Saia (SAIA) 29 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Douglas Col	Executive Vice President and Chief Financial Officer
Frederick Holzgrefe	President and Chief Executive Officer
Todd Fowler	KeyBanc Capital Markets
Amit Mehrotra	Deutsche Bank
Jack Atkins	Stephens
Scott Group	Wolfe Research
Jason Seidl	Cowen
Ariel Rosa	Bank of America
Stephanie Benjamin	SunTrust
David Ross	Stifel
Ravi Shanker	Morgan Stanley
Tyler Brown	Raymond James

Call transcript

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Operator

Good day, and welcome to the Saia Incorporated Hosted Second Quarter 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Doug Col. Please go ahead, sir.

Douglas Col

Thanks, Samantha. welcome second and call. XXXX everyone, morning, to quarter our conference Good me Saia’s Fritz is today’s and With call Officer, President for Chief Executive Holzgrefe.

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

Frederick Holzgrefe

on Saia’s to everyone us we’ve exhibit home response great Saia Good adapt morning. effort thank these normal. cannot focused of nature COVID-XX more the adapt be procedures to from challenges times. at and the to are employees due employees continue to safe by practices put has And start, willingness in many in customers I Those the teamwork, home in new safe and today. at been employees unprecedented discuss environment like who policies by would today, gratified the offices. all safe. thank and a remain start joining XX% unable difficult Saia our forward the to presented quarter professionalism Operational and our you to call brought at I the to and The working than have keeping to results. of and More conditions to have Their through productively on our terminals in our create place while in jobs. policies, their practices enhanced work to new and throughout for place work, remarkable. From March and To pandemic put by efforts been here

any have supplies assessed. employees team where the remotely We trends Daily to leadership able impact do our network, after is who work is our and PPE the of communication work of communities across to COVID-XX still across place one in company can our is consistent encouraged distribution from be from inside so. taking we our

real order and co-workers many time. chain impact environment the changed challenging have and region either and on member city, further in who have We in fill regions variables patterns themselves. ill by restocking are with varied ability described complexity complicated by supply to calibrate has as some economy impact customers. with restrictions concerns been reopened COVID-XX has tested that I’ve new cases daily daily ultimately across are may for employees operating be These have even the or already volunteering slow to in out on COVID-XX’s that a The family in challenges down. our the company who with actually of along imposed Freight as who the basis for or

April in May our to declines saw June. we in cost improved adjust the we support in to able structure the We’re that response saw subsequently trends and and

position revenue starting of down $XXX per XX%. down - Considering results. revenue April only through the a second trying have was I paid with challenging incredibly financial those offer worked in able I very to that in one-time to per As who pleased far as after a quarter was July employees be revenue we X.X% believe these In the have per environment, workday posted the of employee, $XXX bonus we times. were to a solid result, million quarter,

Second in shipments rational we’ve quarter It X.X% and basis operating is was industry to record his basis posted volumes which down that of XX. to we only ratio the worth in comments. in reportedly our which cost quarter XXXX operating for by structure noting re-calibrating $XX.X components operating Despite last the XXX and ratio. margin the even year a result, a XX experienced XX.X ago, environment will compared There detail quarter critical cost operating has points several was XX% remained from our a are performance. point the in pricing Fundamentally, cover deterioration Doug our view. second our side, income being record deteriorated compared XX.X ratio sequentially our first our year down on million down of more, with to the quarter in to more

While our an surcharge, fuel fuel was yield, our down surcharge, increase saw X.X%. yield excluding X.X% and renewals of negotiated rose including X.X%, average contract

of positive increase and of increase shipment length per revenue we combination per With X.X%, fuel of nearly haul excluding the increased X%, an of surcharge pricing in in weight by and revenue. saw X% shipment

Doug noteworthy Before couple of I to financial to changes very made the the of given I’d a out over turn all it like achievements results, in a operational quickly of review few - field. highlight for that are

is also ratio to quarter sequential saw a we second a row improvement. claims cargo ago. X.XX% Our the from improved where year X.XX% in This

on and call the load our and of city versus the terminals continuous the opened on coverage empty associates quarter basis. in area detailed a expanded over addressed, I’ll our and production network year. despite at turn the experienced our particularly improved quarter simplification, those prior the and aimed year-over-year we second the highlights year. With efforts, also mile first the for docks continued training results. for improvement our operations trends continued benefiting Doug in both Through saw Productivity a lower volumes efforts our strong past in quarter We’re newest average, metrics an our to percentage from review within with in our

Douglas Col

Thanks, Fritz.

decline million compared to volume ago. prior from XX.X% a by XX.X% to XX.X% of $XX decreased X.X% by was or million, last in year. down the shipment decline revenue the surcharge was $XXX year revenue year. total compared Second quarter was revenue The revenue Fuel and X.X% driven

While basis by OR to the reported environment Fritz XXX income lower and the was Operating yield in second pricing quarter of $XX.X year operating sequentially, mentioned. ex-fuel of and basis was OR XX.X% pointed only our X.X%, than the of Compared last achieved points Fritz record the ratio this out. was up record XX yield OR quarter. first as we XX.X% from our positive, last remained as million year, surcharge down year’s XX points was deteriorated stable our

terminals nine the benefits the increase our actions of around and the driven approximately beginning Salaries, of savings growth compared we’ve transportation related cost wage furloughs. to Moving the by now COVID-XX, decreased X.X% since quarter to added key last including were expense XX.X% employee X.X%, our somewhat decreased quarter. and by last items in year. second July year. the XXXX wages These to new costs Purchase offset

of the grown continuation quarter, Claims $X prior equipment with This As in to prices investments of a X.X%, of revenue decreased percent X.X% to premium again the quarter, expense reflecting quarter XX.X% network, in throughout diesel by in expense the and versus in prior transportation last cost operating was XXX To rose quarter, related combined $X insurance year. the invest fell in over average trailer is variance XX.X% and year. past in quarter tractor lower year-over-year. basis of year-over-year. the decline a to the were than year $XX.X terminal year, lower company approximately expense Overall, approximate million of our while decreased to by by second total million expenses purchase million higher line meaningful Fuel expense the ago. of miles costs operating perspective, compared the points. we’ve National our expense in the were was XX.X% in increased premium the few seen the XX% trend as X.X% and fleet made revenue, that age put X.X% our higher a Depreciation increases. and accident ratio in quarter X.X% years severity by deteriorated technology. that the we’ve the

decrease from Our compensation tax was second for year. to XX.X% stock the primarily retirements. to impacts XX% The was last rate director quarter compared related

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

earnings $X.XX year. last were share per to diluted $X.XX compared Second

capital and capital very million million than approach measured revolving hand credit a other sheet of all sources. balance We additional net cash to with committed of to capital borrowing anticipate $XX.X six first XXXX, is $XXX.X believe $XXX are our totaling $XXX more of facility and less strong the on our expenditures full this spending. now the the For our made million. year, beginning million we investments will than Outside at And months of purchases equipment we be outside we for through in year, the planned availability continuing year. take

was closing COVID-XX-related cost an workers additional of few back provide and results. remarks, day workers of was one for like all I’d actions our five offered the employee an part-time million, COVID-XX. quarter action $X.X spent in approximate our $XXX The for million quarter Also, $XXX,XXX the PPE the on additional second we details call additional the time was quarter in April in turning X, of light supplies. and than of bonus on full-time days this Before more cost, to to cost off an approximate $X.X impact paid quarter. of in On Fritz the a the

XXX(k) of will in costs comments. to Some quarter. for offset I matching closing said, some turn With our elimination Fritz the call temporary now of were the that back over these by

Frederick Holzgrefe

is workforce that this the margins but this our like cutting, early key Thanks, in in result workload, Doug. In business that our it closing, labor-intensive I will the a of we and In adjustments made was flexible to operating primary steady only of effectively. match driver to critical doing the of not non-union cost very hours also our pandemic. days quarter-to-quarter was ours, model say

and thing. at take and near-term our every the been continue business In another practices, and to the levels, do our the of light care will of united workforce displayed one turn, uncertainty has focus around really us. modified. these procedures all had to changes delivery an of our safety to for our of desire to to for and be did and to all said, the plan. questions, ahead better times, through managers to most we’ll excellent historically challenging ready days that frontline line safety have of meetings, are controlling and to terminal Virtually drivers in in been everything employees of pickup hours to Driver breakroom executing making activities terminal together our clocking costs We’ve and modify to while understated. customer The meetings, major these closed at the dispatching cannot had into staff on all from the where difficulty execution Our be of open and on strategy environment. use, operator. our we’re making on health employees With procedures look and forward now job locations right a be

Operator

Thank first you. [Operator come with will KeyBanc Instructions] Our question Todd Capital Markets. Fowler from

Todd Fowler

yield on Good Thanks. morning. in the for thanks clarification ex-fuel. the Fritz, us number and giving the change

improves consistent the get environment with they Can economy the more consistent half were quarter. into the It had first go about where the renewals an in the yields out some do bit You’ve the track where in still sounds now is environment impact or pretty yield a how right going like difficult But pricing and are here very with of to contract record tonnage where little it’s feel and improving you obviously accelerate contract is? think quarter. year? it still back price of as

Frederick Holzgrefe

mean, pricing I throughout I No, or mid-single-digit. July I mean, around probably we’d of all been it solidly trends is there say July phrase trends, this. have steady would the pretty the

So quarter varies. contracts of there. each still is I review mix the I the think on opportunity mean,

line levels, line everybody possible the say to in seem we’ve and from achieve with of of earlier XX% XX% far. the But or the I stick place to still generally, that so in put historical retained GRI hard quarter-to-quarter. to in that be it’s year most GRI mean, So seems in GRI to something with

as on. see - back but the lot the think half. to have I year Things don’t in So reason up, that levels have tightened any it be will goes with opportunity the do I volume that wouldn’t a

Todd Fowler

June helps. I’m commented. speaking the if want you Do to well? you That And maybe number sure Okay. July tonnage volume us share then, as and about levels what maybe not was Doug, give

Douglas Col

Sure. go in the quarter. remarks. didn’t it I prepared through I do the can

it take just we’ll So month-by-month.

tonnage XX.X% and down shipments down was down X.X% now our in tonnage down X.X%, In April, in shipments May, X.X%, XX.X%. So then shipments tonnage and June, was were X.X%. down and

April July. far shipments of And the So actually far or are been pretty in in down weight up the X.X%. so July, months, weights volatile has last in for couple

had we but place in an X%, what from down continuing is tonnage So improvement still in trend QX.

Todd Fowler

kind know just Okay. per across down of the - shipments there? I And kind weight into the moving pieces the that any think why on been Do do weight thoughts some there with any and has have July? you per impact But per July, in industry you shipment. shipment weight of

Douglas Col

It’s mean, we region or really vertical hard industry it country. to say. don’t particular any I of see in the

the maybe reopening. I it’s think the fits, with new just starts

July I hard to good. in are some pretty Some customers not they’re some shipments confident, of come just in the weight really perhaps feels lower, reopen, that maybe smaller. are say. all, been shipments it’s or in to is the through business more maybe plan others so seeing back, while there the bigger But all been is it’s But good putting their and there the days volatile. positive system, and parts But days shipments mean

Todd Fowler

it. Got

Okay.

then over. forward? ratio good, ask with Obviously, what furlough, lot parts consistent can one share with the and tonnage relatively about and a it But turn of going it insurance trend. you very moving with expense me obviously XQ. the the But us more operating Let was I’ll the

can of the directionally incremental either about anything or ratio the you we half should margins share think operating year? with about into back So how the us

Douglas Col

the to I started Once we QX, the historically, April. usually a QX talk in that would feel go like record deterioration last a bottomed position this uncertainty getting around. close from still had basis into the you if improvement a like months. pieces, And trends to Yeah. XX you we’d bit we’re would you sequential call very we said, see there given and were we did points. say, year, we sequential - into than with fall improving, target better better margins XXX if little March forward hope would moving looking basis of, the XX quarter. points points, I year put is This third little us about of time that, all feel to it, in we to that OR basis

accident So about left and I with points there, could - better two volatility months give mean, guidance would We always quarter you. best target our out XXX actually. that’s the basis we in that’s

Todd Fowler

really That’s helpful. Okay.

time get back in turn the queue. I’ll Let me over. it the Thanks morning. this for

Frederick Holzgrefe

Todd. Thanks,

Operator

Thank you.

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

Amit Mehrotra

maybe wondering to of if have winning? opportunity you weird would appears business, of Thanks, July prices quarter, and that demand the of types you’re or somewhat because it’s nit-picky winning seemingly other wondering raise you be that understand opportunity helpful Doug, question, seeing It’s a market an so are Fritz. business, in demand? Hey, a to guys Doug. more operator. a to Hi, pricing was you big little guys if seems XPL I I a think actually, raise it market kind June that’s like the Hi, improvement trending just hoping guys environment have it be a of seem You shipments be just the seeing little sequentially. bit to are you share but that bit you confidence to some are given I’m share. obviously the And how giving or

Douglas Col

I in So can I us continues Amit, that, and that. that. analytics for is more we’re I on I would very mean, think diligent into there better. we pricing that the jump the certainly the with put just mean, opportunity

the about adding costs scenario. we of sort you through as the manage pandemic pricing that those decisions. when think driving Particularly, We’re we’re

that aware certainly of the and it’s in to are be network. So have impacts the what the very cognizant that and we --

takeaways the opportunity And real - see into the pleased Saia one we it’s We term managed in the we’ve were pricing Saia important we quarter falls we’ve and - in quite So did execution see are with, long the held I look versus picks right? is dealing see category frankly of that. and quarter the of Now up, an rest to that longer to fundamentally that opportunity, Very at the from cases it pricing it think with is the although remains, things, a what continue second opportunity well. to through what of opportunity some that us remains. challenges, we execute. we second but change for the as some light don’t for that the with the industry, maybe it’s what thesis

Frederick Holzgrefe

to your trend. part terms the seeing of still seen really to us kind enough is volume have in every June part May, week And building hard first a pricing all. to your and question, each And day of I’d not per better gives first back we’re would some side. July - - the confidence say the we’ve day. say shipments week, seems bit of the kind that up Amit, it come that virus is in but on COVID week-over-week, early to I since like But terminals, day of of we’ve with per and shipments little labor that each it’s If a

we need, or gives that it a good we push - thing mean, areas congestion you the little bad if some might price. hard position a you if to us in off try a bit I business the in to in lot than a be pretty price higher too puts run have otherwise. little and wouldn’t a push to is us So of network

opportunity is us So I think. still the pricing for good

Amit Mehrotra

that there those accessorial provide able kind effect. hasn’t thing better capture, LTL in companies And the being industry for that really ability on to Okay. of you’ve mean, is you build me is, past expanded to place facilities the charges. got you of and one builds kind LTL an in accessorial That’s break Northeast, helpful. And kind visibility of optimize then And over loads follow-up lot then a done out the smaller have as of the capture that the well there’s I network guys all direct charges. companies

So is to where to line, understand points I’m there - Is bottom just if are trying that as charges drops money basically your capture address to more that accessorial directly like that those can opportunity of well? today? you

Frederick Holzgrefe

that Yeah. accessorial understanding maybe area. where into terminal services customer lift complex or we extended a in situation is, things we a Amit, an that get sure beyond freight what of that absolutely. delivery what a delivery our the that’s drives is providing, part or what or and situation our are gate it we’re a looks it. And the really is, cost making high what are those be we’re range -- what All charges the in with like, making

about hand, one extent ways. think costs You your or the are. it customers’ well. sort that On two And Likewise, where any when are be for you what making sure assets, using the what to need we of sure as of that the delivery for is, making understand that. charge to freight you specialized complexities you charging understand we’re

It’s only but opportunity. making understand on the customer, So an sure of what’s the we then about It’s data-driven with going opportunity. operation. impact it’s kind on a is not our what

Amit Mehrotra

lot. Thanks a

Operator

you. Thank

Our your come mute. on Stephens. Jack with Atkins, is from phone make Atkins not will Mr. please next question sure

Jack Atkins

Yeah.

for about time, and Thanks for very the that. thanks Sorry much questions. taking my

So this you I guess, if take to either one. or Fritz, Doug want

maybe truckload spill-over of sort Doug, most you’ve seeing strength really - of types business apparent? the the from talk you seen think on any of on continue if in the Do July. what upside for is at you July are sort where you’re of Could about market? you through and clarity sequential of sort build that, customers this talk most And a kind moment maybe sort you point seeing of building just the curious of Just the sort May from? into you about or in beginning it can referenced guys

Frederick Holzgrefe

now variability then also not customers’ that, real So Jack, of right only chain. the this has our with the of tonnage, it, volatility challenges is the or and I’ll the daily sort shipments one impacts call of what been on supply but

frequently out out that it’s and things of changing us. for of the we’ve is freight seen pretty the patterns one this we’ve of sort this or they’re So have - of emerged interesting as of depths come the the that changed

a because So days wow, say, little a three you - country, got row there that some well. part it’s you seems in Then you’d pullback, not call the doing be is a bit maybe of days, perhaps to of - pandemic uptick out customers there a is a this restock. or good in it

interesting is with continues. now sort about trends the changing what going supply as So improved, volatility of weekly that is it’s right - the I bit sort and on is of daily, of comes right what’s - described. think underlying interesting chain the Doug underlying that Overall, have change But what’s that.

Jack Atkins

capacity? capacity you. And then Got where relative you. you constraints. today I your follow-up of my headcount, Got excuse stand think curious guess me, just Okay. maybe available to you guys referenced question, for referenced you sort some You

layering relative So economy just to of where And accelerate? have you hope feel sort to I be beginning in continue capacity headcount curious we how about available how the able sort of in? handle how be do an should - think that you to March? should back is we like network is to And today to that now much

Frederick Holzgrefe

Yeah.

We need And that where additional there number we taken we some increased of drivers is our since and I have pinch welcome that labor. - would the points back workers some dock brought think and and drivers March. have on hours

the the a there think issue COVID then staffing, a that’s the complexity is appropriate I that has local we but maybe may impacted terminal workforce. is have

where seen, as us. and feel need we’re feel at don’t demand. have assets These like unusual the LTL is got some both customer to having we we any that handle complexities this like which we’ve an where constraint to match are the the But can to to capacity a stage. we to network - manpower of adjust So running don’t spots there there recruiting, is incremental but are we’ve we do growth not we

Jack Atkins

Thanks again the for Makes time. sense.

Operator

Group Instructions] Our [Operator Scott you. will question from Thank Wolfe Research. come next with

Scott Group

Hey, thanks. Good morning, guys.

Frederick Holzgrefe

Good morning, Scott.

Scott Group

yield good, about per nicely in third the positive weight back should inflecting the shipment and pricing we now yield on quarter? trends still trends So remaining with going back the think down

Douglas Col

of a is I continuation under always than got per saw it. the of weight mean mix month we But I we’ve being to math mean, just less side. part and say the mean, the I shipment, need others taken that’s what a we belt. on backdrop at pricing pricing get But of by our yield look achieve if mean, would The we and the in know the better. I it. would just I decline more action we

for of So we mix spot it yield. to of pricing think terms - is more get us, part always in pricing But is about and the to good tend go we’re price. in a

Scott Group

I not Okay. we’re the year shipments do ask, down, are so to price, getting of fuel think the improvement back back still from the still ago. some positive, you margin third in And then want we’re is to we’re Why getting quarter? cost lapping a

Douglas Col

cost I of quarter. as recruit is Fritz incremental new when through things and going away some supplies about that training need incremental productivity in network. if the said, costs we the you there mean, And because there’s cost to there that in about on side about continued going we’re to I not people. investment adds and they’re across up pandemic. We - I building just then to start is hire, continue there the a some spots talked talked think the of PPE and where hire the mean, as number then are we a

Frederick Holzgrefe

you’re July, I we and the half are of year. other the although the made element, in still - those mean, investments improvements lapping I second some showing in think we in

last half should year, say. I - of will those So second

issue, will a lot So the August world leaves we’re trends we should September. a is those and through the volatile us - over in there think the the balance of of But this pandemic we improved improve. it And beat for through maybe - out issues sort quarter, to certainly with time and related expectations. and

Scott Group

the the the just in some That’s of just walked fair. of bunch through second about maybe on up a those? to Okay. you you just quarter Doug, unusual costs of add any the costs, saw the And think can And quarter? you way lastly, third then net

Douglas Col

off awarded on mean, reduction And offset matching. Well, or of the out that bonus. weren’t our half paid and of it was breakdown the PTO, $XXX major the XXX(k) offsets I we good all to added And we we But call time chunk the of the you gave something. it, elimination the employees cost that of the of of temporary that. maybe able cost the a

Scott Group

furloughs? about And what the

Frederick Holzgrefe

mind, the business, as furloughs, That’s that. cutting of the down we’re real hours. in the keep we scaled driver So

scale So we’d hours as we bring back up, the back up.

we - - And or able scales, be business in so place those, team if we volume. the additional bring handle the we it to doc are team clericals to be back as

Scott Group

in trying out. we’re up see of to trying some That’s So is it just I’m sort and and to that the I’m ultimately just up there’s understand, add what of way quarter? some net I what figure to there trying it about is guys, third bad guys good if add the and a to think

Douglas Col

a that of procedures or Well, have every we in that. routine shifted comfortable don’t month-to-month. good break not quarter within for like line, I lot employees in the was terms more component A and salaries, in might the a just healthcare favorable because going benefits of lot of wages out. mean, just out mean, anything the I been guy,

So those don’t September think going in we to permanent needs away. met happen that’s August, October. will mean, and in into I need and be that

each So on within than typically out individual to cost statement. line we reported we just items lot We’d the granularity discrete give. you more a have income break give don’t the

Scott Group

I it. guys. Thank right. all you, Okay, appreciate

Operator

you. Thank

Cowen. Seidl Jason come will next question from Our with

Jason Seidl

operator. morning, guys. Thank you, Good

Frederick Holzgrefe

Hey, Jason.

Jason Seidl

industry. LTL about think a and like seems you legacy is how on forward of thoughts where do the on business think I’d that for business? now XQ? we it. I your area delivery to should and going this going the And It of growth versus have to your permanent love margins see How hear sort in be XQ residential those moved trends more

Frederick Holzgrefe

of an in months low-double-digit of as uptick think and mid-teen saw opportunity because delivery think it of don’t but house weeks, last percentage the break of last service residential. our our or to the the and of offering kind in that. our are X% deliveries saw want of this, some three terms in high people get percent. or some there with through as to definitely that’s stalled, been difficult like If a two deliveries it’s necessarily ramp we long-term things expanded service into the about up plan year, daily it now year months deliveries. residential We kind the In down we customers time to to going coming what residential apart around we’ve was this of programs But piloted probably X% the it

So But to of as would that service we’re we our use well model residential some agents be see company still in and to end looking level the better But that our operate stalled. we providing the to that of on want eventually up going in we’re service average mean, that’s I the forward. where as and even going at area. business

Jason Seidl

the this could That’s for Okay. COVID the something replicated is employees Also to potentially on to we drag good that bonus that continues future in know. quarter. in here be the If saw quarters? on,

Douglas Col

in out variable, real to days comfortable really moves the of because more comfortable the the compensation. and bonus are on there, terms off with so your Well, $XXX those point. side of With cost additional much we variable uncertainty were making awarding with we’re the

for I’d definitely So think variable but about anything say incentives. now visibility, prone to limited the we’re is more on table, the with

Frederick Holzgrefe

the Jason, with of either sacrifices the take saw just is they people -- one-time are employees an advantage quarter. through in additional where business or could key COVID or issue thing if that and really days. immediate did for themselves and a have Those in and supporting on The Yeah. way, that the things about put of those sort the the was, the hours was of in the we quarter family people a sure later member. based kind it same And the the moves, bonus

almost described, support So that to about, we sort to as we those of need do to just things are what think the the real-time, have do in Doug team.

Jason Seidl

appreciate Well, out time gentlemen, Be No, always. that sense. makes there. safe the I as

Douglas Col

Thanks, Jason.

Frederick Holzgrefe

Jason. Thanks,

Operator

Thank you.

Ariel Rosa of Bank will from next Our come with question America.

Ariel Rosa

guys. good Hey, Great. morning,

the and see kind and tighten on something you truckload does LTL? side. might impact discuss maybe your truckload little So of operation? flow half you How that’s how bit through And on it historically impacted is has the seems truckload a for if like what second prospects Maybe heard for XXXX? into tighter, pricing, capacity getting could that we’ve that capacity

Frederick Holzgrefe

is period, small I way. we’d tightness it’s see Well, that impact our some mean, all truckload over industry, meaningful into the so industry of those -- agree a supply it LTL. shifts much larger in say, in probably pretty the I’d volumes does extended an we a do spill-over

to continues, So of those see heavier if LTL. into the some down we’d I’d it expect slip continues probably and volume say, tightness

inflation and get - the cost the year side, it’s industry rate out our need match to right On to achieve. And while just pricing rational year go and in we try been out returns consistently to the and is a achieve increase for quite now. our we

get it has it. there less don’t They truckload to the much They luxury. volatile. pricing when can So seem that have been they a side. get more Their is consolidation on

in professional go as it So to a impacting year price. to don’t - our each the in view and doesn’t it approach we way consistent our be want discuss We and ability get environment and we customers get really have come the we’re in because easily truckload. - on as that’s and doesn’t Supply industry. it rate. going that consolidation needed as And go probably the do does to our able

Ariel Rosa

the And expense, took claims the on helpful. wanted then it which insurance very to That’s it. touch and I quarter. it a step-up like looks Got in

expect clear the Do the on third heard maybe is insurance One for into carriers road, going from the continue claims other kind beyond traffic quarter anomalous is this reason things less has less is some the less actually of of we’ve in congestion of forward lower expense. second that you from and just that or quarter and financials? to level kind from resulted

Douglas Col

I expect from the in it time to to - it the is of the quarter. it see the and in that round necessarily it We that was $X that of mean, for is quarter that insurance you we piece and each of given and you this $X it’s line accident increase, I wouldn’t completed of part but say that you just unusual, in I wouldn’t around deductible year-over-year see rest about related volatility million-ish line. forward. next a time. million When have moving carry in of that a the won’t severity, to any quarter about impacts of way. model $X renewal volatility million sticks, business. February. just was it’s our And premiums There’s that that that

Ariel Rosa

was line, the it. there? nit-picky. sale Got you other and on it’s a That’s line And had if what any maybe little on the you gains But about in helpful. And below the then talk could thing just the quarter? bit last

Frederick Holzgrefe

remain in And that’s I comp this adjustment hundred quarter. it a each volatility couple level. was to Necessarily, of wouldn’t either dollars an of it expect because That’s usually plan. market. to larger quarter made the a way non-qualified little at thousand that it’s our Yeah. related deferred the But

Ariel Rosa

Understood. Very time. it. for the Got Thanks helpful.

Frederick Holzgrefe

Sure.

Operator

Thank you.

with question next Our Benjamin from will SunTrust. come Stephanie

Stephanie Benjamin

morning. good Hey,

Frederick Holzgrefe

Good morning.

Douglas Col

morning, Good Stephanie.

Stephanie Benjamin

comment progressed touch been some your want productivity that account opened seeing local you Any expansion, will be that some for I wanted How of improved maybe region you’ve at terminals? the in newly those to on penetrations? to with throughout Thanks. of terminals. to Northeast what helpful. color those quarter? Anything Positioning in terms

Frederick Holzgrefe

productivity have tonnage. it’s particularly region - bit of it’s April. time COVID transform that’s along and be costs been certainly we’ve issues those of of able And network to the feel June. that we and during a little with and certainly those rest - to have in lot the the was a shipments better it points we underlying more across of a were the with been and that And - over some those like by May through that deployed region quarter, benefited trended the was initiatives pleased - variable different Well, match also terminals, business The impacted the that. and a we’ve why we

So saw, didn’t quarter. we’re been a execute there. environment But volatility part of our to the what that the it’s the able it’s I But think we overall averages with have simply there in. on been because of still mean, that obviously we I good. the hit that - goals in we what is we I’m were did challenge by environment Load good. pleased

think in the that that success in long-term translates I market.

and execution. the So well with I bodes pleased it think

we continue will that as out this, of that think you grow see I to will improve.

Stephanie Benjamin

terms that know in should XXXX? of of look Anything of some in plans of? out Got as the I be that we half XXXX, it. investments were And for any those rolled Thanks. in then aware back we that technology some investments additional

Frederick Holzgrefe

had those through the in manage an - is our second saw that labor technology. frankly, it’s No, have impact That’s the quarter. and in to thing costs a - the is highlight to quarter, but I and from reflection of it impact biggest return productivity ability to investments think than on the we an would other difficult say our

So I of those that to adjust ability utilization our was think tools.

about excited I’m forward. So that going

rollout we’ve software of be of visualizations. will distance in of additional social I of a sort that think a the the as in of handheld investments next these integrate enhanced - an And handheld that handheld of second of our sort frankly, these some will sort year. as we interactions are replace tools or and versions There’ll of existing be enhanced introduction well with put tools part processes place. that touchless sort the further we

these made so about for but to it’s I’m incrementals all technology, us based in also an not - footprint. tools, drive continue as as that those the continue productivity on investments our So the drive is organization important and excited maximize we’ve to to opportunities in we only what are

Stephanie Benjamin

much. Got it. so you Thank

Operator

you. Thank

from Ross Our Stifel. next will David with question come

David Ross

Good morning, gentlemen.

Frederick Holzgrefe

Good morning.

David Ross

what Good trends it positive crazy that benefit be certain that biggest just Maybe it was to out of the morning. do the business seen? think a we’ve the or surprise to long-term accelerated? you months Fritz, come last four will was maybe got

Frederick Holzgrefe

the we’ve the in said, tools one was of for concept labor considered technology were that a help one productivity one beginning of that started the about And all manage of we the I is is in boy, think the year. to execution the pandemic about talked those better things key at have talked things So second goals plan we by learned we of year, we’ve things I the part to that quarter of I an think those say, the let’s And the to at stress never year want those, right? able quarter of work certainly saw. instituting had we business if beginning David, of I you hit the or improving second investments the plan see our market. executing we year, of up do Well, the we market told impact and tested in our would the tools that, and utilizing And the the the and We made. our costs.

operational can we So the future. out this and is that from one think we out things of to an this learned more do of into that - foundation move and execution whenever of perspective. as think care this as the year you is, our of Take perspective what care operational I I of normal look a grow Take built pandemic, we that exciting environment, the we that translates the employees. the we’ve customer. And saw

sort a in. When business a answer, are in learn a that of quickly, in think got in ground that and you we that’s but adjust I to really now bit situation business position be we like proved could we’re what this -- the falls that out underneath little out you’ve a grow quarter think I of from that, can it. and qualitative it’s or those do So maintain a of we of profitability you’ll

that me, So forward. what’s I think optimistic that’s I’m - to looking

David Ross

you volume? have we if any able don’t in you And that do emerged them you were to glitches find that fix a that get did gaps or surge

Frederick Holzgrefe

that we we the enhanced developed, we - one social of policies distancing was a of On as things of And is particularly in quarter put the -- operational matter then in sort our impressive an those. days. operational

You learn go. you things as

continuous improvement, process. of a of sort a kind So it’s

of longer term Some that learn hope you out things things you to the fully are operationalize. that of

that the one have we’re social So distance. we’ve challenges is of - that now we

terminal company social distance, that for really got has to out a and ways team. maintain that communicate we’ve that It’s into a - figure that valued if employees. connections now with right? employees sort doesn’t our We are to doesn’t sort and other of employees with to culture the long come with a happen, Well, communication right and that of maintain to our support driver interaction

on going at be we’re part and just part of different to getting options. That’s to working something the it’s going - pandemic. it’s So be looking technology-driven, past that’s of

world that I here think as certainly this through because been we’ve want apply network, to sort have key maybe take have do opportunity become markets an line-haul you element and it is line-haul able that in national more that. we those that’s about freight and more of of that player, the around Well, to that in. profitable And we’ve tools a something learned reroute network you optimizing us you other talked that going a the optimizing you locations normal or in downturn impacted. support or forward more learning’s the how the been the we’ve cities around process optimize network is compete better the to helped around

something advantage that’s that going take the that in we downturn So of I we’ll think learned forward.

David Ross

you. Thank

Operator

Thank you.

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

Ravi Shanker

Thanks. guys. Good morning,

about I competitors is from were do LTL ask well capacity. same how assistance time, talk carriers, of bunch exiting capacity. TL the a LTL the in there’s of you side, about new the carriers TL If as your speculation the well? can at LTL or one players you there asset-light Obviously, on think marketplace recently. side asset-based asked and entrants similar you of capacity much larger then earlier both been And also in space, just question impacting that’s of So the a as financial news as smaller got

to marketplace? look months supply do LTL So is or when you think you entering the out months, exiting overall XX six

Frederick Holzgrefe

of about if angles. our difficult the and at withstand know. more we’ve requirements. technology balance cost, different cyclicality insurance The don’t mean, say. you of seen environment The to pressure carriers continued able more gotten think I is when couple time, mean, over on over has not it it. from to their business could puts look of sheet It’s I hard right, a you I very Well, long-term. consolidation, kind

XXXX, form So good the years, environment last XXXX for the as leave in small example, few in freight was company in of a as even we failure. over the saw capacity

of are out a well they I to us that you. So for impact there in the truckload those all few that mentioned as pressures

to network, international it’s build that building since entrants So deregulation, has national nobody an network. The say. - in done new mean, terms to set a of has nobody hard out I

that fully So us, covered is value we’ve to I think to the and states something we because fill huge as with would our built that XX own out hard near geographic map facilities, in there that’s to a be replicate.

Ravi Shanker

kind those like if kind drags can margin, But COVID. on transitory of numbers. responses, pretty one with costs not And huge on also of Understood. earlier and of I follow-up some the of of your guess, been you clear on guys those and fairly, seem because have transitory I

of that what’s remind So of kind years, way lower the gapping in kind or primarily topline Is you can better? path or driven a coming again or what’s to there? the the like if meaningful the algorithm in path low-XXs what’s to us

Frederick Holzgrefe

I Saia’s strategy. it’s of elements think, Ravi, several

with getting the for First you that about and working pricing market, quality great opportunity compare Saia. we talk get the or foremost, with dealing to and service paid the when

Northeast capitalizing networks. leverage and legacy an markets, The it those it’s outbound. exciting on really developing both expansion, is about think gives opportunity our us thing I to the Northeast inbound the

we the expansion, XX So pre-Northeast states, had Northeast. the

incremental Northeast the that’s to in a sell You to Dallas place have the opportunity from like and Dallas, Northeast. to incremental that’s

network network, fixed then Northeast, and revenue a So frankly is opportunity, you the basis pouring look on dynamic, other and over beyond level, corporate additional I cost the then both long-term about interesting that to And sort the also of but the line-haul there. of still really on a Saia’s that the thing value have optimize you think that. it quite you opportunity

ones of than some longer will, you those that network bit perhaps you little above. or little a of the bit XXX are around similar competitors better benchmark that if service or We sort anywhere terminal are and term or have or have terminals XXX success, look ours, at networks a other larger offerings

in we can the what closer so I move business generate third returns And for drives as over in additional if value Saia the estate, for in customer, to element it’s where we us, markets of to have we density the real opportunity the think build time.

add forward, environment a it’s significantly, the difficult us. have execution think was think maybe I it OR was things we performance, going up compelling And for says, one I the that opportunity quarter, most think what but pretty quarter And environment. think the into translate XXs. to you tough and into more drive in all second about a I you really that I a opportunity it those that normal

Ravi Shanker

Understood. you. Thank

Operator

Thank you.

will Tyler Raymond Our James. come Brown last with from question

Tyler Brown

Hey, good morning, guys.

Frederick Holzgrefe

Tyler. morning, Good

Tyler Brown

beat I I’m make I’ve but so to this, Doug, that on Hey, it. got do to sure sorry want

winger and on million drag QX? a that in or day you’ll PTO $X.X basically So make similar is to grant, QX the and QX accrual does specific it

Douglas Col

That’s the - was was QX, spoke piece of million for right. the it. It of $X.X I

Tyler Brown

QX a Will there be and is another QX accrual though one-time or that in accrual?

Douglas Col

No, it’s we across the the when rest of it. year announced

QX QX, in and one. another you yes, have So will

Tyler Brown

Okay.

then So bonus. - on quickly the real $XXX and

is that you So July, it Fritz, that in I like you accrual paying are in thought you sounded QX, right? but mentioned took

Frederick Holzgrefe

That’s exactly right, Tyler.

Tyler Brown

continue I been those in Fritz, maybe this are hard talked for Thanks you year, CapEx have any development as talked pretty this background? but up. last real on, but of clearing examining So then working you those know opportunity on those about you using to you And bigger are estate about question, projects? that - an you the or purchases guys this actually guys pausing And Okay. the

Frederick Holzgrefe

North we two works and the Memphis projects, big charging are in and are So on. the Atlanta

is and can I becomes us If sheet that we a important quarter right may the was are take the available to advantage profitability that. maintaining - balance if really the about execute keeping right we that available. what property available position real to on location, estate become second in think that in available of

we exited to quarter. the where that’s wanted in way. of the So that beginning be at We

now, And we’d that it have be think certainly our I - right available, is don’t we in comments if if so anything but don’t immediate, became the are, it. on we - pipeline it

Tyler Brown

right. Right,

one. last my then And Okay.

by add add you but way of So are capacity? is this won’t to to door set capacity, you next year think up that it year much right

Frederick Holzgrefe

us an the Memphis things some fall other incremental in I Atlanta facility too. terms next be will year. that the mean is next smaller the online longer new of come for what for end we’ve of visibility And pipeline in year the And got we’re Yeah. there term may year that this exiting. towards year,

Tyler Brown

you. I Okay. Thank it. appreciate

Frederick Holzgrefe

Thank you.

Operator

queue are There call questions for now over time. in back to no like would you. Thank Fritz this at the to turn closing the I further remarks.

Frederick Holzgrefe

we Thank exited pleased in on you the Most we’re past position pandemic opportunity the calling position our everyone I profitability has we sheet economy in. for longer very we’re strategy. a our very capitalize that And we keeping quarter we for execute challenging I’d long-term balance can emphasize, and in in feel maintaining focused just that once strongly emphasize Saia. on very where would our moved can the the that period, term second on the a quarter. with performance significantly,

that. it And see about excited don’t change to opportunity we is we are out there Thank you. So the for that us.

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