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

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Jordan Alliger: Yes. I just — I guess, following on some color around the newer terminals that Doug had mentioned, et cetera, as being a slight drag. I’m just sort of curious, the last 12 or 18 that you opened, when you do open them, is the gap between existing and new narrowed versus prior experience? Or do you get out to profitability in a quicker fashion? Just sort of curious. Thanks.

Fritz Holzgrefe: Absolutely. You get back to a quicker to sort of company average OR for sure. When we opened the Northeast, we — it took a little bit of time. Now we’re thrilled with where it is right now. But it took some time to scale those just simply, because we had to build the infrastructure around that. The last 18 are more, I would characterize as, sort of fill in. And these are ones that maybe you’re taking a little bit of stem time out. So you’ve got a cost advantage you’re taking advantage of or frankly, you’re finding a new customer or better serving the customers. So these, I would expect that we would be able to get to company averages much more quickly. Now I will point out that the challenge with that is that when you experience what we did in the fourth quarter about the volume trends that Doug described, that impacts the facility that’s in its infancy.

So they become a bit of a drag in that because you experience that across the board, those sorts of trends.

Jordan Alliger: Great. Thank you.

Operator: Our next question comes from Tom Wadewitz with UBS.

Tom Wadewitz: Yes, good morning. I wanted to see if you could I think offer some thoughts on pricing. I mean it seems like there was debate over the last year about as LTL pricing get a hold or not. And I think generally, people are of the mindset, it will. I think the results are pretty consistent with that. But are you seeing anything in competitor behavior that causes you to be kind of more or less optimistic? I mean, I guess the idea that you said of getting less price and a weaker tonnage environment totally makes sense. But anything on kind of competitive dynamic and conviction on the favorable pricing dynamic for LTL?

Fritz Holzgrefe: Yes, I don’t see any changes there. I mean, certainly, the customer and the environment is, Tom, as you just characterize, a bit softer, right? So that there’s — it’s not what we saw a few months ago or a year ago. But what I’d tell you, I look at specifically Saia and I look at kind of where we stack up against the competition, and I look at the service that we’re providing, which is, in many cases, better. I think there’s an opportunity there for us. And the investments that we’ve made in the facilities and expansion, it deserves that. So I feel pretty good about our position. The rate of growth may not be the same, but the opportunity remains. And I think the environment, underlying everybody still has inflationary costs. So I think that that’s a critical part of the industry and kind of what we see.

Tom Wadewitz: Right. Okay. So it sounds like still a lot of confidence in the competitive dynamic. I guess for the second question, I think you talked a little bit about industrial earlier, maybe parse it a little bit further. Did you see a difference — have you seen a difference over the last several months in terms of how much weakness is being realized with industrial customers versus retail customers? And I think the idea is just that if you have inventory reduction with retail customers, maybe that plays out through 1Q and they improve, but it’s just a little less clear on whether you’ve already seen weakness with industrial customers or whether that’s still to come?

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