Dive Brief:
- Saia implemented a 7.9% general rate increase Oct. 21, citing the need to offset expenses associated with $1 billion in investments being made in 2024 and other costs, the carrier announced.
- The price hike, higher and earlier than last year’s, followed Saia’s opening of 11 terminals in Q3, CFO Matthew Batteh said on an earnings call Friday. The carrier plans to open a total of 21 facilities by the end of 2024, its 100th year in business.
- “Freight moves around a little bit when you take the rate increase at times, and with the macro backdrop where it is, there's customers that may go find other options,” Batteh said. “We're willing to let that walk. We're not going to go chase that.”
Dive Insight:
Saia’s contract renewals have been in the high single digits for the past few quarters, and the general rate increase follows a hike of 7.5% last October and 6.5% in January 2023.
The Georgia-based LTL carrier’s revenue jumped 8.6% YoY to $842 million last quarter, the company reported. Its operating income dipped 2.5% YoY to $125.2 million, however.
The carrier is facing the same industrial demand softness as its competitors, with little indication the manufacturing sector will provide much improvement before the end of the year, Batteh said.
“Our view of the industrial backdrop: We're not seeing anything on our crystal ball that tells us that Q4 is going to, all of a sudden, get better,” the CFO said.
The nearly 8% rate increase reflect’s the carrier’s ability to handle shipments in-house across its increasingly national network, which will total 214 terminals by the end of the year, CEO Fritz Holzgrefe said on the call.
“We continue to look for customers, market opportunities, where somebody says, ‘Hey, we appreciate the value we get from Saia in terms of high level of service [and] the reach of this national network,” Holzgrefe said. “We can now ship more of our wallet with Saia, because we don't have to worry about them handing off freight.’”
