Frederick Holzgrefe: Yes, that’s — thanks, Tom. But I think the key thing for all of these openings, we — there was never an intent for Saia to open these as it — to impact 2024 or this quarter or next quarter. We view these as long-term investments, multi-year return 10-year sort of horizon. The Trenton and Garland facilities that we opened this quarter are ones that are simply in markets that we already are serving and to some extent that we’re doing it inefficiently. So those are ones that we open — the cadence of opening made sense to us because, first of all, it’s an immediate service lift for our customers. There’s going to be some incremental business in there and there’s also going to be a little cost savings. Those are big facilities for us and kind of our opening cadence.
The Great Plains facilities, we’ll open those — the remaining ones. We’ve opened two, Missoula, Montana, and St. George, Utah, already, but we’ll open the remaining ones of those in August, and we’ll do that — actually July, August and September. And we’ll do that purposely because I think for us, it’s a — there’s some efficiency in opening those nearby each other in terms of timing to minimize sort of the inefficiency of having part of a linehaul network put together. So we’re going to go- ahead with those. There is a customer demand for all those. A Missoula, Montana is an opening that is for the entire Saia business is, I would say, not material, but it has far exceeded our initial expectations and that’s simply you have customers that know what they’re experiencing with us and they like dealing with Saia, and we’re really pleased with the early results there.
So we look at that and we say, all right, then it’s worthwhile to go after the remaining Great Plains states, St. George, Utah is another one. These are — these are small markets, but there are ones that customers value that consistent service that maybe they weren’t getting before. So that makes a ton of sense for us to open them. Now they may not be a big lift on the OR the balance of the year, but I think they’re ones that they’re really important investments to make. And I think we can minimize the sort of cost to them. But at the same time, if you’re — if we’re really focused on the customer and on the long-term opportunities of this business, those are the investments we need to be making. So we’re going to continue on that pace. We’re going to obviously look for places that would be — minimize inefficiencies, or embedded costs that are — that we could avoid, absolutely, but there’s just too much value in these not to continue to pursue them.
Tom Wadewitz: So that having been said, if you assumed a flat freight market, how much would the service center openings give you on shipments per day or tonnage. Is it like a couple of points? Just thinking again if we’re seeing the Yellow impact [Multiple Speakers]
Frederick Holzgrefe: Yes, it’s tough to say. Missoula, Montana is not as big as Trenton, New Jersey or Garland, for that matter. So it — I think that’s positive for us the balance of the year. I’m not in a position to really call the macro freight market. I think it — there is probably mixed, but I think Saia’s idiosyncratic story is pretty important to remember. And we’ve shown what we can do in — with these openings and we’ve been able to execute in markets even in slower times.
Tom Wadewitz: Okay. All right. Great. Thank you, Fritz. Thanks, Doug.
Douglas Col: Thanks, Tom.
Operator: Our next question comes from Eric Morgan from Barclays. Please go ahead. Your line is open.
Eric Morgan: Hey, good morning. Thanks for taking my question and congrats to Doug as well. I guess I wanted to ask another on volumes coming in below expectations in the quarter. Just given the pretty strong renewals number you gave earlier, would you say your push on price this year is having any kind of outsized impact there, or is it really just more of a broader market demand story?
Frederick Holzgrefe: I mean, I think, it’s probably broader market. But listen, if — following Saia over time, and we’re focused on generating value to our customer and generating returns for our shareholders. So I — we don’t stay fixated on volume numbers, we stay fixated on making sure we meet those first two expectations. So we’ll continue to push the service level and our expansion thing, because I think there are incremental opportunities for that but that’s only going to work if we keep the — keep working on pricing and mix of business. And that — we’re committed to that.
Eric Morgan: Appreciate that. And just a quick follow-up on revenue per shipment. Do you think that 3% to 4% is still a good benchmark for the full year ex-fuel, or is some of those — or some of the mix changes going to have an impact on that.
Douglas Col: Yes. I mean, after what we saw in Q1, I’m probably — not a crystal ball on the macro, I’m not as confident in that. But like I said, what I did like is the spread improvement, right. So I didn’t get as much revenue per shipment as I had hoped. It’s a mix issue. We’ll work on pricing at every turn. If the customer account’s not operating profitable — profitably, we’ll pull that discussion onto the table right now. But we’re doing a good job managing the cost side. So that’s why I was able to get the margin pickup, and that’s why I think we can still get the 100 basis points to 150 basis points for the full year. I mean, there’s moving parts here. So if that’s the kind of volume, but when I go there, I get some economies on the cost side, then it works for me on the margin side.
I mean that’s what we’re trying to do. We’re growing the business and we’re growing profitability more than that. I think that’s what you kind of want in the business. And on the volume side, I mean, yeah, I mean, for us and for the other transports, I’ve heard a report, March didn’t seem to come together like most expected. But we still had shipment growth in the quarter up 15.7%. I don’t know how many others are doing that. So we kind of think we’re on the right track and we’ll work through this, the cyclicality that’s inherent in our business.
Eric Morgan: Appreciate it.
Douglas Col: Sure.
Operator: Our next question comes from Jordan Alliger from Goldman Sachs. Please go ahead. Your line is open.
Jordan Alliger: Yes. Just a quick question. Curious with the expansion plans that you have at this point. What do you see in terms of the ability to get the folks that you need, both from a driver perspective and terminal perspective? And is there much cost inflation among the — in terms of attracting these folks?
Frederick Holzgrefe: That’s a good question. One of the exciting things about what we’ve got going at Saia is that — as we add these facilities and this coverage footprint, we’ve always felt really good about our team. And one of the things that we’ve seen is that adding new facilities provides career track to a lot of our high performers in the balance of the company. And so as we’ve looked to open facilities, we’ve been able to staff key leadership roles in those facilities from the balance — the experienced part of our Company. So it’s — that’s been great. That helps set the tone, sets the culture, right? And then when you get into the market of recruiting drivers or other staff to fill these facilities. You’ve got, first of all, the folks that are doing the recruiting and they know what Saia is and what our culture is.
So that’s important part of the recruiting effort. And what, as always, when we’re recruiting folks, we’ve got to stay market competitive. You’ve got a growing company, great place to work, great — culture, company that’s very focused on culture. Those are — recruiting advantages. You throw that in there with a very competitive pay and benefits package and we’ve had success staffing and staffing people that understand our core values and kind of what we’re trying to do. So we’ve been real pleased with what we’ve been able to do on that front. So that’s going to be an important part of our growth story going forward.
Jordan Alliger: Thank you.
Operator: Our next question comes from Jonathan Chappell from Evercore ISI. Please go ahead. Your line is open.
Jonathan Chappell: Thank you. Good morning. So you took on a lot of new customers over the last 12 months, obviously, with the type of shipment growth you’ve been putting up. As it comes around to these pricing discussions with them, obviously, there’s a vast array of different customers and different types of freight. But how these customers been receptive to some of the pricing discussions to try to get the value for your service?
Frederick Holzgrefe: Yes. So Jonathan, we’ll — Doug and I’ll double up on this answer. And so, one of the things I — just keep in mind is that one of the things that we benefited from early on with the disruption is that, in many cases, we had shared some of the national account customers with Yellow. So they were people that were familiar with us. So we picked up — there were some pickup economies that kind of came along with that as we picked up that new business. As we have developed the — further developed our relationship with these customers, we have a better understanding of what the freight mix is and what the impacts are. And we’ve been very focused in Q3, Q4 and into Q1, around continued work around pricing to make sure the customers that understand and value the service that they’re getting that there — that we’re being appropriately compensated for that.
And we cycled through some of these customers, as a result of it decided, hey, that maybe this, we prefer something else and they’re pursuing other options. So you see a bit of that. But I think what you also see in part of the traction that you see in our result is the customers are starting to value more of what they’re getting from us and there’s a little bit of stickiness there. So we like that. I think that speaks to some long-term opportunity for us.
Jonathan Chappell: Okay. Thanks, Fritz. And then just a follow-up. Doug, I don’t want to put too fine a tune on pin on this, but you — you’ve keeping the full-year OR guide first quarter was in line, then throwing our track like you said, but it sounds like second quarter is going to be about 100 basis points lower than typical seasonality. Does that mean that we get better than seasonality in the back half of the year? Is this like a front-end loading a cost type thing in the second quarter? I mean, how this business works, people focus on the real short-term here, but if it doesn’t throw the track off, even if the second quarter is maybe a little lower starting point, I guess, that’s probably a key takeaway that we’d like to hear.
Douglas Col: Yes. I mean, Q1 was on the OR side, we were in that range. I mean we all wanted it to do better without a big strong March. We didn’t get there, but Q1 was kind of in the range. And yeah, I mean, now this would be below normal historic seasonality, but the momentum on the volume side and starting to cover some of these fixed costs as shipments grow and these terminals we’re opening today. We open them today, I have all the costs in advance of the opening. I’ve got all the costs on day one and I had zero revenue. So as they build momentum throughout the year. We absolutely expect a pickup to come from that quarter two, quarter three and quarter four out after the opening. So there’s some of that. But —
Frederick Holzgrefe: I think you have to think about too. So we’ve highlighted for you, we’re opening, we just opened Trenton. We’ve just opened Garland. We’re going to open Laredo in June. We’ve got a block of Great Plains facilities we’re going to open. Today, that freight often gets handed off. So that freight becomes 100% Saia revenue. So that’s a pickup into the second half of the year. And we know what we’re going to get service-wise when it kind of travels on our equipment 100% of the time. And I think that’s a real value opportunity for our customers and it’s certainly from a revenue perspective for Saia, is good. So that’s what you’re seeing in kind of what we think about the full-year result.
Jonathan Chappell: Okay. That’s very helpful. Thanks, Fritz. Thanks, Doug.
Operator: Our next question comes from Daniel Imbro from Stephens. Please go ahead. Your line is open.
Daniel Imbro: Yes. Hey. Good morning, guys. Thanks for taking the questions and, Doug, congrats on the retirement. I want to start on the freight mix. When we think about the density you’ve added and the capacity you’re still adding, how much are you leaning on third parties or brokers to find freight? And is that mix impacting reported revenue per shipment or yield metrics? And then, if so, how long would it take to transition that towards first party freight as you understand those new markets?
Frederick Holzgrefe: Yes, certainly, in some new markets, the broker sort of that part of the mix of business is helpful to get started. But the nice thing that we have right now and a lot of this is driven by our own sort of network maturity and business maturity is that a lot of what’s going to fuel the growth in the markets that we’re growing and our customers that we’re already doing business with. And that’s what’s really exciting. If you can go to a customer and you can now offer full Great Plains coverage, that granted, those are not the biggest markets, but if you — we go do a pickup in Dallas, Texas and we can cover the Great Plains to the customer and also go to Trenton and also go to Laredo and maybe even to Mexico if the customer needs that, you’re now having an opportunity to move up on the priority list with that customer, where you’re a much more strategic LTL partner with them.
And because, frankly, we can do more for them. And we’ve proven that they can count on us to replicate service. So I think the exciting part about this, it’s not going to be a mix transition per se, it’s going to be more of further penetration with customers that already know who we are. And then customers that have held back doing business with us because they say, “you know, you guys quite don’t have the coverage I need.” Now we do, and/or will have. And that’s really part of the interesting value here for us.
