Scott Group: Thank you, guys.
Operator: Your next question comes from the line of Jordan Alliger with Goldman Sachs. Please go ahead.
Jordan Alliger: Yeah. Hi, good morning. I was wondering if you could discuss the new terminal opening plan, perhaps the expectation for net new doors open, some thoughts around the timing of when this is going to get added over the quarters? And what sort of additional revenue contribution do you think this could have in your plan? Thanks.
Fritz Holzgrefe: Thanks for the question. So a couple of things. As far as the timing of this, it’s going to be spread out over the year. There’s some of the facilities that we recently acquired that had — requires some level of investment to meet the standard that we expect out of a facility, so they’ll open in the year. The Great Plains facilities, they will open in bunch, probably more in the second half of this year. if you studied the — what we purchased, you’d know that we bought facilities like Laredo or Trenton and we acquired rights to facilities in Cheyenne and St. George, Utah. Those terminals are not in any way similar, the comparison there. So some big, some small. So I think you’ll see it spread out over the year.
I don’t really have a comment specifically on what the revenue add is for those facilities because when we made those investments and any investment we’re thinking about what the 10-year opportunity is for that and what the market share opportunity is. So, based on our history and we’re looking back, we know that when we enter a market, we have the opportunity in that addressable market, and it’s important to understand the ZIP codes around those markets. And maybe in the first year, we ought to be able to get 1% of revenue in those discrete markets or sort of 1% market share. And we’ve shown that we can do that. So I think what you’ll see over time is that, that will be part of our growth for the year as well as ongoing initiatives. Don’t forget about the last several facilities, actually the last 20 that we’ve purchased, that there’s still a lot of opportunity there for us as well.
So I think the — we’ve got some — we’re pretty pleased with what the opportunities are for us.
Doug Col: And…
Jordan Alliger: And just — sorry, go ahead. Sorry.
Doug Col: On the door count part of your question, we ended the year with about a, call it, 8,700 operating doors based on our 15 to 20 kind of openings planned, we could add another 8% or 9% probably to the door count if we got all those open. And then there’s probably — I think we’ve got another 10 like relocations planned during the year and a couple of terminals that we’re expanding. And the aggregate door additions from those efforts too could be another 4% or 5% of the door count. So again, that’s the plan as we walk into the year, and we’ll see where we’ll get done. And like all years, too, I mean, if things unfold differently versus plan throughout the year, if the macro environment worsens or gets better, you can see us slow it down or speed it up a little bit with these openings. So there will always be that kind of factor where it’s hard to put a single point on it, but those are the magnitude of the additions we’re planning.
Jordan Alliger: Great. Thanks so much.
Operator: Your next question comes from the line of Jonathan Chappell with Evercore ISI. Please go ahead.
Jonathan Chappell: Yeah, thank you. Good morning. To that point on relocations and net doors, I mean, it sounds like you’re going to be moving out of some of the terminals you’re currently in to upsize or go to better geographic locations for these new terminals that you’ve acquired. Any sense on how many terminals you’ll actually be closing? And the reason I asked that — or I should follow up and say and what’s going to happen to those terminals? Do you imagine selling those back to like a regional LTL competitor? Or do you think they’ll leave the market? Just asking in regards to the view that all the Yellow capacity is going to come back online versus the potential for net subtractions as you open some of the newly acquired terminals.
Fritz Holzgrefe: I don’t know that I’ve got a good view on what the fate is of the facilities that we might exit. I think we’re still waiting over time to see how the industry repositions the assets that have been redeployed here. If you look at Saia’s growth discretely over the last number of years, I mean, we’ve made — a lot of our footprint expansion has been tied to adding facilities and opening doors at some of our larger competitors may be exiting. So as we continue to grow, I mean, theoretically, those that are sort of below us that may take on some of that. So I think it’s probably still early to call on what — where ours specifically go, but I think that a fair number of the ones that were in the industry likely will exit the industry because as you watch the auction process unfold, you saw that not all of them cleared. So I think there’s some number of those that probably leave the market entirely.
Jonathan Chappell: Okay. Thanks, Fritz. And then for the follow-up, you’ve obviously filled some geographic holes with these acquisitions and the organic growth. As we think about filling out kind of major areas of need, so to speak, how does that kind of filter through with pricing with your national accounts? If you have better geographic coverage like a massive big box retailer or a massive industrial consumer, does that really push the pricing needle with that major national customer as well?
Fritz Holzgrefe: It certainly helps, and it gets you some bets with customers that have very high levels of service requirements. And we’ve got some incumbent large accounts that they look at our footprint, and they’re really excited about what we’ve just added because for them, we help solve a problem. They get a very — they appreciate the very high level of service that they’re getting from Saia right now, and now we can go more points for those customers, they value that. And we like some of the customers that consider a strategic in those situations, those are people that are paying for service and greatly value service. And for them, they make money and their business is dependent upon a supply chain and LTL partner that is reliable and on time and low damage.
So they’re not worried about necessarily pricing per se. They’re thinking more about value. So in that scenario, having more batch for them, that’s a win for us and we like that. And we’re seeing that as we deal with a lot of the larger national accounts that have been satisfied with what they’ve been getting from us.
Jonathan Chappell: Great. Thank you, Fritz.
Operator: Your next question comes from the line of Ken Hoexter with Bank of America. Please go ahead.
Ken Hoexter: Hey, great. Good morning, Fritz and Doug. Fritz and Doug, the groundhog said it’s an early spring. So, Doug, on your weather concern for February, March sounds like you’re all set. Just, Doug, can you talk a bit about your life cycle of conversion? You brought on a lot of operating expenses ahead of time to handle all the freight that you won early last year. Maybe can you talk about the progress you’re making and how we should think about that as we move through ’24?
Doug Col: Sure. I mean I’ll take a shot. I mean I’d like to think it’s kind of leveling out. I mean you’ve seen a major step up the last six months in terms of our growing the workforce to meet these kind of new normal volume levels. And I was really pleased Q3 to Q4 with how we continue through that process. Our headcount number is growing. So Q3 and to end of the year, the headcount was up right about around — a little over 3%, I think. But our FTEs, if I think about how we’re managing the use of those folks, our FTEs were only up about 0.5% on average Q3 compared to Q4. So again, I mean, we do it every year seasonally throughout the business, and this was just kind of exaggerated. But we know we need that trained and well-positioned employee count because soon enough, like you say, we’ll be getting into spring.
And with these new normal volume levels, just the cost that come on is kind of fixed dock and driver costs, for example, which is where most of the hires are happening, as we build density in the business and seasonally as density build, they become more variable. I’ve already kind of absorbed the cost. And now as I make them — got more freight from the handle and all I get those efficiencies. So I think we’ve been pleased with it. And let’s see, we look forward to getting out into the seasonally stronger period and see how it flows through.
