Saia (SAIA) 27 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Doug Col	Executive Vice President & Chief Financial Officer
Fritz Holzgrefe	President & Chief Executive Officer
Scott Group	Wolfe Research
Ravi Shanker	Morgan Stanley
Todd Fowler	KeyBanc Capital Markets
Amit Mehrotra	Deutsche Bank
Bascome Majors	Susquehanna
Ken Hoexter	Bank of America
Jon Chappell	Evercore ISI
Tom Wadewitz	UBS
Tyler Brown	Raymond James
Jack Atkins	Stephens
Bruce Chan	Stifel
James Monigan	Wells Fargo
Ariel Rosa	Credit Suisse
Chris Wetherbee	Citibank

Call transcript

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Operator

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

Second Quarter 2022 Earnings Call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Doug Col, Saia Executive Vice President and Chief Financial Officer. sir. ahead, go Please

Doug Col

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

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

Fritz Holzgrefe

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

second year's X.X% XX.X%, mix second million XX%. for Shipments quarter surpassed pricing company's per drove by business efforts quarter in increase and fuel an excluding surcharge last workday any of history. and by a record grew is $XXX management revenue revenue yield, Our in quarter our of nearly

terminals our and we proposition quarter. per able And solid first doing service customers in and value quarter, the X.XX% in an improve shipments to we upon posted opened Our levels the the LTL XX,XXX and shipment surcharge, quarter we've service new ratio of higher excluding to year-to-date. customers. cargo Keeping across our new the remained core is is the was so, of value the all important a shipment, opened we claims of was markets a value And fuel in and roughly enhance daily XX% revenue build of levels trends year-over-year this Getting activity strong to per X closer Service through total higher year-over-year. another customers part continue proposition. for our Saia. KPIs good provide Business quarter for day. we're across X our offer reputation to

commitment quarter a we and chain the Doug their appreciate realized we in reviews supply when an increase to financial result, our performance. second XX.X%. to of meeting touch renewals our outlook in And our planned for as It's win, our after see average needs. our on the customers customers Our quarter of second openings year win. I'll good the rest terminal contractual

Doug Col

Fritz. Thanks,

to by quarter miles. a increased at XX.X% and revenue by as components X.X%, by Yield, average tonnage the by essentially Second was XXX yield was growth to shipment haul year fuel compared per shipment. grew XX.X% surcharge, combination and Fuel a flat surcharge including XX.X%, X.X% were in increased X.X% of XX.X% million XX.X% revenue increased improved increase $XXX.X of our total ago. excluding in revenue of fuel a and surcharge. revenue of follows: Length weight $XXX.X million. quarter The growth

driven key increased increases few quarter. workforce. and expense a items discuss the wages and benefits let's dock by Now X.X%, in Salaries, driver our across wage

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

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

Our were tax to was quarter XX.X% second quarter ago. the a second $X.XX diluted rate compared per share $X.XX and for XX.X% year earnings quarter in in the last second year the our compared to

$XXX expenditures of capital XXXX be will anticipate million. in to continue We for excess

for anticipate also XX%. the now over tax an effective XX% to year for to of comments. will closing back We call some Fritz full approximately I the turn rate

Fritz Holzgrefe

completed facility steady facility open new area Well, our Chicago later this York New with for and year, X Doug. track. openings stated plan the already in in a I earlier, Thanks, terminal land new Monday as a the this on in the August. year Along Binghamton, through business levels we'll remained new openings and is quarter we

of open end critical expect year. are Beyond these the facilities, an offering. of we X These strategy through our X openings our additional service the to to enhancing to

Our and call. conference for for update part QX carries as on openings pipeline our of well opening plans into We'll XXXX. XXXX terminal you more relocation detailed

on several throttle conditions. it is benefits our last or market up back process over organic expansion that the One depending years we of of can the

openings. especially and However, the our operations. the within can growth through because dependent they existing the markets exclusively increase efficiency not are of year Openings of end market beyond attractive upon new our is

build to years. over continue openings the several We course on successful of

focus find service facility our Atlanta, in and side growth offerings. town. service customers we're higher strong for We synergies seeing we're and to terminal our of facilities, opened these market and significantly acceptance of our on continue December for customers improved to the customer In we've seeing open the and in seen for operations. value in that profitability opportunities we efforts improved example, the just already sales because our last Northeast and new As

We Atlanta Atlanta the Metro terminals the customer recent their only these along expect the market in supply opening seen chain. our adding value with stages. new success Valdosta early further of the The of opening strategy and an is in the to planned Each openings getting benefit and to June closer of to openings Atlanta, from to Macon additional in for terminal south confirms XXXX.

grow satisfaction. response and continue us the who focused customers customer needs new see our freight customers KPIs great as Internally, from We in then the existing onboarded. are ask we new our daily on their customer are brands to to and basis satisfaction track a market, in markets on handle

Our Net by customer Scores we across Promoter team technology. Doug the year our to deliveries to And in invest consecutive over to growing normal, supply wouldn't $X.X map. quarters, disruption is continue. the I members expect billion seem our it as while for exceptional back real Equipment that total, X have estate, service In equipment further does improved slowed. chain provided validating testament say our first the strategy, has this and mentioned,

constructive for to just current environment second that So our view year. the our say of half positive to be and the I'll before remains overall moving on customers appear of the questions,

providing to see best ready to now and You service. said, customer results continue our meet able costs we'll contract line in that the we're recent so open business renewals, on the focus questions, in and we're and price inflationary differentiated experience the for provide operator. to to our With

Operator

question Instructions] take Group Scott with [Operator We'll our from Research. Wolfe first

Scott Group

maybe typical sequential with July OR question you and Can trends for then the you trend the the get tonnage just start QX? in monthly on

Doug Col

buddy. Sure,

full early the and for up in So X% month a But as in up was release were were of and numbers shipments tonnage out April June. well. X% June, the May

basis from in QX, far terms for down it's are to the tonnage year's report number increase. July be of kind around -- of again, it's numbers shipments about right points. to think our we'd usually trend on by line record X.X%. a sequential this OR -- the side, around is wage us, of it's on up the QX So then XXX July, kind And X.X%. was we about normal in our in and guidance That's of that with increase going And X.X% And historical driven increase.

the we quarter basis hope. into we've So historical early -- points our hold be to would XXX but our tried

Scott Group

weight shipment, higher? that so Is is guess, that per I Okay. trends that trending per weight widening. shipment -- actual comp? And Or

Doug Col

of and into Yes, controlling of trends July. bring and weight our per in. out efforts a nicely that's mix higher have basis, And little it's business bit around pricing of trended kind QX on we a primarily the year-over-year shipment up

Scott Group

maybe just Right. And also about the...

Doug Col

us carriers dynamic. just the are -- of work for may our we to point seems So doing hear as on bit to point retail industrial things customers and economy seen view have little a different right? better it It the may what maybe to than exposed a to the LTL it been some versus of retail, It -- we've some on reports. industrial little

all help So case. of that too was would for us, way that if the

Scott Group

maybe And That last thing. then sense. just Right. makes

the back renewals So year you yield it half renewal double-digit you of the growth accelerated. contractual ex into sounds that sort the the you're maintain trend can Do given seeing? think like fuel of

Doug Col

know, what because to continue able and absorb at mean expects like renewals, customer have us the good we pass be along, and are But signaled they positive customers across the I it, accept right? been inflation it's kind to you how it economy. surprised and, to contractual think. mean, I they of our as it they to is I not feel agree guess, the Well, always I well it the

So we right cost outlook. the yield in it's we're don't enough inflation business the that give we guidance of But seeing on path. think a the lot

on out be will their it record for the as in with a carriers some I mean was the Now year expectations larger of goes. us. of guidance fall GRI where come most a last see or that interesting GRI, to

we largest I see next guidance. to come carriers will be out of that on think, big sign with start some So with the the kind GRI of pricing, when

Operator

next take Ravi with from Shanker question We'll our Morgan Stanley.

Ravi Shanker

and like your think year of an there's belt? year, if opportunity back especially recession, there's do about actually next the kind feel Or time tighten forward growth and advantage? Do to you this into to of back do a into of? kind How pull think you push half you capacity it's the

Fritz Holzgrefe

we're ones are Good focused we is half I that earlier we're in and question. marching And the openings. docket the part the very frankly, -- the on that of those have mean, an that our facilities. second of providing to sort also next customers we're that openings think on and, the of of commented with term, to for service I year important are ahead long add XX- year about that Yes. many of with thinking openings I notes XX-year I that. of would sort the balance sort plan

So us for opportunities an efficiency that us But they for dependent growth service for that. these us customer there's incremental in, they at when we these interesting look only to isn't we're well. but provide already not at markets are because -- facilities, on the as

-- that think we many of actually we are benefit going I from. So, to these

around execute come So as we we because but we'll I asset that. future, I remain right march prices that maybe the disciplined our continue And control would know we the I then opportunities in this. can on. think continue now, to environment say and see plan don't is We'll down to

Ravi Shanker

maybe I of because bandwidth don't op mean you're have it. to the can to doing a but that follow-up. smaller margins afford do XX% lot And guys your that. peers a you do Got related

this industry new some of that maybe you think out signs of up quarters? few such? exit next And the costs kind regulations guys inflation some opportunity pressure the the plays to to you of maybe do the share? players how so have and hearing what's and and that on Are smaller in of some on you And there's for they pick because

Fritz Holzgrefe

a great assets then been, -- ongoing And you've markets have but And get going we and do great know exited don't that super-regional provide smaller you've for you if have have that like because compete in provide as the got you're to And or have service you're few got to few to seen, if we you to paid may the service, that. locations opportunity a position sort that for become requires maybe operators this be in us close necessarily Well, real aren't do you There and customers an that very available. probably the or can't an do this that going estate around that, such. there mean, end that that well you market. expectation creates to the is that of in last a And I investment. in months. business markets that capital-intensive

is So product that our and see control, to. great really and on our focus can focus deliver what what to we to leads service customers

good I I going for challenging. think think able I think And little have a And it's bit investments undercapitalized, to it's to got you've not results. more to commitment make result. pretty be the customer, somebody the seen or the that's that

Operator

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

Todd Fowler

I on any expansion these facilities. the guess, So like questions the about business, as it second with expansion one, network the sticking the half I Number start-up margins in as size drag with on commentary, open you seems of signaling kind costs, we you're start. guess, about maybe think X we the guess of new that the first to kind year, the I think of really of the not when

there So within network I able some that to trade-off the growth think then volume market? some just or facilities of I'm number sure some can trying the Or facilities these I contribute. freight the things you're opening differently? tonnage to expect when got to outgrow make pruning the opportunity would doing about new you're or And about you these be that as to right. think we the piece want kind is two, where opportunity,

Fritz Holzgrefe

Yes.

providing good we using a maybe that with a opening replace coverage there provide facilities Saia into X The -- -- remote cartage it's questions. new different are So in getting area of have service. we're we're Todd, area. types market, There's we we're service some coveraging and a an Maybe types. that that carrier are that are going to to

the moved upgrade So so In we've today. new look a that that the great only you and that in had carriers, operate. us. in at a is an market, in on -- probably market ourselves if for service for call Chicago heightened customers adding not which in of the we I've that cartage in level taken cost an before. the terminal for that's the Chicago a reduction does facilities facilities X the added, us we've provide we've got the that's will the And out little other now X we area this is customer, markets, in using And a can bit Chicago we've pointed to positive. presence What added this area other of

density associated synergy although there providing when So there's doing are you're that, to When incremental costs it. times can the terminals, around or customer. with also the build in savings facilities. cases the that, some eliminate you're you new the stem in benefit legacy And you in a can and reduce

customer some there's incremental provide grow So potentially to an grow the can opportunity of service. share because that -- you

to -- there for either enhance us actually don't So laid note time. opportunities think the or just sort they're of I over as we out, we is reason they're the are drag because small our

Todd Fowler

or tonnage facilities? with on ramp of And volume the any thoughts the the kind

Fritz Holzgrefe

stages depends. simply -- for are legacy the it It have now we new intramarket, be to of to may that terminal. Chicago trying do going we're to of replaced early the these -- existing terminals, some from have instead service In the that or a we it

down growth some create incremental an build So but necessarily that's some the and they'll efficiency we'll not volume road.

start, out there's have sure. So But I a a don't for for at call that. savings, the cost

Todd Fowler

Yes.

follow-up That through just kind but I again. And just I Okay, of know this want then to go you've makes it been asked several got it. sense. a and times

the this call cusp OR can the I point, where step has sub-XX right X let's last, to the function these from you speak it, around you've you're a Just commendable. levels? thoughts sustaining your seen at or at big over is given years very just It's OR which mean at X the in of the improvement historically. a been OR that business notable the

or change your and bit? if -- share us at keeping levels think about you your in can different little can share cools a a or you these economic off business So things help pricing the or environment help thoughts

Fritz Holzgrefe

Sure. look focused foremost, and say Fair. at first customer. We we're -- this on the we're we and

great from in great honestly, the low of -- second care what had a perspective. reality renewals is, the look coverage, is. take we've and want improvement the where our of great are pricing around a is not provide claims we quarter And service, although differentiator. that ratio. So we We see customer, market That's be and we to contractual looks good, it we're market quite

opportunity lower. But XX.X see the repeatable it I requires I but opportunity is stay the at -- know of the may for may what, with is team I over regardless there's the although to reality but an an our not And this slow for service. I this delivering be don't And continue drive business So thrilled increases to frankly, of rate us away. here the market, we The to to gone required we're pace the capital think still the now, that market, may time right the in this of need us. the that paid same it. somehow over time, OR We're has in you in because slow mean, improvement pace get quarter.

we still through I grow think this.

Operator

from Next with Amit question Mehrotra Bank. Deutsche

Amit Mehrotra

shipments us shipments give I just in happening and the there show terms the that to maybe footprint a spending? peek in why of it. managing I'm too ship just in are trying given do a of was expansion. a bit declining bit the it's the of little the I with until would bit just something have to you has you guys Fritz, little a on little reconcile Also, proactively maybe to footprint know that opportunity of with kind us hood Maybe can what's the decline expansion. freight are But mix thought acyclicality under early.

Fritz Holzgrefe

business. very of identifying doing spend and see our Saia is of for say, that a it's business. on time lot focus. service. focused customers And we job internally outstanding And this that in that's And We're to great growing you'll driving mix of mix a are business profitability pay this on appropriate

we So terminals not for even in levels pricing accept provided. terminals the there is appropriate not because in businesses the service legacy where being times business new may exit be or

We of the amount in and invest So amount spend we shipments. the tremendous so focused don't service spend about business continue concerned we profitability on of to can levels. a tremendous a time maintain driving time

So the just it's we in don't as I what embrace from value that I that. finding look in focus what's customers July, at I get worry happened necessarily incremental to doing in trend July, what more and they on the business about Saia. drive really those are

Doug Col

say board there's openings, good really in terminals that of that -- and terms like terminal out remember, Amit, on Northeast, next there maybe I'd or markets. up the freight while open opportunities to provide it Atlanta comes year, when Northwest in

go To terminals We they and I'd measure here. customers market shipment if freight are is we're it systems adding initially you but makes good they we growth "Hey, "Hey, for terminals salesperson you we there." because which our a Saia for of map pick know good for Oh, a we and and service, and for are A, our that our lot we know went customer. point. can Fritz' Saia the all we And how that our market We're it's used there use markets our we well?" we types can do the now big handling went easy fill C it. and up accept business a to outbound go necessarily customers to know say, us. because as to this that in Not open out comments, if can B those service that I'd say, is did really shipments existing them charge can provide of when yes, if

terminals of shipments charge because whatever outbound big we'll new that those too. our too. going are then develops, are a share in premium nice all these You markets. the price take brand get into moving that not the But me, shipments they're needle can those And market. we great as And that in trade for market,

Amit Mehrotra

Yes.

that just then Okay, sense. me. And quick makes a for one

expansion then over XXX environment couple improvement. to historically, Fritz, talked it this basis or has opportunity of seemed XXX a as you've to freight accommodated about positive that last and points It margin like XXX been XXX of even years. was the margin So in less

opportunity impressive a about improvement do XXX of pretty after target? pause think to point this we in that right relative a or to we you entering, now Saia that the potential as margins see little So take to has market do we're Or bit had? margin run basis expand still XXX this

Fritz Holzgrefe

at look look -- pricing take we can still and service quality. around above into XXs We're market there best-in-class a right? mean and market -- Yes. at is around and we intending at and to around there's we we pause. we're now, we So great not we I this say to this provide need are that below and we're service be because -- say, --

in that. So can case, that we drive

environment capabilities I the on of OR have through those that focused story very not able high a developed. other pretty of like pandemic go ought came or that around of that manage it, part on we've potentially, think continued as that. time. to macro And when with manage that pretty to through you're the you is being that And the more core I have able through expect improvement efficiencies, service, We over along is maintaining capabilities the -- challenging challenging to you productivity we I disruption well. think the years all be levels environment, the X during to execution -- the X we a X, time piece and last cost seen really think and

Amit Mehrotra

Yes, know just question. allotment but want this last quick to follow-up And my one I one. sense. I that over ask makes I'm

to bottom fuel dollars. the on attack line the a is the impact on of get One lot I on the -- tried the We've EBIT this. questions ratio operating

the good and as some revenue profit to the guys industry around like just It for isolate disclosures net the fuel the you then from X provide of expense. fuel actually a being anywhere last years fuel to has I seems over from XX% come a whole, able do benefit. XX% surcharge think improvement

for think the don't then if the works you it, actually inherently call agree mechanism or a Saia, give that the know base prices on as XX%. couple fuel pretty how profit, low, I over of next years, and if of moderate percentage And of does a it's I with margins dollars been headwind not. that because fuel you rates?

Doug Col

Yes. impact kind of in those kind prices gradual OR -- we us, on average very with of raising I national mean, a or I gone up back have week it. it's headwind overall think at what's that your Yes, going right There's the decline the moderate on pump bit something, when $X some impact way to word is - excluding quickly. your operating are the fuel proper a term short-term bucket. up focusing look drive at to think of the prices little diesel effect there's headwind. refueling net bit you we a higher diesel income investment base of on sure week, the after on been and a being that supply account continuously a fuel return But diesel less the a for rates does think we've But around because margin is us lot going the make earn customer's prices to infrastructure. an earns allow prices the there's But to unless shock going a that's of would dollars. making

XX%, from whatever and base we've the at raised is, rates. surcharge So rates, are by to comes XX% percentage on the the base tables if that's -- down those being they come as offset down our work it

Operator

We'll with take Majors from our Bascome question Susquehanna. next

Bascome Majors

given above bit little a million since guidance? the a the talk about $XXX the beginning year. look you You've Can directional CapEx of

to -- that thoughts focus? plan within admittedly XXXX any look And terminals more what that that the coming With greater on could focus, a into is in like range you little can ex? open wide coming into

Doug Col

secret for exact knew I what path terms million, the no our $X.X a would we see been timing question, have $XXX million. year-to-date, Thanks real it's that. it's $XXX still internal sitting mean in I Bascome. be we behind around a of for that estate, it's the The But always wildcard plan. mean billion. to Yes. would Yes,

equipment tractor here our have Our picked on recently. deliveries especially really side equipment up, is -- the

we expect this year was in that to So to get the number our plan.

that $X.X So million billion if around about equipment. I so plus was spend, in $XXX of thought or

of So that the a We've relatively but will occur lot the couple only that small in pipeline. to those land deals in have got we've not to and that close this estate we openings deals this number. a done But of got we year, that for get real are to hope in We've pipeline. up stuff year year terminal we year the already expect next investments. some teed for buys

recently finally -- up our a see the deliveries pick We caught path we We're on some on completed. plus. year. still and to So nice to portion of we're last what was be caught see ordered a finally to the billion up. finally delivered trailer supposed that $X.X And up again, got that buys, been it's and of on

we path yes, see a still there. So

think an elevated about down as in to probably can eventually us, the X to here us see landscape the kind is it could tapering I teens. think as low long you -- of rate longer-term the revenue to next economy see us to I spend continue years, X over think is to run level the XX% attractive of this you XX% a

sit So outlook we that's as today. the

Operator

with Ken Bank We'll America. from Hoexter the to next of move question

Kenneth Hoexter

hitting quarter solid on congrats impressive Fritz step. the an Really ratio. and a operating XX% Doug, and

right? tons last June Just it comps the like on seemed yet slowed per So year, to quarter a X%. day, decelerated through the

potential the the backdrop and here So obviously, go this. we economic as thoughts maybe just your on to impact pricing through

Doug Col

on remainder August September. easier, not on basis mean, the go much resilient the of we've customer tonnage said, outlook the the pretty in in from year. still the sales and feedback our a to a had all, we and been get seems increases seek. that of like terms have little The and the positive But Yes. leaders accepting comps has in a group of customer surprisingly I to

rates, In very on quarter XX.X% the terms side. contractual good in of the was

that. there. renewals mean, the the going They think September the about and there's not the Now is do -- October, contract of we comp throughout bid QX, a I how there of where timing into year, throughout kind anything ratably -- you year. the all season a contracts like in tougher them don't And if it's

So, quarter year last if is kind XX.X% contractual third renewals tougher little we in got or think increase. there. there That book about renewals in the QX, a of a comp our of XX.X%

us comp So coming have through to the increases. made tougher because got the for this year, account better that's much if not up. those year, those is might since put seek as I we little accounts a rate adjustments hopefully last in we right mean operating

those kind a far, of terms we've the good play. industrial retail. versus the demand. so of bit is landscape the seen still at inventories of in customer in are little it view And But our of seem the that So levels bloated appropriate the inventory variables for there is pretty some more

Kenneth Hoexter

just us get that something relatively about that equipment? work talk And a the way then this peers is there, needed. what's it of of cost, what on? still talk your did -- average? industry the want to talk about, means. -- Is one is matter? morning does is investment perspective X.X% give a and Maybe X.X%, ratio or to Is it newer Maybe secondly, it what about above just X.XX%. you And talked claims maybe the noted differential capital So one, you about,

Doug Col

If and Ken. the I and As a about a just quite around initiatives as highest lot than denominator good well, as regularly, of the do it ratio I claims would math math we've industry, ratio bit be you better always to Well, the the know, prices right? on to my if our all. gets claims in had got and talk be the clear we bigger, -- But we improved. on better reported looks stuff it's had pricing, that of

on then have making better is lot side. company of that by you the fix just claims around the experience claims of if So right initiative, of whole on some we the can focused customer-first a but better pricing a it kind investments

lot docks to freight on the So equipment handling there the and investing appropriate and a tools the be with. and of right the training having

there there's and progress lead making to And there further improvement. making sure. investments like good to we feel So opportunity for we're

Fritz Holzgrefe

standing I pointed but That's, we're And that Doug because for the at underlying all. about X.XX% that number And driving is further would out, at at differentiates doing even that, pat benefit not for a lower that that. math may that it's that as that will then add competition our us from that our tell size. business not that customers disclose number significant that

that opportunity have that's drive if differentiation. further that our whole an So thesis. And even I supports lower, we think a to operating

Operator

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

Jon Chappell

lot salaries, guys benefits wages at a in to Doug, ability is count. as revenue. I and this PT of know still OR a improve and A slowing holistically. high shipment the focus mean you percentage PT look of on still I pretty

up? count of Is the So but of decelerates how see flex it still couple as take the or where on goes a could time? that you PT Does quarter quickly immediate could soon the an something lag relief this side quarter? third tonnage as as you shipment pace down

Doug Col

can quarter to Well, is reducing in next just side, And and mean staffing. or say driver those do I and X we're side those the the work this there's staffing based PT. you an line good up. weekly with We're our I'd year I able Overall, I our start to adjustments. in-house mean, the on handle PT runs on haul bringing some opportunity the the to more with miles pool of basis, use internally. think a of over efforts daily on I and our general, mean, able HR on make required

take certainly there's in is some of and always are just an and network. next help our having So us opportunity it of out runs. the to over use looking of to forward in our staffing haul head PT some I'd view network some on on there's own drivers balance say the going those be always a based versus we going couple good be to that's miles quarters. going the And backhaul, of is to But

Fritz Holzgrefe

it, grow to we around As out the density opportunity there's build it. of

Jon Chappell

last can perception of but follow-up be I my the call just otherwise. until the to you Fritz, asked the proven powerful Right. on question narrative pretty same

was be a business? shortfalls And the that in eases, if of losing that of fleet direct what continues silos capacity of view risk you to that LTL TL, of book And rate consider share there's networks some may this would nontraditional that to into kind to growth there's freight capacity much market TL think be maybe as the have wasn't And LTL sustainable. especially LTL of you grown this your Can I how transportation. beneficiary to just and be to business? loosen? speak going other this off of

Fritz Holzgrefe

the were I of freight. But for last coming the think we I actually it's to bit, it's it's of I and position we're benefited was it as were pandemic we quarters, is maybe tell call of extent think something handling chains the results, a we at focused I'd in we're And bit time it. yes, traditional up, that. think if are would a from in a that carry where backhaul spillover little we're that people -- study reorganizing we're several or set a LTL choice, that probably bit handling a reality we back the the heavier-weighted that don't there of a you, But by and LTL generate freight. -- depths returns we like lane the little freight, supply shipments,

of -- that concept the us. speak is of to as haven't So not I seen several mentioned. space it's that quarters And of we it's any and to frankly, appealing been entering

going have don't material a think going us impact I to forward. on it's So,

be. has we'll core -- on our that's it focus and think to got I LTL where our be

Operator

Citi. forward move Chris to Wetherbee We'll with

Chris Wetherbee

on a pricing wanted of gap particularly bit service is the of of opportunities I your we that there capacity your ability get to potential where into if for this work the do to sense sort to into there maybe today? want particularly get for is take some for highest-priced slower out pricing go of opportunity you, sort the your and think aids just I folks. if other a peers, industry you environment volume between yourself relative given sort a and of

Fritz Holzgrefe

Yes.

average think you that data that's a I revenue on differentiate the service you'd I if you can we the and differentiated around to that and public market. steady think assess providing at look that the performing, to say landscape size can we be and per point need as bill that's just available customer, and service great

the control. there So core I But what maybe think that's we focus a focus improvement, path mentioned of rate it's as can I same. on that for on we've still not earlier, is and to maybe think, us execution. got the And I we to our continue just --

Chris Wetherbee

Okay.

the No, in Okay. a XQ then of maybe sense. us makes that's that just of And can little a like half you openings. what specifically Do XQ? with terminal the help to sense if terms look you versus going bit certainly back have

Fritz Holzgrefe

Yes.

the to think rest open. the I X QX we're open material line opening X of ones not or in on say of includes That broadly structure. to end others QX the I timing exact that when year. would in know that we'll either But a into don't of going top to we going the have on X are impact mentioned results on August. cost the the more they're the of sort I the

Operator

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

Tom Wadewitz

you ask bit about a of the to little mix Wanted shipments.

and a meaningful your was consumer a weaker you it yet? I is you develop a in that look a retail know bit of headwind be a bucket something industrial. with the as that falloff retail? think months? Have that not that think July if you've thought leverage in is something maybe kind of is in little the could stronger. out seen I couple point kind that Or shipments you retail as something you already occurring? referred as next to might big with you your Or industrial little But shipments seen that's of

Doug Col

don't a of weeks. or the residential in range mean, consumer, But I running something and buying, retailer overall, change the deliveries there's to us. our if terms change consumer in their product consumer still Well, are think single-digit BXC I whatever, I the consumer picks patterns and of high they're if I most kind still it goes to guess, doesn't big-box I mean, that impacts don't us spend... the is or up know

Tom Wadewitz

customers, more like saying or just I'm could -- the so retailer it not the DC, the to to but whatever. store be home to to with

retail mix not customers so versus industrial the much So the customers. home just of but

Doug Col

any large customers we contract and a any we for for with The our on any of seen you than have bids and -- No, working are we haven't that's I and retail still vertical big callouts -- still don't don't have to acting trends active mix. overall us significant differently year there terms next we're don't report. renewals in

Fritz Holzgrefe

business Yes. -- over And book just we there recall don't anything X% the of that have of our in total. that's

we So maybe it's on but the have margin call somewhere out. a wouldn't

Tom Wadewitz

Okay.

something you're kind flat 'XX, let's mid-single-digit decline of up of that's sense market if when XXXX keep you down see noticeable. been a that's OR evolve industry I that's end environment? tonnage, did to you maybe in not your really had How think 'XX So of best you like do in mid-single or say but a the like might of able so tonnage, be -- bit an you'd know kind the dip hypothetical If we a do environment how to in ratio operating that that tonnage? what's the in respond digits

Doug Col

mean, of to I mean go know We're shock quarter, I or mean decline down, was what about the a raise was I you've occurring the I particular got but that flat example, I still over. able mean remain Well, can tonnage life in quarter. period time quarter XXXX don't right? it and X% talking you I you're a second real margins to didn't prices. pretty to in X%. good think sudden macro environment, back that

most the ended you on in I of back to opened yield flattish mean year, because tonnage a more year. environment. X% tonnage for flat up bunch down to that So of a about kind even go It we But declines. if side in across of down terminals. pushed the we gradual there's was XXXX, us

margins kind them. So and there's that an improve scenario potentially opportunity hold flat certainly of in to

Tom Wadewitz

X%, a not system freight couple hey, a more XQ shock of cycle, and tonnage more quarters. X% market of of 'XX a, of you see to thinking typical a is was but weaker for I kind the down Yes. the

margin So favorably? to what yields you're response even get you Is that can pretty and in well that you backdrop, do think that up saying?

Doug Col

on I Well, a been be of cover And the us. mean it, industry inflation. the yield. in to largest good we'll I rest get job think our definitely of helps that the the when pricing so really carriers industry doing has focused -- to are able leader

saw where trends that So last down we freight cycles side, X or we've X tonnage prices. on raised the

costs do across well cost business XXX week across model. out on every daily we pretty like mean the the and side We're managing labor things terminals. that terminal. our react and week of we that I So

to for So we're building and cyclicality. that's long managing a the and business here business tied haul industrial in a we're

So to point at think on never is going tonnage some in our a you're naive would -- all or dip have be parts. to shipments of

and XX building we're it for on XXX-year the to we the So, through cycles. And already we've to we'll built. business next like business again, past the tack manage have nearly XX history the years

it yes, environment is, maintain margins. able operate think with up be to pricing can. expand hopefully the And current we'll and set best So the we'll we we way as

Tom Wadewitz

guys building things. have strong done at a certainly job you Well,

congratulations good the So the as well. insights appreciate I XQ results. on

Fritz Holzgrefe

Thanks.

Operator

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

Tyler Brown

the lease kind what having the seeing I know when but on leases? and you end lease are you're those expense life to you renegotiate the reach of P&L is of buried inflation in a

Fritz Holzgrefe

couple of of a single-digit cases, of frankly, had renewals lot are. I Tyler. places sort up pretty lease increases. obviously, It is In varies Southern course, in that that is, when areas. at good significant of these of is of market larger cases, us, news going or by market, for in were maturities mean, X% like in a other a staggered inflation terms see we've you see California The upper some the sort costs urban recently of we'll But thing.

can they quite So a vary bit.

Tyler Brown

Interesting.

mean door to it rise. industry-wide costs support kind through just the Okay. either fundamentally continues efforts? through either fundamental doesn't But cost that of costs feels of I lease through just pricing build like ownership or company-owned,

Fritz Holzgrefe

all a it'd So if that nothing to do not going right? that make heightens. maintaining cost, it Tyler, sort absolutely there's inflationary, and we thing, facilities is you're improvement, remains; technology, that be equipment think I an that of technology, real estate,

job there you of. big think because in better real maybe slowing really return handling a to technology drive you able things aren't to use little you to part Certainly, reduce those estate this in But environment, And those something maybe to a inflationary bit claims. be things margin. on or freight, a your do the be can we I investments a continue business. to the of have even get can costs that a are are business. Fundamentally, it's mindful and on have of that's productivity

Tyler Brown

talked that's know then, you I helpful. a attributes terminals. these Okay, and have And lot I the about of saturation

most. detail in can you're I'm what any, assuming I'm P&D this P&D feel windshield is You say, of And then we're seeing, in give kind early still where quantitative about call actually the productivity the Atlanta. of uplift just increase innings curious, it the that Atlanta? But profitability story? does it, really this manifests it that's talked secondly, in you around probably attacking time,

Fritz Holzgrefe

right? if trying was our one, Northwest from service Yes. real P&D hour is traffic. time, -- both Southeast driver the in that So of to that's cost I windshield Atlanta a Tyler, think certainly, terminal, was sides an

We're And real. customers really in and retention across costs, operate, now job have think those markets the the our that's are. are in soft we drivers I That's we're I also costs board. really, recruiting early You that innings don't critical. call to where want the those recruiting

opportunity terminal to to effective from and trying continue that got We're provide service. either we Atlanta same Georgia has service making couldn't cost and was that Atlanta well to and improve. the think I as

there are both an So things opportunity. an improvement or

there, think I in for we're sure. early innings

Operator

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

Jack Atkins

overall entity. take consolidated in, as the going are back to get year the know your of way of more rolled a sort take feel inning incentive to attack terms changes, as pricing some your being guys to to an that for of of well. make more wanted Doug, But of to kind what going Fritz just last for in I plans compensation forward you making to tweaks some the And maybe have to force a beneficial the would or sales kind would that I on curious there Just effective want you we're moment. maybe to that? made pricing out? like back this be go there's we consider that look you in opportunity -- all if additional front for beginning I opportunity you to get

Fritz Holzgrefe

been a I think it's plan. great

it that team; we provided that embraced quality the that folks we're making compensated great they're I and important. rewarded we've we and service share it's think get that sure for with and that's have our

all to I servicing the what we've this think that. focus And around consecutive the sales a the recent clearly that embraced on sort attributes now and Those putting with of for improvement. of customers incentives go to is provide operations think and of within how made fifth quarter tie see they've drive the customer. we together that that syncs we've you and place kind customer. year enhancement Net important. our Promoter And can the been Score That's able most operating together service things I folks in to

care here. an the But that important taking is I can the think we're We that that more continue that challenging. be entire environment what's in the seems to some something on and make we getting edges working. that focused of may customer on is most may be organization tweaks

Jack Atkins

your clearly maybe have business in on get I I I guess follow-up, question back and and consumer on absolutely and customers maybe of a handy. Okay. customers? versus maybe think sort the versus step of going break at see retail consumer down, update results. Just working. maybe to can when is that kind that breakdown Tom's you We side if where sort the of as industrial a want No, it guess are industrial. of back a mix quick the that revenue a of could a for it the percentage look taking retail us to on you you levered thinking

Doug Col

that. on mean, any I it Jack, is mix mean we XX% of the when industrial customers. XX%, wouldn't look update we really have I at yes,

building our and docks, large, we've retail got You've you freight an when there's But walk whatever been our field some chemicals, on valves dock, and and industrial for fasteners pipes it customers. and certainly moving, may be. it's big-box we're the products whether

improvement things it guess I If retail that, you think if mix. could business mean, some supplies you might those of business vertical the like of be I some good and it's that home and from maybe there. -- But in call manufacturer. a it's building into there's coming locations,

again, But a exposed have of big-box where there So, big-box we is customers concentration kind don't we're the of of parsing it like trends lot the retailers. customer some a spend of time just who TL in lot to not out. concentration the

not input there real probably our So helpful. is

Jack Atkins

of that -- No, to XX% mix it's that just XX%. to get helpful

Operator

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

Bruce Chan

just the a how of follow-up. you of but rest the you which you industry, to the by then Fritz, to that you need I that way. wondering And market hope versus terms it service? how back maybe going assuming on is Score just your miss data Promoter I'm get score are that of make great, I from Net think absolute ground any increase given with where compares updates on the pricing level didn't in up much Mastio?

Fritz Holzgrefe

the -- quoted Promoter is is measurement. Net internal I So our Score that

customers. our against are those So

So of gone be That later Mastio yet. of more a will exercise this year. a kind through we haven't

we our is positive. for I increasingly our own feedback sign as And the So what getting you getting great I pull becoming performance. customers, we're is would a -- tell that -- think that's

sort looks customers, relative say, that others, to studies measurement they're Now I our like telling that own I have critical But what is it and don't yet. to what should versus or but we're market -- the that's what -- relative from of us.

So us. that's for good feedback

from you simplest that of argue the well really the opportunity. at compare think to is, LTL if look up speaks the most that than the carriers would bill and per your I at regardless and the other that think revenue perspective, some what all. is, look But measure not that better think a bill ours. you think is you if other part to service to than the reality less and listen, and question, element their I other is national I per And other or metric revenue national way consider stack is the better than average our the of reference competitors, we I

Operator

from Wells Fargo. our take We'll question next James Monigan with

James Monigan

of follow profitability there made you among Should to I industrial. deal just vertical wanted is the type or characteristics of up that we are I each difference the wanted to profitable sort just the one on comments of is more other? in if more sort think great around freight. understand profitable of in than having any certain

Doug Col

No. we it way. business. We a this decent mean at earn all and to don't need really look make the on return I money

critical higher-value that of if if we're mean, you if some our moving customers, So I freight, in it look, I general, could time-sensitive for about mean, you of industrial an you're you of with you of revenue. way, if it's sort and you're parts, think production think if therefore, customer, impact late some customer a and moving if services component it, maybe oil drilling and, think

for higher that, a better in that's not move something versus easier like business you it's there Sometimes shipments where way the to more as charge impacting you're or deliver commoditized, pallet of goods prices customers' those that restocking be and service are because critical. a are that something big a might the

mean retail out good we job it. all to want that's and need to only of paid a So call I I for get industrial, have. would versus customers then we terms in those for the do But

any look differently. we So it at don't

James Monigan

moving but OR in half? how see comp slower do Should you've it. terms pricing on -- forward? the tough given up? and impressive numbers continuous then keeping focused in impressive you that results some comp pace improvement. we Got sort And improvement the back we OR some put put and of can think of actually you're very with it that across you mentioned improvement year-over-year up also keep you've also think mind the Or Should about we pricing you -- OR should that you of just done

Doug Col

to tough comps try for good had to it. keep and going We've pricing thing. pace a we're that's years Well, with

good yes, So comp. overall, pricing guidance again, to But and yield don't progress whole some would give front our and more be volatility quarter-to-quarter that. lot we've the But on to on got drive based have a you'll the hope, it higher. get continue on we to

Operator

Credit We'll take Rosa our Ariel last Suisse. question from with

Ariel Rosa

of has down been have it real of the market has you're more footprint little center wondering estate. might talked actually one securing as estate just started given accelerate pace maybe tight how you if see a bit about just the the starts difficulty in slow we've to past a been bit, So for things the real that economy I'm thinking of about opportunities to perhaps at real your maybe estate? see look add which we And a that? little compelling or to to you to does even how add industrial the service downturn

Fritz Holzgrefe

We're focused footprint. on our expanding

ago maybe year focus one but I a the frenzied have that quite certainly to seen or and continue to players have there elected it know market that on opportunities it's regional the X was it's the still you exit. I to as don't think attuned that it's some as -- of we'll we're So

position position, and is So balance that in us. execute for footprint, larger moving. extent attractive our the so an sort that a current sheet maybe about reconsidering sense speak, their financial creates some opportunities. of that we're players -- for or best we're that you The we certainly, we're the creates To their look to if in buyer, are recasting networks a of Saia opportunities that part this at can

date than buy a a maybe -- up theoretically a pipeline we the opening. around focused we're next inventory pretty for bit that we've them away. not right think for opportunity, or easier always we further remain them facilities pretty it. little it them call years an good could I open But Now But We and and it's got was. for X X may

Ariel Rosa

the It you Got it. like sounds facilities. those like already pipeline And in you've secured market the for shift contracts that not like it's it's have, with...

Fritz Holzgrefe

No.

maybe doing diligence had a due gosh, on to here, you're you there. zillion going some LOI, you else you find you Some out something an it, exit of intel move them get problem we're in that,

-- they're it's but all they're not one. all So secured

good. pretty is rate close Our

dealing always But real sort our challenging. estate, hit things growth plans. we'll of these So be when take time. you're certainly, can And that with

Ariel Rosa

given last one demands And of of try you pricing just line aspirations in a how maybe how helpful. That's on wanted challenging slower little pricing. has market to leader it. them holding they the a more hold ability bit that Got becomes my how around kind of and takes? out I share environment, then I to the talked and question. and terms about to puts wanted because growing competitors understand to share in for your line of maybe best-in-class slower the plays are a hear about on the kind of or around thinking guys about environment, your in take kind the

Fritz Holzgrefe

going of chase this to expect strategy Yes. slows, be to will the pricing them to that. share Saia I investment it, in to levels way requires share's don't of of it end care That ongoing for We're I take first. the mean, the about We'll But sake. provide get high commensurate the know. listen, an at think -- Perhaps service. won't get keep business with to customer. simpler. is the very pretty We're going we the

we're focused on in I think you pretty returns this follow closely, us if business. driving

that make or probably, was simply doesn't probably us. not much sense for volume us for it strategy about a chasing So doesn't make sense

So to we'll your approach. continue stay Thank everybody, and call would story. in the continuing around our that. participating you, thank be And today's Saia pretty in for growth disciplined That you. interest

Operator

call. Thank for your participation. you And this concludes today's

disconnect. now may You

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