Ladies and gentlemen, please stand by. Good day, and welcome to the Saia Inc. first quarter 2022 earnings conference call. Today's conference is being recorded. Now at this time, I would like to turn the conference over to Mr. Doug Col. Please go ahead, sir. Thanks, Jake. Good morning, everyone. Welcome to Saia's first quarter 2022 conference call. With me for today's call is Saia's President and Chief Executive Officer, Fritz Holzgrefe. Before we begin, you should know that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our SEC filings for more information on the exact risk factors that could cause actual results to differ. Now I'll turn the call over to Fritz for some opening comments. Good morning, and thank you for joining us to discuss Saia's record first quarter results. Our first quarter revenue of $661 million surpassed last year's first quarter revenue by 36.6% and is a record for any quarter in our company's history. Shipments per workday grew by 5.7%, and our revenue per shipment, excluding fuel surcharge, grew by nearly 20%, driven primarily by a 15.6% improvement in LTL yield. We continue to execute our business plan at a very high level. Operational execution was a highlight in the quarter, and our team did a nice job of managing around winter storm activity to minimize network disruptions. Our ability to quickly bounce back after weather-related closures put us in a position to respond quickly to our customers' needs. Not only do we respond to our customers' capacity needs, but I'm thrilled that we were able to do so with excellent quality, evidenced by our first quarter cargo claims ratio of 0.57% and on-time delivery over 98%. The pricing environment in our industry remains stable, and a recent shipper survey conducted by our marketing group indicates to us that our customers have a positive business outlook over the next several months. They're not expecting to see significant increases in capacity in either truckload or less than truckload over that period. The yield improvement is a result of our business strategy, which is stated in its simplest form, is to provide a differentiated high-quality service to our customers. This differentiated service requires that we are paid for the ongoing investments in the business. As we build out our coverage network and maintain very high service levels, we're increasingly able to reach a broader geography and provide superior levels of service. Though our revenue per shipment was a record $273 or $329, including fuel surcharge, we still feel like there's a long runway for improvement there to be on par with some of our high-service level LTL competitors. Record revenue set the table for record financial results in the quarter as operating income grew by more than 100% from the prior year to $103.4 million. Our 84.4 operating ratio is the first quarter record. I'm pleased to report that we're off to a good start this year as it relates to our plan for terminal additions. We've opened two new terminals so far this year, one in LaSalle, Illinois, serving customers in the Chicagoland markets, and another this past week in Parkersburg, West Virginia, our first in the Mountain State. We have four additional terminals on track to commence operations in the second quarter. With that said, I'll turn the call over to Doug for a review of our first quarter financial results. Thanks, Fritz. First quarter revenue increased by $177.1 million to $661.2 million. The components of revenue growth in the quarter were as follows. Tonnage grew 11.2%, a combination of 7.4% shipment growth and a 3.5% increase in our average weight per shipment. On a workday basis, tonnage grew 9.5% and shipments increased by 5.7%. Our yield excluding fuel surcharge improved by 15.6% and 21.4% including fuel surcharge. Fuel surcharge revenue increased by 75.7% and was 16.8% of total revenue compared to 12.9% a year ago. Moving now to key expense items in the quarter. Salaries, wages, and benefits increased 18.4%, driven by wage increases across our driver and dock workforce, as well as hiring and referral bonuses paid in the quarter to attract new employees. Our headcount is up approximately 13% year-over-year. Additionally, our August 2021 wage increase of approximately 4.7% contributed to this increase on a year-over-year basis. Purchase transportation costs increased 73.8% compared to the first quarter last year and were 11.8% of total revenue compared to 9.3% a year ago. Truck and rail purchase transportation miles combined were 19% of our total line haul miles in the quarter, compared to 15.5% in the first quarter of 2021. Fuel expense increased by 63.1% in the quarter, while company miles increased 10.9% year-over-year. The increase in fuel expense was primarily the result of national average diesel prices rising by over 45% year-over-year in the quarter. Claims and insurance expense decreased by 6.5% in the quarter, reflecting decreased frequency and accident severity in that expense line. Claims and insurance expense was down 36.9% or $6.3 million sequentially from the fourth quarter. Depreciation expense of $40 million in the quarter was 12.9% higher year-over-year, driven by investments in real estate, equipment, and technology. Total operating expenses increased by 28.1% in the quarter. With the year-over-year revenue increase of 36.6%, our operating ratio improved 550 basis points from a year ago to a record 84.4%. Our tax rate for the first quarter was 22.5% compared to 22.3% last year, and our diluted earnings per share were $2.98 compared to $1.40 last year. We anticipate an effective tax rate of approximately 25% for the full year. In 2022, we continue to anticipate capital expenditures will be in excess of $500 million. I will now turn the call over to Fritz for some closing comments before Q&A. Thanks, Doug Col. It is always nice to come out of the first quarter with good results, and as we move into our seasonally stronger months of the year, I'm excited about all the new openings and relocations ahead of us this year and the groundwork so far to keep us on track. The March opening in LaSalle provides coverage for the Chicago Northern Illinois freight market. We'll supplement this opening with a new location later this quarter in Rockford, Illinois, and hope to add another Chicago area terminal later this year. In late June, we expect to add two facilities to expand our service area in southern Georgia. Beyond these terminal openings, we have as many as ten slated to open in the second half of the year. With each new opening, our existing customers have confirmed our strategy by asking us to handle their freight needs in the new market. The customer response is a testament to the high quality of service and reliability that we continue to provide. To support our pace of openings, our human resources group is continuously recruiting and onboarding the talent that is required to open and operate these terminals. Along with expanding our Driver Academy program this year, we have partnered with driver schools and technical colleges in some markets to increase our candidate pipeline and to serve as a feeder program for our Driver Academy. In total, as Doug mentioned, we expect to invest over half a billion dollars this year in real estate, equipment, and technology. So far, equipment deliveries are generally on schedule, but we monitor deliveries daily and have developed our equipment plan for the year in a way that should allow us to meet the needs of our terminal openings, even if there are some further supply chain woes. There seems to be a new headline out almost every day about an imminent economic or industrial slowdown or a looming recession, but our business levels remain steady. We're in a unique position as a company in that while we are excited about our expansion and reaching new markets for our customers, we are focusing our growth on those segments of the business that provide a fair return for the valuable service we provide. Our business is a capital-intensive one, and our network is an asset that requires constant reinvestment to maintain. We can only do this if we bring on new businesses that compensate us fairly and is best achieved by providing great service and presenting our customers with great value proposition. I don't want to oversimplify it, but our strategy is to continually put our customers first by maintaining our promise to handle their freight with great care and deliver on time. With that said, we're now ready to open the line for questions, operator. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. Just keep in mind, if you're using a speakerphone, make sure the mute function is released so that signal can reach our equipment. Once again, star one for questions. We will begin with Todd Fowler with KeyBanc Capital Markets. Hey, great. Thanks, and good morning. Fritz, maybe to start, you made the comment that you guys have started the year strong, and we see that in the margins a little bit better than what you had talked about from a seasonal progression. You do have some terminal openings that are more second half or back half weighted. You talked previously about margins being at the high end of 150-200 basis points on a full year basis. You know, sitting here kind of early May, do you have any comments on, you know, some of the moving pieces and your expectations for margins on a full year basis at this point? Yeah, I think I mentioned earlier this year, Todd, that if we, you know, if things worked in our favor, we would expect to beat our range, and I would say that as we are trending right now, I think we'll be above the 200 basis point improvement for the full year. You know, the economic environment will dictate how far above, but I think we like where we're executing right now, and I think that this is an important time because when you're in a position where you can meet those customer requirements and obligations, you can execute even in a slower period of time. I think this is a good time to continue to push our value proposition, and I think it will end up leading us to achieving those sorts of financial returns. Fritz, to that point, it sounds like your team has done some work again on pricing and where you're at in the market. In the past you've shared about, you know, where you think your pricing is relative to some of your peers. I don't know if you've got an updated number on, you know, where you think you're priced versus the market and what you think the yield opportunity is. And then just if you could also comment on contract renewals in the quarter, that would be great. Yeah. Todd, I think if you look at the available public data or some of the market data that's out there, you can see that although we had a great quarter, you know, driving our pricing program and our initiatives, we still have a ways to go, and that's to close the gap and reach parity with, you know, some of the other elements of the market. I think in the quarter, we achieved what was a 10.2% contract renewals, which is roughly in line with what we did in the fourth quarter. That's a. You know, we feel good about that. I think that's indicative of where we are. I would point to also, if you go back several quarters and look at the contractual renewal percentage and then look at our actual yield and shipment sort of rate improvement, you'll notice that we've actually or have been performing at a rate above the contractual renewal rates, and I think that's a testament to us really driving the accessorial initiatives. Got it. Okay. Then the last one for me. Doug, do you have comments on insurance and claims in the quarter? It came in pretty favorable as a% of revenue and you know, relative to where it's been trending recently. Do you have any comments on 1Q and then maybe thoughts for the rest of the year? Thanks. No, I mean, like we said in the opening comments, Todd, it's really. There's always volatility around that line. You know, the premium, our renewal was pretty favorable this year versus the last couple just because it wasn't as inflationary. But that's a small part of the number on a quarterly basis. It's primarily driven by, you know, your actual experience in the layer in terms of your liability expenses. So now I just say, you know, it's normal volatility. For looking forward, probably a three- or four-quarter running average, you know, is probably your best bet, you know, trying to single point it for the next quarter. Okay. Got it. Thanks for the time this morning. Sure. Thanks, Todd. Now we'll take a question from Jonathan Chappell with Evercore ISI. Thank you. Good morning. Fritz, you sounded unsurprisingly optimistic given the recent results, but kinda contrary to some of the headlines, as you noted. Two questions on that tone. First, is there any way you can give an April update on anything, whether it's shipments, tonnage, revenue per hundredweight? I know it'll come out in the Q, but just looking for a little heads up there. Then also in the last call, you had mentioned increase in door count in the mid-single digits and also an increase in shipments in the mid-single digits. I just wanted to make sure that those, as you continue to execute on the terminal additions, if you're still looking for that same correlation or if there's something in the macro backdrop that may change the shipments relative to doors. Good morning, John. I'll jump in on the first part of the question. I'll go ahead and give you the March numbers too. Okay. March shipments were up 2.2%, and the tonnage, both of these are per workday numbers. The tonnage was up 4.2%. Then as far as April, you know, I think our comp last year on the shipment side and comps, I think April a year ago was up 27.8%, if I'm not mistaken. You know, our shipments this month are up slightly and tonnage up low single digits on a year-over-year basis. You know, we don't comment on the yield kinda in the middle of the month or on a monthly basis. But I'd say, April revenue on a year-over-year basis in the mid-20% range. Again, that shows our focus on the mix and freight selectivity that we're still able to see that kind of revenue growth on, you know, essentially shipments that were just up a little bit. Comps get a little easier in the third and fourth quarter, but we've got tough comps over the next couple of months. In terms of the door count, I think on an annual basis, our doors are up about 4% year-over-year. I would continue to expect kinda low single digit shipment growth, you know, if the macro economy holds up, you know, over the rest of the year. I think that's kind of the pace that we're seeing and that makes sense with our focus on mix. Got it. That's helpful. Just my second one. On the contract renewals, I think you're about 10.4% in 4Q, 10.2% in 1Q. Where do you stand on the overall portfolio book of business? Is the majority of the recontracting in 4Q and 1Q, so you've effectively marked the majority of that to market? Or do you still have a pretty long tail over the next couple of months where you can still potentially get those kinds of low double-digit increases? Yeah, I think the way you would look at our book of business, it sort of ratably renews during the year. You know, that we'll have a somewhat similar sort of mix of contracts that come up in Q2 and Q3. The other thing that I'd point out is that, you know, others in the business are not standing pat either, right? We got to continue to push our pricing opportunity, and I think, you know, continue to make sure we charge for all the services that we provide. I've been pleased with how we've performed against that the last couple of quarters. It's been a real important part of our story. I think in a, you know, in an environment where, you know, looking forward, companies that can differentiate on great quality service and keeping the promise for the customer, those are the ones I think take advantage of this environment and kinda continue to grow, operate, and earn the pricing they deserve. That's why we feel confident about where we are. Great. That's very helpful. Thanks, Fritz. Thanks, Doug. Thanks, John. Thank you. Now we'll hear from Amit Mehrotra with Deutsche Bank. Thanks, operator. Hi, guys. Doug, can you just give us the OR expectation sequentially? I know 2Q, there's a decent step down in OR, but I was also thinking there's been maybe a little bit more tailwind on PT COGS sequentially off of 1Q. You know, I'm just wondering if you could just talk about kind of OR expectations sequentially and how maybe PT could impact that as well. Sure. You know, historically, Q1 into Q2, we've seen you know, a pretty wide range of, you know, typically always improvement. You know, coming off of a record Q1 and with the booking pace we've got over the next couple of months, I'd say, you know, we'd still hope for about, you know, maybe 200 basis points sequentially, Q1 into Q2, I think would be good work. We've seen some seasonality, you know, better than that over the last 10 years. It's like I said, it's always been volatile and our ramps moved around, you know, over the years, you know, to increase weather exposure and things like that. I mean, you know, our best guide would be that, you know, we think another 200 basis points from Q1 into Q2 would be a good target. You know, I expect PT miles to continue to run at a similar level for us. I mean, we'd like to get more rail miles if we could. We're still skewed a little bit more, PT truck. versus rail than we've been historically. You know, if we were able to get more rail availability, I think we'd use it. You know, again, with the openings we've got coming up, I think we'll continue to use PT at a similar rate in terms of the percentage of our miles. Like I say, it stepped down a little bit from Q4 to Q1, but I don't see it necessarily trending down right now with all the openings we've got coming up over the rest of the year. Yeah. Okay, that makes sense. Maybe, one for Fritz. The margin commentary was helpful, I guess, for this year. Given, you know, everybody is thinking about a downturn and really nobody knows ultimately what's gonna happen over the next year. I think it'd be helpful, Fritz, if you could talk about how you think the model, you know, performs in a downturn, because I think you guys have invested a lot in service. There's obviously a big correlation between service and your ability to kind of price most of inflation. Just help crystallize that for us in terms of how you think about this business performs in the downturn. I just wanted to clarify on your service count increase. I think you said two so far, four in the second quarter, and then 10 in the back half. That puts you above the 10 to 15. I wasn't sure if I'm misreading that, if you can just clarify that. Thanks. Sure. Yeah, full year, we're expecting 10-15 openings. You know, we may have got it tied up there in the notes, but 10-15 for the full year. Got a pretty good pipeline that'll lead us into next year as well. Listen, Amit, our strategy right now is really centered around customer first, right? Taking care of the customer, meeting expectations, providing a very high level of service. I think in an environment, even if it's slowing, those are things that we can control, right? If we can deliver those and meet or exceed our customers' expectations, we ought to be able to price for that. If I look at the landscape that's out there, I like our quality and service stacked up against any of the national players, right? I think we do a great job. You know, when we look at the pricing opportunity, the market pricing opportunity, we got to continue to push that. I think that the catalyst for us starts with taking care of the customer first and keeping those promises. As we do that gives us our team, our sales team, the opportunity to really push the pricing around that because it. You know, the customer is getting great value, even in a slowing economy. Arguably, if their costs are up, differentiated service that meets or exceeds expectations, well, that's a winning argument even in a slowing economy. You know, I think the things that we can control over time are tools, analytics, how we manage, coach our business. We can deliver those results, and I think that's what gives us confidence to continue to push that OR expansion through a cycle. Okay. Just so I understand, so you're saying that in a downturn, you know, the price cost per shipment can still stay positive because of the focus you guys have laid on service. Is that what you're saying? That, that's what our intent is, and that's our focus. Yeah. Okay. Thank you very much. Appreciate it. Now we'll hear from Ken Hoexter with Bank of America. Hey, great. Good morning, Doug and Fritz. Can you maybe, Fritz, just going on that kinda trend there, can you decipher the difference, you know, where you're in growth mode versus the market? Is this kinda just winning share right now? Is it maybe just can you get a read-through in terms of what you see in the underlying economy and the status of the consumer or manufacturing? And then the ability to get your growth, right? You posted 13% teammate growth. Maybe talk about your ability to do so in this market. Thanks. Sure. You know, listening closely to our customers, they look at the balance of the year into next year. They remain positive, and that would be across all sectors. That's from our own sort of research contact with customers, ongoing communication. You know, we think that is a, the backdrop continues to be positive. I think the other piece that we see our performance when we get the feedback from our customers, and we see that they really value the quality and service, and we've done a good job of maintaining that commitment to them. That has allowed us to, you know, expand our footprint, take share in markets. You know, if you look at it over time, over the last five years, we've accelerated our pace of market share growth, over that time while we've been growing. I think some of that is, it's really testament to our ability as we've opened new facilities to replicate that Saia quality and service pretty consistently. As we've grown in markets or added markets, we've relied on our existing customer base who are familiar with what they get from us. That's important, and I think that puts you in a position where you're not trying to win the customer with price, you're winning the customer with service. When you do that, I think you have the opportunity to maintain the margin structure or even improve the margin structure over time. I think as we look forward, as we fill in these terminals, we don't see a real risk to that plan right now. I mean, one of the terminals, I'll give you one anecdote, the Atlanta market, we've long talked about adding terminals here. We added a second terminal to market in the fourth quarter, and what's exciting about it is that terminal is already profitable. Now, it's not at the company average yet, but more significantly, the entire Atlanta market grew for us because we were in the market already. People knew who we were. We have extended our reach here. We've replicated the service, and now we operate more efficiently at the same time. It's a win-win, and I think as we look forward into the balance of this year and next, as we add our openings, I think those are things that we can repeat. Fritz, I guess, just to clarify, like, are you able to decipher if that's winning business from your peers as you keep growing with your own customers? Is it like is it. I just wanna understand kinda how you can tell when you start to see a turn in the economy. I understand that you're able to grow 'cause you're in growth mode. I wanna understand in a bigger picture what that means, if this is kinda share gains from others or how we look at this growth. Right now, I'd tell you it's both. It's both share gains from others, and it's incremental customers for us. I think you know, it's tough to decipher a little bit. If I'm in a position that I have an existing customer and I couldn't reach or provide service to a market, I now can, that's incremental. Is that share gain or is that a new market? Arguably for us, we consider it to be both. I think today as we look across the landscape, we continue to see opportunities to add new customers, and we haven't seen any slowdown with that at all. Just to follow up, if I may, on CapEx, you mentioned reiterating the $500 million and your number of service centers were the same. Was there something in the first quarter? Was it lack of deliveries that you're gaining confidence you'll still get the trucks you need? Or you mentioned there are other things you can do if you can. Maybe just talk through the CapEx side of it. Yeah. The CapEx equipment deliveries are behind the original schedule. We still think we will get them this year. That's been a bit delayed. Real estate transactions. They're tough to predict closing and things, and that's also a little bit of a timing issue there. We would expect that we'll catch up the equipment deliveries, and the real estate will remain on track for the year. Wonderful. Thanks for the time, guys. Appreciate it. We'll now hear from Allison Poliniak-Cusic with Wells Fargo. Hi, good morning. Just building on that Atlanta example that you gave, you know, obviously, revenue growth or shipment growth, in that scenario. Is there a way to think, I know you mentioned it's still not at the average profit for your terminals, but is there a way to think of the operating capabilities it's bringing in terms of more fluidity to your system that over time it'll be an incremental contribution to that OR increase? Any thoughts there? Absolutely. I mean, I think probably the best anecdote is you have a driver that's in Atlanta that he is not spending an hour to go service the Northwest Atlanta market. He's now serving, doing a better job building density around the South Atlanta terminal, doing all those pickup and deliveries. We've hired a driver in Northwest Atlanta that's now covering that market and building density around, you know, that facility. It gives you an opportunity to better utilize your original or starting assets to better service those customers. The new market in the Northwest Atlanta, you can build density over time there. The best thing for us is it's a better way to utilize existing assets, grow the business, and the incrementals on these should get significantly better over time. Great. Thanks. Just on leverage, you know, obviously very low here. Just any thoughts, you know, obviously it sounds like the ongoing strength continues here. Just any changes in use of the balance sheet here? You know, not really. Kinda staying the same course, Allison. I mean, we're sitting on cash, you know, and we're entering our seasonally stronger period of the year, so generating a lot of cash in the next few months. Like Fritz said, we'll start seeing more and more deliveries as the months of summer roll on in terms of tractors and trailers. You know, plenty of dry powder. You know, if there are dark clouds out on the horizon somewhere in terms of the downturn, historically in our industry, those have always presented opportunity for the healthy companies, and we're in a really fortunate, you know, position. Whichever way things go from here, I think you'd see us, you know, be in a position to take advantage of it. I mean, quite frankly, there's some deals historically during downturns that we just couldn't look at because of the leverage we had on the company. Today, we sit with a really clean balance sheet and generating a lot of cash. You know, no change from our standpoint other than, you know, we intend to put the cash to work that we're generating. Great. Thanks. I'll pass it along. Sure. Next up, we have Scott Group with Wolfe Research. Hey, thanks. Good morning. I wanna ask on fuel, just your thoughts on the impact in the quarter and diesel prices still moving higher. Do we see maybe potentially a bigger tailwind in the second quarter? Then just with fuel surcharges up so much, is that in any way impacting your ability to get accessorials in other parts of the business? You know, I'd say so far it hasn't impacted that ability, Scott. You know, our surcharge table was up quite a bit in Q1. I mentioned the 45% increase in the average diesel price out there. You know, our surcharge table's up, but it's up for all of our competitors, and the shippers understood that, you know, they've got to bear that cost with us. It's not for me to decide whether, you know, what this overall inflation does to the OR or the impact it has on the broader economy. Right now, you know, the goods need to move and the shippers, you know, have been able to pay that. The benefit to size has been that as we've tried to close the gap on our base rates over the last several years, we're now tacking on that fuel surcharge on top of a higher base rate. At the end of the day, our approach has always been that the count or the customer needs, you know, to pay at a level that allows us to earn a decent return. You know, the piece that's coming in fuel surcharge is just one component of it. Okay. The weight per shipment tailwind that you guys have been seeing over the last year, do you think that that's sustainable as this year plays out? What trends are you seeing in weight per shipment right now? Yeah. I mean, in the first quarter, you know, it moderated throughout the quarter a little bit. I think, you know, that's a reflection of all the work we've been doing on it. You know, I'd say that, you know, we continue to try to push the mix to the direction of heavier-weighted freight. You know, if I think about our GRI in January, the average rate increase across the tariff was 7.5%, but it's a targeted approach that we take to allow us to, you know, to focus on the types of shipments we want. It's a short time here since the GRI went into effect on January 24th, but we have seen a trend that our shipments, for example, that weigh less than 1,000 lbs are a little bit smaller percent of the mix. In that short period of time, our shipments that weigh more than a 1,000 lbs are a little bit bigger percent of the mix. We're gonna continue to try to work on mix and drive the right kind of freight into the network. You know, it's come a long way. I mean, in terms of modeling, I don't know how aggressive I'd be saying that it's gonna continue, you know, to increase over the balance of the year. Okay. Just last one longer term. You guys are gonna do, you know, something low 80s in terms of operating ratio in 2Q, and I know that there's seasonality here, but it's gonna be a few years away. But does anything about a full year, you know, sub-80 OR, is that something that is, you know, within the realm of reality over the next few years in your mind, Fritz? A sub-80, a 7 handle in the next few years? Absolutely, right? Yeah. I mean, I don't see an impediment to us doing that. I think we've got a service offering, a commitment to customers that we can recoup and drive the results in the business. We have to because we have to maintain a very high level of investment in this business to maintain that quality and service. I don't see any reason why we can't approach that or get deep into the seventies. It only makes sense to me. Okay. All right. Thank you, guys. Appreciate the time. Thanks, Scott. Now moving on to Jordan Alliger with Goldman Sachs. Hi. Yeah. On your terminal growth plans, just sort of curious, is there scenarios or contexts where you could dial that back if you needed to, or is it something that sort of goes forward, regardless? Secondly, just out of curiosity, when you open up a new terminal, I know it may depend on geography, but about how long does it take, would you say, on average to sort of fully season where it's, you know, within company existing operating margins? Thanks. Yeah. The thing we really like about the organic growth strategy is a couple things. We're in control of regulating it up or down, right? If there were a scenario in which we didn't feel comfortable executing an opening, we could certainly slow it down. If you look back in our history, we also feel quite comfortable if we think there's an opportunity we can accelerate that. It doesn't impact the strategy timing of that. I mean, it's obviously we get the 10-15 in place and get those operational as quickly as possible. That benefits everybody and customers first and foremost. You know, our pipeline of facilities that we look at is several years long. Our, you know, we still feel like we've got a pretty good runway, and I think we've got a pretty good competency around how you execute an opening and get those in the system quickly. You know, the facilities that we opened in the Northeast, both regions of the company that we've added are, you know, not all the way the best operating regions of the company for us, but they're certainly giving chase. They're not really a significant drag on earnings. We've seen that as we add those regions, we can get them profitable. What's more significant, as the openings that we're focused on now are less about opening up regions of the country, and more about saturating regions of the country. You know, I gave the example a few minutes ago about Atlanta. I would fully expect that facility to be a company average, you know, in short order, less than a year, if not sooner. More significantly, what's interesting about that is it really helps drive efficiencies in the legacy Atlanta facility. The benefits of it are pretty significant just from that account. I think, you know, over time, I think it's an important part of our growth strategy. I think as we add these facilities and provide incremental coverage in markets that we're in, the profitabilities and contribution to these facilities will happen pretty quickly. Thank you. Now moving to Bascome Majors with Susquehanna. Yeah, thanks for taking my questions. Fritz, to that prior comment on the improvement in the Atlanta whole region, can you talk about or are you able to quantify how the profitability of the entire region has moved since you opened that second facility? And if so, is that indicative or representative of some of the other openings that you would do? Thank you. Yeah. I mean, the whole region. It was a significant contributor to our overall improvement year-over-year. You know, I think as you look at, as we've built density across our network and as we've built out the company, I mean, we've got regions now that operate below 80. And that, I would fully expect all the other regions to get there as well. I mean, if you're gonna have a seven handle, you better have a few that are low seven handle, if not a six, right? It's as you fill in the map, that gives you the opportunity to do that. I would expect Atlanta now to be driving towards something that looks like our more higher density Western parts of the country, where we're actually operating below 80. You know, I think these are important steps. Thank you for that. On that. Go ahead. On that note too, Bascome, I mean, if you think about it, we break the company up into 12 regions, and like Fritz said, in the East, on average, the East division operated sub-90, and that includes our two northeastern regions that were both sub-90. Only open a few years, they're sub-90. In the West on average, you know, actually was sub- 80 in those five western regions. To the earlier conversation on capital allocation, you talked about being in a position to take advantage of a downturn. Can you clarify if you're talking individual facilities or if there's parts of the network you really would, you know, consider being acquisitive to grow more quickly? Fritz, if you could add anything about how the board's considering a buyback now that your earnings continue to go up and your multiple's been cut in half since last year. Thank you. Yeah. In terms of capital allocation, I mean, I was speaking about potential deals that may be available, you know, in a downturn from a competitor that, you know, struggles or a landlord that owns something that, you know, acquired at the wrong part of the cycle or something. I mean, there were deals, like I said, over the last 10, 15 years that would've been really attractive given what real estate has done since then. In terms of acquisitions, I mean, we'll never say no. There's pockets of the map where, you know, if you were able to find us some coverage, we would certainly not be against acquiring terminals, you know, in a basket type approach if there was an acquisition. Yeah. Yeah, I think on the capital allocation question, I mean, we see a significant pipeline of growth opportunities for us just on organic expansion. We'll do the right thing with the shareholders' capital. At this point, we're very focused on executing that organic expansion plan. 10-15 terminals this year and next with related equipment, that's a significant allocation of capital, and a pipeline of real estate that's likely, you know, multiple years long and one where we wanna increase our ownership of real estate. I think that today there's, what I'd tell you, is there are ample opportunities to deploy capital efficiently. With that said, over time, we completely recognize the need to manage the available capital appropriately. Thank you both. Now we'll hear from Christian Wetherbee with Citigroup. Hey, thanks for the time. You know, I know we're not really seeing much deceleration in the fundamentals of the business, if at all, but, you know, curious to get your take on how you think about that pipeline of expansion and what maybe are the specific parameters you may be looking for to, you know, either adapt that, whether that's sort of push it out a little bit or maybe even accelerate it if opportunities come up. Are there specific guidelines that you're thinking about, you know, when you're looking at opening those terminals in the context of the potential, you know, fundamental freight trends and economic activity? Yeah. You know, I think one of the exciting things about this organic expansion is that we're focusing on better serving markets. I highlighted the Atlanta example. The Chicago example we noted as well. Those are markets in which we probably have we don't have enough door capacity, or we don't have enough of a presence. Adding the facilities does a couple things for you. You can obviously take care of the customer in a much better basis, but it's also a cost savings opportunity or efficiency play. We like those. We're also because of how we've managed the balance sheet and the capital of the company, we are opportunistically always looking for strategic acquisitions, even if it's a market that we're already in. Maybe there's an opportunity to buy a facility that's larger, better positioned. We'll do those. We're also in a position today where we can deploy capital. Economy slows down, we may decide to, I'll call it inventory a facility and open it later. I think we have a lot of latitude where we are with this. I think that what I like about the growth strategy is because it's focused on markets, you know, sort of saturation markets or markets, we're adding something on a peripheral, that gives us an opportunity to kind of provide the service, but it also provides an efficiency play, which even in a slower market may we can benefit from. Okay. That makes a lot of sense. Thanks. I guess a follow-up, just in terms of labor availability, obviously, you have some plans for expansion as we go through the rest of the year. Can you just talk a little bit about labor availability, if you've seen improvements in being able to get folks to work, or how that ultimately is playing out? You know, it's an ongoing challenge. It's certainly competitive in just about every market. You know, one of the nuances of opening facilities is that you now become the new player in a market, and that does give you a qualitative advantage for a while. If we're trying to do a good job of servicing the Atlanta market, and we're having a tough time from one terminal We add a second terminal, we now can recruit drivers in a market that we weren't recruiting before. It's a little bit of a increasing our hireable addressable market, if you will. You know, being the new game in town, we provide, you know, somebody comes in with immediate seniority, that sort of things. Those are qualitative benefits that help with recruiting a little bit. But it's still a challenge. You're competing on. Obviously, you gotta have great pay and benefits. You gotta have a great culture, and it's good to be in a market where you can or in a business where you can talk about growth and what the opportunities are for an employee or a new employee. Ongoing challenges, but we feel pretty good about how it's going. Got it. Thanks for the time. Appreciate it. Next up, we have Bruce Chan with Stifel. Hey, good morning, Fritz. Morning, Doug. Just a follow-up here on the weight per shipment. You mentioned that you're intentionally working to drive that number up, but is there anything to read into the earlier question about consumer versus industrial there in terms of, you know, maybe tailwinds to that number? You know, so far that's not the case. What we're seeing, Fritz mentioned our view of where our customers' outlook is and, you know, our marketing group conduct a shipper survey during the quarter. You know, they all still on average felt that their inventories, you know, were still at a level that, you know, was gonna require consistent replenishing. Their outlook around, you know, rates going forward was that, you know, they still expected that rates, both truckload and LTL, were probably gonna be higher because they didn't really see new capacity being available over the next six months. you know, I'd say so far there's nothing, you know, from what we're seeing to draw any, you know, distinction between where the, you know, retail's going and where industrial's going. Okay. Got it. That's helpful. Just switching gears a little bit, you know, to follow up on some of your CapEx comments, Doug, you mentioned tech as part of that. Can you just remind us of what some of your kind of major initiatives are there right now? Sure. I'll jump in on the tech initiative. Basically, the big items that we pursue are just about anything that data analytics driven. How do we collect data through our driver devices or through our data warehouse tools that we use to develop and understand and better analyze the business? Then we spend a fair amount of money in supporting that infrastructure. You know, one of the great things about using a lot of data to run a business is you become very dependent on that data, which is a good thing. That also means you need to make substantial investments in things like cyber all those sorts of tools as well, which to sustain and protect the business. Those are parts of our investment profile. It's an ongoing software development around line optimization or optimization of the business. As I think about it's really about collecting data, managing the data, optimizing the data, and then really protecting the data. Okay, great. How much of that, you know, half a billion in spend, would you say is related to tech? I mean, it'd be a low- to mid-single-digit% of it. Yeah. Keep in mind that a lot of the tech spend is gonna come in the form of operating expense as well, right? Cloud computing, that sort of thing. Got it. Appreciate the time. Now moving to Ravi Shanker with Morgan Stanley. Thanks. Morning, gents. Thanks for the time. There was a story in The Wall Street Journal a couple of weeks ago talking about e-commerce percentage of retail kind of normalizing pretty sharply back towards long-term trend levels and maybe some of the earlier like, thoughts that we are, like, permanently gapping up on e-commerce penetration may or may not hold true. I'm wondering, A, what do you guys think about this? B, what percentage of your volumes would you say come from e-commerce customers? And C, would you be completely agnostic to e-commerce volumes versus in-store volumes given your network footprint? Yeah. Thanks, Ravi, for the question. You know, in terms of e-commerce, you have to draw a distinction. Are we talking B2B or B2C? For us, you know, residential deliveries is kind of a mid-single digit% of our shipments every day, so that looks, you know, would seemingly be the B2C piece. We haven't, you know, made any big push strategically to grow that. We feel like we do have some, you know, as the B2C continues to grow and it grows for heavier weighted shipments, I think that is a tailwind for LTL. Because, again, some of the LTL carriers are making a push to get different equipment to go into the neighborhoods and provide, you know, the residential delivery or perhaps even a white glove type of delivery service. Even if an LTL carrier doesn't, you know, make a push to do more of that, they probably stand to benefit because, you know, the companies that are positioning themselves to do that, whether it's a small final mile business in a regional area or something, you know, they still need that heavier weighted freight brought in by an LTL carrier. They don't need a full truckload of it. A parcel carrier is not gonna bring them an 800-pound pallet. LTL is still positioned to benefit there. You know, to the bigger question, we're kinda like indifferent to it, should I say, because if the consumer's gonna go back to buying, you know, the appliances at the home improvement, you know, retailer or something. You know, LTL has a role to play there in delivering, you know, multi-unit appliances or whatever into, you know, the back of a store that are gonna get bought off the store floor. It'll be interesting to follow, but I think LTL is pretty well positioned to handle the heavier weighted freight that is B to C. Yep, that makes sense. Thanks for the detail. As a follow-up, I apologize if you missed this, if I missed this, and you said this earlier, but have you had any changes in your thoughts on lease versus owning your facilities, especially your new terminals or the Northeast expansion, kind of given where what rates are doing and you know, just in general, real estate pricing and such? Any shift necessary in the long-term strategy there? No, our emphasis is to try to own as much as we can where it makes sense. Like, if there are some opportunities where we've moved into a market that, you know, we start by leasing a facility because we know well at the beginning that in short order we'll exit and go to an owned facility or a new facility. We think about it that way. We feel like real estate is a long-term asset for us. There are certain markets where frankly, I wouldn't say it's cost prohibitive. It's just not the assets just aren't available, and you end up leasing in those markets, because you wanna be in the market, and where that's more important than not being there. It's a mixed bag really, but the reality of it is we would prefer to own more of our strategic assets and that will continue to be a focus. Wonderful. Thanks for the time. Once again, ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. We'll pause for just another moment. All right. Thank you for everyone's continued interest in Saia. We look forward to executing our growth plan and look forward to talking, giving you update here next quarter. Thank you very much. With that, ladies and gentlemen, this does conclude your conference for today. Thank you for your participation, and you may now disconnect.