Saia, Inc. (NASDAQ:SAIA) Q4 2022 Earnings Call Transcript

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Ravi Shanker: Got it. And just on that note, kind of — I know you spoke about the industrial end markets earlier, but I think you’re a little bit unique in that you have a slightly higher energy market exposure than many of your peers. Given how volatile that has been in €˜21 and €˜22, kind of, is that a tougher comp for you this year? Or does that not really matter?

Fritz Holzgrefe: It doesn’t really matter. I mean — as you know, followed us closely that, as we’ve added the Northeast, that sort of energy exposure probably looks more like the rest of the LTL sort of sector, right? So our book of business is looking more and more similar to everybody else. So I don’t have a call out there, so it’s influence on our results.

Ravi Shanker: Understood. Thank you very much.

Operator: Our next question comes from Allison Poliniak with Wells Fargo.

Allison Poliniak: Hi, good morning. Just keeping on that industrial side, a lot of our coverage in the industrial space is really talking about the sort of recalibration here as we smooth down the backlogs that have extended here with all the supply chain issues. Is that driving any volatility in some of the trends that you’re seeing from some of your industrial customers? Or are you expecting that just given some of that lumpiness potentially?

Fritz Holzgrefe: Allison, I don’t have a great view on that. But we do see — and I think this is an important part of our operating flexibility is that we do see a continued kind of disruption with some of our customers around this order patterns, supply chains changing. Those are important parts of our ability to be flexible and match customer expectations. So I don’t know that there’s a particular vertical there, but it’s — we see that and have seen that over the last year or so where you do see some disruption in sort of month-to-month trading and changing in all parts of the business.

Allison Poliniak: Got it. And then just going back to the facilities you had opened; you had talked about it being a drag to the OR. Does that flip now as you start to build out and leverage or is it just the volume moderation a little bit heavier this year than maybe you would have expected in terms of that kind of flipping from a drag or it’s more of a tailwind for you?

Fritz Holzgrefe: I mean, I think the opportunity for us is that there’s a potential tailwind there, right? We have — we’re really, I think, have been successful in replicating that fantastic service that we’re offering the customer across these new openings. As customers become familiar with us in those markets, we have the opportunity to kind of grow in those facilities. And that’s — it’s a — I think it certainly could be something that would be beneficial to us in the balance of the year.

Allison Poliniak: Great. Thank you.

Operator: Our next question comes from Ari Rosa with Credit Suisse.

Ari Rosa: So I wanted to ask Fritz and Doug, maybe you could give your thoughts on the ability to get to a sub-80 OR kind of over the longer term? I know you said kind of expectations for €˜23 probably within 100 basis points or so of what we saw for €˜22. But is the sub-80 still kind of the long-term target and kind of what’s your confidence level around that? And then should we also have an expectation that Saia can kind of be top quartile among peers in terms of where its OR lands in any given year?

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