Fritz Holzgrefe: Well, I mean, yes, you’re going to see natural growth in the industry. You’re going to see — so people are making their investments to support their business model and plans. I don’t think that you’re going to see all that capacity come back to the industry, what percentage of that remains to be seen. But as I look at it, the only places that we’re adding new greenfield facilities is when they’re in markets where there isn’t anything available. So that — I don’t know that, that’s a — that’s not material to the market generally. And I think in the others, what you’re seeing is at least some percentage of that capacity from Yellows is being redistributed, but I don’t think all of it’s coming back. I mean they weren’t operating at its most basic level, they weren’t operating at capacity.
So they had surplus capacity in that business anyway. So, I don’t suspect that the — that would become new capacity in the industry. So a lot of it’s just going to be redistributed.
Ravi Shanker: Understood. Thank you.
Operator: Your next question comes from the line of Eric Morgan with Barclays. Please go ahead.
Eric Morgan: Hey, good morning. Thanks for taking my question. I wanted to ask another on pricing. You had the above-average GRI in December. So I was just wondering if you could talk about how customers responded to that? Do you see more or less volume impact than you were expecting? And does it give you any insight into how you can tackle closing the pricing gap to some of your peers?
Fritz Holzgrefe: I think that the — what we would say is that the reaction to the GRI is pretty consistent with what we’ve seen historically. I don’t know that any of that was materially different one way or the other. I think it is important, though, I think we need to highlight that the GRI was in December, right? So that’s not a — there are a lot of externalities, could be holiday, it could be weather in that period of time. But from what we’ve seen so far, it’s the typical level of acceptance there. The good thing is that we’re maintaining that high level of service. So it’s a little bit hard for somebody to switch. And I think, generally speaking, over time, you saw the contractual renewal in the fourth quarter plus 8.7%. You saw the GRI, I mean that speaks to the initiatives around making sure we get the pricing right and the mix of business right.
Eric Morgan: Appreciate that. And maybe just a quick follow-up on service. You’ve been at the, I guess, 0.6% claims ratio for a few years now. Obviously, maintaining that with all the volume you took on is pretty impressive. But I guess just given the CapEx number this year and talking about capacity and service, do you think this is a year where we can see kind of a step function improvement in that claims ratio? Or is it kind of steady improvement over time, a better way to think about it?
Fritz Holzgrefe: I think you’d see steady improvement over time. But let’s be clear. That’s a pretty low number as it is right now and how we calculated and reported, that’s a pretty good number. It’s a differentiating number, and it’s a number that, although it has been a bit steady, it is consistent. And customers really expect consistency. And I think the other thing that customers really care about is that you pick up the freight and you deliver when you say you’re going to deliver it. So if you think about the capacity investments that we’re making around our fleet, that’s all about making sure that you also hit the other service metrics that are critical for the customer. So certainly, we don’t damage the freight, but we also have to be able to pick up the freight and deliver it when the customer expects.
So those are also part of that service equation. So those are all things that we’re doing. And then you add in the fact you add terminals and markets close to where the customer needs you to be, that further enhances your ability to deliver services. So services defined more than just claims.
Eric Morgan: Great. Thank you.
Operator: Your next question comes from the line of Stephanie Moore with Jefferies. Please go ahead.
Stephanie Moore: Hi. Good morning. Thank you. Maybe it would be helpful if you could just touch a little bit on what you’re seeing and maybe some of your end markets here. I think it’s pretty clear that the environment remains pretty weak, but maybe any pockets of strength or commentary that you’re hearing either on either end of that to the positive or the more negative?
Fritz Holzgrefe: Yes. Thanks for that. What’s interesting right now is that I would say that what we see across the business is it’s pretty uniform. So I don’t really have a good call out either for a region or for a vertical. So which is important, right? So that’s actually an insight there in the sense that we’re happy with what we’re seeing in the end markets and — but it’s — there’s not a call out one way or the other.
Stephanie Moore: Great. Thank you so much.
Operator: Your next question comes from the line of Bascome Majors with Susquehanna. Please go ahead.
Bascome Majors: If we go back to three years ago, you were at 170 terminals, talking about adding 10 to 15 a year, line of sight to get above 200. And where we sit today with this opportunity to pull that forward a bit, it’ll be at 210, 215 by year-end, if all goes as planned. Can you walk us forward, what does the real estate plan look like in three years, five years? Just any sort of vision on where this can go and we get to the point where you think the network is where it needs to be geographically? Thank you.
Fritz Holzgrefe: Yes, it’s a good question. I think we’re kind of [Technical Difficulty] a little bit of uncharted territory for Saia, which is a pretty exciting place to be. I think as you look at the national players, the bigger folks in us, they have a bigger footprint than we do. So I think there’s some runway beyond the 212, 215 number. I think there’s probably 10-plus per year for a couple of years after that potentially. But I think what’s really important on the investment piece, and we’re already kind of getting there, where when you scale the business like we have, some of your important facilities become — I don’t want to say they’re not pinch points but once you have to invest and kind of further develop those facilities.
I mean, case in point, Harrisburg facility, which we moved into in 2018 or so. And we have — we’re basically going to double the capacity of that facility here in the balance of this year. And that is all reflective of Northeast kind of growth that we’ve seen, the business sort of density we’ve seen develop over time. So I think you’ll see us continue to make those kinds of investments in markets. So I think there’s — maybe it’s not incremental pins on the map but it will be sort of investments in sort of legacy facilities that just have got a scale with a business that’s a national-level business that’s with growing market share. So I think the — it’s an interesting redeployment of capital that remains for this business for some time.
Bascome Majors: Thank you for that.
Operator: Your next question comes from the line of Tyler Brown with Raymond James. Please go ahead.
Tyler Brown: Hey, good morning, guys.
Fritz Holzgrefe: Hey, good morning, Tyler.
Tyler Brown: Hey, Fritz, just real quick. Is the thought that the leased facilities that you took on will be put into service first? I’m assuming those lease payments will kick in fairly immediately. And then will the facilities that you acquired be kind of effectively, call it, stocked on the balance sheet and will be judiciously leaked out into the market maybe over this year and next?
