Less-than-truckload carrier Saia Inc. has big growth plans in 2024 after picking up 28 terminals from bankrupt Yellow Corp.’s estate. It outlined a $1 billion capital expenditures plan in its fourth-quarter report, which if executed would represent nearly one-third of its annual revenue.
The acquired terminals represent $244 million of the capex budget. Saia plans to open 15 to twenty of those facilities this yr. A number of the additions are expected to be accretive to earnings near term, especially in areas where it’s moving out of partner facilities utilized in an interline arrangement into owned service centers. The corporate might want to put some money within the acquired sites before they’re able to handle freight again. Saia also plans to relocate roughly 10 of its current locations into larger facilities.
In total, the outlay on real estate is anticipated to be $550 million.
Saia has about 20% excess capability within the network currently and sees the incremental investments as allowing it to tackle business wins without having to be reactionary with infrastructure.
It opened 25 terminals over the past three years. If the brand new sites come on line as planned, it could have 210 to 215 terminals in use by year-end. Including ongoing efforts to expand and relocate other facilities, the corporate’s door count might be 12% to 14% higher by the tip of the yr in comparison with 8,700 doors in use at the tip of 2023.
“These terminals, once opened, will allow us to supply direct coverage in latest markets, add density in existing markets and function alternative terminals for a few of our existing leased and owned facilities,” said Fritz Holzgrefe, Saia’s president and CEO.
Saia will add to its fleet to accommodate higher volumes with a give attention to trailer additions to enhance efficiency. It is going to also reduce the number of apparatus leases it has, which were quickly taken on following Yellow’s collapse, choosing asset ownership as a substitute. Equipment spend is anticipated to be $400 million to $450 million.
Capex for IT will probably be roughly $50 million. Saia recorded total capex of $437 million last yr (15% of revenue) compared.
As a part of the expansion plan, Saia has increased head count by 1,500 (12%) to just about 14,000 because the end of the second quarter when it appeared Yellow was more likely to close.
Saia was the second LTL carrier this week to voice big growth plans. Old Dominion Freight Line (NASDAQ: ODFL) said Wednesday it was carrying 30% excess capability and that it had grown head count for the primary time in six quarters.
Q4 by the numbers
![](https://www.freightwaves.com/wp-content/uploads/2024/02/02/Saias-KPI-table.jpg)
Saia (NASDAQ: SAIA) reported fourth-quarter earnings per share of $3.33, which was 13 cents higher than the consensus estimate and 68 cents higher yr over yr (y/y). A lower tax rate in comparison with last yr was a 5-cent tailwind.
Revenue of $751 million was 15% higher y/y as tonnage increased 8% and revenue per hundredweight, or yield, was up 7%. Revenue excluding fuel surcharges was 21% higher and yield (excluding fuel) was up 12%. An 8% decline in weight per shipment drove among the increase within the yield metric.
Shipments per day were 18% higher y/y but down 2% from the third quarter. Yields were 5% higher than within the third quarter but weight per shipment was down 3%.
Tonnage through the quarter was 7.8% higher y/y in October, 9.2% higher in November and 6.8% higher in December. December had the advantage of a straightforward prior-year comp (down 13%). Tonnage in January was up just 3.3% y/y but inclement weather, which idled several terminals for days, was a detractor.
Saia pulled forward several contracts within the quarter, renewing 50% more agreements within the period than it did last yr. Those negotiations resulted in a mean price increase of 8.7% y/y. The corporate expects revenue per shipment to extend within the low-single-digit range during 2024.
The carrier implemented a 7.5% general rate increase at the start of December, which positively impacted only one month through the quarter.
An 85% operating ratio was 90 basis points higher y/y. The period contended with a 210-bp increase (as a percentage of revenue) in salaries, wages and advantages as a result of the upper head count and a 4.1% wage increase implemented in July.
Saia’s OR normally improves by 50 bps to 75 bps from fourth to first quarter, which management believes remains to be achievable even with the poor weather to start out the yr. It’s guiding 100 bps to 200 bps of y/y OR improvement for full-year 2024.
Shares of SAIA were up 12.3% Friday at 12:46 p.m. EST in comparison with the S&P 500, which was up 0.7%.
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