SAIA - Earnings call transcript Q1 2020

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Operator

Good day, and welcome to the Saia, Inc. Hosted First Quarter 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I now would like to turn the conference over to Mr. Doug Col, Saia's Executive Vice President and Chief Financial Officer. sir. ahead, go Please

Douglas Col

morning, With to is me Executive and Good XXXX Saia's First Conference Chief Holzgrefe. Fritz Call. for Officer, everyone. you. Saia's Welcome Quarter President Thank today's call

made forward-looking are that begin, we call, make that meaning Reform Securities you statements the know Act These be statements Before and during of all the within other on XXXX. should we that this may Private this Litigation call of some number forward-looking might a you of and historical release facts risk to not could actual differ more refer subject actual factors and We and for cause may exact results to risks results on filings are uncertainties, press the to information that our differ. materially. SEC our statements

Fritz to for over call some comments. the turn I'll opening Now

Frederick Holzgrefe

joining across discuss of our you worked country results. difficult efforts do by Good goods part Saia's like today's customers and to employees very thank word tirelessly in in have giving the to to couple a whose enabled morning, Saia the and us Saia the to essential of start delivering time. months this call last serve who our over to for thanks I'd

efforts we the focused From customers keeping our have and employees safe. start, on

business an safely staff network. protecting to as The as focusing they -- our our dock essential distancing, staff of operating became impact implemented days, practices as customers. of potential realities. the served As In while our workers, changes matter social adapt apparent, throughout operations we COVID-XX to us and adjusted to a they developing allowed drivers, role Saia and the we mechanics new support redesigned fill

to functions environments. have Our office sales remote and largely been office moved general

the additional plans provide and a to or member. time, or benefits Performance compensation term compensation support on has have across family this to to had suspended approximately of paid while those been reduced. on plans Nonessential hours to our also need been difficult the the same that At friend we significant pandemic company's has that XX% potential, impact executive we've a While workforce recognize may reduced the and time possible. spending focusing we company. decision employees, reducing furlough long-term make off for where the eliminated care

changed levels. and on our commentary impact have of since colored will pandemic economy had dramatically by levels be Business and outlook mid-March, COVID-XX freight general and has the the

will the company we took the important However, thereafter. the steps quarter first record during highlight and

plans the last our environment, million records. that of in into and both quarter did of Going midst focused record In $XX.X leveraging first to and operating quarter investments XXXX on report business the several network years. challenging of the first post the we $XXX were million results. in Revenue made our execution pleased current year, were income we I'm

last points XXX to first from ratio basis a improved Our first quarter by low quarter record operating year of the of XX.X%.

rose improvement in that X.X% by in still Despite last case not again March, workday And up late versus per year. the year. per X%. quarter grew for April, shipment, of what was of Typical have volumes half companies a freight first end reported, good March a basis second volumes Similar were seasonality the to of on decline and accelerating through March other before year-over-year the stepping March. indicates rapid usually the for with this but the weight workday the for half shipments an per tonnage weakness in

In several last over by LTL terms rational years the approach carriers pricing, taken it continues. the of appears

we from early we rates first X.X% QX. contractual rose implemented X.X% a just down February, In of rate in the achieved X.X%. general rate the by quarter, Our renewal in increase slightly

combination a reported and mix. X.X%. class The all Keep of of component to by per revenue per of boost shipment by revenue haul. heavier length mind in freight, positive quarter, our longer is haul, weight yield pricing, includes mix of combined the The to per and and For X.X% measured by-product rose that yield shipment weight $XXX. pricing is length hundredweight of

leadership I'd Strong like helping operations technology key the to operational quarter. the with year show dock made basis enhancements us and year-over-year both now highlight in the past a productivity few combined in were the quarter. operational a -- our in factors first achievements leadership in on improved city first in

for tools, It rolled visualizations performance the network increases engineered On set XXXX. our against realistic which tracking handling docks, optimization and ability in real-time professionals measure in standards. across their our expectations our real-time our out freight to success provide

and enabling city Also miles rolled traffic saver. across routes our a cost build enhancer out us delivery last year better inbound operation, productivity planning is as density to tool minimizing in create our new and run

pickup simplification, also maintained we ago. and empty despite our than in achieved on and network we percentage average, and a larger both efforts our customer levels service at a metrics. mile strong small both network year having In quarter, standards delivery improvement saw Through continued the service a load

X.XX X.X improvement training from with the ratio in hires. claims continuous with cargo improved the particularly quarter, by XXXX Our of our driven efforts, fourth

a environment, the operational to while in better or terminal we current pandemic expansion March, Vermont, make of foundation Overall, geography. productivity service I'm XXXX. in the terminal case our a our Saia in provides our improvements steady with challenge cadence execution pleased began quarter. as first is We believe XXth near execution continue customers expanding Finally, results compelling the in the multiyear providing new manage for early opened in a to in our we Burlington, and solid Northeast the since

first With turn call of results. a those for I'll Doug addressed, highlights over the the to review detailed quarter

Douglas Col

Fritz. Thanks,

X.X% was revenue up last over quarter $XXX year. First million,

included was last Fritz and workday Also, Operating revenue higher impacts benefited per last stable than on a compared our to operating typically and total rate by business. XX.X% Fuel of ratio of basis February of XX% X.X% rose XXX revenue more million from X.X% surcharge increased XX.X% XX% points. year ago. this basis, workday our about The which pricing implemented and first X%. X, a year, to a our XX.X% increase improved a than $XX.X rose yield have of environment, year on XX% Revenue mentioned, of X.X%. revenue was income X so general we quarter LTL year as

Moving offer key a now and benefits color the by reflecting items, more average X% employee wages on can few rose bit prior the being our little to X.X%, higher a Salaries, I than quarter. expense count approximately year.

last Our wage X.X% was July approximately increase health care inflationary and costs. year continued

the have terminals beginning XX operation a As additional note, the quarter this of last than first year we at year. in

costs transportation with in the increased extra workday X.X% Purchased X period.

Claims by quarter year-over-year despite Fuel compared costs average As prices diesel company increase a miles, total the in X.X% were to as quarter expense the year higher versus a in in X.X% prior in X% were approximately year. lower line than premium the percent by the X.X% X.X% the fell in and in revenue, the rose transportation first purchased same quarter, expense X.X% insurance last quarter of national costs the expense reflecting and year. normal throughout period ago. that volatility

$XX.X terminal improved of quarter higher in operating age operating made in a have and expense is expenses network, equipment trend of Overall, was quarter This we continuation grown we as past the million our lower meaningful year-over-year. invest the XX% by ratio. of technology. in X.X%, seen the in X.X% we've with our grew and investments of revenue the growth few the Depreciation fleet our years over to

increase primarily was compared to activity. stock rate XX.X% Our XX.X% is to year. first the last quarter related for executive tax The

We tax to to expect rate be our full year XX% XX%.

fleet. cash made in earnings were we operating the of in diluted generated compared with until the substantial of we quarter later $XX.X totaling $XXX deferred year. a manage in $X.XX the new million year, tractors fleet prior to older investments from that tractors to volumes per First majority tractor related capital We've to the and $XX.X the the we million, to first year year million deliveries. of delivery In flow and share $X.XX our our quarter size in of remove first a current ago, portion quarter new as compared our

has mileage, age age of The also better tractor benefit X and reduced reliability years. maintenance of lower average Our less now a expenses. is fleet than better fuel

by from quarter in first per last economy to the year Our average miles X.X improved fuel gallon. X%

of capital XXXX, debt At net the are year. on purchase this to XXXX, our at last XX.X% equipment now our between March million, the be the $XXX.X million XX, taking year, total expenditures compared capital March debt and forecast to million In net inclusive XX.X% capital Outside $XX.X of very we committed of $XXX measured spending. are hand, a all and total million. was end of to $XXX cash to approach was

all expenditures and wants. are are are evaluating determining what needs and We what

planned deferred have investments XXXX clarity Some more for the outlook. were on have we until that economic been

revolving our hand in and on our $XX credit believe than accordion million outside $XXX an million balance aforementioned including additional sheet We availability strong that with borrowing of through cash is and more sources. facility, facility also feature the in

back turning the I'd year. will the our our of actions have those the to the impact outlook the provide actions challenges Before to taken pandemic brought anticipated to remainder face date call few like on remarks, for by closing on Fritz a COVID-XX details some and financial to for on the

$XX and our believe or and we On those that in will this needed additional year. We offered for additional health an of to in to position issues action benefits This the approximately part-time an sure day our action employees the over of all X million workers light days April costs remainder paid additional time take were of was in X, result COVID-XX. a hourly of effort for family X time-off off all full-time make of friends. of workers

such with hand our sanitizers, to monthly incurring safely items and workforce expenses other our we and each needed Additionally, health are masks, as and supplies interact spray as customers. field safety-related for sanitizer for by gloves

approach front, actions, XX%. to leave offered April, as we've and a down we cost these average some well of daily a taken retirement labor developed our the combination In of incentives On workforce reductions, we as absence cost. plan. multipronged active Through down voluntary our hours savings furloughs manage

compensation April on we other and incentive Lastly, well. all suspended and plans XXX(k) executive as X, match compensation our

pass Q&A. closing said, back it I'll move to for we that With Fritz before now some to comments

Frederick Holzgrefe

we're do And we Just benefit Clearly, our past think I first we business an are it capability our pandemic, time on uncertain we to the emphasize that we and move potential will. is. but operating focus quarter. pleased this of to operate with which continue particularly results now, maintaining the and speaks can when from the our position to we quarter, company's such right what profitability in and

that With that, for it up folks to open questions may have. like any I'd

Operator

[Operator Instructions].

from question first KeyBanc Markets. be will Our Todd Capital with Fowler

Todd Fowler

per provide I And one then start, little of on guess, of now if about what the curious, shipment some what you into your day kind mix you're curious And be as you're this change April. bit at relates maybe side. seeing of talked both weight a the I'd I'm and can network profile. the competitors point. about in per to color to through seeing it tons going shipment

Douglas Col

Sure.

into X,XXX get color on month, up to well tonnage to first numbers at up can March, weight in we was down X%, up was a February X,XXX. up February, X give weight In per per April, bit X,XXX quarter our pounds. X.X%, and X.X%, was our down I In was then shipment to as X.X%, and though per shipment of weight ahead up X.X% go the X.X%, for Before shipments was was shipments I positive were and little you X.X%, and by were shipment and January, shipments give the up -- want at sequentially, X.X% weight April date. weight tonnage tonnage and tonnage shipment up up the were down pounds pounds. X.X% our In in

about in weight down trending per continues our are tonnage up far to April, X,XXX as XX%, down So XX% X.X% is at look about solid, shipment pounds. it's shipments

March. a That I like In February then March bit numbers pretty better normal we mean, off to unusual, what the a seasonality The to terms second shipments. started Fritz started but February, there. from steep we're of pretty early of was said, fall started And half seeing, good. improve as Fritz January the then off in weight mentioned, see wasn't to

into tell by about I down that's So you can XX%. gave, shipments January the as continued numbers

and field it's us, down teens, low in XX%. For maybe national isn't the XX%,

count Our there business, shipment is plus seeing a XX% smaller date. which obviously portion month to our XPL of down business, we're

change weeks. that real last the no over the So few in we've seen trends

Todd Fowler

react and helpful, change I what think front. strong. you was very sounds that the profile the in to it just for margins, and the that in XQ that quarter kind saw the about were in you very When you the preserve the late what in was in putting that's that's environment guys and -- being the Doug, furloughs like April? to you about margin look able first do quickly on adjusting you into given looking to the early When March the April. structure super cost How of about exactly performance think in able could now like think environment,

Frederick Holzgrefe

forecast that does is think our that profitability advantage Todd, Yes, the this there the I of in uncertainty very focused is opportunities We're position execute when the there. much that week, that the -- we're a we're to next financial balance on in answer quarter. sheet less will best business. The maintaining you we're can and focused maintaining take challenged that provide on of such very the be end, to market I such full level

against operate the in this with we'll the in So that the interest that we that a position mind, a take maintaining advantage. fluctuations it that to plan as margin in occur and of exit -- of kind with react we being can have business, that may and game we

last It's are think -- there's have markets everybody. far we'll kind -- us some for the I weeks stabilization opening that see. but but of -- bit, of the for around and we've this maybe a -- bounced so kind

to but like seen remains that looks So over that's what be good, time.

Todd Fowler

bit the based Fritz. able That do Yes. market I turn geographic cadence it conditions. expansion? a over. the understand, throttle just throttle you one plan No, and strategically more and I'll into you ask on little when of sense. laid you out, that it makes about up Maybe back think know How term. longer I'll were the with that went you I then to

pulled openings year. of terminal lot obviously, You, a forward late last

where still the continued more for work with do year? balance to the you kind As now rest XXXX, expansion out some you look you you'll through have of the think this is what Or of do environment have? an geographic opportunities of you

Frederick Holzgrefe

Todd. Thanks,

execution. that quarter our our year first and on think XXXX focus I focus full has been

in. our terminals -- last the that in advantage So with the the second those in on is The opportunities year, strong execution be that sheet focus of for the in taking are where Northeast. to and ones keep market, we be may so if we half we there can position one in there particularly balance idea opened Saia disruptions a that that step to

become for continue opened, that that's actively be we but the facilities the to So such around something us -- right product. clearly save to probably but that have move I react going value network, available. advantage than be to our now, us is would, biggest would flexibility I to drive optimizing -- taking into the And we may driver those, of something we're centered if it costs we've optimizing not think, we were to more that think

Operator

next question Our from be Stephens. Atkins will from Jack

Jack Atkins

manage -- go steps of to last for provide several around around structure But here if that context have to you up kind Just costs taken the weeks. guess sort of view aggressive you variable guys flexing maybe type and tonnage see question kind sort the on question could I of So here there structure, cost trying you Todd's fixed we just and business? minute, Doug, the we some in of -- how as back second is following cost a versus this over your about, April? think in some decline of can how

Douglas Col

of company's new a think it got we've cycle, to have I life mean, markets right? we've really you us, to in. of mean I Sure. across invested a lot

new the past Fritz openings As mentioned, XX year. in

start in And incremental got to fixed of have and a see And a we've little we more, to of lot bit opportunity business as costs. there we that. we've shown margins. So improved then an more put

city. approach to last XX% we the of they to -- year running to that where in longer until costs some around you that XX% your us there, But in of even out mean, going miles ought range be. be right? or that the the in margins see think term I You add volume just are take you are the your operation some fixed, of linehaul can't variable out

they're those you're for service efficient good the got costs and customers, not You've miles. providing all but

fixed it down costs that added. variable given fixed I than really because bit -- different all into we've break more any a it's the little to hate I So versus

Jack Atkins

Okay. Got you.

of And Fritz, a what So of about market that I a markets, a has you thinking traditionally given think from sort back, for I seeing guys end could moment about stands you're geographic today guess exposure revenue percentage if maybe from Saia your think, little an bit just of you end more talk of kind kind sort energy you historical where perspective? I perspective? Could of about talk footprint. for

Frederick Holzgrefe

seeing would kind average also. of would for bit us look -- trend-wise the Houston Yes. the we end quoted Houston that's declines. year-over-year, company If reflective say LAX so think, we're probably the were Doug above at I think, higher those the And little at of what I overall to be region, I think I And region of activity. declines, a port I

people of a But it described you sort been volatility energy-centric. If base, region that seen of the of of some what disrupted there's been notable we across the of of I revenue and disrupted rest COVID. as supply is other as sort the mean, sort impacted day-to-day necessarily beyond sort the think Doug of result segment as have most -- on that are, I just across But the about basis verticals we've us. the chains it, Houston call being don't for businesses what's XPL at businesses think as a are I out look rest

and maybe next is it's less. segment down, particular a one day, So down day, the

been with operating a metrics. great our organization, that in it's it service has and of pleased in customer One to this environment our And thing disruption dealt lot done team, job expectations a operations -- there. a the particular, there's as made done great is our of disruption. hitting we've that by meeting standards hit the particularly challenging So we've that's we've

that. So with pleased we're very

Jack Atkins

you to were question Okay. discussing has changed it a over. world But And year. push But, an maybe down? projects quite the of is begins this do about back sort a crisis, you of the were accelerate sort number last settle this and market I'll year, you to looking Fritz, technology? Or think in here targeting going XXXX. that But you think a those initiatives around until hear. this That's are turn investments to to Obviously, technology. bit longer-term of to you for great opportunity question those for me, tech out as that last

Frederick Holzgrefe

say we're going focus to would I in I'll and to on them two continue that describe technology these opportunities, ways.

year things the and tools, our find our a we that are market last optimization those for we us available drive in first dealing disruptive right we're optimize that our our of now planning into And those, tools. as tools, that decisions So right? this crisis. with those things highlighted sorts dock applications to quarter, better linehaul we're city density help They make and in footprint in

in year sort might our our be and be those make. employees, we what to new investments of are into to but safety and safer are created technology, distancing need handheld social able environment our further distancing Certainly, make we'll those, for -- we we're enhance -- a in of in as going investments has those further of And that place that those we this sort continue. around So to refine enhancements to we've had to as operational next year program. procedures able put part social do

because a the a environment for going it's make employees it's well. benefit is our but work to investment customers efficiency, some area as then for the better providing opportunity safer environment our going safer and continue a and drive to of in to sense added So where unique that

is business So that this those for we're continue. This investments long managing will a the -- term.

see So to we the that ones continue. are better opportunities decision-making that drive going to we're

Operator

from be Deutsche Bank. from will question next Our Amit Mehrotra

Amit Mehrotra

there that about wondering national in there, heavier would Fritz if just, I thought. on weight where quarter, holding bit and Is better I you of business Congrats April. per Doug, It's have can it than mix maybe guess, the quite accounts more talk great was shipment a have in trends a that weight. guys. I

if Or that? we per about And decel shipment? be So expect about stable? yields. the high just because you yield can how talk should there weight Can we then of think should some

Douglas Col

April But average mean, I Yes. as of the a will weight, lot to to a weight I volatility it is say post. good update in even we're way the -- the number I day gave seeing in day.

bit little causing what's So parse that's a difficult out been to that.

customers, better if field our on actually, been weight us, the been customers, our about national highest, field way has field or side. the I'm it's For thinking the

it's little So customers. to obviously, has do bit something us, field of the a weighted. been for with mix heavier But

Amit Mehrotra

yield because should And that it X happening we especially in pricing of maybe the our just question. quarter. an can the second expect on I then a Okay. that's weaker because, just then you on shipment? volume important per of maybe context mean, mean, topic, I to weight environment comment in what's you ways. answer And can the decel obviously,

Frederick Holzgrefe

commented earlier, rational. we the that remains pricing I think environment Amit,

discount in environment, weight I environment to business, -- that ones people to are shipment because on yield But remains return not mix impact would this going the would an added of that the for move to have it I are disrupted think that into I that operating are structure think make come that environment pricing performance. cost the an sense this this costs looking our thesis. which in think off per and -- or would

Douglas Col

comes And consider along you I surcharge revenue the that's weight I calculation, fuel, headwind for reported the yield. thinking a about would too. on as down, to mean, add, Amit, yield with impact your have fuel

about. environment we that does and for moving and to have stable so what some it. far. as see the think have to really number it's been us, But rational, about pricing yield up you pieces So And back just the

Frederick Holzgrefe

customer the fuel benefits that the And charge. as well

Amit Mehrotra

of longer-term last in nonunionized LTL opportunity of achieving that's guess just And for line like then vigorously. the Fritz, opportunity been with acceleration an some kind right. seems after left at or more go kind table of gone I And Saia the national been always that cost internally You're for maybe there's to the it OR the as on one after me. mean, least had and you has companies. I an have

years getting I on you do mid-XXs from anything So impede that Saia a maybe sustainable you OR from now, there's to to a X basis? from mean, talk can standpoint. like of that's kind about X, structural structural think If just going

Frederick Holzgrefe

No.

I think long-term Saia. the opportunity for remains

one the the we was opportunistic went really by think that I launched to our an which year an as opportunity year, investment could item of through down cadence the you up But add we was expansion had Northeast also last as move year, is success we in When and emphasize on that terminals, do. May kind additional for to us. a that we XXXX, expansion us. that's to facilities an expansion Those order the opportunity based we there. down Last and made an -- of a was positions up and coverage opportunity saw it that investment, carrier. the there We for in national future for and expensive did move rate of that, sort of Northeast.

initiatives. of results quarter. operations. as think our And think technology same saw we're to the that decisions in we're to -- allowed first better I the us focusing make those in some on time, first I'd doing the of investing that expansion At you I optimize

opportunity tools sort on future. in longer-term that into look the I that fill around investing been So of the going in we're data of to think, years pandemic we for we've as that think as I remains forward, Saia. past toolbox And last we for couple I analytics, continuing get that better the this that the capitalize decision-making can state,

sort that you described. a structural for margin see those don't us achieve I So really longer-term to limitation of

I past think to now. opportunity right just us. challenges We've with is get dealing got that that there for short-term the we're

Operator

next question Wolfe from Scott Group from Research. will be Our

Scott Group

those typically fuel, know just give the us talked month last you're some current us share you So revenue bit can to in help April? you tracking is about giving that don't any I so it, with what not of on weight of little in hundredweight is guidance, per but forward question you there maybe with parts that... give actually and trends, terms us moving way margin can us a you extra with maybe with

Frederick Holzgrefe

lot Scott, of moving there are pieces. a

-- basis. we're think going to It's changing there. we'll with traditional stick focus kind on I daily our of a

with or traditional it guide we're So going -- to analytics. -- continue traditional our

Scott Group

Okay.

another On margins -- improving? and do this on to year understand visibility the I you, is giving you've to full good think the but not do margin you one like had quarter, answer. tough you But guidance maybe obviously, you're quarter. feel front, second got a first

Frederick Holzgrefe

where I do And in I Not guess get back return executed really. we I expect do is is that marketplace we first And when look And margin right that think I the it if across mean, I'd pursue as candidly, on for you a this of leads back we nonessential we -- when pandemic with to quarter. this kinds us and an I company's we time. question the mean, go opportunity our eye improvements get the preserving -- are we quarter. the position now, we at at if again I those the through might to kind have QX normalcy. move do us. of country, go to open to normal, opportunity tell look that first over

for will we opportunity when of of do. improve speak point think we But and the So us. evidence I market is I can't kind the what our that can execution would there, really to to is

Scott Group

fuel to last I Doug. going that X%? that a should and And one right, guys forward? of sense. impact want then makes X% fuel Or I up then down just that normalize? net right? forward? about Is net going the you of cost heard And sort positive spread that how No, for make this was remain think sure Yes. for we fuel the Does should revenue surcharge

Douglas Col

reduction. as fuel coming customer's a and and as you're is down. fuel stabilizes surcharge when that. lower then in your that you're us a surcharge down, point, down cost he the level, at And in you revenue price mean, coming you losing But I chasing it X.X% back as to it while, benefiting it and yes, enough followed it so grew. a and quarter up, for the Well long sees benefits was some revenue turns understand day at expense the it's But

Operator

be Our David Ross next will with Stifel. question from

David Ross

side a how And trailer to Any equipment for comments doing Is nice the job grow trailers? much are the trailer this shaped feed expected age. you first, year? lowering done you side? What the the the on you've are on On trailers? tractor

Douglas Col

Yes.

load well. to depending talking trailers coming Our the out too. has big We're still year, new trailers us or anywhere linehaul capabilities, trailer trailer oldest vans our pup opportunity average. year pups -- from pup investment units, gives I about improve the we're our with an as down process our our years, some mean, not X move volumes of we'll the on over the on age is in XX the as to the the on be of trailers. mean, our same side. beam I or take Trailer this buying to been down And trailer this whether age of will fleet years captive trucks. around average with opportunity

of volumes get rid equipment the So fleet it's on seeing an older like down to some when sides. of your opportunity both rationalize you're this,

David Ross

just more growth, old new, much not efficient But more the and some out trailers? changing bringing

Douglas Col

Yes.

we facilities, but For year. the trailer of in we place growth opening when terminals the all a trailers new last the at a this were fleet to not of part, lot lot had mean, the year, I most

David Ross

at along positioning could when facilities. are it the you the positioning? you you or change or you if Fritz, you there And XX XX Northeast different competitive it? comment continue then, way there in point up on to it's X, as open Or whether now had some And more facilities do expect or to tipping benchmarks point? improved seen that a your been competitive So significantly have has at see Saia's

Frederick Holzgrefe

Yes.

success in our I you really is the so take service. far the differentiated high-quality think -- -- the Northeast about

that we so customers starting with already And that who it people as introduce grow knew to more helped the familiar who in that now You market, were, and that more with we success. market, become have are. initial we

services think and rest as I sort some our of And that. in get of call to feel really Chicago what the of about, focus it's it continue Saia. we're develop market, growth sense do becoming differentiated sort that's region that than is part great some the this is an additional in network, we of us on the different our more the of market, of like to for like related we we we beginning, of as the the and success, sort that that in scale out, and key we're hey, you'll think But on to just rest now, At thrilled we're there. national It's quality. we right becoming is sort more business, to the right which more coverage, has optimize, opportunity continue internally, that footprint there's the freight It and about of footprint. will about. no as that allow time, But -- So a more of a it's excited more with in success and an time it's our Northeast. the It's region. and which now, us. to And been position the another it's individual grow our you over winning same sort of proposition -- intra-regional of and more But national more basis. a market national less national develop And like there. it from see regional that, the we

David Ross

And a million added certain crossed, a it state that feel hundred when was few coverage that number, you that there you any or way? X or a was really made whether you threshold footprint revenue

Frederick Holzgrefe

No.

and we we of kind acceptance could some on just internal We it. we've in could terminals, seen. of customer sort terminals had us it's we confidence market I market. overall X jump And original that share back worked when execute every first to the had thesis go those mean, year, given have if think that had, a last market that in knew that beaten the up expectations for we us it, playbook that opened -- our we the share I that we replicated. we that's

successful that overall the said, "Hey, know point kind a and at of opportunity. just execution advantage was we this which necessarily, the we've there single David, been measurement." to don't the I take is able It's key of So there, been

a still growth it's us. market for So

And there's about. terminals our historic So for operate those terminals. still to excited opportunity we're like what that's

Operator

Shanker will Our Ravi from be next question from Morgan Stanley.

Ravi Shanker

So your even? benefits one of network coming of from what your the in trends or most share trend terms recent maybe of in e-commerce. Can in in powerful the weeks quarters of customers been to that kind has you're growth the seeing you

Douglas Col

real Yes. I haven't basis, change a mean, in. a we on big seen short-term

to mentioned weight thinking field big change a you're deliveries. I the e-commerce consumer, residential in being up. about not our If the customer

maybe customers. So of maybe is that some into

I basis. going into more We a on providing don't goods that it that short-term on any that DCs have But have eventually granularity are e-commerce. than very are

Ravi Shanker

Okay. it. Got

more the of you Just towards of where space shifts kind permanent kind in of more behavior this? out expect it's LTL maybe kind larger XQ, structural shifts out whether movement away we're it's Any that's brokers of in a the it's towards moving or carriers, or long-term consolidation, as the the expected whether from more given mean, any industry bigger-picture of carriers? structure asset-based depth do of makeup recession consumer question. I in share there,

Douglas Col

a And extent, be trough assume comes to great would 'XX. come the seen. capacity and of industry. I a in mean, you assume Yes. the 'XX did of capacity yet a see it's the business cycle, in -- lot the Recession you'd Across that out. happened Great We that some to after cycle, out of

operating, a $X turn their the problems if around a industrial we've requires business. a if a out. able and cycle that business not trillion the year well, come quickly to scenario. term, then that's lose is consumer, operators you're those And pretty sector you of you cycle, at longer is of by over So part happens economy can see the don't reinvesting only in caught mean, where get stimulus that not to created what in in investments, act not lot thrown economic I and the to event the the quickly. short-term those as capacity share out generating But and COVID but of cash, pandemic, if This things you that make this the capital investment in maybe year

Frederick Holzgrefe

I that's environment sure. add, -- think would why it's I challenging a for we're

we've have downturn We a right of -- to this fleet age to substantially no footprint. it weather we something could date with now. have one reality we're Certainly, is bring our all now. that being to dealing say We've But invested that in substantially the predicted invested that invested down. with able our

a in of is that. that benefit the -- we as in and more that and So market state, a a disruption to that that our It's insurance safety heavily we modern we're sheet we in undoubtedly the go can that. to reflection of from benefit position do we're of there that's fleet. invested balance we We've a market will do and position change tough technology The in position this normal is in And from as can we're a position fleet part eventually this. the a can out well. -- back take as advantage

that up that positioned but in may the business we we in presented much as to to we the a this, think opportunities mitigated leading can, So as to that advantage be could, can have we have that be the take position ourselves risks extent the us. we we of

Ravi Shanker

housekeeping one item. this. Fritz, Apologies lastly, missed just And if Understood. I

bit huge that give what line kind a has guidance you modeling insurance few of Again, of a impact going just enough the bit over little quarters. a little to been than but forward? expect bit. can number, Can not little we on volatile a Your us more line last from

Douglas Col

self-insured an that you're mean, in mean, $X going I Yes. line. always we accident. around first I the to see million volatility

a So volatility company in for given will our quarter. create size any itself in that

terms and In Fritz though, truckers on of days. as I alluded market, mean, to, these extreme overall markets pressure there's the insurance

this Our into inflationary mean, cost excess premium I just cost more renewal for XX% tower. walked I year, in budgeting there. our than our

used not So also that harden carrier, a across settlement something. because if by. put company something risk the an verdict the month that's that's to the buy, sheet don't you in terms on or compromises the your financial in months having position that great go as that's cycle to decide against an a seemed again, accident smaller pressure And that jury you your then balance run limits can a to a buy each you of has of environment

insurance is, But to in this market we're technology, we're good insurance able inflationary X do able well. those accidents, renewal. pretty but see around things renewed I volatility us with that the So are was in being safety able equipment cost, premium March being positions just it and these to buy days, our we afford to in our line very ours. you'll mean,

it for there's volatility. So we're year, through but occasionally with a

Ravi Shanker

million? Are we still looking benchmark? at $XX that approximate an about like average right, Is

Douglas Col

thought probably good do. quarters can I've you or running average, and if always go as that's as four you take back three a

Operator

next Benjamin Stephanie will from SunTrust. Our be with question

Stephanie Benjamin

the quite some profitability the or you a I called was wondering that could But seeing I of declines volume in few discuss of wanted you're could with some the productivity follow to out if quarter. those on continuing you company the some just how maybe initiatives -- average? profitable in you about more Northeast talk you're just just the improvements to related if specifically, line the where improve obviously, up and get virus. of a productivity scale to first up before level you just to in the benefited

Frederick Holzgrefe

Stephanie. Thanks,

and best I the what we way the was took as year-end terminals think on we we that to -- adding described around about all a of that is, the the costs, in that simply sort start-up call, Northeast. drag or costs and talked We just new view the lease the how stuff. reached had was added XXX% the the incremental below terminals, OR

markets would over start if improving said simply utilize we So call those those to time, start incrementally we you on that that productivity in our also terminals.

part I for overall specifically can in overall was give -- you quarter, the improvement have I number first it's our but productivity initiatives. of don't what a it's the Now

if would the we those to were dock from benefit in that optimize, we in can add to our operation operation like it, just So run better volume, markets, and going we're we extent Chicago. city

that, really using metrics in focused markets. think tools same we are we those as in So about the and

But new markets and used a I don't have they those those is Now get call -- the they have they out necessarily impact. revenue incremental but tools impact they're have in those as of -- in bigger because the there, a terminals well. bit greater, all

Stephanie Benjamin

And innings the of think it. productivity, out or level maybe timing productivity Or by lines of XXXX. of kind in just some Got next color another savings, call XXXX? to some drive is we in out of on as it, those can rolled we largely the would staying be of same that helpful. technology there that Just on XXXX expect out those, or see called then Were now? initiatives that you to again in rolled investments

Frederick Holzgrefe

Yes.

'XX. how all with then call technology those that to you're where the basis, get those and benefits with ones So we'll of to the team form continue them tools, think the improvements. -- better those XXXX. getting those. use And And those optimize we on in how understanding I when of, into to in initiatives of are daily in comfortable development use a were it we sort get I'll saw them And -- are of some X.X sort

We in pipeline those features to those, tools all to our have add add developed. we've to that development enhancements

our time, take So utilization a at this look really analytics data are a if it's is and about I it, continue -- things step that. really think of something next year, into you back will improve that, -- over all These play. to

real to So an dock a them daily feedback historically, If decision make performance. basis. at operational on do sort tool, in would as back you measure the example, provide it's of productivity we how we we other maybe get might I -- on associates a look and better time. And dock

tool is the real-time. Now

-- a during standard how worker the So a day engineered happening. see dock it's versus progressing supervisor how it's as can the

facilitate and dock the there's change an a So the jump standard. helping getting make in or back if on can worker issue, supervisor

So that learned going see -- benefits it's tool, of optimize of continue use to how the that and sort forward. to the tool, you how we'll to

of but technology, it. the of what I the get out don't be reached might about pinnacle to excited we've we're we think So able

Operator

will question from next Cowen. Our be Jason Seidl from

Jason Seidl

GRI mentioned your about as comments in implemented in the you that Doug, February. was

up that's have taken as how of has question mix. the been probably follow-up a regarding April May? some the going a business likely late -- to wanted downturn know then I through early early holding Just sort of in here And and market

Douglas Col

Yes. lower of I are probably our number fuel bit a as it XX% mean, customers That's historically, the keep an benefiting in little a right, always end GRI, customer. the to estimate good a approximately discounting back we because our up still from pretty tables. surcharges

So it just was again, early February.

seen a keep don't want of any more we've we think and it required in acceptance field I pretty we're a to think anything just here. that haven't I but the rate seen into been -- pressure months there's from So line. has always reduction, I has the that the But and customer customers really don't any everybody mean, been open, -- activity couple it's -- I the business there, customer more aggressive

Jason Seidl

clear. knock Very wood. on Well, Yes.

I also accounts national that and XPL XX%, were your think down were accounts you about down mentioned your XX%.

profile of freight smaller well, in knowing a the XPL? in national us, could margins is Is a difference of the the and business. percentage XPL there Now terms there you full is remind between --

Douglas Col

We business, try be. XPLs. to for there all not to transactional the I we business the try with even mean, the price

of X% a today all a You ago. our price probably or try or day The given XX% on to volume business, XPL them XX% to it's year versus operate profitably. X% shipment

drive part in with of the prices it to we down has like So where would there, volume with bit the loss us our business and of it little I there that more trying been a line of think profitability sticking kind to be. and to

the depends all customers. an on no, We've got it -- profile, of basis. account-by-account So thousands

it So I wouldn't out try by to type. customer call

Operator

Raymond question from Brown next from will be Our Tyler James.

Patrick Brown

and shipment, over haul. I'm the weight, complexion length length per class move We Basically, Fritz, weeks? of of changing. you, is the so drivers few per beyond you see But mentioned freight price. did particularly curious on weight last if classes, shipment of of weight the and haul

Frederick Holzgrefe

out Tyler. I overall, have consistent. by changes a there, but it I'd day, call say -- don't pretty really It looks it's pretty

Patrick Brown

Okay.

guys as are you a to linehaul your mean you know factors you the those I bit, then And outbound are what maintaining that generally little helpful. is, trailers And but compromise still hard, be guys cutting load basically are schedules? not still might I off service? That's if by Okay. flexing even

Frederick Holzgrefe

a balance. It's always

So to customer, that. sure provide. density, care do to you're you communicate you make certainly sure we the the matter sensitive, is you making build service our of position can of service want they we're if that. what what going opportunity And understand or to with we that some take -- it's can a have what to But do you going have

continuing opportunity it's us. So optimization a for

it's of -- anyway. So -- it's bit so just little a little bit right? So both, of a

Patrick Brown

Yes.

Well, Okay. is you the tracking? claims, gave on-time how but percentage

Frederick Holzgrefe

the with We're we've our above. standard able to service pleased We're at provide. been or very

Patrick Brown

Okay.

Okay. That's absorbers QX? in XXX(k) shock And not to the and the Doug, then, April, be helpful. kicked on match lack just of they clear comp. Those in, incentive in were So right?

Douglas Col

April That's right. X.

Frederick Holzgrefe

right. That's

Patrick Brown

Okay. or And be then QX drag, year? through PTO reductions million much incentive will but suspension the again, in and the you comp the $XX mentioned a XXX(k) either guy how that good

Frederick Holzgrefe

the a given So the spread out carve-out we the for haven't earned PTO will specifically And of So year, balance somebody other. year. that's the as goes right? XXX(k) the through over or be

Operator

time. queue I'm showing the no further questions at this in

Frederick Holzgrefe

investing long-term continue, the I'm for in network, along well geographic the while industry. country We be call. in like on today's few what brings to volatility optimistic and that pandemic Thank existing through for closing, our uncertainty our positioned on opportunity. participation will moves By adapt flexibility in over in to Well, remain on view, this us, pandemic as with our to you footprint expanding the meeting our financial all we're Great. capacity I'd challenges share the your years daily crisis. last our say believe extremely consolidating position and the company's to to challenges significant about surrounding by a we gain maintaining focused

Douglas Col

you. Thank

Operator

gentlemen. today's teleconference. Thank This you, concludes and ladies

You may now disconnect.

Saia (SAIA) 29 Apr 202020 Q1 Earnings call transcript