Dive Brief:
- Saia has opened four new LTL terminals this year, CEO Fritz Holzgrefe said on a Q1 earnings call, with plans to open three to four more by the end of 2023.
- The facilities in Buford, Georgia; Kansas City, Kansas; and Morgantown and Princeton, West Virginia, bring the carrier’s terminal count to 191. A fifth terminal will open this month in Muncie, Indiana.
- Holzgrefe cautioned late last year Saia might slow its terminal expansion plans in a worsening economy. He outlined plans during the call last month to open seven to eight terminals this year — fewer than the 10 to 15 openings in 2023 executives had mentioned in November.
Dive Insight:
After investing in their networks to capitalize on the pandemic-induced freight boom, Saia and its competitors are scrutinizing their capital expenditures for savings as demand shows no sign of a near-term turnaround.
The Johns Creek, Georgia-based company’s plan to spend more than $400 million this year is “subject to ongoing evaluation of market conditions,” it said in a securities filing. Pulling back on real estate investments is one lever available to lower that number.
But opening more than 40 new terminals since 2017 has provided Saia with the scale, density and territory needed to offer next-day service in more than 400 lanes across its Northeast and Mid-Atlantic markets, according to a February press release.
New and relocated terminals are key to Saia’s strategy of boosting service, and the company’s pipeline for terminal openings “carries well into 2025,” Holzgrefe said on the earnings call. But the CEO also noted the company is willing to adjust its plans to meet market demand.
“Keep in mind that the key benefit of our organic expansion strategy is it allows us to go at a pace that suits us,” he said.
The carrier expects to open two to three additional terminals in established markets in the second half of this year, Holzgrefe told investors.
“Each new terminal opening supports our strategy of getting closer to the customer and adding value to their supply chain,” the CEO said. “At the same time, we continue to develop the markets around the other 21 facilities we've opened over the last two years.”
