Saia reported revenue of $823.2 million in the second quarter, an 18.5% increase from $694.6 million in the 2023 period. (Saia Inc.)
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Profits and revenues at Saia Inc. jumped in the second quarter of 2024 as the carrier continued to benefit from the collapse of erstwhile less-than-truckload rival Yellow Corp.
Johns Creek, Ga-based Saia posted net income of $102.5 million in Q2, up 12.3% compared with $91.3 million in the year-ago period.
Saia ranks No. 18 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, up from No. 21 a year earlier. The company ranks No. 6 among LTL players after being No. 9 a year before.
The company reported revenue of $823.2 million when releasing its Q2 earnings July 26, an 18.5% increase from $694.6 million in the same period in 2023.
Saia’s LTL shipments rose 18.1% year on year in Q2 to 2.327 million from 1.97 million a year earlier.
“Disruptions in the LTL market that commenced in 2023 and our continued long-term investments in our network have resulted in share gains, including in some markets that we traditionally have not participated in, introducing both new challenges and opportunities,” CEO Fritz Holzgrefe said in comments accompanying the release of the results.
“The mix of business that we are handling post-disruption is more retail in nature and tends to be lighter-weighted. This, coupled with a softer macroeconomic environment, has been a drag on revenue per bill and on our operating ratio,” Holzgrefe added.
Saia’s weight per LTL shipment fell 7.1% to 1,340 pounds from 1,443 pounds a year earlier. The company posted an operating ratio of 83.3 in Q2, compared with 82.7 in the year-ago period.
Operating ratio provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
The OR deteriorated more than expected due to the change in freight mix as a result of Yellow’s exit, Holzgrefe told analysts during the company’s quarterly earnings call. Yellow filed for bankruptcy in August 2023.
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Saia is seeing more national accounts and proportionally more retail-related freight with a shorter length haul in one- and two-day markets as a result of the acquisition of business previously won by Yellow, Holzgrefe added.
“As we all know, this is a fluid business,” Chief Financial Officer Matt Batteh said on the call, adding that the industrial business in particular may improve. “We can’t count on today’s volume being the exact same volume tomorrow.”
Partly as a result of buying one-time Yellow properties, Saia’s capital expenditure totaled $681.3 million during the first six months of 2024 compared with $226.5 million in the year-ago period. Capex through Q2 included $235.7 million to secure properties as part of the Yellow auction, the company said.
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During Saia’s fourth-quarter earnings, the company said its 2024 capex was expected to total $1 billion compared with $437.2 million in 2023.
Saia was the winning bidder for 17 facilities in the first Yellow auction, agreeing to pay a combined $235.7 million for the assets.
Those facilities were in: Fresno, Calif.; Seaford, Del.; Augusta, Ga.; Bowling Green and Paducah, Ky.; West Boston, Mass.; Grand Rapids and Grayling, Mich; Duluth and Owatonna, Minn.; Trenton, N.J.; Rochester, N.Y.; Akron and Youngstown, Ohio; Reading, Pa.; Knoxville, Tenn.; and Laredo, Texas.
Saia then won the most properties on offer in the second round of the auction, agreeing to pay a combined $7.92 million for 11 properties across seven Western states.
In Q2, Saia opened six new terminals and relocated two others. The company opened terminals in Stockton, Calif., and Davenport, Iowa, the week of July 22. Holzgrefe told analysts Saia plans to open nine more facilities in the third quarter and as many as four in the final three months of the year. He said Saia had added 50 facilities since 2017.
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Holzgrefe said Saia was pleased with the new terminals’ progress, however he warned they were investments that require a lot of training and onboarding to achieve success.
The terminals that opened in Q2 operated at a loss, the executive said, adding that terminals opened in the past two or three years averaged a 95 OR while terminals operated longer than three years had an 82 OR.
More are opening though, he said, because “having a comparable footprint to our peers is critical to our overall value proposition. Every new opening moves us closer to the customer, and provides an opportunity to better support their success, while creating long-term value in our core business.”
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