Saia (SAIA) 1 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Douglas Col	Chief Financial Officer
Frederick Holzgrefe	President & Chief Executive Officer
Jack Atkins	Stephens Inc.
Todd Fowler	KeyBanc Capital Markets
Amit Mehrotra	Deutsche Bank
Jonathan Chappell	Evercore ISI
Tom Wadewitz	UBS Group AG
Scott Group	Wolfe Research, LLC
Jason Seidl	Cowen
Jordan Alliger	Goldman Sachs
Stephanie Moore	Truist Securities
Tyler Brown	Raymond James & Associates, Inc.
Ari Rosa	Bank of America Merrill Lynch
Bruce Chan	Stifel

Call transcript

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Operator

Good day and welcome to the Saia Incorporated hosted Second Quarter 2021 Earnings 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

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

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

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

Frederick Holzgrefe

you quarter. second Thank discuss morning. for joining to us Saia's Good

history. by and operating results quarter last quarter the Operating XX.X in XX.X record million results record and quarter income record surpassing [ph] a single was fourth is year's record or our XXX% quarter quarter Saia Our another where $XXX revenue revenues represent grew long second XXXX following in record financial at our Saia in a in million, XX%. second to marked our quarter the this company's here fourth $XX.X The consecutive the OR year. ratio also performance by the quarterly sub-XX. are of quarter quarter of of first best

recruiting face -- per impact lingering that market disruptions across financial quarter, shipment needs the also labor despite quality posted and on basis count and of hiring and With network a labor supply labor -- $X of we Tonnage workday quarter, challenges. record our The actively freight market record record. the work higher shipments surge Second in per weight a was employee are chain million able strength that geographies and as very of increased customer's care the lingering and companies. our achieved shipment all reflecting We're our in during for XX.X% COVID-XX COVID-XX take in across while metrics the to our felt tight per quarter freight in labor of was creating this the all employee the X.X% year-over-year tight with challenges. surpassed workday XX.X% was increased another quarter, and to experiencing pleased deliver service customers shortages volume the in for we're I'm reflecting face

testament on-time XX.XX% cargo standard. and Our This service record team. XX.X% performance efforts a we the is talent ratio was and claims had a of a to entire the

customers hiring recognize quality bonuses a labor we're costs increasingly and to cost ongoing very to see referral reinvesting our we're we're leading and we're experiencing, maintain these support us. inflation offering in service share competitive ask market and focusing further to the that providing continue many customers team to hiring on In markets, initiatives Our our in improve the and with match build to experience. their to we

rate of in to enables charges various in consideration Pricing to cost include all limited Our actions our us must pricing challenges these substantial recoup are of accessorial increases an might cases not base market to or investments challenges. adjustment many and service.

and also X% shipment, Revenue proposition. We call positive fuels driving per support gains I'll turn quarter The to X.X% that in business excluding improvement the is shipment overall performance record to the mix XX.X% quarter. improving Ultimately, increase and is that key performance. and surcharge, of increase fuel recognize pricing X.X%. pricing increase to length operating second achieving in now in increased record XX.X% an the surcharge the of margins on of fuel Contractual and our over from the and from drove continue by revenue of per our average customers for efforts benefiting optimize haul yield emphasis shipment. financial improved an review Doug pricing weight these results. the with in not renewals excluding our but mix we're per combination value only our our further

Douglas Col

Fritz. Thanks,

XX.X% was grew Fritz in of up second in $XXX.X surcharge to surcharge, total of $XX.X of year, and XX.X% compared by XX.X% increase Fuel including fuel a haul. As year fuel revenue mentioned increase quarter revenue or $XXX.X combination tonnage XX.X% or workday, excluding revenue in a X.X% a million XX.X% ago. increase increased [ph] million factors, million, surcharge with length yield last a a revenue was excluding revenue X% and from per XX.X%

Salaries, key from increased compared costs pandemic-related of compared and additional to XXXX. recruitment and the rise quarter. prior to XX.X% higher year year-over-year. the of X.X% well X year, year. the meaningfully last XX% company now combined second second quarter in Purchase to second continue last were wage benefits total XXX.X% which compared while quarter with Fuel to X.X% increased quarter in wages, miles the averaged in compensation reflecting wages, over second expense first of items fuel Performance compared last costs our of after national prices increase impacted by in purchase revenue and our this in in was of increased XX% XX.X% the about the quarter XX.X% prices with year. PT XX% Truck increased up that to transportation compared the expense COVID-XX in the the were revenue average costs to rising miles increase and year. a compensation time approximately the rail to and with compared The diesel along is as XX% in result benefits quarter a quarter combined linehaul Salaries, January and in X.X% second total drop expense to miles average XXXX based last year Moving costs. of ago. in XX.X% of quarter transportation the year quarter X.X% to were

the surcharge the expenses accident-related offset fuel fuel. year-over-year XX% in premiums. from by were and and down but in year-over-year, helped actually $XX.X increase around expense sequentially down increased Claims points by as revenue X.X% from improved year-over-year, mentioned in higher million insurance XX.X% quarter as the quarter increases year-over-year expense by offset insurance [Indiscernible] from was decreased of tractor operating quarter. somewhat expense the X% As of in the been increase trailer with first normal operating a our the seasonal and quarter quarter deliveries year basis first increased Total have XX.X% ago pattern. and our improved and XXX basis points revenue delivery XX.X% ratio XXX was lighter by to than expenses the

anticipate for compared earnings effective and of XX.X% XXX second per XX.X% was the last rate for last tax quarter $X.X were XX% Our approximately year the rate year. of We share to to tax the remainder our an compared year. diluted

in capital below and The on and schedule. totaling made in are Capital component seeing has behind equipment our been months first six were we million. XXXX, $XXX.X first our production forecast shipments delays investments in expenditures the six months some of suppliers

full-year We trailers, couple of expect next tractors to be take approximately million. capital increasing still expenditures $XXX we we to step over and delivering capital expenditures XXXX expect as of and the numbers months

Fritz now with up over comments availability million strong facility outside $XX.X for the to balance additional to revolving some credit of before our sheet I turn through remains $XXX million call borrowing and questions. cash hand back Our closing will on in and sources.

Frederick Holzgrefe

meeting the expectation, very through customers, a had at or our focusing share we the ahead significantly customers than to flexibility us expectations, with equipment our costs investment the deliveries We're our to in half we their execution Maintaining through have the very able important most and will year, providing equipment we us. both have on slower cost and come to to although in requires and Saia continue with take have while and continue significantly, with expect. maintain we've most so pleased The to would we'll the challenges and busy of working late half performance second recruiting their retention levels improving We'll require customers. these growth setting year first hoped quality our of of here as half to on plans. our deliveries for continue our customers, to provide services continue these and the operational second and end planned and continue of focus will operational service the the been do delivery been continued

average years clean tractor is latest and with Our four age the is the fleet diesel equipped technology.

quarter. next began We five We clean tractors. into all-electric freightliner continue evaluate Volvo to second exciting more energy adoption recently opportunities operating vehicles a in our build to technology. to In put important and invest the put in position ourselves is two alternative tractors into seek we the our efficient and and experience Getting time. base service over in CNG knowledge and is fleet as technologies new viability these broader generation

XX a national the Since a XX have As establish in navigated added areas relocated XXXX, we to carrier. improvements of the expanded level as months of last facilities we sought the we've we're company-wide several XX of as challenges of very and all launch sustaining or and Northeast LTL company. initiatives across Saia execution leading demonstrable the to high the others

on introduces through new commitment to we've it remainder exceeding is been to our replicate Throughout while customers enhancing some markets, A We Delaware. reach expansion, and focused while national year, us expansion customers. playbook to we've it manage network two of we've that longer-term meeting current a has others. in new the quality plan year. risk, and these opened far and enhanced So customer service ones the to one for Each service to up build and this in expectations. allowed through and challenges to terminals, overtime another our and size open five planning to in continuing this built new Maryland in able

value feel year. we as our Looking We're on customers of accelerating metropolitan pace add of the have our supports key our expansion quite as where to can into strongly to market that well capabilities a and focused service addressable XXXX beyond we our of XX XX proposition. We about our areas locations identified teams. expand

service and by lines positioned and we're the With development. we're that both financially accelerate the times questions, pace We this plan to provide the operator. perhaps Accelerating expansion open operationally of we've challenging can and business superior said, to ready now not risk date, have it. to proven guided our is but for replicate our most experience for and opportunity, without Saia our

Operator

First comes Atkins [Operator with Stephens. Thank you. from Jack Instructions] question

Jack Atkins

and great guys. Great. quarter congratulations Good a morning on

Douglas Col

Jack. Thanks,

Jack Atkins

-- targeted I you quarter very take tonnage sort stack taking could of I'd start, the guess customers. I'd with the I'm guessing maybe actions of been of because Fritz, that as improve LTL if second market talk I on. robust. to for get your are decelerated year yield went to Obviously, initiatives types you management guys guys accelerated maybe two to here. undertaking revenue moment, don't It's very love you underlying So some is Could the quarter about love if you through your growth certain that the a that's mind? were on

Frederick Holzgrefe

Absolutely, Jack. Thank you.

position times. and understand have providing way force hard that was challenging over the when we've you're We've that think a couple very and on going we of throughout great and that values like really very, executing We're been RMR different customer quality the the the think service and what in force and is operational years it well focused and cost need, I sales our service one customer, the customer great close execution at. they very of approach we in position providing ways. long and to structure are, to understanding some a [ph] what where our sales about things the very our look stays a to very around the to been in

on the is. have if a we providing that all all we of to It's the hazmat customer, We it to with are for And feel focus be job good maybe it's responsibility cost. for. limited very deliveries, access things, that be for that, we customer. execute a is reimbursed strongly we got range to paid add now these need We do service a be and these or the delivery, things what

what is that you've basis. kind it as time, the We sales position we've this force and worked they getting They've have executed through that at of look year can the seen customer. focus difficult think daily where and on we for seen a pricing. on a not I last really over very our

to to mix at of looking of looks of through execute length freight this job customer the that pricing business. a a the for in region for are able might approach maybe whatever optimal what you. sort the we've because like, what great is are to it's the can make proposition. value getting of position the customer available, going the is they're cost force in sales to longer We haul, and that armed the They it Understanding are be be. higher the what But of explain. do mix because These been our accept freight We're importantly, it. something levels it network, the

that hour day we continuous this that the that. that And focus we so an think driving daily what's on focus how that about not it on. can It's by and improve goes is

So it's the year, a labor what quarter work supply continuous the through of fruits was the work, intensified we saw in as chain you of last challenging over environment. constant the kind

Jack Atkins

Okay.

a And great I Doug guess, you. hear. Okay, that's for to question

a I taking would just look lot you delays. equipment the forward. you're OEM On How about of are the in XQ to progression, second to the that more going the you operating sort be XQ half imagine of year because thinking ratio as of

So Could maybe to inflationary through about degradation be about we depreciation basis PT seasonality, is normally how which some ratio normal like XQ cost just XXX headwind thinking seems operating should of you higher points so. or is a maybe progression there relative it's to walk XQ pressures.

Douglas Col

of things couple there. A

pushed that's though the history bit. wage a I increase, a a quarter go a number by mean X had our we for When deterioration influenced period. not of X little wage be been It's back July at look this usually the You're into two. in our years. right, which number will increase There it's and out July sequential

day little the the in So, a I demand business, July shipments the step still seasonality. down not levels that historically. X% X.X% per there. seeing mean are our at in strength historically, given bit to We're

July that very trends day on to the exited look basis rates June. we shipment in Our a similar here run per

we the keeping making on each sequentially, and has expect the productivity the cost, tightness over has the job and mid-single step few good, team digit network good months. done revenue progress through the we're But remainder up in probably the that the -- the the good of and So bill Managing per labor ops all. volumes. thinking all side depreciation Yes, pricing percentage great year throughout been quarter. to about shape last on a

normal the we forecast I seen versus don't move, So out normal a like QX of to action really mean, pricing and about understand pricing demand little all hold. haven't been like -- shipment comparison. of was year I we really We think mean, use And when try you to but the when is wage the in all. wacky on It's our historical to of your weather because and a that QX. comparisons, I QX, good. and early of I because last hold our just and expectation May, what May. hasn't flat, against a to March was two-year February, it's step-up don't of in see our was they then question, April it probably stack we out some was so earlier to step the things strong. with as through look number year as not from lot move taking transactional And appreciate that is we up we due annual the pushed action know pricing a into numbers we is business But I a the was month-to-month different to guidance try give like as and action. print little tonnage the kind the compare felt March strong we customers what seasonality bit, but moved big there sequential to

as historically. it The was number wasn't April wasn't step May strong as the So as up from strong.

So looking out going it's to comps lean what's at see those just and is strong. you're on and really the on very demand hard, there still

Jack Atkins

that's much hear. Thanks time. so to All great for the

Douglas Col

Jack. Thanks,

Operator

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

Todd Fowler

quarter that Hey, quarter OR just the to great think you clarification thanks, good third that flat you're with second morning. Jack, for OR. you Doug sequentially saying be the and could with what answered

Douglas Col

that's our goal. That's -- our

Todd Fowler

you're wasn't with the I if saying good. constantly quarter. Okay, five-year sure second with the

about on growing can going outside you sort base all you a XX growth on the factors terminal size that to environment. tonnage then not and Is you think improvement, count. So, growth service created algorithm service of of in the Fritz, is think know and equal. your an of then underlying know you the business that based think how XX And But absorb in to comments to that's growth me and assuming locations forward, course annually, current of expansion of for the are I that from mid-single-digit normal about that context that your that you accelerating at of with cadence there on thank see OR centers center sort that. the a where cyclical environment still do about

Frederick Holzgrefe

question, Yes, start philosophy around really our going thanks we growing we're I business, for mean of Todd. the this right. that about to -- in profitability is with sort

those So as we think over incremental opportunities. about time

and this that's look this, our at feel to are provide build how we the for but customers be reach of we can going of the model. -- business we I back to can to think operate game to growth playbook around we've progression we do kind say mean into we and service operating I -- is think a so in. is developing an that the at expansion. natural same our like expensive incremental we the We time here we're long organic learned

or. longer-term it. think opportunity focus This of continue that. the will develop we developing, to on is around so part I And that about we don't as

operating Atlanta, should like there help of of the As coverage we the that that time, is a terminals shown we've some had going geography we in At that growth. that fund incremental to can same improve out replicate that city that service seamlessly be to come customer. we efficiencies in filled that to

but over to line. growth don't shipment our time, to continuing I look over it's we track making impede for I bottom would growth OR for -- the we're, you'll see going tonnage is that our return sure But So expansion. really and focus don't to think grow to or a for that's on and a what mean grow that we're investment. our think time continue us we'll going I that get development to all growth growth, that's with know economy

Todd Fowler

great it's growing makes you And Yes, success that's the Northeast. into had and of that great color on that helpful. -- kind in sense

follow-up your your near constrain understand that the with short-term to half it is how back near-term labor does year, just the on growth into of into availability a then term about So labor the out labor half. the will grow situation Thanks. back and the where situation, some strong, a that that I for play market remained Doug the shipment playing but levels how comments and the ability is

Douglas Col

position, have sort right. we this same a we're our of I plan, also market, at a time the the execute a we but of is objectives the think year on think I in we're target understand challenging achieve for to half can second

that to us I Without that technology, trucks great those when an and stuff, is replicating just XX,XXX it's employees. executed competitive help people that critically of about channel, upon the company but they think got dock the sort that of like have you the [ph] only This all can and about that continue the be somebody that's and it's that, recruiting even we've and feels that incumbent provide can hear it this the you about successful that, drops team. employees. talk really I it's business XX,XXX to building not CDL grow around is business labor reporting us environment be and industrial business that mean all retention you we assets with but provide all think see, the on the terminals we and that service it's I runs replicating working sort sort on jobs, jobs. build are model of see roughly and where which the they we've pay emphasizing particularly that's most or benefits, about

the in to but So, we a the think for of year. the playbook say got We've game challenge. the can second we half do it going that's -- not it, not

Todd Fowler

understood. Yes,

morning. Okay, thanks talk We'll soon. you to the this for time

Operator

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

Amit Mehrotra

I speak, about morning, to the in I'm the kind how of -- out just more from if -- trying to we think typically should XXXX mid higher so XXX in run to kind of pivoted of rate you've we perspective, Good just end and you wanted of led stay market, that's operator. growth footprint and to look good as XXXX. a kind annual talked the fixed think 'XXs of transition is points just grow ask Also, here to the should this period wondering now as accelerating basis I just operating improvement new little a about higher everybody. into you're a Thanks, you're terms in about a ratio, of annual in bit about you Fritz, to in of obviously that think you to cost a estate neighborhood, kind XXXX. to XXX real of have understand in a I relative base. which you

or some next what can of you the this environment see today So, improvement in do forward of maybe XXXX XXXX versus and investments growth in that in making given you're pulling of OR you year? OR we type the

Frederick Holzgrefe

different. the The growth we bit -- for -- Thanks a our way we about this growth is is, our little of hit think question. nature the

maybe growth about you Now and terminal the was, heard expansion. us talk Northeast it the

dividends was incremental, for so So was forward. that certainly Northeast ahead expansion And important it. going territories, investments were those an think events of have we're about infrastructure out and paid and building new -- the they as us terminal in and model in in leveraging third next us second about does adding think And that have. you the infrastructure now, growth the what It's filling geography. that like wave you're Atlanta places for we the and that

there we but Northern this from time, efficient terminals the if service as cost there two to savings at better as when you the you'd yes, were is And open market aren't them, a so, like too. overall those same be

So over I time. know is stopping in think at we there on with OR that XX.X, us. the see I mind we improvement for not are that a continue march map out we there

I execute push this our sales that service to starts ultimately continue game accelerate terminals an with there incremental continue quality to for growth. and product, force map and us the -- to our our value get and that continue arms proposition, think replicate across paid to we opportunity that and for to is

about So, that. I'm excited

think well-positioned estate without seen I is when challenges, finding but than not we for real It's we're that'll on that. a it it right. has We also we've understand we been, a it. any find be that easier not growth can challenge, that is execute

We So time. feel good about over back through off a is think the it. OR we pretty on don't there trend

Amit Mehrotra

a certainly just versus and you the progress of lot I of know gap made you narrowing on up terms And that's in helpful. that's then revenue OR. have guys follow-up, peers for your as the it a guys showing per-bill, huge Okay, a been in focus

and I'm to dynamics. progress just is above understand, tremendous there if market are trying made to and improvement from You we today date. further cycle you beyond where know,

density, you if about of kind as you just have your So cost or the talk now opportunity structure can all and up how guys bill gaining is per level. in that much get shipment on what more as of specific when by understand the you're idiosyncratic Saia shipment opportunity about well? you business look a you business, and you to can, Is there when network chopped the you at look that at filling revenue

Frederick Holzgrefe

I benchmark I'd listen, think you to things. do I Saia, Amit, encourage you two

great of claims you we we Saia better to great just now do everybody. a If service at national value touch and bats our sort you incremental the of that's the customer as markets we're providing and that than sales service. has And do for incremental a picture ratio -- enhanced look and penetration really rest more customers, we new service force differentiator about get see and well that can got to replicating That's carriers, benchmark broader customer. versus going they our paid to quality in the market more and is

don't up in like revenue side, is over there a to more steps we I national to be time So the really think, most that is a slowdown I the a but maybe Saia basis, there no on bill it, per get reason importantly for it think discount. that fact

Douglas Col

add work around all bill. all -- of mean, to closest I'd it that we've that And at I our pricing revenue ourselves Yes, think folks. our a an pricing. in improved though that improvement are I we per mean, see competitor. spoke add to and I'd still discount with We the for Fritz of service our

cost-plus So that think opportunity. where you're but there's is and at the the paying kind of market service a what's if for you component. When about pricing, and there's that's the market also providing level the

Amit Mehrotra

Very good, thank you very much everybody. Appreciate it.

Douglas Col

Amit. Thanks,

Operator

our take We'll with ISI next question from Evercore Jon Chappell

Jonathan Chappell

in think in we're April XX% what's and obviously important but to about in points certain but and the XX% I network, aware delays of well back the Fritz and six all most capacity next on pinch you half, growth is just months. spare the how the equipment the issues take you to on ability doors even network, the your business morning, Good second the you. talked Thank labor have your terminals for today level And is your today. spare on new in capacity based plan comfort

Frederick Holzgrefe

the think first and to I opportunity is finding doing that of what customers them. sort value primary that, really for do but objective have we're we our

April, of those through going the make what address ways on these those. that's in LTL of can all the you would in we not you probably categories capacity say, that. the But service where could you assets could So sort different have We're the address of different drivers, be where capacity. there mix in much influence providing things available doors, I back business you as become of those to terminals, we and of an levels are and first as know, focus way understand tell spare like this trying that be and are they incremental one the the just we're handle let's could opportunities sure that we

is to think is this the freight have for. service stage at we now And the this to a network, have that right is for capacity think but more reimbursed value better we change opportunity I So biggest capacity be in we can where that spare there we ultimately us driver. that provide

growth. positions think future us that I for

I think we take can business. see additional Certainly, we on as opportunities.

Jonathan Chappell

how makes Fred times if said second you've core And strong in much flow a past the or couple charges. may in wondering, ebb a put may pricing sticky accessorial the entire justify Pricing a to result as in up that look and pricing Okay, pure kind And sense. chain is not environment. little of also overtime? little real I'm bit of calls. bit that versus it accessorial that tightness on of service, supply the you you the just intensify XQ, used then, at charges is eases as we

Frederick Holzgrefe

and a able of -- needs what need and of charges at Those for we we We is those be part business the are for that going becomes happen about quite So, market, -- accessorial view, we're to that's around to for as get our is From forward, that are kind actually we right? equation doing level to long this at of so customer the game going if covered, what continue right? think We this be of need to think be and to paid cost look service of service. us for incremental say business. to that again that's that's Saia, covered. a look paid needs costs part that That us. it's but to needs doing that business, there, We get sticky.

or view don't go take, find -- we give that's our come It's the So, transactional, and it's of not accessorial not program. that charges. on part that. and -- it's of is We

Jonathan Chappell

to great hear. All Fred. Thanks, That's right.

Operator

from UBS. question comes Our next Tom with Wadewitz

Tom Wadewitz

Yes. Good morning.

as So, of do little certainly. big It of to thing to terminal -- capacity I on network like kind same How expansion. the ask or the is wanted more that I the step, terminal deal that a not not expansion. as know take count terminal count about I ramping same up door a positive or seems pretty

overall focus you that's is I pace the say, more a question, It of tonnage do growth kind pace And existing capacity on model this of new but perhaps right and think a higher increased then network of should at is you're And extrapolate it? expanding way look up how you is do it terminal given but this -- natural on facilities a, that? of expansion? to guess, just seems So, the to Or -- versus facilities? expansion? little kind a stepping nuance focusing it about fair we that

Frederick Holzgrefe

Yes.

you both, of I when part are have XX I both, opportunities will, us what So bit even it the certainly recently facilities, or facilities, there incremental network, to our ongoing So, purchased built. in have we in ones we nature legacy XX actually expand to for business. little of right? of of some kind to if a of say ways. That's of think this And kind about the That's that do. the two

markets it's appropriate that it the kind sort addressable or of of addressable of also enhanced about getting we'd sort so, tonnage a windows that's we business fairly bit market, we're providing like in new out think finding tend We now. like now, service we'd have is, a consider things not and market customer. not -- Those maybe with doing we'd this, that incremental the think sense as don't I times targets about think so the to new providing sort we or on service flexible internally. reaching as a to for to get Maybe we're that expansion. them revenue So, as be I us to think about well of quite specifically delivery it right as it about as we market -- it's be. addressable particularly bit to of service, customers of expect

providing So, macro we markets. -- assumption that is. I a think because addressable of than rate grow address sort service at we new what your are do I sort on And probably incremental think of faster we're and focusing

Tom Wadewitz

is new if existing". expansion, XX% about, it that higher number expanding or on X% Just you more you year before we're be like, number capacity was, "Hey, a to facilities if just your less is number think a and a year, doing on whatever the clear, is more network

Frederick Holzgrefe

to we existing terms on facilities. capacity in as same adding the of doing We're go

and with of -- And to same the India, so Harrisburg, like that you added, of there. top terminals that part will XX add those places markets add incremental sort So, to going XX eventually, but capacity then add opportunities. we on we're we of of grow That's naturally you have. mix the we

to Some great new provide service. most will markets, them they importantly, small, the touch of them but will some of provide be big, opportunity be us

Tom Wadewitz

Okay.

pace and faster a growth expansion it faster of So, pace presumably, with is of that. tonnage

your All right, patience for Appreciate questions. the thanks it. Yes. and Okay.

Douglas Col

Tom. Thanks,

Operator

Research. Our next with from comes Group question Wolfe Scott

Scott Group

Hey, guys. thanks. Morning,

expansion out sort means XX the this year? think any you is bump? organically? on this Is to acquisition any next going through year the doing would then CapEx network. of a Doug, then XX this And And of XX XX instead a sticking to thoughts, for one-year what Just of about or this of

Frederick Holzgrefe

for the is particularly that I growth, sort is few the of terminals that's we years environment Scott. Listen, opened everything that the the a Thanks, starting Northeast, the the opening, of the at the to thing is find optimizing, of idea. kind customer we the look that since of sort compelling all think from of this back we've way next And we of that, experience how provided experience operation. the in rate we've if developed run supportive around lot XX

a replicate, pace execution. So, we we that a the is tuck-in It's organic Certainly, acquisition, opportunity something like one maybe there's of expansion. thrive we us. but the always for good idea for on organic

think workable. we that's -- a very it's So

of puts the and a to sort beginning start reach not legacy, think I market we're the throughout and we assessing don't stem maybe in only low that really this, a where that very footing to sort whether great that this, maybe customer, are I there, capacity of that end slows providing building third-year equal addressable we about the to drives next going But do know. I much be focus year the service. happen. which of think our down is closer that and cadence, range a what's more on you very, pace or year year that times But on at of that after, quality somewhere in optimal, to we pricing could thesis

that, should you the place a you can customer, You in do for you're do get that returns.

we of how focus over on So years. that's couple kind the of next

of why [ph]. that's mentioned still are. I earlier, reason expansion, to within I over kind think like the stays guidance OR As idea And have we kind of organic of the of part it get our time, objectives capital what our the

Douglas Col

Scott. Hey, Yes.

like going the years. over these especially, terminals Fritz, have next we of hypercompetitive to some lot the of when hope these of We'd XX% you see CapEx, in where point that of XX% kind couple to key would like, years, hopefully, we're XX% But a cycle markets a kind that revenue of pace. the mentioned nice couple mean On a step-up. of I It's up life what next I own into thinking markets. Atlanta. of estate in add, definitely in the do get on steps to that own been real on we've or we our you XX%, of about some

versus we way that, one for another. think range if a up we'd that. stuff more XX% to beyond can couple to or or open -- find we'll down then lease. So, the of step hope get revenue I'd something steps would say, at But it years, like XX% I after I of them XX% buy to it the And least in

Scott Group

one [ph] call about think got the of Any you shipments good their about us we it. quoted of it can LTLs from then LTL give you And are, or however percentage color spot now helpful. there? Very right yesterday color that other

Douglas Col

mean of there's spot than shipments component. mean, less and weighted X.X% our quotes I given things. Sure. of shipments I couple heavier another a day. There's kind any of they're that's on too is

move weighted were it's that's down daily our are of on June. shipments what X.X% XX% and run X% than heavier spot probably in those we quotes and down -- of but shipments rate, XX% to July in Some running

that's those magnitude of some in TL they're bit, but and them. So, are of a down little all know, all spillover the you about

Scott Group

a to mean, are -- Maybe you get bit for truckload say, you're I year if any trying to they prevent doing maybe this the guys that spillover July, sounds they're didn't like or truckload trying same truckload guys Are risk comment thing. capacity. ask; it to I in -- deemphasize the are you more you loosens basically, market next

Douglas Col

Yes.

tight with, that our is TL obviously the accommodate Some way just of in I freight and them of typical as need a if try growth. a our pricing shipments customer customers who trying not serve shipment targeted your are growth But weight that's help certainly is have LTL have to were aren't We spillover core system. -- heavier to environment. our need that they line targeting of of they know a certainly not some is in how they good it. view the at I think that we freight, terms and description a with area in We're we'll in action what for or

Scott Group

guys. it. Thank appreciate Great. I you,

Operator

Our Jason from next Seidl Cowen. comes question with

Jason Seidl

very the at healthy to a that in Wanted some at Thank you rates. think did talk this that times post you you, were well quarter, about least. of little elevated encompass? your morning. What of the percent remainder the of And you recent for were them in do very will remember levels Obviously, hope XX.X those targeted at business guys the stay [ph]; to number Doug, operator. talking most the renewal that's that I are Fritz, a about bit year?

Douglas Col

just to again I in mean it an public increased certainly seem bit saw mean QX, here it's what little a LTL it And they looks you contractual I acceleration across accelerate, QX. like But as us. reported the on not for renewals.

with they customers, year. us, window like basis an know, it's on our annual not bid but You of a specific most account every it's renew national

So, cadence to normal ratably there the a year. it, it's is kind of through

spread the to our given say, over you've got of in So, the of year, kind terms speak you're quarter. account looking contracts, is a business, so in half business roughly, pro-rata at number if national of that of

Jason Seidl

of revenue. mean, this XX% the is That out about you. talking strong relates XX%, jump of a But really Wanted kind sense. know, on Got in up stepping asked CapEx follow-up. makes cash before. you're to years to you something somebody balance. And I

utilizing margins cash free even levels beyond your of your the thoughts are still Given some What and are your those trajectory, probably beyond at your current cash means cash that flow. of XXXX? generating sort flow,

Douglas Col

always across and in work, where terminals, cyclical a things to discussion new be a like and good think at or our we to we're strongly beyond not be will but some We're around flow investing productivity investments at think see healthy in technology, But gain efficiency. that, -- capital mean, or and clip cash put safety the to it's business, I a position tools I to I a it's positive. that. on only looking dock, equipment opportunities pretty and free

cyclicality any be to a advantage is. will positioned know another we're share there followed conservatively on next that depending take discussion Jason think we don't point how were business know at an depending that of of of some the around lot industrial-based a I We enough be the I the long hard hopefully, what and cycle opportunity we dividend to buyback it of mean having you couple to on a downturn a we're might years. potentially, where like over and round may deal like looks cyclicality. the So, with do in industry make arise and sense

So, at to than back in moment. business the invest plans the no really other

Jason Seidl

Okay, quarter. always. fair enough. the Appreciate time as And nice

Douglas Col

Jason. Thanks,

Operator

Sachs. Our next Goldman with question comes Alliger Jordan from

Jordan Alliger

hi. Yes,

purchase Thanks. have to ensure transport a pay around it thoughts just I'm these that days you or it? these sort that hard that rate on secondly, do question capacity a relationships spot people? contractual specifically. And How is like is third-party then more with have do your Just deals and of curious, you you typically

Douglas Col

Yes.

serve we have little wouldn't than mean like have have used if effectively. more as In there. it to we it's We carriers. the -- cost market terms more again, of core some partner able much bit out we our can had I at are a got to PT and of tight of customers But been as real rail it. if try We wouldn't explains a in we I kind pretty QX relationships, in the could spot able used that with that of were the there. level use we we [ph]; been to do typically move used it we to mean, we

across everybody's in modes, labor. different with tightness the demand boat and -- of everybody's in So, terms same of the with kind the

said, -- I with we're partner hope to carriers. market. out of typically spot get XX% XX%, typically we like So, We're the

Frederick Holzgrefe

And I importantly fully and maintain would expect to around this that, when we add service standard we is use PT.

of that our core it proposition. value part is -- a So,

the it customer So, be that else for with needs because partner, PT a part that consistent to everything if value it is to -- performance proposition. we're needs doing of that's the

So, that's critical.

So, we the yes, but -- standard there. costs don't on it more, also compromise it

Jordan Alliger

you. Thank

Douglas Col

Jason. Thanks,

Operator

We'll take Truist. our next question from Stephanie Moore with

Stephanie Moore

morning. Hi, Doug. good Fred. Hi, Hi,

Frederick Holzgrefe

Morning.

Stephanie Moore

could know if Wondering an of some in what update provide you just seeing you you're just terms the in on newest of profitability your terminals.

kind versus So, now building where volume corporate about seeing trending so more the specifically, obviously, think those that? you. we how are or density, you're Thank up the and terminals just given progress Northeast, the trends should in the strong the average of

Douglas Col

XX breaking we've of kind at not. Stephanie. last specific nicely. of out company the short detail. few are going break don't kind Northeast gains regions been I share with to one to talking just a the think about then said up since us the all I point. we've the been to in of time. or ramped need region kind is they we mid tell that We're opened get terminals We've which has made will now trying of get a the out I to it's and months pleased like We've I XX, there stop 'XX up there nicely it now. and if we're mean Northeast really XX, better. we're Thanks, Northeast regions Yes. our But for profitable you, But We or to mean average

in new then, new it's the find into the long, region. nice They have in our that position to our both, has going us themselves some then sales we'll customers long trusted the grew for customers and now that have really and we've and because good. business. benefit been introducing find that's customers of grown are customers start there. Our a we'll And time, now used up how us with so a business and their service new a region And

the So, progression we're pleased margin up with there.

Stephanie Moore

Thank helpful. Really you. Great.

Operator

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

Tyler Brown

Good Hey. guys. morning,

Frederick Holzgrefe

morning, Tyler. Good

Tyler Brown

So, been. maybe and the to I freight you But longest ever you've I to heaviest characteristics. back come want are guys think

So, haul this is that been in do I'm your this function that length hanging effort? can market? around of you the a kind much this by driven curious And weight how neighborhood? a think that per shipment of of focus Or has of sales

Douglas Col

of continue more a we up. footprint, national shore to I statistics Tyler, that think become those As

this is operates to be those can time, But our optimization for may focus As network. what by finding over of optimal of This sort or and customers, build and continuous that we service for sort we and over analytics so time. as national country is -- analytics think network. our on we you'd as that ebb lanes us firm time. characteristics can flow diverse continue over we best different best ultimately, But freight those the parts of the that around continue freight to approach of support those approach, such. is in deploy could is we a the And we I a data up know, sort data statistics well think

Tyler Brown

Right.

more I a point, of And so you... guess this what's is, kind fuels ex bill important revenue per jumping-off of

Frederick Holzgrefe

improve. to Continue

Douglas Col

a we're good this The business doing key that is is job. Absolutely. Tyler, and an expensive thing,

pricing That focus sort those we market tools of service, and ought sort if more where our than market prices. we're the team maybe that market to with and that's we market is in at of so providing on what and So, to very cost-plus. sales -- need that exceeding be closely be we

Tyler Brown

very how the on mean anyone. I for much of a line XX sight to frankly centers, have then you frankly, XX And XX is big mean, here? I do Okay. service XX number to

Douglas Col

Yes.

pipeline can So, be is losses we some going that that. you, excess and in is I pretty that a se the not to really next that And out years, We couple building fill more but to that network. about it's the And year, of right, we've end that. per that know that you pipeline in game wins about next the here XX assure gives really is, good got the work there on or pipeline. it's of XX pipeline

the us sometimes And us get which Atlanta, will years northeast you've this Atlanta into took talk later turn to up long and then year a that's is focus. north -- about they that taken there. They us So, heard get months northwest there. Atlanta for Atlanta, -- to time open

of -- estate the the XX in years But it's next and it's we're year combing build our So so after. deliver in kind we real and pipeline. investment down about doubling on to XX pipeline the continuing can to that

Tyler Brown

And mean the envision how sorry. it's lastly; -- owned it then, envision you somewhat do mix like Okay. between be Yes, seems going leased. it to -- do you and I just Is --

Frederick Holzgrefe

Sorry. Go ahead.

Tyler Brown

seems have going different to lease like it does, going do animal much a you But to to sure that's was but I that prefer a leasing. quite to know everybody say, I I'm you're than bit. owned.

Frederick Holzgrefe

been. I totally agree, has and it

market, going got through to sense we've to we're us lease followed with us -- if runway we makes we're wherever we can if it's to northeast, know, presence, long-term establish and up in the well going that. But a something get you the be we're it's strategic strategically. that can get do going some buy our As done to

the way. develop that You capacity business, cases, we ourselves know, organic we or that by to going more we're add on of and in in -- to know go and the sort we as continue grow look facilities some that

somebody adding opportunistic -- we're than on exiting. think the -- be focused I locations be somebody may So, else's might finding more around facilities somebody

lease to some combination We're things ownership in both. ones that the the of the to that I of going potential a now. long-term built leased is one own take of now as is that, facilities you some it's number So, and to well. were were now, ones capital we so strategic want the that we of be leases They into will place tell that the that -- we're and buyer now we'll going of

Tyler Brown

Thanks, guys. perfect. Okay,

Operator

America. Our question Bank with from of Rosa comes next Ari

Ari Rosa

Doug on quarter a morning. Fritz, nice here. good and congrats Hey,

pretty like responsive So, well responded pretty it customers or rate to increases. -- sounds been have

customers a of on see Just and of back get on some little to end just color market wanted of those to passing at a -- in come LTL function start some is to -- kind in terms point nature push historically, carriers? of supply on to prices start those if you get Kind do discussions. their of customers terms more aggressive? consumers, of to it what to inability start they back the kind Or things of demand sort LTL of do and for the

Douglas Col

that is you've it's Well, I that, for I meet we've are what able great there to this think a and modestly able similar customer customer cases developed make right? been that dealing the many or you they be now, these is one environment going sort to that And think over execute anywhere time. this when We're probably this increase, is a team our with with the the -- that we're an in quality for doing -- with well challenging may observation is which can particularly provide and would and is We've environment, the expectations. in to is is wants in of has ours. environment, don't back it customers I been service. rate But this -- you developed relationships some is how easier in right

know we're that, market. of challenged. a charges below they'll an get providing. no are because cost cases, they -- paid But pricing up particularly we at that see delivering if push than to probably is this And opportunity and picking with been. that some market we we're significant certainly, doubt that armed in business. doing that that's the we you customers or So, point be on they I service we can The -- have results better what back is that ever need cost to And improvement discussion think accessorial

a in a for So team I we the than challenge -- think of have. that discussion better position have ever but I we're to kind discussion that's the it's

Ari Rosa

obviously, get guys have why out looking question, second of industry Understood. ratio. a my And the you kind to it. Got for operating might whole, competitors can think as at peak in it freight laid improvement terms have on people case you compelling some But a the you to like pretty continue we're a lot record as also conditions. reporting of are what levels of be margins. of kind And your seems of seeing, kind suggested

are industry-wide margins? that So, of looking about And of XX, of environment do sustain XX kind for road, of kind implications down can what months this the itself? you think kind the

Frederick Holzgrefe

that of look to game we over there". we in do "Listen, for do when in has think service our cases, That's We are able of there been to some sort a of We we for to the drive better think have service we look at us, look published. of kind ways. or the customers. are out our roadmap And level We're right? that. performance fully as providing we Certainly, -- been we we the we same want to best-in-class. I industry, at these would see get expect of time. what to couple need performance we that's it that, a at Certainly, that say the some

slower plays that and with I through and do that -- provide comes service and stickiness we I to value maybe about the to of they disciplined economic there we've shown data think shown is to are through We execute service environment, been But that even sort this this. time. the and of -- we've as even that, We've over can we recently that maybe very that think that manage we've become generate as that. in a we more customers more a able a continue been we've strengths pricing that it. our focused kind And so as on slowdown, it quality analytics. well

Ari Rosa

time. helpful. for Very Thanks the it. Got

Operator

with We'll take Chan Bruce from our final question Stifel.

Bruce Chan

Appreciate squeezing gents. you here. in morning, me Good Hey.

to couple Just a if want more get I could.

high PT inflation about count? the a side, grow what or kind to of maybe is target a level On could mid that if in single-digit your range? any revenue percentage Is you that I network? to in normalized level there as terminal back something on your you thoughts as of And get think it think is

Douglas Col

using have it an it full I'm in our tool I've over terms our of I more the think But the where a environment. miles. gets and great team of I back of the kit. PT in your driver love network build empty, it's How trailers, density, and time in our general, into linehaul is you we and overtime of the quickly Yes. use this with said sure But has to we will opportunity every lower low that opportunity mean, efficiently kind is day if as -- network to our run percentage to to digits, low-double know the there. connect migrate a not return way tool to tractor and PT being one mile in the equipment, -- build our

or So think down yes, it the of reliance quarter no on but kind will over it's down time, or use two. near-term come it that over trend next our expectation of I to going

Bruce Chan

enough. And Doug. just here, one Okay, then final the fair

for you're adjustment pricing with of And mentioned on us the and need now? fuel. also customer thoughts you how any about those through as surcharge takes move right some you You some the some and whether of give could you conversations? Maybe puts talked see action tables you feeling about

Douglas Col

is lockstep and doesn't it's fuel of we The fueling cycle ourselves hedge refuel our that. as surcharge going. where over cost mechanism mean pretty average pretty like fuel diesel the against our things hedge stations a fuel added good way is always to and and the the make But recoup investments in with at time, that allows much the and not only prices. across own rising build expense with to terminals all use us but with costs a go national surcharge we I kept peers line that

gets surcharge lot our looks and peers think like cycle. I a updated So, our the across

Bruce Chan

you. enough. Thank fair Great,

Douglas Col

Thanks, Bruce.

Operator

I will concludes today's turn now closing Fritz to Holzgrefe This question-and-answer remarks. session. it back for

Frederick Holzgrefe

the day. of looking we saw in to thank excited have everyone quarter that you, coming your third We you. in a for time upon thank in calling And on interest the Saia. that And growth Thank success we in. the that going you, We're and for years. and again, as second over the about performance the the quarter. business appreciate We're safe the replicate build accelerate

Operator

Ladies and now participation. gentlemen, for this concludes today's disconnect you your call. phone And you may your Thank lines.

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