce $XX.X size out a negative XX% which approximate XX.X% care versus prior X.X% of of quarter grew Within are from the second health tonnage revenue at in to $X.X improved call, variance Fuel third the costs of outset XX.X% in X% expense year-over-year. resulted as unfavorable half an

level. expense by year's fell X.X% quarter Fuel in the last from third

million diesel prices average a purchase increase of the was and average increased result purchase from year-over-year. line a miles, to price third fuel offsetting third which the In imbalanced as year year, in with by a of This segments. used XX.X% year. $XX.X X% haul were last last a revenue this miles higher result quarter of paid X.X% expense optimizing lower X.X% versus rose versus over miles of truck the associated rail we down percentage X.X% grew by transportation in the miles was XX.X%. transportation PT quarter, usage National somewhat the nearly increase Purchase costs cost

last $XX.X Depreciation moderate year, expands prior reflects more compared The favorably year to from in million to quarter increase the primarily investment expense across quarter. $XX.X million, severity amortization down to and and and XX.X% insurance accident continued rose benefiting the XX.X%, in our Claims in equipment. compares the third period. properties

third the was quarter compared in XXXX. third rate tax to effective XXXX, Our of in XX.X% the quarter of XX.X%

from to to total income million debt of $XXX.X total XXXX, that inclusive XX, XX.X%. At XX, debt as XX.X% $XXX.X to was net-net million This of of was Third million million capital September $XX total is quarter and September compares debt on $XX.X the capital last cash hand, net rose XX.X% year. total XXXX.

million were September leases. period of nine months $XXX.X capital through first year-to-date acquired XXXX. of net million, the the expenditures through $XXX.X in including compares expenditures with capital to equipment capital Net This

to For we net $XXX total expect million. year the full expenditures XXXX, will capital $XXX approximately million

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

Frederick Holzgrefe

Thanks, Rob.

terminal opportunity Before we open get in like time in the eight in able to Long have the new year-to-date Of the to I'd Northeast, state. Outside terminals in in those existing year. SAIA. summarize we Northeast a our Rick over terminal of new minute legacy for Beach, our new been questions, service new XX locate and the in opened are at customers, basin the things to the past open we is in open a the mentioned have fourth years, and market, markets customers. to accomplishments for to opportunity terminal opening highlights we here that this L.A. of This the the opened a up California. closer two-and-a-half to were terminals the multi-year Every we have also standards geography. potential improve XXth This existing take

the and Along year, major terminals including we've Indianapolis. Harrisburg, break existing in this with all new three Pennsylvania opened facilities also relocated terminals,

relocated and our two But which facilities before terminals and had XXXX, Newburgh, New Philadelphia also relocate year, in York. existing of more first opened terminal the the the new We will in we Phoenix end we quickly outgrown.

internally. flows cash are growth performance allowing this us much strong financial resulting Our to of fund in

up year, our $XX million While than investing less is long-term year. $XXX million debt nearly this by this

up comments we open the for questions. before of current brief Now, just on couple it a environment

X.X% While negative weight per impact challenge. a per ongoing is costs of shipments per day a October Month-to-date the lot shipment, has positive, weight that shipment X.X%. on the to across for shipment weight in tonnage and remain shipment day for negative X.X%, an work up are revenue same yet destination. is work network remain Lower down is the shipments shipment final for work day moving for up per

questions. ready comments, answer to we're With Operator? your these now

Operator

Todd much. Markets. gentlemen, to at Fowler, Instructions] question floor would we will Ladies first for very come you questions. and Key Thank Capital Bank time Our this the [Operator open like from

Todd Fowler

given have the might this think the the expecting had Maybe few in with as don't how on And then of on give you're couple quarter well terminal the What but side, OR a late progression can cost terminal thoughts Rob, Rick that impact on know OR sort fourth you the quarter? would openings as be a of the about or I the just quarter? this start relocations? for into the really who that you to openings

Rob Chambers

He's -- XQ. you're there Is impact? quarter asking looking about for the third

Todd Fowler

could about double-double fourth quarter. maybe the Yes, about third Rob. what you you that if impact you. talk into question we any was on should sequentially the hoping quarter, thoughts on a have was the the potential It's I impact and then for how think

Rob Chambers

appreciate problem. Todd. No it, I

we results So that by be impacted points. way the we that XX basis about third would the thinking our it about in is would quarter,

up ended training productivity about others it half back and as end likely million in those costs, things. quarter, us, thinking quarter, of we in hiring we third And all is go the opening the other costs, of third $X results we're incurring For the into impact the range. it's terminals then that the and going our the to the the impact in way QX,

Todd Fowler

on that would and the quarter third top another Is thought we costs OR that? quarter, the quarter sequential be million $X $X -- about the of of fourth if normal So think way third about to million right progression, then versus add progression? maybe

Rob Chambers

basis to be It's going XXX is about -- points. historically curation actually that

going for to terminal openings the beyond. -- be to us incremental targeted the in clearly an plus an you expense share gains XXXX think is the at I our Northeast, in look operating with if impact. support meaningful for quarter quarter investments relocations investment the It's market capacity, and have fourth in

points benchmark by has obviously of for we quarter. mean the And key we're their looked the growth. to one if fourth also basis portion but relocations look we've currently of been we these some other at is capacity, expect of that OR their that So strategies third have that to you approximately impacted I at, invest and performers the from ahead Northeast, deteriorate XXX biggest quarter probably of

obviously we've a anticipated there's opportunities. maybe some of only because the And our due costs, accelerated that executing to also as market in of the plus terminals would we facilities. and higher us success Northeast expansion lease the been lot even we so available operating came And our probably than to kind then have

So it's up more on the operating line front. expense

Richard O'Dell

so So practical gain. got for Erie, essentially first Todd, and purposes are in is last new of which a Albany Buffalo for fourth opened northeast, -- more business the terminals two openings it first Then Those in for add quarter. out you is. kind know, the openings, as -- we've I the quarter, seasonally, real in were we two They as of there's weeks are in essentially the the time productivity there. that the quarter all start open challenging no would that the to

we advantage optimize spring next into can these will, in if the it these you with has an this seasonally new year. but get that great that terminals facilities inefficiency, so place thing -- and The is we look the we change. quarter have We're of positioned So new of this would impact, incremental assets. take that next -- the is to well at

Todd Fowler

doesn't economy kind maybe progression can significant over and investment that about skip could holds of assuming all had, ones So the and helpful. just how me about that's of framework just about a a into investment any maybe what made you deceleration? investment but so and I'll kind expectations, to standpoint, given made general your the year, from couple but comments point, or thinking year margin sort XXXX XXXX think other acceleration Fritz, steady for of give guidance this Rick's sort that the that not of this forward, of pulling -- us some you into you ‘XX, but into have that I we

Richard O'Dell

Yes.

incremental of comment improved So OR environment. that we just XXXX fully I spite a I expect stable, fairly mean improvements soft margins our I anticipation in but in guess of would volume and

expectations the the external would mostly basis kind XXX basis XXX environment. to in dependent for year, our points So targeted upon the of points somewhere and current probably

Todd Fowler

volume something mix? the thoughts just on one just a weight it with of how on you weight with function? into the on fourth maybe per of kind per perspective, just but and a what's Thanks. shipment? thoughts shipment. last about Okay, ask. like Is Is There's from stable It looks I'll specific general the there going couple sequentially, going any feels comments that the environment have the macro right was maybe quarter. And been a your now do

Richard O'Dell

energy announced think already, I expansion look a our at tends weight thought would a it's sector's play Northeast is but be you to mean sure a weight higher per that -- per I'm standpoint, into be that, the that a have couple shipment. board, shipment. I if obviously, industrial softening the not how, to that across higher think from mix tends economy Yes, and right, anyway, competitors it it's I theme

base planning our So from I going is stable here of kind that it's mean of assumption forward. kind

not from and So anticipating rebound. anticipating we not and modeling --we're -- a but deteriorating, don't standpoint a we're cost it

that's I guess it's but our opportunity, downside So the just it's upside of of kind -- from an on right, kind on risk of the potentially perspective, a should improve. kind things

Todd Fowler

over I'll the to Okay, somebody Thanks time. it turn for makes sense. else.

Operator

Thank you.

come Scott question Wolfe from Group, Next Research. will

Scott Group

thanks. Hey, Morning, guys.

about of is you're be margins: now continuing sort terminal shipment sort to and the other So you per a headwinds talking than longer of one headwind two to thought. the just maybe is weight costs

tougher of year? sub now per message get away? if do are next terminal somewhat we be we that but the shipment, of to we're rebound that a see what sort temporary, should maybe sort maybe costs Is is OR for don't XX in So we taken is -- weight to a hearing the

Richard O'Dell

all I it that would it be No, makes on margin right, the volume some two at years quarter, were our -- would some were -- half we've on the where our a the we if ended terminals time and volumes plus Yes. from us. our the -- we but ago a to volumes by part third margin the disagree that has were and impact up you up has -- of year. flattish look above terminals kind opened legacy be the said, this clearly year-over-year, and with that, some wouldn't would supported market That Northeast, anticipate maturity XX% even standpoint, for of our the open volumes from -- being and -- the

pretty still that that continue due seen we're right, anticipate to share above but only we legacy networks, market would the because in the some others. seeing have from Northeast, in not our compared tonnage negative some would good our flats gains. we to So we've of to tonnage And

Scott Group

full Do in X.X of just benefit tonnage we're full opened Right. guys you gave seeing us? think you in you think the of a on plus whatever September? Do benefit we're October seeing you that the

Frederick Holzgrefe

one opened are that mean you XXth. Scott, I No, about mean -- of way those, -- on was XXth. the think those I Albany on them the the opened on

is. an I Immaterial So early, does impact. it not it's so if think don't have -- it it

Richard O'Dell

but and all that it we facilities, your at for density in be When a the headwind, apply over revenue the gets made once cost. so production -- as right? than to And again, more a year, not apply Year-over-year time, to look new continues the XX% investments up that well. there's you as because of materially running the coverage run openings, incremental that that about in terminals you open we've been you're routes terminal the then into rate much to and is improves those productivity have

Scott Group

Right. GM? you from you of Can impact -- tell an seeing are much

Richard O'Dell

all. much auto industry We don't at in the play

that's it. parts; secondary about Some

Scott Group

per the And as where we've And [indiscernible] pretty we've a weight been. impact meaningful up that with shipment, from per in that's dealing I the deceleration X%, but Okay. then the get been just well. shipment of earlier year on

So, slowing? about per a is after giving should up we mix? price is shipment? bit we little that How this tonnage [indiscernible] think of Are sign pricing going a this or and

Richard O'Dell

even you I it, contract renewals so mean, it per actually shipment was decelerated, And renewals, at this, look as a when you bigger were Yes, fair if on a right? -- impact bit, yield have have amount, right? right? a offset your historically, per getting efforts, our you your a well, if though at while we you partial tell down, look come little impact there rates renewal So I contract contract our was then down your from shipment. higher And weight the coming to weight due even

Scott Group

you renewals? contract it give the I you Did did. us if missed

Frederick Holzgrefe

point quarter -- X It's X.X%. third the was

Richard O'Dell

right? for If just to the you year want though, it you -- give let's give

Frederick Holzgrefe

so QX X.X, X.X quarter to is date. the Yes, and look X.X, if you then then at

Scott Group

time, you All Thank Okay. guys. right. the for

Richard O'Dell

it's yield Just right? general as not it's environment, particularly anymore, mean comment high single-digits the -- environment, But I -- considering the rational, not volume right? think I it's

Scott Group

it. see get that. I No, I

guys. you thank Okay,

Richard O'Dell

Sure.

Frederick Holzgrefe

Scott. Thanks,

Operator

Thank you.

from will next Bank. Our Mehrotra, Deutsche question come Amit

Amit Mehrotra

wanted, Thanks, comment on question. if wanted point just the XXX I Rick, operator. Hi, I more… XXX to guys. I to that's maybe in Thanks the XXXX for improvement I know back basis point the could, taking basis circle with to respect just OR.

Richard O'Dell

volume I I mean, said environment, environment. XXX different was to even we've XXX. yield in We've But And right? said a XXX to before XXX. said that

So I ahead. environment. of external sorry. reflective the stepped more go think ours we've you down, But of as I'm know, kind

Amit Mehrotra

kind fine. And that's on talked necessarily just in wrong more to maybe you've that, I conceptually guess revenue more the it's I historically in XXX that. no, industry. of about makes because business I the the not in question levers could XXX think and work of relevant how No, cost the terms guidance. be

So correct this third I had why year quarter? a lot unabsorbed given framework wrong. greater me that what that of make basis hundred on and shouldn't basis costs next the I'm it reasons think in the be much kind the this deterioration better, than XXXX, year the just quarter, explainable XXX in seasonal than in of if talked point that OR There's about. your to you for fourth point better costs that XXX right that you've the would progression year should But

for Is XXXX? talk go really really that about of to terms about you shaping to than conceptual So we how out kind if in things that's ability way business, that? of better the just that how much their should you that could because see is about do or think a just

Richard O'Dell

come And our it's what some guidance, the a is I yield costs that average obviously this yields, get see tell going that, like. I market's you opportunities have to indication we're somewhat just what not going And what into the of we opportunity. on of to fixed year. It's anticipate look made then headwinds -- yield I going in are think right? an material investments the And that on we we've we're of are able above necessarily depends anticipating all, but as that some what think those comments then be think like, an still on us depreciation soft being to to volume numbers. environment. which We're I comments first would kind opportunities -- within can't

Frederick Holzgrefe

cost would inflationary. I business underlying mean this have to on costs add And side, in I remain

So over just that things you doesn't the macro about. talking those that so year to backdrop things that Rick numbers flip that that up described, let of the -- cost the side, think -- get I kind of next combination we're the those

Richard O'Dell

may Fritz in mean I I better. And like being investments good to synergies we a make margins And a with there some we incremental comments, mean period density manage technology and said, rates opportunities couple solid our to continue business our have time. over of to that to run some have apply current see we make good, for and but synergy feel opportunities

Frederick Holzgrefe

in I from business, pretty how costs monetize some the optimization, to network generate schedule making, The critical, we're enormous offset those everything are are efficiency. help those software, terminals, an network our for schedule and we're make substantial how In pretty -- all things described. right? we we it, for it's will decision all inflationary sort drivers, data see how through that Yes, of then and to or in some those we that tools -- labor, this things our us productivity amount drive of our handhelds investments optimization those better we that and some But making that investing our things either dispatch network, opportunity of that we capture data.

of some So for there's kind of I -- offset think think I us opportunities that. that to

Amit Mehrotra

some the Right. that, about expansion network And of you east us Northeast related about the is. think you what benefits the talked the density is lot and uplift think some know, or about and the class of the go how and Northeast see there. there kind to also, that Fritz, predominantly -- in are come kind to to think the overall density you, think, to the in density more of west and the a build regions, about some the talked of total further density no? one going best regions? When other moving or in me, There's now, I your there's further and gives past, OR to the much of going you company and OR the is even OR, help you've from just talked from things of further Fritz effect Maybe, about about just there, just more Rick to opportunity kind room you've of network the excuse there get

Frederick Holzgrefe

have Relocated the customers. can't to now, that attention support get operating better you're simply country, and highlighted later Long some from Indy say opportunity for the can to are of that. their if country XX I to in those I'd will look all you regions the of leveraging elements create and for center the some benefits from contiguous they're better because ones of in best in their the there, network. customers; that directly added. improve state class best mean time, are we that performance the internally call locations. think I those that mean simply that's service we've the our growth. -- at that right? Beach, reach additional that benefit because mentioned operating benefiting year, coverage. legacy mean their to operators all But they at in effect efficiencies terminals -- we us your out seen Northeast leverage network of continue, to are were we've help this They Northeast having we've the can not look But I us they leveraging we're our Phoenix where I greater regions over -- right

us we well. that leverage assets be actually -- effect you'll as as able as is So it's customers. that the That scale of we also states, to the service -- this see related XX we business better to

Amit Mehrotra

want understand talked survey as just And just mean is for guys I you I of [ph] about question work to service do use they perception customer I of this last me could, Mastio OD earlier to evolving the kind a and how the if volume. And -- showing just how the quality perception perception how guys is and their your service look kind widening customers in volume I'm you service competitors. at interested is is and of grow you shipment significantly. your pretty actually gross actually to deep how week Right. relative perceiving grow and the as that

Frederick Holzgrefe

that did Well, would that data, growth our the -- are that what saw with We're they experiencing do a lot improvements is directly to well. we related that. see customers when with Mastio as we we've point business we scores I -- -- our in of add SAIA. success what's we or seen pleased would I to think

They driven understand look, you by of acceptance mentioned but markets Northeast flattish customer that's a quality from that they been what our the think the of has if real significant, customers growth and growth, I we earlier the and in ultimately So sort what us. of we're is in understand measure thinks. legacy the service our customer get

Amit Mehrotra

Thanks Okay. it. questions. lot, for guys, my Appreciate a taking

Operator

Thank you.

from next question will Benjamin, SunTrust. Stephanie Our come

Stephanie Benjamin

an acceleration of additional wanted in year. you touch update open back can turmoil Hi, provide opening stand on bit this of in looking maybe to was a on of terms good And Northeast. Maybe morning. the to where the expansion you just I plans. terminal there an

open can northeast, only So terminals us of also but terms the XXXX, what provide of in existing of expanding new also well. to Thanks. not in you your in update an maybe locations how view that you in means markets as kind

Frederick Holzgrefe

of have I the change little launch saw -- this estate and is planned. real environment more an or So accelerate the to opportunistically organically take move originally a advantage the way we could saw case in bit in our is opportunity than the was we available if this of that original we quickly this we Northeast, idea of we year, down -- from in what and slow to that the point done or

did we So that.

one So Northeast, that here think look next Those -- Northeast end the really into on I now of the of specifically added and you the year. we've optimizing maybe year, of next probably on September the into October. in our focus as focus there's pipeline, middle be two that'll to will a the from five kind the be there's

opportunistically say now. that. came that our that's up, take right that's kind But of wouldn't we In not Now advantage most something -- there's plan the to that of if of the markets, we've the may an -- us the and -- that be a in what pursue one. to to seen, tend opportunistic opportunity exit legacy somebody where gives more facility typically

investments That's significant we opportunity have big some would or pretty that some the expanding year But got one. that We've operation our in improving a terminals well. just existing for that us. be as and that biggest terminals building. we next have relocating we're facilities currently is Memphis the probably

Stephanie Benjamin

chance house a during trends you. tonnage the for there could of that's sequential more And keeping just item, And through a and helpful. it you is the walk really that's shipment me. Thank Great, quarter?

Richard O'Dell

Sure. problem, Stephanie. No

up tonnage shipments X.X%. up go And X.X% tonnage started August, In up September, X.X%. were we in up So up up shipments X.X% was and we back, when shipments tonnage was were X.X%, were July, in X.X%. and

quarter, up X.X%, And shipments again X%. the for tonnage so up full

Stephanie Benjamin

Great. Thanks so much.

Operator

come Jason Our next Cowen question will from Company. Seidl, &

Jason Seidl

you, Thank wanted circle Hey, operator. morning. shipment. your weight gentlemen. per to to I back just Good

numbers? however, have bit and that more there actually a focus you it we the little You a was Were Is improve? down of talking the something seeing on bit. in expecting spent in ticked call up time same it's to it; as why or XQ is sequentially this about about a you're lot it else

Richard O'Dell

$XX.XX, has little July, we in were a deteriorated mean through it the right? I bit actually So Well then… quarter, and

Frederick Holzgrefe

down $XX.XX. Yes, $XX.XX to and we dropped

Richard O'Dell

$XX.XX and now $XX.XX. it's

Frederick Holzgrefe

of Yes, so deteriorated the through kind it quarter.

Richard O'Dell

anticipated a were more looking headwind would bit at right? a July, than we That's when of have we

Jason Seidl

No.

see continuing fourth the quarter? you Okay, deteriorate enough. to it throughout move we And fair do as

Richard O'Dell

revenue of whether pretty to and ascertain it's I necessarily. sound to you much. XX But it's we get tend because that, happens weighs pounds it pounds move be phenomena exactly from a mean happened just at Not when has model paid. it is of XX XX look -- same or it it where to kind cost tend even to it right? came kind And the more, something per it odd odd how it's hard the very kind like XX we basically, an an how in we shipment, impact, to flat, doesn't pounds but or pounds big of

Jason Seidl

Right. renewals. contractual back That's want your I enough. All switch to color. Well, fair good And right. to

prior high weren't obviously, acknowledged stepped another single-digit really are you call those Now even down, they've sustainable. but numbers in think I --

to So that they're still quarter? increases. that gave contractual step number even us, rate contractual the down were you pretty good that in the you expecting Because increase

Richard O'Dell

I you to and renewals there. how a several the just So that, last little cover would we've been with say our it's if weight right? compared I Yes, providing over that quarters, offset partial contract look we just even to disagree higher at seeing were us it shipment per decline, right? don't a performing was less bit that giving

Jason Seidl

the about you sustainable, and you XX% is ask terms of the were different I But X% of you able increase what for what in rate increases terms to know you that to achieve thought aren't going let in in guess get knowing were that quarter, a you've to got XQ? in what me you way. number the before rate

Richard O'Dell

Yes.

Frederick Holzgrefe

Yes.

Jason Seidl

make Also this. understand want for enough. a little one, to nitpicky probably a bit of but I fair I That's sure -- it's

in care that's at one costs of XQ? $X.X You quarter. the expect end we in Is that million nature in mentioned time more to reoccur shouldn't something the that there health was

Frederick Holzgrefe

health expense Yes, about would be costs tends and little the way -- kind bit the through just of we the to that That would that, in up run increase a saw probably-- volatile quarter. that's I care rate down. think

health -- cost we cost business inflationary. kind underlying of that doing of us. probably That's know costs care are for the So the

So it was it in we try an than plan higher was higher for impact costs; for just quarter. the We expected. us to

Richard O'Dell

And we're should in the stats see we thing that we're but it's may and the we on time volatility think if visits should can't for had initiatives inflation quantify the do I term tell we've the because impact expensive we're up over so some we're can since that I'm but impact have before. do to this volatile, of back near wellness dividends not investments combat that. particularly seeing the And you a it, that, way that right? paying this will doing more environment that one-time a mean you'd clients, obviously, self-insured, really until pay health probably signing are only self-insured time, may doing making you but and some anticipate all that's care. But But was -- I we necessarily seen this somewhat over some that

Frederick Holzgrefe

It's underlying our goes know going It pretty to it's we're inflationary that. we are -- And the costs up, underlying. business. underlying earlier comment,

Jason Seidl

Okay. the team, appreciate Rick, time as always. Fritz,

Operator

you. Thank

Atkins, will Stephens from Jack Inc. next Our question come

Jack Atkins

taking guys. Thanks much my for morning, very Good questions.

picture months And ago we XX So of your are versus, today of costs. with, of inflationary sort kind the are guess use the months effort -- and to opportunities XX taken. a more to well sector a seems about point kind start transportation in I just bigger broadly, think costs question, on playing off an within there I but to and drive out when to lot technology technology role of like that's it

So down costs in can expenses, other line are realize next there an some some find months sort or all of whether your technology the shipment over in to of cost opportunities to XX you months ways maybe to sort check? per to effort XX guys expenses, keep investments that for maybe it's drive

Frederick Holzgrefe

optimization area Jack. haul, for to have the ways of our actually efficiency, every the operation on projects thanks about driving starting better Yes, question, and focused with network plants, out schedule. We line figuring just in productivity

line have from being Clearly, to costs, state better to support that to to we go be that. into a where equipment operator, schedule position got move XX XX labor hauls we clearly we also a about in state that change operator think because costs a you the As that. the can

focus starting in pretty that year. would invested benefits projects. expect we've next those that, heavily in So a from big We're early see to but to be we

are schedule this our terminal our -- implemented year and also in allow dispatch folks We technology operations to P&D new assets. that better deploy our

offset -- better data, or decision our inflationary then it a generates with we know, we better The that service opportunity capture the point defray customers. and we a the more same amount you make as those At it's quickly; you business time, a So tremendous some data to can have this out. as of of costs.

are big into projects XXXX. the for So a it's focus -- us

Richard O'Dell

just have side haul we that just our would terminal from brief longer do nationwide for And do kind same is we other of haul one and benefits line ascertain the our current haul some line that. thing the a comment be tonnage optimization would to it's the re-optimize that coverage, tell planning is our on you people also would project obviously expect there constant And flows. the I a specific network to more over expansions in one doing

So of resources to are optimization allow basically currently actually, right? quite spent us that slowing should on expansion the expansion, add to our frankly, reallocate

Jack Atkins

Okay, that makes sense.

about Or And I include sort from think in so, to really for outlined? something of basis guy that that about of year about you XXX of margin guess, basis you relative point be Rick, talking a year productivity mean goalpost improvement, items numbers you next just that OR next as point good I thinking earlier? XXX benefit those to that terms much does were that is that those could

Richard O'Dell

with a industry. what about it But the disagree -- looks you I -- be. uncertainty yield there's Could don't I at I amount in mean, and could environment looks volume like fair be. and the volume that yield think underlying of

there's they obviously two those if come things upside. do together, both all And other? if So they each come offset -- then

Jack Atkins

Maybe of definitely at the the terminals relocated, just we of this little different and the doors to number doors network added look today No, way. sense to about over a we rate trying 'XX. next get you capacity how do out year? sort I to the of of end about relative thing sense. I'm terminal question a that broadly, your makes 'XX this And -- expectation year play follow-up this there your been sort a end you've then more of added think that Instead kind bit year just or strategy, number growth added about be year could verses Okay. it for it the and network. what expansion can this just want around thinking I that you've for months? the what's then XX of that's within And think utilization as capacity from -- a network a guess

Richard O'Dell

the $XX.XX. a of doors. XXX 'XX, we've we just So at Northeast alone, doors you to the in give capacity XXX in XXXX, had perspective so $XX.XX we had enhancements made

increase. over this XXX that's quite At we on 'XX. on our terms exceeded the it's and, low as going of doors, we're in up XXX% of to end year, XX% And we've So the increase acceleration then that at expectations a share base, obviously, commented we've be a frankly, had, so own there. $XX.XX gains

Jack Atkins

Okay, broader on it's point, the relocating curious a your network, though, the that's I where basis. within And of great. Just sort then you've been things it to -- your know outside Northeast? terminals. count Have of door expanding been you consolidated on stand

Richard O'Dell

again, dock you're tonnage, out, then been, expanded expansion definition And having you paid haul organic cause they've excess off the clearly we've constraints, things our strategy right, operation. by both and of do others look your that right, has because capacity at you through as in flattish type the inefficient that's for if as gone have We and that to you densities which not capacity. on on build line a

Jack Atkins

the it. guys, for Okay. time. appreciate you, Really Thank

Richard O'Dell

Sure.

Operator

you. Thank

David from Stifle. next Our come Ross, question will

David Ross

to but year cargo I if ago? talk I don't versus a a where Yes. know quarter they Good morning, it, gentlemen. about were planes. We're in missed going

Frederick Holzgrefe

It in this quarter, XX was David.

indicator. you operating think bit as and slightly locations. year a ago. that's The -- It without those -- metrics new of it I all also little bring or trends and And tends in is before deliveries to up exception been a exceptions be that a around have a of lot such, little expect people underlying with lot bit a of of from a was trailing you would new improving.

to we that into into next better So see expect QX the and QX year. getting from

David Ross

become Fritz, a you as and then grow President guys responsibilities? the up Rick and And how CEO do you divide and organization, bigger

Frederick Holzgrefe

more come and execution up So operations so we our on tend do, your to focus on you I let part.

Richard O'Dell

culture team, a know, on together, could I see but closely of leadership you only don't. that, but And Yes, that the And I rest and just that I comment Right, We we're work and approach. as not responsibility. team approach the a comment strategy. to guess opposed work we as an Fritz would not it carve team. I I, I

than leadership, some return six participating picked provide you functions, up picked in core he's know, since up some periods he's picked the in again, Group process responsibility, gauged Rob and technology finance prior Operations no up obviously our but as and pricing specifically improvement. function other has So came that for does in or things And, it that up investments, everybody strategy well. but know, Fred incremental picked as different else. Again, whether and be on in good he that's headcount sessions, you the

I So, approach. we team view as it again, mean, a

David Ross

management to was reprising business. of focus for strong peers. A that your at due just then, there's last, the yield outperform eight or It was been you seen a And know underpriced. lot years, SAIA nine from XXX say, and revenue we've

mix inning afraid lower were price? What in out, was network we change performing better getting do the business at you right performing for freight where you trade type to think the yield able the and strategy business. of management Some you want overall were in

Richard O'Dell

I would mean, know, versus competition, constant yield David, do you the a and about we process. as well. know, that, lot before it's you is I've talked of you have the a we the But, GAAP. this biggest you benchmarking comment know, GAAP that to just and continue I

position including price do marketplace, business you've control, environment, we've but pricing change obviously it's, anytime a seen So, control you it's know, know, don't immediate the including, we change we on how balance business mean, you has tried an materially clearly volume. and your external between we their I us, I on to think we with those, in but, who the and materially impact basis, to anyone who's tried an there's

investments make think strategies and experience, technology well go marketing much initiatives of you're think have too our people some to But you continue enhancements push paying of So, tried to it's levers better getting but as, and dividends. analytical to we think to I And science part would think its at and I I our investing I part our art. and with and market both comment, fast. a too aware know, we're I

on had business. unfavorable So, it's them, fixed we because impact a you generally cost network and high have fairly an know,

don't what I so right clearly that the reasonable pay slow And I would apple you, we we're the would it direction, but I in think doing just call upset moving it probably so we're tell to cart.

Operator

Thank you.

will next from Research. Our question come Brooklier, Buckingham Matt

Matt Brooklier

morning. Good thanks. Hey,

also in so terms down terminals you to So just maybe terminal It sounds be could ahead is and terminal technology us gave maybe investment much expansion a because success a the of rate progression. bit this I point lesser XXXX, thoughts had thinking he at at this is think on maybe the little you going talk like Fred you the terminals, finding opening to versus expansion up. year but know, to just be some guys but

way your just of So kind preliminary winded on long a asking thoughts CapEx? of XXXX

Richard O'Dell

a next even was mean guidance XXX year those this shift I bucket buckets revenue about I our to consistent IT the it to but made year, think been, we've it and bit the leased which you expansion, real between will may would equipment, in we slightly down in may dollar where know, a be around of this CapEx the little that spend say things. estate, of when them the of be, for shifts relates XXX. what with relatively as investments experienced to But just year, capital. total terms us, lot relative was the we types similar facilities likely have and absolute

significant next other off drop expect the we So, year. a don't

MattBrooklier

kind And can number know, we we you was of get hoping September the but tonnage what tonnage that I into then, the it. back September it, got Got growth?

Richard O'Dell

September in growth tonnage X.X%. Yes, was

MattBrooklier

Okay, and then question. last

your capacity guess market in yourself could facilities, currently legacy take markets you by You talked how excess network? the about expanding in place much positioning the you as to a have

Richard O'Dell

entire just question or have in network network? excess the we just much capacity legacy how in the Matt, the to is, clarify,

MattBrooklier

think the guess, in you capacity entire have best more... right network, you excess do how know, now, So much if we

Richard O'Dell

legacy, I to to at I look probably XX%. say were the mean, I if XX% would

mean, in plenty plenty in now. strategy there right the in capacity that capacity XX% the we to into of so there's the obviously, northeast XX% there You so bit can the grow know, is in I to get assets our a of legacy.

Operator

you. Thank

Our Morgan Stanley. from next will come Shanker, Ravi question

Ravi Shanker

Thanks, gentlemen.

Just a here. ups couple follow

function per a in weight think that shipment. the is little your driver just shipment? about I is mentioned unexpected? that the natural a that you like mix that something earlier of of weight for expected And more, responses headwinds affecting in Northeast one in you bit Can indeed a northeast? on of elaborate some or business the Is of

Richard O'Dell

shipment. don't it's general close to our of driver just and weight less it an inbound But Northeast was I think a big comment. market more it's I a obviously industrial market per an is average think of further the the go and you

Ravi Shanker

just it like of was and nature the unexpected. this like sounds something of not northeast part It the

Richard O'Dell

Correct.

Ravi Shanker

player that, state so their meaningfully. of one off to be improve you, you XX network if mix accounts, of kind also state network the national lot talk large operation in a have being is which, in scale, steps benefits of players to just we've for everywhere? freight a the you of be the forced on seen reduce cases, of the scale, find drag about some just of given of a to their give of you're and And spoke nature because a margin and their can the also being you trying some about of where trying make scale a which but and sweet effect maybe taken doesn't without large how And business, network the going can costs the of between effect to find the get spot drag the operation actually sense terms a somewhat up it. fixed Got bunch being of being you're XX that balance footprint economies of

Richard O'Dell

And working and net look that everywhere. our the then make year, mix call terminal we're next I it of know don't more being constantly would I mean, contributory below to business correct say, if Yes, -- forced players. count, and it's national our obviously, we're on sure be clearly at about you improving. most below the to I

up you to obviously network that count across So, our know, I to of good in And best the our tell just you northeast. look was X.X% X.X%. of business segment our which obviously, your up tends and quarter field national more we're up business business, would if business and transactional XPL a third our that's success and was or having the that be is operating portion was with from you, three XX.X%, at

Operator

Thank you.

from Raymond Our James. next Tyler question Brown, come will

Tyler Brown

does you to any This there? it Greg. find average Hey, it like guys. good open frayed and your call improve Does when morning, kind do a is those its what I'm typically materially stem it, in to on terminal that saturation Long terminal, going is question, times Beach, P&D your PMD conceptual But of a markets? efficiency color natural just

Rob Chambers

of part very better able the a Long efficiently. be time, to that was it the coverage didn't is Yes, of in stem market, couldn't parts to some also do us opportunity improve Beach we elements that basin giving access

across of kind the really. it's So board

Richard O'Dell

right. Long was to orange And Beach. it opening actually pretty terminal It that's was our close

have capacity, more there. this a savings benefit a resolving of big before you a as cost time, as can But And that you in are there more not there's we've of So some challenge to closer be get seen Plus, responsive. customer, was but capacity over capacity a an growth you that only rate. the your have market on, anticipated market. we've tight cover always share area know, in not you and items, to where where particular sure we to make done, benchmarking are with we we do capacity

one capacity even the our revenue little Right? said, for need to door to at And these hey, and or and particular reasons. in our really coverage two where was so larger benchmarked Tier we our bit that probably a doors basin are compared competitors that secure we

Tyler Brown

terminals capacity, and each one but add bit their so costs not but improvers? a only P&D savers, little idiosyncratic, they're is Okay, service the saturation also ultimately

Richard O'Dell

Absolutely correct.

Tyler Brown

transactional can Okay. broadly? on mix and the just give you the field And then national

Richard O'Dell

of -- terms the increases year-over-year in So

Tyler Brown

your book. total of in Just mix terms your

Richard O'Dell

with that here with We we'll to be us provide us. that. But didn't we'll, happy in bring

Tyler Brown

I very at so my problem. last no about one, your characteristic little it on be a basis, the adjusted And then bit, few years. improved over claims discount talked have if past is pricing to Yes, But that it your it, a look just still you but to peers. seems

is coverage. closer full broad footprint getting service obviously Your day kind XX of that to

are percentage time dramatically your is on You're improvement. showing scores improved

really there's gap. that close you you agree impediment, reason structural So no pricing at Would or least with partially couldn't that?

Richard O'Dell

We totally that. agree with

Operator

Thank you very much.

Our Wolfe Scott last question will come from Group, Research.

Scott Group

guys, thanks follow-up. Hey, for the

are So in can you trending us give where October? yields

Richard O'Dell

month. I necessarily by what? not to to But would trending. a you usually Yes. don't deceleration we where We there's were give Similar Right. it's that similar tell

Scott Group

the you are saying? quarter In third

Richard O'Dell

improved, slightly right. guess we you could but actually tell it's It's directly, I not deteriorating,

Scott Group

you back margins the had of sir, picture, then quarter. that right? gives in this next step us that incremental breakout control under And and less confidence your sort us step like You maybe Okay. quarter. give Other new that, quarter, else terminal cost. Anything than sort a that's back big of and getting to of better is year? second this And sort terminal in fourth sounds incremental back

Richard O'Dell

of either reload control you our September the opened the from we year, to new facilities. end middle moved the of we'll between is, what's opened or Right, in know, have XX

those what's assets. So sell how control we optimize those our next better absolutely is facilities and and utilize into year, within

to year, places do about Discreetly we've I and that's, We efficiently this assets. of you know, the more those within getting opportunity. northeast think our, we business of look Long at an view really our Right? opportunistic Beach, the time control. our our around of I, that us the the in long And these was it? think like allows next operations our in plan. those game in a that optimize of ahead --this is So So place as opened accelerate what's the our for take to northeast how that's So you history that's and assets optimizing in grow for plans growth it's total. business into advantage

those our may Now some take is happens certainly the that but operate think we how how control. margins within control, a little in marketplace our part in we create less that I be one than what incremental

Frederick Holzgrefe

started guess to I efficiency opportunities, Yes, just we target year. would earlier that we year this our I planning and process obviously add certain every

that sure with, could and and You out. network, working are know, have else, using to your example, the within efficient expansion across across or investments think you And, meeting clearly line of new optimize some that resources that the associated haul something And investments that think technology to slow know, regardless deliverables, control, most our rolled underway. I operating making used combined technology are our the with now our the the for we're that's levels all of I or network, at we've tools external on be environment.

that's, I So, mean, issue. a that's control plus type

we be commented, to we assuming, do really get So an could and improved better, environment kind think to right. again, get stable of as we able a we

Operator

queue. Thank in questions you, the time this no speakers, have we further at

Richard O'Dell

time. Great, thanks for We it. appreciate your

Operator

Thank you. Ladies conference. concludes and today's gentlemen, this

week. have of lines the and you. You phone Thank your disconnect may great rest a

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