Saia, Inc. (NASDAQ:SAIA) Q2 2023 Earnings Call Transcript

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So that’s good. But in the interim, we’re going to meet service, where we need to utilizing our purchase transportation partners, and but the key part of that model is it’s got to make sense to meeting customer expectations. And it’s got to be cost effective. And those — we put those two things together, we feel pretty good with our ability to flex up. And we’ll continue to supplement that with adding more of our own drivers.

Jonathan Chappell: Got it? Thank you, Fritz.

Operator: The next question is from Eric Morgan with Barclays, your line is open.

Eric Morgan: Hey, good morning. Thanks for taking my question. I wanted to come back to your comment on closing the pricing gap to the peer group. Just curious, how big of a focus that is for you right now? And can some of this disruption going on be a catalyst to get there to parity faster than you might have thought otherwise? You know, not saying really near term or anything more as the dust settles? Is that an opportunity? Or is it going to be kind of a steady approach over time?

Fritz Holzgrefe: Well, listen, we think about the service that we provide to our customers on a daily basis. And as a result, we think about making sure that we get paid for that service on a daily basis. Now, if you’re following us closely, we know that we have our organic expansion that’s going on, we’re adding terminals providing greater, which is really about providing higher levels of service to our customer. Moving closer to the customer, we’re providing that hitting those touch points in those pickup and delivery times that are important to the customer and making their transit times. When you do all that you have the opportunity to get paid for it. And as we continue to grow, we become closer and closer parity to our larger national peers.

We see what their average revenue per bill is. And we look at our service levels, we know what it looks like with the competition. So the opportunity for us to continue to drive closing that gap is it’s critical. And that’s part of the value proposition of what we’re doing. So if anything, this environment, I would expect that will — we’ll double down on that effort. I would expect our peers would also do that. And I think the environment will continue with what we’ve seen here in the last number of quarters, even as things have slowed down. We’ve seen the discipline around the competitive set around pricing, and I think that’s important.

Operator: The next question is from Jason Seidl with TD Cowen, your line is open.

Jason Seidl: Hey, thank you, operator. Hey, Doug. Hey, Fritz. Doug, I wanted to make sure I understood what you said about the OR on a sequential basis, you’re coming up with 100 to 150 basis points of degradation. That is the typical OR that you see or that’s what you guys are assuming if that’s the assumption, does that include more freight from a yellow bankruptcy?

Doug Col: It’s pretty typical. You know, like I said, if you go back and you want an average, you got to start taking a couple of things out. So that’s what I tried to do. I think the math of it says it’s been 150 to 200 words, if you just take off a COVID year and in ‘21. But, just based on what we’ve seen in July, we have very little clarity on where this goes over the next few weeks, actually, but, based on what we’ve seen, we think we can we can do that. So maybe 100 to 150 basis points makes sense. I mean, we — maybe it’s a little better than the historical average, but like I said, that average is kind of our math because we take out a couple things. But driven we know the wage increase has been in place, we’re starting to use some driver hiring bonuses. Again, we haven’t used in a few quarters. So factoring in what we know now month to date in July we think 100 150 basis points is doable. You know, given what happens on revenue is still not clear to us.

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