Saia (SAIA) 31 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Doug Col	Executive Vice President and Chief Financial Officer
Fritz Holzgrefe	President and Chief Executive Officer
David Ross	Stifel
Jordan Alliger	Goldman Sachs
Amit Mehrotra	Deutsche Bank
Jack Atkins	Stephens, Inc.
Scott Group	Wolfe Research
Todd Fowler	KeyBanc Capital Markets
Ari Rosa	Bank of America
Stephanie Benjamin	Truist
Jason Seidl	Cowen
Tyler Brown	Raymond James

Call transcript

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Operator

Good day, and welcome to the Saia, Inc. Hosted Third Quarter 2020 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Saia’s Executive Vice President and CFO, Doug Col. Please go ahead, sir.

Doug Col

you. Thank everyone. morning, Good third conference Saia’s quarter to call. XXXX Welcome is and Chief me for Officer, President call today’s With Executive Saia’s Fritz Holzgrefe.

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

Fritz Holzgrefe

Saia’s for Good you morning, and thank to joining results. discuss us

year include to Third in business income is second continued given last before. almost volatility dramatic record middle company’s year. ended for that compared the to third compared shipment second the quarter. revenue quite activity the of XX% felt the saw develop daily a quarter in This was which workday the in revenue quarter, on X% levels the history. results nearly down quarter, quarter rebound any operating in trend improving the the In we in Shipments per and

per our it X% to adapt Weight shipment, the throughout the customers was their to flex – country. to was and shift full as for quarter volatile continue at supply normal see see quarter. down shipping it also geographically patterns the We new chains pandemic-stricken

to market of by that has that on to the purchase in flat these From customers increased COVID-XX was normal. the driver operations The foreseeable quarter continued pandemic face daily financial doing the industry pricing rose remained on The we in heightening the adding per in underlying to procedures that remotely the now in this safe, require how come adopted with efforts unprecedented changes new on adapted keeping and employees and together our to to team all pleased our conditions – remain markets start, focused our conditions daily I brought us our unison, the very plan we adjust operate. the call practice necessity many turn over future. so of become our to work I’m operations. and to of standard Doug for to review company that are shipment, for margins, to a a improve Operators is Employees areas are of a able workday results. remains still developed continue third few out revenue to going structure practice fuel pleased and revenue cost stable for surcharge report continue I’m per by being in to focus improvement throughout transportation. that key ratio This per operating shipment the we to a cost environment surcharge, per operating with challenging inflationary, of the and shipment, pandemic the report fuel pressures. role pandemic. The including the XX.X% excluding plays and I’m record tonnage pricing X.X%. of down extremely in the X.X%. So still revenue year-over-year, quarter. XX% any surcharge managed third revenue a Despite The our proud quarter improving year-over-year.

Doug Col

excluding a increase X.X%. providing workday well of third tonnage $XX.X With comparisons million a year length I’ll surcharge start fuel to by X.X% quarter, was the driven or as for million, in in haul. quarter Revenue Fritz. some by the a as $XXX.X flat was Thanks, ago. in X.X% revenue up yield, increase the increase

of XX.X% the mentioned, growth, was ago. and revenue total revenue a surcharge XX.X% fuel to headwind a down to Fritz compared As was being year XX.X%

now wages Salaries, and some increased benefits the X.X%. key quarter. in Moving to items expense

X.X% prior was employees. count offset Our with quarter than somewhat these lower employee Purchase by usage year. year-over-year increased the the compared costs of year. benefits by Health were through lower transportation inflationary our average XX.X% to being approximately costs essentially insurance flat last costs

X% a in claims of $X prior was line, fleet XX% have age down quarter used X.X% as from XX% or was quarter. I it a to to with expense in than reflecting sequentially National Fuel trend As expense purchase approximately increased equipment trailer cost invested imbalanced expense approximate Put shift and expense year. were ago. some to our the fell year. in XX.X% past the perspective, insurance meaningful Also we premium and transportation expense in average higher expense the and the standpoint lower note this have the the technology. year-over-year. million our X.X% the severity and a grown costs was lower frequency markets in quarter revenue, and or the $XX.X and total of second of over percent the in that of quarter, the made faced network, to last shortages the Claims period In driver or illustrate internal million grew X.X% would year-over-year. we related third $X is and prices was volatility that pandemic investments where the were advantageous tractor XX.X% quarter, X.X% same insurance increases. in prior compared Depreciation quarter accident of continuation transportation others. million year $X.X by line miles seen and expense to higher years rose variance diesel in in in related quarter, were we year, million the versus from costs few the throughout premium in This by that the company while purchase a

of ago, compared operating to quarter only XX.X% X.X% rate our total million. of year, year to million than the record. ratio with reduction slightly operating and net which XXX XX.X% in interest total X.X% basis $XX.X and our up income was expense rose the a last last operating up income third lower a ratio to in So points revenue than expenses $XX.X XX% XX.X% higher a and by with was Operating improved a year, quarter, tax

Our last for and tax to we fourth XX.X% to year, rate and XX%. XX% compared quarter quarter XX.X% was between expect third the tax rate be

last million, quarter of approximately earnings $X.XX spend. investments $XXX.X represents per diluted which third that The capital equipment share $X.XX compared to XX% were have totaling Year-to-date, revenue made we of year.

we third hand, with to stood our a comments. of turn debt million the at with year $XX.X now quarter and and some debt call For I will the debt over approximately cash be $XXX expect ago. will ended $XXX We million at $XXX.X capital net This closing in net million of at of million. on back in the full to $XXX.X quarter for the total the year, expenditures the compares now million. million end the end Fritz quarter second $XX.X

Fritz Holzgrefe

Thanks, Doug.

Before great working don’t These like this vast to we the worked our The volatile professionals given I’d effort provide through the comment continue for service remotely and essential call have open majority steadily several these employees by again for from times. customers. have dedicated that year to employees to questions, our our professionalism option. hundred employees home. of had on We’ve

claims of a current sales. prior XX% and record continue year standard to met service solid ratio see our our from volume improved trends was business On to third our we in continues. pricing on-time Our of X.XX% cargo XX% the and to the opportunity conditions, quarter, improve

The an an supporting Memphis step-up average facility not new support Our from national X.X%, up state-of-the-art important with The also were average hub of quarter. in second operation is October. operation our the our break it network an facility customers contracts our a of new We renewed as growth. bigger than the sequential market quarter only X.X% in XX% Memphis in third serve but the operation replaces. will opened

two replaced capacity. Although additional offering, in facilities to providing investments for with service larger and These our smaller door Texas customers. our facilities markets, support continue improved we

focus and and our the foremost, health safety and the remains on quarter, our into Moving of first employees customers. fourth

at diligent and COVID across well network. ready line hotspots we’ve for open different our focus we’re the operator. challenges to questions, those challenge execution our remain With of planning, and company move teamwork now continue been to While the as to the as said, terminals remain, that through meet on through able competitors,

Operator

The Instructions] question. with from come will question first Ross [Operator David your go ahead with Please Stifel.

David Ross

getting maybe Fritz, predominant gentlemen. on on from price. a purchase the Saia is to under contract? them providers, time? PT Or spot? do capacity the look essentially your is morning, about across are those the the have more most than that’s you truck coming lanes out concern, a network for Good some committed So little of for capacity situation rate you capacity so just But as the and talk main I know Yes. bit transportation. pressure there The

Doug Col

side, our we’ve probably – got PT to PT the David, Yes, XX% XX% on contract. miles the under of

to any weren’t spot we the exposed to the in So quarter. great market extent

and usage a this it’s was of to calling We I shows up Our use we but that we’re to drivers find do had the lanes. certain linehaul in here in it. mean up. off struggle we total it we think quarter. the of use throughout whether and we little But coronavirus, the markets And way just to driver in PT need advantage there, quarter, And at benefit drivers this was we pandemic or the our good some year, we it past that’s city our the in quarter. greater can to pretty that stepped related. a this I operate when found most because that

Fritz Holzgrefe

add. would I David,

as evolved. customers’ We and that we shipment because lot I chain particularly that in now think important changes has resource patterns. see pandemic supply simply right it’s a tap our of

us that needed given flexibility match we to. has this where to So

David Ross

lot specific of year for come quarter where contract bubble And first year? renewal are period there to or in, is up say, second going quarter a next next rates any those

Doug Col

from of that and PT the lot relationships, through long-standing the No. go to – you QX them a But spike give A we average truckload number about But an idea, right was the know really ratably spending mile truck QX, were QX. in really, are of on in well, our year. kind there cost same I rates. to they us

from QX. of step-up per because our mile but flat, was QX, our a in it So relationships, cost really

David Ross

important terrific. little gas the view because recover What’s if question yet sector there? has the been bit energy over of is that operation oil years. And a legacy your and holding there a How and back maybe that has more is just demand on of last results Saia to That’s currently? got

Fritz Holzgrefe

Yes.

of able we’ve those match you sort to that’s great I flex density But year-over-year, freight. is some If comment changes. would at and typically Houston things that best that our to been cost operations look structure of our two region, those actually down.

years would good five the growing really prior And less. If we’d much model ago, some the and or the that hasn’t fortunately, be that it this So able on grow I of freight. – But of is energy that would other and been Northeast, say, and OR. our that. the that the percentage conversation, a as bit more as be to business have we’ve shrunk. of is become a those energy reality exposure sure of drag larger sector our adjust in a of would to to flex to the national operator, offset be sector it’s we’re to a it markets book, had it’s four like it elements

David Ross

Excellent. Thank you very much.

Fritz Holzgrefe

David. Thanks,

Operator

Thank with Goldman next go Please question will come from Jordan question. question. with Alliger you ahead Sachs. the The your for

Jordan Alliger

morning. Good Hi. Yes.

color is on thought on just give what if trend? through a move – thus it could we went I’m you better October? normal seeing September curious, some it Or and what is running the the little through a if I way. recovery far perspective than additional October? you might could color you volume Is more certainly have curious – you’re versus Thanks. is well as under exact into you Just it as from know give

Doug Col

September seasonally, were very was single-digit Yes. shipments, us, kind Throughout per in down the decline when October. shipments there August then in X.X% for And up it’s July per down Jordan. a from but still go shipments and they a And low X.X%. you basis, up it’s and were some to just day of of Thanks, back it running fractionally, was low but down you were less. September of terms day a normally, on see was – base. quarter, kind there was swings,

recent that’s every like there��s have shipment some year So caused weather normal than so in weather quarter, been in ice that. Texas, few October our but count. in days. all far some been to and But hit October, in the seasonally, and hit fourth It’s it’s snow a last better Denver but with unusual mean, we’ve in with little big we’ve week volatility in markets the I that. this

Jordan Alliger

you you as optimism Or on your of think improvement? And follow-up, as a and past there what of a kind October that and volume uncertainty still get a of hard into quick December talk a to as next sense is just out of to and is full bit standpoint? ahead from generally year, continued read may into it happen November there a customers,

Doug Col

up mean, a our LTL. good Yes. uncertainty I they business, they say was would us. feels for which a the the have shipper step-up definitely Customers, to it’s intermodal next shows whether or in from contractual there’s about their of pretty capacity year, employees quarter, X.X% me deal like. QX still I that sure make renewals all the and want truckload, and great being of that But

I’d coming the in the weeks for probably a few shipper is cautiously the things of and like vaccine out So that. with sure optimistic, but say next news and lot election

Jordan Alliger

Thanks much. Thanks. Great. very

Operator

The will question you. Mehrotra Thank come Deutsche next with Bank. your go question. Please with ahead Amit from

Amit Mehrotra

Thanks. in on have big the on just a segment cyclical and implemented obviously much pricing. contract tools question the is trying to X.X% hope That’s on understand your guys Hi, of terms you number, that a and are how to raise Doug. I’m I to Fred. you of customers? technology better of get Hi, well. Quick guys more I know prices opportunity certain renewals.

and kind dynamic of us of that is tools? cyclical then just to pricing kind And could getting better you of help if deconstruct further to via you optimize the what and between what technology there wanted are I maybe the at doing? guys the so And runway more kind – pricing

Fritz Holzgrefe

in all Amit, for So came when renewal those contracts the that we the the – quarter. quote renewal, the contractual are up

the to up of analytics assess through that it’s period. the that data contracts So the reflective we came in went

year. So those kind of come up ratably during the

the push the cover cost to on hard we’ve year. that largely, business those pretty we got So structure into next is in

we’ve where understanding we we lot revenue still So movements, of price I we us. looked and and opportunity, accordingly. what of got it’s freight as a those the opportunity, like, for look the looks pricing a the what bill stand characteristics, per freight market runway try a at If at our the to perspective customers’ versus better there’s from

– pricing that tells characterize of opportunity. don’t extend alone have in So as us I that where more know network margin as are well. that I going can we And drive we we this cycle. I into opportunity for the that’s But us and that network a national to

So I of reflective the think business. that’s

go to an was reflective And of the because that And we quarter. is in that’s your this we business see question, the to to that. available pushing the keep supported So us expensive operate. that business back that analytics

to capture generate every is important. So can opportunity we return that that and

Amit Mehrotra

extend all the of just fourth the saw ledger, then third that And weight and And like should the kind volume, should margin crossing right on both the answer. talk you kind into over Doug, But incremental on terms maybe related – the quarter? in you the OR, follow-up the XX that, the that typical of then incremental then to always next initiatives pricing that way productivity fingers kind If that’s I and the one, that implemented? about. I margin year, and for the more both happen. context what’s OR thanks you question, near-term in up shipments it quarter, see of about the next of guys Fritz that hopefully, I opportunity step seems about a question be just maybe right momentum side asking think to and in What’s the have you fourth operating can the on quarter think in that muting hate like like what the the of that? Hey, the of in ask OR, right months does our

Doug Col

get degradation, part there’s to in XXX XXX about points we’re so mean, there of QX. take our view, typically, how thinking a us, kind – you only when days, up in half I’ll QX sequential is with I a you of into couple also lose and there of Usually, – the first end step-up but adjusted QX. terms holidays. you into days OR around here our move the some basis tell miss not for and you you

that for couple quarter. So that will get impact full this mean, we’re I took the explains a Depreciation different of I’d thinking up the with of depreciation. say, some hit third in about. the it, typically fourth and equipment And quarter. that’s – no probably will We quarter later step year. in us didn’t things

going a step-up to there’s depreciation. be So

We our think it, quarter anyway back as benefits points thinking healthcare stuff. XXX have into deductible seen XXX typically with headwinds the to about we’re our employee folks in normal, those usage the quarter. meet in and areas, some their basis trend happens fourth of and to fourth I that walking But

Fritz Holzgrefe

Amit, done was year driving the particularly the and at I frankly, our cost on go exciting execution the data quarter pricing, I back job had this think focus I third even and deal about we with of plan year-to-date, year. that capitalizing the about far And driving the to a first one beginning And optimization. challenges analytics that our to with so in pretty really and of think the we’ve good and on the quarter, Yes. was things the quarter the second

year-on-year. long think in environment of or to So we be XXX XXX sort growth, GDP said sort basis reasonable next macro we’ve point ought of improvement to the into as year, a I that in

bit up year next is side end changes or stronger, if higher this year, right. to we a where environment the on depending Now the that maybe

have to I kind is around tested managed of would plan pandemic, us time. a as over And this drive can we our we OR have the adjust think that strategy sort and block the I that opportunity think the have of kind to we can we this. And is important longer-term thing our something can what’s I it’s that. how anything confirmation see we of through and is that don’t on, us that exciting capabilities to execute

what to impediment. the feel going there, what’s and we the focus on chief be can things control, on good think do the I macro can we we would that But about if I environment execute. pretty

Amit Mehrotra

Yes. But Has the progress XX% variable down side? that little before. business? some Like in thinking guys new of overhead about being productivity cost have Doug, you’ve as come made about a the talked kind that fixed like fixed bit on you what’s cost baseline terms in of the

Doug Col

the XX% for a to all mean us. next mean we’ve XX% to up got target closer of or we’ve been we’ve with XX.X-percent-ish had from to XX Amit, minute, the year even of step a in capital revenue I running. plans probably moving our growth a kind it’s I further, investments

So moving it’s of kind a target.

at happening like to manufacturing, time. depending – it’s So macro. it’s on you – vacuum in I around and around environment economic, from you can’t the just look talking moves of kind And go I all don’t is because either. lot a it’s it it about how a the The pandemic, moved whether quarter-to-quarter

Amit Mehrotra

Congrats lot. it. I Okay. Thanks the All right, good a quarter. appreciate guys. on

Operator

you next come with the Jack Please Thank will Stephens, go question. ahead. Inc. for from question The Atkins

Jack Atkins

for you time. thank And morning. Good guys. Hey, the

I October what if commentary it. – trends for in as maybe you Could don’t and Doug, seeing could that know, give well? in to maybe September that’s just so back maybe I moment. saw – you October the going maybe tonnage Is possible? you missed the far you’re a Just and

Doug Col

Jack. Sure,

tonnage So up and in was X.X% September, X.X%. shipments were up

up slight about weight a X.X%. in increase shipment, So per

shipments and so far tonnage year-over-year up X.X% are X.X%. up the in And October,

But. how X.X%. been, up days, the so favorable. So we about to continue per far But the last shipment Weight trend just weights in I in been talk three volatile the see October has or volatility mean two there. we is

Jack Atkins

about, CapEx a guess shifting percentage where is of take plans, things, moment year. you That’s next one, revenue into next has to are the XXXX guys up been in the is? kind back ago advantage think growth know that able XXXX? How kind stepping moment, a think sort network growth Okay. of as terminal I to available it a it of guess, plan I sounds terminal perspective kind stands going thinking a be for go from you just we to for next then of couple And of of fantastic. expansion how of That’s about should maybe today sort then about a of I XXXX thinking broadly of to sort and gears muted great. but year? industry sort commentary of capacity as maybe we And do and year just obvious in about reaccelerate like the secondly, regions,

Doug Col

Yes.

next In estate on terminal healthy terms we’ve I out year side, of a got mean, budget growing pretty real into the there.

got And the in of number but one things so planned Northeast we’ve it And we’re beyond opening step like up. far, in a got quarter. to we’ve we’d that, first looking the at,

Fritz Holzgrefe

service, and available. a are Not other of yet, as been list similar add the of that to one replacing in that North in kind we’re legacy we’ve improve those we’ve of that. customer. markets to like the we of great working a move would very pipeline But opening across looking very, We’ll And the year, opportunities into then opportunities kind Terminal. then vigilant to the there pursued, as to got to strategies. Atlanta in kind closer be there’s we’re that become long markets at around. assess they network we communicate quite I’ll Yes. got facilities where example are that and some where monitor pursue I on next Atlanta still has on position and – point a

Doug Col

in probably few a capacity. of I on of think I But part. component we’re over think say the general, lot only We I the I in capacity got of invested part on capacity, capacity be XX% think the to standpoint, added But mean, I like first the terms there. last terms question, pressure mean, we’ve in We’ve would that the points. feel And I And of a in third XX% last several Jack, years. And a in that door to the we’ve got that the drivers. you’ve not one equipment. going caught next forgot power. we’ve that’s of lot years. front your I got challenged we doors is

that feel So the that’s now, mile. advantageous and relationships from in where we the would experience be us of on we lane seen a factor used providers. if I really we PT really a like mean, per there. it would our have but the help our side some kind cost balance. gotten in have quarter the more could shift That’s We’ve rail

related. that PT And Some of have headhaul to flipped could pandemic have probably if backhaul. more it. we found used that’s be Oftentimes, used we to lanes,

Jack Atkins

for Okay. the guys. That time, Thanks makes again sense.

Doug Col

Thanks, Jack.

Operator

Thank next will ahead. the go come The you Group question for question. from Research. with Please Scott Wolfe

Scott Group

thanks. morning, guys. Hey, Good

just second. the to to want a for back discussion PT I So go

some you’re making meaningfully longer-term year? benchmarking versus about And PT from as we from have not they from seen periods in where we third you’re there headwinds understand you truck tightness So in anything PT? Anything any seen PT I the do in for differently little think to very an to changes you PT. protect doing next differently about issue. right, that everyone thinks Is PT exposure? past markets, reduce have standpoint quarter was your past. a OD, doing Do

Doug Col

percentage mean the four you’ve I market the mean, you’re from that, network. got of that five if another your of and load it, becomes the one a only comes to lot last Well, maturity schedule. now load add is you schedule the of PT on ability last you’re is running reduce factor I density only out something to – partial schedules if XX% the smaller schedule a like a or and because

So become smaller. parcels your

into that have is own schedules until run to the have back to of a want drive and the way density out don’t that, market down But empty market. to the – build equipment market. them pay more of headhaul you to So benefits to on number you a to bring your

of got that upset number maturity, the we’ve great So to relationships. not have but mean, it. just use I mean, move one to we ways when we’re I is

per is mile us. miles cost cost pretty advantageous. for Our very The has for stable rail been

I but suspect to it down, it’s urgency – not over comes probably bring it not So an time, naturally down. there’s

Fritz Holzgrefe

to you’re from it’s of the the is network build a just And assessing key I that part thing, market on way. you’re a optimization what is making, in advantageous build and the around perspective point is, revenue the Doug’s decision opportunity Scott, linehaul cost mean you

will change, take had a there assets or becomes a times to how hire, long you we we you maybe change, you’re lane maybe quarter, refactor – So where in you of permanent provide the a service customer, sustainable balance how let’s be PT. deploy advantage the If that then your own there.

decisions a there, ongoing. workforce that it third sense. the was the become national customer. a are make to made cost In network, we quarter, So we utilize provide it PT, as as Doug stage to won Pricing we have more we go of through piece the those here, of growth and can service, a described, the

and here. from you that’s So optimize important

Scott Group

why up – the up? little Is up September, weight overall per the that thoughts shipment on just I on bit Thank in a lot picking Or that’s was can thoughts October, then And driving shipment what’s a And a you. some just just Great. per happening. Okay. that comp? weight acceleration? in is

Doug Col

per improved national the in actually, been in I basis Yes. slightly. our And some on the shipment as And down XPL a book just both action weight just flat business, per mean, across quarter. pretty actually I the quarter. and we we’ve with weight mean year accounts of requires XPLs, our taking pricing do much was fuel national shipment were customers as the the that business across

in can’t numbers mean, driving So September. finger really put were on it. strong I we again But anything our ISM

kind continued be base the could life. just and of coming manufacturing back to replenishment So inventories of

Scott Group

Thank you, guys. Okay.

Doug Col

Scott. Thanks,

Operator

you question next ahead. Markets. for with Capital Thank the question. The go from Fowler Please Todd will come KeyBanc

Todd Fowler

reason a any high I here, XXXX Thanks, were past, about up double-digit digit, of contract to the low you’ve pricing. talked Fritz, like why on out, be think morning. looking your some to and you the I the Great. renewals? renewals year where see single differential X.X%, you able the contract XXXX see in guess, shape good can’t type do with

Fritz Holzgrefe

within of Yes. it’s walk, little of going you’ll or I a think I what sort reach. think think – mid-single-digit totally I forward, those mean, Todd, I numbers we’re bit a see,

I is underlying around is say quarter, that unequivocally, the comes is this opportunity given structure inflationary. business book – what there. of your with the cost it the of in impacted some the think can of up But by business a I

So pushing – us and the we the opportunity for data base that’s we then just to we requirements Costs underneath, and an only are customers’ not what are because that. the keep are and us, are rates, to Those to have better freight, such. – continue push critically related the it’s have business. pricing important accessorial challenging. to so rates the but it’s understanding and Drivers important challenging, pushing are better it’s of our complex for and the a have keep

Todd Fowler

more Or an pricing you’d basis points that’s margin see, feels you ability expecting? XXX holding to put there cost expand improving contract the set And kind else of you’re is just Is to – XXX inflation margins a environment? in the than that acceleration reason maybe that could then like is this annually. that improvement back up that in why that the expect typical to for mean, you the I renewals, it something

Fritz Holzgrefe

give comes very, that But in committed of things very the it the contracts contractual with as you agreements, a these don’t of couple going That’s with volume and And are does indicative. renewals. think a that is what keep you environment have of pricing sort strong along a indication that. effectively pricing forward. I Well, all know mind,

have if reason sort I we any now structure. I issues the underlying we place think around – needs operate in business do that the think frankly, there. that think come it’s the ISM cost right that macro lot that to everybody I trend. sees there play And based are I environment, a market the of a that on same a don’t disciplined favorable factors into that be, But to a cost. continue we of But see couldn’t why

Todd Fowler

Yes. Got it.

sense. makes That Okay.

Just quick follow-up. a last

that front choppy any drive I going know near-term I you kind And you’ve environment curious your the on things But working within a As obviously to initiatives on update and couple to that more Thanks. thoughts us productivity if productivity through pretty last the And there’s you’ve are some this the moved just the Or been just the give right of that now. is on more Can ability about productivity? is of drive forward? operating environment ability an year, organization. for the know center improvements? it think on here you gradual more basis? years,

Fritz Holzgrefe

we’re think I all scheduling from around that tools are to decisions for sort our the to Those remains using everything city linehaul better will. DNA, us continue building you our opportunity make into to if there our operations. of

maintain And to that a volatile results the decline, cost there, And been those to we If has in see in us a we you to operate historically and very one can allowed up QX, with allowed and benefits way structure us say, great I that that environment able were down deal productivity. tools there, look right? back the to challenge we at kind you tough should for that manage down because great saw of it the and in a the the that’s us the then had to. but of QX we in had quarter, or

you As margin see we’ve improvement. grown out of that, the

on but over flow we per through sense able this, big to it’s those excited – in grow around not future. and the that’s volatile what this us about the out think And helped to tools I I’m So process, incrementals apparent to of And customer. through this it’s support as efficiency, I really period, allow how going think time. and us se, into necessarily the have it’s will we’re those drive a to what’s execute cost it help that certainly and continue

Todd Fowler

Yes.

makes That Okay. sense. time. for Thanks the

Fritz Holzgrefe

Todd. Thanks,

Operator

America. of next from will Bank ahead. Rosa Thank go with Please you. question The come Ari

Ari Rosa

morning, bit and on terms you’re could into guys. Congrats talk bit to just a the for you quarters. about the it’s in more good quantify little Maybe possible the of dig your results find of the front, what a particularly of talk wage on Hey, drivers here. And that seeing difficulty expectations couple terms talk little seeing of nice cost in about extent to that specifically what a you next we’re about are lot what hearing workers. there. could pressure Maybe dock you’re to inflation and

Doug Col

I health to the talk healthcare single-digit pharma. every double-digit low I inflation mean, I high inflation, kind cost Sure. of seeing mean, same year. about and mean, around the some of we’re we numbers numbers

for again will of of For little year. Part us, but a spend, step part paying higher a more its bit everything. depreciation that’s up next

front, a I wage not mean, number there’s side, provide anything good drivers. got but cost will to wage pressure. constant not behind And it’s And that’s a market away. we’re the be in and haven’t not there. That’s pressure attract finding to a a wage a supervisors, that going competitive going mechanics, the managers, we finding announced On mean, in just market. fall We’ve and people. on proper I

just driver becoming there’s on inflation. are the mind. So see main that those difficult to we’ll mean, just there. besides items other I demographics, it’s the there’s And come – the increasingly pressures side,

Ari Rosa

Got it.

that? if some to maybe prices in space ahead where That’s Memphis. about you’re and seeing get footprint the something estate Or service you But did for next you’re for helpful. we pre-emptively scheduled couple are of what the of terms there’s quarters? terminal for you industrial adding there quarter. well. about in how marketplace saw first And talk maybe if And footprint thinking Obviously, in you Okay. mentioned you of the if with about opportunities to could that’s could the center the what real maybe then maybe Northeast as talk

Fritz Holzgrefe

of certainly on a at the I you underlying of – real investments mean, opportunity, coast, the lot cost. markets around around Look, real clearly, Yes. the edge if estate, inflation sort on look of estate like that industrial maybe there. investor in in something looking estate opportunity, warehouse greenfield or cases, you’re put you’re sort real many last-mile at green against who a would competing in space, if a there

those challenging pretty So are that markets. –

You add out there. zoning pressures the are in that

North we’re we’re if to to support are change invest quickly those of I assets, a market, those cycle the you or to pursuing our balance available, to where look what exited as need XXXX, our a where we sort zoning there the also and along Atlanta haven’t time, position time that competitors. back we legacy things our built. are been have get But Northeast with at of over go advantage these through get a bit though, we’ve competitor exit that sheet, moved many quite going a And if an of you this built opportunities we our cases, have became I maybe the in challenging, sort of say prime become to to right? there And opportunities say, we jumped something. is In by but have example, we and off larger to in find if assets some in shakeout assets would that, of into that by expansion that took been that. in – other and found the been available. those position So similarly, takes network cases able participate continue a have we to although those and where, growth, You’ve or industry would either to got saw

those the that’s handle we take to to bandwidth that. and somebody We’re available have assets,

or looking assets the So as actively we’re looking at new in new footprint. both space as well at foot existing

out It takes execute for real time So to there’s a transactions. lot us. just of estate opportunity

Ari Rosa

or region it of particular are terms as there that you’d other regions see focused Northeast? Or growth Is – most on that a you’re think? where you being the of most advantageous? there looking at kind still where you Is in

Fritz Holzgrefe

we Well, fills stage And XX. we’re terminals we started we’re XX I XX right talked to probably in around kind think about, geography. when – geez, of that at expansion a the Northeast

And so market, more tuck a in if that facilities. of in few I in, think sort find fill they’re we that more

of sort landscape, than across XXX at at you XXX, Saia, high-quality up look you some we’re anywhere XXX the are that If of of at the of to our over look sort sort terminals. or terminals broader operators they’re XXX if larger country. And

a terminal Atlanta, a us. an market second us, next the Potentially a name So could about be second added there couple like a add a or adding recognition. – Chicago would are we’ve where where terminal. more customer the excellent one potentially. recognition road, great We is We’ve terminal we’ll in for great for had down We’ve be we doing relationships. opportunities got opportunity. Houston do things second job. there’s great

years Saia, to over for Fort couple ago, back added strong another or go Worth. last last of two market You – years we’ve added Dallas, Texas, the

that market. So in it gave us terminals three

for us, about closer do that you for the to opportunity geographies, density if us our of of customer, will, a So legacy building some and in as job the it’s to much then move gives a servicing perhaps better charge customer, that. in

opportunity grow. become it’s a filling space from So more have – of kind a more where maybe we away it’s to region to in

Ari Rosa

for the time. That’s color. great Thanks

Doug Col

mean, along the don’t to pressure XX% up to more, I with mention couple XX% like forgot side. know from I the or inflation auto insurance premiums seems have mean, is how see on of going I last been Ari, our the I point there, another volatility anywhere it you years.

renewal not till meeting Our a two the got of weeks. kickoff actually end I’ve is February, renewal but in

best get got inflationary lot things to really a So of that to we’re those you can But in doing to one. costs. there on try protect we as front of us

Ari Rosa

Got Thanks for Okay. up. it. the follow

Doug Col

Sure.

Operator

with The come from go Thank you Benjamin question. will for the question Please next ahead. Stephanie Truist.

Stephanie Benjamin

profitability of I productivity Hey, some end opened Maybe the bit from terminals last newly Fred. vein of a and improved Thanks. quarter? through the year, third the those to Doug. Hey, in Northeast of little in touch in expansion. of on you what anything wanted same terms the terms

Doug Col

openings, the been The the in a and newest they’ve markets in smaller. year. pretty performers, Phillies been terminals good also you opened round the were out Sure. But you and and if the too, last annualized terms exiting as of definitely the is actually, expect, we we opened now in to market. the lot of region, there, on growth. last an of of strong freight growth Harrisburgs rate I think mean, over might basis, The Northeast million, run our in has $XXX QX going $XXX million, original rate closer about

did with we that So we able quicker five opened have back XXXX. to the get breakeven back original been four in to or we than

for than bit better a allocated, the fully So quarter, in Northeast us. breakeven the operate little

year, to market the pandemic, that’s to bogged there year market continues well. one dots – open we’re map by remains put got probably quarter. down that more there recognized, and the if up environment we’ll and the the put brand and first opportunity So next dots next we’ve continue as down But of on encouraging. And the in a grow to remains probably we’ll good up the if more not couple a the be couple on

Stephanie Benjamin

Got so it. had. that’s Thanks much. all I Well,

Doug Col

Thanks, Stephanie.

Operator

question you will come the Jason Please from for go Cowen. next question. Thank The Seidl with ahead.

Jason Seidl

forward? and one Hey, full asked, in guys. apologize little increase morning, been a think quick from has this Good if both rate as call bit. well. amount phone terms should off we my and as One, how about we I questions, timing look Two a of dropped general

Doug Col

not carrier I the Yes. mean, in we’re industry. – generally biggest the we

So customer we can’t move acceptance. and that our get on own

to we one one the early was go So in February place. there January with there’s and ours I couple a on out year. GRI, know after getting last to tend fall ready follow

consistent good carriers certainly within So will We with and and it think discuss kind in come want the annually. at markets, to that try needs, spend. shippers with environment, more spikes And the customers and annually. annual cadence. truckload the they’ve The we be costs there and conversations to our capacity our their partner of I their are it seen secure out to try

year. So a be I expect this cadence similar will it

Jason Seidl

So look right? of Okay. percent takes over percent network look like in a quarter. PT It as more XXXX? obviously, should PT. we I as revenue it Fair time about to change enough. high OD, And an a the think fairly this to to of how at back When revenue,

Doug Col

into was this spend. year, I intermodal walk tightness mean, the and the availability. expecting to and TL year we Jason. changed, it in didn’t It what spend side we whether the on But conditions varies, driver

change don’t quarter, this drives of our we’re cost that’s for I mile have times, could been proposition, this had spend mean, lot use quarter a better revenue. of if it’s going would But the market-driven. probably more we’d to of account as more kind next that early capacity, rail It’s us. I doing a it are think So things for if and – lower. it more. structurally, I drivers I’d year a percent

driven. So it’s market fairly in We’ve kind a of time. tight been band over

Jason Seidl

Okay.

band that think within you’ve had over So that stay you time? you’ll

Fritz Holzgrefe

I add, at I think would Jason, I we’re just driven. mean low, OR is simple

drive an us for our that. there’s if opportunity do the to PT OR we’re going or to So utilize down OR, improve to

OR. that’s earlier dynamic we cheaper you of one through made decision, that points the cheaper the an is use PT of position in optimization to to our the to it use got extent the is drive us, to assets data-driven a go can versus decision opportunity? that own of So that a in we for right? continue we So kind So particular or rail? Is it to make particular market we’re

have it about to target although a guess, really I target, is good would potentially driving prime OR. PT really, be our So

Jason Seidl

a a from you rail, service No. I limit sort just have on in understand. – even of And you terms use don’t perspective? of with can much how though,

Fritz Holzgrefe

Sure. Yes.

Jason Seidl

that you’d of that think sort limit What of?

Doug Col

those helpful. to are lanes California. advantage. coast, the Southern places it when really belt kind it’s the you our over I it’s use our we from primary the or There’s certain only really mean, iron where mean, think moves, where whether of Northwest can transcontinental of I Pacific the

any able us of short-haul we’re in use to it to extent. not ways kind So to help any

Jason Seidl

Alright.

for listened. Gentlemen, always. time guys. appreciate I Thanks color. Thanks, the as well Okay, the

Doug Col

Jason. Thanks,

Operator

will The next go with Brown question come ahead. Please Tyler Raymond from you. James. Thank

Tyler Brown

Good you but parse help Doug, morning, margin me quarter point on I the side, could great hoping the improvement. XXX guys. out that was basis

PTO? three, And I how lapping any So But there? way did think. did be last Any you anyway. one, were heightened it to to much July I’m tough Two, the terminals match payment, And lack a the how going How maybe I year’s help? know but parse out the help from going the I can think there XXX(k) $XXX how cost then it’s paid were ask is you much that much much headwinds? help? of those

Doug Col

a not little I’ll whole we’re XXX(k) probably you help. mean, the first as say give for pleased our A much little you all, was Tyler, of help, really reinstatement I quarter. as but want, to that

only there. quarter use a was vacation a across said, There’s from that is there. mentioned, and you spread quarter people impact for weeks busier craziness. PTO like our second employees So we $XXX, impact there and days, that’s bigger I the was in $XX of is million PTO thing I quarters. about PTO, the August, gap July there, a The think But our event. a getting number and/or and a break the taking one of their mean, dollar have extra we that some that three there’s in and a great extra The them. But lot

there. So would. little not an what cost we additional I’m there was the sure ones that

Tyler Brown

maybe just of are Those see. helpful. kind least switch that’s gears some the Yes, of – yes. just idiosyncratic I things, at that But

Doug Col

what We puts normal kind the terms view the of in view quarter back much we pretty is to and on expenses. – of takes

Tyler Brown

Okay.

the of from on assessorials increases? helpful. how tariff in then guys but and layering much you X% specifically, that That’s this, Okay. And was maybe versus addressed base renewals

Fritz Holzgrefe

customer on would paid get – we’ve total, all the getting we’re it’s If it I So for the from At of base, don’t if it look just on customer. the providing is the get to got in break it there. going can assessorials, what out. the there. going we get we’re to to that we’re end it, get Tyler, way at right? we we that’s the it we’re

Tyler Brown

Right, right.

Memphis my West freight? Okay. one, And last so East key a is Fritz,

Fritz Holzgrefe

is. It

Tyler Brown

XXX any pushing there? you idea a Kind Do big like really mean, facility? through have how of I freight limits. flows seems much the doors

Fritz Holzgrefe

Let’s see here. Pass.

Doug Col

We you that. might well. That’s to get back with to be able

Tyler Brown

is, question an pressure the the out some Well – there you connections up give my door question does the well on that the opportunity here’s was East And hall? linking West? holding my big big of to

Fritz Holzgrefe

the Listen, facilitates here. an is a us. this constraint more that, This We opportunity. it hey, all got it not this for estate was was real – about,

we ample got front growth push continue to we as of here. in this, sure make power get Let’s

was that I This over an wouldn’t immediate don’t the look maybe So constraint. it one horizon a I bit was more say – here.

Tyler Brown

And site? was Okay. that an owned greenfield

Fritz Holzgrefe

Yes.

So and – a we’ve built and we’re bought we from flipping then parcel there. owned

Tyler Brown

Okay. Good guys. deal. Thanks,

Operator

I’ll our speakers you. are questions There over Thank for conference time. back the this closing no turn at remarks. to further

Fritz Holzgrefe

everyone, Thank calling for in. you,

results. We’re excited our about quarter third

on I for we’ll driving the and really look it to forward and opportunity and value our longer-term think continue for business the Saia, that the execution what speaks to to growing is you Thank continued focus shareholders. much.

Operator

this Ladies Thank you. and gentlemen, event. today’s concludes

You may your enjoy now disconnect of rest your lines, and day. the

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