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

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Fritz Holzgrefe: Yes, it’s part of our total line haul cost investment. So at any given point in time, we’re going to make a decision around what’s cost optimal around the options that we have available via rail, truck or internal fleet. So it’s — it will flex and change over time as we meet service obligations. The first step we have in that process is that whatever choice we may make has to be about supporting what the customer requires and then we cost optimization there.

Jon Chappell: That’s good to have that flexibility in this volatile time. Fritz big picture one for you quickly, it feels like the consumer narrative is pretty binary right now, but maybe getting a bit more optimistic. The industrial narrative seems a lot more negative. And you carry more industrial freight, so the last couple months of data you provided notwithstanding what are you thinking and what your customers are saying about the industrial outlook for this year?

Fritz Holzgrefe: I think we read much the same thing that you do. And I think what you — I would say generally across the board, it’s tempered. I think it’s critical for us to remain — keep that flexibility and keep the — our network in a position that we can flex as we need to. If the consumer is a bit stronger, certainly we have some elements of our business that would be more consumer tied or others that maybe a more industrial tied. So we want to be able to handle both or be able to deal both and be in a position that we can flex, but most significantly meet those service requirements. That’s why we’ve kind of managed the way we have. We really focused our cost optimization efforts around reducing hours and maintaining flexibility and availability in our workforce. So far that’s been successful and I think we’ve got to continue to focus on matching the service expectations and balancing that against maximizing or you’re best utilizing our driver fleet.

Jon Chappell: Thanks a lot, Fritz. Thanks, Doug.

Operator: Our next question comes from Amit Mehrotra with Deutsche Bank.

Amit Mehrotra: Thanks, operator. Hi, Fritz. Hi, Doug. Good morning. I just wanted to follow-up on the margin expectation for the first quarter. I guess just given how weak November was or counter seasonal November was and the relative snapback in January, we just think there may be an opportunity to see some counter seasonal OR improvement. I don’t know if you vehemently disagree with that or if there’s something in the cost structure that evolves that I’m missing, but it just seems like 4Q was just a lot worse, because it doesn’t remember fall off and that’s counter seasonal and maybe you get some of that back in the first quarter?

Fritz Holzgrefe: You know, Amit we could and I could also paint a picture that we could go the other way. I think the challenge you have with forecasting and really considering sort of March — or sort of March quarter — first quarter result is that January and February historically and you go back in time for us have been kind of up and down. It could be everything from economic to weather related, all those sorts of things. So it’s tough to draw a correlation to say that, hey, would this could bounce back, we know that March is the most important month of the quarter. But what I like the position that we’re in right now, because we’ve worked extensively November, December into the present time and kind of resetting our profile to be able to be in a position that we’re little bit more cost optimal, as compared to what we saw as tonnage declined in November and December.

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