Please note this event is being recorded. I would now like to turn the conference over to Matt Petay, Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Michael. Good morning, everyone. Welcome to Saia, Inc.'s first quarter 2025 conference call. With me for today's call is Saia, Inc.'s President and Chief Executive Officer, Fritz Holzgrefe. Before we begin, you should note that during this call, we may make some 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 will now turn the call over to Fritz for some opening comments.

Good morning, and thank you for joining us to discuss Saia, Inc.'s first quarter results. To open the year, we experienced first quarter records for revenue, tonnage, and shipments on one less workday than in the first quarter of 2024, with growth driven primarily by ramping terminals opened in the last three years. Our first quarter revenue of $787.6 million increased from last first quarter by 4.3%. The growth we experienced was concentrated in our newer markets where we were pleased with customer acceptance. Going into the year, our business plans for 2025 are focused on execution and leveraging the investments we have made in our network over the last several years. We expect that the macro environment for being somewhat muted or at least as we approach the end of April, the backdrop is notably different. Historically, we have typically seen seasonal increases in shipments and tonnage of approximately in facilities open less than three years, we saw the 3% sequential improvement. In legacy facilities, shipments were actually down slightly February, for the company were only modestly improved from March to April, which we attribute primarily to the uncertain macro environment. Customers, although satisfied with their service and value of our network expansion, appear cautious in the current backdrop and are taking a wait-and-see approach. We estimate the revenue impact of the sub-seasonal trends to be approximately $25 to $40 million. While the first quarter is typically impacted by adverse weather events, this year's disruptions proved more challenging in both magnitude and geographic location. Winter weather in the southern part of the country prompted closures and limited operations at some of our most dense and profitable regions. We experienced significantly more closures and terminals with limited operations in 2025 compared to the first quarter last year, with substantial impacts…

Thanks, Fritz. First quarter revenue increased by $32.8 million to $787.6 million, a record for any first quarter in the company's history. Fuel surcharge revenue remained flat, increasing by 0.2% and was 15.1% of total revenue compared to 15.7% a year ago. Revenue per shipment, excluding fuel surcharge, increased 2.3% to $376 compared to $293.96 in the first quarter of 2024, an increase of 0.5% sequentially from the fourth quarter of 2024. Yield excluding fuel surcharge declined by 5.1% and yield decreased by 5.8% including fuel surcharge, reflecting the inverse relationship between weight per shipment and yield, a heavier weighted shipment typically drives a lower yield. Tonnage increased 11.0% attributable to a 2.9% shipment increase and a 7.8% increase in our average weight per shipment. Length of haul increased 1.9% to 905 miles. Shifting to the expense side for a few items to note in the quarter. Salaries, wages, and benefits increased 13.9%, which is primarily driven by a combination of our employee headcount growth of approximately 8% year over year and the result of our July 2024 wage increase, which averaged approximately 4.1%. The growth in headcount is primarily related to the opening of 21 new resulting in over 500 new employees comprising more million dollars in additional wages and benefits for the first quarter compared to last year. In addition to the increase in volume compared to the prior year. Also impacting this line item was increased employee cost to keep the network fluid and provide service to our customers during the winter weather disruptions. During the quarter, we ran extra line haul miles and leveraged purchased transportation post storms to keep the network running effectively. We also ran extra dock operations over some weekends to ensure customers' freight was minimally impacted by weather disruption. In addition, other…

Thanks, Matt. While there were challenges associated with the underlying environment and weather events in the first quarter, there are signs of continued progress being made as a trusted carrier for our customers as we continue to provide a high level of service across the network. As always, we remain intently focused on the long term. All the 21 terminals open in 2024, have all been opened less than a year, we're beginning to see the benefit of a national network that allows us to serve our customers' needs more immediately than has been the case in the past. Evidenced by our shipment growth in those new markets. The markets opened in 2024 represented the majority of our shipment growth compared to last year, but these markets operated at roughly breakeven in Q1 of 2025. We do not open these terminals for growth in the next month or next quarter, rather these are long term investments that allow us to provide service to our customers nationwide. As each month passes, we continue to build density in these markets will continue to drive long term value. As we look forward, we'll continue to manage through the macroeconomic environment looking to adjust our cost structure and adapt to the changing landscape across our network. All while maintaining our focus on the customer. Through discussions with our customers, it's no surprise to hear the hesitation and uncertainty around the macroeconomic backdrop. Remain close to our customers and feel strongly well positioned to provide solutions in the changing supply chain. The first quarter represents certain challenges that are somewhat out of our control. However, we do not see any evidence that would suggest that there's a significant long term opportunity for Saia, Inc. In this environment, we continue to commit to providing an exceptional product to our customers, while at the same time continuing to maintain and enhance a very competitive cost structure. Over the long term, we remain confident in our value proposition and the organic growth story that is Saia, Inc. as well as the benefits that we'll add to our customer and the growth and performance of our company over time. We're now ready to open the line for questions, operator.

The first question comes from Chris Wetherbee with Wells Fargo. Please go ahead.

Maybe the question, maybe first big picture on pricing, kind of want to get a sense of how you view the current pricing environment. Obviously, some of the yield metrics could be pressured by mix, but I'm kinda curious how you guys are thinking big picture about pricing first.

Hey, Chris. Yeah. I mean, important to note the weight per shipment impact on yield. I know we've talked before about our focus on revenue per shipment. So the yield metrics have that weight per shipment component. I mean, for us, we're focused on pricing no different than we have been in the past. Certainly, with you know, the capacity environment the way that it is, we see customers choosing other options in certain instances when we're taking rate increases. But we view the environment the same as it has been before. Everyone's acting as we would expect. We maintain our focus on it. So nothing different from us in that regard. Of course, customers always challenge the pricing increases that we propose, and with a looser capacity environment, that gets a little bit louder, but no difference in focus from our side.

And then maybe just a follow-up on that. So if we look at you know, weight per shipment was up sequentially, length of haul was up sequentially, and then revenue per shipment was kind of pretty close to flat. It was up a little bit from 4Q to 1Q. So I guess when you think about what are the drivers within mix there that are offsetting some of those what should be fairly positive factors to revenue per shipment ex fuel?

Well, as Fritz noted in his comments, the vast majority of the growth for us is coming from these ramping market or those that have opened in the past three years. And the vast majority of that growth is coming from existing customers that we already work with. So there's rates in place with them. And each month that passes, we're finding out more about the mix that we handle for them and the pricing opportunities that we handle with them. So as we go into these markets, our lead list is our existing book of customers. And we're winning some heavier weighted share in those markets. And we understand where our opportunities are, and we're not gonna handle business that doesn't work for us. But mix in those markets can be a little bit different than what we handle in our legacy, and that's something about the going into new markets and learning more about what we handle for customers. In different geographical locations.

So it still feels like you have the opportunity to reprice that business after you onboard it, see what it is, then ultimately address it as we move forward through the rest of this year.

Chris, I think if you just look at our top line metrics, right, we recognize that the entire book of business, you know, relative to peers, and folks that are you know, have mix of business, weight per shipment, like the haul, similar or even different than ours that there's an opportunity for us to continue to make sure that we get paid for all the service we're providing. Our service is really good. And, you know, we feel like we can we should be able to continue to push our you know, let's get this to market. And we look around and we see that there are opportunities for us to continue to push that. We haven't we're unrelenting about that. Just this environment right now, people have choices. So you know, we're we we haven't, you know, in for the balance of this year, and I'm sure to the next couple, we still have runway around that. And I we're we're focused on that opportunity. Appreciate the time. Thank you.

And your next question comes from John Chappell with Evercore ISI. Please go ahead.

Thank you. Good morning. Matt, trying to put a little bit of a pin on the sub-seasonal trends. So you were expecting thirty to fifty basis points of lower deterioration 4Q to 1Q. Pret said weather was twenty five to seventy five. So let's call that fifty. So let's say weather you know, strip all that other stuff out. It feels like the sub-seasonal trends was about three hundred basis points. So as we think about April two q and really going forward for the rest of the year, absent some return to seasonality or even kind of a catch up, is this one q OR kind of the starting point on how we think about know, the the OR cadence going forward? Or do you think that, you know, this is a very low bar for one q and and there's a lot to catch up in two q and going forward?

Well, I'll start here and then Fritz can chime in too. I mean, if you look at when we talked about January and February, we've talked along about how March is really the make or break month for the quarter. And historically, yes. You'll always have some weather. This year was more challenging just in magnitude and location, but there's always weather and typically March just makes up for it. And we're planning for a seasonal step up in March. And like Fritz said, we got that in those ramping markets in the new But when it doesn't come in the legacy markets, it's just tough to take the cost out in a quick thirty day time period. Right? So we we weren't expecting a lack of step up from from that seasonal point. Obviously, there's a lot going on in the macro, and that remains uncertain. I I wish we had a crystal ball to be able to say what that looks like. I mean, April to date, we're seeing sub-seasonal trends as well. So I don't think anything stands out to us that would say that that's better right now until we see more of that on the ground. But from our view, March sub-seasonal trends and how they're tracking in April is pretty similar. There's a lot going on from the from the customer side right now.

I think I would clarify one point that we're making on the weather. The twenty five to seventy five basis points is really about what we would say. We always have weather in the first quarter. Twenty five to seventy five basis points is the sort of incremental impact of the how much worse than normal impact. So it's always it's always there. And quite honestly, when you're in a freight business and you're running the network across the country, always going to have weather. This what was unusual about this is when you have when our best operating part of the company is shutdown, that's an impact for us. And that's what that's the only reason why we called that out. Sort of life in a big city for us. I think the the the challenge though from as Matt was pointing out, when we didn't see that sort of seasonal pickup from Feb to March, that didn't give us the opportunity pick that up, right, or to recover, if you will, from the January, February piece. As we look forward, as we plan and operate the business, we look we look strictly at sort of what March looked like we said, alright, we got a our model around March going forward. We haven't really seen a step up into April. And I'm not going we're not going to predict May or June or frankly the rest of the year. So we're very focused on know, kinda getting this back to sort of some normalcy around this. So know, obviously, when you look at Q1 to Q2 and you take out the weather, you know, we're going to be at a run rate that I think it's not where we wanna be, but it's better. Right? So we operated in March. Sort of sub ninety, right around eighty nine. On a sort of with no changes. I think that probably runs in the queue into q two. That's kinda what we're we're managing. We like to get to that kind of a number for the full quarter, but we'll see how that plays out. Certainly, we're taking cost actions where we can. But, you know, at the same time, it's important that we maintain the long term structure and opportunity for the business.

That leads right to my follow-up, Fritz. I mean, Matt did say, when you don't get that seasonal improvement in March, it's kinda too quick for you to make cost adjustments. But here we are now, almost through April. It sounds like it has sounds like it hasn't gotten any better. Of course, nobody knows where we're going from here, but certainly more concerned about the macro than at three months ago. When do you start taking some of those cost actions? And what and what could they be? To maybe manage into a a slower demand backdrop beyond just a two month period.

Yes. So I mean we we those are the cost sort of actions are course, in flight. And you know, you've got one of the things you have to do in the LTL business, you have to match labor with what the available freight is, both in frankly, in our legacy markets and new markets both. If some of our network planning initiatives initiatives, we're we're pulling those forward and implementing those around how do we optimize that. And I now Nash network. Those are in flight. We are looking at sort of what can we how can we reposition parts of our company to more closely and better serve customers. At the same time, there's a cost benefit comes out of that. So that's kind of built into what our siding is right now. You know, we feel like, you know, we'll see those the the fruits of those sorts of changes will happen a little bit into this quarter and into the balance of the year. So I you know, it's just all about matching our cost structure at with what our customers need alongside of what we need to do to continue to drive performance in the company.

Okay. Thanks, Fred. Thanks, Matt.

With Goldman Sachs. Please go ahead.

Yes. Hi, morning. I just two questions. One, how far forward do you have visibility on volume and what based on whatever that visibility is, are your customers telling you? And then second, you still have thirteen percent or so tonnage growth in the quarter, which wasn't enough obviously. What as an entity kind of volumes on that front Well, how do we think about to get you back on track seasonally from an overall volume perspective? Thanks.

Hey, Jordan. I mean, to answer the first part, I mean we have a robust forecasting process, but I think as everybody well knows that the news changes frequently and so when we hear from our customers, like Fred said in the script, there's no hesitancy. I mean, I think there's know, there trying to understand how long the potential changes can be in place for, Supply chains are years in the making, so it's sometimes hard to flip overnight. I think it's it's that wait and see approach. So I think remains to be seen, but depending on how long impacts last, I think that's that's part of it. And we're planning. Right? We're understanding that. We're forecasting and doing scenario modeling just just like everybody else is. And then on the tonnage side, it's the tonnage growth and the shipment growth really came from these new markets, those that have been open over the past three years. So those are operating roughly breakeven. We're not getting that seasonal lift in the growth from the legacy markets, which are our best operating. We've been in those markets for many years, really great density. So it's you can't just take the volume and the tonnage growth isolation because of where it's coming from. That matters.

And I I think I would add, Jason, is that listen, we'll continue those new markets are going to continue to get better. And I would expect through q two that we'd start seeing some of those in the black as we're gonna be classed you know, kinda going over, you know, the one year mark for them. So that's great. So what you would expect, particularly in a tough environment. I think for the for the the balance of the business, The focus has gotta be what's the available freight? What are we hearing from customers? Making sure that our sort of operating model matches that. When you when you don't have seasonal pick pickup, I mean, this may be hard to believe, but when you don't see volumes going from February to March, the ability to to adapt to that within a matter of days, it's pretty challenging. Right? If you go to a customer and you're expecting three pallets of pickup and you you get one, well, you have still the same driver that's there, and you have, you know, significantly less revenue. So you make the adjustments to how do you schedule your pickup and delivery operation to take it take care of that situation. Right? So you're reducing the number of hours, and also all things that we have to do and are doing March and April into the balance of the year. So as we look forward, you know, we hear what we see what our customers are telling us, but then it's, you know, it's like, alright. This is what they think right now. They're uncertain. They're making the a aligned to that as well, which I think we are. And this be in a position to meet their expectations when they need it, depending on where it goes. I'll tell you what is really important to not lose sight of in this situation is when this the reason why we invested in the national network when the when the economy does settle and things go spring the other way, we will be in a position to capitalize on this. And that we can't lose sight of that in a tough environment for two months.

Just a real a real quick follow-up. And I apologize if you've said this already. On the legacy terminals, the older terminals, can you give a sense of what what was the year over year tonnage or shipment growth in those terminals year over year as opposed to seasonal sequential?

On the on the legacy ones, I mean, they're they're shipments in those markets are down. I mean our legacy book of business is looking like the pure set in the macro right now. So year over year in February and March, our legacy shipments were down in those markets. Thank you. Sure.

And your next question comes from Fady Shimon with BMO Capital Markets. Please go ahead.

Thank you. Good morning. Wanted to dig a little bit into the mix because you know, first, you know, last year for most part of it, it was lighter weight shipment mixed challenging. And then it feels like in q four and q one, we very quickly switched into kinda very heavier type of weight per shipment. Which supposed to be margin accretive typically, but it wasn't. the And it looks like if I if I look at the revenue per shipment, the weight, the length of haul realized pricing into one was negative. And I know you mentioned renewal was plus six. I'm trying to reconcile these things. What what how would you describe the characteristics of this freight that is entering the network? Right now. Heavy freight, but not a greener freight. I'm just trying to reconcile all of these things and why why we're not really seeing a much better effect overall on the gross and profitability.

Yes. So, Fahad, it's a good question. I mean, there's a variety of factors there. Right? So I think it's the wafer shipment is a positive trend for sure. But weight heavier weight per shipment in time at times does have higher or more difficult handling characteristics, so it does attract some additional costs. So it's not a complete flow through. But it's positive in general. So I think that's good. I think what impacted us probably more significantly in the quarter is that not seeing the step up in revenue in those legacy facilities. So we got all the growth, came from the new markets, right, which is good. Somewhat attractive way for shipment and margin structure. In immature facilities. So you have know, our line haul cost associated with those are higher than anything else, so that the growth is all there. So the relative contribution of those of that new freight mix is not it not what we'd hope. Right? But that's part of startup. Meanwhile, the facilities that have been open for a three years or longer we actually saw declines in March. And a bit in February. Right? And those that's tough to overcome, and that's where we're trying to adjust the cost structure to make that to match that more closely and to build the efficiency more generally across the whole network. So I think there's several factors in there. I think the trends the top line trends are important and they're good, but when you're in you know, big part of our sort of footprint is now in a sort of more startup mode. That that can be challenging to overcome on a margin side.

If you think about those locations, Todd, I mean, they're we're not running as many directs out of those new geographies. So higher way to shipments, generally, yes, we prefer those, but you also prefer them in the legacy markets because you get more efficiencies out of those. Our our newly opened markets, they're often running back to a break consolidate freight. So there's typically more handling involved with them. So where it comes from matters. In in this instance, we just the legacy parts were down. So you you see from that.

So and when you take take expand that further, so if you take that run that through a legacy break operation. So that legacy brake operation is is its core sort of local business is down year on year. You don't have the opportunity to optimize cost because you gotta keep your labor in place to be able to handle freight that goes actually passes through the facility rather than this picked up or delivered from that facility.

Okay. And you know, maybe you've answered it partially, but like, specifically, how how should we interpret this realize pricing seems negative when in reality, you're saying pricing renewal is quite strong.

Well, keep in there's a really important point is that the contractual rules, that's a great sort of metric that's out there, but that assumes that that mix of business that came along with this contract contractual renewals is exactly what we get. And I think right now, what you see is customers have options so we don't necessarily our realization of what we're getting on contractual renewals is you know, it's not one for one. It's obviously less. So it's that's we we provide that just to give you an indicative sort of view of what the pricing environment looks like. But our actual real realization will likely always be different.

Thank you.

And your next question comes from Tom Wadewitz with UBS. Please go ahead.

I want to try to get a sense of I'm sure this is hard to do, but how much of the task to improvement in OR, I mean, you know, I'm sure you're not satisfied with the go forward of an eighty nine OR. And, you know, we want want to focus on improving that. You know, there are other factors like service you wanna maintain, but how much is the path to improvement off of, you know, what you talked about with, I think, March is in eighty nine? Is purely driven by freight market improvement and they're not beyond your control. Obviously, you don't you don't control tariffs and freight economy and uncertainty and all of that. And how much do you think is in your control that it's like, hey, we just need a bit more time to know, right size the resources. Because I know, I think you guys are good at that historically managing your your cost structure and pick up and delivery route. And you know, that would be something that could be in your control. Maybe there's some other things on mix mix management. That are in your control. So just wanna see if you could offer you know, some thoughts on OR and, you know, what you're just waiting for freight and what maybe you can work on.

So, Tom, that's a great question. I mean, internally, the way we think about this, and this is important, is we're very, very focused on the things that we can control. Inside the company. So that's things like on time for the customer, claims ratios, all those things. Those are things that we can deal with. Cost structure are things that we can deal with. You know, do we get to a market in which, you know, we think the long term opportunity of businesses a seventy five o r or or better perhaps. Right? We're gonna need market help for that. Right? In the environment that we're in right now, we're it's that's gonna be a long there's not a path on the cost side that gets us there. Yeah. Can we see continued OR improvement on a modest level from here? Into the balance of the year? Yeah. There's gonna be some cost levers that we're gonna take advantage of, and and there are ones that you know, will hopefully be able to mat be able to improve service the same time that we reduce costs. Those are things that we could deal with, but they're not sequential. If you look at our cost structure relative to the competition or you know, the public peers, that this this is a top line opportunity for us. And, yeah, there's some cost things we're gonna deal with. But I don't think that that's gonna be the path to the low OR that we would that we want and think we can achieve. You know, in the short term, there's certainly things we're gonna do. You know, that we're not quite ready to to identify kinda what the magnitude of that is. Largely because I think there's a fair amount of uncertainty around what we think the market's gonna do even through the quarter. We're focused right now and say, listen, there's not a change from today around the market. We're not expecting some big step up in this second half of this quarter or the next ninety days or anything. We're just saying, listen, we gotta manage from this point and focus on the things that we can control.

Okay. Great. That makes a lot of sense. I think for the follow-up, I know you asked on pricing a bit, but just one I I guess, it seems to me like the kind of construct you could say, hey, LTL pricing, going to be gonna be four percent to five percent this year and you know, weaker freight backdrop, maybe it's maybe it's lower than that. Maybe it's two to three. Maybe it's flat. I don't know. How how do you think about that? I mean, it does seem like the market that you compete in might market pricing price softer, but do you think that's the right way to look at it? Do you think it goes negative, or you think it just kinda you know, you you can't get as much price but still positive?

Oh, I think it's positive. Listen, it's a fundamentals. Even even in the fact that the the the tonnage profile across the industry right now is is soft. Right? I mean, you just look at what's been reported. The the cost structures are all still inflationary. Right? And I I think that there's not really a path that makes a lot of sense where you cut rates to try to fill up volume and all that sort of it. These businesses require their capital intensive. They were we talk require a return. So I would expect to see pricing environment to to remain stable People be rational around it. Now is that gonna maybe be know, kind of the stronger end of that? I think it's probably less likely just by the nature that folks have options right now. But I I don't I don't see a situation where that turns negative by any stretch. It just may not be what it has been at the same rates in the last number of years.

Right. Okay. Great. Thank you for the time.

And your next question will come from Scott Group with Wolfe Research. Please go ahead.

So I didn't hear yet the March and April tonnage. And then you know, maybe I know you don't typically do this, but one of the other LTLs does, and I think it's helpful. Like, that eighty nine sort of OR you're talking about for q two, like, what's the revenue assumption, you know, embedded within that?

Hey, Scott. So I'll give the the update on the shipments and tonnage for the month. So March was up on shipments two point eight percent and tonnage up twelve point three percent. And then month to date in April, and this is not a good Friday adjustment just just overall. Shipments are tracking down about two percent, tonnage up five percent. And then on the second piece of it, we we don't give a revenue guy but what our assumption is right now is that we're not really seeing anything in April that would tell us that seasonality is back in or anything like that. So our modeling assumptions right now are what we're seeing in April and what we saw in March. Just continues on till we see otherwise on the ground floor. And we talked about we're stay very close to our customers. And conversations with them reflect that. Of understanding what the environment looks like, how to plan their supply chain. So that's what we think about right now, and we remain close to them. And to the extent that it changes up or down, obviously, we manage to that. But we're not seeing anything right now that would tell us to model anything substantially better.

Okay. And, Matt, you had a comment. A lot of this new business is coming on from existing customers, and we already have contract in place with them. But and maybe I'm not understanding this right, but, like, isn't every terminal and every shipment had different characteristics in terms of costs. And so don't they all need to be priced differently rather than more of like a a blanket price?

Absolutely. And don't take my comments, Scott, as a blanket price. My comment around that was when we price out a customer's business, we are providing rates in the new markets and we have been. Doesn't mean that we get that volume right away or have handled it historically. So sometimes when it comes on board, characteristics may be different than what we assumed or different than what we handle for them in a different market. And we absolutely have the opportunities to go back and have different conversations. So my point around that is that our lead list, when we open new markets, is to go to our customers and say, hey. We're doing a great job for you in our legacy Texas market. sometimes we find out that the characteristics are different and But what we view is across our total book, and that's publicly available data, we know that there's a pricing opportunity. So was what my comment was around that.

Okay. And then maybe just first if I can just take a step back big picture. I know we're talking about March time wasn't as good as we thought, but, like, you know, you look at it and cost per shipment's up nine and revenue for shipments up two. Right? That's a really big spread. When what is the is the fix getting cost down or is it getting rev for shipment up and realistically, like, how is this does this take quarters or or does this take years to start getting back to a a positive spread on rev revenue per shipment versus cost per shipment.

Yeah. I I I it's not years. I mean, certainly, I think you have to think about, we for everybody what the costs increases were year over year. And if you disaggregate that, you would see know, there's a big chunk of headcount that got added. That is related to facilities that have been open in the last year. So you're going to as you mature those facilities, that the returns on that investment, unfortunately, we can't calibrate down salaries and wages for in new markets to match kinda what that growth looks like necessarily. So you have to you know, there's a startup period there. So that's gonna get better. The other big element that's in there is that you have a big step up in depreciation If you look at over the last couple of years, our increases in in the size of our fleet to be able to match all the growth that we had, that's that's an important step. So I think we'll see over the as we continue to to you know, maybe get in a more certain environment, I think we're in a position where we're in a know, in a matter of quarters, we're we're seeing that relationship grow back to where we feel a little bit better about it. You know, I I don't know that q one portends a trend for forever. I mean, if you just seasonally look at our sort of cost structure, we know that as if we get any kind of lift there, we know how to leverage that pretty quickly. So yeah, I think it's a matter of time. I I don't think this is a year sort of on exercise. In the environment that we're in right now, I'm not willing to kind of predict that with certainty, you know, I'm certain you're not a position to be able to predict with certainty either. What the market's gonna look like over the next three, six, nine months. So you know, if we if we return back to a little more normalcy, maybe we this speeds up.

And on the cost per shipment basis, I mean, obviously, like we talked about, it's tough to pull the cost out that quickly when the seasonal step up doesn't come, but if we go back to sort of the twenty two time period, our cost per shipment is only up a little bit. From from that. Period. So we certainly have opportunity there, but it's you know, wouldn't when the growth there shipments and tons were still up in q one. So we have to handle that freight and do a great job for our customers, but our cost structure is still really good, and our opportunity remains on the pricing side.

Pricing and mix of business. Absolutely.

Okay. Alright. I think I understand. Thank you, guys.

Next question comes from Jason Seidl with TD.

When was the last time you saw flat pricing? And then as a follow-up can you walk us through the percentage of business that's gonna reprice on the contractual side in two q?

Hey, Jason. Pricing was a flat, I mean, on a q one versus q one basis, revenue per shipment x fuel is up two point three percent.

No. I'm I'm aware. I'm looking for when is the last time it in in your business that you saw flat LTL pricing?

I don't know. We have to go back and yeah. Look at all that there. And and and that's a raise back, I would imagine.

Yeah. I mean, the for this point earlier, this underlying nature of this business is inflationary. Expensive to to run an LTL network. And then on the the second part of that in terms of the contractual renewals, I mean, our contracts were due pretty So There's no one bid season. At times, maybe you see a a customer go out to bid more when the environment's a little bit looser, but our contracts renew pretty ratably throughout the year.

Okay. That that that makes sense. And then I I wanted to clarify You talked about shipments were were down in March, and then I think you said that April is sub seasonal as well. Is that implying that you're seeing shipments down in April?

That's right. Months to date shipments year over year are tracking down about about two percent. Now that does have Good Friday in it. So if you adjust, it maybe comes back a little bit. But, yes, that's right. It's still down with a good Friday time.

It yeah. It's down overall don't adjust for it. And if you adjust for Good Friday, maybe you get it back to flattish. But similar trends to what we were we were seeing.

Okay. That makes sense. And maybe if you can just you and me on the CapEx side. I know you've caught it. I wonder if you could bucket where you made the big cuts in. Sure. Wait.

I mean, revenue equipment and equipment overall is is mostly in. I mean, we brought revenue equipment in earlier in the year to prepare for peak, and and that really on the depreciation side hits more of the legacy markets. That is an investment to support the legacy markets and the new, but it's mostly in the legacy side. So most of the equipment's already delivered and in service. We'll have a little bit that still comes through. The changes were more on the real estate side and we closely look at projects and evaluate it's not that we're not going to do these projects. We're just deferring them out, kicking them out a little bit. So that's the real estate's really the genesis of that.

Alright. I appreciate it. Thank you, guys.

From Daniel Imbro with Stephens. Please go ahead.

Hey, good morning. Thanks for taking our questions. Maybe to Fritz follow-up on the sub-seasonal volume commentary. I think you said March shipments were down in legacy shipments month over month. That is weaker than some of the peers have talked about. So even in a weak macro, it feels like maybe you guys underperformed a little bit from February to March. I can see talk about why you you think that shipment growth underperformed? Were there service issues in March that you would point to? Just just curious. And if there were service issues for it, like, how do you fix that while controlling costs? Yeah. I I don't know that I'm not aware of it.

Service issues. I think we've done a pretty good job through this time. I think one of the things that's really important in this business, there are a lot of variables that kind of puts and takes around monthly, daily, weekly volume. So you know, it I I don't know that I have a specific callout to explain why we might be slightly below you know, what somebody else is doing. You know, I I look more at kinda what the broader trend was as that legacy markets, yeah, they were down. It could be as simple as you know, we'd have a little bit of weather again in in March, but I, you know, fact of the matter is we got to get the continue to serve customers, and we got to make sure we have the cost structure we as much as there may be an underlying trend in there to explain that, I I don't have a callout for you. I just know what we're focused on.

Okay. And then maybe on the call side, I guess, Matt, digging into it, trying to understand the the magnitude of salary wages and benefits deleverage. You you called out, like, headcount was added in the back half. Or added mostly for new facilities, but that was there in the back half of last year. In the back half of last year, I guess, SWB only delivered, like, two hundred basis points. That doubled in the first quarter. Could you just impact maybe the drivers of that?

Just remember, what we also just told you is that shipments in our legacy facilities went down. Or were down. Year over year. Right? So that the the ramping markets, yeah, we added the heads, They got a little bit better in the q one, but when you don't have the same growth in the legacy markets, that's you're you're inefficient just by in a short term period of time where you can't delever the cost structure to match shipments down in those markets. Right? So that that's Got it. Really more of the story there. I'm not mad. You probably got something like that.

Yeah. The same as the other piece, right, geography matters and those markets you don't have as dense of a customer base. You're not necessarily getting ten shipments to pick up at some of the locations that the brand building I'll important to keep in mind. I mean, the twenty twenty four openings they didn't start until April last year. So they haven't even been open a year. Through the first quarter. So that's when that's where the growth comes from. It's they're gonna continue to grow market share and continue to be more efficient. And improve. But when you don't have that same pickup and a little bit of that divergence between the the ramping markets and the legacy, That's where that comes from. And and first to understand your cost comment there, so the fix here is just we wait for volumes to improve. We're you're not looking at adjusting the cost structure structure down, I guess, to to match the sound macro. No. No. No. Let's be a hundred percent clear.

We never said we're not looking to adjust the cost structure. We absolutely look to make sure the cost structure matches what you know, kinda what's available in the market. You've gotta reduce the number of hours. You gotta make sure your load averages are good. You gotta make sure your dock operations are scaled appropriately to match So, yeah, please do not infer that I I said that there was any situation that we would not be considering costs.

Great.

Next question from Ravi Shanker with Morgan Stanley. Please go ahead.

Great. Thanks. Good morning, everyone. If I can ask a previously asked question another way, how confident are you that the industry volume weakness you're seeing is purely cyclical or macro related versus maybe share shifts away from larger carriers to smaller private ones or maybe volumes leaving LTL going to the TL market?

Yeah. I like you or maybe you have access to this. I don't necessarily see the private company data anywhere. So I can't really opine on what their business looks like. I'm sure they're getting some of this as it moves back around. Across the LTL space. I think if you are looking to to different modes, either be to I guess, conceivably to parcel or to truckload. I mean, that's gonna be on the fringes. That could be going on. And I think on the truckload side, as people look at different consolidation opportunities, certainly, that goes on. But I think as the market tightens up, I think you'll see freight return to the traditional modes. But I I don't have a crystal ball or ability to say with a hundred percent certainty, I think those are the factors you see that are are probably not too dissimilar to what we see.

Ravi, that highlights our the importance of having a national network. Means, history says that when the market tightens and eventually it'll it'll bounce back, that shippers float back to quality national providers. There's certainly instances where shippers are taking a chance and maybe trying a regional or trying someone different in this environment, but they having a national footprint matters and its ability to provide a solution to a customer. Throughout throughout every geography. And Better. that's an opportunity that we have now and that we'll continue to have in the market.

Understood. That's helpful. And maybe a follow-up for end of the weight spectrum. I think you've said in the past that a lot of the new facilities are opened in markets that are lighter weight freight, maybe more consumer exposed. We have seen some competitive dynamics there as well. I think UPS just launched a new product, and Amazon has entered the inbound LTL business at least. Can you just talk about what you're seeing there and maybe, like, if if if the high end, there is potential of some freight bleeding from LTL to TL, At the low end, is there some risk of freight bleeding from LTL to parcel?

Yeah. You know, I I suppose those factors could happen. I'll just speaking from our own experience. What we're seeing is actually the new markets that we're opening. Ones we've opened in the last three years, we actually see higher waiver shipment maybe more say, industrial sort of freight. So that's we're pleased with that. Customers seem to appreciate it as well.

Great. Thank you.

Question comes from Bruce Chan with Stifel. Please go ahead.

Hey, good morning. This is Matt Milask on for Bruce. Just a follow-up here on CapEx. I know the change was primarily related to the real estate side. We were curious to what you might be able to perhaps scale it back even further. Should trends, I guess, deteriorate from here. Thanks.

Well, the the equipment portion, like I mentioned, is already mostly delivered and mostly in place, and we we look at the real estate projects very critically and what's the market dynamics and how does that fit into our investment platform. So when there's the real estate market market can change. We don't wanna miss on an opportunity to you know, move into a facility or get a a property that really fits our network and fits our long term strategy. So we're gonna be opportunistic around that. But we closely about evaluate the projects and to the extent that the environment deteriorates, we're gonna have a pretty critical eye on this.

Great. And then curious to see your view, from the overall of industry capacity across LTL. And perhaps how much excess capacity you guys currently have in your network?

Yeah. I mean, I think that if you look at the across kind of what you see around trends across the group, I mean, I think there's capacity. We feel for us, because we're in a for a good part of our network, it's in sort of a startup phase or near startup phase. We have a lot of capacity. We're not interested in filling it this week or next week. Those are long term investments. So for us, we have some legacy facilities that you know, are have less capacity. Largely because the company has grown quite a bit in the last number of years. So I I think for us, on average, we probably got twenty five to thirty percent capacity and depends on you know, which markets know, could be higher or lower than that. But I think it's important we think it's important to have capacity to make sure it's available for customers to utilize, to as their businesses grow. We are not this is a stress. We are not in the business to try to fill the capacity. So we will over time. But for us, it's more about being disciplined, making sure we get a return on all that capacity. I think across the network or across the industry, if you watch how others are kind of managing their business, I think they understand it's an inflationary business. So they're continuing to try to provide a good product competitive product, and focus on being disciplined around running managing that business in a inflationary environment with, you know, kind of softer top So I think you see that going on. I think there's a fair amount of capacity across the industry right now.

Thanks for the time.

And your next question comes from Brian Ossenbeck with JPMorgan. Please go ahead.

Hey, good morning guys. Thanks for taking the question. Fritz, there's no shortage of uncertainty out there in the end markets and with some of your customers, but any callouts that you would provide in terms of we've seen some negative headlines on machinery agriculture, maybe some auto stuff. But anything that you're seeing in your network from from those perspectives and also anything that's maybe a little bit more positive and durable? You would have thought?

You know, I would say, Brian, across the board, I think that the message around maybe the caution or the you know, let's let's take time here. Let's consider kinda what the macro is. I think it's been one of the interesting about this is it's pretty unique for consistent across all industries. I think you would naturally as you watch what's going on with sort of import volumes and such, certainly, anything that is sort of coastal for us is probably a little bit softer than it has been. But, you know, I'd say that, and then you look across other sort of more heartland areas, you also seems in the legacy markets, you you don't see a real strength there. And I think maybe that's people holding back on sort of capital investments or and that's kind of having a trickle down effect or impacting us in the LTL market more broadly. But I don't know that there's a specific industry call on that is either positive or negative. In the customer sets that we serve.

And just follow-up on the coastal commentary. I'm seeing no shortage of headlines about volume falling off a cliff in the back half of this year. But is that something that you're got any visibility into at this point?

Not not really, Brian. I, you know, I think we're just watching the trends there. We're watching kind of some of our best performing facilities and there are those legacy markets and those are California and through Florida, those have been some pretty good operating areas for us as well. Texas, Louisiana, all those places where CHAMP some impacts there. And so we're you know, we don't have sort of that growth in those markets. I think you have to point to at least some of that.

Right. Well, then just to touch on the startup stuff a little bit. Matt, can you give us a little bit of context in terms of how these will ramp up you know, for the rest of the year. Obviously, breakeven right now, you called out depreciation is a big headwind. Commissioning labor productivity, is a bit challenging right now, but maybe if things stay where they are in April, do you have visibility to when these might turn profitable or maybe quantify of a headwind you expect a little bit more temporary here given Yeah. It seems to be a little bit muted.

Sure. With if you think about the difference in a new market, we've talked about Garland before, and we wish they were all like that. You go into a market you've already got several terminals in the market, good density, But a lot of these new facilities, they're brand building exercises. We're going in and talking to customers customers about Saia, Inc. in those local markets. So when we look at the twenty twenty four openings, they've all been open less than a year. And even those ramping ones twenty two onward, we don't open facilities with the expectation that they're gonna be at market share or company average operating ratio in you know, the the first year or two years, sometimes even even longer than that. So each market's a little bit different, but I think very important is every conversation we have with customers is an opportunity for us to sell a nationwide network. And when you do that, you can handle more business for them. You can provide solutions for them. There's opportunities for us where even in a legacy market, we have not been able to handle a customer's business because they ship to one location we handle and another that maybe we would have handed off in the past. Now that we have a national network, we get opportunity to both the new market and the legacy market because the customer when it may wanna may have wanted to route that entire location. So both in the existing markets and the newer markets, you have opportunity to build density Over time, you're gonna be able to build enough schedules to run direct rather than having to run a break. So all of that's just part of the natural opening And years subsequent to that of of really improving operations and that takes time. It's something that we're very focused on, but we don't expect that to happen in the first nine months. And we work hard at it, and our teams work hard at it, but it it's it takes time.

Okay. Understood. Thanks, guys.

Your next question comes from Brandon Oglenski with Barclays. Please go ahead.

Hey, good morning and thanks taking the question. I know it's been a long call. But first, I guess strategically, I mean, we're listening to you here. This has been a a multiyear you know, nationwide network investment for you guys, and and you're you know, there's gonna be a multiyear process too to build it out. And when you talk about that excess capacity, I mean, there's always the balance between scope and scale on a network. If you're gonna continue to serve those customers, I thought you brought up a great example, like, where a better times, you'll be picking up three pallets, but now you're picking up one. And you'll try to manage, you know, pickup and delivery labor hours against that. But at some point, you know, network scope will dictate that you're gonna serve that customer. So do you look at that a little bit differently if we're heading into a downturn commercially? Do you manage a little bit more towards variable cost thinking if the capacity is gonna be there, why not try to take some incremental revenue? Or is that the wrong way to think here?

Listen. If there if there's an opportunity for us to to drive some incremental revenue the right way, meaning that, hey, we're in a position that if we schedule our operation or our pickup and delivery delivery that we can get that second or third pallet from a customer because we've got a national reach now or making sure that they understand that we have a national reach. I mean, think about it. If you had a if you got a a an, you know, manufacturer somewhere and if our sales rep can go into that manufacturer and say, listen. Hey. You know what? I know we're picking up one pallet of freight. And it's going to Dallas right now because that's what we've been doing for a long time. By the way, I've got twenty one new facilities we've opened in the last year and know what a great job we do for it and going to Dallas. How about I get you to get the next two pallets and we'll go to the other twenty one facilities? And that that's an opportunity for our folks to be able to that's a sales opportunity for them. Right? And that's the right way to grow grow the business. And you might say, listen, you know what, we could there's an efficiency that comes along with you know, that pickup I just described. Give us all three pallets. And, you know, we can we can provide that service during it. Kinda in this sort of environment, that's what you have to be willing to do. Is to go into the customer and make sure they understand what it is what value we can provide to them. And I think our team you know, we're doing that, but it, you know, it takes time too. And that customer's gonna say, well, I'm not familiar with you, and in these new markets. Maybe it's one pallet at a time. Alright. You did one. Now you give me two. I'm gonna need three. So it it it that's a kind of a it's a part of building scale and depth into a network, and I think that's a bit of our opportunity. That remains But in an environment right now where customers are, you know, not they're they're being cautious, that that's a tough sell, but that doesn't mean we don't give up we give up on.

I appreciate that. And then just thinking from a line haul perspective, how do you optimize the know, when you were thinking shipments are gonna be up and and now just not getting that growth?

Yeah. So the biggest the biggest thing that we're working on around line haul is figuring out how do we our load averages were actually pretty pleased with. But as you build density, you wanna be able to build more of what we call direct So rather than having freight that moves through two or three brake operations or hubs to get it, you know, say, coast to coast or even across more regionally. If you can figure out ways to go drive a little bit of volume, get those customers, consolidate that freight, and build a direct route from, say, Atlanta all the way to, you know, California without having to break the freight through Dallas or Phoenix, that that's actually a way for you to build scale. You take out a handle out of that, meaning don't have to touch that freight quite as often. That's a way to build efficiency. So that's something that we're working on. And as we've scaled the network, there are more and more opportunities for us to do that. Which we'll continue to do. And you know, those are that's that's a core execution sort of program for us.

Thank you, Fritz.

And your next question comes from Rija Harnain Deutsche Bank. Please go ahead.

Hey, thanks. Just wanted to follow-up on a couple of points. So on the share shift question, from a public LTL standpoint at least, you guys still have very attractive pricing, I would say, relative to competition. I guess I'm just surprised. I would think that as customers get maybe priced more price sensitive in an environment like this, you would have more opportunity to take shares. So maybe you can just elaborate on, you know, why this not happening or transpiring, especially now that you have a national network to to market. And know, number two, I I think, you know, skeptics say, Saia, Inc. maybe just added too much capacity and mix is now really coming to bite. Just wonder how you would push back against that. And is it just cycle turn to get that mixed headwind to abate? Or will it just happen naturally as you build density that you've talked about at this low point in the cycle? Thanks.

Yeah. Those are good questions. You know, I I I think of I look at although we're not real pleased with we were expecting more of an uptick into March, I think, in total, you look at our performance for the first quarter, I we reported growth. So and I think others haven't reported that. So I think we are taking some share there. But, yeah, it's on the margin. At the end of the day, to be quite honest with you, we're really focused less maybe on market share and more on driving value. So we think value comes from being able to provide that national footprint and provide consistent service across that. Now, we'll get our fair share as a result of that. We'll also get our fair return on that. As we look at, you know, running this business over the long term, we've long said this is all about an inorganic long term investment to build a national network. And that's what we've done. We've got an asset now that is pretty significant that when the market does turn, and I think it will, I I can't tell you when, but we'll be in a position to leverage a two hundred and thirteen, fourteen facility network that we couldn't have. Had we sat on the sidelines and sat on our hands, that would that wouldn't be that value that we could provide the customer. So I think it's it was those are important investments to make. I think the opportunity for us to scale out of this on a recovery and maybe a macro or strengthening macro I mean, think there's a lot of value that that we can provide to customers, and I think we can provide to shareholders. So I I think about these things on a long term basis and less on what happened in March of twenty twenty five. I think about what the long term value is.

Alright. Thank you.

And your next question comes from Bekommi Majors with Susquehanna. Please go ahead.

Thanks for taking my questions. You can't control what the market gives you. I guess you only have a little control of of mix and some other factors that are that are impacting the business here, but think you can manage expectations. And you know, what's the right way to think about, you know, maybe the rest of the year starting from kinda the eighty nine ish OR that we're tracking you at today. I mean, typically, in LTL and a normal seasonal period would have some margin degradation in the third quarter and the fourth quarter, a new framed what that looks like for you before. But, you know, how do we level set expectations to a place where you know, maybe expect the worst and and wait for better? I mean, can you help us with with that framing even if it's not, you know, your base case expectation for how the year goes? Thank you.

Listen. I I'm not in a position where I I feel comfortable giving a sort of a long term view or three and fourth quarter view on this. I what I'll tell you is that I I'm gonna we're gonna focus on maintaining very high levels of service, maintaining a what we have right now on the sort of runway that we're on right now and making sure that we have the appropriate organization cost structure to match this and continue to drive what productivity we can in the business. And be in a position most significantly that when the recovery or strengthening macro happens, that we can take advantage of it. That's where the value is created. Value isn't gonna be created about what happens next month, the month after that, or frankly, third quarter in all likelihood. It's gonna be all about what we can do to scale out of this. And I think that's we can't lose sight of that. So I I think about that. And I know that I I don't know what the catalyst will be for the macro one way or the other, I've just we just looked through the first quarter into April, and we know what that is. So I we're gonna manage around that sort of level. And then if things get better from here, great. We'll be in a position to take advantage of it.

I appreciate that and the long term focus. Just housekeeping, Matt. You had talked about last quarter about interest expense. Any way to frame maybe some of the fixed costs you have visibility into whether, you know, where you're shaking out on on on interest for the year and and maybe depreciation as well so we can level set that piece. Thanks.

Yeah. And depreciation obviously, up pretty substantially in Q1. I'd expect that sort of year over year run rate continue. We got the equipment in service earlier than we typically would in the year past. A billion dollars worth of investments gonna continue to flow through the p and l. So I'd I continue to to run that out. And then on the interest line, we had talked about that we'd be into our credit facilities, and and we are. And I'd expect that to continue through the year and maybe peaks in the Q2, Q3 ish timeframe and then starts to come back down, a lot of that really just depends on timing of real estate transactions and things like that. But those those fixed items will will stay relatively consistent in terms of the impact.

Thank you, both.

And your next question comes from Ken Hoexter with Bank of America. Please go ahead.

Hey, great. Good morning. I know you've run over pricing a lot, but stocks down, I guess, almost thirty percent right now. Very unsightly at at ninety one o r. I wanna talk maybe a bit more on pricing. You mentioned customers have choices Something we haven't heard from you before versus kind of normal pricing when you talk about pricing. TFI noted that they're lowering GRIs to to keep some customers. ArcBest is taking some transactional business. Help us understand if you've got thirty percent excess capacity in the industry, how we not seeing the beginning of of chasing on price Certainly, at the lower end, it it seems like that you've been asked about customers at bottom end, top end moving to different modes. So how are we not seeing the the, you know, the the this being really pricing competition kicking it?

Yeah. And just to be very clear, when we say that customers have options, it doesn't necessarily mean that someone is coming in and using rate to grow the business or anything like that. It means that there's shippers in an environment like this are willing to try things that they may not have tried before. Maybe they're moving it and splitting it into a regional move and the cost structure and density of a regional carrier spits out a different price than what a national carrier can provide. So it's it's not that someone's coming in this driving it with rates. It's just there's different cost structures out there, different densities, different plays like that. And when an environment where people have capacity, and shippers are challenged and they're trying to save money, they're just more willing to to take that chance on a on something different. So that's doesn't change the fundamentals of this business that is very inflationary. Capacity has come out of this industry continuously over the past number of years and that's not changing from that regard. And the national network to us is really an opportunity as we continue to build share with customers and when the market turns, we're going to benefit even more from that. So there's just you see it and you hear it from shippers and their supply chains. They're in an environment where they're pressed. They're they're willing to try something different. So that's our comment around that.

Okay. And then can you talk a bit about service levels? I don't think we've heard, I don't know, claims ratio on time performance Have you given those numbers? And then I think just in response to the last answer, you cut CapEx, but you took out more debt which happened actually after your massive CapEx program was done. So what drove that? Is there something going on on working cap or or anything else we need to know about, Mike?

Mike? From a claims ratio standpoint, claims ratio for the quarter zero point five zero percent which is improvement. We've still got room to work on that, but zero point five percent from a claims ratio standpoint On a CapEx standpoint, I mean, keep in mind that's timing. We had a lot of deliveries and in service of equipment in in q one. So a big chunk of CapEx in Q1 that drove the need for the Revar.

Okay.

And your next question comes from Stephanie Moore with Jefferies.

Hi, good morning. Maybe just to continue on the last the last question and conversation. So, you know, a high level question question here. You know, look, whether it's due to whatever reason, it's increased technology or better inventory management or ability to use a broker in multiple modes of transportation, is there a potential overarching industry dynamic that simply less volume needs to move via an LTL network to the point where you know, when this environment does eventually turn, you know, is there a potential for less volume to return to the LTL industry versus know, maybe prior recoveries? Thanks.

You know, I Stephanie, thanks for the question. I suppose there's some set of facts that you could see some of that, but I think that what you see though potentially, I mean, you consider that, you know, potentially is reshoring, near shoring in the LTL or in the sort of broader industrial space. I think that plays well for LTL. I think the characteristics that freight may change over time, but the fundamentals of it still where we fit in the supply chain are pretty important. Right? So the fact, you know, that characteristics of freight that goes into a home improvement store a coffee shop, a residential delivery to a manufacturer, Those characteristics over time may change, but the fundamentals might say that each one of those destinations they don't require a truckload of anything. Right? They require pallets of whatever it might be. It may be a lower weight. It may have different profile. But that's the unique part about LTL. Right? We we're servicing all those at those customers characteristic of it. And I think the other thing about it is that those assets, underlying assets and the people who do it, that's inflationary. So I think that that's not something that's easily replaced by other things. What our business and what the freight we handle, the characteristics of it certainly may change over time. But I do think the industry broadly and Saia, Inc. in particular, I think we're have a unique place in the supply chain that I think that it has a sort of a permanent place. It just may look different over time, much like it looked different twenty years ago.

Great. Appreciate the time. Thank you.

Our next question comes from Christopher Koon with Benchmark. Please go ahead.

Yes. Hey, Fritz. Hey, Matt. Thanks for taking my question. How, Fritz, how are you feeling about the long term profitability some of these new facilities? Is there something structural we should think about in terms of you the long term of law of of some of the new facilities? You know, I know each one is different, but know, some of them smaller and just aren't gonna get to the OR level that, of the legacy ones are or maybe just help me out with a long term OI that we should be thinking about.

Yeah. Chris, that's a great question. It it speaks to the long term potential of Saia, Inc. And when we have the last couple of years, we've touched spent a lot of time talking about how important the and what the opportunity is for the organic sort of growth story of our company. And I haven't seen anything that would tell me that the organic growth story has changed. It maybe has slowed because of what we just saw in in the quarter, but I still remain very, very adamantly believe that the the potential is still there. It's just it's delayed, unfortunately, by what we've seen. The facilities that we've opened, I haven't seen anything that would suggest that they're not value or contributors to our sort of drive to get the business into the seventies OR. I still see that. I think it's the potential absolutely is there. Yeah. Some of those facilities, and we know this, and we've long known this, some of those facilities are not gonna get the company average OR. That's okay because what it's gonna do it can facilitate some of our leading facilities getting well below the company average OR. And that's important. In a network business, the value of the network is every single point in that network. And I I think that I haven't seen anything in the this quarter or any recent time that would suggest that there our ability to get there in time has been impacted. It just it's just been drawn out of it.

Okay. That's helpful. And then, Matt, just a shorter term, I know salaries and wages will be a headwind on year. I mean, how should we think about headcount as we go forward here? Just given the hiring you've already done and and the facilities you've already opened and then the fact that there are not gonna be that many open this year.

Yeah. I mean, we'd expect this to trend down from here. We're again, keep in mind, the first quarter, we're still up in volume, but with the trends we're seeing right now, we wouldn't expect that moving forward. And unless something changes. So we we evaluate that closely, and we'll be looking at that as we continue to move forward. But I would I would expect it to trend down from here.

So I've just just just to clarify, some of these new facilities then don'tChris Kuhn: So I've just just just to clarify, some of these new facilities then don't I mean, if the if the volume went up, you would still need to add employees. You haven't fully I mean, they're not fully staffed.

Oh, absolutely not. But that you know what, if I have to we have to add people in Butte, Montana, that means we probably are in Dallas. And you want us to do that.

Got it. Thank you, guys. Appreciate it.

This concludes our question and answer session. I would like to turn the conference back over to Fritz Holzgrefe for any closing remarks.

Thank you, operator, and thanks to all that have called in. Q1 marked a challenging quarter for Saia, Inc. But I we remain very, very committed to the long term value proposition that Saia, Inc. can provide to our customers and to our shareholders. And it's not a I would consider Q1 perhaps as a speed bump or a delay. But ultimately long term, the value of the business remains to be significant, and I think we look forward to talking about success in quarters and years to come.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.