1 00:00:07,920 --> 00:00:10,840 Speaker 1: Hi everyone, this is Lee Klaskow when We're Talking Transports. 2 00:00:10,920 --> 00:00:14,160 Speaker 1: Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:14,200 --> 00:00:18,280 Speaker 1: Lee Klaskaw, Senior Freight Transportation Logistics AANDLES at Bloomberg Intelligence, 4 00:00:18,520 --> 00:00:21,360 Speaker 1: Bloomberg's in house research arm of almost five hundred analysts 5 00:00:21,400 --> 00:00:24,479 Speaker 1: and strategists around the globe. Before diving in a little 6 00:00:24,480 --> 00:00:27,920 Speaker 1: public service announcement, your support is instrumental to keep bringing 7 00:00:28,000 --> 00:00:30,480 Speaker 1: great guests onto the podcast like the one we have today, 8 00:00:31,040 --> 00:00:33,200 Speaker 1: and we need your support. So please, if you enjoy 9 00:00:33,240 --> 00:00:36,320 Speaker 1: this podcast, share it, like it, and leave a comment. Also, 10 00:00:36,479 --> 00:00:38,680 Speaker 1: if you have any ideas for future episodes you just 11 00:00:38,720 --> 00:00:41,159 Speaker 1: want to talk transports, please hit me up on the 12 00:00:41,200 --> 00:00:44,680 Speaker 1: Bloomberg terminal, on LinkedIn or on Twitter at Logistics Lee. 13 00:00:45,080 --> 00:00:48,479 Speaker 1: Now onto our episode. We're delighted to have today a 14 00:00:48,560 --> 00:00:53,080 Speaker 1: return guests. Fritz holdgref Sia's president and chief executive Officer. 15 00:00:53,360 --> 00:00:55,840 Speaker 1: He joined the company as chief financial officer in twenty 16 00:00:55,880 --> 00:00:58,800 Speaker 1: fourteen and transition to the role of president and Chief 17 00:00:58,840 --> 00:01:02,280 Speaker 1: Operating Officer and John twenty nineteen. He's also a member 18 00:01:02,320 --> 00:01:05,319 Speaker 1: of the board of directors. He holds a master's degree 19 00:01:05,319 --> 00:01:08,880 Speaker 1: in business from Washington University. In Saint Louis and a 20 00:01:08,959 --> 00:01:12,240 Speaker 1: Batchelor's degree in economics from the University of Notre Dame. 21 00:01:12,440 --> 00:01:12,759 Speaker 2: Fritz. 22 00:01:12,800 --> 00:01:14,840 Speaker 1: Welcome back to the podcast. Thanks for joining us. 23 00:01:14,880 --> 00:01:16,759 Speaker 2: Great to be here, Lee, Thanks for the opportunity. 24 00:01:16,959 --> 00:01:19,000 Speaker 1: All right, So, I don't know if everyone heard our 25 00:01:19,000 --> 00:01:21,520 Speaker 1: first episode together, So why don't you let people know 26 00:01:21,560 --> 00:01:23,120 Speaker 1: a little bit about SIA. 27 00:01:23,280 --> 00:01:27,000 Speaker 2: Sure? So, SIA is a now forty eight state national 28 00:01:27,160 --> 00:01:30,440 Speaker 2: LTL provider. We're based down in a suburb of Atlanta. 29 00:01:31,240 --> 00:01:36,920 Speaker 2: We embarked two decades ago on a national expansion and 30 00:01:37,600 --> 00:01:39,880 Speaker 2: it slowed for a bit, but then began in earnest 31 00:01:39,920 --> 00:01:43,640 Speaker 2: in twenty seventeen, and we have added sixty nine new 32 00:01:43,680 --> 00:01:46,880 Speaker 2: facilities in that period of time and now are proud 33 00:01:46,880 --> 00:01:48,920 Speaker 2: to say that we operate in all forty eight states. 34 00:01:48,920 --> 00:01:51,080 Speaker 2: So big year for us in twenty twenty four. 35 00:01:51,200 --> 00:01:53,960 Speaker 1: Okay, let's break this down just a little further. LTL 36 00:01:54,040 --> 00:01:55,760 Speaker 1: lesson truckload. What exactly is that? 37 00:01:56,080 --> 00:01:59,960 Speaker 2: So our customers are any number of shippers. It could 38 00:01:59,960 --> 00:02:04,760 Speaker 2: be any large big box retailers, to manufacturers, to consumer 39 00:02:04,800 --> 00:02:08,840 Speaker 2: package goods companies. Our shipments typically weigh fourteen hundred pounds. 40 00:02:08,840 --> 00:02:11,040 Speaker 2: They usually go nine hundred miles and they go through 41 00:02:11,040 --> 00:02:14,720 Speaker 2: a networks set up that we currently operate two hundred 42 00:02:14,720 --> 00:02:17,600 Speaker 2: and thirteen facilities, so that that freight will get routed 43 00:02:17,600 --> 00:02:20,919 Speaker 2: through that network, much like an airline going through airline hubs. 44 00:02:21,320 --> 00:02:23,840 Speaker 1: Great, and so you mentioned you are growing and that 45 00:02:23,880 --> 00:02:27,520 Speaker 1: growth is coming organically through an expansion plan. Can you 46 00:02:27,560 --> 00:02:30,680 Speaker 1: talk about, you know, February business, because I know you 47 00:02:30,760 --> 00:02:35,080 Speaker 1: recently came out with tonnage and shipping information for the month. 48 00:02:35,600 --> 00:02:40,120 Speaker 2: Yeah, so we're really excited. Last year we opened twenty 49 00:02:40,160 --> 00:02:43,440 Speaker 2: one facilities across the network and expanding that. If you 50 00:02:43,480 --> 00:02:46,839 Speaker 2: look at our tonnage update for both January and February, 51 00:02:47,240 --> 00:02:50,040 Speaker 2: two thirds of the growth are reported roughly twelve percent 52 00:02:50,040 --> 00:02:53,520 Speaker 2: in February and thirteen or so in January those tons 53 00:02:53,600 --> 00:02:55,720 Speaker 2: came from two thirds of that came from facilities we 54 00:02:55,760 --> 00:02:58,600 Speaker 2: opened in the last year. So we're really excited to 55 00:02:58,639 --> 00:03:03,480 Speaker 2: see customers are accepting our service and respect our service, 56 00:03:03,560 --> 00:03:05,359 Speaker 2: look to continue to grow with us. And that's been 57 00:03:05,400 --> 00:03:08,160 Speaker 2: a big part of what you've seen from our growth 58 00:03:08,160 --> 00:03:10,720 Speaker 2: here in the last not only last year, but into 59 00:03:10,760 --> 00:03:12,079 Speaker 2: the first couple of months of this year. 60 00:03:12,200 --> 00:03:14,080 Speaker 1: So if two thirds of the growth is coming from 61 00:03:14,200 --> 00:03:16,440 Speaker 1: these new facilities, that mean a third of the growth 62 00:03:16,600 --> 00:03:19,360 Speaker 1: is coming from somewhere else, which is still very good 63 00:03:19,440 --> 00:03:23,200 Speaker 1: because a lot of your competitors are experiencing down tonnage 64 00:03:23,440 --> 00:03:26,880 Speaker 1: in the month of January and February. What's driving the 65 00:03:27,200 --> 00:03:28,760 Speaker 1: market share gains well. 66 00:03:28,639 --> 00:03:31,720 Speaker 2: What we're excited about is that customers now have an 67 00:03:31,760 --> 00:03:34,200 Speaker 2: option that they can do business with that provides them 68 00:03:34,200 --> 00:03:37,120 Speaker 2: full forty eight state coverage. So now we're easier to 69 00:03:37,120 --> 00:03:39,440 Speaker 2: do business with So in the markets in which we've 70 00:03:39,480 --> 00:03:42,160 Speaker 2: long been in, we can now approach a customer and 71 00:03:42,240 --> 00:03:44,960 Speaker 2: offer the service to places that we couldn't do before, 72 00:03:45,360 --> 00:03:48,640 Speaker 2: and those customers are responding to us by saying, while 73 00:03:48,640 --> 00:03:52,360 Speaker 2: the service is fantastic, here's some additional opportunities for you 74 00:03:52,480 --> 00:03:54,120 Speaker 2: and the rest of the network that we hadn't been 75 00:03:54,120 --> 00:03:57,120 Speaker 2: able to touch before. And what's key to this is 76 00:03:57,160 --> 00:04:01,320 Speaker 2: that customers see this Our service levels at some of 77 00:04:01,360 --> 00:04:04,080 Speaker 2: the best in the industry, and that's provided us the 78 00:04:04,080 --> 00:04:06,840 Speaker 2: opportunity to provide that sort of forty eight state coverage 79 00:04:06,840 --> 00:04:11,040 Speaker 2: for them in both old and new facilities. We're solving 80 00:04:11,080 --> 00:04:13,800 Speaker 2: problems for customers and we're excited about that. Right. 81 00:04:14,080 --> 00:04:17,760 Speaker 1: So, earnings expectations for the first quarter according to consensus. 82 00:04:17,800 --> 00:04:20,400 Speaker 1: The consensus is expecting two dollars and seventy nine cents 83 00:04:20,400 --> 00:04:22,680 Speaker 1: a share at the time we're recording this, which is 84 00:04:22,720 --> 00:04:25,560 Speaker 1: down about eighteen percent. A lot of that has to 85 00:04:25,560 --> 00:04:28,760 Speaker 1: do with looks looks of margin compression. Can you talk about, 86 00:04:28,839 --> 00:04:31,560 Speaker 1: you know, the higher costs that you're facing year of 87 00:04:31,600 --> 00:04:31,960 Speaker 1: a year. 88 00:04:32,480 --> 00:04:35,760 Speaker 2: Sure, we were very proud of the twenty one facilities 89 00:04:35,800 --> 00:04:37,840 Speaker 2: that we've opened in the last year. We opened close 90 00:04:37,880 --> 00:04:40,719 Speaker 2: to thirty in the last two years. And you know 91 00:04:40,800 --> 00:04:44,400 Speaker 2: that those facilities in order to staff them appropriately and 92 00:04:44,440 --> 00:04:48,600 Speaker 2: provide the level of service that customers expect, we're probably 93 00:04:48,600 --> 00:04:52,719 Speaker 2: our cost structure reflects that expectation and leading to service 94 00:04:52,760 --> 00:04:56,320 Speaker 2: making sure we have ample headcount to meet expectations. Those 95 00:04:56,360 --> 00:04:59,479 Speaker 2: facilities don't operate as efficiently as our legacy facilities do, 96 00:04:59,600 --> 00:05:02,640 Speaker 2: so that it's a bit of a drag. You know. 97 00:05:02,839 --> 00:05:04,680 Speaker 2: We think this is a matter of time though, as 98 00:05:04,680 --> 00:05:07,280 Speaker 2: we grow out of this, and we think that's the 99 00:05:07,920 --> 00:05:11,200 Speaker 2: compelling long term story for Size, the opportunity to really 100 00:05:11,200 --> 00:05:12,279 Speaker 2: grow into this footprint. 101 00:05:12,400 --> 00:05:14,320 Speaker 1: Yeah, because it's worth noting that, you know, we mentioned 102 00:05:14,360 --> 00:05:17,800 Speaker 1: the tonnage growth, but also consensus expecting in the first 103 00:05:17,880 --> 00:05:22,280 Speaker 1: quarter revenue to increase seven percent a year every year, 104 00:05:22,440 --> 00:05:24,960 Speaker 1: so you know, more revenue, a little less earnings, and 105 00:05:25,000 --> 00:05:29,479 Speaker 1: again because of that the high higher cost. So outside 106 00:05:29,480 --> 00:05:31,560 Speaker 1: of the growth that you're doing, which is which is 107 00:05:31,600 --> 00:05:34,400 Speaker 1: obviously you know, part of the story for SAYA, could 108 00:05:34,440 --> 00:05:38,479 Speaker 1: you talk about the the overarching demand backdrop for LTL. 109 00:05:38,160 --> 00:05:40,480 Speaker 2: Because it hasn't been great, you know, And what I 110 00:05:40,480 --> 00:05:43,680 Speaker 2: would add is it hasn't changed much. So if I 111 00:05:43,680 --> 00:05:45,599 Speaker 2: if I go back for US and I look back 112 00:05:45,680 --> 00:05:48,880 Speaker 2: just a year, I think we would say that the 113 00:05:48,960 --> 00:05:51,640 Speaker 2: market was kind of tepid, you know, not a lot 114 00:05:51,640 --> 00:05:56,880 Speaker 2: of growth in any particular sector regionally, pretty consistent performance, 115 00:05:57,560 --> 00:05:59,839 Speaker 2: you know, for the last number of months. You know, 116 00:06:00,080 --> 00:06:03,440 Speaker 2: I don't know that it's necessarily changed much. I think 117 00:06:03,480 --> 00:06:05,880 Speaker 2: we're you know, I think after the election there was 118 00:06:06,480 --> 00:06:10,760 Speaker 2: some optimism. As I look at our results, I saw 119 00:06:11,240 --> 00:06:13,800 Speaker 2: pretty much the same environment. I think people were maybe 120 00:06:13,880 --> 00:06:16,920 Speaker 2: more favorable, but you know, that was more of a 121 00:06:17,120 --> 00:06:20,200 Speaker 2: sort of expectations looking forward. I don't know that we've 122 00:06:20,240 --> 00:06:23,760 Speaker 2: necessarily seen a change the macro backdrop up to the 123 00:06:23,839 --> 00:06:26,200 Speaker 2: last few days for sure. I mean, it's been pretty 124 00:06:26,200 --> 00:06:27,200 Speaker 2: consistent for US. 125 00:06:27,440 --> 00:06:29,279 Speaker 1: Right, And could you talk about you know, you said 126 00:06:29,320 --> 00:06:33,239 Speaker 1: that the demand has been pretty consistent across industries. Roughly 127 00:06:33,240 --> 00:06:36,960 Speaker 1: what percentage of your business is retail versus industrial slash manufacturing. 128 00:06:37,760 --> 00:06:40,920 Speaker 2: Historically we've had roughly two thirds of the book of 129 00:06:40,960 --> 00:06:46,320 Speaker 2: business has been industrial, a third retail or sort of 130 00:06:46,320 --> 00:06:49,680 Speaker 2: more consumer facing. About this time a year ago, we 131 00:06:50,160 --> 00:06:52,440 Speaker 2: saw a bit of a shift in the sense that 132 00:06:53,160 --> 00:06:56,360 Speaker 2: the industrial economy did not see the seasonal change that 133 00:06:56,440 --> 00:06:59,080 Speaker 2: you typically would see from Q one into Q two. 134 00:07:00,480 --> 00:07:03,800 Speaker 2: Our mix of business has thus changed actually more to 135 00:07:03,960 --> 00:07:07,440 Speaker 2: sixty forty, so sixty percent of the business industrial, more 136 00:07:07,480 --> 00:07:10,680 Speaker 2: waiting to retail. That's been a little bit of a 137 00:07:10,760 --> 00:07:13,080 Speaker 2: change that was a bit more challenging for us through 138 00:07:13,200 --> 00:07:18,600 Speaker 2: last year. Industrial customers really value the service. They really 139 00:07:18,720 --> 00:07:22,960 Speaker 2: value on time, damage free, and the result you'd see 140 00:07:23,160 --> 00:07:25,080 Speaker 2: margin structures that go along with that a little bit 141 00:07:25,080 --> 00:07:29,040 Speaker 2: more favorable for us anyway, not that the retail clients 142 00:07:29,080 --> 00:07:33,080 Speaker 2: aren't valued and important, but that industrial freight is really 143 00:07:33,080 --> 00:07:36,360 Speaker 2: what LTL is all about. So that changed last year, 144 00:07:36,480 --> 00:07:38,200 Speaker 2: was a bit of a drag through the year, and 145 00:07:38,200 --> 00:07:40,240 Speaker 2: it's remained pretty consistent up till today. 146 00:07:40,720 --> 00:07:43,080 Speaker 1: So when you guys are all up in terms of 147 00:07:43,200 --> 00:07:46,400 Speaker 1: you know, ramping up these new facilities. Do you expect 148 00:07:46,440 --> 00:07:49,520 Speaker 1: that sixty forty split to continue or do you think 149 00:07:49,560 --> 00:07:52,640 Speaker 1: you're going to drift back more towards the industrial manufacturing 150 00:07:52,720 --> 00:07:53,720 Speaker 1: part of the economy. 151 00:07:53,840 --> 00:07:56,400 Speaker 2: I would expect that it'll stay consistent with where we 152 00:07:56,440 --> 00:07:59,400 Speaker 2: are until we see the industrial economy get stronger. Which 153 00:07:59,440 --> 00:08:01,840 Speaker 2: interesting the growth that we've seen in the last year 154 00:08:02,680 --> 00:08:04,960 Speaker 2: is it really is very similar to what we said 155 00:08:05,040 --> 00:08:07,400 Speaker 2: I have seen in our legacy business, so that the 156 00:08:07,520 --> 00:08:10,520 Speaker 2: new openings haven't created a change of mix of business. 157 00:08:10,520 --> 00:08:14,040 Speaker 2: It's actually been very consistent with legacy business. So I 158 00:08:14,080 --> 00:08:18,040 Speaker 2: would expect as the industrial economy strengthens over time, we 159 00:08:18,080 --> 00:08:20,240 Speaker 2: would see that reflected in our results, and I think 160 00:08:20,240 --> 00:08:23,320 Speaker 2: you'll see the more traditional two thirds one third industrial 161 00:08:23,360 --> 00:08:24,760 Speaker 2: to retail sort of focus. 162 00:08:24,960 --> 00:08:27,120 Speaker 1: Right I think all bets are off in terms of 163 00:08:27,120 --> 00:08:29,600 Speaker 1: trying to predict a future right now with noise from 164 00:08:29,720 --> 00:08:32,640 Speaker 1: tariffs out of Washington. But the ISM has been in 165 00:08:33,280 --> 00:08:36,480 Speaker 1: expansion territory for the last two months. How closely do 166 00:08:36,520 --> 00:08:39,720 Speaker 1: you follow ISM? Does it really track LTL demand for 167 00:08:39,760 --> 00:08:42,680 Speaker 1: you guys? Is there a lag that you usually see 168 00:08:42,720 --> 00:08:44,280 Speaker 1: with the ISM index? 169 00:08:44,440 --> 00:08:46,840 Speaker 2: I would say that over time, it's a it's a 170 00:08:46,880 --> 00:08:51,400 Speaker 2: pretty reasonable proxy there's a good strong correlation between LTL 171 00:08:51,480 --> 00:08:55,920 Speaker 2: and ISM data. I would say I would caution though 172 00:08:56,000 --> 00:08:59,480 Speaker 2: that January and February typically are the eleventh and twelfth 173 00:08:59,480 --> 00:09:01,840 Speaker 2: most important months of the year for US, right, So 174 00:09:01,920 --> 00:09:05,760 Speaker 2: although we like favorable trends, I think it's early to 175 00:09:05,760 --> 00:09:07,520 Speaker 2: say that we're out of the woods there or that 176 00:09:07,559 --> 00:09:09,080 Speaker 2: there's been a fundamental change. 177 00:09:09,280 --> 00:09:12,640 Speaker 1: And then March is usually significantly a better month. 178 00:09:12,880 --> 00:09:16,360 Speaker 2: Absolutely in the first quarter, it's all about March. Yeah, 179 00:09:16,559 --> 00:09:19,880 Speaker 2: you know January and February, and this year definitely has 180 00:09:19,920 --> 00:09:24,079 Speaker 2: been the case. Your weather impacted for sure. Interestingly enough, 181 00:09:25,000 --> 00:09:27,680 Speaker 2: the weather patterns this year impacted more of our legacy 182 00:09:27,720 --> 00:09:30,960 Speaker 2: networks than it did the new northern facilities that we've added. 183 00:09:31,040 --> 00:09:33,880 Speaker 2: So so a little different challenge for us this year. 184 00:09:34,400 --> 00:09:37,760 Speaker 2: But you know LTL every year, particularly in the first quarter, 185 00:09:37,840 --> 00:09:40,160 Speaker 2: you generally have to deal with weather. That's part of the. 186 00:09:40,120 --> 00:09:42,880 Speaker 1: Game, right, And so you know, we are in March. 187 00:09:42,960 --> 00:09:44,840 Speaker 1: We're kind of in early March now, and I know 188 00:09:45,000 --> 00:09:47,319 Speaker 1: you're not going to give exact numbers, but is what 189 00:09:47,360 --> 00:09:50,040 Speaker 1: you saw in February kind of rolling into to March 190 00:09:50,080 --> 00:09:51,000 Speaker 1: in terms of demand? 191 00:09:52,000 --> 00:09:54,199 Speaker 2: You know, I think the macro is pretty similar I 192 00:09:54,200 --> 00:09:55,880 Speaker 2: don't know that there's much of a change there. It's 193 00:09:55,880 --> 00:09:56,960 Speaker 2: still early in March, though. 194 00:09:57,120 --> 00:09:59,800 Speaker 1: Yeah, when do comparisons get more difficult for you guys 195 00:10:00,559 --> 00:10:02,400 Speaker 1: when it comes to a ton of growth. 196 00:10:02,640 --> 00:10:05,040 Speaker 2: You know it'll continue through this year. I mean, if 197 00:10:05,080 --> 00:10:07,320 Speaker 2: you look at the twenty one facilities that we added, 198 00:10:07,720 --> 00:10:09,959 Speaker 2: they were weighted to sort of the second half of 199 00:10:10,000 --> 00:10:14,080 Speaker 2: the year, so we'll be comping against those openings from 200 00:10:14,160 --> 00:10:17,120 Speaker 2: last year for a while. I think it's more important. 201 00:10:17,160 --> 00:10:19,600 Speaker 2: What's interesting for us is that because of the change 202 00:10:19,640 --> 00:10:24,200 Speaker 2: in footprint, our legacy sort of comps are changing. We're 203 00:10:24,240 --> 00:10:27,080 Speaker 2: different business than we were just two years ago. Right. 204 00:10:27,559 --> 00:10:31,000 Speaker 1: So one of the good things about the LTL market 205 00:10:31,200 --> 00:10:34,400 Speaker 1: is how consolidated it is, and that probably helps with 206 00:10:34,559 --> 00:10:39,360 Speaker 1: keeping pricing relatively rational compared to the truckload market, and 207 00:10:39,400 --> 00:10:42,319 Speaker 1: it usually means that you guys get higher multiples than 208 00:10:42,320 --> 00:10:45,440 Speaker 1: other transportation companies. Can you talk about the pricing environment 209 00:10:46,640 --> 00:10:48,719 Speaker 1: what it's been like so far in the first quarter. 210 00:10:49,160 --> 00:10:52,079 Speaker 2: Listen, I think the pricing environment continues to be very 211 00:10:52,120 --> 00:10:57,520 Speaker 2: stable and practical. Frankly, this is an inflationary business. Capital 212 00:10:57,559 --> 00:11:02,920 Speaker 2: intensative business and business customer have high expectations in order 213 00:11:02,960 --> 00:11:04,679 Speaker 2: to meet those You have to be able to make 214 00:11:04,720 --> 00:11:08,320 Speaker 2: investments in the business, not only most significantly in people, 215 00:11:08,600 --> 00:11:13,319 Speaker 2: but real estate, technology, equipment, all those things that's all inflationary. 216 00:11:14,360 --> 00:11:16,840 Speaker 2: I think the industry realizes that, and I think what 217 00:11:16,960 --> 00:11:19,480 Speaker 2: you see in the pricing environment's reflective of that. People 218 00:11:19,520 --> 00:11:22,120 Speaker 2: need to be able to get a return on significant 219 00:11:22,559 --> 00:11:25,840 Speaker 2: capital outlays to support this level of type of business. 220 00:11:26,120 --> 00:11:28,520 Speaker 1: Right And it's worth noting that one of your competitors, 221 00:11:28,520 --> 00:11:32,240 Speaker 1: when they came out with the February market update, you know, 222 00:11:32,280 --> 00:11:35,040 Speaker 1: they mentioned that pricing excluding fuels are charges at mid 223 00:11:35,120 --> 00:11:38,880 Speaker 1: single digits, and so, you know, you mentioned that you're 224 00:11:38,880 --> 00:11:43,959 Speaker 1: winning more share from your current customers, and is that 225 00:11:44,559 --> 00:11:47,480 Speaker 1: are you able to charge more for that additional share 226 00:11:47,840 --> 00:11:53,800 Speaker 1: because you're either offering more services or maybe you're on 227 00:11:53,960 --> 00:11:57,160 Speaker 1: time services has improved. Are you able to kind of 228 00:11:58,000 --> 00:11:59,640 Speaker 1: increase pricing on current customers. 229 00:12:00,440 --> 00:12:04,240 Speaker 2: We continue to focus on pricing for all customers. You know, 230 00:12:04,520 --> 00:12:08,000 Speaker 2: as I pointed out, the inflation under inflationary elements of 231 00:12:08,000 --> 00:12:12,840 Speaker 2: this business are significant. As we expand the network, though, 232 00:12:13,000 --> 00:12:16,200 Speaker 2: and we have opportunities to better serve customers, we earned 233 00:12:16,200 --> 00:12:19,080 Speaker 2: that higher price. We're providing high levels of service into 234 00:12:19,120 --> 00:12:22,280 Speaker 2: these new markets and we're solving more problems for customers 235 00:12:22,280 --> 00:12:25,040 Speaker 2: those solutions. Did we deserve to get paid for that? 236 00:12:25,120 --> 00:12:27,400 Speaker 2: And I think we are able to do that. I 237 00:12:27,440 --> 00:12:31,559 Speaker 2: think you see customers looking for high quality of service. 238 00:12:31,679 --> 00:12:34,720 Speaker 2: Those customers typically realize they make money because the freight 239 00:12:34,760 --> 00:12:37,360 Speaker 2: gets delivered on time, not damaged when they need it. 240 00:12:39,280 --> 00:12:42,720 Speaker 2: That usually commands a higher price and or a more 241 00:12:42,840 --> 00:12:45,360 Speaker 2: market price, and I think that's what we're seeing. 242 00:12:46,240 --> 00:12:49,200 Speaker 1: So pricing is a bedrock of the l tail industry, 243 00:12:49,400 --> 00:12:51,439 Speaker 1: and there were some concerns over the last couple of 244 00:12:51,480 --> 00:12:55,760 Speaker 1: weeks about pricing because of either you know, reports that 245 00:12:56,080 --> 00:13:00,360 Speaker 1: Amazon might be entering the ltail market or fed X 246 00:13:00,480 --> 00:13:04,320 Speaker 1: is you know, spinning off this lt L business. We'll 247 00:13:04,400 --> 00:13:06,720 Speaker 1: maybe talk about Amazon a little later, but what do 248 00:13:06,760 --> 00:13:09,840 Speaker 1: you think the impact of FedEx freight, which is FedEx 249 00:13:09,920 --> 00:13:13,120 Speaker 1: is less than truckload business, being an independent company. How 250 00:13:13,160 --> 00:13:15,520 Speaker 1: do you think that's going to impact competition? Because you know, 251 00:13:15,559 --> 00:13:17,960 Speaker 1: they said they are going out and looking for you know, 252 00:13:18,000 --> 00:13:20,560 Speaker 1: more sales people, so that just means that they're going 253 00:13:20,640 --> 00:13:21,880 Speaker 1: to be trying to get more business. 254 00:13:21,880 --> 00:13:24,439 Speaker 2: I'm assuming sure. So when I think about it, I 255 00:13:24,800 --> 00:13:27,400 Speaker 2: start always start with kind of what what SAIA doing 256 00:13:27,440 --> 00:13:31,120 Speaker 2: for our customers, and we've got to continue to maintain 257 00:13:31,200 --> 00:13:33,600 Speaker 2: very high levels of service. We need to make sure 258 00:13:33,640 --> 00:13:36,679 Speaker 2: that we're easy to do business with. You know, as 259 00:13:36,800 --> 00:13:40,000 Speaker 2: competitors maybe you know FedEx Freight or others are going 260 00:13:40,040 --> 00:13:43,520 Speaker 2: through change that creates a disruption for a customer. Customers 261 00:13:43,520 --> 00:13:47,560 Speaker 2: are in business to sell their products, build their products, 262 00:13:47,600 --> 00:13:50,880 Speaker 2: move their products, not to solve the LTL providers problems. 263 00:13:51,400 --> 00:13:53,400 Speaker 2: So for us, it's a focus on what can we 264 00:13:53,440 --> 00:13:56,280 Speaker 2: do for our customers, and I think that's a differentiator. 265 00:13:56,720 --> 00:13:59,880 Speaker 2: I think with respect to you know, competitive environment for 266 00:14:00,559 --> 00:14:05,640 Speaker 2: great employees, we focus on keeping our team engaged, providing 267 00:14:05,679 --> 00:14:10,480 Speaker 2: opportunities for career development, making sure we're competitively paid and opportunity. 268 00:14:10,559 --> 00:14:12,720 Speaker 2: Part of a company is growing quickly. The great product. 269 00:14:12,720 --> 00:14:15,199 Speaker 2: That's frankly, if you've got a great product, if you're 270 00:14:15,200 --> 00:14:17,280 Speaker 2: in sales, that's something you want to sell, and if 271 00:14:17,280 --> 00:14:19,920 Speaker 2: you're easy to do business with for the customer, that's 272 00:14:19,920 --> 00:14:23,080 Speaker 2: something our folks can sell. That creates a good opportunity 273 00:14:23,120 --> 00:14:26,600 Speaker 2: for us. So we like the landscape that the opportunity 274 00:14:26,680 --> 00:14:30,360 Speaker 2: presents us. I think that frankly, if you're going to 275 00:14:30,360 --> 00:14:33,280 Speaker 2: be any LTL business, because of the nature the capital 276 00:14:33,360 --> 00:14:37,840 Speaker 2: required and the inflationary structure that's there. You need competitors 277 00:14:37,840 --> 00:14:39,800 Speaker 2: that are focused on returns in that business, and I 278 00:14:39,800 --> 00:14:42,400 Speaker 2: think that makes for a healthy, healthy environment. So to 279 00:14:42,440 --> 00:14:45,840 Speaker 2: the extent that the landscape are that the competitors are 280 00:14:45,880 --> 00:14:48,080 Speaker 2: ones that are focused on being in an LTL space, 281 00:14:48,120 --> 00:14:49,520 Speaker 2: I think that's that's a good thing. 282 00:14:49,400 --> 00:14:53,120 Speaker 1: Overall, right, And so I guess on that note again, 283 00:14:53,160 --> 00:14:55,640 Speaker 1: there was like some press reports that Amazon may be 284 00:14:56,000 --> 00:14:58,600 Speaker 1: entering the LTL market. Do you have any thoughts about that? 285 00:14:59,440 --> 00:15:02,680 Speaker 2: Yeah, I know, I can't really speak to Amazon. I mean, 286 00:15:02,760 --> 00:15:05,360 Speaker 2: that's less than a half a percent of our business 287 00:15:05,400 --> 00:15:07,520 Speaker 2: that is kind of influenced by Amazon. It's a very 288 00:15:07,640 --> 00:15:11,080 Speaker 2: very small part. People that have followed SAIA, I know 289 00:15:11,200 --> 00:15:15,359 Speaker 2: that we've been focused on an organic expansion since twenty seventeen, 290 00:15:16,080 --> 00:15:18,880 Speaker 2: and since that time, we have been involved in probably 291 00:15:18,960 --> 00:15:22,120 Speaker 2: one hundred and twenty or so real estate transactions, either 292 00:15:22,160 --> 00:15:25,800 Speaker 2: to support the openings of sixty nine new facilities since 293 00:15:25,840 --> 00:15:29,440 Speaker 2: seventeen or the thirty nine new locations that we have 294 00:15:29,560 --> 00:15:33,360 Speaker 2: relocated to over that intervening period. There have been a 295 00:15:33,360 --> 00:15:36,280 Speaker 2: handful of transactions that we didn't participate in, but we 296 00:15:36,280 --> 00:15:40,160 Speaker 2: were aware of LTL properties being traded, and I can 297 00:15:40,240 --> 00:15:43,280 Speaker 2: think of a single time once that we encountered Amazon 298 00:15:43,320 --> 00:15:45,360 Speaker 2: in any of those transactions, and they were I think 299 00:15:45,560 --> 00:15:49,960 Speaker 2: looking at a warehouse property. So I can't speak to 300 00:15:50,680 --> 00:15:52,920 Speaker 2: what they're doing. I can speak to what we're doing 301 00:15:53,000 --> 00:15:55,120 Speaker 2: and kind of what of our experience has been in 302 00:15:55,160 --> 00:15:58,480 Speaker 2: the marketplace. So that's what we've seen. 303 00:15:59,120 --> 00:16:02,200 Speaker 1: I'm all skeptical of them going in and going head 304 00:16:02,200 --> 00:16:05,680 Speaker 1: to head with the legacy players. You think they would 305 00:16:05,680 --> 00:16:07,560 Speaker 1: have bought maybe some of those yellow facilities. 306 00:16:07,800 --> 00:16:10,680 Speaker 2: I don't think they participate a transaction now. 307 00:16:10,720 --> 00:16:12,600 Speaker 1: And you know you talk about service, how do you 308 00:16:12,640 --> 00:16:15,680 Speaker 1: benchmark service? What is service in LTL? 309 00:16:16,160 --> 00:16:18,760 Speaker 2: Well, for us at Saya, we have a customer first 310 00:16:18,840 --> 00:16:22,640 Speaker 2: dashboard that we start to day with that every terminal 311 00:16:22,680 --> 00:16:26,160 Speaker 2: manager measures all the key elements of what matter to 312 00:16:26,240 --> 00:16:29,720 Speaker 2: a customer. We measure that on a daily basis. We 313 00:16:29,800 --> 00:16:33,560 Speaker 2: track the performance. It's everything from on time to deliveries 314 00:16:33,600 --> 00:16:38,920 Speaker 2: before exceptions, to any sort of element that would customer values. 315 00:16:38,920 --> 00:16:40,920 Speaker 2: We track that every day in our dashboards and we 316 00:16:40,960 --> 00:16:43,000 Speaker 2: follow up on that. We share that with our customers, 317 00:16:43,000 --> 00:16:45,560 Speaker 2: who share our employees. We all kind of worked the 318 00:16:45,640 --> 00:16:49,320 Speaker 2: same sheet of music so to speak. We realize that 319 00:16:49,920 --> 00:16:52,280 Speaker 2: we're in business to work for the customer, and so 320 00:16:52,600 --> 00:16:56,400 Speaker 2: it behooves us that everybody in our organization is aligned 321 00:16:56,400 --> 00:16:59,880 Speaker 2: to those dashboard metrics or all the KPIs that support 322 00:17:00,200 --> 00:17:03,920 Speaker 2: what customers need from us. That's how we measure ourselves, 323 00:17:04,000 --> 00:17:06,680 Speaker 2: and that's how customers measures us. 324 00:17:06,960 --> 00:17:09,880 Speaker 1: Can you talk about just what a couple of KPIs are. 325 00:17:10,440 --> 00:17:12,560 Speaker 2: On time service? Did you pick up the freight when 326 00:17:12,560 --> 00:17:13,760 Speaker 2: you said you were going to pick it up? Did 327 00:17:13,840 --> 00:17:16,639 Speaker 2: you deliver it when you said the customer expected to 328 00:17:16,680 --> 00:17:17,320 Speaker 2: be delivered? 329 00:17:18,200 --> 00:17:19,960 Speaker 1: I feel like you're asking me the question, yes, we 330 00:17:20,000 --> 00:17:20,399 Speaker 1: did deliver. 331 00:17:20,520 --> 00:17:23,000 Speaker 2: Yeah though. That's that's exactly how we think about it, though, 332 00:17:23,080 --> 00:17:25,960 Speaker 2: and that's how we measure ourselves. I phrase it in 333 00:17:26,000 --> 00:17:28,359 Speaker 2: those terms because that's how we talk about, right, what 334 00:17:28,440 --> 00:17:32,280 Speaker 2: are deliveries before exceptions? How many deliveries do we make 335 00:17:32,320 --> 00:17:34,720 Speaker 2: before there may have been a problem, not damage, but 336 00:17:34,840 --> 00:17:38,240 Speaker 2: may have been a problem. We measure those things, and 337 00:17:38,280 --> 00:17:41,200 Speaker 2: then I think we get customer verbatims on a daily basis, 338 00:17:41,520 --> 00:17:43,679 Speaker 2: and we follow up with the customer how do we do? 339 00:17:44,359 --> 00:17:47,320 Speaker 2: What can we do better? Those are all key elements 340 00:17:47,400 --> 00:17:48,719 Speaker 2: what customers expect from us. 341 00:17:49,080 --> 00:17:51,439 Speaker 1: Obviously, you have goals and targets that you want everyone 342 00:17:51,480 --> 00:17:55,120 Speaker 1: to reach, you know, to improve upon, to build upon. 343 00:17:55,480 --> 00:17:58,720 Speaker 1: Can you share any like near term or aspirational targets 344 00:17:58,720 --> 00:18:01,359 Speaker 1: that you guys have from from a service standpoint. 345 00:18:02,600 --> 00:18:08,600 Speaker 2: Listen, we measure ourselves in the Mastio scorecard comes out 346 00:18:08,640 --> 00:18:11,200 Speaker 2: every fall. We look at that and we want to 347 00:18:11,240 --> 00:18:13,280 Speaker 2: be the best. So our long term goal is to 348 00:18:13,320 --> 00:18:15,880 Speaker 2: be the best in that and not to be the biggest, 349 00:18:16,160 --> 00:18:19,040 Speaker 2: but be perceived as the best LTL provider. We think 350 00:18:19,040 --> 00:18:21,040 Speaker 2: when we have the opportunity where we have the full 351 00:18:21,080 --> 00:18:25,040 Speaker 2: network coverage, we stack up really really well. That's our 352 00:18:25,080 --> 00:18:27,840 Speaker 2: goal because we think that what comes to us then 353 00:18:28,000 --> 00:18:30,160 Speaker 2: is we have a lot of value that we create 354 00:18:30,200 --> 00:18:32,119 Speaker 2: for our customers and we create for the shareholders of 355 00:18:32,119 --> 00:18:32,600 Speaker 2: the company. 356 00:18:33,160 --> 00:18:37,800 Speaker 1: Gotcha. You know, we couldn't have a conversation unfortunately without 357 00:18:37,880 --> 00:18:40,560 Speaker 1: talking about tariffs. So I'm going to ask the question, 358 00:18:41,160 --> 00:18:43,240 Speaker 1: how are all this talk of tariffs? How's that going 359 00:18:43,240 --> 00:18:47,920 Speaker 1: to impact sy, your network, your customers, and your bottom line? 360 00:18:47,920 --> 00:18:49,440 Speaker 2: Well, I think there are a couple of things. I 361 00:18:49,520 --> 00:18:52,600 Speaker 2: think that the biggest at the highest level, you know, 362 00:18:52,600 --> 00:18:54,399 Speaker 2: I think people have to make a judgment as to 363 00:18:54,400 --> 00:18:57,719 Speaker 2: what the impact of tariffs may or may not have 364 00:18:57,800 --> 00:19:00,960 Speaker 2: on the industrial economy, right, and I think that you know, 365 00:19:01,000 --> 00:19:04,399 Speaker 2: if you have a thesis that says that will help 366 00:19:04,680 --> 00:19:09,160 Speaker 2: motivate facilitate reshoring or near shoring, that probably helps LTL. 367 00:19:09,640 --> 00:19:11,440 Speaker 2: I think in the short term, it creates a fair 368 00:19:11,440 --> 00:19:15,120 Speaker 2: amount of uncertainty. I think that makes it challenging for 369 00:19:15,280 --> 00:19:18,560 Speaker 2: customers to organize and run their business not knowing what 370 00:19:18,600 --> 00:19:20,919 Speaker 2: the cost structure is going to look like as teriffs 371 00:19:21,000 --> 00:19:24,919 Speaker 2: come and go. I do think that to the extent that, 372 00:19:25,080 --> 00:19:28,200 Speaker 2: you know, if we've had some certainty around that and 373 00:19:28,800 --> 00:19:32,280 Speaker 2: customers importing raw materials or goods into their facilities there, 374 00:19:32,480 --> 00:19:35,359 Speaker 2: tariff would indicate that they're that much more expensive. Right 375 00:19:35,400 --> 00:19:37,560 Speaker 2: for them to handle that, right, they're going to need 376 00:19:37,560 --> 00:19:39,639 Speaker 2: an LTL provider that does a good job delivering the 377 00:19:39,680 --> 00:19:41,160 Speaker 2: product on time, not damaged. 378 00:19:41,480 --> 00:19:44,080 Speaker 1: Do you guys have any crossborder expecise. 379 00:19:44,119 --> 00:19:47,160 Speaker 2: It's a little bit round three percent of our revenue. 380 00:19:46,840 --> 00:19:48,800 Speaker 1: ABUSS and that's both on the north and the South. 381 00:19:48,880 --> 00:19:50,359 Speaker 2: Yeah, most of it's north, okay. 382 00:19:52,480 --> 00:19:54,200 Speaker 1: And then you know, I just a kind of a 383 00:19:55,600 --> 00:19:58,520 Speaker 1: network question. You know, what percentage of the linehul movements 384 00:19:58,520 --> 00:20:01,960 Speaker 1: are done by third party or and and and kind 385 00:20:02,000 --> 00:20:03,960 Speaker 1: of do you guys have plans to bringing more of 386 00:20:03,960 --> 00:20:06,480 Speaker 1: that in house? And is that just a function also 387 00:20:06,800 --> 00:20:09,960 Speaker 1: that percentage of the fact that you're bringing on these 388 00:20:10,000 --> 00:20:13,560 Speaker 1: new facilities and before you want to bring up in 389 00:20:13,600 --> 00:20:15,760 Speaker 1: your own assets, you want to have the density to do. 390 00:20:15,720 --> 00:20:19,719 Speaker 2: So, we don't really have internal goals around how what 391 00:20:19,800 --> 00:20:23,440 Speaker 2: percentage of our miles are run are outsourced, So we're 392 00:20:23,440 --> 00:20:26,080 Speaker 2: load double digits in the fourth quarter as to what 393 00:20:26,119 --> 00:20:31,560 Speaker 2: the outsourced miles were. What we focus on primarily. Number one, however, 394 00:20:31,600 --> 00:20:35,040 Speaker 2: whatever form we use to run our line haul network, 395 00:20:35,160 --> 00:20:36,840 Speaker 2: number one thing it has to happen is we have 396 00:20:36,880 --> 00:20:40,600 Speaker 2: to meet customer expectations. Well the goods, will the freight 397 00:20:40,640 --> 00:20:42,159 Speaker 2: make it to where the customer needs it to be 398 00:20:42,200 --> 00:20:45,400 Speaker 2: delivered on time? First and foremost, can we make sure 399 00:20:45,400 --> 00:20:47,040 Speaker 2: we do that in a way that's not damage or 400 00:20:47,080 --> 00:20:49,840 Speaker 2: creating any kind of issue for the customer. We achieve that, 401 00:20:50,040 --> 00:20:53,240 Speaker 2: then we go find what's the cost optimal solution, so 402 00:20:53,840 --> 00:20:56,920 Speaker 2: we may keep our line haul miles outsourced at the 403 00:20:56,960 --> 00:21:00,600 Speaker 2: same level if we feel like over time that's cost effective. 404 00:21:00,600 --> 00:21:02,560 Speaker 2: But most importantly, it's got to take care of the 405 00:21:02,560 --> 00:21:05,679 Speaker 2: customer first. If we do that, we'll continue to use it, 406 00:21:05,720 --> 00:21:08,240 Speaker 2: but I think as you'll see over time, as we 407 00:21:08,320 --> 00:21:12,120 Speaker 2: continue to scale this network, naturally, I think that number 408 00:21:12,160 --> 00:21:14,760 Speaker 2: probably comes down. But we don't necessarily have a target 409 00:21:14,760 --> 00:21:17,440 Speaker 2: of you know, load single digits or something like that. 410 00:21:17,480 --> 00:21:19,439 Speaker 2: We just want to have a cost effective model that 411 00:21:19,480 --> 00:21:21,560 Speaker 2: meets service requirements for the customer. Right. 412 00:21:21,760 --> 00:21:24,240 Speaker 1: I know drivers are important to SAIA, They're obviously also 413 00:21:24,280 --> 00:21:27,000 Speaker 1: important to the overall economy. Can you talk about like 414 00:21:27,320 --> 00:21:30,280 Speaker 1: a driver that comes to Saiya do they do they 415 00:21:30,520 --> 00:21:32,480 Speaker 1: start in the pick up and delivery and go to 416 00:21:32,560 --> 00:21:34,439 Speaker 1: line haul? Do they start in line haul and then 417 00:21:34,560 --> 00:21:36,400 Speaker 1: they want to be pick up and delivery? 418 00:21:36,880 --> 00:21:37,000 Speaker 2: Like? 419 00:21:37,400 --> 00:21:39,879 Speaker 1: And also I don't know if you can talk about it, 420 00:21:39,920 --> 00:21:41,880 Speaker 1: but like does one pay better than the other? 421 00:21:42,080 --> 00:21:43,439 Speaker 2: Like? What? What? What? What? What? 422 00:21:43,480 --> 00:21:45,320 Speaker 1: Has it worked with drivers for Siya? 423 00:21:45,560 --> 00:21:48,400 Speaker 2: And there's a third opportunity for someone come and work 424 00:21:48,440 --> 00:21:50,800 Speaker 2: in our doc We put you through a doctor driver 425 00:21:50,920 --> 00:21:55,000 Speaker 2: program and we'll train drivers internally as well, so we'll 426 00:21:55,000 --> 00:21:58,720 Speaker 2: recruit drivers that have experience from the outside. The come 427 00:21:58,760 --> 00:22:02,520 Speaker 2: inies either city drive line drivers, and over an individual's 428 00:22:02,560 --> 00:22:05,000 Speaker 2: career you might see them move back and forth between 429 00:22:05,080 --> 00:22:09,440 Speaker 2: city or in the line roles. They can go back 430 00:22:09,440 --> 00:22:11,960 Speaker 2: and forth. Typically the line drivers, it's in over the 431 00:22:12,080 --> 00:22:15,600 Speaker 2: road driving at night, they're at home most often, not 432 00:22:15,800 --> 00:22:18,280 Speaker 2: every day, but you know many are every day, some 433 00:22:18,440 --> 00:22:21,600 Speaker 2: are every other day or every couple of days. That's 434 00:22:21,680 --> 00:22:25,360 Speaker 2: usually the highest paying job. But you'll find is we'll 435 00:22:25,359 --> 00:22:28,399 Speaker 2: have some city drivers to do really well that drive 436 00:22:28,440 --> 00:22:30,720 Speaker 2: in the city and then also volunteer to maybe drive 437 00:22:30,760 --> 00:22:34,679 Speaker 2: in the line over the weekend or on alternate between roles. 438 00:22:35,359 --> 00:22:37,679 Speaker 2: That's one of the great things about having a successful 439 00:22:37,680 --> 00:22:41,240 Speaker 2: company like Saya is that our drivers are like taking 440 00:22:41,240 --> 00:22:43,960 Speaker 2: on many different roles. So it's been we've been able 441 00:22:44,000 --> 00:22:46,760 Speaker 2: to provide those kind of career opportunities for them. So typically, 442 00:22:47,600 --> 00:22:51,520 Speaker 2: you know, there's some variation, but traditionally a historic that 443 00:22:51,600 --> 00:22:54,800 Speaker 2: people will focus on either line or city. But we're 444 00:22:54,800 --> 00:22:56,840 Speaker 2: really proud of the folks. We also train up through 445 00:22:56,840 --> 00:22:57,760 Speaker 2: the ranks. Right. 446 00:22:57,840 --> 00:22:59,720 Speaker 1: You know, we mentioned in the beginning of the conversation 447 00:22:59,760 --> 00:23:03,920 Speaker 1: that one was up real double digits so far through February, 448 00:23:03,960 --> 00:23:08,320 Speaker 1: and shipment's probably up mid single digits. So obviously the 449 00:23:08,320 --> 00:23:11,200 Speaker 1: weight per shipment has changed. Can you talk about, you know, 450 00:23:11,640 --> 00:23:14,320 Speaker 1: what is driving that change and what does that do 451 00:23:14,640 --> 00:23:17,000 Speaker 1: to you know, revenue per one hundred weight, which is 452 00:23:17,040 --> 00:23:19,640 Speaker 1: a measurement for pricing for the company. 453 00:23:20,240 --> 00:23:24,760 Speaker 2: Yeah, Traditionally cost kind of follow shipments, right, So if 454 00:23:24,800 --> 00:23:29,040 Speaker 2: you have a shipment, higher weighted shipment, you typically have 455 00:23:29,119 --> 00:23:33,520 Speaker 2: the similar cost structure as a lower weighted shipment. Typically 456 00:23:33,600 --> 00:23:36,000 Speaker 2: higher weighted shipment give you a higher revenue per bill. 457 00:23:36,480 --> 00:23:38,880 Speaker 2: So for us, as we look at more attractive freight, 458 00:23:38,920 --> 00:23:42,200 Speaker 2: we want to have freight that will economically more viable. 459 00:23:42,200 --> 00:23:44,440 Speaker 2: And that's not to say the lighter weighted shipments can't 460 00:23:44,440 --> 00:23:47,639 Speaker 2: be if they're priced appropriately, can't be can't be successful 461 00:23:47,640 --> 00:23:50,320 Speaker 2: with that as well. So I think in the short 462 00:23:50,440 --> 00:23:53,960 Speaker 2: term that has provided a little bit of margin tailwind 463 00:23:54,000 --> 00:23:58,120 Speaker 2: as we've added more freight that is conducive to matching 464 00:23:58,200 --> 00:24:02,200 Speaker 2: cost and getting paid appropriately. But you typically would see 465 00:24:02,280 --> 00:24:05,560 Speaker 2: higher weighted shipment gets you higher revenue per bill. 466 00:24:05,640 --> 00:24:07,800 Speaker 1: And is that going to still be the case because 467 00:24:07,800 --> 00:24:12,119 Speaker 1: I know the industry is moving the way they price 468 00:24:12,200 --> 00:24:14,280 Speaker 1: their freight. Can you talk about that change? 469 00:24:14,920 --> 00:24:17,320 Speaker 2: Yeah, I think what's going to be important over time, 470 00:24:17,359 --> 00:24:19,280 Speaker 2: and I think what you're talking about is the more 471 00:24:19,400 --> 00:24:24,040 Speaker 2: of a dimension based strategy or program. I think what's 472 00:24:24,119 --> 00:24:26,280 Speaker 2: critical about that is if you look at our trailers 473 00:24:26,280 --> 00:24:28,760 Speaker 2: typically they cube out before they weigh out, right, So 474 00:24:28,800 --> 00:24:32,560 Speaker 2: you're we're really selling airspace on a trailer. So it's 475 00:24:32,600 --> 00:24:36,520 Speaker 2: critically important that we optimize the capacity we do have. 476 00:24:36,560 --> 00:24:38,680 Speaker 2: And I think to the extent that the industry evolves 477 00:24:38,680 --> 00:24:42,040 Speaker 2: to more of a dimension based process, I think that 478 00:24:42,280 --> 00:24:45,439 Speaker 2: only makes sense, and that's economically makes sense, and I 479 00:24:45,440 --> 00:24:47,040 Speaker 2: think it'll be good for customers as well. 480 00:24:47,480 --> 00:24:49,520 Speaker 1: Okay, great, So you know, we talked a lot about 481 00:24:49,520 --> 00:24:52,200 Speaker 1: the LTL market, but that's not all you guys do, right, 482 00:24:52,359 --> 00:24:53,760 Speaker 1: Can you talk about your other businesses. 483 00:24:54,000 --> 00:24:58,240 Speaker 2: Yeah, We've got a smaller about three four percent of 484 00:24:58,280 --> 00:25:01,480 Speaker 2: our revenue base as a company called link X, which 485 00:25:01,520 --> 00:25:08,600 Speaker 2: does everything from logistics, warehousing, brokerage. It has been a 486 00:25:08,640 --> 00:25:14,119 Speaker 2: fantastic add on to our core LTL business. We actually 487 00:25:14,119 --> 00:25:16,840 Speaker 2: have added last mile work within that group as well. 488 00:25:17,600 --> 00:25:20,200 Speaker 2: It's just all about providing a solution to the customer. 489 00:25:20,200 --> 00:25:21,600 Speaker 2: We want to be in a position that we can 490 00:25:21,640 --> 00:25:24,760 Speaker 2: solve a customer's problem, and we found that that business 491 00:25:24,800 --> 00:25:27,400 Speaker 2: is a nice add on that will look to grow 492 00:25:27,440 --> 00:25:29,080 Speaker 2: over time. Great. 493 00:25:30,000 --> 00:25:32,520 Speaker 1: I know you're not necessarily in the truckload market, but 494 00:25:32,560 --> 00:25:35,040 Speaker 1: obviously the truckload market is going to impact you. Whether 495 00:25:35,080 --> 00:25:39,080 Speaker 1: it's costs because of doing line haul. But can you 496 00:25:39,119 --> 00:25:41,600 Speaker 1: talk about, you know, what a tightening truckload market can 497 00:25:41,640 --> 00:25:42,879 Speaker 1: do for LTL demand. 498 00:25:43,560 --> 00:25:46,480 Speaker 2: Yeah, I think that in a tightening truckload market, that's 499 00:25:46,520 --> 00:25:49,360 Speaker 2: probably a macro backdrop that's a little bit more positive 500 00:25:49,400 --> 00:25:52,000 Speaker 2: than it is right now. I think what you'll see 501 00:25:52,320 --> 00:25:55,840 Speaker 2: is more freight go back to the traditional modes, you know, LTL. 502 00:25:56,040 --> 00:25:58,600 Speaker 2: To the extent that some LTL is ended up in 503 00:25:58,680 --> 00:26:01,280 Speaker 2: sort of the truckload sort of market, that'll kind of 504 00:26:01,280 --> 00:26:04,919 Speaker 2: gravitates it way back, you know. I think in a 505 00:26:05,000 --> 00:26:07,359 Speaker 2: market like that, you probably have a greater demand for 506 00:26:07,440 --> 00:26:12,120 Speaker 2: drivers in the truckload space, so that'll create a related 507 00:26:12,200 --> 00:26:15,120 Speaker 2: demand in LTL. So I think that'll disappoint to more 508 00:26:15,119 --> 00:26:18,000 Speaker 2: inflationary costs, and we've got to make sure that we 509 00:26:18,119 --> 00:26:20,760 Speaker 2: provide a great place for people to work and we 510 00:26:20,880 --> 00:26:23,120 Speaker 2: charge for the service we provide. I think is where 511 00:26:23,160 --> 00:26:27,480 Speaker 2: that ultimately leads SIA. But I think overall that probably 512 00:26:27,560 --> 00:26:29,679 Speaker 2: is good for the overall economy because it speaks to 513 00:26:29,680 --> 00:26:31,440 Speaker 2: the health of the economy more than anything else. 514 00:26:31,640 --> 00:26:34,760 Speaker 1: Right, I've been to a bunch of transportation conferences lately. 515 00:26:35,200 --> 00:26:38,000 Speaker 1: Outside of tariffs, everyone wants to talk about AI. So 516 00:26:38,320 --> 00:26:41,400 Speaker 1: I'll ask the question, is saia, what are you guys 517 00:26:41,440 --> 00:26:44,640 Speaker 1: doing with machine learning and AI to become a more 518 00:26:45,119 --> 00:26:46,359 Speaker 1: productive organization? 519 00:26:47,040 --> 00:26:52,200 Speaker 2: Listen, SAIA has been we call it often before AI 520 00:26:52,320 --> 00:26:54,560 Speaker 2: became the term, we were calling a machine learning. So 521 00:26:54,640 --> 00:26:58,560 Speaker 2: how we optimize and route our line hauled network, how 522 00:26:58,600 --> 00:27:04,480 Speaker 2: we run our city operations, those are all forms of AI. Right, 523 00:27:04,520 --> 00:27:08,560 Speaker 2: that's machine learning. It is about data. This is a 524 00:27:08,720 --> 00:27:12,040 Speaker 2: massively data intensive business. So every opportunity that you have 525 00:27:12,240 --> 00:27:15,920 Speaker 2: to more effectively priced use data around pricing to more 526 00:27:16,160 --> 00:27:20,480 Speaker 2: effectively cost the services you provide, you have an opportunity 527 00:27:20,480 --> 00:27:22,119 Speaker 2: to create value in it. So I think there's a 528 00:27:22,119 --> 00:27:25,720 Speaker 2: lot of opportunity for maybe not the gen AI but 529 00:27:26,240 --> 00:27:28,240 Speaker 2: in the early stages, but I think you'll see more 530 00:27:28,280 --> 00:27:32,720 Speaker 2: and more utilization of tools that help us facilitate and 531 00:27:32,760 --> 00:27:34,800 Speaker 2: optimize all the data that's in this business. 532 00:27:35,840 --> 00:27:38,240 Speaker 1: And when you're talking about LTL services, do you have 533 00:27:38,359 --> 00:27:40,439 Speaker 1: one service or do you have like a premium service 534 00:27:40,520 --> 00:27:43,640 Speaker 1: or an economy type service or is it just like 535 00:27:43,840 --> 00:27:45,760 Speaker 1: one service, Like if you need to go to New 536 00:27:45,840 --> 00:27:48,080 Speaker 1: York to LA, it's going to take three days and 537 00:27:48,080 --> 00:27:50,000 Speaker 1: it's going to take or maybe four days. I don't know. 538 00:27:50,160 --> 00:27:54,359 Speaker 2: Yeah, listen, we'll have expedited service we have you know, 539 00:27:54,640 --> 00:27:58,880 Speaker 2: we'll provide whatever the customer might need to specialize their 540 00:27:59,040 --> 00:28:02,320 Speaker 2: LTL delivery can do that. It may require using our 541 00:28:02,400 --> 00:28:07,200 Speaker 2: link link X last mile offering. It may be appointment windows, 542 00:28:07,320 --> 00:28:12,040 Speaker 2: it could be retail assurance sort of products. Those are 543 00:28:12,119 --> 00:28:15,280 Speaker 2: all essentially the fundamental LTL business of moving a pallet 544 00:28:15,400 --> 00:28:19,120 Speaker 2: of freight, and the variations are meeting whatever the customer's 545 00:28:19,160 --> 00:28:20,560 Speaker 2: expectations or needs might be. 546 00:28:21,400 --> 00:28:25,240 Speaker 1: And you know, you mentioned final mile in the logistics business, 547 00:28:26,000 --> 00:28:29,320 Speaker 1: but is Saiah delivering like stuff to people's house like 548 00:28:29,320 --> 00:28:33,240 Speaker 1: white glove service, like installing washing machines or furniture. 549 00:28:33,480 --> 00:28:36,520 Speaker 2: Now we have we partner with folks on some of 550 00:28:36,560 --> 00:28:39,320 Speaker 2: those sort of offerings and it's very limited basis. We're 551 00:28:39,640 --> 00:28:41,800 Speaker 2: sort of sticking our toe in the water, if you will. 552 00:28:41,960 --> 00:28:44,920 Speaker 1: Okay, hope the water's warm for you. Yeah. You know 553 00:28:45,080 --> 00:28:47,320 Speaker 1: you mentioned I guess a couple of months ago that 554 00:28:47,800 --> 00:28:50,440 Speaker 1: you know your capax outlook for seven hundred million and 555 00:28:50,480 --> 00:28:53,520 Speaker 1: twenty twenty five. That's down from about a billion last year. 556 00:28:54,440 --> 00:28:56,720 Speaker 1: A can you talk about, you know, what's driving the 557 00:28:56,800 --> 00:28:59,480 Speaker 1: decline and also maybe break out, you know, how you 558 00:28:59,480 --> 00:29:03,640 Speaker 1: spend your money on equipment, technology, and all that sort 559 00:29:03,680 --> 00:29:04,080 Speaker 1: of stuff. 560 00:29:04,360 --> 00:29:07,720 Speaker 2: Yeah, So last year the billion dollar number included about 561 00:29:07,960 --> 00:29:10,680 Speaker 2: almost two hundred and fifty million dollars of real estate 562 00:29:10,880 --> 00:29:15,600 Speaker 2: that we purchased through the Yellow auction. This year the 563 00:29:15,680 --> 00:29:19,040 Speaker 2: number of seven hundred and twenty million includes about fifty 564 00:29:19,080 --> 00:29:21,560 Speaker 2: million dollars of technology, and then the balance is split 565 00:29:21,600 --> 00:29:24,880 Speaker 2: fifty to fifty between real estate and equipment, with most 566 00:29:24,920 --> 00:29:28,680 Speaker 2: of the equipment by this year being power. Last year, 567 00:29:28,720 --> 00:29:32,880 Speaker 2: we've actually invested six and purchased six thousand trailers to 568 00:29:32,920 --> 00:29:37,000 Speaker 2: help support the upsized fleet. So it's part of the 569 00:29:37,680 --> 00:29:41,440 Speaker 2: investment required to support the business. So you know, our 570 00:29:41,480 --> 00:29:43,960 Speaker 2: fleet were very pleased with the kind of the average age, 571 00:29:44,000 --> 00:29:47,840 Speaker 2: one of the newest fleets in the industry, and we 572 00:29:47,920 --> 00:29:50,760 Speaker 2: continue to invest in that reliability for customers. Those are 573 00:29:50,760 --> 00:29:52,680 Speaker 2: all things that are important to the customer. And the 574 00:29:52,720 --> 00:29:56,160 Speaker 2: real estate investment is that's continued to upsize that the 575 00:29:56,160 --> 00:29:59,680 Speaker 2: facilities that we have and relocate into new ones and 576 00:30:00,320 --> 00:30:01,760 Speaker 2: add some new ones along the way. 577 00:30:03,280 --> 00:30:06,560 Speaker 1: And in terms of like maintenance CAPBAC because you're still growing. 578 00:30:06,640 --> 00:30:09,400 Speaker 1: So I'm assuming the seven that you say, seven hundred 579 00:30:09,400 --> 00:30:11,320 Speaker 1: and seven and fifty seven hundred and twenty seven hundred 580 00:30:11,320 --> 00:30:13,080 Speaker 1: and twenty Okay, let'll split the difference. Seven hundred and 581 00:30:13,120 --> 00:30:17,160 Speaker 1: twenty million is still considered growth cap backs. What is 582 00:30:17,240 --> 00:30:18,680 Speaker 1: kind of more of a maintenance number. 583 00:30:18,840 --> 00:30:21,560 Speaker 2: Maintenance is probably be somewhere between two and three hundred 584 00:30:21,600 --> 00:30:24,800 Speaker 2: million dollars. We're still trying to find what that home 585 00:30:24,880 --> 00:30:27,360 Speaker 2: is going to be for us, you know, when we're 586 00:30:27,400 --> 00:30:29,600 Speaker 2: growing like we are right now, I don't know exactly 587 00:30:29,600 --> 00:30:33,560 Speaker 2: what steady state is right we're What I would say though, 588 00:30:33,680 --> 00:30:36,760 Speaker 2: is that the under the fundamentals to be able to 589 00:30:36,760 --> 00:30:40,040 Speaker 2: put a class state tractor on a road with a 590 00:30:40,080 --> 00:30:42,560 Speaker 2: set of pups, you know, you're looking at well over 591 00:30:42,600 --> 00:30:45,600 Speaker 2: two hundred thousand dollars and that's not getting any cheaper. 592 00:30:45,720 --> 00:30:50,160 Speaker 2: So that maintenance capital number keeps growing. And if you 593 00:30:50,200 --> 00:30:53,360 Speaker 2: add in the you know, two hundred and thirteen facilities today, 594 00:30:53,400 --> 00:30:55,080 Speaker 2: we intend to keep those to be some of the 595 00:30:55,080 --> 00:30:58,360 Speaker 2: best in the business. That's going to retire require ongoing 596 00:30:58,400 --> 00:31:01,240 Speaker 2: investment as well. So you know, I think that number 597 00:31:01,240 --> 00:31:03,720 Speaker 2: of the two to three hundred million dollar maintenance number 598 00:31:03,760 --> 00:31:06,840 Speaker 2: is that's current for today. I think it's probably goes 599 00:31:06,920 --> 00:31:07,440 Speaker 2: up from here. 600 00:31:07,680 --> 00:31:09,880 Speaker 1: And for those that aren't familiar with trucking. Pups are 601 00:31:09,880 --> 00:31:11,600 Speaker 1: not dogs. They're small trailers. 602 00:31:11,600 --> 00:31:11,920 Speaker 2: What are they? 603 00:31:11,960 --> 00:31:12,920 Speaker 1: Twenty twenty foot. 604 00:31:12,680 --> 00:31:15,440 Speaker 2: Trailers, twenty eight We operate twenty foot. 605 00:31:15,280 --> 00:31:16,760 Speaker 1: Trailer twenty eight foot trailers. So if you see the 606 00:31:16,760 --> 00:31:20,040 Speaker 1: two trailers next to each other in tandem, that those 607 00:31:20,080 --> 00:31:22,240 Speaker 1: are the two pups that are that are going along. 608 00:31:22,600 --> 00:31:25,360 Speaker 1: You know, you mentioned equipment and you know the new fleet. 609 00:31:26,080 --> 00:31:28,560 Speaker 1: Is there a make of trucks that you kind of 610 00:31:28,600 --> 00:31:31,440 Speaker 1: like focus on. Do you just buy like one brand or. 611 00:31:31,360 --> 00:31:33,600 Speaker 2: Do you know, we we spread it around a little bit. 612 00:31:33,600 --> 00:31:36,760 Speaker 2: We like to see what the technology is it's out there, 613 00:31:36,920 --> 00:31:43,160 Speaker 2: see what the reliability. You know, we're primarily freightliner buyers. 614 00:31:43,200 --> 00:31:46,360 Speaker 2: We also have some Volvos and some pack our products, 615 00:31:46,600 --> 00:31:50,040 Speaker 2: and we have a couple of Tesla trucks, so we've 616 00:31:50,080 --> 00:31:53,160 Speaker 2: we've kind of got the full footprint there, right. 617 00:31:53,280 --> 00:31:56,240 Speaker 1: And do you care about the engine, like do you like, 618 00:31:56,280 --> 00:31:58,560 Speaker 1: oh we want a Commons engine or it doesn't really? 619 00:31:59,160 --> 00:32:02,640 Speaker 2: We want reliable first and foremost and cost of ownership. 620 00:32:02,760 --> 00:32:05,680 Speaker 2: So we we like all the products where we've got 621 00:32:05,720 --> 00:32:09,280 Speaker 2: the freight liner products, the Cummins product, we're learning about 622 00:32:09,320 --> 00:32:13,480 Speaker 2: the Tesla platform, so all those those are all. It's 623 00:32:13,520 --> 00:32:15,600 Speaker 2: important for us to not put all of our eggs 624 00:32:15,600 --> 00:32:16,959 Speaker 2: in one basket, so to speak. 625 00:32:17,120 --> 00:32:19,760 Speaker 1: Sure, you mentioned you have a couple of Tesla trucks, 626 00:32:20,040 --> 00:32:24,000 Speaker 1: So what other alternative trucks are you testing out besides electric? 627 00:32:25,120 --> 00:32:30,440 Speaker 2: You know, we continue to look through LNG in the 628 00:32:30,480 --> 00:32:36,280 Speaker 2: orange sort of opportunities today that there aren't many options 629 00:32:36,280 --> 00:32:39,480 Speaker 2: out there. There aren't hydrogen options to really study at scale. 630 00:32:40,360 --> 00:32:43,400 Speaker 2: The battery electrics we have is that's not at scale, 631 00:32:43,560 --> 00:32:46,200 Speaker 2: but it's an opportunity. It's important for us to understand 632 00:32:46,200 --> 00:32:47,360 Speaker 2: what's available. 633 00:32:47,120 --> 00:32:49,080 Speaker 1: And would the electric be for your pickup and delivery 634 00:32:49,080 --> 00:32:50,560 Speaker 1: network or your linehole network. 635 00:32:51,080 --> 00:32:54,400 Speaker 2: It could be for either, you know, depending on what 636 00:32:54,480 --> 00:32:56,840 Speaker 2: the future looks like. We better make sure we understand 637 00:32:57,000 --> 00:32:58,120 Speaker 2: where we need to be. 638 00:32:58,400 --> 00:33:01,480 Speaker 1: Okay, So the ones that you you have are actually 639 00:33:01,560 --> 00:33:02,080 Speaker 1: in service? 640 00:33:02,120 --> 00:33:03,760 Speaker 2: Are they? Yeah? We've got two in service? 641 00:33:04,000 --> 00:33:06,520 Speaker 1: Okay, and have you been what what have is? I 642 00:33:06,520 --> 00:33:09,880 Speaker 1: guess the feedback on those performances. 643 00:33:10,120 --> 00:33:17,440 Speaker 2: A lot of great technology ranges not comparable to diesel right. Performance, 644 00:33:17,560 --> 00:33:22,160 Speaker 2: Driver satisfactions high right. That's important. Of course, when you're 645 00:33:22,200 --> 00:33:24,440 Speaker 2: driving one, you're aren't many others on the road, so 646 00:33:24,520 --> 00:33:27,200 Speaker 2: your your stand out A bit, particularly into Siah Red, 647 00:33:27,200 --> 00:33:30,600 Speaker 2: which is good. But what we've seen early on the 648 00:33:30,640 --> 00:33:33,680 Speaker 2: performance has been good. You know, we're still trying to 649 00:33:33,680 --> 00:33:35,640 Speaker 2: figure out what the long term business case will be. 650 00:33:36,200 --> 00:33:39,000 Speaker 1: Okay, so let's talk about stocks a little bit. Your 651 00:33:39,200 --> 00:33:42,960 Speaker 1: public company tick our S A I A, you know, 652 00:33:43,080 --> 00:33:45,280 Speaker 1: the your your peer group. So we look at all 653 00:33:45,320 --> 00:33:48,480 Speaker 1: the publicly traded uh, folks, So the B I L 654 00:33:48,560 --> 00:33:51,200 Speaker 1: t L peer group is down. I guess when I 655 00:33:51,200 --> 00:33:54,440 Speaker 1: wrote this was twenty percent year to date, so underperforming 656 00:33:54,480 --> 00:33:57,720 Speaker 1: the S and P. Can you talk about what's driving 657 00:33:57,880 --> 00:34:01,200 Speaker 1: that that underperformance from your vantage point. 658 00:34:01,000 --> 00:34:04,680 Speaker 2: Because when I look at it, I tend to focus 659 00:34:04,760 --> 00:34:07,320 Speaker 2: really on the things that we can control. I think 660 00:34:07,320 --> 00:34:11,200 Speaker 2: that our you know, we're pleased with our execution and 661 00:34:11,239 --> 00:34:13,879 Speaker 2: result from twenty four into twenty five, So I think 662 00:34:13,920 --> 00:34:17,520 Speaker 2: that's positive. I think when people see how that develops 663 00:34:17,640 --> 00:34:19,680 Speaker 2: for US into twenty five, they'll be pleased what they 664 00:34:19,719 --> 00:34:22,400 Speaker 2: see with these with what they see in the market 665 00:34:22,440 --> 00:34:25,400 Speaker 2: from US. I think if you look at the group 666 00:34:25,440 --> 00:34:29,560 Speaker 2: in general, I think that the impact is probably reflective 667 00:34:29,560 --> 00:34:32,920 Speaker 2: what people's view of the macro economy is. The uncertainty 668 00:34:32,920 --> 00:34:35,480 Speaker 2: that kind of comes along with that. I don't think 669 00:34:35,560 --> 00:34:39,960 Speaker 2: that the underlying LTL business has fundamentally changed. I think 670 00:34:40,000 --> 00:34:43,360 Speaker 2: this is more of more of a macro sort of situation, 671 00:34:43,440 --> 00:34:45,880 Speaker 2: and I think that's probably reflected in the share price 672 00:34:46,680 --> 00:34:51,080 Speaker 2: for the whole group. So that's why in this stage 673 00:34:51,200 --> 00:34:54,040 Speaker 2: our focus is, let's focus on taking care of the customer, 674 00:34:54,080 --> 00:34:55,560 Speaker 2: and that focus is where we need to be. 675 00:34:56,000 --> 00:34:58,880 Speaker 1: And when you're trying to increase margins, what has a 676 00:34:58,920 --> 00:35:02,000 Speaker 1: bigger influence one hundred basis points of like tonnage growth 677 00:35:02,080 --> 00:35:04,600 Speaker 1: or one hundred basis points of pricing. 678 00:35:04,640 --> 00:35:08,720 Speaker 2: Oh, pricing pricing. I mean, listen, the if you're providing 679 00:35:08,800 --> 00:35:11,399 Speaker 2: high level of service and you can do the same 680 00:35:11,480 --> 00:35:15,200 Speaker 2: level of service and just simply charge more for it 681 00:35:15,320 --> 00:35:18,800 Speaker 2: or find customers, it's value that more that's going to 682 00:35:19,040 --> 00:35:22,800 Speaker 2: be beneficial far beyond any growth and shipments and tonnage. 683 00:35:23,520 --> 00:35:26,920 Speaker 1: You know, we were talking about truckers earlier in this market. 684 00:35:27,760 --> 00:35:30,040 Speaker 1: You know, it seems like the economy. I'm not going 685 00:35:30,120 --> 00:35:34,000 Speaker 1: to say it's it's it's decelerating. I guess we could 686 00:35:34,040 --> 00:35:37,440 Speaker 1: say that. You know, according to Bloomberg terminal consensuses that 687 00:35:37,560 --> 00:35:40,640 Speaker 1: there could be a recession with a twenty five percent probability. 688 00:35:41,200 --> 00:35:44,400 Speaker 1: That's up from a low of twenty percent in December, 689 00:35:44,800 --> 00:35:46,960 Speaker 1: so you know, people are getting a little more pessimistic. 690 00:35:47,040 --> 00:35:50,279 Speaker 1: I'm just curious, you know, how is it to how 691 00:35:50,440 --> 00:35:52,880 Speaker 1: is it for you guys to attract and retain drivers 692 00:35:52,960 --> 00:35:53,759 Speaker 1: in today's market. 693 00:35:54,640 --> 00:35:56,319 Speaker 2: We've got to be a great place to work first 694 00:35:56,360 --> 00:35:59,680 Speaker 2: and foremost. If you get that, solve that problem, then 695 00:36:00,120 --> 00:36:02,880 Speaker 2: position where you can recruit drivers of this market. You 696 00:36:02,960 --> 00:36:05,200 Speaker 2: got to be very competitive on paying benefits. We think 697 00:36:05,239 --> 00:36:09,920 Speaker 2: we are the overall. If you look at the driver population, 698 00:36:10,080 --> 00:36:12,799 Speaker 2: it is aging. I don't think as many people are 699 00:36:12,840 --> 00:36:15,640 Speaker 2: coming into the profession as they have historically, so it 700 00:36:15,719 --> 00:36:18,600 Speaker 2: makes it competitive. At this stage, we've been able to 701 00:36:18,640 --> 00:36:23,080 Speaker 2: compete on the points that I highlighted, but you know, 702 00:36:23,160 --> 00:36:27,440 Speaker 2: I think in a more robust macro backdrop that might 703 00:36:27,480 --> 00:36:30,440 Speaker 2: be a bit more challenging to compete. And I think 704 00:36:30,480 --> 00:36:34,200 Speaker 2: then it comes down to what can you offer the driver? Right? 705 00:36:35,560 --> 00:36:40,040 Speaker 1: And I guess you know because coming into transportation views 706 00:36:40,200 --> 00:36:42,000 Speaker 1: with somewhat of a different career, you did a little 707 00:36:42,280 --> 00:36:45,720 Speaker 1: career change. When I was looking at your LinkedIn profile, 708 00:36:45,800 --> 00:36:48,160 Speaker 1: you worked for it was it the peanut company? Yeah, 709 00:36:48,560 --> 00:36:50,400 Speaker 1: so how did you go from peanuts to trucks? 710 00:36:51,239 --> 00:36:54,160 Speaker 2: Well, what's interesting about peanuts or or any of the 711 00:36:54,239 --> 00:36:58,200 Speaker 2: other businesses I've ever worked in. Logistics a really really 712 00:36:58,280 --> 00:37:01,600 Speaker 2: important part of the supply chain in the business, right, 713 00:37:01,680 --> 00:37:05,120 Speaker 2: So if you look at big AG commodities, picking up 714 00:37:05,200 --> 00:37:09,120 Speaker 2: the crop from the farmer, how you handle it, how 715 00:37:09,160 --> 00:37:10,800 Speaker 2: you process it, and you end up getting it to 716 00:37:10,880 --> 00:37:13,440 Speaker 2: the customer. When you think about those things, the elements 717 00:37:13,480 --> 00:37:17,440 Speaker 2: that you use to manage and optimize that business, that's 718 00:37:17,480 --> 00:37:20,080 Speaker 2: kind of like an LTL business in many regards. So 719 00:37:20,360 --> 00:37:23,320 Speaker 2: for me, it wasn't that big of a step to 720 00:37:23,400 --> 00:37:27,600 Speaker 2: go from an asset intensive AG business that to an 721 00:37:27,760 --> 00:37:31,319 Speaker 2: LTL business because it's asset intensive, a lot of data 722 00:37:31,400 --> 00:37:34,200 Speaker 2: here business that you've really got to be focused on 723 00:37:34,280 --> 00:37:36,880 Speaker 2: the market and the customers. Those things are similar across 724 00:37:36,920 --> 00:37:39,319 Speaker 2: every company I've ever worked for, so I think those 725 00:37:39,400 --> 00:37:42,879 Speaker 2: are sometimes you can benefit the new company by bringing 726 00:37:42,960 --> 00:37:44,600 Speaker 2: some of the experiences from other industries. 727 00:37:45,480 --> 00:37:48,040 Speaker 1: And I'm just curious, just so just talking about maybe 728 00:37:48,120 --> 00:37:51,840 Speaker 1: the history of SAYA, you know what change from you 729 00:37:51,960 --> 00:37:54,920 Speaker 1: guys to be like, Okay, we're in this network now 730 00:37:54,960 --> 00:37:55,880 Speaker 1: we want to go national. 731 00:37:56,080 --> 00:37:57,760 Speaker 2: Like what was that change? 732 00:37:57,840 --> 00:38:00,800 Speaker 1: Like? Was that a boardroom change? Was that the c suite? 733 00:38:01,200 --> 00:38:04,240 Speaker 2: How did that come about, Well, listen, it was actually 734 00:38:04,400 --> 00:38:07,239 Speaker 2: if you think about sia's history, it's one hundred years now. 735 00:38:07,760 --> 00:38:13,360 Speaker 2: It's always been the plan, particularly after the after deregulation, 736 00:38:14,040 --> 00:38:16,279 Speaker 2: and it was a slow churn for a number of years. 737 00:38:16,760 --> 00:38:18,800 Speaker 2: We were actually at one point part of the yellow 738 00:38:19,320 --> 00:38:22,560 Speaker 2: sort of portfolio. We were spun out as a public company. 739 00:38:22,680 --> 00:38:25,400 Speaker 2: We went through sort of the two thousand to twenty 740 00:38:25,719 --> 00:38:28,759 Speaker 2: ten period looking for bolton acquisitions, and that was an 741 00:38:28,840 --> 00:38:32,880 Speaker 2: arduous process, particularly leading into the financial crisis, but that 742 00:38:33,160 --> 00:38:37,840 Speaker 2: was the first steps in expanding that national network. So 743 00:38:37,960 --> 00:38:41,360 Speaker 2: we get through that, we survived the financial crisis, We 744 00:38:41,520 --> 00:38:44,160 Speaker 2: began to make the business investable again sort of in 745 00:38:44,239 --> 00:38:48,040 Speaker 2: the early sort of twenty thirteen fourteen, had to look 746 00:38:48,120 --> 00:38:51,800 Speaker 2: focused on providing a better product of our customers, started 747 00:38:51,880 --> 00:38:54,560 Speaker 2: adding the data analytics tools and the people needed to 748 00:38:54,600 --> 00:38:57,920 Speaker 2: be able to start in twenty seventeen an organic expansion 749 00:38:57,960 --> 00:39:03,000 Speaker 2: from there's a business that sort of bolt on acquisitions 750 00:39:03,000 --> 00:39:06,640 Speaker 2: are pretty challenging, so we saw that and we saw 751 00:39:06,719 --> 00:39:10,040 Speaker 2: the experience of that in our earlier history, so we 752 00:39:10,160 --> 00:39:13,320 Speaker 2: had the opportunity to expand again in the position, in 753 00:39:13,360 --> 00:39:16,600 Speaker 2: the financial position to do it. We developed a competency 754 00:39:16,640 --> 00:39:19,040 Speaker 2: around organic expansion, and that's really what we've done for 755 00:39:19,120 --> 00:39:23,160 Speaker 2: the last you know, since twenty seventeen. So it's been 756 00:39:23,280 --> 00:39:26,520 Speaker 2: part of the long term plan for Siah for all 757 00:39:26,520 --> 00:39:29,680 Speaker 2: the way back to the beginning, just taking time right. 758 00:39:30,000 --> 00:39:33,800 Speaker 1: Great, well, I wish you continued success in building and 759 00:39:33,920 --> 00:39:36,160 Speaker 1: growing and I really want to thank you again for 760 00:39:36,280 --> 00:39:40,000 Speaker 1: coming into our studios and to do this again once 761 00:39:40,040 --> 00:39:42,640 Speaker 1: again with Bloomberg Intelligence Talking transports. 762 00:39:42,960 --> 00:39:45,880 Speaker 2: Great, thank you for the opportunity and share the story 763 00:39:45,880 --> 00:39:46,719 Speaker 2: about Sia. 764 00:39:47,560 --> 00:39:49,799 Speaker 1: And I want to thank you for tuning in. If 765 00:39:49,840 --> 00:39:52,400 Speaker 1: you liked the episode, please subscribe and leave a review. 766 00:39:52,840 --> 00:39:55,240 Speaker 1: We've lined up a number of great guests for the podcast, 767 00:39:55,320 --> 00:39:59,840 Speaker 1: so please check back to here conversations with C suite executives, shippers, regulators, 768 00:40:00,040 --> 00:40:02,920 Speaker 1: decision makers within the freight markets. Also, if you want 769 00:40:02,920 --> 00:40:05,560 Speaker 1: to learn more about the freight transportation markets, please check 770 00:40:05,600 --> 00:40:08,719 Speaker 1: out our work on the Bloomberg terminal at Bigo and 771 00:40:08,960 --> 00:40:11,680 Speaker 1: on social media. That's about it all the time we 772 00:40:11,800 --> 00:40:13,120 Speaker 1: have Thank you and take care.