Q4 2023 Saia Inc Earnings Call

Operator: Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2023 Saia Incorporated Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Thank you for standing by my name is Eric and I will be your conference operator today.

Eric: At this time I would like to welcome everyone to the Q4 2023 Cyan incorporated earnings Conference call.

All lines have been placed on mute to prevent any background noise.

Eric: After the Speakers' remarks, there'll be a question and answer session.

Eric: If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

Operator: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Doug Cole, SAIA's Executive Vice President and Chief Financial Officer. Please go ahead. Good morning, everyone.

Eric: She would like to withdraw your question Press Star one again.

Eric: Okay.

Eric: I would now like to turn the call over to Doug Col <unk> Executive Vice President and Chief Financial Officer. Please go ahead.

Douglas Col: Good morning, everyone welcome to <unk> fourth quarter 2023 conference call.

Douglas Col: Welcome to SAIA's fourth quarter 2023 conference call. With me for today's call is SAIA's President and Chief Executive Officer, Fritz Holzgreif. Before we begin, you should know that during the call, we may make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our SEC filings for more information on the exact risk factors that could cause actual results to differ. I'll now turn the call over to Fritz for some opening comments.

With me for today's call is <unk>, President and Chief Executive Officer Fritz whole space.

Douglas Col: Before we begin you should know that during the call. We may make certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Douglas Col: These forward looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties and actual results may differ materially.

Douglas Col: We refer you to our press release, and our SEC filings for more information on the exact risk factors that could cause actual results to differ I'll now turn the call over to Fritz for some opening comments.

Frederick J. Holzgrefe: Good morning, and thank you for joining us to discuss SAIA's fourth quarter and full year results. I must start my comments today with a word of thanks to the entire SAIA team for their dedicated efforts as we worked through volatile business trends in 2023. We start our 100th anniversary year with an engaged team that delivered a record number of shipments in 2023, just shy of $8 million in total for the year. In turn, 2023 revenue of $2.9 billion was also a record for our company. 2023 was really a tale of two halves.

Fritz: Good morning, and thank you for joining us to discuss <unk> fourth quarter and full year results I must start my comments today with a word of thanks to the entire <unk> team for their dedicated efforts as we work through volatile business trends in 2023, we started our 100th anniversary year with an engaged team that delivered a record number of shipments in 2023.

Fritz: Just shy of $8 million in total for the year and then turn to 2023 revenue of $2 9 billion was also a record for our company.

Fritz: 2023 was really a tale of two halves, both shipments and tonnage per workday were down year over year for the first six months of the year, continuing a trend, which we began in the second half of 2022 as the industrial economy slowed turning to calendar to the month of July our industry experienced a generational type of movement is.

Frederick J. Holzgrefe: Both shipments and tonnage per workday were down year over year for the first six months of the year, continuing a trend which would begin in the second half of 2022 as the industrial economy slowed. Turning the calendar to the month of July, our industry experienced a generational moment as a large national competitor began limiting service and ultimately ceased operations. At SAIA, we saw volumes increase by as much as 10% to 20% on a given day from trends just a month earlier. Our contingency planning in advance of this change put us in a position to handle the increased volumes almost seamlessly while still maintaining excellent service for our customers. In the months that followed that initial surge in business, we increased our staffing levels by adding nearly 1,500 dedicated employees in the second half of the year, 90% of whom were drivers, dock workers, and frontline leadership to support growth.

Fritz: The large national competitor began limited service and ultimately ceased operations at Shire, we saw volumes increase by as much as 10% to 20% on a given day from trends just a month earlier, our contingency planning in advance of this change put us in a position to handle the increased volumes almost seamlessly while still maintain.

Fritz: Excellent service to our customers in the months that followed that initial surge in business, we increased our staffing levels by adding nearly 500 dedicated employees in the second half of the year, 90% of which were drivers dock workers, a frontline leadership to support growth.

Frederick J. Holzgrefe: We've focused our team on taking care of the customer as we absorb all the growth in the second half. We've continued... We have continued the painstaking process of investing in our network to maintain our service while also optimizing how we provide the service with our expanding line haul and driving team. We have plans to open 15 to 20 new terminals in 2024. Our teams are committed to accomplishing this with an eye on always putting the customer first. Those customer-first initiatives have been the cornerstone of our success over the last several years, and included in that is our desire to have more locations through which to serve new and existing customers. In Q4, Mastio released its latest survey results.

Fritz: We have focused our team on taking care of the customer as we absorb all the growth in the second half we've continued.

Fritz: We have continued for the painstaking process of investing in our network to maintain our service while also optimizing how we provide the service with our expanding Whitehall and driving teams. We plan to open 15 to 20, new terminals in 2024. Our teams are committed to accomplishing this with an eye on always putting the customer first.

Fritz: Those customer first initiatives had been the cornerstone of our success over the last several years and included in that is our desire to have more locations through which to serve new and existing customers. In Q4 Mascio released its latest survey results. The results highlight a couple of significant achievements for <unk> first the scores highly.

Frederick J. Holzgrefe: The results highlight a couple of significant achievements for SAIA. First, the scores highlight our continued improvement and positive feedback from our customers who are recognizing SAIA's ongoing investment and service. Second, it's becoming increasingly evident that customers are viewing us as a leading national LTL provider, reflecting not only our investments and service but our expanding footprint. It is critical to note there has been no drop-off in perceived levels of service.

Fritz: Our continued improvement and positive feedback from our customers are recognizing side as ongoing investment in service second is becoming increasingly evident that customers are viewing us as a leading national LCL provider, reflecting not only our investments in service, but the expanding footprint.

Fritz: It is critical to note there've been no drop off in perceived levels of service importantly, we've added nearly 20 new facilities in the last two years come.

Frederick J. Holzgrefe: Importantly, we've added nearly 20 new facilities in the last two years. Customers are recognizing our ability to not only improve service but to replicate that improved service in new locations. So today, we'll have to give a recap of 2023 results and provide an update on our plans for 2024. I will now turn it over to Doug for a review of fourth-quarter results and full 2024 financial highlights. Thanks, Fritz.

Fritz: Customers are recognizing our ability to not only improve service, but to replicate that improved service in new locations. So today.

Fritz: We will have to give a recap of 2023 results and provide an update on our plans for 2024 I will now turn it over to Doug for a review of first fourth quarter results and full 2024 financial highlights.

Douglas Col: Thanks, Rich fourth quarter revenue increased by $95 4 million to a record $751 1 million shipments grew by 18, 1% and with weight per shipment decreasing by eight 3% tonnage growth for the quarter was eight 2%.

Douglas Col: Fourth quarter revenue increased by $95.4 million to a record $751.1 million. Shipments grew by 18.1%, and with wafer shipment decreasing by 8.3%, tonnage growth for the quarter was 8.2%. Yield excluding fuel surcharge improved by 11.7%, while yield including fuel surcharge increased by 7%. These reported yield results benefit from the lighter average weight per shipment versus the fourth quarter last year. Revenue per shipment excluding fuel surcharge increased 2.4% to $295.22 compared to $288.34 in the fourth quarter of 2022. Fuel surcharge revenue decreased by 3.4% and was 17% of total revenue compared to 20.1% a year ago, primarily the result of lower national average diesel prices, which are used to establish the surcharge rate in our fuel table.

Douglas Col: Yield excluding fuel surcharge improved by 11, 7%, while yield including fuel surcharge increased by 7%.

Douglas Col: These reported yield yield results benefit from a lighter average weight per shipment versus the fourth quarter last year.

Douglas Col: Revenue per shipment, excluding fuel surcharge increased two 4% to $295 22 compared to $288 34 in the fourth quarter of 2022.

Douglas Col: Fuel surcharge revenue decreased by three 4% and was 17% of total revenue compared to 21% a year ago, primarily the.

Douglas Col: The result of lower National average diesel prices, which are used to establish the surcharge rate in our fuel tables.

Douglas Col: Shifting to the expense side, a few key items to note in the quarter. Salaries, wages, and benefits increased 20.2 percent from a combination of our increased employee headcount of approximately 14 percent year-over-year to support our network expansion and volume growth over the last six months, and also our July 2023 wage increase, which averaged 4.1 percent across our employee base. Purchase transportation expense increased by 8.4% compared to the fourth quarter last year, primarily due to increased purchase transportation miles, partially offset by a decrease in the cost per mile compared to the same period in 2022. PT expense was 8.7% of total revenue compared to 9.2% in the fourth quarter of 2022. Purchased transportation miles were 15.4% of total online haul miles in the fourth quarter compared to 12% in last year's fourth quarter. Fuel expense decreased by 12.1% in the quarter despite company miles increasing 7.6% year-over-year.

Douglas Col: Shifting to the expense side, a few key items to note in the quarter salaries wages and benefits increased 22% from a combination of our increased employee head count of approximately 14% year over year to support our network expansion and volume growth over the last six months and also our July 2023 wage increase which averaged four.

1% across our employee base.

Douglas Col: Purchase transportation expense increased by eight 4% compared to the fourth quarter last year, primarily due to increased purchase transportation miles, partially offset by a decrease in the cost per mile compared to the same period in 2022.

Douglas Col: <unk> expense was eight 7% of total revenue compared to nine 2% in the fourth quarter of 2022.

Douglas Col: Purchase transportation miles were 18 or 15, 4% of total on line haul miles in the fourth quarter compared to 12% last year's fourth quarter.

Douglas Col: Fuel expense decreased by 12, 1% in the quarter, Despite company miles, increasing seven 6% year over year. The decrease in fuel expense was primarily the result of national average diesel prices.

Douglas Col: The decrease in fuel expense was primarily the result of national average diesel prices decreasing by over 15.9% on a year-over-year basis. Claims and insurance expense increased by 21% year-over-year in the quarter and was up 5.1%, or $0.9 million, sequentially from the third quarter of 2023. The increase compared to the fourth quarter of 2022 was primarily due to the increase in accident-related self-insurance and claims costs, as well as increases in insurance premiums. The depreciation expense of $45.7 million a quarter was 15.3% higher year-over-year, primarily due to ongoing investments in revenue, equipment, and our network expansion. Total operating expenses increased by 13.4% in the quarter and with a year-over-year revenue increase of 14.5%.

Douglas Col: Decreasing by over 15, 9% on a year over year basis.

Douglas Col: James and insurance expense increased by 21% year over year in the quarter was up five 1% or <unk> 9 million sequentially from the third quarter of 2023, the increase compared to the fourth quarter of 2022 was primarily due to the increase in accident related self insurance and claims costs as well as increases in insurance premiums.

Douglas Col: Depreciation expense of $45 7 million in the quarter was $15, 3% higher year over year, primarily due to ongoing investments in revenue equipment and our network expansion.

Douglas Col: Total operating expenses increased by 13, 4% in the quarter with year over year revenue increase of 14, 5% our operating rate operating ratio improved to 85% compared to 85, 9% a year ago.

Douglas Col: Our operating ratio improved to 85% compared to 85.9% a year ago. Our tax rate for the 4th quarter was 22.8% compared to 24% in the 4th quarter last year, and our diluted earnings per share increased to $3.33 compared to $2.65 in the 4th quarter a year ago. Moving on to the financial highlights of our full year 2023 results, as Fritz mentioned, revenue was a record $2.9 billion, and operating income was $460.5 million. Our operating ratio deteriorated by 90 basis points in 2023 to exactly 84.0%.

Douglas Col: Our tax rate for the fourth quarter was 22, 8% compared to 24% in the fourth quarter last year and our diluted earnings per share increased to $3 33 compared to $2 65.

In the fourth quarter a year ago.

Douglas Col: Moving onto the financial highlights of our full year 2023 result, as Fritz mentioned revenue was a record $2 9 billion and operating income was $460 5 million or.

Douglas Col: <unk> ratio deteriorated by 90 basis points in 2023, 284, exactly 84, 7%.

Frederick J. Holzgrefe: For the full year 2023, our diluted earnings per share were $13.26 versus $13.40 in 2022. I'll now turn the call back over to Fritz for some closing comments. Thanks, Doug. To continue to operate with an OR in the mid-80s, given the activity in the network during the quarter, is a testament to the improved operating performance of our team over the last few years. Our customer-first focus is yielding tangible results across our organization. With a talented, growing, and engaged workforce, our value proposition to our customers continues to grow. We initially embarked on our geographic expansion in 2017 with four terminals in the Northeast. Since that time, we've opened 48 facilities that will cover the Northeast geography while also refining the strategy to enhance our coverage in legacy markets. Throughout, we've actually seen our underlying service offering continue to improve. This success is attributable to our team across the organization who have spent countless hours supporting these initiatives.

Douglas Col: For the full year of 2023, our diluted earnings per share were $13 26.

Douglas Col: It was $13 <unk> in 2022.

I'll now turn the call back over to Fritz for some closing comments. Thanks, Doug to continue to operate with Nomura. The mid eighties, given the activity in our network. During the quarter is a testament to the improved operating performance of our team over the last few years, our customer first focus is yielding tangible results across our organization with a talented drawing and engage.

Workforce the value proposition to our customers continues to grow we initially embarked on our geographic expansion in 2017 with four terminals in the northeast since that time, we've opened 48 facilities that we've covered the northeast geography, while also refining the strategy to enhance our coverage in legacy markets throughout.

Douglas Col: We've actually seen our underlying service offering continue to approve this success is attributable to our team across the organization have spent countless hours supporting these initiatives I am excited about the terminals acquired in January and believe this to be a once in a lifetime opportunity for us to be able to bring our offerings to more markets meet new cut.

Frederick J. Holzgrefe: I'm excited about the terminals acquired in January and believe this to be a once-in-a-lifetime opportunity for us to be able to bring our offerings to more markets, meet new customers, and serve our current customers more efficiently. The last seven years have proven our ability to execute an organic expansion strategy. Critical to our success opening SAIA facilities is an intense focus on maintaining our culture, which starts with the customer.

Douglas Col: <unk> and serve our current customers more efficiently. The last seven years have proven our ability to execute and organic expansion strategy critical to our success opening side facilities and intense focus on maintaining our culture, which starts with the customer we believe the unique opportunities at hand will allow us to systematically grow over the next <unk>.

Douglas Col: Of years as the facility additions provided an important supplement to our real estate investment pipeline.

Frederick J. Holzgrefe: We believe the unique opportunities at hand will allow us to systematically grow over the next couple of years as the facility additions provide an important supplement to our real estate investment pipeline. As seen from our results over the last several years, we've shown the ability to make substantial investments in our network to benefit our customers while generating improved financial performance over time and efficiently and effectively deploying capital. SAIA will approach record levels of capital investment in 2024, but at no time in the company's 100-year history have we had a similar opportunity. The capital is focused on continuing...

Douglas Col: As seen from our results over the last several years, we've shown that the ability to make substantial investments in our network to benefit our customers, while generating improved financial performance over time and efficiently and effectively deploying capital silo approached record levels of capital investment in 2024, but at no time in the company's 100 year history have.

Douglas Col: We had a similar opportunity that capital is focused on continuing developing.

Douglas Col: Developing our terminal network as well as significant investments in our fleet, providing increased capacity and flexibility for our customers key to our success will be delivering the customer first focus that started in <unk>, Louisiana 100 years ago and has been refined over a century, we continue to have significant opportunities to develop the markets around.

Frederick J. Holzgrefe: Developing our terminal network as well as significant investments in our fleet providing increased capacity and flexibility for our customers, Key to our success will be delivering the customer-first focus that started in Houma, Louisiana 100 years ago and has been refined over a century. We continue to have significant opportunities to develop the markets around the other nearly 20 terminals that we've opened over the last two years. Although we're excited about the success of these locations to date, we see considerable runway to build density in all these new markets. Finally, before opening the call for questions, I would say there's still a lot of uncertainty around the strength of the economy. At SAIA, we've emphasized the importance of the customer and focused on the things that we can control.

Douglas Col: The other nearly 20 terminals that we've opened over the last two years, although works excite excited about the success of these locations to date, we see considerable runway to build density in all of these new markets. Finally before opening the call for questions. I would say there is still a lot of uncertainty around the strength of the economy at Si we've emphasized.

Douglas Col: Is the importance of the customer and focusing on the things that we can control so as our industry adjust and adapt to the evolving evolving economic environment over the coming months my conviction about the long term prospects of side. It remains steadfast great employees, great service and a growing footprint are all key to securing our.

Frederick J. Holzgrefe: So as our industry adjusts and adapts to the evolving economic environment over the coming months, my conviction about the long-term prospects of SAIA remains steadfast. Great employees, great service, and a growing footprint are all key to securing our position as a long-term sharegainer in our industry. With that said, we're now ready to open the line for questions, Operator. Thank you. At this time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone keypad.

Speaker Change: Positioned as a long term share gainer in our industry with that said, we're now ready to open the line for questions operator.

Speaker Change: Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.

Speaker Change: Your first question comes from the line of Jack Atkins with Stephens.

Jack Atkins: Please go ahead.

Jack Atkins: Okay, Great Fritz and Doug Good morning, Thanks for taking my questions.

Jack Atkins: So if we could maybe start.

Jack Atkins: Here first with the Capex guide for 'twenty for Doug I don't know if you want to take this or if it's for Fred's, but yes, the $1 billion Capex number I know, obviously part of that a good chunk of that is related to the purchase of a yellow terminals, but can you maybe break breakdown.

Operator: We'll pause for just a moment to compile the Q&A. Your first question comes from the line of Jack Atkins with Stephen. Please go ahead. Okay, great. Fritz and Doug, good morning.

Jack Atkins: Thanks for taking my question. So, if we could maybe start here first with the CapEx guide for 24. Doug, I don't know if you want to take this or if it's for Fritz, but the billion-dollar CapEx number, I know obviously part of that, a good chunk of that is related to the purchase of the yellow terminals, but can you maybe break down kind of the rest of that kind of $750 million, how that's gonna kind of shake out between real estate versus equipment and just sort of help us think about what' Good morning.

Jack Atkins: But kind of the rest of that kind of $750 million, how thats going to have kind of a shakeout between real estate versus equipment, and just sort of help us think about whats for 2024, and maybe whats related to capex beyond that.

Douglas Col: Sure Jeff Good morning.

Douglas Col: Yes, like you mentioned.

Speaker Change: The kind of $1 billion ish number that we target youre right about about a quarter of that call. It was related to the yellow investment and then we've got to get these terminals ready to get up and opening the ones that were in the purchase that are going to be part of our 15 to 20 openings. This year. We've got some investments we want to put into them and then there is a lot of construction going on across.

Douglas Col: Yeah, like you mentioned, I mean, of the kind of billion-ish number that we target, you're right, about a quarter of it, call it, is related to the yellow investment. And then we've got to get these terminals ready to get up and open. The ones that were in the purchase that are going to be part of our 15 to 20 openings this year, we've got some investments we want to put into them, and then there's a lot of construction going on across the network. I mean, we're upsizing some major terminals in some different markets. So, you know, in addition to the, call it 250 or so, that was the initial yellow investment, there's probably another 300 plus in real estate this year.

Speaker Change: <unk> the network and then we're upsizing some major terminals.

Speaker Change: In some different markets. So in addition to the call it $2 50, or so that was the initial yellow investment theres, probably another 300, plus and real estate this year.

Speaker Change: We've got a big equipment investment, we're going to make this year I mean.

Speaker Change: First of all I mean as volumes stepped up last summer.

Speaker Change: <unk> will step up 10% to 20% kind of over a matter of a couple of weeks and volume increase our contingency planning that we have put in place had us running some equipment, bringing in additional tractors and trailers to get ready to serve the customer, but we want to we want to do that large equipment and get rid of some of those costs. So we will be we've upped our tray.

Speaker Change: Dollar by this year, along with just the needs for connecting the network every night and picking up everything in the city.

Douglas Col: We've got a big equipment investment we're going to make this year. You know, first of all, as volume stepped up last summer, a meaningful step up of 10 to 20%, kind of over a matter of a couple of weeks of volume increase, our contingency planning that we put in place had us renting some equipment, bringing in additional tractors and trailers to get ready to serve the customer. But we want to do that with our equipment and get rid of some of those costs. So we've upped our trailer this year along with just the needs for connecting to the network every night and picking up everything in the city.

Speaker Change: We've also got an opportunity to grow a lot of these customers that we're serving.

Speaker Change: Now you have the service in it and if we can put more trailers in their hands. They will fill them up for us. So we've been trying to do that at the last several years in the supply chain has limited some of those efforts, but but we're going to catch up on some of that this year. So you could see.

Call it $400 million to $450 million in equipment.

Speaker Change: And then we've got ongoing investments that will approach probably $50 million and that's related a lot of that is related to these these new openings and all I know you've got to get it in place in the terminals.

Douglas Col: We've also got an opportunity to grow. A lot of these customers that we're serving value the service, and if we can put more trailers in their hands, they'll fill them up for us. So we've been trying to do that for the last several years, and the supply chain has limited some of those efforts, but we're going to catch up on some of that this year. So you could see, you know, kind of call it $400 to 450 million in equipment. And then we've got, you know, ongoing IT investments that'll approach $50 million. And that's related, a lot of that's related to these new openings and all, you know, you've got to get IT in place, you know, in the terminals and whatever security technology is put in all the terminals. You've got, you know, new driver handhelds that we roll out and things like that. So those are the buckets.

Speaker Change: Whatever security technology is putting all the terminals you have got new driver handhelds that we roll out and things like that so those are the buckets.

Speaker Change: Okay. No that's really helpful. Doug Thanks for breaking it down for us like that and I guess, maybe for my follow up question.

Speaker Change: Can you maybe give us an update on <unk>.

Speaker Change: January <unk>.

Speaker Change: Trends to start the year and maybe how you're thinking about any sequential changes to operating ratio fourth quarter to first quarter.

Speaker Change: Sure.

I might as well go ahead and I'll give you the December numbers due to the October and November nominal numbers were published in the quarter and our public in December our shipments per day grew 16, 5%.

Jack Atkins: Okay, no, that's really helpful, Doug. Thanks for breaking it down for us like that. And I guess maybe for my follow-up question, can you maybe give us an update on, you know, January trends to start the year and, you know, maybe how you're thinking about any sequential changes to operating ratio from fourth quarter to first quarter? I might as well go ahead, and I'll give you the December numbers too. The October and November numbers were published in the quarter and are public.

And our tonnage per day in December per Workday grew six 8%.

Speaker Change: And then as we move into January January shipments per workday were up 11, 8%.

And tonnage was up three 3%.

Speaker Change: So the January number just for little commentary I mean, we had set.

Speaker Change: Several days call it six or seven days, where we had literally dozens of terminals impacted and some of those days so.

Douglas Col: In December, our shipments per day grew 16.5%. In our tonnage per day in December, per work day, grew 6.8%. And then as we move into January, January shipments per workday were up 11.8%, and tonnage was up 3.3%. So, you know, the January number, just for a little commentary, I mean, we had, You know several days call it six or seven days where we had literally dozens of terminals impacted in some of those days So, you know, that's that's the same for all of us we always kid about it being an outdoor sport and we got quite a bit of weather in January and You know, it'll be hard to give any kind of guide I mean, it's sunny here to start February, but in some years February has been the worst weather month for us We'll see how that unfolds and then you get you know March is the most important month in Q1 and and to Fritz's point That's where maybe we'll start to get a better feel for what's going on with this underlying freight economy That's a seasonally stronger period for us.

Speaker Change: That's the same for all of US at we always get about it being an outdoor sport and we got quite a bit of weather in January.

Speaker Change: It'll be hard to give any kind of guide I mean, it's sunny here to start February but.

Speaker Change: Some years February has been the worst weather month for US we will see how that unfolds and then you've got you know Jack that March is the most important month in Q1 and to Fred's point, that's where maybe we will start to get a better feel for what's going on with this underlying freight economy, that's a seasonally stronger period for us. So we'll see what things look like in March but.

And just in terms of the <unk> guide.

Speaker Change: Usually Q4 to Q1, the last several years gets a little better call. It 50 to 75 basis points better in Q4 to Q1, a lot of that is depending on where the weather falls, but based on how we got out of January.

Think that that's that's still reasonable to expect and again a lot of it is going to be determined in March but we're still confident that we can show some MLR improvement from Q4 into Q1.

Speaker Change: Alright, that's fantastic. Thanks, Thanks for the time, Doug sure.

Speaker Change: Your next question comes from the line of Amit Mehrotra with Deutsche Bank.

Amit Mehrotra: Please go ahead.

Amit Mehrotra: Thanks, Operator, hi, guys just just following up on Jack's questions.

Amit Mehrotra: So obviously this year is a pretty heavy very heavy investment year, you talked about <unk>, but I'd love to get your perspective on.

Douglas Col: So we'll see what things look like in March, but And just in terms of the OR guide You know, usually Q4 to Q1 the last several years gets a little better call it You know 50 to 75 basis points better Q4 to Q1 a lot of that's depending on where the weather falls But you know based on how we got out of January, you know We think that that's that's still reasonable to expect and again a lot of it's going to be determined in March But we're still confident that we can show some OR improvement from Q4 into Q1, Alright, that's fantastic. Thanks for the time, Doug.

Amit Mehrotra: What the margin expectations are for the full year or more broadly I mean.

Amit Mehrotra: There is one angle, where it could be a transition year as these investments kind of hit the P&L on the volume follows after that or maybe there's a little bit more quicker payback from these investments you could talk about that and just more broadly.

Amit Mehrotra: Broadly if you expect margins to get.

Speaker Change: Yeah. Thanks, Amit.

Speaker Change: The interesting thing about the opportunity we have here is the facilities that we are that are in our pipeline.

Speaker Change: In this in the year are they provide a range of opportunities for us. So some of them are are moving into markets that are established.

Amit Mehrotra: Sure. Your next question comes from the line of Amit Mehrotra with Deutsche Bank. Please go ahead.

Douglas Col: Thanks, operator. Hi guys. Just following up on Jack's questions. Obviously, this year is a pretty heavy, very heavy investment year. You talked about 1Q, but for instance, I'd love to get your perspective on, you know, what the margin expectations are for the full year more broadly. I mean, there's one angle where it could be a transition year as these investments kind of hit the P&L and the volume follows after that, or maybe there's a little bit more quicker payback from these investors. You could talk about that and just more broadly if you expect margins to get bigger. Yeah, thanks, Amit.

Speaker Change: And we're going to be able to provide some incremental.

Speaker Change: Benefit to the customer right away and those you would expect to generate be accretive to us potentially.

Speaker Change: Potentially in the year you have got other facilities that across the great Plains States, where we have <unk>.

Speaker Change: <unk> with agents in those markets to provide service and now we'll be able to go to direct to those customers.

Speaker Change: Really excited about that opportunity and feedback from customers are that they are really excited about it. So when we think about all those things and what the opportunities are and what we're doing around focusing on our mix of business. I mean, we're as we look at the year and if we have a reasonable backdrop I mean, I think we ought to be able to think about a range of 100 to 200.

Douglas Col: You know, the interesting thing about the opportunity we have here is the facilities that are in our pipeline for the year. They provide a range of opportunities for us. So some of them are moving into markets that are established, and we're going to be able to provide some incremental benefit to the customer right away. And those you'd expect to generate, be accretive to us, potentially in the year. You've got other facilities that are across the Great Plains states where we have, you know, partnered with agents in those markets to provide service. And now we'll be able to go directly to those customers. And we're really excited about that opportunity, and feedback from customers has been that they're really excited about it.

Speaker Change: Basis points sort of or improvement from <unk>.

Speaker Change: 'twenty three saw the top end of that range that you've probably got a favorable.

Speaker Change: The economic backdrop in the second half.

Speaker Change: In the but through that I think there's a tremendous amount of opportunities to capitalize on our investments and where we're excited about those and what it does for the customers. So on the lower end of that range, maybe thats an environment that is not quite as.

Speaker Change: Strong are favorable, but I think the I think what we're doing right now is because we've got this customer proposition that is improving.

Douglas Col: So we think about all those things and what the opportunities are and what we're doing around, you know, focusing on our mix of business. I mean, we're, you know, as we look at the year, and if we have a reasonable backdrop, I mean, I think we ought to be able to think about a range of 100 to 200 basis points of OR improvement from 23, you know. So on the top end of that range, you probably have a favorable economic sort of backdrop in the second half, but through that, I think there's a tremendous amount of opportunities to capitalize on So, you know, on the lower end of that range, maybe that's an environment that is not quite as strong or favorable.

Speaker Change: Improving overtime that EBIT at a.

Speaker Change: A softer environment, we have an opportunity to differentiate and we have an opportunity for our team to execute.

Speaker Change: I think we can drive those kinds of returns even while we're making substantial investments in the business.

Okay and my follow up question I, just wanted to ask about pricing.

Speaker Change: Obviously, you took on a lot of freight in the third quarter.

Speaker Change: <unk> been trying to optimize that freight or we are we at the point now where you are happy with where we are on that business and you took on and as you guys expand you guys have.

Speaker Change: I guess the sub scale you have holes in the National network and you fill in more dots in the network because it also gives you an ability to kind of go back to some of your large national customers that are maybe giving you discounted pricing because you don't have the full coverage. If you could just talk about the pricing dynamic from that expansion as well.

Frederick J. Holzgrefe: But I think what we're doing right now is because we've got this customer proposition that is improving over time, so even in a, you know, softer environment, we have an opportunity to differentiate, and we have an opportunity for our team to execute. And I think we can drive those kinds of returns, even while we're making substantial investments in the business. Okay, and my follow-up question. I just wanted to ask about pricing. Obviously, you took on a lot of freight in the third quarter.

Speaker Change: Yes.

Speaker Change: It's an important point so we.

Speaker Change: We have as we've taken this freight on we've we analyze this pretty closely and we pulled forward quite a bit of sort of contract renewals into the into the fourth quarter, our renewal rates year over year up roughly contracts the number of contracts renewed or renegotiated the fourth quarter were up about 50% year over.

Speaker Change: Year.

Speaker Change: At our contractual renewal for the quarter in total was eight 7%. So listen we're very very focused on that.

Frederick J. Holzgrefe: I think you've been trying to optimize that freight. Are we at the point now where you're happy with where we are on that business that you took on? And as you guys expand, you know, you guys have a, I guess a, subscale. You have holes in the national network.

Speaker Change: <unk>.

Speaker Change: We're talking about making some pretty substantial investments in service for the customer this year and when we do that.

Speaker Change: So we've got we've also got to make sure we generate.

The appropriate level of return to support that level of investment. So we're very very focused on making sure that we are compensated for the service, but in order to be compensated for the service you've got to be doing a great job. So that's kind of altogether, but we're continuing to work.

Frederick J. Holzgrefe: As you fill in more dots in the network, does it also give you an ability to kind of go back to some of your larger national customers that are maybe giving you discounted pricing because you don't have full coverage? If you could just talk about the pricing dynamic, yeah, so I mean, I think it's an important point.

Speaker Change: Through and understanding the value that we're providing to the customer and an understanding what the impact is of the customer's freight on our network.

Frederick J. Holzgrefe: So we, as we've taken this freight on, we've analyzed this pretty closely, and we pulled forward quite a bit of sort of contract renewals into the fourth quarter. Our renewal rates, year over year, I mean, roughly up roughly contracts; the number of contracts renewed or renegotiated in the fourth quarter were up about 50% year over year. And our contractual renewal for the quarter in total was 8.7%.

Thank you very much guys I appreciate it.

Speaker Change: The next question comes from the line of Chris Wetherbee with Citigroup. Please go ahead.

Chris Wetherbee: Hey, Thanks, good morning, guys.

Chris Wetherbee: Maybe wanted to get your perspective sort of what you just piggybacking on what you just noted there around price relative to some of the volume that you brought on so I guess I'm curious, how you're thinking about if you need to make any tradeoffs between the opportunity for volume growth as you continue to expand the network and then the ability to get priced on somewhat of a catch up basis. So I guess I'd just kind of curious how you are.

Frederick J. Holzgrefe: So listen, we're very, very focused on that. And We're talking about making some pretty substantial investments in service for the customer this year and when we do that You know, we've got a we've also got to make sure we generate some the appropriate level of return to support that level of investment So we're very very focused on making sure that we are Compensated for the service, but in order to be compensated for the service, you got to be doing a great job So that's kind of all together, but we're continue to work Through and understanding the value that we're providing to the customer and understanding what the impact is of the customer's freight on our network, Thanks very much, guys. Appreciate it. Your next question comes from the line of Chris Weatherby with Citigroup. Please go ahead.

Chris Wetherbee: Balancing those two priorities as we're entering 2024.

Chris Wetherbee: Yes.

Chris Wetherbee: We always balance that but I think that whats.

Chris Wetherbee: Incumbent upon us as that.

Chris Wetherbee: This is a very high service level that we are providing so.

Chris Wetherbee: Our team is very focused focused on making sure that were fairly compensated for those service levels.

Chris Wetherbee: We're going to get volume growth simply by.

Chris Weatherby: Hey, thanks. Good morning, guys. Maybe I want to get your perspective on sort of what you just piggybacked on what you just noted there around price relative to some of the volume that you brought on. So I guess I'm curious how you think about if you need to make any trade-offs between the opportunity for volume growth as you continue to expand the network and then the ability to get prices on somewhat of a cash-up basis. So I guess I'm just kind of curious how you're balancing those two priorities as we enter 2024.

Chris Wetherbee: Some of the network coverage, we're going to grow add this year, that's going to be beneficial at the same time, while we're doing that we get that priced.

Chris Wetherbee: Price in the right way.

Chris Wetherbee: We'll continue to develop the ore profile over time, so I think it's a.

Chris Wetherbee: It's an important part of our business case, and I think if you look back at the last.

Chris Wetherbee: Four or five years. This is what we do.

Chris Wetherbee: So provide high level of service and focus on making sure that we are compensated for it.

Okay. That's helpful and then.

Chris Wetherbee: We've heard some mixed things about 'twenty 'twenty four in terms of pricing being more of a sort of returned to normal type year. After a bunch of years of pretty elevated levels. We obviously had a significant capacity event in what was a relatively sort of soft market from a freight perspective broadly in 'twenty three.

Frederick J. Holzgrefe: You know, we always balance that, but I think that what's incumbent upon us is that this is a very high service level that we're providing, so our team is very focused on making sure that we're fairly compensated for those service levels. So, you know, we're gonna get volume growth simply through some of the network coverage we're gonna grow at this year. That's gonna be beneficial at the same time while we're doing that, because we get that priced in the right way. We'll continue to develop the OR profile over time, so I think it's a good idea.

Chris Wetherbee: Conceptually as you think about pricing 24 versus 23 years, theres still sort of more acceleration opportunity and maybe thats unique desire, but bigger picture or is it maybe more of a normalizing environment kind of get a sense of what you think that sort of direction broadly for the industry.

Douglas Col: It's an important part of our business case, and I think if you look back at the last four or five years, this is what we do. So, you know, provide high-level service and focus on making sure that we are compensated for it. Okay, that's helpful.

Speaker Change: Well I think broadly for the industry.

Underlying costs for the industry are inflationary right.

Speaker Change: That's an important note and I think that.

Douglas Col: And then, you know, we've heard some mixed things about 2024 in terms of, you know, pricing being more of a sort of return to normal type year after a bunch of years of pretty elevated levels. We obviously had a significant capacity event in what was a relatively sort of soft market from a freight perspective broadly in 23. So I guess just conceptually, as you think about pricing 24 versus 23 years, there's still sort of more acceleration opportunity. And maybe that's unique to SAIA, but the bigger picture, or is it maybe more of a normalizing environment, just kind of get a sense of what you think the sort of direction broadly for the industry is. Well, I think broadly for the industry. I mean, the underlying costs for the industry are inflationary, right? And I think that that's an important note.

Speaker Change: Those that choose to invest in service levels Thats, probably double the inflationary right. So you have to really see.

Speaker Change: <unk> remained focused on balancing that equation I think that the industry dynamics broadly.

Speaker Change: That those trends aren't going to change in the coming year in terms of what the underlying inflationary costs are so I think that youll consider just continue to see positive pricing in the business.

Speaker Change: When I think about <unk> I think.

Speaker Change: About what our relative position is look at our relative service liquid are.

Speaker Change: Relative sort of pricing opportunities I think that's pretty positive for us.

Speaker Change: I'd say too Chris Theres, a case to be made that you could see another leg up in industry pricing right I mean.

Speaker Change: The industry event happened and there was capacity there to handle it but thats because tonnage in our industry, but negative for basically a year when it happened but.

Chris Weatherby: And I think that those that choose to invest in service levels, that's probably doubly inflationary, right? So you have to really remain focused on balancing that equation. I think that the industry dynamics broadly, that those trends aren't going to change in the coming years in terms of what the underlying inflationary costs are. So I think that, you know, you'll consider this, and continue to see positive pricing in the business. When I think about SAIA, I think about what our relative position is, and I look at our relative service, and I look at our relative pricing opportunities, and I think that's pretty positive. I'd say, Chris, there's a case to be made that you could see another leg up in industry pricing, right?

Speaker Change: If you give.

Players IC operating in our industry today, if you give us a little bit better macro backdrop in terms of industrial freight.

Speaker Change: Nobody's given away to service they've all made investments provide good service and improving service levels.

Speaker Change: As backdrop gets a little better I'd say theres a case, we made that.

Speaker Change: We're handling all of this extra volume now that you could see another leg up in industry pricing. So we'll have to see what the macro deals, especially in the second half.

Speaker Change: Okay. That's helpful color I appreciate it guys. Thank you.

Speaker Change: The next question comes from the line of Scott Group with Wolfe Research. Please go ahead.

Chris Weatherby: I mean, the industry event happened, and there was capacity there to handle it, but that's because tonnage in our industry had been negative for basically a year when it happened. But if you give the players I see operating in our industry today, if you give us a little bit better macro backdrop in terms of industrial freight, nobody's giving away this service. They've all made investments to provide good service and improve service levels. If the backdrop gets a little better, I'd say there's a case to be made that if we're handling all this extra volume now, you could see another leg up in industry pricing. So we'll have to see what the macro deals are, especially in the second half. That's a helpful call.

Scott H. Group: Hey, Thanks, good morning so.

Scott H. Group: I think you just said you repriced, 50% more of your business in Q4 than Q4, a year ago I guess I'm wondering how do you do that and then.

Can you just put some perspective like what percent of the actual business was repriced in Q4, and then maybe just Doug maybe you can help a little bit we got so many moving parts with.

Douglas Col: Yields were up 12, but Rev per shipment was up two or three like how should we think about.

Douglas Col: Just overall yield growth.

Scott H. Group: I appreciate it, guys. Your next question comes from the line of Scott Group with Wolf Research. Please go ahead. Hey, thanks. Good morning. So, Fritz, I think you just said you repriced 50% more of your business in Q4 than you did in Q4 a year ago. I guess I'm wondering, how do you do that?

Douglas Col: Going forward.

Douglas Col: Hey, Scott Thank you for bringing it up let me disqualify my comments around the contractual renewals. So those would be the number of contracts.

Scott H. Group: Year over year increased by 50%. So it wasn't 50% of the book of business or something like that it was just the absolute number of contracts.

Scott H. Group: And then, Can you just put some perspective on it, like what percent of the actual business was repriced in Q4? And then, you know, maybe just Doug, maybe you can help a little bit. We've got so many moving parts with, you know, yields were up 12, but rep or shipment was up two or three. Like, how should we think about just overall yield growth going forward? Hey, Scott, thank you for bringing up the Let me just clarify my comments around the contractual renewals. So those would be the number of contracts, .......

Scott H. Group: The key thing with that is as you know those contracts are effectively pricing agreements. They don't have a volume commitment to it so what we ended up doing.

Scott H. Group: We're very pleased with how that process went now.

Scott H. Group: Now, it's a matter of making sure that we hang onto the business going forward, but I think it's a directional indication that's pretty positive.

Scott H. Group: Kind of a trend for us so we think about it in that context, but it's it was the number of contracts.

Frederick J. Holzgrefe: The key thing with that is, as you know, those contracts are effectively pricing agreements. They don't have a volume commitment to it. So what we end up doing, we're very pleased with how that process went. Now it's a matter of making sure that we hang on to the business going forward, but I think it's a directional indication that's pretty positive, kind of a trend for us. So we think about it in that context, but it was the number of contracts that we physically renewed this year versus last year. And then, Scott, just in terms of the right environment, I mean, I, You know, you saw our GRI that we put into December, early December, we pulled it forward, so if you're looking at, you know, December shipments, that early GRI, you know, might have taken a little bit of the top off of shipments, but we're okay with that, again, because it was the right thing to do, but I'd say, I mean, our revenue per shipment for the full year, 2023, was still up in that low single-digit range, 4%-ish, so, you know, the cost inflation last year, X fuel was a little bit less than that, so, I mean, I think pricing, you know, revenue per shipment in the three, you know, mid-single, you know, three to 4% range, probably still makes sense for us, and again, a little bit better backdrop, maybe you get more than that, but you're right, it's confusing with the weight per shipment coming down so much, the yields not really telling the pricing story, but underlying pricing and revenue per shipment growth is still going to be positive, I think, in that low single-digit range. Okay, and then just want to follow up on the CapEx piece. How should we think about DNA and interest expenses here to fund it?

Scott H. Group: We ask physically renewed this year versus last.

Scott H. Group: And then.

Scott H. Group: Scott just in terms of the rate environment.

Scott H. Group: You saw our Gi.

Scott H. Group: Put ended December early in December we pulled it forward. So if youre looking at December shipments that early <unk> might have taken a little bit of the top off of shipments, but we're okay with that again because it was the right thing to do but I would say I mean, our revenue per shipment for the full year 2023 was still up in that low low single digit range, 4%.

So.

Scott H. Group: The cost.

Scott H. Group: <unk> last year ex fuel is a little bit less than that so I mean I think.

Scott H. Group: <unk> pricing.

Scott H. Group: Revenue per shipment and the three mid single.

Scott H. Group: 3% to 4% range, probably still makes sense for us.

Scott H. Group: And again, a little bit better backdrop, maybe you get more than that but you are right. Its confusing with the weight per shipment coming down so much the yields not really telling the pricing story, but underlying pricing and revenue per shipment growth is still still going to be positive I think in that low single digit range.

Scott H. Group: Yes.

Speaker Change: Okay, and then just wanted to follow up on the Capex piece.

Speaker Change: How should we think about DNA and interest expense this year to fund it and then should we think about this is.

Speaker Change: It's $1 billion this year, but then it sort of normalizes back down in the out years and this was a bit of a pull forward or is this a new run rate in your mind.

Speaker Change: Yes, I mean in terms of depreciation I mean, it's been increasing as we've expanded and expanded the footprint over the years. So I'd expect another step up.

Speaker Change: If we get all this equipment delivered in the timing of some of these.

Speaker Change: No.

Speaker Change: Construction investments in things I'd expect depreciation will be up another 15% to 20% I would guess in 2024.

Douglas Col: And then should we think about this as, you know, it's a billion this year, but then it sort of normalizes back down in the following years, and this was a bit of a pull forward, or is this a new run rate in your mind? Yeah, I mean, in terms of depreciation, I mean, it's been increasing as we've expanded the footprint over the years. So, I mean, I'd expect another step up, you know, if we get all this equipment delivered and the timing of some of these, you know, construction investments and things, I'd expect depreciation to be up another 15 to 20%, I would guess, in 2024. You're right.

Speaker Change: Youre right.

Speaker Change: We ended the year with a lot of cash and we've made our yellow investment we're not regularly into the line or anything, but we'll be we'll be using our line.

Speaker Change: Putting a little bit of that on throughout the year. So I mean, youre going to have you're going to flip from.

Speaker Change: Interest expense interest income and interest expense somewhere probably.

Speaker Change:

Speaker Change: I would expect probably.

Speaker Change: Five or $10 million, probably in interest expense in 2024, depending on timing.

Speaker Change: And then is this a one year capex or multi year at this level.

Douglas Col: I mean, we ended the year with a lot of cash, and we've made our Yela investment. We're not regularly into the line or anything, but we'll be using our line and putting a little bit of debt on throughout the year. So I mean, you're going to flip from, you know, interest expense or interest income to interest expense and, you know, some more probably.

I think you you obviously have the one off related to the real estate.

Speaker Change: Yellow auction.

Speaker Change: I think what youre going to see over time as we grow the company youre going to see elevated levels of Capex investment.

Speaker Change: That reflective of that growth.

Speaker Change: So I think you would expect to see it step down and then I think you'd see it expect to over time normalize we still won't have all the levels of or the all the real estate or all the locations that we think we ultimately want to have.

Douglas Col: You know, I expect probably, you know, five or ten million, probably interest expense in 2024, depending on timing. And then, is this a one-year CapEx or a multi-year at this level? You know, I think you obviously have the one-off related to the real estate here in the yellow auction.

Speaker Change: And an underlying all of this I think it's important to understand that that real estate line is we've got some pretty nice investments in the legacy network in order to support.

Frederick J. Holzgrefe: I think what you're going to see over time as we grow the company is elevated levels of CapEx investment that are reflective of that growth. So I think you would expect to see it step down, and then I think you'd expect it to normalize over time. We still won't have all the levels of, or all the real estate, or all the locations that we think we ultimately want to have, and underlying all this, I think it's important to understand in that real estate line is that we've got some pretty nice investments in the legacy network in order to support growing business. So I think you'll see us continue to invest in real estate over time. The fleet will have to match that. You'll see the OR improve over time. We'll be able to fund a lot of this from operating CapEx. Thank you, guys. Your next question comes from the line of Jordan Alliger with Goldman Sachs. Please go ahead.

Speaker Change: Growing business so.

Speaker Change: I think youll see us continue to.

Invest in real estate over time, the fleet will have to match that youll see the or improve over time, we'll be able to fund a lot of this from operating cash flow.

Speaker Change: Thank you guys.

Speaker Change: Your next question comes from the line of Jordan <unk> with Goldman Sachs. Please go ahead.

Jordan: Yes, hi, good morning, I was wondering if you could discuss the new terminal opening plan, perhaps the expectation for net new doors open.

Jordan: Some thoughts around the timing of when this is going to get added over the quarters.

Jordan: And what sort of additional revenue contribution do you think this could have in your plan. Thanks.

Speaker Change: Thanks for the question so a couple of things.

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 opening, 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. Thanks for the question. So, there are a couple things. As far as the timing of this, it's going to be spread out over the year. Some of the facilities that we recently acquired require some level of investment to meet the standard that we expect out of a facility. So, they'll open during the year. The Great Plains facilities will open in a bunch, probably more in the second half of this year. If you've studied what we purchased, you would 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 is not helpful.

Speaker Change: As far as the timing of this.

Speaker Change: It's going to be spread out over the year.

Speaker Change: Some of the facilities that we recently acquired.

Speaker Change: Had requires some level of investment to meet the standards that we expect out of a facility. So they will open into the year.

Speaker Change: Great Plains facilities, they will open and bunch, probably more in the second half of this.

Speaker Change: Year, if you've studied.

What we purchased you'd know that we bought facilities like Laredo are of Trenton and we.

Speaker Change: Acquired rights to facilities and Cheyenne in St George Utah.

Speaker Change: Those terminals or not.

Speaker Change: In any way similar the comparison there so some big some small.

Frederick J. Holzgrefe: 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 make those investments, and any investment, we think about what the 10-year opportunity is for that and what the market share opportunity is. Based on our history, and 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, that maybe in the first year, we ought to be able to get 1% of revenue in those discrete markets, or 1% of market share, and we've shown that we can do that.

Speaker Change: So I think youll see it spread out over the year.

Speaker Change: Not really have a comment specifically on what the revenue add is for those facilities because when we made those investments in any investment we are thinking about what the 10 year opportunity is for that and what the market share opportunity as so we based on our history and we looking back we know that when we enter a market we have the opportunity in that addressable market.

Speaker Change: 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 are sort of 1% market share.

Speaker Change: And we've shown that we can do that so I think what youll see over time is that will be part of our growth for the year as well as ongoing initiatives don't forget about the last <unk>.

Frederick J. Holzgrefe: So, I think what you'll see over time is that'll 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 they're you know, we've got some we're pretty pleased with what the opportunities are for us And then just oh, sorry. God, sir On the door on the door count, you know part of your question You know, we ended the year with about a call it a 700, you know operating doors You know based on our 15 to 20 Kind of openings planned we could add another eight or nine percent Probably the door count if we got all those open and then there's probably I think we've got another ten like relocations planned during the year and a couple of terminals that we're expanding and you know The aggregate door additions from those efforts to could be another, you know, four or five percent of the door count so, you know again, it's that's the plan as we walk into the year and You know, we'll see we'll get we'll get done in like all years too.

Speaker Change: Several facilities actually the last two that we've purchased that Theres still a lot of opportunity there for us as well. So I think we've got some we're pretty pleased with the opportunities are for us.

Speaker Change: And then just sorry go ahead Sir.

On the door and the door count part of your question.

Speaker Change: We ended the year with about a call it 8700 opt.

Speaker Change: Operating doors.

Speaker Change: Based on our 15% to 20.

Speaker Change: On the openings planned we could add another eight or 9% probably of 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 in a couple of terminals that we're expanding in the aggregate door additions from those efforts to could be another.

Speaker Change: Four 5% in the door count so.

Speaker Change: So that's the plan as we walk into the year end.

Speaker Change: We will see we will get lower won't get done and like all years too.

Frederick J. Holzgrefe: 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. Great, thanks so much. Your next question comes from the line of Jonathan Chappell with Evercore ISI. Please go ahead. Yeah, thank you. Good morning.

Speaker Change: If things.

Speaker Change: Whole differently.

Versus planned throughout the year, if the macro environment worsens or gets better you can see a 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 were planning.

Alright, thanks, so much.

Speaker Change: Your next question comes from the line of Jonathan Chappell with Evercore ISI. Please.

Jonathan B. Chappell: Please go ahead.

Jonathan B. Chappell: 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, you know, and what's going to happen to those terminals? Do you imagine selling those back to a regional LTO competitor, or do you think they will leave the market? They're 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. You know, I don't know that I've got a good view on what the fate is of the facilities that we might exit, you know.

Jonathan B. Chappell: Yes. Thank you good morning to that point on relocations and net doors I mean, it sounds like youre going to be moving out of some of the terminals. You're currently in to upsize or go to a better geographic locations to these new terminals that you've acquired any sense for how many terminals you'll actually be closing.

Jonathan B. Chappell: Reason I ask that I should follow up and say, what's going to happen to those terminals do you imagine dialing those back to like the regional LCL competitor or do you think they lead the market just asking.

Jonathan B. Chappell: Gardens to the view that it's all the yellow capacity is going to come back online versus the potential for net subtractions as you've opened some of the newly acquired terminals.

I don't know that Ive got a good view on what the fade as of the facilities that we might exit.

Jonathan B. Chappell: In.

Frederick J. Holzgrefe: I think we're still waiting for time to see how the industry repositions the assets that have been redeployed here. You know, if you look at SAIA's growth discreetly over the last number of years, I mean, a lot of our footprint expansion has been tied to, you know, adding facilities and opening doors that some of our larger competitors may be aggregating. So, as we continue to grow, I mean, theoretically, those that are sort of below us may, you know, take on some of that. So, I think it's probably still early to call on 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, you know, 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, you know, probably will leave the market entirely. Okay, thanks, Fritz.

Jonathan B. Chappell: I think we are still waiting over time to see how the industry repositions the assets have been redeployed here.

Jonathan B. Chappell: If you look at <unk> growth discreetly over the last number of years I mean, we've made a lot of our footprint expansion has been tied to.

Jonathan B. Chappell: No.

Jonathan B. Chappell: Adding facilities and opening doors at some of our larger competitors, maybe exiting so as we continue to grow I mean theoretically those that are sort of.

Jonathan B. Chappell: Below us.

Jonathan B. Chappell: May take on some of that so I think it's probably.

Jonathan B. Chappell: Still early.

Jonathan B. Chappell: To call or what.

Jonathan B. Chappell: Our specifically go but I think that a fair number of the ones that were in the industry likely we will exit the industry because as you watch the auction process unfold you saw that not all of them cleared. So I think there is some number of those at <unk>.

Jonathan B. Chappell: Leave the market entirely.

Frederick J. Holzgrefe: And then for the follow-up, you've obviously filled some geographic holes with these acquisitions and your 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 for like a massive big box retailer or a massive, you know, industrial consumer, does that really push the pricing needle with that major national customer as well?

Speaker Change: Okay. Thanks, and then for the follow up you've obviously filled some geographic holes to these acquisitions and then on your organic growth as we think about filling out kind of major.

Speaker Change: Areas of need so to speak how does that kind of filter through with pricing with your national accounts.

Speaker Change: Better geographic coverage like a massive big box retailer or a massive industrial consumer does that really pushed the pricing needle without major national customers as well.

Frederick J. Holzgrefe: You know, it certainly helps, and it gets you some at-bats with customers that, you know, have very high levels of service requirements. And, you know, we've got some incumbent large accounts that look at our footprint, and they're really excited about what we've just added, because for them, we help solve a problem. Again, they appreciate the very high level of service that they're getting from SAIA right now, and now we can score more points with those customers. They value that, and we like some of the customers that consider us 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 has low damage. They're not necessarily worried about pricing per se.

Speaker Change: It certainly helps and it gets you some adverse with customers that.

Speaker Change: I have very high levels of service requirements and we've got some incumbent large accounts that.

Speaker Change: 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 are they.

Speaker Change: I appreciate the very high level of service that they are.

Speaker Change: Getting from site right now and now we can go more points for those customers they value that and we like that.

Speaker Change: Customers that consider a strategic and those situations. Those are people that are paying for service and greatly value service.

Speaker Change: And for them there.

Speaker Change: They make money in their businesses.

Speaker Change: Dependent upon our supply chain and LCL partner that is reliable on time and that low damage. So.

Speaker Change: They're not worried about necessarily pricing per se. They are thinking more about value. So in that scenario, having more at bats 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 have been satisfied.

Frederick J. Holzgrefe: They're thinking more about value. So in that scenario, having more opportunities 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. Great. Thank you, Fred.

Speaker Change: They've been getting for us.

Speaker Change: Great. Thank you Chris.

Kenneth Scott Hoexter: Your next question comes from the line of Ken Hoexter with Bank of America. Let's go ahead. Hey, good morning, Fitz and Doug. The groundhog said it was an early spring.

Speaker Change: Your next question comes from the line of <unk> with Bank of America. Please go ahead.

Speaker Change: Hey, good morning, Fritz and Doug Groundhog.

Groundhog said its early spring so Doug on your weather concern for February and March sounds like you're all set.

Kenneth Scott Hoexter: So Doug, on your weather concern for February, March sounds like you're all set. Just Doug, can you talk a bit about your lifecycle of conversion? You brought on a lot of operating expenses, you know, ahead of time to handle all the freight that you won early last year. Maybe you could talk about the progress you're making and how we should think about that as we move through 24? Sure, I mean, I'll take a shot.

Speaker Change: Just can.

Speaker Change: Can you talk a bit about your lifecycle 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 are making and how we should think about that as we move through 'twenty four.

Sure I mean take a shot.

Douglas Col: I mean, you know, I like to think it's kind of leveling off. I mean, you've seen a major step up in the last six months in terms of our, you know, growing the workforce to meet these kind of new normal volume levels. And I was really pleased in Q3 to Q4 with how we continued through that process, our headcount numbers growing. So from Q3 end to the end of the year, the headcount was up, you know, about right around three, a little over 3%, I think.

Speaker Change: I like to think it is kind of leveling it 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.

Speaker Change: With how we continued through that process, our head count numbers growing so Q3 end to end of the year the head count head count was up.

Speaker Change: <unk>.

Speaker Change: Right around three little over 3%, I think but but our ftes of I think about how we're managing the use of those folks. Our ftes were were only up about a half a percent on average Q3 compared to Q4. So again, we do it every year seasonally throughout the business and this was just kind of exaggerated but.

Douglas Col: But our FTEs, if I think about how we're managing the use of those folks, our FTEs were only up about a half a percent on average in Q3 compared to Q4. So again, I mean, we do it every year seasonally throughout the business, and this was just kind of exaggerated.

Douglas Col: But, you know, we know we need that trained and well-positioned employee count because, you know, soon enough, like you say, we'll be getting into spring. And with these new normal volume levels, just the cost that comes on is kind of fixed dock and driver costs, for example, which is where most of the hires are happening. As we build density, you know, in the business, and seasonally, as density builds, it becomes more variable. I've already kind of, you know, absorbed the cost.

Speaker Change: We need that.

Speaker Change: Trained and well positioned employee count because sooner now like you say will begin in the spring and with these new new normal volume levels just.

Speaker Change: The cost that come on is kind of fixed dock in driver cost for example, which is where most of the hires are happening.

As we build density in the business and seasonally as density builds they become more variable are already kind of absorb the cost and now as I make them got more freight from the handle on all I get those those efficiencies so.

Douglas Col: And now as I make them, you know, I've got more freight for them to handle, and all, I get those efficiencies. So, you know, I think we've been pleased with it. And, you know, let's see, you know, we look forward to getting out into the seasonally stronger period and see how it flows through. So just to clarify that, Doug, you've got the people that you needed, you're getting the equipment, which was your concern, you mentioned the lease stuff, so the added cost now will be the DNA focus and maybe more wage growth, or maybe not, but you've already got them at the ready. Is that just trying to understand where we should see incremental costs relative to the volume growth leverage you can get from that?

I think we've been pleased with it.

Speaker Change: Let's see we look forward to getting out into.

Speaker Change: Seasonally stronger period and see how it flows through.

Speaker Change: So just to clarify that one Doug so you've got the people that you needed youre getting the equipment, which was your concern you mentioned are leased up so the added cost now will be the DNA focus in may.

Speaker Change: Maybe more wage growth what are maybe I shouldn't but you've already got them at the ready is that I'm, just trying to understand where we should see incremental cost relative to the volume growth leverage you can get from that yes, we will see better utilization or better efficiency across those costs. You've added because now you can start adding volume to its volume, but because we are opening new market.

Douglas Col: Yeah, well, you'll just see better utilization or better efficiency across those costs you've added because now you'll start adding volume to them. It's volume because we're opening new markets and can bring in new business, and it's volume because, seasonally, we expect things to get better. And then the kind of tracking margins from Q3 to Q4 is kind of tough, because Q4 is always the seasonally softer quarter. You've got additional holiday noise in the fourth quarter. So it's always hard to kind of compare how I'm doing in Q3 versus Q4.

Speaker Change: And can bring in new business and its volume because seasonally we expect things to get better.

Speaker Change: And then the kind.

Speaker Change: It's on a track in margins Q3 into Q4 is kind of tough because Q4 is always the seasonally softer quarter, you've got additional holiday noise in the fourth quarter. So it's always hard to kind of compare how I'm doing in Q3 versus Q4, it's just a different kind of a cadence on the seasonal trends, which you have to manage through every year and this year was <unk>.

Douglas Col: It's just a different kind of cadence on the seasonal trends, which you have to manage through every year. And this year it was exaggerated because, like you said, the workforce was ramping up. You're typically not doing that in Q3.

Speaker Change: Because like you said the workforce was ramping up.

Speaker Change: You're typically not doing that Q3 to Q4.

Speaker Change: Great Thanks for that.

Kenneth Scott Hoexter: Yeah, great. Thanks for that. You mentioned the pace of, I guess, the contract renewals or the number of contracts. Can you talk about the percent of books yet to reprice, or maybe the pace of renewals? Has that accelerated at this point? And then you have the capacity; you have excess capacity. Where are you entering, I guess, as you add the additional doors and service centers? Yeah, so we'll, you know, from here. I would expect the contract renewals to be pretty stable for the balance of the year.

Speaker Change: You mentioned the.

The pace of I guess, the contract renewals or the number of contracts can you talk about the percent of booked yet to reprice or maybe the pace of renewals has that accelerated at this point and then the capacity you have excess capacity where are you entering I guess as you add.

The additional doors in and service centers.

Yes, so from here I would expect the contract renewals.

Speaker Change: To be pretty ratable for the balance of the year.

Frederick J. Holzgrefe: But you know what? As a mix of businesses, we continue to assess what we're taking on as part of the sort of industry disruption, right? I mean, freight's moving around a bit from carrier to carrier here, too. So as we continue to assess what's coming our way, we may push again on those renewals to maybe accelerate some of that. But I think it's important for us to continue to manage that mix.

Speaker Change: But what is the mix of business as we continue to assess what we're taking on as part of the sort of industry disruption right freights moving around a bit from carrier to carrier too. So as we continue to assess with Kevin our way.

Speaker Change: We may push again on those renewals to maybe accelerate some of that but I think it's important for us to continue to manage that mix. So that's kind of what we started off with in Q4.

Frederick J. Holzgrefe: And that's kind of what we started off with in Q4. When you think about capacities here, so, you know, I think we feel pretty good at any point in time on the network, and it's all dependent on where that freight comes from. You know, we've added, we had a real pinch point in Salt Lake City, as an example, last year, and we've added a facility that's significantly bigger than where we were, and that has freed up capacity in that market. So, for us, we manage it market to market, and I think, in total, you'd say that, you know, we probably have 20-ish percent sort of excess capacity, but you're also seeing us make a pretty significant investment here in our fleet, namely, to make sure we've got ample capacity to, you know, continue to provide really high levels of service.

Speaker Change: When you think about capacities here so.

Speaker Change: I think we feel pretty good at any point in time in the network and it's all dependent on where that freight comes from.

Speaker Change: We've added we had a really a real pinch point in Salt Lake City as an example last year.

Speaker Change: We've added.

Speaker Change: Facility, it's significantly bigger than where we were in that is freed up capacity of that market. So it for us we manage it market to market and I think in total you'd say that we'd probably get twentyish percent sort of excess capacity, but you're also seeing us make a pretty significant investment here and.

Speaker Change: Our fleet, namely to make sure we've got ample capacity to continue to provide really high levels of service, we want to be invest ahead, a little bit there. So that we're in a position that when that customer has got that extra drop trailer or that that extra opportunity. The new facility that we're in a position to get.

Frederick J. Holzgrefe: We want to invest ahead a little bit there so that when that customer's got that extra drop trailer or that extra opportunity in a new facility, we're in a position to get that business and do a great job for them. So, we like the overall position of where we are. We study it market by market. As we grow, we'll continue to invest in those pinch points, but, you know, I think we feel pretty good with where we are. Awesome. I appreciate the insight. Congratulations!

Speaker Change: That business and do a great job for them. So we.

Speaker Change: We like the overall position of where we are we study it market by market as we grow we're continuing to invest in those pinch points, but I think we feel pretty good with where we are.

Speaker Change: Awesome I appreciate the answers and congrats great great great stuff.

James Monaghan: Great, great, great stuff. Your next question comes from the line of James Monaghan with Wells Fargo. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of James Monaghan with Wells Fargo. Please.

Douglas Col: Hey guys, thank you. Great to get a little bit more context around the growth cost and kind of follow up on the prior question a bit. I guess, like, is there a way to sort of think about the utilization headwind on headcount and the usage of PT in fourth quarters, like 100 or 200 basis points? Just trying to understand that in the context of that full year OR improvement that you're talking about. Is it really just utilization coming through? Or are you getting a positive cost spread that adds to that too? Well, I don't know.

James Monaghan: Please go ahead.

James Monaghan: Hey, guys. Thank you.

James Monaghan: Get a little bit more context around it.

James Monaghan: And the growth.

Growth costs and kind of follow up on the prior question.

Yes.

Like is there a way to sort of think about that utilization headwind on head count or like in the usage of PT in fourth quarter or is it like 100 or 200 basis points, just trying to understand that in the context of that full year.

James Monaghan: Improvement that youre talking about or is it really just utilization coming through are you getting a.

James Monaghan: Positive cost spread that add to that too.

James Monaghan: Okay.

James Monaghan: Well.

Speaker Change: I don't know.

Douglas Col: I mean, on the PT line, like I think about Q4, 15.4% of our miles, of our line home miles, were purchased in the fourth quarter. And while that was up year over year, you know, we brought it down from 18% at the end of Q3. So again, that's just something we have to manage. As we get drivers on board and in a position to drive for us, that helps us take PT out. You know, as we move into the year 2024, I think we feel a lot better positioned in terms of our ability to handle our line hall needs with our own workforce. So that's good. PT might be an opportunity.

Speaker Change: On the PT.

Speaker Change: When I think about Q4, I mean 15, 4% of our miles.

Speaker Change: Of our line haul miles were purchased in the fourth quarter and while that was up year over year.

Speaker Change: We brought it down from 18% at the end of Q3, So again Thats just something we have to manage as we get drivers onboard in a position to drive for us that helps us take <unk> out.

Speaker Change: <unk>.

Speaker Change: As we move into the <unk>.

Speaker Change: 2024, I think we feel a lot better positioned in terms of our ability to handle our line haul needs with our own workforce. So that's good PT might be an opportunity if volumes bounce back really strong and somehow we get a macro tailwind or something.

Douglas Col: If volumes bounce back, you know, really strong, and somehow we get, you know, a macro tailwind or something, we effectively utilize PT. So it comes and goes, but, you know, I think in general, having to staff up in a period where, seasonally, you might not otherwise be doing so was a challenge, and I was pleased to see that, you know, Q4 was better than Q4 a year ago, and we'll try to build on that this year. Got it, but I guess the better utilization of the workforce is the majority of that 100 to 200 basis point improvement year over full year to full year for the OR? No, I think that what you have to look at when we study that. We talk about pricing opportunity over time, and freight selection opportunity over time. We talk about Line Hall Optimization over time. Not only is that how we utilize PT, but it's also how we utilize our own assets, driving the load averages, those sorts of things. Rather than handing off freight to an agent to make that delivery in the Great Plains states, that's having a SAIA-flagged truck making that delivery, right?

Speaker Change: We effectively utilized so it comes and goes but.

I think in general having to staff up in a period, where seasonally you might not otherwise be doing so is a challenge and I was pleased to see that.

Q4 was better in Q4, a year ago, and we will try to build on that this year.

Speaker Change: Got it I guess.

Speaker Change: <unk> is better utilization of the workforce. The majority of that 100 to 100 basis point improvement year over year full year to full year four.

Speaker Change: Sure.

Speaker Change: No.

Speaker Change: I think that what you have to look at when we studied that.

Speaker Change: We talk about pricing opportunity overtime freight selection opportunity over time, we've talked about.

Speaker Change: Line haul optimization over time, not only is that.

Speaker Change: How we utilize PT, but it's also how we utilize our own assets driving the load averages.

Speaker Change: Those sorts of things.

Speaker Change: Rather than handle handing off freight.

Speaker Change: And to an agent to make that delivery in the great Plains States.

Speaker Change: Having a <unk> truck, making that delivery right. That's building scale on that network. So all those things together around providing that value proposition, that's what drives the improvement overtime.

Frederick J. Holzgrefe: That's building scale on that network. So all those things together around providing that value proposition, that's what drives OR improvement over time. We'll invest in the business to continue to maintain that and improve it. As you build scale in a business naturally, and we've said this all along when it comes to PT, as you build scale in the business, you have the opportunity to build your own line hall network internally because you have the appropriate scale to do that.

We will invest in the business to continue to maintain that and improve it as you build scale on our business naturally and we've said this all along and when it comes to PT as.

Speaker Change: As you build scale of business you have the opportunity to build your own line haul network internally because you have the appropriate scale to do that in some cases is.

Frederick J. Holzgrefe: In some cases, in a smaller company, you use maybe a little bit more PT simply because you don't have the infrastructure or the balance in the network. So you use PT assets to leverage that opportunity to service the customer. Now, as you grow your business, you have the opportunity to further balance lanes across the network and use a little bit of relatively less PT because you're using more of your own assets. But important, all of that. The biggest driver of value in SAIA's business is, without a doubt, getting the pricing right, getting that mix of business right, and that's the most critical thing to OR. Just real quick, you mentioned higher capital to support higher quality services; how should we sort of think about the maintenance capital for that higher quality service, sort of like for a high quality service? What's the maintenance capex requirement?

Speaker Change: Smaller company you use maybe a little bit more PT simply because you don't have the infrastructure.

Speaker Change: The balance of the networks, who use PTC assets.

Speaker Change: To leverage that opportunity to service the customer now as you grow the grow your business you have the opportunity to further balanced lanes across the network and to use a little bit relatively less.

Because you're using more of your own assets, but important all of that the biggest driver of value in size business without a doubt is getting the pricing right getting that mix of business right and that's the most critical thing to or improvement.

Speaker Change: Got it.

And then just real quick you mentioned higher capital to support higher quality service or how should we sort of think about the maintenance capital for higher quality.

Douglas Col: Well, I think it's important probably, you know, to give a kind of longer-term outlook, let's kind of see where the network looks like year in and year out. I mean, we've opened 25 terminals in the last three years. We've got plans to open 15 to 20 this year and add equipment to support the network expansion as well as our share gains and higher volumes. It's a moving target.

Service sort of like for.

Speaker Change: For like high quality service, what sort of maintenance capex requirement.

Speaker Change: Well.

It is important probably.

Speaker Change: To give a kind of longer term outlook, let's kind of see where.

Speaker Change: What the network looks like year in and year out I mean, we've opened 25 terminals in the last three years, we've got plans to open 15 to 20, this year and adding the equipment to support.

Speaker Change: The network expansion as well as our share gains and higher volumes. It's a moving target. The fleet is getting bigger the footprint is getting bigger so.

Douglas Col: The fleet's getting bigger, the footprint's getting bigger. So, you know, I think the good carriers in our industry, on an ongoing basis, have always put, you know, 12 to, you know, low double-digit percent of revenue back into the business. So maybe longer term, that's what you model for. But like, like Fred said, we still have an opportunity to make this network more competitive. And that means investing. Thank you. Your next question comes from the line of Tom Wadewitz with UBS. Please go ahead.

Speaker Change: I think the good carriers in our industry on an ongoing basis.

But 12 to.

Speaker Change: Low double digit percent of revenue back into the business. So maybe longer term, that's what you model for but like Fred said, we still got an opportunity to take this network more competitive and that means investing.

Thank you I appreciate it.

Speaker Change: The next question comes from the line of Tom <unk>.

Tom: <unk> with UBS.

Please go ahead.

Tom Wadewitz: Yeah, good morning. I wanted to see if you could offer some kind of broad thoughts on how we might think about shipment or tonnage growth. When you look at the second half of this year, you know, obviously, the big step up in yellow business is driving growth in the first half. But, you know, when you think about, I guess, maybe one framework would be if the freight market stays kind of flat, you know, I think given your capacity expansion and strong service, you'd expect growth. Is that like, you know, low single digits?

Tom: Yes, good morning.

Tom: Wanted to see if you could offer some kind of broad thoughts on how we might think about <unk>.

Shipment or tonnage growth.

Speaker Change: When you look at the second half of this year, obviously that gives us a big step up in yellow.

<unk> is driving growth in first half, but when you think about I guess, maybe one framework would be if the freight market stays kind of flat.

Speaker Change: Given your capacity expansion strong service you would expect to grow is that like low single digits is more than that and then if you actually saw a pickup in the freight market. If you saw a bit of a cycle lift.

Frederick J. Holzgrefe: Is it more than that? And then, if you actually saw a pickup in the freight market, if you saw a bit of a cycle lift, you know, what kind of growth could you get given stronger freight and given your capacity expansion? I know it's not precise, but just, you know, directionally, how should we think about, you know, kind of those two scenarios?

Speaker Change: What kind of growth could you get given stronger freight and given your capacity expansion I know, it's not precision, but just directionally.

Speaker Change: How should we think about.

Frederick J. Holzgrefe: Thanks, Tom. You know, the way I think about this is, you know, you got to start with what you think the macro assumption is going to be in the second half. And, you know, that's kind of that, whatever that is. And from my perspective, I think it's probably going to be a pretty, I don't see anything that would say that it's going to be a, you know, big change, but it could be right in the second half, and we could see growth that comes out of that. What I would specifically say, though, is that I look at SAIA's position in the market.

Speaker Change: Kind of those two scenarios.

Speaker Change: Thanks, Tom.

Tom: I think about this is you got to start with what you think the macro assumption is going to be in the second half and that's kind of that whatever that is and from my perspective.

Speaker Change: It's probably a pretty.

Speaker Change: I don't see anything that would say that it's going to be big.

Speaker Change: Big change, but it could be right in the second half we could see growth that comes out of that what I would specifically say, though as I look at <unk> position in the market.

Speaker Change: I look at this as we open these facilities were on an equal footing with some of the other national carriers that I think from a quality perspective.

Frederick J. Holzgrefe: I look at this as we open these facilities; we're on an equal footing with some of the other national carriers, and I think from a quality perspective, I think we're in a leading position versus some of the national carriers. And I think that if we continue to focus on the right mix of business, there's a share gain opportunity for us, not only in the first half, as things continue to settle, but into the second half. So I think it's in a more tepid environment; it's probably at the low end of any sort of range, right, in terms of shipments and tonnage growth.

I think we're at a <unk>.

Speaker Change: Our leading position versus some of the national carriers and I think that is if we continue to focus on the right mix of business. There is a share gain for us opportunity.

Speaker Change: Not only in the first half as things continue to settle but into the second half. So I think as in a more tepid environment is probably at the low end of any sort of range right in terms of shipments and tonnage growth, but I think that our.

Frederick J. Holzgrefe: But I think that by focusing on what we can control, there's an opportunity for us to continue to grow in the market. Now, in a more limited sort of economic environment in the second half, it's probably a little bit slower. But the opportunities are there for us, and we're very focused on that. Okay. And then the other question would just be like, you know, so you've added people to 4Q. You know, I guess you're probably more calibrated to the volume you anticipate on the people side than the terminals, right? The doors can sit there even if you don't use them, but the people, you don't want them sitting around.

Speaker Change: Focusing on what we can control there is an opportunity for us to continue to grow through the market now.

Speaker Change: More limited sort of economic environment in the second half, it's probably a little bit slower, but the opportunities are for us and we're very focused on that.

Speaker Change: Okay.

Speaker Change: Thank you and then the other question would just be like so you've added people in <unk>.

I guess youre, probably more calibrated to the volume you anticipate on the people side than the terminals right. The doors can sit there even if you don't use them, but the people you don't want them sitting around so what what would you say given the current head count level, what have you calibrated for in terms of shipment growth given the 500 you added is it like mid single or is it.

Tom Wadewitz: So what would you say, given the current headcount level, what are you calibrated for in terms of shipment growth, given the 1500 you added? Is it like mid-single digit, or is it different than that in terms of shipment growth? Yeah, I mean, I think it's probably consistent with what we've seen from the trends we've had in the last few months that Doug gave us the update on. I think we feel pretty good about our positioning there. We feel pretty good about our ability to further scale from here if we need to. But yeah, I think we're appropriately positioned right now. But as we go into seasonal peak times, I think we will continue to scale up from here. And that's our tradition; that's kind of how we've operated it.

Speaker Change: Is it different than that in terms of shipment growth.

Speaker Change: Yes, I mean, I think it's probably consistent with what we've seen from the trends. We've had the last few months Doug gave us the update on I think we feel pretty good about our positioning there we still feel pretty good about our ability to further scale from here if we need to.

Speaker Change: But yes, I think we're appropriately.

Speaker Change: Position right now, but as we go into seasonally.

Peak times I think we continue to scale up from here and that's that's our tradition. That's what we've that's kind of how we've operated it so I feel pretty good about our value proposition to attract people as we need then I feel pretty good about worse, where staff right now.

Frederick J. Holzgrefe: So I feel pretty good about our value proposition to attract people as we need them, and I feel pretty good about where we're staffed right now. Great, thanks for the time. Your next question comes from the line of Jason Seidl with TD Cowan. Please go ahead.

Speaker Change: Great. Thanks for the time.

Speaker Change: Yeah.

Speaker Change: Your next.

Speaker Change: Question comes from the line of Jason Seidl with TD Cowen.

Jason H. Seidl: Please go ahead.

Thank you operator, and good morning, gentlemen.

Jason H. Seidl: Thank you, operator. Doug, you talked a little bit about the trends in January on a time basis, and clearly, as you mentioned, weather was a little bit of a hit. If we exclude weather, are you guys in that sort of up five to six percent range? Well, I mean, it's probably better to talk about shipments, you know, shipments, you know, per workday up 11.8%. Definitely, you know, a little bit of the shine was taken off that by the weather.

Jason H. Seidl: Doug you talked a little bit about the trends in January on a tonnage basis clearly as you mentioned, whether it was a little bit of a hit if we exclude whether are you guys in that sort of up 5% to 6% range is that how we should think about it.

Douglas Col: Well I mean, that's.

Douglas Col: Probably better to talk about shipments shipments.

Douglas Col: Per workday up 11, 8% definitely little bit of the Schein was taken off that from weather I mean, we've continued to see weight per shipment impact from some of the business we've picked up since.

Douglas Col: I mean, we've continued to see, you know, a weight per shipment impact from some of the business we've picked up since, you know, last summer's event. So I'd say the 11.8% shipments per workday would have had some upside. We, like all of our other competitors, had a lot of days impacted in January by weather. And your terminals are just either closed, or they're limited operations, or they're making a few deliveries, but they're not able to pick up freight. The customers are closed, that kind of thing. So that's not unusual for January or February. It just happened!

Douglas Col: Last summer's event.

So I'd say, the 11, 8% shipments per workday would've had some upside.

All of our other competitors had a lot of days impacted in January by weather in your terminals or just either closed or limited operations or.

Douglas Col: They are making a few deliveries, but not able to pick up freight customers close that kind of thing.

Douglas Col: That's not unusual for January or February it just happened, but I would say thinking about the 11, 8% number it could have been better.

Douglas Col: But I'd say, thinking about the 11.8% number, it could have been better. Fair enough. And as we think about, you know, you guys obviously took on a bunch of terminals. The Bulletproof Executive 2013, Douglas Goldstein, CFP®. Is there anything on there that you guys could acquire?

Okay fair enough and as we think about you guys. Obviously took on a bunch of terminals here from.

Douglas Col: The yellow dispositions, but there are still a bunch of other leases that are have not been billed out yet is there anything on there that you guys could acquire as well.

So Jason.

Jason H. Seidl: So Jason, we are aware of everything that's still on the market, and we kind of continuously look at those assets, as well as others in the, in the, in our. So yeah, that's part of the potential opportunity for sure. And maybe some of those assets are particularly attractive to a competitor. And maybe that's an opportunity for that competitor to move from their current facility to a new facility. And then maybe that leaves it, and creates an opportunity for us in another facility. So yeah, I think there's potentially some opportunity. And do you know the timing of the next round of those?

Douglas Col: <unk>.

Speaker Change: Are aware of everything is still on the market.

Speaker Change: We continuously look at those assets as well as others in the in the in our pipeline. So yes, that's part of potential opportunity for sure and maybe some of those assets are particularly attractive to a competitor and maybe that's an opportunity for that competitor to move from.

Speaker Change: So our current facility.

Speaker Change: To a new facility.

Speaker Change: And then maybe that leaves it creates an opportunity for us in another facility. So it's yes.

Speaker Change: Yes, I think theres potentially some opportunities in <unk>.

The timing of.

Speaker Change: The next round of those assets.

Frederick J. Holzgrefe: Good question, we monitor it closely; I'm not aware of anything right now. Fair enough. Gentlemen, appreciate the time. Your next question comes from the line of Bruce Chan with Stiefel. Please go ahead. Hey, thanks, Operator. Morning, Fritz.

Speaker Change: Good question.

Speaker Change: We monitor it closely.

Speaker Change: Not aware of anything right now.

Fair enough gentlemen, I appreciate the time nice quarter.

Speaker Change: Thanks.

Speaker Change: Your next question comes from the line of Bruce Chan with Stifel.

Bruce Chan: Please go ahead.

Bruce Chan: Thanks, operator, good morning, <unk> morning, Doug just a couple of clean ups here, you talked about the or progression a bit but when you think about the <unk> line, specifically is that growing faster than other expenses. This year due to that elevated head count and if so by how much or is there may be some offset there because <unk> got less overtime spend.

Bruce Chan: Morning, Doug. Just a couple of cleanups. You talked about the OR progression a bit, but when you think about the SWB line specifically, is that growing faster than other expenses this year due to that elevated headcount? And if so, by how much?

Douglas Col: Or is there maybe some offset there because you've got less overtime spent? Maybe just, you know, some comments around the potential squeeze on that line item. Yeah, I mean, I expect it to go up, right? I mean, as we bring on our own employees and, like, you know, just trend-wise have been able to get folks onboarded and trained and stuff, that'll put upward pressure on that line. And on the driver's side, you'll probably benefit because we remove some PT where we decide to, things like that. And then, you know, we still have wage inflation out there, so as we open new terminals, we've got to get them staffed before the opening so we can get them trained and everything like that.

Bruce Chan: Just some comments around the potential squeeze on that line item.

Bruce Chan: Yeah.

Bruce Chan: Yes.

Douglas Col: I expect it to go up right I mean, as we bring on our own employees and like.

Douglas Col: Just trend wise has been able to.

Douglas Col: Get folks onboard and trained and stuff that will put upward pressure on that line on the driver side Youll, probably benefit because we removed some PT, where we decide to things like that and then you still have wage inflation out there so as.

Douglas Col: As we opened new terminals, we've got to get them staffed before the openings. So we can get them trained and everything like that so.

Douglas Col: So, you know, the ramped-up opening plan, you know, the pre-opening expenses go up, and some of that's wages. So, yeah, I think. You know, that line will be, you know, you're going to see a wage increase. Salary Wage and Benefits Increase. Okay, that's helpful. And then just on the PT side right now, how much rail are you using that outsources percentage and directionally? If you think about it long term, do you expect that number to go up or down or stay relatively flat? Yeah, I mean, it's come down.

With the ramped up opening plan the Preopening expenses go up and some of Thats wages. So yes.

Douglas Col: That line will be.

Douglas Col: Youre going to see wage increase in salaries wages and benefits increase.

Speaker Change: Okay. That's helpful. And then just on the PT side right now how much rail are using or that outsource percentage and directionally. If you think about it long term do you expect that number to go up or down or staying relatively flat.

Speaker Change: Yeah.

Speaker Change: Sure.

Yes.

Douglas Col: I mean, when we needed to move the freight, a lot of it was in lanes where we couldn't optimize and use rail when things really ramped up last July, August, September, and even into October. So we were heavier there on the truck side for a while. And it's probably, in this environment, it's more normalized back at that kind of, you know, low 60 to high 30% range truck to rail. And we'll see seasonally what develops, and that's generally how that team manages it, where they get a chance to. They'd love to use rail.

Speaker Change: It's come down I mean, when we needed to move the freight a lot of it was in lines, where we couldnt optimize the newsreel when things really ramped up last July August September even into October. So we were heavier there on the truck side for a while and it's.

Speaker Change: It's probably in this environment, it's more normalized back at that kind of.

Speaker Change: No.

Speaker Change: Low 60 high 30% range truck to rail.

Speaker Change: And we will see seasonally what develops and thats generally how that team manages it where they can get a chance to they'd love to use rail.

Bruce Chan: That's great. Thank you. Your next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead.

Speaker Change: Okay. That's great. Thank you.

Speaker Change: Okay.

Speaker Change: And the next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead.

Ravi Shanker: Thanks a lot, gentlemen. I think you said that you have about 20% excess capacity in the network right now. Given this capex number, are you looking to expand that closer to 25% to 30%? Or what's the normal run rate?

Ravi Shanker: Thanks, Good morning, gentlemen.

Ravi Shanker: I think you said that you have about 20% excess capacity in the network right now just given this capex number are you looking to expand that close at a 25%, 30% or whats the normal run rate kind of do you expect to stay at it.

Frederick J. Holzgrefe: Do you expect to stay at 20%? Yeah, I mean, I think we would expect that CapEx is going to help us expand that right and, you know, more on the equipment side. So, particularly on the trailer investment. So those are important.

Speaker Change: Yes, I mean, I think we would that the capex is going to help us expand that right in.

Speaker Change: More on the equipment side, so, particularly a trailer investments. So those are those are important that gives you flexibility the value of the incremental value can provide to your customer.

Frederick J. Holzgrefe: It gives you flexibility, the value, the incremental value, you can provide your customer that that's really important. So, you know, we'd look to drive that capacity a bit there, expand that capacity, Gardner, maybe as a related follow-up, I think just given like post the yellow auctions, kind of given how much the LTL capacity kind of stayed within the LTL space and given the step-up in organic capex we're seeing from you and some of your peers, is there a risk that not as much capacity comes out of the network as we all thought like back in June or July kind of, what's the risk that maybe some of the kind of less disciplined players in the space kind of run away with a little bit?

Speaker Change: That's really important so we'd look to drive that capacity a bit there.

Speaker Change: And that capacity.

Speaker Change: Got it and maybe as a related follow up.

Speaker Change: I mean, just given like both the yellow auction's kind of given how much the LDL capacity kind of stayed with the LDL space.

Speaker Change: And given the step up in organic Capex, we are seeing from you and some of your peers.

Speaker Change: There are risks that not as much capacity comes out of the network as we all thought like back in June or July.

Speaker Change: What's the risk that you know maybe some of the kind of less disciplined players in the space is going to run away with a little bit.

Frederick J. Holzgrefe: Well, I mean, yeah, you're going to see natural growth in the industry; you're going to see some people making their investments to support their business model plans. But I don't think that you're going to see all that capacity come back into the industry. You know, what percentage of that remains to be seen. But you know, as I look at it, we're, you know, the only places that we're adding new greenfield facilities are when they're in markets where there isn't anything available. So I don't know that that's a material number 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 their most basic level.

Speaker Change: Well I mean.

Speaker Change: Yes, youre going to see natural growth in the industry Youre going to see so if people are making their investments to support their business model plans I don't think youre going to see all of that capacity come back to the industry.

Speaker Change: What percentage of that remains to be seen.

But as I look at it.

Speaker Change: The only places that we're adding new greenfield facilities as when they are in markets, where there isn't anything available. So I don't know that Thats a.

Speaker Change: It's not material to the market generally.

Speaker Change: And the others, which youre seeing is at least some percentage of that.

Capacity from yellow is being redistributed, but I don't think all of it is coming back I mean, they were operating at its most basic level. They werent operating at capacity. So they had surplus capacity in that business anyway. So.

Frederick J. Holzgrefe: They weren't operating at capacity, so they had surplus capacity in that business anyway. So I don't suspect that that would become new capacity in the industry. A lot of it is just going to be redistributed. I understand. Thank you. Your next question comes from the line of Eric Morgan with Barclays. Please go ahead. Hey, good morning.

Speaker Change: Don't suspect that that would become new capacity in the industry a lot of it is going to be redistributed.

Speaker Change: Yes.

Speaker Change: Understood. Thank you.

Speaker Change: The next question comes from the line of Eric Morgan with Barclays.

Eric Morgan: Please go ahead.

Eric Morgan: Thanks for taking my question. I wanted to ask another question on pricing. You had an above average GRI in December, so I was just wondering if you could talk about how customers responded to that. Did you see more or less volume impact than you were expecting, and does that give you any insight into how you can tackle closing the pricing gap with some of your peers? You know, I think that 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.

Hey, good morning, Thanks for taking my question I wanted to ask another on pricing.

Eric Morgan: The above average <unk> 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.

Speaker Change: I think that the what we would say is that the reaction to the <unk> pretty consistent with what we've seen historically.

Speaker Change: Yes.

Speaker Change: Know that any of that was materially different one way or the other.

Frederick J. Holzgrefe: I think it is important, though, I think we need to highlight that the GRI was in December, right? So it's, you know, that's not a good time of year, there are a lot of externalities, you know, it could be a holiday, it could be weather in that period of time, so. But from what we've seen so far, you know, 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 harder for somebody to switch. You know, 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 just speaks to the initiatives around making sure we get the pricing right in the mix of business.

Speaker Change: It is important though I think we need to highlight that the <unk> was in December right. So.

That's not a it's there are a lot of that.

Speaker Change: Externalities could be holiday it can be whether in that period of time, so but from what we've seen so far.

Speaker Change: Typical level of acceptance there.

Speaker Change: Yes.

Speaker Change: The good thing is that we're maintaining that high level of service. So it's a little bit harder for somebody to switch.

Speaker Change: And I think generally speaking over time, you saw the contractual renewal in the fourth quarter plus eight seven and you saw the <unk> <unk> to.

Speaker Change: It speaks to the initiatives around making sure we get the pricing right and the mix of business right.

Frederick J. Holzgrefe: I would appreciate that. And maybe just a quick follow-up on the service. You know, 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, you know, 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 a steady improvement over time, a better way to think about it? 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 calculate and report it, that's a pretty good number.

Speaker Change: I appreciate that and maybe just a quick follow up on on service.

Speaker Change: <unk> been at 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.

Speaker Change: Steady steady improvement over time, a better way to think about it.

Speaker Change: I think you'd see steady improvement over time.

Speaker Change: Be clear that that's a pretty low number as it is right now.

Calculate reported Thats, a pretty good number it's a differentiating number and thats a number that although it has been a bit steady it is consistent at customers.

Frederick J. Holzgrefe: 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. I think the other thing that customers really care about is that you pick up the freight and you deliver it when you say you'll deliver it. So if you think about the capacity investments that we're making in 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.

Speaker Change: Really expect consistency and I think the other thing that customers really care about is that you pick up the freight and you deliver it when you say youre 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.

Speaker Change: The freight, but we also have to be able to pick up the freight and deliver it when the customer expects.

Speaker Change: So those are also part of that service equation. So those are all things that we're doing it and you add in the fact, yet terminals in markets close to where the customer needs to debate that further enhances your ability to deliver service so services defined more than just claims.

Eric Morgan: 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 service. So service is defined more than just claims.

Speaker Change: Okay.

Speaker Change: Great. Thank you.

Speaker Change: Okay.

Definitely More: Your next question comes from the line of definitely more with Jefferies.

Stephanie Moore: Great, thank you. Your next question comes from the line of Stephanie Moore with Jeffries. Please go ahead. Hi, good morning.

Please go ahead.

Jefferies: Hi, good morning, Thank you.

Jefferies: Maybe it'd be helpful. If you could just touch a little bit on what you're seeing and maybe some of your end markets are pretty.

More: Pretty clear that the environment remains pretty pretty weak, but maybe any pockets of strength or commentary that you're hearing.

Frederick J. Holzgrefe: Thank you. You know, maybe it'd be helpful if you could just touch a little bit on what you're saying 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, you know, to the positive or the more negative.

More: Either on either end of that to the positive or to the morning.

More: Thanks.

Speaker Change: Yes, thanks for that and what's interesting right now is that I would say that what we see across the businesses.

Speaker Change: Pretty uniform, so I don't I don't really have a good call out either for a region or for.

Speaker Change: Our vertical.

Frederick J. Holzgrefe: Thanks. Yeah, thanks for that. You know, what's interesting right now is that I would say that what we see across the business is pretty uniform. So I don't really have a good call out either for a region or for

Speaker Change: So which is which is important right so that.

Speaker Change: That's actually an insight there in the sense that.

Speaker Change: We're happy with what we're seeing in the end markets.

Bascom Majors: You know, but it's, you know, not there's not a call out one way or the other.

But it's not there's not a call out one way or the other.

Frederick J. Holzgrefe: Great, thank you so much. Your next question comes from the line of Bascom Majors with Susquehanna. Please go ahead.

Speaker Change: Great. Thank you so much.

Speaker Change: The next question.

Question comes from the line of bass <unk> majors with Susquehanna.

Frederick J. Holzgrefe: 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 you know, where we sit today with this opportunity to pull that forward a bit, we will be at 210, 215 by year end, if all goes as planned. Can you walk us forward? You know, 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. Yeah, that's a good question. I think we're, you know, Canada; we're in a little bit of uncharted territory for SAIA here, which is a pretty exciting place to be. You know, I think as you look at the national players, the bigger folks than us, they have a bigger footprint than we do.

Bass Majors: Please go ahead.

Bass 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 you'll be at $2 10, $2 15 by by year end, if all goes as planned.

Bass Majors: Right.

Can you walk US forward what is what is the real estate plan look like in three years five years, just any sort of vision on where this can go in and we get to the point, where you think the network is where it needs to be geographically. Thank you.

Speaker Change: Yes, it's a good question I think.

Speaker Change: <unk>, a little bit of uncharted territory for side here, which is a pretty exciting place to be.

Speaker Change: I think as you look at the national players the bigger focus than us they have a bigger footprint than we do so I think there's some runway beyond.

Douglas Col: So I think there's some runway beyond the 212 and 215 numbers. You know, I think there's probably 10, plus, you know, per year for a couple years after that, potentially. But I think what's really important in 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, you know, I don't want to say they're not pinch points, but ones you have to invest in and kind of further develop those facilities. I mean, case in point, the 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 the northeast kind of growth that we've seen and business sort of density we've seen develop over time.

Speaker Change: The $2 12, $2 15 number.

Speaker Change: I think theres probably.

Speaker Change: <unk> 10, plus.

Speaker Change: 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.

Speaker Change: Where when you scale the business like we have some of your important facilities become.

Speaker Change: I don't want to say, they're not pinch points, but once you have to invest in kind of further develop those facilities I mean case in point.

Speaker Change: Harrisburg facility, which we moved into in 2018.

Speaker Change: 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 to kind of growth that we've seen in the business sort of density we've seen develop over time.

Frederick J. Holzgrefe: So I think you'll see us continue to make those kinds of investments in markets. So I think there's, you know, maybe they're not incremental pins on the map, but they'll be sort of investments in sort of legacy facilities that just have got to scale with a business that's a national level business that's, you know, with growing market share. So I think there is an interesting redeployment of capital that remains for this business for some time. Thank you for that. Your next question comes from the line of Tyler Brown with Raymond James. Please go ahead.

Speaker Change: So I think youll see us continue to make those kinds of investments in market. So I think there is maybe its not incremental pins on the map, but it'll be sort of investments in sort of legacy facilities that just got a scale of the business, that's a national level business.

Speaker Change: With growing market share so I think there.

Speaker Change: Interesting redeployment of capital that remains for this business for some time.

Speaker Change: Thank you for that.

Speaker Change: Your next question comes from the line of Tyler Brown with Raymond James.

Tyler Brown: Hey, good morning, guys. 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 stocked on the balance sheet and will be judiciously leaked out into the market maybe over this year and next? Yeah, I think that's a good insight, Tyler, you know, the gating item around opening facilities. One, if there's a lease facility, we're going to make sure that it's a place that meets the SAIA standard in terms of safety. You know, a good place for a colleague to come to work every day, so we're going to make the needed investments there.

Please go ahead.

Tyler Brown: Hey, good morning, guys.

Tyler Brown: Hey, Good morning, Hey, 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 March.

Tyler Brown: It may be over this year and next.

Fritz: Yes, I think the.

Speaker Change: That's a good insight Tyler.

Speaker Change: The gating item around opening facilities, one if there is a lease facility.

Fritz: We're going to make sure that it's a place that meets the <unk> standard.

Fritz: In terms of safety.

Fritz: A good place for our colleagues to come to work every day. So we're going to make the needed investments there, we'll make sure that if it remains to be leased.

Tyler Brown: We'll make sure that if it remains to be leased, you know, that it's got the appropriate sort of term and such. So, yeah, those would probably move closer to the front of the list. The other element you'll look at is, in some cases, you have a facility that maybe has got some sort of local zoning requirement that says, you know, you've got to be active in business to be able to maintain zoning.

Fritz: It's got the appropriate sort of term and such so those would probably move closer to the front of the list. The other element you'll look at us in some cases you have a.

Fritz: Facility that maybe has got some sort of local zoning requirement that says <unk>.

Fritz: <unk> got to be active in business to be able to maintain zoning. So those would be next in line and then they are also ones that just have a real meaningful market opportunity, which we would move those in line as some of the others all the ones we purchased have.

Frederick J. Holzgrefe: So those would be next in line. And then there are also ones that just have a real meaningful market opportunity, so we'd move those in line. Now, some of the others, all the ones we've purchased have significant value to us longer term. Some of them may just simply be an upsize or a lease replacement.

Fritz: Significant value to us longer term some of them are just simply be an upsize or a lease replacement the ones that we don't open this year would be sort of available.

Frederick J. Holzgrefe: The ones that we don't open this year would be sort of available, and we'd make the important upgrades and then put them into service at a later time. So that would be how we'd manage that. Yeah, that is extremely helpful.

Fritz: And we make the important upgrades and put into service at a later time.

Fritz: That would be how we manage that.

Fritz: Yes.

Speaker Change: Extremely helpful.

Tyler Brown: Um, Doug, I want to come back to a previous question. So it takes me a second to get it all straight. But there's obviously a ton going on with the network.

Speaker Change: But Doug I wanted to come back to a prior question and so it takes me a second to get it all straight, but there's obviously a ton going on with the network Super exciting, but did you say that theres, maybe 8% to 9% door growth from acquired and leased facilities and then another four to five from expansion. So in aggregate call. It 12 to 14.

Douglas Col: Super exciting. But did you say that there's maybe eight to 9% door growth from acquired and leased facilities and then another four to five from expansion? So an aggregate call it 12 to 14 on the door side net in 2015. If we ended up opening all 20, for example, Tyler, and then, you know, we relocate what we've got planned to relocate and the, you know, the expansions, Fritz mentioned, your numbers are right. So if we did everything, that's what it could be this year.

Speaker Change: On the door side net in 'twenty four.

Speaker Change: If we ended up opening all 20 for example, Tyler and then we relocate what we've got planned to relocate and.

Douglas Col: The expansion Fritz mentioned your numbers are right. So if we did everything that's what it could be this year.

Tyler Brown: .... Tyler, you know, when we think about network expansion, we don't think about this year; we're looking at a 10 or 12 year horizon. So those doors, that's all about runway. No, absolutely understand it. This is a bit of an esoteric question.

Speaker Change: Okay perfect.

Speaker Change: Tyler as you know when we think about network expansion. We don't think about this year, we're looking at a 10 or 12 year horizon.

Speaker Change: So those doors, that's all about runway.

Tyler Brown: Yes, no absolutely get it right. This is a bit of an esoteric question. So.

Tyler Brown: You know, maybe you'll entertain me or not, but I think it will help maybe conceptualize the power of the footprint. So do you have any idea what your inner line mix of P&D is today versus, say, five to ten years ago? Because I assume it's way down, but it still likely has an opportunity to go to virtually zero, which I would assume internalizes margin, and it gives you control over service.

Tyler Brown: Maybe I'll entertain me or not but I think it will help maybe conceptualize the power of the footprint. So do you have any idea whats your interline mix of T&D is today versus say five to 10 years ago, because I assume its way down.

Tyler Brown: It's still likely has the opportunity to go to virtually zero, which I would assume internalizes margin and it gives you control over service.

Tyler Brown: Tyler, you broke up just a little bit at the beginning. I want to make sure I got this right. You were referring to, you said interline. Yeah, sorry, sorry about that. What was your inner line mix of P&D today versus five to 10 years ago? Because I assume it's way down, but there's still an opportunity to go to zero.

Tyler you broke up just a little bit at the beginning I want to make sure I got this right you were referring to you said interline.

Tyler Brown: Yes, sorry, sorry about that.

Tyler Brown: Was the interim what is your interline mix of PND today versus five to 10 years ago, because I assume its way down.

Tyler Brown: There's still an opportunity Dakota zero and that just gives you control over your service.

Frederick J. Holzgrefe: And that just gives you control over your service. Oh, yeah, great. It's I don't have the number, Tyler, but you're right.

Speaker Change: Yeah, Great I don't have the number Tyler, but youre right.

Frederick J. Holzgrefe: That that's a tremendous opportunity for us, right, in terms of, Certainly, there's the cost element in building the density around that network, but from a customer perspective, that customer experience is so critical. And in those markets, absolutely, that'll be a positive. And then, and then along with that, I mean, not splitting the revenue, right?

A tremendous.

Speaker Change: <unk> opportunity for us right in terms of.

Speaker Change: Certainly those the cost element in building the density around that network, but from a customer perspective that customer experience is so critical and those markets absolutely that'll be that'll be a positive.

And then along with that.

Speaker Change: Not splitting the revenue right yes.

Frederick J. Holzgrefe: Yes. Exactly. Yep.

Speaker Change: Exactly yes, okay cool. Thank you guys. Okay. So your China.

Tyler Brown: Okay, cool. Thank you, guys. Okay. See you later, Tyler. I will now turn the call back over to Fritz Holzgreve for his closing remarks. Please go ahead. Thank you for taking the time to join us to talk about the compelling opportunities for SAIA. We're excited to start the 100th year of our company with a really, really exciting investment and growth opportunity, and we look forward to talking about those successes at the end of the next quarter. Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining us, and you may now disconnect your lines.

Speaker Change: Okay.

Speaker Change: I will now turn the call back over to Fred <unk> for closing remarks. Please go ahead.

Fred: Yes. Thank you for taking the time to join us to talk about the compelling opportunities for <unk>, we're excited to start.

Fred: The 100th year of our company with a really really exciting investment opportunity and growth opportunity and.

Fred: We look forward to talking about those success at the end of next quarter. Thank you.

Yes.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect your lines.

[music].

Speaker Change: Okay.

Speaker Change: Yes.

[music].

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: [music].