Saia (SAIA) 28 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Douglas Col	EVP, CFO & Secretary
Frederick Holzgrefe	President, CEO & Director
Amit Mehrotra	Deutsche Bank
Jason Seidl	Cowen and Company
Jonathan Chappell	Evercore ISI
Scott Group	Wolfe Research
Thomas Wadewitz	UBS
Jack Atkins	Stephens Inc.
Jordan Alliger	Goldman Sachs Group
Allison Poliniak	Wells Fargo Securities
Stephanie Moore	Truist Securities

Call transcript

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Operator

Good day, and welcome to the Saia Third 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

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

the 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 the should begin, These statements historical to call, to Reform facts and results We are factors results and forward-looking are for on in that adjusted release we I Act call differ make press release a operating materially. filings statements the discuss press sale recorded for more million you our a Also, That of certain reconciliation now quarter, opening the See subject non-GAAP Relations sale. a within our Private Securities be diluted actual that all on comments, adjusted you SEC statements the actual we and share our made to gain cause our information we it exact When $X.X results earnings of of quarter terminal. Saia's Financial in exclude gain as third for the per the from Fritz comments. page results a measures. Investor website well. third on turn that of is financial adjusted Releases over available ratio release to or announcing the from will some press refers

Frederick Holzgrefe

record in that we quarter us results discuss have third report I'm you results. pleased joining for morning, to board to XXXX. across the thank to and Good continue Saia's

record XX%. quarter was XX% a third quarter record million, quarter consecutive revenue last million, sub and XX.X% record $XXX grew to where by operating Our ratio our our the also fifth XX%. marked year's income in $XXX revenue the during Operating surpassing a is the by OR

the levels by single as worked this tight best quarter our that our the history. marked customers a from quarter through XX.X%, demands in long OR ratio operating company's supply consistent adjusted for of is persist. markets all the labor was Our challenges and reported is we've and shipper for quarter The

to in per in with number across service group workday bit we the and continues in quarter, provide shipments various delivery the Stock new excellent headwind a still on XX.X% X.X% to stages the increase third a continues training productivity the a based just associates, operations face Our standard in company. continuous still of a quarter. on-time of of posted

new still on-boarded footprint, employees flat maintain expanded and team with cargo the in we as year industry. ratio our best even among was X.XX%, a our and However, claims last the able of to

remains achieve year. on we've key this a profitability pricing Our able again pillar the focus improving results to been of

Our approach in LTL quarter. weight great to yield haul, to well. charges important increased for have not and of length charges but These increased as revenue density, pricing accessorial pricing only our but utilization to gains and optimal service customers measure in overall The market-based of driven not in capacity by pricing importance improvement shipment accessorials, our including per rate mix LTL an implications factors freight cube, business. or consider overestimate in us by improvements shipment. per increase by is continuing our yield This provide a the XX.X% fuel handling is for the base aided I length and factors across only our somewhat offset of surcharge which accompanying special by Strong cannot quality as in carrier, an hundredweight revenue quarter. X.X% by of this per X.X%, shipment our $XXX increase XX.X%, the but the and well. haul all managing freight per for mix to enabled to record for

Our I quarter but said, the call pricing, turn With our performance mix that over of the reflects ability financial QX results. business. only of our a continuing review third will not improve to to in Doug for

Douglas Col

Fritz. Thanks,

a increased revenue Third a quarter, growth XX.X% XX% excluding year. revenue surcharge and year and improved of were shipment; The to average an yield, quarter million, grew XX% the total by XX% weight follows: the XX.X%; surcharge, to from $XXX.X X.X% in revenue increase per was components by fuel of in growth increase our shipment increased X.X% fuel prior tonnage compared as $XXX.X by revenue XX.X% of combination quarter this ago. the

benefits dock items workforce and and increased in new Salaries, by attract as as the now to quarter across quarter. by some our were expense paid referral driven employees. increases that the in well bonuses Moving X.X%, wages wage the key to and driver hiring

Truck our increased national year-over-year. related of in their a to continued was miles fuel diesel increase prior XX.X% result third pandemic of period; increases that while total in the the The year. expense the by accident the costs quarter, X.X% in the transportation the year. by Additionally, average to rail were of of approximately increased costs XX.X% in XXXX. X.X% rising prices revenue and miles XX.X% versus last company and and the line after contributed quarter the reflecting our respectively, compared quarter third prices prior quarter expense and the XX% frequency a combined increased and XX.X% in compared drop rise to higher to wage X.X% miles increased XX.X% Fuel year-over-year August quarter that X.X%, year. in XX% January on Claims in compared year quarter, the compared increase third of insurance quarter this premium last prior third severity were basis. haul total expense PT Purchase and line and in to expense increased to

quarter expenses been to million of sequentially the years compared volatility the $X.X the past from terminal of Also we've to was in fleet not we've few investments $X.X invested technology. continuation over the quarter. revenue perspective, increases. age to higher or the year this of ago our our have a meaningful would XX.X%. increased I XX.X% the equipment increase of X.X% in is by as the expense million, operating XXX with For Total to line, million Appreciation the if trend would and the year for year-over-year. $X.X expense This the lower expense and made ratio premium year-over-year illustrate note in points XX%, claims quarter increase the in grown a XX.X% improved million insurance and down operating the in expense that second was basis seen from network, $XX.X prior

results a company. record impact is estate adjusted XX.X%, for OR adjusting the our As our of million real earlier, the we to exclude mentioned a gain, $X.X

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

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

will we projects We quarter, in $XXX number still expenditures million. be the current in XXXX about estate have capital of pipeline expect approximately and a full year real the

million remains additional the I'll credit through outside to facility Our million strong some of for turn our closing availability comments. $XXX.X call now and hand than over cash balance sheet sources. borrowing $XXX with revolving more Fritz on back and

Frederick Holzgrefe

opened state September, with financial terminal we around execution third Along openings. produced terminal Doug. in I'm year. Virginia, the late new quarter, our by the Thanks, and pleased In this the terminal opening our Fredericksburg, particularly a the in solid results of team with fourth our new

Additionally, with we more to allow Youngstown, Connecticut, direct New our customers opened These in terminals new shipping Haven, points. October, terminals provide near in us Ohio.

customers, of to XXXX. look As a differentiated we our to That service. open X before We year new the XXX to end in total the a of position We additional at we're at to compared the terminals get of for offer closer openings end would put forward XXXX. to XXXX. X terminals us XXX plan in

expanding well. openings and order of our are to plan also recruiting and also and that to and support these We're year, driver next is new to open terminals terminals. target year we program for operate with as required Human several Our increase our into or pace continuously XX of relocations academy driver openings, facilities to coming In and calls group terminal onboarding our is Resources select existing the positioned larger partnering candidate technical better to talent markets pipeline. XX the in in schools locations more colleges our

of stick continue our We playbook growth. to in to terms

off growth company. changed Our the profile footprint XXXX of the has organic and strategy kicked in

With to growth. and closer strategy in people each for as we customer and so, as base the opening, to backbone the customers our proposition, have opportunity to catalyst is with terminal the our successful investments our doing important been choose customer for familiar continued Our an appealing as existing will value new serve new our get customers technology quality. this and well give we which

growth. position said, and operating performance same time, multiyear We continue With ready from open for operational we're flow. real questions, cash to At these to now financial estate operator. us current line the pipeline allow that execution to our our will fund the for investments

Operator

Instructions]. [Operator

question Our from Bank. Mehrotra Amit first with Deutsche

Amit Mehrotra

a the you good $XXX real revenue baseline that is it's for talk about if seeing Fritz, know that in things guys. the a Can company? how you're as the terms on per maybe -- bill, for Congrats pricing or well. addressing drive so things results, quarters? been you trending new over what focus like that guys. the action that trending I next you're that doing of number charges either few to And seeing or in or minimum like number you're

Frederick Holzgrefe

in of as the runway availability what that's any So us we're making continue at a that. mean have opportunity around does a business, things. you and is, any mean $XXX. understand us. we're thing other better pricing to this and impact could minimum best-in-class there. stopping could one Amit, opportunity is of It of initiatives investments and network to inflationary. sort our Absolutely. our great capacities customers. see shipments. our But charge this? could here. be still -- said, against continuing excessive sort and of complex what we -- if I could going not you continue Do freight business that I And doing is be is to push benchmark deliveries, national With out our we're We're I carriers, job It big to the be clear in it the be we there's the of is this length. that underlying for It the number you market for -- a I mean, think

we made push focused that that, done, more So got we're on very, continue and about it's view, our because can not be the to initiative what to our excited continuing. progress There's we've quarter, in still that opportunity team is We're in that done. you, means pricing to is tell very third the there. I but the work

So the pricing our expect us more continuously let This I business opportunity looking don't mix at and is of up. our be process to more to and becoming opportunity.

Amit Mehrotra

range then, or of And see to year I the fourth then could incredible. XXX that margin helpful. for something next given there? in about, expectation of That's for basis And talk is expectation Is year that OR related going to density in obviously the terminals? XXX kind it Can there range, deteriorates it XXX well? the that in the for bps still which Okay. know Just what that, right you're this even to just speak the Doug, points new next right Fritz, quarter? expansion better obviously, the sequentially. points typically basis to like as what's expectation you expectation benefits year? the be to XXX about you it talked What's XXX right is

Douglas Col

take Amit, yes, first I'll the part.

to December think I A of deterioration. we've working QX working freight you is have And the the have do X of around then got couple the way still day. kind schedule. some little less yes, probably get basis the days holidays, XXX in I they're days a So mean the into and about -- right period. you November points the shipments think different because per holiday businesses normal are light revenue to days

So still all those there. factors are

good a So think I around which basis about think XXX historic, is QX. has to points, been way the

Frederick Holzgrefe

right business for about Yes. of opportunity that potentially. sort this. improvement the of to that think XXX this And in us there's in top point now, to around Amit, I think XXX that the And the to think range year-on-year. future said always of that range even basis I We've environment we're and the to push is above end the certainly

steadily we do think done since I have things around openings the that and of we successfully we those better openings. how at got how scale XXXX, efficiency One we the terminal

year that we to going view the done. open drag. get I do. that is to to XX it XX So That's going next we're a -- work XX We're don't

into relocations be we I range an think as sort -- well into that story will of year as that in well next as be any baked that of so do, time. part number important well over which the will margin as

in it conditions, with that's end certainly, as within very continues, the the is reach. is is like and environment in play, our favorable we're long -- think feel in, economic as we -- that So range top a range clearly I of that that

Operator

our of Seidl take next We'll Cowen. question from Jason

Jason Seidl

terms further And that versus a you been wanted little there of we charges guys a year-over-year to about on. what's should increase year-over-year expected have the look I should your penetration in How go at think operator. how 'XX? more that you, Is these talk opportunity then putting Thank ancillary to putting bit increase pricing? the of in about charges? on maybe for we

Douglas Col

Yes. is look Jason, revenue there's improvements third around at it estimate I quarter, of what good to accessorial A do -- Fritz of our think in like customer a to think a if And of we're in mean, you for past of go it's at look market a the stages bill long year-over-year to I in the to just the door there, some one impact somewhere in foot it waived business, improvement the the per runway you be I way not cases, XX% And was. would we said, the I some have now may some work at consider your as days. to early market. work. don't doing the get these I charge mean,

it next market's up to charge that have charge And put then the been, need here year, it so hey, for the any charge, the that conversation this And might in the to We we're raise to well this can't waive year, conversation, now, get longer. on. we is, going and ballpark. hey,

early And in so think mean, the all like they're I stages we're said, So there. I Fritz impactful.

of And next thing, as looking QX as QX. of other well, contractual question Amit's on renewals kind a contractual we accelerated renewals outlook. for kind to use year, The from our basis into our

contractual year-over-year, the renewals our So up in third were quarter XX.X%.

as improvement, this is to chain pure you that but supply that into that. can't we're persist, the bake and for indication again, your And so, model challenges continue to the expects to price compensate it and yield tightness an shipper able -- to

Jason Seidl

good That's color.

You percent you accessorials? said being market you of long Where would as in base have a to say at you penetration are of customer terms runway. a for your

Frederick Holzgrefe

do where we that, take ours that have it's will at of I folks. don't basis I of those, to best-in-class where you a is is they but emphasize against don't haul be going some you kind guide a we at a a over reporting statistics, or the gap, all I what to are business that important gap, keep providing right? is the -- would carriers, they Jason, at weight to let's to reported, public great right, I other -- metric and as can to those too like look of you you think you because a are pushing we operating too job, service time, and right? for we a know look we've get but this there have the paid. to close really view get lay that be this of premium the think of point revenue good I the I kind to and if don't -- more per this kind And shipment expensive to shipment go where But that ought opportunity not or It's of that the close on some you per that -- of to a what's target. stagnant, as you're So, we're sort important got

Jason Seidl

What And to still telling the That's to customers out your it's demand in 'XX? are it there. fairly I expect back mean, like robust just great color. side, you going seems

Frederick Holzgrefe

this I chain disruption I they they see think the next -- -- year. disruption that broadly, think into supply carrying

that still of in the economy stimulus also think -- fair I see amount there's they a there's a now.

positive to well I environment of into would bit see well it and see this into well. that -- think continues but stay over as next -- there So that you is year. we maybe expect to sort that and makes economic spending is stimulus a the what the further year hearing we're the extent To or inflationary,

Operator

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

Jonathan Chappell

you Doug, question, renewals last that XQ in your XX.X%. said in Doug, up contract

the said X%. you think quarter, I last in

obviously, through XQ to business you is gauge momentum. momentum lot Is gone there, where in as of are So the year? the we're in think So there you've if in this there seeing renewals? of of part these we a first next maintained, any acceleration further book overall way about being

Douglas Col

it's hard to mean say. I

and I up window likely see We're when inflation face some seeing at have just next I been no a are It's this consistent like been to the just us. look the season. proper contracts the I for for even think, think that through on mean, increases earning rate XX.X% said, accounts pressures of business we're there's XX.X% year return. I of market's where year, customers operates how based the them pretty approach depending the to to we've we at again on not path simply on bid cost in QX, this The aren't kind year. as was of that cost receiving we increases renew narrow the ratably business, kind quarter. and

is accelerates that early GRI already kind be of the next that's but So about we've do in this to customers some their know early seen announcements or letting for forecasting don't GRIs think year, I folks and here, coming. know pretty from I that it

of feels the next half of at it So for kind the year. expected, first like be should least more same

Jonathan Chappell

Great. And Fritz, really then, important. Okay. you on touched something

grown the base a X%. terminal you've up little X% less than year, So by this bit

pace double bit hoping scale with bring you of into costs XX%, relevant. impact online XX% little you're made? overall kind the limited equipment, would basically little terminals is for next associated basis. you that on margin where to aggressively, these to do start-up now bit land, But talking got of a year, be that hiring you've with Next when that a less can percentage bringing which noted on the year Can you're improvements you terminal people speak kind you margin growth impact think about on X% a you've

Frederick Holzgrefe

Yes, we think we can.

think I that way stem now. We're to markets the our terminals to moving attempting adding reach now right we we're essentially the with long times. at or stage -- we're moving were -- we're to where closer customer

customer So also in have kind a to recruit. closer maybe you you regard. a a to savings little can -- you bit And that of as cost easier easier position, modestly the -- of a it's to bit built-in move you're in little

when hiring, pretty needed The we started to that's the quickly facility move always but when playbook technology traffic, start example, that to the you can for you're example We so first build in we training, that as you're then at initiate open can of got we understand a we infrastructure Atlanta get an those. an avoiding much with staff new get little facilities that. there. as example, easier So bit facilities, in regions you we've us, that cite where place, in the operating out markets flag those we already Atlanta an to Northeast, also planted the use putting it's recruit,

this. to to see And so, we don't having corporate overheads us add

-- additions you're big aren't there. So not the

those, terminal in to So some actually operations, speed. up savings. now a Atlanta cases, it In generate to comes you staff those cost my you can and example, get down

helps that this. you So through fund

make a So doing to one understand And we when see the how by we all or look is at think things this of of it, drag I part that reopenings, already, new and organically, pace Customers service do openings we don't not a that's know to pick related -- the this that facility. challenge. pace open improved our us they've operation. down up up, the got to the a disruptive own slow in we and way

broadly profile. rest 'XX, about easy switch just at whole opened our we ago, our that an network, -- started like region is sort say now. years of which much at cases. several But operates the that's So we in typically our the we look the of more company the reality that across those don't Northeast, When

on already it's it's for we facilities So around -- -- in and us, the dots you're dropping have. infrastructure map

openings. creating So about pretty not these we feel a with good drag

Operator

Our comes of from Scott Wolfe next Group question Research.

Scott Group

year, missed think better and shipment growth about the about just as if but if this, September, you next potential tonnage And know the next don't maybe year? door can give think and count we growth I for way numbers way I terminal to the for us about to growth that's October? volume any think a

Frederick Holzgrefe

per Sure. and X.X% per shipments terms X% workday then to day Scott, -- were the shipments in And XX% are then up X% up tonnage the And September tonnage in October, in XX.X%. is far, range. and so up up of was about

Scott Group

the growth? count And door

Frederick Holzgrefe

terms in door the count, XXX year-end openings is what on X.X%, at mean, be I base will we X%, the I think guess. XX Yes, of of

about we'll X% also year right. in have When some going you relocations. of work probably I count with XX% is think think the door in the the of to range on

terminals every got So just bigger. into like we've out where we we something move year, do some

on think So door basis XX% it. probably way X% to about count to right a is the

Douglas Col

with about count. the door One thing think to Scott

those making grow -- to year's be right, we're into just volumes. that's we not that, for time. should over next that So investments, That's able

Scott Group

a underestimate and Yes. Got we comment you made Fritz, it. or that of can't importance And overestimate the utilization. mix then,

is? the shipment's year. what weight this nice tailwind just opportunity along And a just So where maybe been those per lines, you that about maybe talk are, and

weight shipment? room If go per to further you think that on there's

Frederick Holzgrefe

Yes.

is Scott, one we the freight are So the network. our that studying, impact what things continuously of is on

amount a it's excessive you've to of that. got can difficult So if manage length, we say that up freight, That fair have capacity, be of take to category handle. a and could

freight, really sure we of it's identify of So make it. for that important sort for charge category those, we us, that

the it, keep, to that same the time, Some get paid of may we to want for capacity with providing but at that. we we're absolutely need

So take as fair an return simply on, -- action we does, of that's that of would generate relation it or capacity. analyze that different fair the because of that be are a amount capacity area to and action in utilizes an if a segments we business, example we'll taking it that better

So those access sort a sorts in the heard quarters of shipments, you minimum delivery we charge things about talked lot past, shipments. us limited we've talked or about of

are to and those of your adding business complexity your cost All structure.

decide paid to going So part either get of be you the or not you you're in that market.

be that So a would mix change.

of And and of the the that. of And our particularly impact exit that both. freight in on that's and making sure network analytics best environment, ongoing understand part the managing make focus comfortable kind to this what it. we're capacities, and You time is you're sure the we pricing on our doing it's

Scott Group

said per just weight shipment? you sorry, the I'm

Frederick Holzgrefe

Pardon?

Scott Group

weight per into going on forward thoughts your year? Just shipment next

Frederick Holzgrefe

making so focus you we we the feel business, best the our and got think that that's that the parts trends. right? the targeting that returns we market of I available that's of we like can generate see best reflective mix with of of on sure our So mix can business handle right

continue the -- that's year. could right business continues think think world don't I think mix that -- next changes, I change, of focus. that's a probably but that into That's now, focus. our certainly, I that, I

Operator

question from with take our UBS. Wadewitz Tom We'll next

Thomas Wadewitz

driven shipment do I on growth capacity, continue adding about that tonnage Do kind reason really you or or significant capacity of bit terminal theme capacity. by by Wanted that think the muted, ask then about your a driven guess, of more do the And that think that weight think guess, but shipments. little door you're more seeing How the you you like use shipments I capacity? is is strong of versus more I to, per you're and weight? is of growth, shipment the

the Is by look or fairly utilization and kind capacity terminal a wide the wonder that the it you versus kind So look the that future do than shipments, more I gap. that's opening through capacity to shipments? at more tonnage right of if goes way add it's of up at just

Frederick Holzgrefe

our basis, it's line in night. probably tonnage on the docks, Probably, look same we're doors. pressure, our thinking haul about say think in tonnage network door through it I probably we when Yes. think across at especially the too. about more view, a I'd for I at so mean, we the us,

I yes, additions, us network growth. the across really are capacity preparing the So for mean, across our tonnage both and terminal fleet continued

Thomas Wadewitz

Yes.

-- All Okay. question, That's right. that. I it's a appreciate but know nuanced I

the from being you're labor. some on other I more little a the sound like constraint? you is that constrained you're a hearing terms labor of of location certainly the constructive us we're is labor, side, give sense in to you how constraint something maybe terminals all transports On seems But guess, don't on at in of your And growth, on doing comments labor of market? easier can that a it's get

Douglas Col

not labor means, by introduces that markets, to it's a new incremental the essentially offered that's right? Just an benefit, it challenge. but is underscore, you facilities new I challenging, no So to so

We ongoing referral recruiting have sign-on referral bonuses, we the across bonuses, -- fares opportunity have a country.

ad around you marketing it's Some markets TV and others. identifying We've out a that and also target it, branding, it's about we've really much than but Saia drivers hotter employees. put that about got as pay to if attention then

capacity, of of capacity and best you need resource, out that that's So it's your are and can. the right? really part a important got place you've because a you to drivers capacity. an where an to that's market So it's important there utilize gets yes scarce part optimize the that -- price challenged and constraint, you all And to you I critical be able accordingly resources, that think our no,

in We've some challenge here improvements -- things, challenging. of quarters to down but it's hiring in yes couple able as some last referral a for we we've on doubled So continuing and saw the sure. no, that's and been -- focus bonuses

Thomas Wadewitz

growth limiting your not really? or that Is

Douglas Col

is to for customers. can limit that business but serve I places, does think can serve have we what some In what well we identify our and to growth, down our comes we what it it

So right it's building got you've focus in sure on the that case, route a structures. density, making

-- You're driver and scarce have not a terminal. taking serve try take XXX to miles them a from customer a

customers, them serve then capacity. can the and them, time, you service where capabilities best focusing into leverage same the their at You're markets but their best

Operator

We'll question Atkins from Jack our next Stephens. take of

Jack Atkins

incremental guess, it's dollar, sure the want about results. thinking about after getting accessorial these to your of I they are very force you for to structural you larger as for whether executing How paid it's sales structure your the going getting or that clearly, compensated to services in on incentive and as the you to terms sales kind made get paid So just how doing you're customer. the you paid looking things align to little better guys force go service Fritz, well at you're Have that be with consolidated a you're company? of just how you're do changes And an changes incentivize thinking providing? guys making how

Frederick Holzgrefe

absolutely. Yes,

growth, year-over-year. there's two year, So you X the we our if X -- measurements axis, force, two sales through that variables, it's improvement revenue in this OR instituted think about

margin. to significantly most targeted So driving revenue of are both those and

the we've that that company. yes, in a for we why big a the great part participate them. So of have. performance success the They incentive of it's They're achieved

I in I okay. The for incentive been them, works right? are the the And for the doing so think they're done, operations and we're the think making to of can them. front you, selling, team lines the upside customer pointing And guys customer are that's up and the Our what sales in participate they getting from results, out tell I it getting it great.

Jack Atkins

to think was I on maybe a Okay. the move expect And kind something from those bigger there bit productivity dock Would you some and Could that year all technology just efficiency of you've prepared mind you theme about as guess, your remarks Fritz, that you've and some to makes from as kind hires were that drive more? tailwinds about you No Can of you seen revisiting in you picture And get into back ways the more everyone's kind going greater year. to a I around to folks seasoned? saying, help new making. maybe productivity? that talk bit last that dock technology leverage maybe next think been of us perspective, guess headwinds sense. maybe I with see a

Frederick Holzgrefe

Sure.

the team So obviously, than, it, -- and no we because our we'll to have the that. so sure is our of service care a that, the for end, We're improvement little more operations of take productivity good be will as out pricing ability service a one efficient next our be certainly, if focused we first critical is to what and But call tailwind OR to get be a know we'll of dock part And that'll team in our make more focus on with bit with bit foremost, our that. little next dock of going in is deliver OR cost the to huge say, see improvement claims. driven year. don't I customers. freight, productivity, into by year

ops continue most team us. and to get that's most That's So that critical valuable done. the to can

we tablet dock a see look their have and technology, workers, that the if on enhance Pacer that's or a on we can of And on can dock one the they managers production, which we've -- at and we out, supervisors -- bar tells the scorecard or they behind. and that. they're what basically that terminal see them of rolled our have task our a our for technology to each continue one So that

maybe somebody be some new performing real-time can results. if some about those that's intervention their or uncertainty in not and pace there to influence So that has is duties, there's somebody keeping

and bit and and rolling little got do technology enhance of to continue key dock productivity we'll customers' for take ultimately, critical. But foremost, and out that's hopefully to of of a the that's there a that drive they part look and care it. first So to freight ways

Operator

question Goldman take We'll next our Alliger from with Sachs. Jordan

Jordan Alliger

Just question, a again, front. the on labor

of some revenues, look me lot terms compensation per growth wages. rate and think give sense? next a around relative is there's at the to XXXX? thinking pressures best been it Is like change if about inflationary year-over-year to could way How of you it to best in of Just or year, ton just obviously,

Frederick Holzgrefe

mid-August. got in in increases this Well, this and then in year, one X wage another we've one mind, keep year, January

think moment, is the percentage X feels just which base it at But last like single-digit So about of pure I rate to off to just been same this right those the increase That's few expense. think wage you've is X.X%. inflation of over the that way line, X.X% low we the to year-out. foresee wouldn't think range probably right and about run years, we've on and year's of got next year. inflation, has seen benefits year-in way which It

Operator

next our take of Poliniak Fargo. from Allison Wells will We question

Allison Poliniak

how of more sounds Just to past that want to versus But new that older OR. are sort additive off in expected terminals. OR as Does back favorable that comments in of the some go should the those to conversation extent at terms about some ones, impacting of more become since a terminals we expansion? first to like, terminals it certainly position the not that accelerate to of year new maybe think Fritz, new the productive? your starting they're It start

Frederick Holzgrefe

that's about moving this think critical is more of it part other And we you to how about about they become is that think Yes, terminals the the -- as efficient. customers. closer I those kind

significantly, that you expect. customer, there's they So cost close the reach when service More savings you're expects, embedded that provide customer that in can that there. to the

but competition. also then our provide and us it service differentiated opportunities, versus expansion pricing So or only it longer-term further not supports does

Douglas Col

years it that in of get sub is tell I took years if to the that just think you of Northeast, into started think best our XXXX you up and example, to expansion too, XX. us a it, couple operating is the region for another we breakeven. there I'll couple Allison, about

of to much So drop once improvement it's factor continue the as up contributing built doing base that seeing. very a get we we're as to you kind terminals we've been in, there,

Allison Poliniak

Understanding in leverage a mode optimal the in balance thinking how that obviously, and some a the Got then is optimal growth here? range about sheet, we range cyclicality for How on certainly should position obviously, you're you it. And here. leverage favorable leverage about business are think just guys the that or business what term. longer

Frederick Holzgrefe

in think cash-generating mean, Well, we position. we're about a it strong lot. I whole don't a

use So we aggressive side, we put pieces the CapEx, together. of estate I we'd the on I but can balance of we the think terms could for years, to to end. there, around could the of there's mean, see XX% right real get in our have revenue next XX% like sheet to CapEx a more opportunities if couple and certainly willingness on

even current able rate, to the we're but at to think -- that going profitability, flow of I So -- run rate be at cash we'd that.

that balance something that comfortable management So the of it's it's really put opportunity to with, not really just we foresee an have opportunity is on a don't question what sheet. to

Operator

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

Unidentified Analyst

is This Zach for on Todd.

would onboard about productivity moving elevated should Just how that general new wanted to something increases percentage transportation, off first or hear then the there. Is and stays brought thoughts probably maybe employees just and guess purchase half that of like I as as trails your we think in ask into a are XXXX? about that revenue to first

Douglas Col

going that it, stays I'm tails leave it your probably level, at and to Yes. part first of at the question, off. say not I'd say elevated it just it

we're drivers, the challenge, mean, a drivers. While this, growth have adding like I and net love it's we're as more in to said, mode we'd Fritz but

the going this your an So model. in I half, okay level won't to first commit I to but stay at it's it think through would assumption be tailing down,

Unidentified Analyst

have Okay. steady guys terminals, way be to in cadence the year maybe other? is through That's weighted visibility on those it adds of helpful. kind as you we or do what just XXXX? assume with the the addition then could a or Should any one And

Frederick Holzgrefe

of that's in weight but getting the final right some of getting bit but are touches the we to little and a weighted it probably now in of to half. It's where terms second place, the second kind I'd things half,

Operator

We'll Hoexter Bank take our from of next question Ken of America.

Unidentified Analyst

and the on quarter ops. job the Nice

Just to maybe Zach's to there. wanted actually follow-up just question a

in a your think a max Obviously, you the maybe level terms I to how know rail line what in-sourcing thought terms you -- or just that get of want bringing you mentioned in Just employees online? versus but of strategically kind on goals of have do haul it what do about to of you truck? outsourcing back and

Douglas Col

I -- drivers, be but it PT direction. through. for now, mean need much only think And if way a it's to optimal you've need more Yes. meaning going something like can, a balancing lot a that than and we we imbalance, network to it's many into haul do There's we'd but internally manage connectivity. we probably backhaul market, that the also network. right got head your the not about as of so to there's can't of run always as It's view in going you want to -- we of

sense. network, drift going mode have think as it you imbalance and But and think there's more to So growth some in-source. the use over you're to build time, naturally need and density as it, the makes now, balance you I we to more where in I we're it in of

Unidentified Analyst

then on scale what thoughts discussion And the are ability of of a terms the to that. it. Perfect. in you obviously, mentioned service But XX to really your lot XX centers,

the of you've just multiple So can is set -- or it's -- X% pretty a years? that given if just lead of you growth? just accelerate opportunities that year kind So kind of planning a per fixed -- to or XX% that's got more time

Frederick Holzgrefe

kind give Just color some that. around you of

We you on expect. have team a that's this, as pretty focused might

a X pipeline out building years. we're X So looks that and

So know might pretty got what there idea a -- we -- but is a XXXX good not like. look I've of XXXX,

that -- So that cadence. we're of kind of kind building

get this imagine, At itself, and this of well. like make I'd kind of whatever, it it to feel as or position this presents That's -- hey, kind or if right? meaning down we let's inventory as in those If we'll we about a mean is don't you're customer organic you We right perhaps Now or same the there's sorts really I watched pull slows accelerate, what where, can this where opportunity strategy. half it, and could a do that down fits the opportunity open work. of of can facility, we we're cadence can second the world we forward, the to the strategy market or the slow is year year. of be time, wait a you the things opportunity. you if if saying, like you we you that say, timing the can closely, and

forward thing serve rapidly. better this move because we Let's more a customer can

of fluid for both That it's year to a as real bit we that know this XX like, a So and on -- well. into what XX. XXXX it's solid looks number. We're

Unidentified Analyst

per shipment, of shift just truckload factor that like Great. last just is of driving Is that to more the shipment? and a your I e-commerce of want that kind or are per fundamental overflow shifting one, weight weight moves And a then clarify that. just

Frederick Holzgrefe

it Yes. in terms of more mix. around I'd about think our efforts

So much just of that's as right? part function a weight we shipments call of there's So that a of weight working gain of what taking on that's out, -- been lot us mix. lighter that

kind a make length per So shipment you as doesn't haul you're need, not shipments, out, each the truckload that if maybe say come and I'd something, about during less revenue quarter was sense weight came get that per the of the you move or fuel shipment. weight the pandemic. the spillover of that it's there's some in have lighter it to going increase able those of that's shipments of helped

Operator

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

Stephanie Moore

-- of verticals on trends touch customers the in recovery from any the the or token the are with industrial if of maybe with just how you some saw really to And the depths characterize performance just where quarter. underperformance particular line wanted same outsized of and you I on kind would top pandemic? and your we industry

Frederick Holzgrefe

down nice levels geographically, is Stephanie, of region, had and Coast for mean, all quarter very, West the obviously, of us. a Texas I strong activity nice very Houston terms The markets there. mean, I in still

where markets not of able there. because I just energy related. you that's capacity could to industrial ship the I some we're got to businesses call-outs. of Not mean, real all So other serve guess we've say only

next the From So of demand like a GDP solid us, solid hear. the and it into feels backdrop year. industrial to I the morning, out into but what moving that's end we this a standpoint, the see didn't year feels number to still us. pretty customer

Stephanie Moore

you're pretty shaping Great. is be And of then side the and robust hearing that, holiday everything growth to a on of up season in particular. a e-commerce lot I other think

a you might be benefit we to little some just these just maybe of versus go what of into if that have that years, year you exposed customers more bit view the shipments are as saying might So e-commerce-related these prior or holidays? and this some the

Frederick Holzgrefe

the good it. position a position think to dealing get is in Yes. that. residential is I big-box that trend hauler retailer. deliveries, growing as better not We're space. I LTL industrial benefit with to of online more make from really paid we and in guess buying to freight we're sure answer in have that's a much to position It's that. just probably But probably somewhat probably but our a a an for not retailers carrier on truckload handle of We

Operator

take next We'll from our question Chan Stifel. of Bruce

Unidentified Analyst

sure as percentage there truck thinking or of less network that conceptually, Just the may is and rail. line improve then the how part up room between rail back that as as higher for that And are PT. targeting network? levels? you these gave your number just service haul about on a component, a your breakdown Not that Does starts rail to you in if follow-up long-term on be tick of service you're some

Frederick Holzgrefe

of terms in XX-XX about XX Yes. run split Historically, miles, rail. it's XX that's truck, of the

trucks, This quarter, XX to was XX closer it rail.

normal you that can drift as I think you want. been split. can't it rail that The get you has -- XX-XX a service capacity get now as just so you much the I carrier. will it's on to mean, just from limited okay, back historical of it probably So

will probably I for while, guess terms get XX-XX can that's of we to in it's a drift where capacity. our I So been balance, and of kind network, a when the think rail quite it back

Operator

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

Amit Mehrotra

ones I'm hopping last just are terminal you've Sorry, there of given sales and year as that added between footprint quarter? the bigger you're in guys a maybe but you or of the wondering the grow why I so? good terminals smaller given dispose the sale some candidate did to the was calls, to the trying about in talk any was other of over opportunities

Frederick Holzgrefe

the Yes. better which Memphis is Amit, on into little we that increase, terminal. moved facility, significant a position a

it's what the I twice think we of exited. size

that in didn't facility legacy to the need keep market, it. we So

to is one a point that ways: And The connection then market the to I great in operation one is big was haul well it's a break a X facility that So job or wouldn't One that the interpret positioned us. for was for for well new do exit. important that our Memphis. line led positioned beyond surplus. Memphis anything it's that is

that the a facilities, time. see additional it's markets, special one that's There there could sort but but we smaller that addressable we other could a expect ones happen I it, most happen. would of and big developed. an which one. and just the situation, big a terminal And call something maybe adding it's how exit frankly, you exit one that be in kind find market that But to a some over markets be of So and you'll the -- I older in facility where scenario general, go ones, us special don't have could markets, in larger,

and as optimal maybe you That like you us Atlanta to happen could add grow and is it, to down here, road, If well. for but we'll something X you X say, have got the that. or maybe you well,

Operator

it back that Fritz And concludes closing questions. for I'll turn to our remarks.

Frederick Holzgrefe

Saia's like in we've continuing execute today's in-store everyone, I growth And We're your really story. place call for for you, excited got deliver feel that Thank and interest us. the what XXXX participating and to has and about in plan in results.

So thank great and a have day. all, you

Operator

Thank call. your today's concludes This participation. you for

now disconnect. may You

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