Saia (SAIA) 3 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Fritz Holzgrefe	President & Chief Executive Officer
Doug Col	Executive Vice President & Chief Financial Officer
Todd Fowler	KeyBanc Capital Markets
Jon Chappell	Evercore ISI
Amit Mehrotra	Deutsche Bank
Ken Hoexter	Bank of America
Allison Poliniak	Wells Fargo
Scott Group	Wolfe Research
Jordan Alliger	Goldman Sachs
Bascome Majors	Susquehanna
Chris Wetherbee	Citibank
Bruce Chan	Stifel
Ravi Shanker	Morgan Stanley

Call transcript

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Operator

And ladies and gentlemen, please standby. Good day and welcome to the Saia, Inc.

First Quarter 2022 Earnings Conference Call. Today's conference is being recorded. And now at this time, I would like to turn the conference over to Mr. Col. Doug sir. ahead, go Please

Doug Col

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

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

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

Fritz Holzgrefe

joining discuss you record Good Saia's quarter thank results. morning and us to for first

Our first year's fuel and record company's by surpassed XX%, by workday primarily first quarter is driven surcharge, nearly $XXX any grew improvement revenue history. quarter revenue quarter a million XX.X% shipment, excluding and yield. our revenue per a LTL in per for XX.X% last in grew of Shipments our by by X.X%

We at high Operational the storm activity a was disruptions. business our network level. nice in continue team quarter a managing very highlight did our around winter execute execution and a to of plan job to minimize

has pricing our shipper only on-time customers' needs and Not weather-related that claims us by capacity delivery a quarter in survey thrilled able industry remains needs. respond either recent truckload we increases outlook positive in is and stayed our stable put ratio X.XX% The to excellent or This requires high-quality is conducted investments next improvement environment a period. service for with not do They're provide truckload our to quality, back differentiated which over that closures cargo see a customers. our ability result evidenced first form, group we're indicates to business. to by in paid significant a we're quickly so to our over after I'm had marketing bounce the simplest XX%. its The than ongoing customers Our in position over strategy that expecting a the of that us business in to respond our of the in but quickly our yield our capacity months. differentiated to several customers' service less business do to to

provide improvement reach level our build our set competitors. grew than like high broader by to runway geography maintain fuel Chicago call Virginia, table Doug a have $XXX over in to four Mountain state, results operations our year record terminals still turn West in there to one coverage good the revenues said, is the And first par and two opened of pleased additions. year With quarter. Parkersburg, terminals track the $XXX, operating the As including financial was in XX.X% prior be service. a there's with Though for service revenue Record a high more levels, our a and for XXX% LTL we on $XXX.X first our and to some on off ratio I'm the it far we in the new week as in as of report to our million. markets quarter the for record. so operating to income land superior terminal very from or We've able record plan that feel surcharge, service a we first I'll increasingly network additional shipping levels of to serving out long we're start quarter results. this we're for that LaSalle, our to relates year, past our quarter review this commence Illinois, customers another the this financial in per second

Doug Col

Thanks, Fritz.

quarter quarter X.X% basis, grew and as revenue shipment. increased the On growth revenue million. tonnage X.X%. a in our average X.X% $XXX.X grew components to workday and shipment increase of Tonnage in per $XXX.X growth by XX.X%, shipments follows. a million a weight were The increased First combination of X.X% by

to Our XX.X% fuel revenue year total and surcharge, yield, XX.X% by Fuel increased XX.X%, surcharge. revenue ago. improved XX.X% including excluding by fuel surcharge of was and a compared XX.X%

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

is XX% headcount up Our approximately year-over-year.

XXX with year and company Total approximately increased in XX.X% in miles the XX% of diesel a year year-over-year, in quarter expense the while higher increase XX.X% on transportation rail increased a from investments record of expenses line X.X% XX.X% our our first from and the over real year quarter equipment result national were severity first by Purchased total by XX.X%, by of to expense total line. wage technology. $XX driven miles to sequentially increased quarter or the of year-over-year. and increase a XX.X% points insurance XX% this XXXX of and and XX.X% year-over-year year Depreciation August and increase the XX.X% expense year-over-year revenue haul in XX.X% basis. quarter was our increase in in ratio primarily fuel operating XX.X%. to decreased insurance were and was increased average of compared XXXX. rising compared purchase decreased down the the to year ago fourth Truck by expense Claims The X.X% quarter, X.X% in over in contributed quarter ago. in quarter, quarter. frequency Claims the the XX.X% by revenue of a to accident estate, prices quarter. million expense the in million reflecting combined improved $X.X costs basis expense was that Fuel miles Additionally, operating compared the transportation last

capital diluted And first last rate tax effective to to approximately will share call excess an will $X.XX Q&A. XX.X% to comments In to anticipate We for earnings was closing the before anticipate $XXX compared compared were we $X.XX for tax Our the over year. the in last of quarter XXXX, some per I XX.X% rate expenditures XX% our turn Fritz million. now year. for full continue be year. of

Fritz Holzgrefe

Thanks, In keep on freight openings Doug. Georgia. opening with later the Chicago the results of Illinois about supplement and year. this in It to March June, two expect new later the track. is opening excited another seasonally always nice with us this this as Southern the area into move good to add add out and market. this relocations The We'll our of quarter in to for come year the of I'm us far to groundwork ahead LaSalle location quarter Chicago all new and first terminal so to facilities provides we we Illinois Rockford, and stronger coverage months the expand in hope late year. our area Northern and service of

open provide. of response needs high testament pace partnered required freight some service continuously talent to terminals. of To customer driver by increase these invest the our the a we feeder that support as as for this the serve candidate The our terminal have to continue technical the half Beyond resources strategy to existing year year, onboarding and program slated each these Doug with many is is academy pipeline new our and of $X.X equipment our over as our in recruiting have operate in open driver group technology. in total, have the openings, In schools expanding the quality a estate, human we expect in and to to second to markets reliability we to XX and real and customers that our confirmed market. us and openings, as drivers this program academy. billion is Along with our handle asking we new with colleges year opening mentioned, to

far, So generally schedule. are deliveries equipment on

deliveries our about about a supply slowdown are focusing if will we We're position while and a or that for are on in chain as of seems company that to in our the provide. out unique But for growth allow service way and fair us even our to our to business or steady. industrial terminal expansion day an provide excited be the and imminent almost of a There We segments plan a have customers, levels for business a remain recession. our openings reaching we a the new every there looming valuable those monitor year we are economic markets meet woes. new the our return should headline needs some further daily developed equipment

that can and if compensate Our reinvestment and achieved an only is to by we presenting this on to business fairly to for freight great new our bring a our great businesses asset We customers service do to is operator. we're one oversimplify but great intensive network handle and a providing strategy customers with is the now our our our care that best constant value their proposition. it don't I questions, this deliver requires capital that is to ready said, continually and by time. with first promise maintaining With on open put line want maintain.

Operator

with will Todd We with Capital Fowler Instructions] KeyBanc begin Markets. [Operator

Todd Fowler

maybe to Fritz, start.

about guys little So, the year see from than what the bit we started a you progression. you seasonal have better comment and the talked margins, had in that made that strong a you

terminal some have more second openings are weighted. do or back-half half You that

pieces at being the high do at full basis of some to of margins points here full May, any on comments the early margins about XXX the on a moving kind year end previously expectations talked point? on have Sitting basis. You for year XXX a this basis of your and you

Fritz Holzgrefe

Yes.

things dictate I think full that requirements I I favor, a those The right right obligations, now. this expect time we are important period And can range. you that we'll year, like we our I environment to meet be think the where when year. think, would economic in above XXX a position I far. And an that would executing time. in our can beat think now, I if is because you earlier you're trending basis say improvement the for of in Todd, will we're customer point we mentioned where as execute and slower this how But even worked

So, value think I of up financial this to will time push sort good I proposition those returns. achieving and continue a our to us leading think it to end is

Todd Fowler

team if versus know renewals that the And don't you're then, also the yield would is? number market the where what opportunity done pricing on is your like pricing sounds some you it where market. the has point, of you've that shared some think to I in contract the and if could quarter, an priced past, again just think in work and you've you're on relative be where comment updated In peers. you to Fritz, at you your your you got And think about on great.

Fritz Holzgrefe

Yes.

I driving still Todd, if program market of and you So the the that elements pricing of market. initiatives, our although we parity we or that and some the with public the close our the have to some at data look data great think see out you had that's there, go. gap available to And reach can of ways a other quarter a

So, the fourth quarter. quarter, line is a what achieved in I renewals we we in with was contract which in roughly think, what the XX.X% did

good So a feel we about that. that's --

the several I performing at really the improvement, accessorial at been and and we would notice think look actually at our go are. driving look then at renewal also, back if a percentage of rates. testament look renewal of the contractual contractual actual sort you'll think And quarters that's indicative to a -- rate yield if us shipment that actual above to I where point initiatives. I our have you you rate that's and we

Todd Fowler

Got it.

for trending favorable relative Doug, one in on comments it's have you in been And where Okay. as quarter? last a of me. the to revenue claims the pretty insurance percent do came and then, It and recently.

any comments for rest then on the thoughts year? maybe have and of you XQ do So, the

Doug Col

quarterly it's this renewal No. I favorable year actual couple of around the part premium comments, the the the your expenses. -- was experience as by basis. we line. really in just versus said mean, because there's opening on that The that's of your driven liability in a like in inflationary it number last terms but pretty volatility small It's wasn't Todd, always layer primarily a

running it's no, four just for to three trying just a your quarter I'd the bet probably And So, up for it's next point say or single volatility. probably forward, best looking quarter. average, normal

Operator

with Chappell take we'll from now And a Jon question Evercore ISI.

Jon Chappell

you but optimistic tone. some questions given of unsurprisingly the kind as you Fritz, the contrary of to sounded recent noted. headlines on results two that

hundredweight? mid-single shipments And you I queue looking anything, mentioned on you shipments there. but a April heads last the revenue up tonnage, update little the First, count will in it additions, the is there backdrop out if for digits. doors? that door know that an way then those make also, in that just to digits call, -- give to in sure or increase execute any to And in and whether continue also the in an increase for terminal can may you in there's in shipments as mid-single relative just per you're it's had come macro I correlation if the the same the still looking change on something want

Fritz Holzgrefe

the in and jump give March I'll question. I'll ahead of you numbers the too. on first go part the

And I comp mistaken. April a up side, year And XX.X%, these a on comps are And on yield monthly workday don't think And -- up if then, year low-single both comment So March on basis digits month think was X.X%. say, of April, the or But of think mid-XX% last are basis. year-over-year month the as April this revenue basis. in our tonnage I'm X.X%. ago shipments slightly kind of a the the range. our a were the year-over-year middle far I the tonnage the I'd up on not tonnage and up shipments as we shipment on per was -- in numbers, I up

in the shows kind and a bit. selectivity that shipments the on revenue of a freight focus got see get quarter So, little were the our that couple again, third months. to still mix we've little able growth over next comps easier but tough that comps on fourth up and essentially just And we're of that

the the our And door growth an macro kind the terms year-over-year. of over annual holds doors economy on I continue to In year. the count, low think, X% I of single-digit basis, expect up up are would if of about rest shipment

seeing. that think it that's I we're with sense the our pace And on kind focus of makes mix.

Jon Chappell

just And then, Got my second it. one. That's helpful.

the I you you to XQ, Is portfolio think majority kind marked the business? tail On increases? overall you the low potentially you've that of XQ. renewals, recontracting XQ in XX.X% double-digit effectively Or market? do pretty Where over contract next in and have so long XX.X% of the XQ in you're stand get where the still on majority about of book of still a of can those couple do the months

Doug Col

Yes.

look of business, year. you sort the ratably I at renewed would think, of the during way our book it's

the is we'll sure we've QX up to been have a got opportunity business our point our we somewhat couple thing of think pleased we charge that of services So, in are part either, provide. sort and for the the we that the continue push against that to how story. real I've with important make pricing others mix I performed been contracts has out to of similar that So come quarters And all of not last in and PAT right? other that QX. I'd continue And standing a

on for continue and the in advantage quality keeping where companies the think those they are I deserve. looking to and the and of pricing customer, think, earn differentiate service environment kind that the take forward, can promise great grow, this of an environment I operate ones

So we confident feel are. where that's why about we

Operator

And now Amit from with Bank. hear Deutsche we'll Mehrotra

Amit Mehrotra

also on was Doug, little XQ, off but you XQ. I PT decent know more down the expectations a bit gap just thinking I in OR OR sequentially a can maybe there's give of us sequentially? tailwind there's cost

if sequentially you impact as kind how OR PT and just that wondering about could Just of maybe talk could well. expectations

Doug Col

be better weather of But the points range, months. QX things exposure and of seen QX, say, seasonality maybe over good years. about moved over than next I off into I'd that always the we've improvement We've think for QX, and into our it's said, with over always volatile pretty been that. to we've increase would QX I the still opening pace years work. wide record a seen around and XX couple like got XXX hope sequentially, we'd some maps typically the like basis a last Historically, QX Sure. coming

us. we points would PT hundred run to think I of mean, our would QX to target. be basis QX a miles I mean, miles we could. We're PT if expect at another truck couple a like more bit best versus a I skewed guide for be good rail that to into level rail been from historically. we'd than similar get more little still So, continue we've

a said, think with little we it trending up don't we've rate in coming I coming we'd to with use And at stepped Like down the again, from were of if So, openings, year. terms But availability, got QX. it a the I percentage more to get necessarily use miles. we've bit all rail I continue I up, think of got similar the now down able openings see to our right over we'll rest of QX PT the the it.

Amit Mehrotra

Yes.

performs of for to Okay. in business downturn crystallize that a is But between obviously maybe happen performs That there's would price this think year, your [ph] lot really downturn. then, a margin I I think think in wanted next just correlation year. you could But it invested the clarify you given talk if The and motif this your the And what's makes was because service, increase. in commentary for how service about ultimately of how have think inflation. big for ability count service a just guys a terms and to I on us kind you sense. help about downturn going guess, over knows helpful, nobody model helpful I you in thinking be And everybody to us the for about Fritz. one

XX. I'm if so sure and above puts XX I in to I if wasn't half, then second misreading that, the you the you in back think that quarter you just X that. clarify said can the XX far, two

Doug Col

Sure.

So, full XX we're to year, expecting yes, XX openings.

XX service centered there So We've tied year. lead Listen, around is an got those us the pretty care good it's right think now we those customers' I deliver at if a have And stacked I players, in and our up the strategy customer, and if really can our our look that slowing, service. landscape And of for we gotten that. be the I to the to we control, able think got And do a of notes that's like at market we into even job. continue XX to look taking And to year quality against things well. full if environment, expectations, may level for any first, right? right? national and as can opportunity, in right meet we the the customer up of Amit, will we next pricing we've that. meeting out but a price exceed or are ought that high pricing opportunity, And the I push pipeline expectations, to providing great there, very

meets well, up, pricing a great value getting is economy. expectations, the arguably, around argument that's costs of think their our that slowing exceeds and as or us gives that So us are keeping a and that first those taking And team in team slowing the catalyst a because differentiated starts customer opportunity economy. promises. sales the our do that, if care we in winning push to really customer even And service I for that the even with the

analytics, we expansion the our that we and cycle. coach how things think to us can think OR I those our that's continue time, through manage, results gives confidence we can business, a deliver over that tools, push I to So, what control

Amit Mehrotra

Okay.

per saying? positive have so Is that guys -- cost focus stay you're So I because you of so let that still a understand, you're saying the service? what stay price up the shipment in can just downturn,

Doug Col

intent That's what our is and focus. our that's

Operator

we'll hear with now from And America. Hoexter Ken Bank of

Ken Hoexter

status just Is the decipher right, maybe ability you you manufacturing? right just in versus in to terms kind ability in underlying -- get where maybe for a the the make this of you through you're Can can and growth, so about of kind talk share that then, -- going the read your winning on you growth. Is get in to the consumer this of just you your posted it now? growth market. economy the there, trend can of mode market? or to what Maybe see And do XX% difference

Fritz Holzgrefe

our That's and communication. into would the closely year We're to remain next from They the all Sure. positive with year. of contact listening sectors. sort customers. of be at They ongoing across look research that our own customers' balance

So they the is that be a continues backdrop -- we to positive. that, -- think

see I that and a service. that they our our customers piece think expand get that performance of to we really from they share the other we allowed feedback us markets. value to that and done and job them. maintaining see, the our the we We've good quality footprint we take see in -- And has commitment

quality market If some we've you been time, last it's structure And a at who our customer five to from trying -- I that relied think the we've you and it relied they We've in existing over consistently. the we've base win on that accelerated important. winning -- that service. customer what to And over us markets, time. of and I with position really opened the margin maintain that's with look Saia familiar a the that years, pretty on new or growth you're we've and share of is price, think in replicate grown growing. even opportunity get I markets over ability not And as puts structure our pace we've added when time you are testament service over to with the think, while as our do to where improve the you have you're that, margin customer the facilities

the is you profitable. is added market long these here. mean, see about already adding terminals, about one fourth in the see exciting the we quarter. one real give And -- we that to risk We don't market, a we've terminals fill we of right Atlanta what's I that a in plan as forward, anecdote, it look terminals, we as the think, I a So, second terminal talked I'd don't in now. terminal

yet grew people because the more in average Now at company were. us not the it's we were entire significantly, the who Atlanta for we knew but market market already,

extended our have at here. We more operate same we and We've the the now replicated service reach efficiently time.

as openings, that's I forward win-win. our balance those a we things think add And it's we as the I look can So, we repeat. -- this and think, of are year that into next

Ken Hoexter

But decipher Fritz, I I when guess means economy. in understand are I'm you're business you understanding growing you to can your a start able winning just you're peers look picture it you at customers? turn mode tell gains like want to that, you to if with Is or of how own this new -- that's clarify your as the that from keep to of that we -- kind how grow just but growth? is understand see the share kind bigger I to growth is this from able if in what others it because

Fritz Holzgrefe

from gains you, both for and it's share It's incremental customers now, it's us. tell I'd both. others Right

a I'm tough think, That's I new to If opportunities and to to look landscape, with So. slowdown haven't we across us, we a consider see seen is and And I we in add position be to for share or think today, I both. we service that continue I I any or existing reach at have all. new now arguably, little a that it as customers market? it's could provide to that Is a can. customer incremental. gain bit. market, that decipher an the

Ken Hoexter

may, if a then And on follow-up, CapEx. just I

you're other there your number do, service of you the there first $XXX something mentioned centers Or of CapEx and the talk reiterating just side still that it are quarter? million trucks mentioned maybe you things need? same. can in gaining Was deliveries the You confidence can, lack of the you'll if were get you through you it. the Was

Doug Col

transactions Yes. up equipment that them The predict estate schedule. real been of expect things, on remain the there. will we the still bit also think that's equipment would catch behind year. year. get this we'll We they're historically, a and will track a deliveries But the closing to CapEx, timing delayed. That's deliveries the little a and tough the original for are we issue estate bit Real

Operator

Allison hear Poliniak Fargo. now from We'll with Wells

Allison Poliniak

Just is you gave, that revenue you the at -- for growth shipment obviously average bringing building in capabilities that it's will Atlanta there think know be mentioned example Any a think to contribution the that terminals. over a it's terms your But way there in more to of profit an fluidity that growth increase? thoughts on system time that way to of is I But still there? your scenario. operating it to not OR or incremental

Fritz Holzgrefe

mean, density have that's you around facility. in Atlanta and a that serving and that market. the now I is anecdote is, building South go that market terminal a probably that's those Atlanta job doing best around hired better think I the building Atlanta doing all the density Northwest pickup Northwest Absolutely. deliveries. We've a spending now covering in driver service driver Atlanta he to hour -- not an He's

in So, or you And the it those customers. better you utilize can gives original then, density better time an service starting the there. market your to assets build opportunity to Atlanta, over Northwest new

thing time. the grow best a is, -- these should for way So, utilize to business the better the a existing significantly get assets, on incrementals it's it's us better and over

Allison Poliniak

Great. then, And on just leverage, low very here. obviously

the Just here. continues any thoughts, like obviously it ongoing sounds strength

balance in Just changes use sheet any here. of the

Doug Col

see go on we're said, companies. with I And frankly, We're same cash the a take some Fritz we always start things mean, the we'll a in staying of of months. sheet few really it. at lot on on seasonally cash. Not couldn't you'd sitting think have in historically summer dark horizon in terms really historically Allison, the the downturn, clouds a of because stronger as kind the of months course. next are deliveries to so a here, lot like company. generating and position opportunity period mean, have the that way somewhere our more trailers us we're during dry presented on really be we of of and and year, we just those in the If position of for fortunate entering in more the there in from seeing there industry, tractors of downturns the sit are And roll but whichever leverage But a terms healthy of I quite powder. plenty of cash. advantage deals look balance generating clean today, I our

that change than intend we our cash work no the to other generating. put So, from standpoint to we're

Operator

up, with have Next Wolfe Scott we Group Research.

Scott Group

ask tailwind Do the on is quarter? impacting and any just the the your the in higher. price fuel fuel, to your ability impact with second And in we in want diesel and on so accessorials that to moving I up parts surcharges way just a other see is still of much, get bigger potentially thoughts business? quarter then, maybe

Doug Col

far, Scott. it impacted so ability, say I'd that hasn't

was Our QX. diesel the a quite in surcharge bit up increase XX% in out mentioned the average there. price I table

last But the we've tried that of customer the decent it's that the shipper earn that has -- of the has the as a fuel to count at The But that right has our the higher end Our to always at the top able we're surcharge of us on up to now us over all several overall our to to but for not goods benefit gap size has close the understood It's shipper now, with a table cost economy. been needs us. or -- move the does it broader and base been or the allows base on return. to impact they've that to rates up on day, for the years, pay is that. to it has surcharge need And inflation on the got rate. pay level what a approach earns our the bear tacking of this that competitors. me decide been

it. just piece surcharge is that's So, one coming in the fuel component of

Scott Group

Okay. are The guys weight you year been you plays what the that per shipment seeing over in year, that have sustainable as per think now? this you tailwind And weight out? seeing that's right shipment last do trends

Doug Col

a quarter, the little Yes. I first quarter bit. moderated it mean, in throughout the

GRI freight. it's weighted a to we say we try us I our rate about average to I'd But of that the shipments a direction we focus targeted I work want. been tariff push doing the mix If across to the X.X% it. think types all January, that's think heavier the the take on the that to was but on approach reflection allow in of increase we've to continue of

So smaller the are went XX here on of mix. since percent that but X,XXX it's January the that more time, weigh shipments little that of example, X,XXX bit trend into of than mix. our our pounds bit a we percent GRI short bigger for are seen little effect pounds period have a And that time a in the a less than short weigh shipments,

on So to try mix But continue way. we're to come a network. kind it's drive and work going freight to the long of the into right

of how to going in over increase modeling, don't of mean, it's I terms to continue I know the that balance I'd So aggressive saying be year. the

Scott Group

but -- that then, seasonality there's the away. But And term, going the does terms is over going low And just Okay. in years it's in one to years something year realm know reality XQ. longer mind, do you few something to here in OR, operating few full sub-XX so is I last next so a anything within your be XXs that are Fritz? about guys of ratio of that a

Fritz Holzgrefe

in next that. see [ph] impediment Absolutely, mean, years? to handle Sub-XX us I I the don't an right? doing few

commitment that business. results the drive I think customers and we service can a got to in we've recoup offering, the a

have high this We have maintain to a that because very in of quality to, we level of maintain to business investment service.

get why that can't reason sense we see It any or deep I me. makes only XXs. So approach the to don't into

Operator

Alliger to Goldman moving with Now Jordan on Sachs.

Jordan Alliger

terminal to goes season open margins? something sort needed when know you or is just about of terminal, say, could forward within that would how company curiosity, on you you but long operating depend regardless? geography scenarios or it does up a then, of to take, fully is new out on secondly, sort it if where I it's curious, it your plans, may sort you back where growth average existing And dial there of context just that of On

Fritz Holzgrefe

Yes.

things. the couple So, like really a about we growth the thing of strategies, organic

an are down you back if if an XX that. we benefits right? as get there look there's could feel comfortable or and obviously certainly control executing it it up doesn't in we possible. think which That in first opportunity and quickly or, comfortable I the scenario down, that. our we regulating XX We we quite we feel those it's if in were strategy, slow accelerate that mean, get opening, of didn't to we history, So, as also timing a in It can impact of customers the place the operational everybody, foremost.

several is we of that at pipeline facilities look long. years Our

and we those pretty we competency quickly. facilities system I got all execute runway. the us regions for like the in the the And are we've pretty a a really a that So, but drag in the good how chase. that added around significant company you opening and got on best Northeast, certainly earnings. both get not operating we've The into not think they're company giving feel the opened we've They're and way, regions good

What's get So, we've regions significant and country. that more of we them we're add as openings opening now regions about focused regions, seen that less country the saturating the of about are can those profitable. the on more up we as

that I in interesting really minutes year be is, efficiencies order, -- facility that I a about Atlanta, drive what's to fully that helps So, fully short expect would if the in example at Atlanta gave less facility facility. or few expect sooner. a company than Northwest significantly, But to company the Atlanta. it not ago be average about a I legacy more

just So, from significant it are of the account. that benefits pretty

it's of I an important I our think think So, part growth over strategy. time,

the these markets I think coverage pretty to profitability that quickly. facilities as contribution will in, we're we and these add happen incremental and provide in facilities

Operator

Susquehanna. Now Bascome with moving to Majors

Bascome Majors

Atlanta whole the the facility? Fritz, some the about that able how opened comment the do? so, the in profitability if talk entire is -- other to are you region, openings of And to you or that or indicative can prior has you that you would second of of that representative quantify on since improvement moved region

Fritz Holzgrefe

it -- year-over-year. it the drove Yes. significant improvement a was region, whole I mean contributor to our overall

And out other seven gives regions more to you XX. our all as but as expect would I towards these and that density and country like that few we've be western think, Atlanta fill density handle, below I I now expect that handle below a built driving are not I XX. if higher fully network we to that well. something mean, at if regions the that a seven low company, got the -- get across in I our -- we've you a the going actually looks we're would look as -- opportunity the mean, have if have -- operate that. now to to parts the six, there you're as to right, as where you do so it's map, of built operating

are think important I these So, steps.

Doug Col

On into break like that about the East were it, if I regions. XX includes said, sub-XX. and operated in average, -- Fritz mean Northeastern sub-XX division Bascome, think regions our And to company you note the we a that the up East on both that two

was a those Western only in five sub-XX actually sub-XX and They're on average years. open So few the regions. West

Bascome Majors

there's advantage talking being more since would conversation And downturn. the and how facilities on you capital is been or to to earnings Fritz, last you're earlier grow that the the your of Board you talked a to being And about multiple network cut considering has quickly? if in a in buyback position of continue acquisitive your individual if add now to consider really half you a take could you up clarify if parts year. Can anything go about Doug, allocation,

Doug Col

struggles mean, landlord last In potential that in estate XX a been I owns something capital terms I a like cycle attractive downturn I that have there about given that years or that deals, were competitor that then. the from was at really real acquired may of allocation, deals since speaking be I of the available would has a part wrong done or what mean, something. XX, said, the over

we I say some in be of you find There's In no. if a basket the pockets there of acquisition. terminals acquisitions, against approach terms map to mean, if coverage, were acquiring we'll was able type wouldn't us an never where certainly

Fritz Holzgrefe

Yes.

pipeline organic expansion. allocation capital the mean, see opportunities on for I question, of think, on significant just us we I growth a

real point, where that's plan. XX estate. and the with year shareholders' likely one and XX increase right the thing on to pipeline focused equipment, do of capital. this we're this At related we'll significant that's real that multiple we a very organic years estate a our next with of allocation want terminals So, of capital to expansion and executing long ownership

the opportunities available efficiently. -- capital -- is, that capital that the deploy to tell to there's manage But time, ample need what we said, recognize with capital appropriately. think I'd completely over today, are I So, you there

Operator

from with we'll Wetherbee Chris Now hear Citibank.

Chris Wetherbee

what of whether that of you're much think little either that be opening about in a all there the I are the take activity? the that, Are come fundamentals up? context know economic guidelines and looking you're the trends curious bit but accelerate maybe specific thinking terminals seeing in sort on opportunities of maybe push to deceleration about the adapt if at even those out or we're when specific potential it at may freight fundamental expansion. that not really your pipeline looking how you for business of parameters And you

Doug Col

Yes.

that things one on is about think, of better serving I this focusing exciting the we're markets. organic expansion

markets Chicago are Atlanta example the a door the enough Those for have we the we of highlighted enough well. or we as And probably couple things example, which don't presence. have you. facilities a we -- have I capacity adding noted does of So in don't

customer care take but obviously a it's opportunity can You of cost a efficiency much basis play. also savings better or the

a always that for strategic an if So capital better company, maybe in, the larger, also managed opportunity we there's like positioned. we're to the of that's of because already a and opportunistically are we how the looking even those. -- market facility it's sheet buy acquisitions, we've We're balance

call economy So deploy down. We today we'll do it inventory we I'll where in later. open it, and slows can capital facility those. also a We're decide to, may position

So, are of we latitude where I think we a lot with have this. that

which efficiency like of what it to play even provides think may gives an also the or but something focused on a markets peripheral, market I on the markets, the saturation of we in because sort I strategy that -- that benefit us it's is markets an growth opportunity kind slower provide from. service we're adding can about

Chris Wetherbee

a through get to I guess, for the rest That availability, year. labor expansion of able in sense. being terms bit lot of to seen some go a Can plans makes folks improvements have Or Okay. follow-up, ultimately that obviously you you of just then, a how is as And just out? little the talk work? Have availability? playing labor and about you you

Doug Col

just every market. It's an about certainly challenge. in ongoing competitive It's

a One a and facilities you a now nuances player is while. opening does qualitative in of that for new the the you market of advantage become that give

we're for market, we we a tough in a now good weren't job add a term if having second terminal, Atlanta servicing do a where can recruit one the drivers time we to we're trying before. So, of that recruiting market

still -- market, a a So are you that little bit. in it's comes increasing a qualitative benefits little immediate provides if with which thing. it's new recruiting will, addressable bit horrible of somebody town help being Those the in seniority, game sort or an with challenge. to But of

a you -- an business in can about have on or can you growth where got where opportunities to for market new talk great good be to to culture. what the competing obviously great are a benefits, employee. employee you paying You're you a have and a it's And got earn

So, ongoing we challenges pretty going. how but feel it's good about

Operator

Chan And next Stifel. up, with we have Bruce

Bruce Chan

shipment. per weight the on here follow-up a Just

read question You to that there terms there industrial tailwinds working intentionally of up. about in the is drive that that into versus to number But mentioned consumer you're anything to maybe earlier number?

Doug Col

not at far, didn't expected So quarter. still six capacity a felt being be group going available still rates case the customers' consistent that forward of replenishing. that seeing. our on outlook mentioned during LTL view still that we're the And new And our going outlook that's were they average they survey Fritz next truckload -- really over conducted inventories around we're and a going that they our rates, require shipper their all to And the in probably see both the marketing higher was because level is. where months. their is to what

industrial going. there's so the to and we're where draw say, between going So, seeing any nothing distinction far, retail where what is I'd is from

Bruce Chan

of Doug, mentioned Okay, of of got kind your as it. follow-up switching to of your what just right initiatives some just some on now? bit there little gears That's CapEx a comments, that. us helpful. Can tech are you And remind then, part you of major

Doug Col

I'll the in on initiative. tech jump Sure.

then, the big so warehouse to infrastructure. So, we analyze how our supporting or we money items data tools of driver pursue analytics that basically or through spend just we in better and collect the And understand data that do business. data we driven, our that devices a anything in about and through develop fair use amount

about that of which those cyber, as means sustain a you to data using But the sorts thing. data -- become the dependent and of very like things on is business. in need protect good very, run lot all great One things which you well of as a -- to tools a to substantial also that business make investments

how are our the But of ongoing to line of those an So business. or investment software optimization parts around optimization development profile. it's

as I data really it, the data, the the about protecting data, So, about and data. managing it's collecting then think optimizing really

Bruce Chan

much then, in $X.X And of that related Great. tech? you is to how would Okay. say, spend, billion

Fritz Holzgrefe

percentage of to low mid-single-digit it. mean, a I would be it

Doug Col

sort going cloud that keep well, mind Yes. tech operating that of computing, a in is lot spend of in come expense of thing. as the And right? form to So, the

Operator

Ravi to moving Now Shanker Stanley. with Morgan

Ravi Shanker

footprint? maybe think e-commerce weeks gapping back long-term of that hold levels volumes story given ago Street this? like may do the may couple e-commerce percentage you trend we earlier your your There kind B, normalizing retail customers? was and Wall of -- in-store And pretty completely C, not from would true. say about on of in a percentage to you would versus e-commerce wondering, some of sharply permanently be the agnostic about come penetration up a what Journal volumes volumes what of guys like towards I'm are thoughts or e-commerce network you talking

Fritz Holzgrefe

question. Ravi, for Thanks, the Yes.

we to In terms are draw BXC. or talking you a distinction, BXB of e-commerce, have

every a of our of kind is percentage deliveries mid-single-digit residential us, For day. shipments

the -- would piece. So be that seemingly BXC looks

by of to for push grow and is think strategically heavier any some big for different continues we glove making to weighted LTL like type carriers that I We the have business benefit a probably an to push if regional need pallet. small because even A LTL a or shipments, to push carrier. that companies mile feel -- LTL a do provide equipment haven't to more delivery service. LTL or truckload make the them that, don't are whether stand doesn't perhaps it's in they itself get that heavier something, some full grows final because, going a residential again, freight a as is We the do are They BXC it. of brought position a an of made of do bring tailwind weighted still the delivery area into they to partial an grow XXX-pound the neighborhoods need it and that, carrier in a But to that. white even carrier go not

to off the home benefit because if get appliances consumer is bigger indifferent into So going retailer LTL to kind delivering the go the is still question, to of a the positioned store role LTL bought buying to there there. should the multi-unit a improvement in of store, back say, like it, to they're But the we're I or appliances to play at whatever floor. has going to back something,

freight positioned that to interesting BXC. weighted LTL a heavier follow. think is handle I is be will well But pretty it So, to

Ravi Shanker

Yes. That makes sense.

of -- general, Any have doing especially with you strategy had kind changes in shift long-term your if this you there? a in -- Northeast and just if where you facilities, this this terminals follow-up, I any necessarily versus missed estate real earlier. given such. on the lease the what our apologize thoughts are expansion said and new owning REITs missed pricing As in your I But and

Fritz Holzgrefe

as to it can try Now, makes own where much to emphasis we sense. our as is

in are if and know market a some moved facility to order, well by that because new at So, beginning that we a facility. there facility we owned opportunities a go short into leasing start we'll we've where the an exit or

more aren't than market. just -- end us. There not frankly, where, it's are long-term That's the and it's We those is it's feel I you there. be estate we So, way. the real -- assets markets markets cost cost a prohibitive, for about leasing wouldn't think just certain available not say up asset being in you in because it to like important that want

it's reality will that to a of to prefer strategic a our So, the own we bag mixed and would focus. it assets be of really. is, more continue But

Operator

Instructions] [Operator

Fritz Holzgrefe

right. and interest the you continued forward much. for All growth look forward to our Thank giving Saia. executing you everyone's We you here plan Thank in next look to very update in quarter.

Operator

your conclude with for this your And may gentlemen, today. you conference ladies for disconnect. and now and participation that, Thank you does

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