Good morning. My name is Saskia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Saia, Inc. third quarter conference call. Today's conference is being recorded. To ask a question today, please signal by pressing star one. I will now turn the call over to Doug Col, Saia's Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Saskia. Good morning, everyone. Welcome to Saia's third quarter 2022 conference call. With me for today's call is Saia's President and Chief Executive Officer, Fritz Holzgrefe. Thank you for joining us today. We sincerely appreciate your patience as we had to work through some technical issues with our earnings call service provider yesterday. Before we begin today's call, you should know that during the call we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our SEC filings for more information on the exact risk factors that could cause actual results to differ. I will now turn the call over to Fritz for some opening comments. Good morning, and thank you for joining us to discuss Saia's third quarter results. Freight trends have moderated over the last couple of months. I'm pleased to report this morning that Saia achieved record third quarter revenue and operating in-income, topping last year's record results. In the quarter, we averaged approximately 30,500 shipments per day, about 800 fewer shipments per day than in the same quarter last year and down from 32,000 shipments per day average in the second quarter. The Q2 to Q3 daily trends were below normal seasonality. The shipments were down 2.5% in the quarter. Weight per shipment increased and tonnage was essentially flat to last year at down 0.4%. Our third quarter revenue of $729 million surpassed last year's third quarter revenue by 18.4%, and our LTL revenue per shipment increased by 20.1%. Our revenue growth, ex-fuel surcharge, continues to be the result of positive pricing and effective mix management. Our yield or revenue per hundredweight, excluding fuel surcharge, rose 7.8%, reflecting a constructive pricing backdrop despite the moderating demand environment. Further evidence of stable industry pricing is seen in our average contractual renewal increase of 12.2% in the third quarter. We're committed to providing excellent service to our customers and are investing heavily in the business to expand coverage, and it is gratifying to see that our customers see the value in our service offering. Our third quarter operating ratio of 82.4% was 110 basis points better than our adjusted operating ratio of 83.5 posted in the third quarter last year. You'll remember that the adjusted operating ratio excludes a $4.3 million real estate gain recorded in the third quarter of 2021. As you have likely seen from our numerous press releases, we successfully opened five new terminals in new markets, and with our Lafayette, Indiana terminal opening this week, we've now opened a total of 11 terminals this year. We do not have any additional openings planned. We're currently planning to open another 10 to 15 terminals in 2023 in our ongoing effort to offer new and existing customers more service options. I'll speak more on our outlook for the rest of the year and the next year after Doug reviews a few more details from our third quarter financial results. Thanks, Fritz. As mentioned, third quarter revenue increased by $113.3 million to $729.6 million. The components of revenue growth in the quarter were as follows, our yield, excluding fuel surcharge, improved by 7.8%, and yield increased by 17.5%, including the fuel surcharge. Tonnage decreased 0.4%, attributable to a 2.5% shipment decline and a 2.2% increase in our average weight per shipment. Length of haul was down 2% at 897 miles. Fuel surcharge revenue increased by 74.6% and was 20.5% of total revenue compared to 13.9% a year ago. Shifting to the expense side for a few key items to note in the quarter. Our salaries, wages, and benefits increased 7.3% from a combination of our July wage increase, which averaged 4.3% across our employee base, and also the result of our employee count having grown by approximately 10% year-over-year. Purchase transportation costs increased by 18.4% compared to the third quarter last year, and were 11.7% of total revenue compared to 11.7% in the third quarter of 2021. Truck and rail PT miles combined were 17.1% of our total line haul miles in the quarter compared to 19.7% in the third quarter of 2021. Fuel expense increased by 60% in the quarter, while company miles increased 8.2% year-over-year. The increase in fuel expense was primarily the result of national average diesel prices rising by over 53% on a year-over-year basis. Claims and insurance expense increased by 3% year-over-year in the quarter and was up 12.5% or $1.8 million sequentially from the second quarter. Depreciation expense of $40.7 million in the quarter was 13.8% higher year-over-year and $3.7 million more than in the second quarter, primarily due to the onboarding of new tractors and trailers. Total operating expenses increased by 17.9% in the quarter, and with a year-over-year revenue increase of 18.4%, our operating ratio improved to 82.4%, compared to an adjusted operating ratio of 83.5% a year ago. Our tax rate for the third quarter was 23.3% compared to 24.3% in the third quarter last year, and our diluted earnings per share were $3.67 compared to $2.98 in the third quarter a year ago. We anticipate an effective tax rate for the full year of approximately 24%. Capital expenditures through September totaled $279 million and will approach $500 million for the full year. I will now turn the call back over to Fritz for some closing comments. Thanks, Doug. Well, as I stated earlier, business levels have moderated over the past couple of months, and obviously we're also entering some of the seasonally weaker months of the year. With that said, we continue to be pleased with the progress we're having with identifying and securing new locations in targeted expansion markets. We expect to open a handful of terminals in the first quarter of 2023, and plan to open as many as 10-15 locations in 2023. As we will have done with the four terminals this year, we plan to relocate another 10 or so terminals next year that we've either outgrown or, in some cases, we're moving to put us in a better position operationally or strategically. All of these openings, both new and relocated terminals, are important to our strategy of enhancing our service offering. While our pipeline for terminal openings carries well into 2025, keep in mind that a key benefit of our organic expansion strategy is it allows us to go at the pace that suits us. Our business cycle is subject to cyclicality, and depending on where we are in the cycle, we may see an opportunity to accelerate or even slow our terminal expansion activity. We are currently planning for business as usual in 2023, and we'll update all of you quarterly on any changes in our opening plans. Each new terminal opening supports our strategy of getting closer to the customer and adding value to their supply chain. We continue to see great response from our existing customers who ask us to handle their freight needs in the new markets. As our brand grows in the market, we pick up additional customers that are new to Saia. Internally, we track customer satisfaction on a daily basis, and KPIs are focused on customer satisfaction. Our Net Promoter Scores have improved for seven consecutive quarters, further validating our customer-first strategy, a testament to the exceptional service provided by our team members across our growing map. Before moving on to question, I'll just say that our view of the current pricing environment remains constructive, and indications are that cost inflation will continue in the business. Pricing to maintain and improve margins is critical in an inflationary cost environment, and we'll continue to do our part for our customers in providing great quality and differentiated service to justify the pricing. With that said, we're now ready to open the line for questions, operator. Thank you, sir. As a reminder, to ask a question, please signal by pressing star one on your telephone keypad. Our first question today comes from Jon Chappell of Evercore. Please go ahead. Thank you. Excuse me, and good morning. Fritz, one of the last things you said was the inflationary cost environment. I just wanted to focus on two parts there. You said your headcounts up 10% year-over-year, which makes sense given the growth of the last 12 months. As you think about labor, and if we layer in PT, which is still elevated by your historical standards, which one of those levers gets pulled first? Can you match them to kind of the slowing tonnage or shipment backdrop that you're seeing today? Yeah. The first thing we want to do is leverage our internal workforce where possible. I think over time, you'll see us work through the PT, and that'll continue to come down over time. You know, we contract our PT rates, so as a result, you know, you didn't see necessarily the impact of what you see with current spot rates. It's a contractual rate, so it's incumbent upon us then to leverage our internal assets, our driver network wherever we can to build density. That's something that we'll continue to work on, you know, Q3, well into Q4 in the next year. That'll be an important opportunity for us, you know, as we kind of fill in our geography and build needed density across the network. Mm-hmm. That makes sense. Super quick follow-up, just if you can, any update on the trends in October? I know it'll be in your queue, but we're through the month now. Any commentary you can give on either the shipment or tonnage or even the pricing environment? Yeah. I'll jump in here, Jon. October has been the first month really in a while where we've seen kind of a more sequential, normal sequential flow from September into October. In October, our shipments are down about 4.5%, and our tonnage is down about 3%. We're still seeing a year-over-year kind of weight per shipment number that's, you know, improved. Again, that seasonality, we bucked seasonality all year, but this was the first month where it's kind of felt normal seasonally to us. Okay. That's super helpful. That's kind of gonna be, that'll be our expectation, you know, going through the rest of the year, and we'll see how it pans out. Great. Thanks, Doug. Thanks, Fritz. No problem. Thank you. We now move on to Jack Atkins from Stephens with our next question. Please go ahead. Okay, great. Good morning. Thank you for taking my questions. I guess, you know, Fritz, if we could maybe go back to the pricing and cost discussion for a moment. You know, in the quarter, Doug, I believe you said that contractual re-rate renewals were up, I think, 12.2% in the third quarter. You know, any kind of color you can provide us on sort of how that specific metric is, you know, trended in October? You know, do you feel like that you're seeing, you know, rate increases that are covering your cost inflation at this point? Yeah, I mean, I think we see a continuing trend around pricing and being favorable. The environment's good. I think what's for Saia in particular, which is critical, is, you know, I'll point to what we're doing for the customer. Our service trends are as good as they've ever been. When you're in that situation, it allows you to continue to support the longer-term proposition around making sure we get paid for that service. I think they go hand in hand. I think the trends are positive. Our service standards are high. I think that is kind of foundational to be able to continue that pricing trend, and it's based on differentiated service. I think that helps us, that's supporting our thesis specifically to what's the opportunity at Saia. Okay. Understood. I guess maybe kind of thinking bigger picture about you know your growth plans here. You know, Fritz, I think you said that the plan for 2023 is sort of business as usual, bringing on 10-15 new facilities. You know, when we kind of think about the last year or so, you know, we have been adding a good bit of capacity in terms of new doors coming online, new facilities, upgrading facilities. The shipment growth really hasn't sort of been keeping up with the door growth, and we're adding more doors into next year. You know, at what point do you need to see the shipment growth kind of catch up to the footprint that you've been adding or, you know, before you start thinking about maybe pulling back a bit on the expansion plans to sort of let the market catch up with what you already put in place? Yeah, good question. I mean, I think the big thing, the way we look at this is that when we add doors, we're not thinking about adding doors for, frankly, this year, this quarter, or next year or the year after that. It's really kind of a sort of a longer-term, 10-year horizon, right? You're adding that capacity. I think what you're doing when you can provide that, you're providing a new, you know, expanded service map for a customer and, you know, you can provide great service for it and you have the opportunity to find the business that operates out of your legacy network into the new coverage that's beneficial. The mix of business view that you look at is across a larger and growing portfolio. Now with that said, what's really, and I'll underscore it's important, with our geographic expansion initiative is that, you know, we have the ability to, you know, slow that, delay that, maybe even some cases accelerate it, depending on the environment. What we see right now is that we see at least, you know, as we look at the full year, we continue to see that opportunity for us. That's not to say, you know, three months or a couple of quarters into next year where we might say, "You know, let's pause." I don't think that has a material impact on our business. We have the balance sheet that, you know, we could delay openings. It's not. We're not necessarily pressured by that one way or the other. What we see is a long-term opportunity for us to continue to improve our service map. If we think there are opportunities for us to do that, we will. If the market isn't accepting of that, I think we back off or we slow down or delay. I think I like the optionality here. Okay. Thank you again for the time. Thank you. We now have Ken Hoexter of Bank of America with our next question. Please go ahead. Hey, good morning, Fritz and Doug, and thanks for putting up with all the questions on moving the call. Maybe just talk about how you think about the progression of the operating ratio here. If we start thinking about a deterioration in volumes, it looks like you're working to hold price pretty well. Maybe just talk about how we should think about it, you know, if you're jumping back to seasonality where tonnage is down 3% and shipments down 4.5%, how should we start thinking about that into the fourth quarter and next year? Hey, Ken. Good morning. I'd say for the fourth quarter, I mean, like I said, we're pretty pleased with October. Just that it was, you know, something we expected, you know, finally kind of occurred this year. We're gonna expect normal seasonality through the end of the year. With that, we would expect that our historical margin degradation would come in pretty much in line. Historically, we've seen around 200 basis points as you move from Q3 to Q4 of deterioration or degradation in the OR. You know, based on what we saw in October, we would think we could hit it. If there's a fall off in volume or we don't get to kind of the end of the month normal pickup in one of the months remaining, then maybe it's a little worse than that. I think about 200 basis points is our target as we sit today with one month under our belt. Moving into next year, I mean, you know, we've always said because we felt like, you know, we've really improved our service and had a valuable product to our customers, but yet still had a pricing gap. Walking into a year, we expect to be able to improve margins by, you know, providing good service and then charging a fair price, which is market. As we do that's, you know, generated a lot of the margin improvement we've seen. As we move into 2023, that would be our goal. Now look, if shipments and tonnage are gonna be negative all year, then that's gonna be challenging to do. I don't know, everybody's got a different economic model and when do things stabilize or turn positive across, you know, the industrial and retail economy. Our view is that, you know, we've got an opportunity to, you know, continue to raise the bar on service, charge more for it, improve margins, and we'll just see what kind of a macro environment we're dealt as we move into 2023. I'm sorry if I missed this earlier, but did you talk about is it too early for pricing discussions or timing for GRI and how you think that might flow as we move into a decelerating freight environment, knowing that as you said, you've got to catch up on pricing relative to peers? Well, yeah, I mean, our view would be that we certainly can't fall behind, so we haven't made any announcement yet, and we typically don't kinda lead the pack in terms of when we announce things. You know, the largest carrier in our industry has already kinda come out and laid out their plans for next year, which, you know, includes an increase first of January. We'll kinda watch the market, but if, you know, if everyone else does and we sit on our hands, we fall behind. That's not gonna put us in a better position and certainly won't. You know, a flat environment doesn't allow us to price for the cost inflation we're seeing that we've been talking about. Yeah, I think I'd add that you're renewing contracts throughout the year for the national accounts. The third quarter renewals reflected the mix of contracts that came up in that quarter. We would expect, you know, I don't know if it's gonna maintain that rate, but we would expect to continue to negotiate with our customers pointing out the service offering. You know, the underlying costs are inflationary, so we're gonna have to keep continuing to focus on pricing in the contractual negotiations as well. Thanks, Fritz. Thanks, Doug. Appreciate the time. Thank you. We now move on to Jason Seidl of Cowen with our next question. Please go ahead. Thank you, operator. Fritz, Doug, good morning, gentlemen. Wanted to talk a little bit about how we should view the quarter. Obviously, you know, you saw a degradation in seasonality in 3Q, and then you've seen a return to normal seasonality here in October. How much of that degradation in seasonality do you think was just a pull forward of people's shipping habits this year? Morning, Jason. You know, it's hard to say. I mean, the normal Q2 to Q3 seasonality, you know, would have been something like down 1.5%-2%. For us, Q2 to Q3 shipments per day were down about 5%. It was a big break to seasonality. You know, there's the weight per shipment is, in our view, a combination of the health and strength of our industrial customers. And, you know, in our view, the industrial customers probably, you know, weren't seeing the same kinda inventory issues play out that we saw with, you know, across some of the retail landscape. To the extent we have retail volume in our network, if some of those shipments were down, that also, you know, supports the higher weight per shipment we saw. I mean, all in all, you know, we were certainly pleased with the quarter given the, you know, trends we saw on the shipment side. You know, we know some of the shipment trends are kinda self-inflicted, and we're okay with that, you know, because you see that evidenced in our mix and, you know, selecting the freight that works for us and doing business with the customers that value the service has been a, you know, a good path for us to be on, and we intend to stay on it. You know, we're pleased with Q3. Again, we'll see if the seasonality that we saw in October continues. Okay, fair enough. Directionally, how should we think about CapEx into 2023 in sort of a more stabilized environment, not one which you have to pull back anything? Yeah. I think you'll probably see, you know, similar levels of CapEx. I mean, we've still got, you know, a pretty nice pipeline of real estate opportunities. Like Fritz mentioned in his comments, you know, you might see us act on some real estate activities, be it land or terminals and not necessarily have to open them. It wouldn't be a bad thing if we end up stockpiling a few things. I don't think we're gonna be shy about making good investments, even if we don't open them. If we make good investments and find properties that will put us in a better position or in a new market, you know, I think you'll see us continue to act on it because, you know, we do have a good balance sheet. You know, that's probably the. You know, I don't know what kind of cyclicality is ahead of us over the next few quarters, but I don't think Saia's balance sheet, you know, since the spin-out 20 years ago, has ever been better positioned, you know, to thrive in a cyclical industry than it is today. No, that's for sure. If I can sneak one more in here. Fritz, you know, you mentioned, you know, plans to open more terminals, as we look into 2023, but you said that you would be flexible about that. What type of environment would you need to see that's out there for you to pull back on your expansion plans? You know, I think you would be in a situation, it'd be two things. One, that be an environment in which you saw significant sort of economic contraction. And then you would also, for us, discrete, the facilities, maybe the in a particular market or something like that, maybe in a situation where the business, we didn't see appropriate levels of ongoing activity to support an opening. In that case, you're not doing an opening, you're simply delaying it. You know, I think it's kind of the sort of overall macro conditions and then the discrete conditions you may see in a particular market. Okay. Fair enough. Gentlemen, I appreciate the time as always. Thanks, Jason. Thank you. Next up is Scott Group from Wolfe Research. Please go ahead. Hey, thanks. Good morning, guys. I don't think I got the September tonnage, and shipments, if you can give us that. Do you think there was much of a hurricane impact in September? Do you think that's sort of impacting the September to October seasonality here? Hey, good morning, Scott. I'll run through the monthly numbers. I know we put them out mid-quarter, but I'll just go ahead and run through them. On the shipment side, in July, shipments were down 1.1% per day. In August, shipments per workday were down 1.9%. In September, shipments per workday were down 4.5%. As I mentioned, the trend here in October is running down about 4.5%. Moving over to tonnage. In July, tonnage per workday was up 2.9%. In August, tonnage per workday was up 0.4%. In September, tonnage per workday was down 4.1%. In October, tonnage per day was down about 3%. You know, for us, I think, you know, as I remember, it was, you know, towards the end of the month, you know, I'd say given the markets that were impacted and the way we prepared for them, I don't think it was, you know, a driver of the results. I mean, the shipment trends in September were pretty well established at, you know, down 4% or so. So I don't think it had a big impact on the business. It certainly disrupted the, you know, all of our employees and their families in that area. When those things happen, that's the thing we think about most. But it wasn't that impactful to the volumes, I don't think. Okay. In terms of the fourth quarter operating ratio, Doug, you talked about 200 basis points. You know, you look back over the last 8 years or so, I think there's only been 1 year where it's been 200 basis points or more. It's typically better than that. Any additional color there? Then maybe just separately, you know, there's so much focus on LTLs and the impact of fuel, just maybe how you think about the impact of fuel in the third quarter, and how do you think the impact would be if we go into a period of lower fuel prices? I know that's not happening right now, but just people are focused on it and curious. Well, I mean, when I look back. Thank you. When I look back and give our guide on these, you know, quarterly sequential moves, you know, we use an adjusted number. We try to adjust for accident volatility. You'll remember, you know, with our level of, you know, retention or deductible that can swing some quarters. The number we speak to is, you know, an adjusted number. You know, in terms of the current outlook, I think given the volumes we're seeing today and our ability to, you know, to work on optimization and taking out, you know, major costs around things like PT and all that, I think we feel pretty good about it. The fuel piece? Yeah. Listen, as you know, Scott, I mean, that's, it's a cost in the business for sure, and it's something that we got to make sure that we continue to price for, and it's part of the ongoing cost structure of the business. Now, obviously, at lower levels, you know, fuel price levels, the surcharge comes down. It's a bit of a headwind, but at the end of it, what it really comes down to, it's incumbent upon us to get the entire pricing right. Right? So that's one element of it. That's kind of our focus. You know, we know that at different times in the volatility that's associated with that, you know, there's some swings in profitability. As we measure the business, assess the business, we really focus on the all-in cost and all-in price. That, you know, we've just got to deal with it as we go through the cycles. Okay. Thank you, guys. Thank you. We now have Chris Wetherbee of Citi next. Please go ahead. Hey. Thanks. Good morning, guys. You know, one of your competitors talked about cost inflation on certain shipments running kind of 7%-9% as we carry into the end of this year, maybe the beginning of next year. Wanted to get your sense. That sounds sort of right what you're seeing in your network. I guess when you think about that potential level of cost inflation, do you think that sort of your contract resets as we think about next year are likely to kind of get close to that, maybe be a little bit below or above? What are your kind of general thoughts on that price-cost dynamic? Yeah. I think those numbers make a lot of sense to us. High single digit ex-fuel on the cost side is kind of where we're at these days, it feels like. You know, we feel good about our ability to go to the customer, demonstrate value, and you know, it's not like we're bringing a message to them they haven't heard. They're feeling inflation across their business as well. We seek to partner with them and provide good service and you know, overcome the cost challenges. We feel pretty good about that. I mean, like Fred said, you know, fuel is a component of it. That enters into all these negotiations, not obviously, not all of our contractual customers, you know, pay a fuel surcharge, you know, that is similar to what's out there in the national tables that you all can see on all of our websites. A lot of them pay a lot lower than that. You just have to have a, you know, a negotiation which really looks at everything in total and looks at the total price we offer the customer compared to the market. We'll continue to try to, you know, price above that inflation, and I think we'll be successful. I think it's important to highlight is that, you know, through that, you're certainly looking at opportunities to drive productivity in the business, you know, to more efficiently run your line haul, your city operation, you know. At the end of it, you probably aren't going to be able to recover that level of inflation through productivity gains. It really comes down to making sure you're executing and providing service and value to the customer, that supports being able to push the pricing thesis, which is really critical. Because the underlying costs in the business remain inflationary. There's only so much you can do to deal with that internally. Okay. That, that's helpful. Then just following up maybe along those lines, what are your thoughts around labor, I guess labor availability and maybe your thoughts for, you know, for hiring as you're thinking about some of those terminals potentially coming online in the first quarter? You know, how does the pipeline look, and what are your thoughts in terms of headcount as we think about next year? Yeah, you know, I think that the recruiting environment is a little bit. I mean, it's you know, if you talk to us at any time over the last seven, eight, 10 years, we talked about it's always challenging to hire drivers and find really skilled dock professionals. You know, it's maybe a little bit easier than it has been the last couple years. That helps overall. I would say, as you add facilities in new markets, one of the benefits you get out of it is you're the new player in town, and you're bringing in the you know new growing dynamic business, and you can you know offer sort of qualitative benefits to a driver around maybe a shorter commute or maybe it's a you know the opportunity to pick a start time or something like that. Those things are qualitative differences, so that helps. It actually is. We find it's a little bit easier often in new markets to add new drivers. You know, I think that we'll be able to staff the facilities you know as we need to. We feel pretty good about that. Okay. That's helpful. Thank you very much. Thank you. We now move to Amit Mehrotra of Deutsche Bank. Please go ahead. Thanks, operator. Hi, everyone. My first question: if I look at revenue per shipment ex fuel, it was up, like, 10.2% in the quarter. If I look at cost ex fuel per shipment, they were up, like, 13.7%. There was a negative spread between rev per shipment ex fuel and cost per shipment ex fuel, which is, like, the first time that's happened in a long time. I guess the question I have is, are we just at the point in the cycle where, you know, pricing off of this high base is just obviously a little bit harder, but cost inflation is still unabated, so the right expectation is, as we move kind of over the next fourth quarter in 2023, we take a pause in margin expansion because of this dynamic where pricing is relative to cost inflation? Just get your thoughts on that. Well, I mean, I'm not sure where, you know, we go in terms of exact, you know, margin numbers, but I wouldn't pin it all to a fuel discussion. I mean, fuel's very inflationary. We don't break out the exact fuel cost for you. I know you've done some analysis, but we don't give you the fuel expense, you know, discretely, so it's hard to put a fine point on it. But, you know, if I think about our OpEx per shipment in the quarter, you know, fuel and other expenses in that line was explained, you know, more than 50% of the increase. So, you know, labor was another probably quarter of it. And then underneath that, you know, you've got things like purchase transportation, where we've seen some price cost inflation, and we don't expect that to continue. You know, depreciation for us because of the investments in the business is running up as well. You know, if you think about the fuel component, that enters into that pricing discussion, and there's kind of a compounding benefit over time of the work we've already done. I'm not talking about fuel. I'm excluding fuel. I'm not talking about fuel. I'm trying to exclude fuel from that, from the discussion. Yeah. The cost inflation is running in that high single-digit, low double-digit range. To your point, revenue per shipment ex the fuel, up 10% is covering that. Where we go from here, we'll have to see, but our intent is to continue to price to keep up with that underlying cost expense ex fuel. Yeah. Okay. That makes sense. If anything. Yeah, go ahead. Yeah. If anything, you have to double down on that now, right, Amit? I mean, it's you know, if we understand the underlying cost pressures that we have, we understand that there's only so much we're gonna be able to take out in productivity, and then we know what we're doing for the customer. Listen, that just drives the thesis of, listen, we've got to charge for that sort of level of service, and that's where our focus has got to be. Yeah. That's a perfect segue to my second question because I wanna understand the opportunity to further improve the mix of business as a proxy for revenue per shipment. When I look across the sector, I see Saia's length of haul, weight per shipment higher or longer than certain peers, but then the revenue per shipment is 5%-10% lower. To me, that speaks to the prospective opportunity in my mind. I just wanna get your thoughts on kind of your ability to be somewhat acyclical. I mean, you're not immune to the cycle, obviously, but there just seems to be this, like, gap between where your mix should be and where it is today that it's outside of the macro. Do you still feel like, you know, the macro is not, it's turning, but there's still opportunity to kind of more than offset that with some of the idiosyncratic mix opportunities? Listen, Amit, regardless of the environment, and certainly in a more heated environment, you know, maybe it's relatively more straightforward to how you can close that gap, I guess. But the fact of the matter is when we stack our sort of revenue per bill, our mix of business up to the national competitors, we stack up our level of service and our service trends to the national competitors. We see that we need to fill in the geography to be able to help find the addressable market that is gonna pay, that gets us to a more market-based rate. I think the opportunity remains for us. I don't see anything that says that is tempered. Maybe it slows, doesn't go quite as fast, but I think our opportunity remains even through a slower period. I think it's important that we continue to maintain service levels to be able to do that. Do the right things around costs. Where we can get productivity, we got to get that. We can't give up on the service level because at the end of the day, we got to be able to charge for it. Keep in mind. Yeah. Last question for Yeah, go ahead. Keep in mind too that we've got a bunch of people in the queue. We'll have to get you on a follow-up with additional ones. Keep in mind too that, you know, part of our pricing story, I mean, it's a path we've been on, but all of our, you know, high-quality competitors have been doing the same thing. There's still an opportunity to close that gap. If you think about accessorials again, for example, in the quarter, I mean, of our revenue per bill or per shipment increase in the quarter, you know, 40% of that or so was just from an improvement in the accessorials. We still see the data and feel like we're below market there. We'll continue to push that opportunity to be paid fairly. Thanks a lot. Appreciate it. Thanks. Thank you. Before taking our next question, we kindly ask you to limit your questions to one to allow everyone the opportunity to pose their questions. Thank you. Up next we have Todd Fowler of KeyBanc Capital Markets. Please go ahead. Great. Thanks, and good morning, and thanks for the extra time to think about the questions here today. I guess sticking with the pricing conversation, you know, Fritz, as I look at the contract renewals, I'm actually a little bit surprised to see the acceleration to that 12.2% in the third quarter. It's been moving up, you know, from, you know, first quarter, second quarter now into third quarter, and you've got some more challenging comps. It's probably difficult to tease out how much of that is service versus how much of that is some changes that you've been doing, you know, internally with the comp structure. I guess, can you give some sense on how much you think is related to, you know, those two buckets? Is there a way to think about maybe how much of your book, you know, still needs to reprice? I know it comes up pretty ratably, but when you think about the large national accounts and kind of the service changes that you've been making, you know, kind of that sustainability of the contract levels, the contract renewals at these levels. Thanks. Thanks, Todd. I mean, I think first and foremost, in order to be able to get any sort of competitive increase with a customer, you have to have a compelling service proposition, and I think our team's doing a great job with that. That kind of creates the backdrop so that a focused and well-positioned sales force can go make that pitch to close that. They've got to go hand in hand to get that, to be able to land that sort of contractual renewal number. You know well that, you know, the customer doesn't provide a volume commitment with that, right? You've got to continue to perform once you get those contracts in place so that you don't get optimized or a customer doesn't trade you out for another option in the quarters to come. When, you know, I don't have a good feel for what inning we're in. The thing I know is that if I look and benchmark, simply benchmark our sort of revenue per bill and kind of normalize it for, you know, weight per shipment, length of haul versus the other sort of our peer national competitors, I still see a runway. What's really important is where I see a differentiation is on the service side, right? If we feel like we're doing a better job than some of those, you know, acclaimed national competitors, and that means that we've got to be able to continue to deliver that to the customer and be in a position to arm our sales force with something that says, "Listen, you're getting great service, customer," or, and, you know, these are more market rates for that level of service. You know, I still think we're kind of the early innings, mid-innings, just simply by benchmarking ourselves versus the others. I think the key thing is that service trend is so critical to all this. Okay. Fritz, I don't want to put words in your mouth, but it sounds like your feeling is it's more service than some of the changes you've done internally to compensate the sales force. You know, I think it's service for sure. I think that a successful sales professional has got a great product to sell. They're properly incented, those things work pretty well. Yeah. Okay. All right. I'll turn it over. I know you've got a lot of people to get to. Thanks. Thank you. Up next we have Allison Poliniak of Wells Fargo. Please go ahead. Hey, guys, it's James on. I'm just wondering to sort of follow up on that question around the pricing gap. In a down environment or a weaker environment, how should we think about your ability to close that gap? Obviously, you probably outperform peers on pricing, but will you get essentially less pricing in a weaker environment than sort of on the cost side, are there any discrete items that cost that would come out? Like, if you slow terminal expansion, should we expect sort of essentially some costs to fall out or sort of CapEx to fall out? Just sort of trying to understand sort of the puts and takes on pricing and discrete cost items in a weaker environment. Yeah. On the pricing side, I mean, you, we'll have to see how it plays out, but you'd think there might even, you know, be an opportunity, you know, if we're, you know, lower price to start with and entering into a negotiation with a customer, you'd think our service would be a pretty attractive option for them. You know, you'd think that perhaps whatever volume trends are out there, maybe we do a little less worse, right? Because, you know, maybe we're an option for a customer that they hadn't used us enough before, and they use us, and they see the quality we provide, and maybe we're a little bit lower price, even though we're raising prices. We'll have to see how that plays out. On the openings, like Fritz mentioned in his commentary, you know, I think, you know, if we get into the back half of the year and we really saw, you know, unstable trends or deterioration in volume trends, there's some terminals that we could kind of put on the shelf and, you know, even though they're ready to open, maybe not put the OpEx into them. But a lot of these smaller terminals, they're, you know, they get to break even pretty quickly these days. And there's not huge cost dollars to pull out. But, you know, activity-wise, people-wise, workload-wise, we could choose to slow them down and wait for a better opportunity. Got it. Just to follow up on a point you made earlier in the call, I think you had called out some weakness by end market with among retail. Have those specific sort of end market trends moderated at all, or are those sort of continuing and even though the overall book of business is falling seasonally? Yeah, that wasn't any specific call out, just in general what you read, and we saw some of it with retail customers, but no specific end markets. No, it's just kind of been there for a few months that way. We haven't seen any further deterioration or anything like that. Okay. Thank you very much. Thanks, man. Thank you. We now move over to Ravi Shanker of Morgan Stanley. Please go ahead. Great. Thanks. Good morning, everyone. Just a quick question on service versus price, because you and your peers have all been saying that, "Hey, you know, we're getting better pricing for service." How do we think about the kind of long-term trajectory there? Kind of, does that mean there's like a max cap on the pricing you can get because the industry service can only get so good, I mean, you can't be better than perfect? Or does that mean that you can get better price over time because, like, not everyone can reach that level? I'm just trying to get a sense of whether that pricing part can accelerate or kind of tapers off here a little bit as your service keeps getting better and better. Yeah, I think specifically to Saia, if I look at our well, how we assess and measure service and compare that to the peer group, we stack up pretty well. Then I look at our relative pricing versus that same peer group, and I see that we have an opportunity to close that gap. I think for Saia discretely, I think we have some runway there for sure, right? I just think that, you know, as we continue to increase our addressable market, as we continue to execute on that repeatable service, customer expectations can be there, and we can be in a position to continue to push the pricing thesis. Now, the industry in total, I think that, you know, I think over time, what's gonna happen is that you're gonna differentiate on service, and I think it's already happening today. I think that those that can continue to provide high levels of service and value to the customer, I think those will differentiate and gain share over time. I think that, you know, as the supply chains onshore change, adjust to e-commerce, et cetera, I think that LTL is probably in a good position generally for our market to continue to grow, and then I think the differentiation there is gonna be who can do the best job for the customer, and that's where the growth is gonna be. Got it. Maybe as a follow-up, can you just unpack some of the differences you're seeing in the end markets out there, kind of, consumer or industrial, which one's potentially kind of more at, kind of macro risk going into 2023? Can you also briefly comment on what you're seeing out there in the energy markets? Obviously very volatile right now. Yeah. I think generally, I would tell you, Ravi, that we don't have a call out for a particular end market or even energy for that matter. I think what I would say is that what the result that we have posted and highlighted have really been sort of uniform across our book of business. There isn't really a call-out for a, you know, region or even an end market per se. I think we've seen it kind of trend in that way. I don't have any insight that we can provide for you there. Very good. Thank you. Thank you. Up next we have Tom Wadewitz of UBS. Please go ahead. Yeah, good morning. You've provided some commentary, I think on October that the I guess the seasonal pattern was a little bit better, or the pattern was a little better relative to seasonality than September. But you're down, I don't know, 4.5% year-over-year. How do you think about the full quarter? Is that, you know, you're saying like mid-single digit decline in tonnage, is that what we should think about for the kind of 4Q trend? You know, normal seasonality from here would be, you know, the months, you know, kind of get weaker as you go, right? If in terms of a year-over-year comparison, the comps get a little bit tougher. You know, I expect if normal seasonality plays out, you know, maybe trends to look similar in terms of per workday analysis and potentially, you know, down just based on the comps. Okay. Something down kinda mid-single digits tonnage-wise would be consistent with the comments you're providing. Yeah, low to mid-single digit, probably. Okay. I know you've been asked quite a few questions on kind of cost versus price. I don't think you've really talked about headcount. Doug, I think you said headcount was up something like 10% in the quarter. Would you expect, even recognizing you're gonna do more new terminals, would you expect that number to be more moderate in terms of headcount increase in 2023? If you're in a flat tonnage environment, is headcount, you know, up 5% instead of up 10? How much flexibility do you have on that? That would, you know, that would obviously help your cost structure. Yeah, I think it'll moderate into next year. You know, I think one of the things you do in an environment like this is that you kinda really manage their productivity and hours, so you kinda you know uniform around reducing hours and that sort of thing to kinda leverage your driver force. You know, we might tick up a little bit on the driver side simply as we look to continue to build density around our line haul network, so that would be insourcing more of the PT. I would think that it would. From where we have been in headcount growth, you'll see it kind of more moderate into next year. Thanks, Tom. Right. Okay, thanks for the time. Thank you. We now move to Jordan Alliger of Goldman Sachs. Please go ahead. Yeah, hi. Just a couple quick questions on talked a bunch about cost, but can you update sort of where you are right now, fixed cost versus variable cost. Then do you have a sense for, you know, we talked about tonnage, but you know, how revenue per day might be looking as we've moved through October? Thank you. Yeah, I mean, the fixed cost conversation really doesn't change quarter to quarter. I mean, it's 35% or so of our costs are fixed and, you know, we've got some blended costs in there that they're moving around a little bit depending on where you're at, you know, with your network and all, but that hasn't changed much. Then, you know, we don't have any, you know, pricing still, you know, positive in our view, and we don't have a revenue guidance after the month of October. All right. I'll leave it there. Thanks. Thank you. We move to Bascome Majors of Susquehanna with our next question. Please go ahead. Yeah. To follow up on Tom's question about headcount, can you just clarify, is 10% up for year-end with the numbers you report a decent approximation for this year? Just, you know, looking at employees per shipment per day and other metrics, it's still, you call it, you know, 12%, 15% below where that was in 2018, 2019. I'm just. Is there some cyclical fluff with the growth here that that number can start to go back to other levels? Or is it just naturally as you grow the network and expand into more markets, you know, that number needs to be a little lower than it was historically? Thank you. In terms of the year-end number, I think that's probably about the right trend. Like Fritz said, we don't have any other, you know, new terminals planned for this year. We've got some relocations we're doing. You know, in terms of the longer-term trend, you know, we have to invest not only in the new terminals, but you know, in the infrastructure somewhat to support them back here. Like Fritz said, at least into next year, I think the pace of growth, even with the terminal adds we planned, will probably moderate some from what we've seen this year. I think part of it is where it could, you know, adjust still is we're looking at opportunities to build density around line haul. That's insourcing, that would be adding headcount there. You know, that's in the mix and you know, you're essentially replacing one cost stream with an internal cost stream when you do that. You know, that would be part of our sort of medium term view. It sounds like with the additions and expansions, even with a moderate decline in tonnage next year, headcount will probably be up, just not nearly as much as the last few years. Yeah. It could be. Thank you. Thank you. Next up is Chris Kuhn of Benchmark. Please go ahead. Hey, good morning. Good morning, Fritz. Good morning, Doug. Thanks for squeezing me in at the end here. It's just, Fritz, on a quick question on the pricing. You talked about the pricing gap between peers. I mean, is that both base and accessorials? Do some of the accessorial fees go down as supply chains loosen and some of those fees maybe get less as we go forward? Thanks. No, the accessorial fees reflect service, right? If anything, you know, as we've focused on making sure those are built into the pricing structure, you know, you're in a position, you know, if we're providing a lift gate service or inside delivery or hazmat or service in the high-cost areas, I mean, those are all real hard costs that we have to, you know, pass along to the customer, and that's part of the supply chain cost for them. Our peers, we think one of the biggest differences in pricing, relative pricing of Saia versus, you know, the other national competitors is specifically around the areas of accessorial. You know, as we continue to get those in place, you know, we have an opportunity to move those to closer to market as well. I think that even in a looser environment, maybe the pace of change slows, but they're real. I think that that's something that there's a stickiness that comes with that. Okay. Okay, great. Thanks, guys. Thank you. Next is Ariel Rosa of Credit Suisse. Please go ahead. Hey, good morning, Doug, Fritz. I wanted to go back to one of the questions from earlier. You know, in the context of you've added 11 service centers this year, but system-wide shipments and tonnage are flat. You saw OR improvement. Is there a way to think about the dynamics in terms of where the OR might have been for this quarter if you hadn't added those additional terminals and kind of what the incremental costs are of carrying additional terminals? Is that kind of the wrong way to think about it, especially as we think about the incremental cost associated with adding more terminals next year if we're looking at an environment where volumes might continue to be flat? I think it's important to understand the context of terminal additions. We would never add a terminal with the idea of this quarter or next quarter, right? That’s just not part of the equation. Adding a terminal means you think there’s a seven-10-year opportunity in a specific market, so you’re not thinking about it in that context. The terminals that we’re adding right now are. Yeah, they do, they have different roles for us, depending on where they are. You recall that we added an Atlanta Northwest terminal in December of last year, and that was a critical opening because that actually was important to the Atlanta market. We were able to provide incremental service, and we actually took stem time costs out to be able to provide that service. That actually got pretty quick payback. Frankly, the Atlanta market operates better than it ever has as a company or in the company's history. That's important. Then if you think about a market like Lafayette, Indiana, which we just opened up, you know, the 24th, that terminal, that market, we were trying to service that from Indianapolis, and that that's difficult to do. It's an hour from the terminal. A beautiful facility in Indianapolis. Now you get to an industrial market that provides, you know, potentially some incremental shipments coming out of it. It also, we can do a better job for the customer in there. Although it's an investment to do that, it's de minimis in the whole scheme of things. I You know, the openings that we've had haven't had a drag. If anything, they have been neutral to well positive. That's why even in a slower period, we'll continue to look at these as potential opportunities for us, because not only there's some short-term benefit in many cases, but longer term they make a ton of sense. Got it. Just to clarify, and I understand of course, that terminal additions are a long-term investment, but you don't see yourself necessarily as carrying additional costs associated with those terminal openings. Listen, the terminals I just described, particularly the one we opened 10 days ago, it's not operating at a you know, company average by any stretch, right? It's brand new. We realize that there's a drag there. We think that, even in a short period of time, that's not a meaningful impact on the financials. Thus we opened it, thus we continue with it. Okay, that's very helpful. Thanks so much. Yeah. Thank you. Our last question today comes from Bruce Chan of Stifel. Please go ahead. Hey, thanks. Morning, Fritz and Doug. Just wanna follow up here on your comments around the contractual PT commitments. How should we be thinking about that in terms of timing? Is that, you know, something that tracks pretty evenly by quarter as the market normalizes, or do those come due in any big chunks? No, I think it's pretty ratable through the year. We're probably, you know, 95% or so of our PT is run with partners on contract basis. We're kind of, you know, taking them as they come, and we should. Not that we'll necessarily see a reduction, but the rate of inflation we've seen around PT costs will certainly moderate going forward. Got it. That's super helpful. Just maybe one last point of clarification. We've talked, you know, a lot about discrete terminal openings here, but, you know, how do terminal expansions factor in to your plans and what do you have going on for the remainder of the year? Go ahead. Yeah, I think in total this year, I think we will have, when it's all said and done, we will have relocated four facilities into new and or improved locations. Next year we've got a pretty busy calendar as well in terms of relocations, expansions. Probably, if we get everything done we want, it'd probably be up to 10 or so relos next year. Sometimes it's just a, you know, a better part of town. Sometimes it's a buy versus a lease replacement. Sometimes it's just you needed, you know, more doors. A number of things drive it. You know, as your business grows, your volumes grow. You know, the needs across the network change over time, and that's just something ongoing for all of us in this business. Okay, got it. If we were to think about total number of doors, you know, this year and next year, you know, do you have a ballpark of what that might be? You know, this year, you know, I think when it's all said and done, we'll probably add 5%-6% to the door count. You know, next year could be similar to that. Got it. Okay, appreciate it. Thank you. All right. I think we've covered all the outstanding questions. Thank you for your interest in Saia and participation on the call. Again, apologize with the having to reschedule due to technical issues yesterday, but glad that we were able to reconvene today and tell everyone and describe what's going on with Saia and what the compelling long-term opportunity is. Thanks for your time. Thank you. That concludes today's call. You may now disconnect.