1 00:00:07,880 --> 00:00:11,480 Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transports podcast. 2 00:00:11,520 --> 00:00:15,280 Speaker 1: I'm your host, Lee Klasgau, senior freight, transportation and logistics 3 00:00:15,280 --> 00:00:19,200 Speaker 1: analysts at Bloomberg Intelligence, Bloomberg's in house research arm. We're 4 00:00:19,200 --> 00:00:23,560 Speaker 1: delighted to have Fritz Holdgref, President and CEO of SIA. 5 00:00:24,079 --> 00:00:27,960 Speaker 1: Fritz joined SIA in twenty fourteen as VP and Chief 6 00:00:28,040 --> 00:00:31,639 Speaker 1: Financial Officer. Since then, he held other senior leadership roles, 7 00:00:31,680 --> 00:00:35,440 Speaker 1: including COO. He assumed the role of president and CEO 8 00:00:35,720 --> 00:00:39,320 Speaker 1: in twenty twenty. He earned a Masters of Business Administration 9 00:00:39,400 --> 00:00:42,560 Speaker 1: from Washington University in Saint Louis. In addition, he earned 10 00:00:42,560 --> 00:00:45,839 Speaker 1: a Bachelors of Arts and Economics from the University of 11 00:00:46,120 --> 00:00:48,600 Speaker 1: Notre Dame. So I guess that's a go fighting Irish. 12 00:00:48,680 --> 00:00:50,360 Speaker 2: Absolutely all right, Irish. 13 00:00:50,400 --> 00:00:53,040 Speaker 1: Well, thanks for joining us on the podcast. 14 00:00:53,040 --> 00:00:53,400 Speaker 2: Fritz. 15 00:00:53,479 --> 00:00:54,440 Speaker 1: It's great to have you. 16 00:00:54,400 --> 00:00:56,680 Speaker 2: Here, great to be here, Thanks for the opportunity. 17 00:00:57,080 --> 00:01:01,080 Speaker 1: So you know, people might not recognize SAIA. It's not 18 00:01:01,120 --> 00:01:03,840 Speaker 1: a household name. It is for me, even though sometimes 19 00:01:03,880 --> 00:01:07,320 Speaker 1: I mispronounce it. Give the my Jersey accent. But if 20 00:01:07,360 --> 00:01:09,240 Speaker 1: you see them on the road their trucks, can you 21 00:01:09,280 --> 00:01:11,640 Speaker 1: talk a little bit about Saya's business. 22 00:01:11,319 --> 00:01:15,200 Speaker 2: Sure Saya is a one hundred year old company founded 23 00:01:15,200 --> 00:01:19,199 Speaker 2: in Homa, Louisiana. We're in the less than truckload space, 24 00:01:19,280 --> 00:01:23,600 Speaker 2: so we're operating a network of terminals across the country 25 00:01:24,200 --> 00:01:28,400 Speaker 2: moving freight from all varieties of customers, from consumer package 26 00:01:28,400 --> 00:01:34,960 Speaker 2: goods companies to industrial manufacturers. We carry freight to thousands 27 00:01:35,000 --> 00:01:39,160 Speaker 2: of customers every month. Are freight typically weighs thirteen hundred 28 00:01:39,160 --> 00:01:42,560 Speaker 2: pounds and we usually drive eight nine hundred miles to 29 00:01:42,600 --> 00:01:45,960 Speaker 2: make that delivery for the customer. So it's a business 30 00:01:45,959 --> 00:01:49,200 Speaker 2: that reflects the US economy and covering all sectors of 31 00:01:49,200 --> 00:01:49,920 Speaker 2: that economy. 32 00:01:50,200 --> 00:01:52,520 Speaker 1: Right, And I'd add Sia as a publicly traded company 33 00:01:52,560 --> 00:01:55,800 Speaker 1: as a market cap around fourteen billion and trades at 34 00:01:55,800 --> 00:02:00,000 Speaker 1: the ticker SAIA. And so it's been a real interesting time. 35 00:02:00,000 --> 00:02:02,440 Speaker 1: I'm in the lesson truckloader we're going to say now 36 00:02:02,520 --> 00:02:06,640 Speaker 1: the LTL market. Because of a bankruptcy of Yellow, which 37 00:02:06,720 --> 00:02:09,760 Speaker 1: was one of the largest LTL carriers in North America 38 00:02:10,040 --> 00:02:15,160 Speaker 1: back in last summer, Saia bought a bunch of terminals. 39 00:02:15,160 --> 00:02:17,399 Speaker 1: Could you talk about you know what you bought, why 40 00:02:17,480 --> 00:02:19,160 Speaker 1: you bought it, and how it's going to benefit you. 41 00:02:19,440 --> 00:02:23,960 Speaker 2: Absolutely so SIA has been on a kind of organic 42 00:02:24,160 --> 00:02:28,640 Speaker 2: growth strategy for several years, starting in twenty seventeen. We 43 00:02:28,680 --> 00:02:31,600 Speaker 2: had operated in thirty four states up until that point, 44 00:02:31,639 --> 00:02:34,480 Speaker 2: and we were determined as we invested in the business 45 00:02:34,480 --> 00:02:36,960 Speaker 2: and looked for growth opportunities, we were looking for opportunities 46 00:02:36,960 --> 00:02:40,000 Speaker 2: to expand to become a national carrier. So we started 47 00:02:40,000 --> 00:02:43,760 Speaker 2: in twenty seventeen with our northeast expansion, adding four terminals 48 00:02:44,040 --> 00:02:48,079 Speaker 2: in Pennsylvania, New Jersey. Now, as we developed that strategy 49 00:02:48,120 --> 00:02:50,800 Speaker 2: over time, it became increasingly clear to us that we 50 00:02:50,800 --> 00:02:54,519 Speaker 2: could provide a lot of value to our customers growing organically, 51 00:02:54,600 --> 00:02:58,680 Speaker 2: adding terminals, incremental service and coverage to our customers. When 52 00:02:58,720 --> 00:03:03,399 Speaker 2: the yellow Back sup happened, there were naturally they're going 53 00:03:03,400 --> 00:03:07,720 Speaker 2: through the process of liquidating the real estate, and that 54 00:03:07,880 --> 00:03:11,280 Speaker 2: was part of our growth strategy around organically growing, so 55 00:03:11,320 --> 00:03:15,079 Speaker 2: we saw an opportunity participate in that process. We ended 56 00:03:15,120 --> 00:03:20,919 Speaker 2: up acquiring seventeen terminals. Also, we acquired eleven least terminals 57 00:03:20,919 --> 00:03:23,880 Speaker 2: as well, so we'll be operating twenty eight additional terminals 58 00:03:23,880 --> 00:03:25,919 Speaker 2: over the next couple of years that have come out 59 00:03:25,919 --> 00:03:27,600 Speaker 2: of that liquidation process. 60 00:03:27,639 --> 00:03:30,600 Speaker 1: And geographically are they in a specific area. Are they 61 00:03:30,720 --> 00:03:31,919 Speaker 1: just all over the United States? 62 00:03:32,080 --> 00:03:33,560 Speaker 2: Big chunk of them are in the center of the 63 00:03:33,560 --> 00:03:35,720 Speaker 2: country covering the Great Plains. It was an area that 64 00:03:35,760 --> 00:03:38,840 Speaker 2: we had not filled in on our map. But there 65 00:03:38,880 --> 00:03:41,880 Speaker 2: are also some strategic terminals and markets that we already serve, 66 00:03:42,480 --> 00:03:45,240 Speaker 2: but we're just moving closer to the customer with these acquisitions. 67 00:03:45,280 --> 00:03:48,280 Speaker 2: So it's a really exciting opportunity for us to provide 68 00:03:48,360 --> 00:03:49,960 Speaker 2: enhance service to our customer set. 69 00:03:50,080 --> 00:03:51,800 Speaker 1: And will this bring you into all the states? 70 00:03:52,080 --> 00:03:54,560 Speaker 2: Yes, we'll be in all forty eight states as lower 71 00:03:54,600 --> 00:03:55,280 Speaker 2: forty eight. 72 00:03:55,280 --> 00:03:59,040 Speaker 1: Right, and so do you need to rely on third 73 00:03:59,080 --> 00:04:02,520 Speaker 1: parties to make picks up in deliveries anymore or you're 74 00:04:02,520 --> 00:04:05,240 Speaker 1: still going to have you still have more to fill 75 00:04:05,280 --> 00:04:08,520 Speaker 1: out in all the states that you're maybe newer in. 76 00:04:08,960 --> 00:04:12,600 Speaker 2: You know, well, in some spots we'll continue to use partners. 77 00:04:12,640 --> 00:04:16,320 Speaker 2: But the exciting part about this expansion is this allows 78 00:04:16,400 --> 00:04:19,080 Speaker 2: us to really take that freight from pick up the 79 00:04:19,200 --> 00:04:23,520 Speaker 2: delivery in a SIA network and ASIA equipment. The customers 80 00:04:23,560 --> 00:04:26,839 Speaker 2: get a better experience from that, and we're excited about 81 00:04:26,839 --> 00:04:30,680 Speaker 2: that opportunity growth our customers. As we enhance our coverage 82 00:04:30,720 --> 00:04:34,000 Speaker 2: in our service territory, there may be some markets where 83 00:04:34,040 --> 00:04:38,480 Speaker 2: we continue to partner with other carriers, but this is 84 00:04:38,560 --> 00:04:41,320 Speaker 2: a really interesting opportunity for us to move closer to 85 00:04:41,400 --> 00:04:41,919 Speaker 2: the customer. 86 00:04:42,120 --> 00:04:44,520 Speaker 1: Yeah, I would imagine for the industry it's at once 87 00:04:44,560 --> 00:04:47,400 Speaker 1: in a lifetime opportunity for a lot of companies. So 88 00:04:47,520 --> 00:04:53,159 Speaker 1: Yell is not done liquidating, it's it's real estate footprint. 89 00:04:53,960 --> 00:04:56,280 Speaker 1: I'm assuming you guys are going to take a hard 90 00:04:56,279 --> 00:04:58,760 Speaker 1: look at all the other facilities that might come up 91 00:04:58,800 --> 00:04:59,400 Speaker 1: for a bid. 92 00:05:00,080 --> 00:05:03,400 Speaker 2: You know, we have a pipeline of facilities that we 93 00:05:03,480 --> 00:05:07,279 Speaker 2: consider not only in this situation, but there are other 94 00:05:07,360 --> 00:05:10,320 Speaker 2: terminals that we have purchased from other of some of 95 00:05:10,360 --> 00:05:14,679 Speaker 2: our larger competitors or frankly, other businesses that have exited 96 00:05:14,720 --> 00:05:17,680 Speaker 2: the market. So this is an opportunity. It's just continue 97 00:05:17,720 --> 00:05:21,000 Speaker 2: to enhance our real estate development pipeline. There could be 98 00:05:21,040 --> 00:05:23,760 Speaker 2: some facilities there, but there could be facilities in other areas. 99 00:05:24,240 --> 00:05:27,599 Speaker 2: I would expect that over time we shall see these 100 00:05:28,000 --> 00:05:32,680 Speaker 2: as the industry absorbs this capacity, You'll see terminals trade 101 00:05:32,680 --> 00:05:35,760 Speaker 2: as somebody maybe trades into a larger facility exits a 102 00:05:35,800 --> 00:05:38,920 Speaker 2: smaller one. There may be opportunities for us as part 103 00:05:38,920 --> 00:05:39,560 Speaker 2: of that as well. 104 00:05:39,760 --> 00:05:42,640 Speaker 1: Right in this Yellow event really consolidated or an already 105 00:05:42,680 --> 00:05:48,440 Speaker 1: consolidated market. Before the Yellow bankruptcy, the top ten LTL 106 00:05:48,480 --> 00:05:51,640 Speaker 1: carriers had about two thirds of the market roughly, so 107 00:05:52,120 --> 00:05:56,679 Speaker 1: that's getting even more consolidated. So obviously, so you're getting 108 00:05:56,680 --> 00:05:59,360 Speaker 1: the facilities, but you're also getting some of the volume too, right. 109 00:05:59,360 --> 00:06:01,280 Speaker 1: Can you talk about the volume that you've picked up 110 00:06:01,880 --> 00:06:04,440 Speaker 1: since the Yellow bankruptcy and what that's meaning to your 111 00:06:04,480 --> 00:06:06,040 Speaker 1: you know, the numbers that you put out, whether it's 112 00:06:06,040 --> 00:06:06,960 Speaker 1: tonnage or shipments. 113 00:06:07,279 --> 00:06:10,200 Speaker 2: Yeah, I mean, if you look at our our sort 114 00:06:10,240 --> 00:06:13,719 Speaker 2: of performance over the last couple of quarters, you clearly 115 00:06:13,760 --> 00:06:17,479 Speaker 2: see the impact of our growth is as we've taken 116 00:06:17,520 --> 00:06:20,320 Speaker 2: on share that was with Yellow and frankly in other 117 00:06:20,480 --> 00:06:23,800 Speaker 2: areas in the market as well. We're excited about that 118 00:06:23,920 --> 00:06:27,040 Speaker 2: opportunity and it's important upon it for us. At this stage, 119 00:06:27,080 --> 00:06:29,120 Speaker 2: we're spending a lot of time making sure that we're 120 00:06:29,120 --> 00:06:32,400 Speaker 2: providing the great level of service the customers expect. It 121 00:06:32,440 --> 00:06:35,239 Speaker 2: may be improved service compared to what they were getting before, 122 00:06:35,560 --> 00:06:37,680 Speaker 2: but then it's also important for us to make sure 123 00:06:37,720 --> 00:06:40,520 Speaker 2: we understand the impact of that freight in our network 124 00:06:41,240 --> 00:06:43,280 Speaker 2: because we're making a lot of investments in the network 125 00:06:43,320 --> 00:06:46,040 Speaker 2: to support this growth. So it's going to be important 126 00:06:46,080 --> 00:06:49,000 Speaker 2: that we get that new revenue, those new shipments priced 127 00:06:49,000 --> 00:06:51,960 Speaker 2: the right way and in a position that we can 128 00:06:52,000 --> 00:06:55,240 Speaker 2: continue to invest in our business and support that growth 129 00:06:55,240 --> 00:06:56,039 Speaker 2: for our customers. 130 00:06:56,279 --> 00:06:58,839 Speaker 1: And it was there a big difference between the new 131 00:06:59,320 --> 00:07:03,520 Speaker 1: tonnage that you're bringing on from Yellow compared to your 132 00:07:03,640 --> 00:07:08,599 Speaker 1: legacy business, Like is it are they lighter per shipment weights? 133 00:07:08,680 --> 00:07:12,480 Speaker 1: Are they less? Are they they less on palettes? 134 00:07:12,560 --> 00:07:15,600 Speaker 2: You know, is there any difference. It's been interesting because 135 00:07:15,640 --> 00:07:19,160 Speaker 2: I think Yellow had maybe more of an exposure to 136 00:07:19,320 --> 00:07:23,080 Speaker 2: retail than maybe we did. So what we've seen is 137 00:07:23,160 --> 00:07:26,160 Speaker 2: we've grown our share of wallet, if you will, some 138 00:07:26,200 --> 00:07:29,680 Speaker 2: of the customers that retail customers that had did the 139 00:07:29,680 --> 00:07:33,560 Speaker 2: business with Yellow and us, so we picked up additional 140 00:07:33,600 --> 00:07:36,760 Speaker 2: retail accounts there. It shows up on our weight for shipment, 141 00:07:37,800 --> 00:07:39,760 Speaker 2: which is down at bit year over year about four 142 00:07:39,760 --> 00:07:42,680 Speaker 2: and a half five percent. So you know, it's something 143 00:07:42,680 --> 00:07:45,280 Speaker 2: we'll manage, continue to manage. It's it's a good opportunity 144 00:07:45,320 --> 00:07:45,800 Speaker 2: for us though. 145 00:07:46,040 --> 00:07:49,200 Speaker 1: Yeah, and LTL tends to be, you know, more weighted 146 00:07:49,240 --> 00:07:54,520 Speaker 1: towards the manufacturing industrial economy. Roughly what it's the split 147 00:07:54,600 --> 00:07:57,800 Speaker 1: of size freight and customer mix. 148 00:07:57,960 --> 00:08:00,200 Speaker 2: You know, we would we typically say two thirds it's 149 00:08:00,200 --> 00:08:04,880 Speaker 2: one third two thirds industrial, one third retail. That you know, 150 00:08:05,240 --> 00:08:07,400 Speaker 2: we don't really spend a lot of time on that 151 00:08:07,480 --> 00:08:10,640 Speaker 2: because if you think about some of our customers, maybe 152 00:08:10,680 --> 00:08:14,560 Speaker 2: you have a home goods retailer that is shipping say 153 00:08:14,640 --> 00:08:18,520 Speaker 2: lawnmowers that comes out of a manufacturing plant. You know 154 00:08:18,560 --> 00:08:21,080 Speaker 2: that maybe that's an industrial freight, but it's ending up 155 00:08:21,080 --> 00:08:24,160 Speaker 2: in a retail space. So it's more important for us 156 00:08:24,200 --> 00:08:27,160 Speaker 2: to understand what that freight is, make sure we provide 157 00:08:27,200 --> 00:08:29,520 Speaker 2: the service that's needed, make sure we charge for it. 158 00:08:30,000 --> 00:08:32,719 Speaker 1: And how do you how do you measure service when 159 00:08:33,040 --> 00:08:35,599 Speaker 1: you're looking inward, Well. 160 00:08:35,360 --> 00:08:38,320 Speaker 2: We measure it in a lot of different ways, but 161 00:08:38,360 --> 00:08:41,560 Speaker 2: the fundamental measurement in the industry often is claims. So 162 00:08:41,600 --> 00:08:44,280 Speaker 2: we would have claims would be the amount of damage. 163 00:08:44,440 --> 00:08:46,679 Speaker 2: And we have an industry one of the industry leading 164 00:08:46,800 --> 00:08:50,960 Speaker 2: claims ratios. But if you really study a customer, customers 165 00:08:50,960 --> 00:08:53,040 Speaker 2: care about a few different things. Pick the freight up 166 00:08:53,080 --> 00:08:54,920 Speaker 2: when you say you're going to pick it up, be available, 167 00:08:55,760 --> 00:08:57,240 Speaker 2: deliver it when you say you're going to deliver it, 168 00:08:57,280 --> 00:08:59,040 Speaker 2: and don't break it in the middle. So we measure 169 00:08:59,080 --> 00:09:01,200 Speaker 2: it at every step way in the process. 170 00:09:01,559 --> 00:09:05,040 Speaker 1: All right, great, So you know when you look at 171 00:09:05,080 --> 00:09:08,640 Speaker 1: freight companies, everyone looks to you guys to say, how's 172 00:09:08,679 --> 00:09:11,520 Speaker 1: the economy. So, you know, the freight cycle has been 173 00:09:11,640 --> 00:09:15,360 Speaker 1: relatively weak. The impact of Yellow is kind of really 174 00:09:15,400 --> 00:09:19,199 Speaker 1: mitigated that weakness. You know, it's early twenty twenty four. 175 00:09:19,440 --> 00:09:22,000 Speaker 1: What are your customers telling you and what's your crystal 176 00:09:22,000 --> 00:09:24,120 Speaker 1: ball telling you about the freight economy? 177 00:09:24,520 --> 00:09:27,160 Speaker 2: You know, I think it's a great observation you make, 178 00:09:27,280 --> 00:09:29,400 Speaker 2: is that a lot of what we're seeing right now 179 00:09:29,520 --> 00:09:32,240 Speaker 2: is the exit of Yellow and kind of the disruption 180 00:09:32,360 --> 00:09:36,080 Speaker 2: in the industry. You know, the underlying dynamics in the 181 00:09:36,120 --> 00:09:40,240 Speaker 2: business sort of the macro situation remains kind of tepid 182 00:09:40,760 --> 00:09:42,920 Speaker 2: in terms of and I think it's pretty consistent to 183 00:09:42,960 --> 00:09:46,839 Speaker 2: what we have seen prior to that. Maybe a little 184 00:09:46,840 --> 00:09:50,160 Speaker 2: bit more growth now. Our customers are a little bit 185 00:09:50,200 --> 00:09:55,000 Speaker 2: more optimistic. Now, we're really optimistic about what we bring 186 00:09:55,040 --> 00:09:57,360 Speaker 2: to the market. If you go back to the first 187 00:09:57,360 --> 00:10:02,520 Speaker 2: half of last year, prior to the disruption, sia's performance 188 00:10:02,600 --> 00:10:05,160 Speaker 2: rolled for the industry was stronger. I mean, we were 189 00:10:05,240 --> 00:10:09,040 Speaker 2: leading in you know kind of performance versus the rest 190 00:10:09,080 --> 00:10:11,800 Speaker 2: of the industry. We saw share gains there. We think 191 00:10:11,840 --> 00:10:14,520 Speaker 2: that underlying growth story that we have going on is 192 00:10:14,559 --> 00:10:16,360 Speaker 2: going to help us drive growth through the balance of 193 00:10:16,360 --> 00:10:19,040 Speaker 2: this year. So if we get to a place where 194 00:10:19,679 --> 00:10:21,560 Speaker 2: maybe things are a little bit more optimistic in the 195 00:10:21,600 --> 00:10:23,559 Speaker 2: second half, which could be I mean, I think if 196 00:10:23,840 --> 00:10:26,600 Speaker 2: you follow the interest rates, you have to think that 197 00:10:26,640 --> 00:10:28,120 Speaker 2: at some point it's going to be a bit of 198 00:10:28,160 --> 00:10:30,719 Speaker 2: a stimulation in the economy in the second half of 199 00:10:30,760 --> 00:10:35,079 Speaker 2: the year, potentially we stand to benefit. But in interim 200 00:10:35,360 --> 00:10:37,480 Speaker 2: we've got a lot of opportunity as it is. So 201 00:10:38,240 --> 00:10:41,040 Speaker 2: we're managing this around focusing on the things that we 202 00:10:41,080 --> 00:10:44,360 Speaker 2: can control, so that if there is an uptick in 203 00:10:44,400 --> 00:10:46,160 Speaker 2: the economy in the second half of the year or 204 00:10:46,160 --> 00:10:48,440 Speaker 2: into twenty five, we're well positioned for it. 205 00:10:48,920 --> 00:10:53,200 Speaker 1: Right and SIA has been considered within the freight transportation 206 00:10:53,320 --> 00:10:55,959 Speaker 1: logistics market a kind of growth story. You know, we're 207 00:10:55,960 --> 00:10:58,800 Speaker 1: looking five year out it stocks up around seven and 208 00:10:58,840 --> 00:11:02,400 Speaker 1: twenty percent versus the BI LTL index, which is up 209 00:11:02,440 --> 00:11:04,560 Speaker 1: three hundred and forty percent, and the S and P 210 00:11:04,640 --> 00:11:06,920 Speaker 1: five hundred which is up eighty five percent, So you 211 00:11:07,000 --> 00:11:10,000 Speaker 1: guys are definitely outperforming not only the broader market, but 212 00:11:10,480 --> 00:11:14,280 Speaker 1: your peers because of that growth story, So can you 213 00:11:14,400 --> 00:11:18,400 Speaker 1: talk about the growth for twenty twenty four, What are 214 00:11:18,440 --> 00:11:22,360 Speaker 1: your expectations. Can you give any insights into, you know, 215 00:11:22,640 --> 00:11:26,679 Speaker 1: where you see growth in twenty twenty four From Sia's perspective. 216 00:11:26,600 --> 00:11:28,240 Speaker 2: You know, you're going to see growth because we're going 217 00:11:28,280 --> 00:11:32,240 Speaker 2: to open fifteen to twenty facilities this year. That's going 218 00:11:32,320 --> 00:11:34,960 Speaker 2: to be a important part of what our messaging is 219 00:11:35,480 --> 00:11:38,280 Speaker 2: to our company around focusing on the customer. But I 220 00:11:38,320 --> 00:11:41,720 Speaker 2: think the underlying growth in the business is pretty compelling 221 00:11:41,760 --> 00:11:44,719 Speaker 2: as well. In the last two years, we've opened up 222 00:11:44,720 --> 00:11:48,439 Speaker 2: twenty facilities, which quite frankly this stage are we think 223 00:11:48,520 --> 00:11:52,320 Speaker 2: there's still a lot of opportunity in those facilities. So 224 00:11:52,400 --> 00:11:55,520 Speaker 2: if you couple that with what we're opening, you know, 225 00:11:55,559 --> 00:11:57,840 Speaker 2: I think there's a growth through growth for us through 226 00:11:57,880 --> 00:12:02,080 Speaker 2: twenty twenty four. I think we have potential to be 227 00:12:02,160 --> 00:12:05,000 Speaker 2: a you know, kind of leading and sort of growth 228 00:12:05,040 --> 00:12:07,720 Speaker 2: story in our space, in the LTL space. As we 229 00:12:07,760 --> 00:12:10,920 Speaker 2: continue to sort of optimize those facilities that we open, 230 00:12:11,040 --> 00:12:14,800 Speaker 2: maybe that you know, we'll be able to drive operating 231 00:12:14,880 --> 00:12:17,640 Speaker 2: income improvement at the same time. So we're exciting about 232 00:12:17,640 --> 00:12:22,280 Speaker 2: this opportunity for us you know, the macro situation. If 233 00:12:22,280 --> 00:12:24,480 Speaker 2: it slows down, that'll have an impact on us. But 234 00:12:24,559 --> 00:12:27,760 Speaker 2: I think that there is an underlying momentum in our 235 00:12:27,800 --> 00:12:31,120 Speaker 2: business that you know, should carry us pretty well in 236 00:12:31,160 --> 00:12:31,880 Speaker 2: twenty twenty four. 237 00:12:32,120 --> 00:12:34,080 Speaker 1: Are you hiring a lot for these new facilities or 238 00:12:34,160 --> 00:12:36,280 Speaker 1: it's kind of like there's a lag there because obviously 239 00:12:36,280 --> 00:12:38,000 Speaker 1: all the facilities are going to open up day one. 240 00:12:38,000 --> 00:12:40,000 Speaker 1: You guys are got to invest money in some of 241 00:12:40,040 --> 00:12:43,880 Speaker 1: these facilities. So how's the labor market from a freight 242 00:12:43,960 --> 00:12:45,280 Speaker 1: transportation standpoint. 243 00:12:45,440 --> 00:12:48,200 Speaker 2: You know, we've we've got a great story to pitch 244 00:12:48,240 --> 00:12:52,080 Speaker 2: to employees. New employees talk about the success of the company. 245 00:12:52,600 --> 00:12:54,880 Speaker 2: So when we go and recruit and all these new markets, 246 00:12:54,880 --> 00:12:57,640 Speaker 2: which is what we'll have to do, we talk a 247 00:12:57,640 --> 00:13:01,680 Speaker 2: lot about what the SIA culture is, customer first, taking 248 00:13:01,679 --> 00:13:04,000 Speaker 2: care of each other. Those are things that are really 249 00:13:04,120 --> 00:13:07,320 Speaker 2: part of the fiber of the business. So we've got 250 00:13:07,360 --> 00:13:09,880 Speaker 2: a compelling opportunity for folks that want to have a 251 00:13:09,920 --> 00:13:12,360 Speaker 2: career in transportation. So when we open up in these 252 00:13:12,440 --> 00:13:15,199 Speaker 2: new markets and every one of the terminals that we're opening, 253 00:13:15,720 --> 00:13:19,000 Speaker 2: we'll have to do some recruiting either in the facilities 254 00:13:19,000 --> 00:13:20,959 Speaker 2: that are in a green space for us, or there 255 00:13:21,000 --> 00:13:23,640 Speaker 2: may be in a market where we're already serving but 256 00:13:23,720 --> 00:13:27,320 Speaker 2: we're moving into a nearby facility. We may have employees 257 00:13:27,360 --> 00:13:29,760 Speaker 2: that transfer to the new facility, but we'll still be 258 00:13:30,240 --> 00:13:32,960 Speaker 2: recruiting as we expect growth out of both both the 259 00:13:33,000 --> 00:13:35,720 Speaker 2: you know, the original the and the newer facility. So 260 00:13:35,800 --> 00:13:39,720 Speaker 2: I think for us across the board, we're recruiting. We've 261 00:13:39,720 --> 00:13:42,000 Speaker 2: been able to because of this story that we have, 262 00:13:42,120 --> 00:13:44,680 Speaker 2: and we've been able to provide employees around a great 263 00:13:44,679 --> 00:13:47,440 Speaker 2: place to work. It's been a compelling and we've been 264 00:13:47,440 --> 00:13:49,160 Speaker 2: able to an argument for us and that we've been 265 00:13:49,200 --> 00:13:51,120 Speaker 2: able to grow with that. So it's it's been a 266 00:13:51,120 --> 00:13:52,400 Speaker 2: good good space for us. 267 00:13:52,920 --> 00:13:54,800 Speaker 1: And I'm assuming it's a it's a good time to 268 00:13:54,840 --> 00:13:57,520 Speaker 1: be hiring truck drivers right now, given how difficult the 269 00:13:57,559 --> 00:13:58,520 Speaker 1: truckload market is. 270 00:13:58,840 --> 00:14:03,040 Speaker 2: Yeah, and you know you can it's a classic LTL position, right, 271 00:14:03,120 --> 00:14:05,560 Speaker 2: so you can talk about Hey, listen, this is a 272 00:14:05,600 --> 00:14:08,200 Speaker 2: great place to have work life balance, You be home 273 00:14:08,280 --> 00:14:11,040 Speaker 2: every day, you have the opportunity to get a very 274 00:14:11,040 --> 00:14:16,280 Speaker 2: competitive compensation structure, great benefits in a growing business. Those 275 00:14:16,320 --> 00:14:17,720 Speaker 2: are all positives, right. 276 00:14:17,720 --> 00:14:19,520 Speaker 1: And so if I remember it's correctly when I was 277 00:14:20,000 --> 00:14:23,040 Speaker 1: a college kid, I worked for an LTL carrier, worked 278 00:14:23,080 --> 00:14:25,840 Speaker 1: the graveyard shift. It's a now defunct carriers. The Teamster 279 00:14:26,000 --> 00:14:30,560 Speaker 1: organization is no longer around, called APA. The line haul 280 00:14:30,960 --> 00:14:34,760 Speaker 1: usually was the better paying job, but the pick up 281 00:14:34,800 --> 00:14:37,000 Speaker 1: and delivery is probably the better quality of life, if 282 00:14:37,000 --> 00:14:39,640 Speaker 1: you will, because you're home every night. Is that still true? 283 00:14:39,840 --> 00:14:42,520 Speaker 2: Very similar? You know, we try to organize our line 284 00:14:42,560 --> 00:14:45,920 Speaker 2: hall network, so all those that team drives at night, 285 00:14:46,440 --> 00:14:49,760 Speaker 2: you know, they're home every you know, every morning or evening. However, 286 00:14:49,760 --> 00:14:52,040 Speaker 2: the schedule works, so you know, there's a good chunk 287 00:14:52,040 --> 00:14:54,440 Speaker 2: of our guys that are on that kind of a schedule. 288 00:14:54,440 --> 00:14:56,520 Speaker 2: Now there are others that are what we call system 289 00:14:56,600 --> 00:14:59,400 Speaker 2: drivers that you know, continue on for maybe are gone 290 00:14:59,440 --> 00:15:02,120 Speaker 2: for a week, but there or a few days anyway. 291 00:15:02,200 --> 00:15:05,160 Speaker 2: So it's it's important for us, you know, as we 292 00:15:05,320 --> 00:15:07,480 Speaker 2: developed maturity in our network, what we can do is 293 00:15:07,560 --> 00:15:10,840 Speaker 2: create those opportunities for a line haul driver to be 294 00:15:10,920 --> 00:15:12,200 Speaker 2: home every day. 295 00:15:12,720 --> 00:15:15,280 Speaker 1: Okay, and let's talk a little bit about pricing. So 296 00:15:15,480 --> 00:15:20,080 Speaker 1: pricing has been pretty fantastic. You know, if I remember correctly, 297 00:15:20,120 --> 00:15:23,960 Speaker 1: on your earnings call, you said contract rates were. 298 00:15:23,920 --> 00:15:26,040 Speaker 2: Up eight point seven. 299 00:15:25,760 --> 00:15:28,760 Speaker 1: Eight print seven percent. XPO just came out with a 300 00:15:28,840 --> 00:15:32,520 Speaker 1: number of this morning at nine percent. You know, people 301 00:15:32,600 --> 00:15:34,520 Speaker 1: might be taking a step back and being like, Wow, 302 00:15:34,600 --> 00:15:38,040 Speaker 1: that's that's extremely good pricing. Why why is pricing so 303 00:15:38,560 --> 00:15:41,400 Speaker 1: good right now? And especially why is it good for 304 00:15:41,640 --> 00:15:45,040 Speaker 1: for Siah. How are you able to increase the rates 305 00:15:45,040 --> 00:15:47,560 Speaker 1: that you're charging your customers in this environment? 306 00:15:47,720 --> 00:15:50,560 Speaker 2: Well, you know, it all starts with the service you're 307 00:15:50,600 --> 00:15:53,560 Speaker 2: providing the customer. So if you are not providing high 308 00:15:53,640 --> 00:15:56,440 Speaker 2: levels of service, you know I discussed earlier, I talked 309 00:15:56,440 --> 00:16:00,760 Speaker 2: about picking up freight, delivering what we customer expects, no damage, 310 00:16:01,120 --> 00:16:03,920 Speaker 2: easy to do business with. You accomplish those things, you 311 00:16:03,960 --> 00:16:06,800 Speaker 2: have the opportunity to charge for that. In the environment 312 00:16:06,800 --> 00:16:09,880 Speaker 2: that we're in right now. You know, I think that 313 00:16:10,240 --> 00:16:13,120 Speaker 2: by and large, the best companies are focused on service 314 00:16:14,160 --> 00:16:17,240 Speaker 2: or providing that sort of incremental coverage to a customer 315 00:16:18,680 --> 00:16:22,280 Speaker 2: that allows you to charge for the service. Now, it's 316 00:16:22,680 --> 00:16:27,360 Speaker 2: fundamental underneath this business. It's highly inflationary. You know, you've 317 00:16:27,400 --> 00:16:30,160 Speaker 2: got to invest in technology, you got invest equipment, you 318 00:16:30,240 --> 00:16:32,440 Speaker 2: got to recruit and retain people that are you know, 319 00:16:32,480 --> 00:16:34,880 Speaker 2: the best in the business to be able to differentiate. 320 00:16:35,400 --> 00:16:38,440 Speaker 2: All those things are inflationary. So you have to keep 321 00:16:38,520 --> 00:16:42,680 Speaker 2: the pricing there in order to generate the appropriate return 322 00:16:42,720 --> 00:16:45,840 Speaker 2: for that kind of a business. But fundamentally, you can 323 00:16:45,880 --> 00:16:48,120 Speaker 2: do all those things in the inflationary business, but if 324 00:16:48,120 --> 00:16:50,840 Speaker 2: you're not providing great service, you're not going to get 325 00:16:50,880 --> 00:16:54,160 Speaker 2: the price. So in this environment, I think it's a 326 00:16:54,200 --> 00:16:56,240 Speaker 2: bit more focused there. But I think there's also the 327 00:16:56,280 --> 00:17:00,360 Speaker 2: realization that fundamentally, this is a business that reques requires 328 00:17:00,360 --> 00:17:03,160 Speaker 2: a lot of investment, and in order for that to happen, 329 00:17:03,400 --> 00:17:05,040 Speaker 2: people have to get the appropriate return. 330 00:17:05,359 --> 00:17:08,679 Speaker 1: Yeah, and also we mentioned earlier it's a pretty consolidated 331 00:17:08,760 --> 00:17:11,280 Speaker 1: market and all the players are very disciplined and rational 332 00:17:11,280 --> 00:17:13,719 Speaker 1: when it comes to pricing because they all have their 333 00:17:13,880 --> 00:17:17,960 Speaker 1: ROI benchmarks that they have to overcome to make that reinvestment. 334 00:17:18,119 --> 00:17:23,640 Speaker 1: So very different than the truckload market currently. So your 335 00:17:23,720 --> 00:17:25,920 Speaker 1: o R, if I got this right, it was eighty 336 00:17:25,960 --> 00:17:30,240 Speaker 1: four percent last year. Is there anything structural preventing you 337 00:17:30,280 --> 00:17:33,600 Speaker 1: guys from getting to a sub eighty into the seventies 338 00:17:33,600 --> 00:17:37,200 Speaker 1: because some of your competitors, you know, have lower ors 339 00:17:37,440 --> 00:17:38,360 Speaker 1: operating ratios. 340 00:17:39,240 --> 00:17:44,240 Speaker 2: Absolutely, we recognize and see their performance and we say 341 00:17:44,280 --> 00:17:46,439 Speaker 2: that we've got to get there. Side needs to be 342 00:17:46,480 --> 00:17:50,359 Speaker 2: There are services on a par with those other competitors, 343 00:17:50,359 --> 00:17:53,159 Speaker 2: are you know, high performing companies. We don't see a 344 00:17:53,160 --> 00:17:56,159 Speaker 2: way or see a reason why we would have a 345 00:17:56,200 --> 00:17:59,280 Speaker 2: limitation to drive the o R in this business into 346 00:17:59,280 --> 00:18:02,120 Speaker 2: the seventies. I mean some of our best operating regions 347 00:18:02,119 --> 00:18:04,920 Speaker 2: of the country right now already operate in the SEVENTIESK 348 00:18:05,240 --> 00:18:07,600 Speaker 2: And so for us, you know, as we continue to 349 00:18:07,640 --> 00:18:11,600 Speaker 2: develop the maturity of our network, you know, we'll drive 350 00:18:11,640 --> 00:18:15,119 Speaker 2: the whole company performance to that kind of level it 351 00:18:15,200 --> 00:18:18,160 Speaker 2: needs to be because your customers are getting that level 352 00:18:18,200 --> 00:18:20,880 Speaker 2: of service from us, and it just that's the appropriate 353 00:18:20,960 --> 00:18:22,280 Speaker 2: return for this kind of a business. 354 00:18:22,359 --> 00:18:24,840 Speaker 1: Is there any like low hanging fruit that you know, 355 00:18:24,960 --> 00:18:28,119 Speaker 1: you know you're doing and in that region where you 356 00:18:28,160 --> 00:18:31,000 Speaker 1: are in the seventies, where you're you're maybe doing it 357 00:18:31,040 --> 00:18:32,920 Speaker 1: in the high eighties, Is there is there a low 358 00:18:32,920 --> 00:18:35,920 Speaker 1: hanging fruit that you guys can see, whether it's purchase, transportation, 359 00:18:36,720 --> 00:18:37,159 Speaker 1: I don't know. 360 00:18:37,720 --> 00:18:39,960 Speaker 2: You know, the big the biggest thing in the markets 361 00:18:40,080 --> 00:18:43,439 Speaker 2: that we have the longest history. So you take the 362 00:18:43,600 --> 00:18:47,560 Speaker 2: sort of Texas region, Gulf States, Uh, those are the 363 00:18:47,600 --> 00:18:50,600 Speaker 2: areas that we have the best density. Those are the 364 00:18:50,640 --> 00:18:54,840 Speaker 2: areas where we have the best brand recognition. We've got 365 00:18:54,840 --> 00:18:57,760 Speaker 2: the team that has been in place the longest, you've 366 00:18:57,760 --> 00:19:00,280 Speaker 2: got the consistency that comes with that, and you've got 367 00:19:00,320 --> 00:19:02,480 Speaker 2: a very very high level of service. Those are our 368 00:19:02,480 --> 00:19:07,959 Speaker 2: best performing network or business parts of our business. They 369 00:19:08,119 --> 00:19:11,400 Speaker 2: lead in all the service metrics, not surprisingly, so as 370 00:19:11,400 --> 00:19:14,280 Speaker 2: we continue to repeat that model in other regions of 371 00:19:14,320 --> 00:19:16,720 Speaker 2: the country, that will drive the pricing to where it 372 00:19:16,760 --> 00:19:19,840 Speaker 2: needs to be and that will get us to the 373 00:19:19,960 --> 00:19:22,439 Speaker 2: finding that freight in that mix of business that we 374 00:19:22,480 --> 00:19:25,680 Speaker 2: can generate those kinds of returns. So it's I would 375 00:19:25,720 --> 00:19:27,680 Speaker 2: tell you that I think it's really more about sort 376 00:19:27,680 --> 00:19:31,760 Speaker 2: of network maturity over time as we build densities and 377 00:19:31,880 --> 00:19:34,200 Speaker 2: markets that we haven't been in as long as we'd 378 00:19:34,240 --> 00:19:37,199 Speaker 2: like to have been. We're developing that now, but we 379 00:19:37,280 --> 00:19:39,840 Speaker 2: see a lot of runway for those business. Customers are 380 00:19:39,880 --> 00:19:43,280 Speaker 2: really excited to do business with sayah, and we see 381 00:19:43,280 --> 00:19:46,920 Speaker 2: it in our sort of continuous tracking of their feedback 382 00:19:46,960 --> 00:19:49,639 Speaker 2: on how we're doing. So as we can replicate that 383 00:19:49,720 --> 00:19:52,199 Speaker 2: in more markets, as we add all these terminals, I 384 00:19:52,200 --> 00:19:54,600 Speaker 2: think the opportunity for us to perform at that level 385 00:19:54,960 --> 00:19:58,200 Speaker 2: company wide, it's definitely right there for us. 386 00:19:58,280 --> 00:20:00,879 Speaker 1: Okay, And while you're mostly an lt Carrie, you do 387 00:20:00,960 --> 00:20:05,320 Speaker 1: have other businesses brokerage, Expedited. Can you talk about the 388 00:20:05,320 --> 00:20:07,760 Speaker 1: other businesses, how they're doing, what percentage they make up 389 00:20:07,800 --> 00:20:11,200 Speaker 1: of your total revenue and maybe your total ebit. 390 00:20:11,720 --> 00:20:14,719 Speaker 2: Yeah, so that in total, those group of businesses are 391 00:20:14,760 --> 00:20:17,000 Speaker 2: a little bit sort of three to five percent of 392 00:20:17,040 --> 00:20:21,400 Speaker 2: our totalk and what's really important about those businesses for us, 393 00:20:22,000 --> 00:20:25,840 Speaker 2: it's all about our customer focus. So these are opportunities 394 00:20:25,960 --> 00:20:29,960 Speaker 2: for us to provide an incremental service to our customers, 395 00:20:29,960 --> 00:20:33,480 Speaker 2: be it logistics or truckload brokerage or some of our 396 00:20:33,520 --> 00:20:37,880 Speaker 2: specialty services around Expedited or whatever the customer might need. 397 00:20:38,320 --> 00:20:40,760 Speaker 2: Part of that is just developing that relationship with the 398 00:20:40,800 --> 00:20:43,560 Speaker 2: customers that they understand that if they have a supply 399 00:20:43,680 --> 00:20:47,840 Speaker 2: chain issue or they have an opportunity that they need resolve, 400 00:20:47,960 --> 00:20:51,240 Speaker 2: we're there to help them facilitate their success. So we 401 00:20:51,400 --> 00:20:54,800 Speaker 2: view that as not so much of a segment so 402 00:20:54,840 --> 00:20:57,520 Speaker 2: to speak, is more of a compliment to what we're 403 00:20:57,520 --> 00:21:01,560 Speaker 2: already offering the customer. So we view it that way. 404 00:21:01,720 --> 00:21:04,600 Speaker 2: So that'll be as we continue to mature as a company, 405 00:21:04,680 --> 00:21:08,480 Speaker 2: that'll become a bigger part. But fundamentally, we're an LTL business, 406 00:21:08,880 --> 00:21:12,280 Speaker 2: and we're providing additional solutions for customers. 407 00:21:11,960 --> 00:21:15,440 Speaker 1: Right and does and I'm assuming the LTL business feeds 408 00:21:15,480 --> 00:21:18,800 Speaker 1: the other businesses, and the other businesses feeds the LTL business. 409 00:21:18,840 --> 00:21:23,480 Speaker 2: Absolutely, it's hand in hand. And it works best when 410 00:21:23,480 --> 00:21:27,320 Speaker 2: a customers when they realize that, hey, this LTL business 411 00:21:27,320 --> 00:21:30,400 Speaker 2: works really well with the logistics problem they need help solving, 412 00:21:31,160 --> 00:21:34,080 Speaker 2: we can combine those services and that's a win for 413 00:21:34,119 --> 00:21:36,399 Speaker 2: the customer and that works for us to have. 414 00:21:36,480 --> 00:21:38,680 Speaker 1: You guys ever really used M and A in terms 415 00:21:38,720 --> 00:21:42,800 Speaker 1: of growth, whether it's into a segment or the LTL network. 416 00:21:43,160 --> 00:21:45,560 Speaker 2: So if you go back in the history of Siah 417 00:21:45,600 --> 00:21:48,439 Speaker 2: and you really look at what we did in the 418 00:21:48,520 --> 00:21:51,960 Speaker 2: sort of two thousands, we cobble together are the first 419 00:21:52,000 --> 00:21:56,680 Speaker 2: parts of our national network through acquisitions. The financial crisis 420 00:21:56,720 --> 00:22:00,560 Speaker 2: happened that kind of put all that on the brakes 421 00:22:00,600 --> 00:22:03,359 Speaker 2: on it, so to speak, and we had to kind 422 00:22:03,400 --> 00:22:06,720 Speaker 2: of survive that process because we acquired all those businesses 423 00:22:06,800 --> 00:22:10,080 Speaker 2: right as the economy slowed down into the crisis. So 424 00:22:10,119 --> 00:22:13,119 Speaker 2: the company kind of spent the period of you know, 425 00:22:13,200 --> 00:22:18,320 Speaker 2: twenty eight, nine and ten surviving and eleven twelve thirteen 426 00:22:18,480 --> 00:22:22,840 Speaker 2: was a period of stabilizing, starting to return the investment 427 00:22:22,920 --> 00:22:26,639 Speaker 2: in the business, bringing down the fleet age. We considered 428 00:22:26,800 --> 00:22:30,359 Speaker 2: M and A through the sort of mid twenty tens. 429 00:22:30,440 --> 00:22:35,120 Speaker 2: We've acquired some of our logistics and brokerage businesses at 430 00:22:35,119 --> 00:22:38,119 Speaker 2: that point in time. But then we figured out in 431 00:22:38,280 --> 00:22:42,200 Speaker 2: sixteen and seventeen that our opportunity to grow was really 432 00:22:42,200 --> 00:22:46,520 Speaker 2: about developing an organic pipeline in an organic structure that 433 00:22:46,560 --> 00:22:49,199 Speaker 2: we followed the strategy. If followed, we can control what 434 00:22:49,240 --> 00:22:52,080 Speaker 2: we're providing the customer in terms of making sure we 435 00:22:52,119 --> 00:22:56,880 Speaker 2: provide that consistent service. Most importantly, also replicating the culture 436 00:22:56,920 --> 00:22:59,520 Speaker 2: that Saya, you know, that sort of focus on the customer, 437 00:23:00,040 --> 00:23:04,400 Speaker 2: and you organically grow, you hire, you train, you position 438 00:23:04,520 --> 00:23:08,560 Speaker 2: the team to be successful and provide that uh replicate 439 00:23:08,640 --> 00:23:12,040 Speaker 2: that service for the customer, rather than trying to integrate 440 00:23:12,280 --> 00:23:15,840 Speaker 2: an acquisition that perhaps, you know, maybe creates a disruption 441 00:23:15,960 --> 00:23:17,879 Speaker 2: for the customers. You don't want to do that. So 442 00:23:17,960 --> 00:23:20,679 Speaker 2: when we've done that in our sort of organic strategy, 443 00:23:21,200 --> 00:23:23,240 Speaker 2: we've found that we've we've gotten pretty good at that. 444 00:23:23,400 --> 00:23:26,880 Speaker 2: So when this yellow opportunity came together, this was really 445 00:23:26,920 --> 00:23:29,560 Speaker 2: exciting for us because this kind of accelerates our sort 446 00:23:29,600 --> 00:23:32,000 Speaker 2: of growth trajectory. 447 00:23:32,040 --> 00:23:36,040 Speaker 1: And you know, you mentioned earlier reinvesting in the business. 448 00:23:36,160 --> 00:23:38,720 Speaker 1: You mentioned technology. Can you talk a little bit about 449 00:23:38,720 --> 00:23:41,480 Speaker 1: technology and how it relates a side. Do you guys 450 00:23:41,560 --> 00:23:44,199 Speaker 1: use off the shelf program or you guys are you 451 00:23:44,200 --> 00:23:47,960 Speaker 1: guys building your own proprietary technology and what does that 452 00:23:48,000 --> 00:23:51,440 Speaker 1: technology do for you that you're that you're using or building. 453 00:23:52,000 --> 00:23:55,240 Speaker 2: You know, I tell people that are outside of the industry, 454 00:23:55,280 --> 00:23:58,560 Speaker 2: they say, tell me, tell me about trucking. I'll tell them, Well, 455 00:23:58,600 --> 00:24:02,360 Speaker 2: there's there's a lot of technologlogy in this business. There's 456 00:24:02,400 --> 00:24:05,240 Speaker 2: a lot of data optimization, and you could argue that 457 00:24:05,359 --> 00:24:07,879 Speaker 2: this is actually a big data play as much as 458 00:24:07,960 --> 00:24:11,560 Speaker 2: it is a asset play. You know, if you think 459 00:24:11,560 --> 00:24:15,080 Speaker 2: about you know, SIA will deal with in a given month, 460 00:24:15,160 --> 00:24:18,359 Speaker 2: maybe forty thousand different ship to locations. We're going to 461 00:24:18,760 --> 00:24:22,320 Speaker 2: handle thirty five ish thousand bills a day. We're going 462 00:24:22,359 --> 00:24:24,600 Speaker 2: to run that through a network of one hundred and 463 00:24:24,680 --> 00:24:26,760 Speaker 2: ninety four terminals. Soon to be, you know, we're going 464 00:24:26,800 --> 00:24:30,600 Speaker 2: to add another fifteen to twenty to that mix. You're 465 00:24:30,600 --> 00:24:33,920 Speaker 2: going to say we're going to travel nine hundred miles 466 00:24:33,920 --> 00:24:37,040 Speaker 2: and carry shipments the weigh fourteen hundred pounds. I mean, 467 00:24:37,080 --> 00:24:39,159 Speaker 2: there's a lot of data and how do you optimize 468 00:24:39,200 --> 00:24:41,679 Speaker 2: all that? So we have invested quite a bit of 469 00:24:41,720 --> 00:24:46,080 Speaker 2: technology around data optimization tools that allow us to better 470 00:24:46,160 --> 00:24:49,199 Speaker 2: schedule our pickup and delivery networks, that allow us to 471 00:24:49,200 --> 00:24:52,640 Speaker 2: better schedule our line haul networks. At the same time 472 00:24:52,760 --> 00:24:56,679 Speaker 2: taking all that data scheduling data, you're also taking the 473 00:24:56,680 --> 00:24:59,240 Speaker 2: time to collect the data around what's going on with 474 00:24:59,280 --> 00:25:01,680 Speaker 2: the freight, your pick, what are the dimensions of the freight, 475 00:25:01,760 --> 00:25:05,080 Speaker 2: where is it going, what are the delivery locations? And 476 00:25:05,160 --> 00:25:08,840 Speaker 2: from that you're modeling not only the operations in terms 477 00:25:08,880 --> 00:25:11,199 Speaker 2: of what type of equipment you have to use, but 478 00:25:11,200 --> 00:25:14,000 Speaker 2: you're also focused on pricing and how do I make 479 00:25:14,040 --> 00:25:17,560 Speaker 2: sure that I charge for all the services that we're providing. 480 00:25:17,720 --> 00:25:21,200 Speaker 2: Is the does the delivery go to a limited access 481 00:25:21,280 --> 00:25:24,560 Speaker 2: location that requires a liftgate? Well, those are all special 482 00:25:24,640 --> 00:25:29,000 Speaker 2: services and those require specialized assets that all deserve a 483 00:25:29,080 --> 00:25:33,000 Speaker 2: return for those assets. So that takes you that operating 484 00:25:33,080 --> 00:25:36,240 Speaker 2: data turns into pricing data, and then as you put 485 00:25:36,280 --> 00:25:40,040 Speaker 2: all that together, that's all about driving profitability. So it's 486 00:25:40,080 --> 00:25:45,359 Speaker 2: a it is a massive data optimization problem problem. It 487 00:25:45,480 --> 00:25:49,479 Speaker 2: is artificial intelligence on a daily basis. Dealing with all that, 488 00:25:50,080 --> 00:25:53,520 Speaker 2: and so I think it's uh, it's a different differentiating 489 00:25:53,560 --> 00:25:54,200 Speaker 2: thing for us. 490 00:25:54,600 --> 00:25:58,359 Speaker 1: And roughly, what what's your CAPEX spend in this did 491 00:25:58,400 --> 00:25:59,240 Speaker 1: you give out a guidance? 492 00:25:59,400 --> 00:26:01,520 Speaker 2: Yes, So for the for twenty twenty four, we're going 493 00:26:01,560 --> 00:26:05,320 Speaker 2: to approach a billion dollars and spend. This is an 494 00:26:05,359 --> 00:26:07,600 Speaker 2: interesting year for us. We just spent over two hundred 495 00:26:07,600 --> 00:26:10,800 Speaker 2: and fifty million dollars to acquire facilities. We're going to 496 00:26:10,880 --> 00:26:13,560 Speaker 2: have to upgrade those facilities to get them ready to 497 00:26:13,880 --> 00:26:17,200 Speaker 2: operate like SIA facilities. With the big step up and 498 00:26:17,320 --> 00:26:19,200 Speaker 2: volume that we had last year, we're gonna have to 499 00:26:19,240 --> 00:26:21,720 Speaker 2: make the biggest investment in our fleet that we've ever 500 00:26:22,240 --> 00:26:26,400 Speaker 2: had around everything from power to trailers, most significantly trailers. 501 00:26:27,560 --> 00:26:30,600 Speaker 2: All about providing service and flexibility for our customers, and 502 00:26:30,760 --> 00:26:33,960 Speaker 2: we'll continue to invest in it and all the data 503 00:26:34,000 --> 00:26:35,680 Speaker 2: analytic tools that we use every day. 504 00:26:35,840 --> 00:26:37,359 Speaker 1: Is it hard to get equipment because you know, a 505 00:26:37,359 --> 00:26:39,640 Speaker 1: couple of years ago, during the pandemic, it was impossible. 506 00:26:40,160 --> 00:26:43,080 Speaker 1: It seems like it's gotten better, is it? Are you 507 00:26:43,119 --> 00:26:44,600 Speaker 1: getting what you want or are you still await? 508 00:26:44,720 --> 00:26:48,119 Speaker 2: So far, we're getting what we want and it's you know, 509 00:26:48,160 --> 00:26:52,159 Speaker 2: we're focused on making sure that that trailer pool is 510 00:26:52,200 --> 00:26:56,040 Speaker 2: one that is all about availability to the customer. Customers 511 00:26:56,080 --> 00:26:56,600 Speaker 2: care about that. 512 00:26:56,800 --> 00:26:59,200 Speaker 1: And can you talk about a life of the life 513 00:26:59,280 --> 00:27:03,479 Speaker 1: of a truck within Saya's network as it starts in 514 00:27:03,520 --> 00:27:05,120 Speaker 1: one business and kind. 515 00:27:04,920 --> 00:27:07,440 Speaker 2: Of absolutely, So, you know, the first couple of years 516 00:27:07,440 --> 00:27:09,680 Speaker 2: of the tractor's life, we're going to run it in 517 00:27:09,760 --> 00:27:12,320 Speaker 2: our line hall network. And the idea with that is 518 00:27:12,359 --> 00:27:16,439 Speaker 2: that's the peak performance of the vehicle. It's uh, you know, 519 00:27:16,520 --> 00:27:21,359 Speaker 2: the best fuel economy, latest safety technologies on board, highest 520 00:27:21,440 --> 00:27:26,120 Speaker 2: level of reliability for that equipment. And then as it ages, 521 00:27:26,320 --> 00:27:28,400 Speaker 2: it moves out of the line hall sort of role 522 00:27:28,760 --> 00:27:31,120 Speaker 2: and it moves into sort of line hall city role 523 00:27:31,200 --> 00:27:34,760 Speaker 2: until ultimately it graduates to our city operation. And in 524 00:27:34,800 --> 00:27:37,600 Speaker 2: the city operation, you know, the equipment's not on the 525 00:27:37,640 --> 00:27:43,080 Speaker 2: road as long you can manage the reliability a little 526 00:27:43,080 --> 00:27:46,960 Speaker 2: bit easier in that environment fuel economy. You're unfortunately operating 527 00:27:47,000 --> 00:27:49,160 Speaker 2: the city, so you're not going to get high levels 528 00:27:49,160 --> 00:27:51,239 Speaker 2: of fuel economy anyway there, but you're going to get 529 00:27:51,320 --> 00:27:54,360 Speaker 2: decent fuel economy, So you kind of manage the tractor's 530 00:27:54,359 --> 00:27:57,600 Speaker 2: life in that way. So you know, our fleet tractor 531 00:27:57,640 --> 00:27:59,920 Speaker 2: age right now is right around four. We like that, 532 00:28:00,760 --> 00:28:02,880 Speaker 2: but when we're done with a piece of equipment, it's 533 00:28:03,240 --> 00:28:04,480 Speaker 2: it's fully utilized. 534 00:28:04,680 --> 00:28:08,920 Speaker 1: Yeah, that's good. Are you guys testing at all EVS? 535 00:28:09,119 --> 00:28:12,600 Speaker 2: We are we you know, we we don't know that 536 00:28:12,640 --> 00:28:15,840 Speaker 2: we're an earlier adopter per se, but we would say 537 00:28:15,840 --> 00:28:19,879 Speaker 2: we're a really fast follower. We're have tested, uh, a 538 00:28:19,880 --> 00:28:22,480 Speaker 2: fair amount of both E E V and now more 539 00:28:22,520 --> 00:28:26,320 Speaker 2: recently some hydrogen equipment. You know, I think that the 540 00:28:27,480 --> 00:28:30,800 Speaker 2: you know, there's some there's some promise there, but I 541 00:28:30,840 --> 00:28:34,199 Speaker 2: think that, you know, the the economic viability of that 542 00:28:34,240 --> 00:28:37,960 Speaker 2: equipment yet is still to be determined. And I think 543 00:28:38,000 --> 00:28:40,040 Speaker 2: at the same time, you know, we have to understand 544 00:28:40,120 --> 00:28:44,200 Speaker 2: really fully what the performance characteristics are of it. How 545 00:28:44,240 --> 00:28:49,200 Speaker 2: will operate in extreme environments is a really critical uh focus? 546 00:28:49,600 --> 00:28:52,880 Speaker 1: Right, And I'm assuming EV's maybe work for pick up 547 00:28:52,920 --> 00:28:58,240 Speaker 1: and delivery, but not so much in the line haul. Yes, okay, 548 00:28:58,440 --> 00:29:03,360 Speaker 1: So you know, obviously you're you're reinvesting a lot into 549 00:29:03,440 --> 00:29:06,360 Speaker 1: the network. What other capital priorities do you have? 550 00:29:06,560 --> 00:29:07,520 Speaker 2: Do you do buybacks? 551 00:29:07,640 --> 00:29:08,320 Speaker 1: Dividends? 552 00:29:08,920 --> 00:29:11,520 Speaker 2: Right now, we have a I think a pretty compelling 553 00:29:12,600 --> 00:29:16,680 Speaker 2: growth pipeline, both in real estate and sort of technology 554 00:29:16,720 --> 00:29:21,240 Speaker 2: and fleet that that our investors would say, or it's 555 00:29:21,280 --> 00:29:24,440 Speaker 2: an optimal return for them is to focus on those 556 00:29:24,480 --> 00:29:28,240 Speaker 2: sort of capital deployment. But listen, we also understand very 557 00:29:28,280 --> 00:29:31,880 Speaker 2: clearly that we are stewards of the shareholder's capital. They'll 558 00:29:31,960 --> 00:29:33,680 Speaker 2: come a day where we're going to have to figure 559 00:29:33,680 --> 00:29:39,000 Speaker 2: out ways to balance that. Today, there's some really interesting 560 00:29:39,000 --> 00:29:42,080 Speaker 2: opportunities for SIA, So our deployment of capital today is 561 00:29:42,160 --> 00:29:43,680 Speaker 2: very focused on growth. 562 00:29:43,440 --> 00:29:46,360 Speaker 1: All right, And so some just switching gears a little bit. 563 00:29:46,440 --> 00:29:48,800 Speaker 1: So you know, you've been with Taia for a while, 564 00:29:48,800 --> 00:29:51,400 Speaker 1: you came on as a CFO. Were you in transportation 565 00:29:51,520 --> 00:29:55,520 Speaker 1: before that or was SAI your first fora into transports. 566 00:29:55,720 --> 00:29:58,000 Speaker 2: This is the first time I've been in a transportation 567 00:29:58,240 --> 00:30:02,960 Speaker 2: focus business. But every business I've ever been in, a 568 00:30:03,000 --> 00:30:06,920 Speaker 2: great part of the value that provided the customer has 569 00:30:06,960 --> 00:30:10,360 Speaker 2: been about that supply chain partner and the transportation networks 570 00:30:10,360 --> 00:30:14,080 Speaker 2: that we utilized. So I probably somebody that understands and 571 00:30:14,120 --> 00:30:18,080 Speaker 2: appreciates the use of a good transportation partner, maybe more 572 00:30:18,120 --> 00:30:19,760 Speaker 2: than others. Right. 573 00:30:19,840 --> 00:30:22,239 Speaker 1: And what do you do for fun when you're when 574 00:30:22,280 --> 00:30:23,760 Speaker 1: you're not running an LTL company? 575 00:30:24,120 --> 00:30:27,400 Speaker 2: Well, I try to play golf. But that just tells 576 00:30:27,400 --> 00:30:29,959 Speaker 2: me I need to go back to work. That's your 577 00:30:30,000 --> 00:30:34,400 Speaker 2: handicap too high. It's about this today, it's about fifteen. 578 00:30:34,440 --> 00:30:41,480 Speaker 2: I think it's not very good twenty so, but you know, 579 00:30:41,520 --> 00:30:46,120 Speaker 2: I'll enjoy time with family, you know. It's uh, kids 580 00:30:46,160 --> 00:30:48,560 Speaker 2: in college are graduating college. That's a lot of fun. 581 00:30:48,400 --> 00:30:50,360 Speaker 1: Too, Okay, So you have a light at the end 582 00:30:50,400 --> 00:30:53,040 Speaker 1: of the tunnel. I do, kids, That's that's good. I'm 583 00:30:53,080 --> 00:30:58,080 Speaker 1: early on in that life cycle. So, you know, have 584 00:30:58,200 --> 00:31:01,840 Speaker 1: you read any books about insportation that you know you 585 00:31:02,000 --> 00:31:04,800 Speaker 1: kind of like, you know, wow, it was really eye opening, 586 00:31:04,840 --> 00:31:08,880 Speaker 1: whether it's fiction or nonfiction, you know, over the years. 587 00:31:09,320 --> 00:31:11,480 Speaker 2: You know, I don't know that I have a specific 588 00:31:11,560 --> 00:31:16,440 Speaker 2: book about transportation that I would point out as one 589 00:31:16,440 --> 00:31:18,120 Speaker 2: that said, hey, this is what you got to read. 590 00:31:18,160 --> 00:31:20,720 Speaker 2: But what I would say this is that if you 591 00:31:20,800 --> 00:31:25,479 Speaker 2: read any book about either and I'm into sort of 592 00:31:25,640 --> 00:31:29,400 Speaker 2: historical economics industrial development, and if you look at it 593 00:31:29,440 --> 00:31:32,920 Speaker 2: over time and you look at all the great industries 594 00:31:32,960 --> 00:31:35,320 Speaker 2: that have been developed in the United States for around the 595 00:31:35,320 --> 00:31:39,040 Speaker 2: world for that matter, there has always been a significant 596 00:31:39,080 --> 00:31:42,600 Speaker 2: element of the supply chain that has facilitated that growth 597 00:31:43,120 --> 00:31:47,280 Speaker 2: or that enablement. So I have always gravitated to those books, 598 00:31:47,280 --> 00:31:49,680 Speaker 2: and I think if you if you spend time in 599 00:31:49,720 --> 00:31:52,880 Speaker 2: that space, studying those markets and those economies, you quickly 600 00:31:53,720 --> 00:31:57,640 Speaker 2: see the importance of transportation and the value potentially provides 601 00:31:57,680 --> 00:31:59,240 Speaker 2: the part of the market. 602 00:31:59,400 --> 00:32:00,920 Speaker 1: Yeah. I mean, that's one of the reasons why I 603 00:32:00,920 --> 00:32:03,040 Speaker 1: love covering. I love covering for so long. It's just 604 00:32:03,720 --> 00:32:08,440 Speaker 1: it makes me pretty knowledgeable about every other vertical that 605 00:32:08,480 --> 00:32:12,280 Speaker 1: my colleagues cover, so and it's a great kind of 606 00:32:13,520 --> 00:32:15,680 Speaker 1: vantage point to see where the economy is heading. So 607 00:32:15,720 --> 00:32:18,160 Speaker 1: it's a transports are great. Well, Fritz, I really want 608 00:32:18,200 --> 00:32:20,160 Speaker 1: to thank you for your time today. I thought the 609 00:32:20,200 --> 00:32:23,040 Speaker 1: conversation was fantastic, So thank you Lee. 610 00:32:23,080 --> 00:32:25,440 Speaker 2: Thanks for the time, and I enjoyed the opportunity to 611 00:32:25,520 --> 00:32:26,880 Speaker 2: tell you about what's going on in Saia. 612 00:32:27,000 --> 00:32:29,400 Speaker 1: All right, great, well, thanks for tuning in, and if 613 00:32:29,440 --> 00:32:32,360 Speaker 1: you like the episode, please subscribe and leave a review. 614 00:32:32,600 --> 00:32:35,280 Speaker 1: We've lined up a number of great guests for the podcast. 615 00:32:35,560 --> 00:32:40,240 Speaker 1: Check back to hear conversations with c suit executives, shippers, regulators, 616 00:32:40,240 --> 00:32:43,440 Speaker 1: and decision makers within the freight markets. Also, if you 617 00:32:43,440 --> 00:32:45,800 Speaker 1: have an idea for a future episode, please hit me 618 00:32:45,920 --> 00:32:49,000 Speaker 1: up on the terminal or on Twitter at Logistics Lee. 619 00:32:49,240 --> 00:32:50,960 Speaker 1: Thanks everyone, and be safe out there