Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2023 Saia Incorporated Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Doug Col, Executive Vice President and CFO. Please go ahead. Thanks. Good morning, everyone. Welcome to Saia's third quarter 2023 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. I'll 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. Our third quarter revenue of $775 million surpassed last year's third quarter revenue by 6.2%, and is a record for any quarter in our company's history. Shipments per workday increased by 12.2% compared to last year, obviously impacted in a positive way from the shuttering of operations as at a competitor began in late July. The sudden elimination of industry capacity has presented challenges for customers and carriers alike, but the transition to other providers seems to have gone relatively smoothly. At Saia, we monitor our critical service indicators daily. I was pleased to see that despite the influx of freight in a matter of days, we were able to sustain very high levels of service. In our view, it was critical to maintain high service levels, as this time provided a unique opportunity to show customers our differentiated service in the midst of industry disruption. As we've been able to maintain high service levels, pricing has been positive, and our yield or revenue per hundredweight, excluding fuel surcharge, increased by 8.4% compared to last year. The reported yield improved in part due to the 5% decline in average weight per shipment, but despite the lower weight, revenue per shipment, excluding fuel surcharge, still increased by 3%. The weeks and months that have followed the major industry disruption has been marked by long days for our employees. We've been putting forth a concentrated effort to maintain great customer service and meet the needs of our customers. We supplemented our growing linehaul network with additional purchased transportation where needed to keep our network fluid and service levels high. At the same time, we've also incurred quite a bit of overtime to handle the immediate step-up in volumes we've felt. Since the end of June, we've hired and onboarded more than 1,000 new Saia employees. The scale of that hiring effort and the training that is required to onboard each associate has been a necessary cost headwind that had to be absorbed. Our third quarter operating ratio of 83.4% compares to 82.7% posted in the second quarter of 2023, and 82.4% posted in the third quarter of last year. I'll now turn the call over to Doug for more details from our third quarter results. Thanks, Fritz. Third quarter revenue increased by $45.6 million to $775.1 million, as Fritz mentioned. Yield, excluding fuel surcharge, improved by 8.4%, while yield increased 3.1%, including fuel surcharge. Revenue per shipment, excluding fuel surcharge, increased 3% to $290.79, compared to $282.41 in the third quarter of 2022. Fuel surcharge revenue decreased by 12.3% and was 16.9% of total revenue, compared to 20.5% a year ago, as national average diesel prices are lower than in 2022. Tonnage per workday increased 6.7%, attributable to a 12.2% increase in shipments per workday, offset by a 5% decrease in our average weight per shipment. Length of Haul remained essentially flat compared to the prior year at 896 miles. Shifting to the expense side for a few key items of note in the quarter. Salaries, wages, and benefits increased 15.9%. This change was primarily driven by an increase in employee hours and an 8.9% increase in headcount in response to overall increased volumes during the quarter, combined with a company-wide wage increase in July of approximately 4.1%. Purchased transportation expense decreased by 10.2% compared to the third quarter last year, primarily due to a decrease in cost per mile, partially offset by an increase in LTL purchased transportation miles compared to that same period in 2022. PT miles were 18% of total Linehaul miles in the quarter, compared to 17.1% last year. PT expense was 9.9% of total revenue, compared to 11.7% in the third quarter of 2022. Fuel expense decreased by 9.1% in the quarter, in spite of company miles increasing 5.5% year-over-year. The decrease in fuel expense was primarily a result of national average diesel prices decreasing by over 17% on a year-over-year basis. Claims and insurance expense increased by 12.7% year-over-year in the quarter and was up 6.3%, or $1.1 million sequentially from the second quarter of 2023. The increase compared to the third quarter of 2022 is primarily due to increases in insurance premiums, as well as accident-related self-insurance costs. Depreciation expense of $45.6 million in the quarter was 12.1% higher year-over-year, primarily due to ongoing investments in revenue equipment and network expansion. So our total operating expenses increased by 7.6% in the quarter, and with the year-over-year revenue increase of 6.2%, our operating ratio deteriorated to an 83.4% number, compared to 82.4% a year ago. Our tax rate for the third quarter was 24.6%, compared to 23.3% in the third quarter last year, and our diluted earnings per share were flat at $3.67 compared to the third quarter a year ago. I'll now turn the call back over to Fritz for some closing comments. Thanks, Doug. While the last few months of increased activity have been refreshing following a year of negative freight trends, I think it is important to highlight that the macro freight environment outlook remain uncertain. At Saia, we'll continue to put the customer first and seek to fulfill service commitments for both existing and new customers. Our first half operating results highlighted an important underlying business trend, as our internal growth initiatives are proving successful. We look to continue to leverage those initiatives, along with maintaining new business to grow, and growing in the midst of this quarter's market disruption. It's important to note, in the early days of the industry consolidation, customers often were looking for available capacity. Longer term, we strongly believe that customers will gravitate to those partners that provide the best service and best support of their customer's value proposition. Maintaining those service levels requires continuous reinvestment in the business. As we have a long history of doing, we're going to make sure that freight rates are commensurate with the quality of service we provide. We will continue to be opportunistic as it relates to terminal expansion, terminal acquisitions, and we'll continue down the path of expanding our network, not only to reach new customers in markets where we may not be currently be serving, but also to get closer to customers in existing markets. Our financial performance positions us to take advantage of investment opportunities. We continue to manage a pipeline for expansion, and we'll look to match those investments with the economic environment. In some cases, we may accelerate an opportunity, prioritizing those that most immediately enhance our service proposition. Our value proposition is raised in the eyes of our customers, as we've moved closer to them and are able to provide more for them. We're also intent in developing business around the 20 or so terminals opened in the last three years. History shows us that if we have a meaningful footprint in the market, we have a strong service offering that enables us to have an outsized share compared to our national average industry share. With this strategy being executed by the best team in the business, I remain excited about our ability to gain market share and do so with improving profitability over time. With that said, with that said, we're now ready to open the line for questions, operator. Thank you. At this time, I would like to remind everyone, in order to ask a question, press Star, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from Chris Wetherbee with Citigroup. Please go ahead. Hey, hey, thanks. Good morning, guys. You know, obviously, you took on a significant amount of volume sequentially and had to sort of respond to that with increased resources. Where do you think you are today in terms of resources relative to what maybe you see the opportunity over the course of the next couple of quarters? Maybe kind of, you know, honing in specifically on the fourth quarter, how does that impact the OR as you think about it sequentially? Yeah, good morning, Chris. Yeah, like you say, I mean, sequentially, you know, Q3 compared to Q2, shipments per day, you know, up low double digits, quite a big step up. But, you know, I think we absorbed the change pretty well, even in late July, and got into a better place in August. So, you know, FTEs, I think, you know, on a Q2- Q3 basis, were up almost 9.5%, compared to a headcount increase of about 7%. So you can see we were, you know, using a lot more hours to handle the business, to onboard and train new associates and all. But, you know, I mean, if I just look at our performance, you know, OR-wise, as we moved from July into August and September, it got quite a bit better. So I think we absorbed that initial, you know, call it 10, 11% step up and then got into a better run rate. So, you know, I expect kind of more normal seasonality now, in not only in the volume trends, but, but how we operate. And historically, Q3- Q4 is about a 200 basis point degradation, if we look back the last three to five years. And, you know, we've got less than a month under our belt. I hope we can do a little better at that, so a little bit better than that. So maybe it's a range of 150-200 basis points of degradation is what we, is what we, what we might expect. Okay. That, that's helpful. Appreciate the color, and I guess just maybe a quick one on, on the price environment. Just want to get a sense of, you know, how you're thinking about that. Obviously, you know, we can see some of the metrics, and your results have, have shown that acceleration. I guess, you know, where do you think we are in this process of kind of moving through? Obviously, you put a GRI in relatively recently, and that's stepped up. So how do you think about sort of the pricing set up over the course of the next several quarters? Yeah, I mean, Chris, as we look at managing the book of business, I mean, this is kind of in our playbook, where we make the assessment, we understand the investments we have to make to support high levels of service, and then as the, you know, contractual renewals come up, I would expect that we'll continue to work on making sure we're driving our pricing to market. And, you know, at this stage, I think there's continues to be runway for us in that regard. And I think that we have a product that our sales team can get out and help drive that, get us to closer to where our market should be for the level of service- ... that we're providing to customers. So I, you know, I think it probably, you know, our GRI reflects that, and I think you'll, we'll see that across our book of business going forward. Appreciate the time. Thank you. Thank you. Your next question comes from the line of Jack Atkins with Stephens. Please go ahead. Oh, my apologies. Your next question comes from the line of Amit Mehrotra with Deutsche Bank. Please go ahead. Thanks, operator. Hi, guys. Hey, Doug, I wanted to just circle back on that OR commentary for the fourth quarter, because I know you're comparing it to the last three to five years. I just don't know how relevant that period is, given where you and the industry are today. So if I were to just think about the amount of onboarding you did in the third quarter, I guess you know it takes 10 days to train somebody, and you've got 63 days or whatever in the quarter. So there's a big productivity deficit, I would imagine. So as you kind of think about the relationship between PT and labor costs, I mean, why couldn't we see kind of much better than that 200-300 basis points sequential? Because I think the wage increase went in early July. So long-winded way of saying, is that just conservatism, or just talk about the walk in terms of the productivity deficit you guys had in the third quarter? I don't know. I mean, if I think of—I mean, go back to my example in Q3, I mean, the OR in July, you know, north of 86, I think, kind of a monthly OR. And then for the quarter to end up where it did, I feel like we got back in a pretty good spot, even though we're, you know, even today, I mean, hopefully, it's a near-term peak. I think overtime percentage probably, you know, hopefully it peaked in September. We see it down a little bit in October. That's good news. But, I mean, we're still, you know, we're bringing on, you know, we're still renting a lot of equipment to handle this business, and we'll step up our equipment deliveries and buys next year and stuff to operate well at these higher levels. But we've still got some costs that are related to this unusual event. So, I mean, there's not, in my view, I'm not building in a lot of conservatism there. 150-200 basis points is, you know, kind of a little bit more open range than guiding straight to the historical 200. Now, I hope to do better than that, but, you know, I think we're still investing to maintain the high service level. And the GRI has been announced. It'll go into effect beginning of December, and that impacts, you know, 25% of the book of business. But again, it's a seasonally slow month to be putting that in place. It's just necessary, and you know from following us closely. I mean, we've absorbed all this volume. We've, we've done a good job for our customer. I don't think you heard any anecdotes during the quarter of big service disruptions in our network or anything like that. So, so we spent money to provide good service, and now it's just work, right? Now, it's just going through that grind we've been going through for a few years. We handle the business, then we go say, "Hey, we've done a good job for you, but it looks like we're below market for the value we're adding, and we need a rate increase." So you know, we- Yeah ... we don't mind running off a little volume if it doesn't work. So now it's just we've got the new volumes, a lot of it with existing customers. We met some new customers, and now we've just got to work, right? We got to price it and play the long game here. But we're really pleased with how good service stayed throughout this. And you know, we didn't really have many weeks we walked into where we weren't prepared, and that's just kudos to all the folks that made it happen out in the field, and our ops team, and all the investments that we've made over there over the years to do a good job for people. Now, we're going to go out and try to get paid for it. Okay. And then just as a follow-up, you know, I obviously pay very close attention to the Mastio data, and if you look at the Mastio data carefully, it looks like you guys are even more of a value today in your eyes of the customers than you were last year, and you were already a pretty nice value last year. I just wonder if the pricing is keeping pace with the service sustainability and whether there's an opportunity more aggressive. I mean, I know you did a GRI of 7.5%, the highest GRI tied with 2021. So, it's a little bit of a weird question, but I wonder if you could be even more aggressive, given in the eyes of your customers, the survey tells you that you're even more of a value today than you were last year. You know, Amit, we've, as you might expect, studied the Mastio data as well, and one of the things that's particularly pleasing to us as we look across all the attributes, how many that we improved on year over year in terms of that customer experience. And that's really important because that then gets to the place that says, you know, that level of service requires a high level of investment on our part, and that's going to require that we continue to push the... and making sure that we're, you know, we're paid for all that investment. Customers get a lot of value for it, and at the same time, that requires investment from us, and that's going to require that we make sure the pricing is in line with where it needs to be. So I look at that data, and I, I'm pleased with the service performance, because I think what that says is that SCI has an opportunity to continue to be, pursue the best-in-class opportunity and then, you know, get paid for it. I mean, that's, that's all part of it, and it requires investment to be able to maintain that service. Thank you very much. Thank you. Your next question comes from the line of Scott Group with Wolfe Research. Please go ahead. ... Hey, thanks. Good morning. Did you guys give the October tonnage and pricing renewals? If you could... I don't think I heard those, if you can give those. And then, Doug, can you just clarify your comment about, like, the July OR versus the Q3 OR? Like, is that somewhat seasonally normal, where July is always the worst OR of the month and OR of the quarter in Q3? Sure. Good morning, Scott. So September, I don't think you have the September numbers yet. We haven't given those. So September shipments were up 16.3%. The tonnage was up 9.7%, with weight per shipment down 5.7%. All, all of those per workday numbers. October shipments per workday up 18.6%, and tonnage is up 8.4% per workday here in October. So weight per shipment continuing to run lower, down 8.6% so far in October. That's, that's through the middle of this week. And in terms of the OR, I mean, look, July's got 20 days this year. We kind of figured we had a half a day in there or two because of where the Fourth of July fell. Monday was kind of a hanging day. So yeah, I mean, that's a tough, tough month with 19.5 workdays in it. But I'm just saying the magnitude of improvement in August, you know, of 300-400 basis points, really shows us... Well, more than that, 400-500 basis points, really shows us that, you know, we absorbed it pretty well, despite the need for the extra labor and linehaul support, that, you know, we're pretty pleased with how we adapted to those volumes. And as we get folks settled in and can bring the PT or the overtime cost down more, that's an opportunity. Yeah, makes sense. As we run into these seasonally slower months, the next few months, I mean, that's what you do, right? I mean, you manage down hours every day in every terminal and get ready for it because seasonally, that's what we're walking into the next few months. Yep. And then, you know, people—maybe people are disappointed near term, you know, OR fine. You know, Fritz, I want to just ask you, right, about, like, ultimately, what the operating leverage and margin profile could look like a year from now, right? I think in the past, you've talked about 100-200 basis points of margin improvement a year. I know it's early, but, you know, we're digesting some costs this year. I'm guessing we'll have opportunities to get more price next year. Like, is next year a year where it should be, you know, in that 1-2-point range? Should it be better than that, given what you know today? Just how should we think about ultimately where the operating leverage and margins can go? Well, I think the big thing to think about is that, you know, if you look at this over the longer term, I don't see an impediment for us not driving this into the seventies OR, right? I mean, that's out there. That's available to us. We have proven that we can handle a disruption, big step up in volume changes and all those things. Our team is really conditioned to maintain very high levels of service. And if you do that, you've got an opportunity to continue to push our pricing to where it ought to be in the market. Now, you know, the tough part about the question you asked, Scott, is that it's going to require... You know, next year, I, you know, I would expect to have OR improvement over where we exit this year, and I think the ranges you talk about are- are- they, they make some sense. Maybe it's 150-200 basis points. That makes some sense. You know, I, I can't really opine yet on what the overall macro environment is going to look like next year. You know, I've- you, you hear things that are a little bit positive and constructive. I'd, I'd sure like to see that realized. I think that what's most important on the things that Saia can control, and I think we have done a great job of handling our customers' business this quarter, and I think what that does is that positions us to continue to drive the results. And I think that that, you know, I think we ought to perform well next year in a good environment. And I think most significantly, longer term, I don't see a limit to what we can do as an organization. So I, I'm, I'm excited about the prospects. So, is the answer, Fritz, that, hey, you know, we've never had mid-teens, high teen shipment growth before. Ultimately, this is going to be great, but, you know, that's a big number. It's just going to take maybe a little bit longer to sort of fully digest and leverage. Is that- Yeah - sort of the idea? Yeah, I mean, we've, we've got it, Scott. We've got to... We're going to build the... And, you know, if we, we talked about the 1,000 folks that we added on the team in the third quarter. I mean, 40% of those were drivers. So what that is, is that's us building density in our internal resources. That's driving our linehaul costs, leveraging our linehaul network. As we get scale in the business, you know, I think we're going to see the benefits of scale. You know, but what's important while we're getting that figured out and getting that scale to the right level, we cannot, absolutely cannot, come short on service with customers. Our focus is always going to be service first, and then let's get everything- let's build the cost structure around that, and I think there's an opportunity for us to certainly leverage the business. That, that's the great value of what we can drive in the organization, because we've proven that we can provide repeatable high levels of service. Yep, makes sense. Thank you, guys. Appreciate the time. Thank you. Your next question comes from the line of Jack Atkins with Stevens. Please go ahead. Okay, great. Good morning, guys, and thanks for taking my questions here. You know, maybe if I could just follow up on that last, you know, line of questioning there for a moment. You know, Fritz, I mean, as the business grows and matures, and as you add, you know, terminals and service centers across the network and gain density on the investments that you've been making, you know, can you maybe update us on how your thoughts around the incremental margin profile of the business should look? I mean, I know right now it's obviously tougher in the short term, given how dynamic the market is. But, you know, how are you thinking about incremental margins on your business, you know, over the longer term now? Yeah, I think when you look back the last couple of years, and we saw a more favorable environment as we grew, adding facilities, I mean, you saw us getting sort of incrementals of sort of 25%-30% in there. And I think as you go forward, as we get more normalized, we've been, you know, brought all this new freight into our network, got it stabilized, continued to open facilities, I think you'll see us return our incremental margins to that level. Now, of course, if most of that comes in the revenue line in the form of, you know, pushing our pricing to more market levels, then, you know, maybe we push up that incremental margin profile. But, you know, as the company builds scale over time, I think that, you know, scale automatically means that those incrementals are going to get better. And I feel really good about that, and I think that's what's going to drive this OR into the 70. Frankly, it's because our ability to execute on that. Yeah. Absolutely right. And we've seen accelerating incrementals, you know, from some of your competitors as that's happened. So that, that makes a lot of sense. I guess maybe for my, for my follow-up question, just kind of, kind of going back to October for a moment, you know, there was further disruption from a- from another competitor due to a cyberattack. Did you guys see much of an impact, have you seen much of an impact, from that? And I guess that would have been the first half of October, and, yeah, I guess, you know, how do you think about, all things considered, the amount of latent capacity you have in the network as it stands today? Yeah. Good morning, Jack. Yeah, we definitely saw an impact, you know, for a few days there. I mean, normal seasonality for us, September to October is down about 2%, and we're running better than that. We're down, call it, you know, 1% now. So we definitely saw some effect from that disruption there, and it feels like they got it resolved, but there were a few days there where it was... We saw it flow through. So, You know, in terms of incremental capacity, I, you know, we're probably, Jack, it's going to be a pretty similar response that I've had in other quarters. You know, it depends on the location, but I think we're, you know, sort of 15%-20% incremental capacity. You know, some of the pinch points, we had Salt Lake City, we opened a replacement facility in that market in this quarter, and that's a huge opportunity for us. So, you know, that helps the capacity numbers. So it, you know, I think we're in that range, but you know what? We can also know how to flex if we have to, so, we can go beyond that if need be. Okay. Thanks again for the time, guys. Thank you. Your next question comes from the line of Ken Hoexter with Bank of America. Please go ahead. Great. Good morning. You know, great detail on the cost leverage. Just to follow up on that last question there, Fritz, you got 15-20, but you grew volumes 18% in October. So if it was 15-20 before, or was it 20, 25, 30% before, and now you're at 15, 20? I just want to understand just with the phenomenal thoughts, and then just other data, you know, maybe on time performance and claims ratio. Can you give us an update on those? Yeah. So on the capacity, sort of comment, I mean, one of the things that we know how to leverage, we know how to leverage a line haul network well, and, you know, we judiciously have used purchase transportation, and that we know how to manage that well, keep maintaining service levels with that. So that, that's kind of our flex capacity. We've long done that, so we're pretty comfortable with it. You know, with respect to the service levels, you know, we measure service levels on a variety of different points, whether it's pickup completion, on-time delivery, it's claims, and we're tracking at or above where we were prior to not only this disruption, but if you go back to even the most disrupted time. So we're very pleased with where we are with that. That's an important measurement for our customers, and as you know, we measure that every day. So is there a number that you give in terms of on-time performance and claims ratio? The claims number is, what? 0.58%. On time, we measure it. We have our internal measurements, and, you know, we're at 98 on time, outside for 98, 99 out, as we report customers, and internally, we measure it. Our own metrics, we're well above our internal standards. Okay. Just, you know, I guess with such a strong volume gain, you know, thoughts on the sustainability of those volume gains. We've heard, you know, some of the peers struggled. You know, we saw one carrier give some back in October. Any thoughts on, you know, on the movement back of some of these volumes or the sustainability continue to grow in the face of others struggling? Well, I think people that value service, and on time and quality, they're going to gravitate to Saia. I think folks that maybe are looking for, cheaper service, lower quality service, they're going to move on, and we're okay with that. We're not, we're not in the game, to see how much incremental volume we can drive. We're looking at creating value not only for our customers, but for our shareholders. So it's, I'm, I'm not necessarily worried about seeing how fast we can grow. I'm just, we're more worried about executing and making sure that we're in a position where we can get paid for very high levels of service and consistency. Fritz, thank you. I appreciate the time. It's just obvious the concern here is just your phenomenal growth and the concern on how you get that cost leverage, but it sounds like just something that continues over time as you kind of work through the quick added costs and just get the benefit with the pricing over time. Appreciate the thoughts. Yeah, absolutely. Thank you. Your next question comes from the line of Allison Poliniak with Wells Fargo. Please go ahead. Hi, good morning. Just want to go back to your comment on the pinch points. You know, I think you mentioned in terms of terminal investment, maybe some incremental acceleration into next year, potentially. Is this influx of volumes sort of highlighting any potential holes or, to your point, pinch points, that maybe we would see that in the first half of the year? Just any thoughts there? Yeah, you know, I think it was great to get the Salt Lake City facility open. That helped kind of our Western region. It's a big break operation for us, so that's pretty exciting. We've got some projects coming online in the first quarter that, you know, if we continue at these levels, we're going to get some benefits, primarily in the ones coming in the first quarter are ones that, frankly, it's an incremental service opportunity for our customers. So I think that's exciting. And so I, you know, I don't think there's one call-out per se that would say that it's a capacity play. Most of these that are online at this point are ones that are really related to, you know, getting closer to the customer, so but those are great value. Got it. And then just in terms of some of the new volume brought on, is there any way to understand sort of the mix between sort of new customers versus existing customers, where you can sort of increase this density or scale that you have with them? Just any thoughts there? Yeah. So a good portion of what we brought on actually was with, you know, maybe there were shared—where we had an account that we shared with, you know, the rest of the market. And as, you know, one player exits the market, we pick up incremental levels of business from a customer. You know, that freight, so you get some economies at the pickup part, but at the delivery, may actually go to different markets or have different profiles. And in those cases, you know, that may not operate quite as efficiently or effectively. So it's very important that we then make sure we understand what the impact of this new volume is. Some of this volume may or may not be something that makes a whole lot of sense for Saia. It may need to gravitate somewhere else in the market. Whereas, there could be a customer that we picked up a shared account, or we picked up some additional business, and they say, "Well, the service level is really helping drive value in our organization. I need to do more business with Saia." And we just got to make sure we get the pricing right, and we get that right, and I think that's a winning proposition both for the customer and us, and that's business we keep over time. Great. Thank you. Thank you. Your next question comes from the line of Bruce Chan with Stifel. Please go ahead. Yes, thanks, operator, and morning, gents. Just maybe want to get some clarification around the CapEx guidance. Doug, you know, maybe if you can give us a breakdown of what's maintenance and what's growth. And then, you know, when you think about the fleet, I know, Fritz, you talked about the opportunity to flex up on the line haul, but do you need to, you know, maybe grow the tractor or trailer fleet as we move into next year as well? Yeah, I mean, it's a little early to give, you know, some real clear CapEx guidance, but we're expecting a pretty big year next year on the, as you point out, on the equipment side. You know, both in our network operations as well as city operations, you know, we see a good benefit for, if we're able to, you know, secure more equipment, put more trailers out there at customers, in customer yards. You know, our network, you know, fluidity requires, you know, more pups each and every year, and especially after this volume step up. So you'll see a step up in investment for sure on the trailer side. Our age of fleet on the tractor side is in pretty good shape. You know, we'll have some growth equipment coming in, but I could see a, you know, CapEx number, you know, next year, certainly running in excess of half a billion dollars. And again, we're still in the 2024 planning stages right now. A lot of moving pieces, as you're familiar with, on the real estate front. So, we'll give you some better guidance as we're able to put it together ourselves. But a big opportunity on the equipment side, I think, to be in a position to keep running the network effectively, take down some PT costs, and then take share if we can put trailers in, you know, in big customers' yards. We're renting a lot of equipment right now, so we want to pull that rental cost out and get our own equipment out there. Okay, I appreciate that. Maybe just for a follow-up here, any broad commentary on end markets, you know, whether it's industrial versus consumer, you know, anything to call out there on general inventory levels and, you know, whether some of those mix changes may be affecting the weight per shipment? No, I mean, I think primarily what we've seen in the weight per shipment is customer driven. Like Fritz mentioned, some of the accounts we may have been servicing that others were into, and as a competitor leaves, you get more opportunities there. And some of that for us, it's obvious we've had some, you know, increases with retail customers, and some of that's tending to be lighter weight. And like Fritz said, I mean, if you're going to the same location and getting extra shipments, that's great. You take out a piece of the cost component, even if the revenue per shipment is lower, that math works. But, you know, there are instances where, you know, we're serving one DC for a big retailer, and all of a sudden they need help, you know, in another DC, so it's not pickup economies. It's a, you know, it's another- ... It's another pickup cost, and, and the revenue per shipment on some of that retail stuff's lighter, and that's, you know, the weight's lighter, and that's what's driving the revenue per shipment. That's great. Appreciate the color. Thank you. Your next question comes from the line of Jordan Alliger with Goldman Sachs. Please go ahead. Yeah, just, just to follow up, I think you talked earlier about the hiring process of folks, and as you sort of think ahead and the influx of business from the redistributed freight, how do you think about your headcount driver needs, et cetera, as you move ahead from here? Thanks. Yeah, I mean, it-- for us, as we build scale and density in this, certainly we want to make sure we leverage our internal assets and capabilities. You know, one of the exciting things that that I think we have to offer is that it's a great place to work for somebody that's interested in a career in transportation and logistics, and a professional truck driver, and the business that's growing healthy, a lot of opportunities. So I think that it's... When you're recruiting drivers in this market, that's an effective place to be or a great place to be, and I think we've attracted that, and we'll continue to focus on hiring because I think that it's, you know, we see runway to grow the business, we see runway to optimize the business. You know, as we continue to utilize more of our, the scale that we developed in our, in our linehaul network, that gives us an opportunity to really support and build that driver force around that. And I think that it's something that, you know, it's a challenge, always is, but I think that's a competency we're developing around recruiting, too. Got it. Thank you. Thank you. Your next question comes from the line of Eric Morgan with Barclays. Please go ahead. Hey, good morning. Thanks for taking my question. I just wanted to ask on the freight onboarding process this quarter, you know, your release mentioned your focus on ensuring, you know, the freight profile was appropriate and margins met expectations. So just wanted to see if you could speak to that process a bit more. Obviously, you took on, you know, more freight than others, at least from the outside. You know, it wasn't too profitable at the prior carrier. So just wondering if you could comment on some of the variables you look at, with respect to, you know, margins, returns, density, things like that. Yeah, sure. You know, our focus is really making sure we understand the freight characteristics that, the freight that we pick up, make sure that it's understanding what its impact is on our network, where we're going to make those pickups and deliveries. And when you do that, all those things, you've got to make sure the pricing is right. So we pretty rigorously review that on an ongoing basis. And, you know, to the extent that there are situations where, you know, that it's not priced appropriately, then we've got to, you know, go have the conversation with the customer, or we've got to come through and, you know, provide the customer, remind the customer of the service they're getting, and then being in a position that we can, you know, make the appropriate pricing adjustments. So we, we started that, you know, as soon as we saw the changes in the marketplace. We've been kind of rigorously on that. Shows up in our results. You saw the GRI that we've communicated earlier this week, and those are all pointing to, you know, our, our focus around making sure that we're compensated for these high levels of service. We, we know what our customers are telling us. We watch very closely what the, you know, the feedback is, both internally as we measure customer satisfaction on a daily basis, and then we watch what third parties say about our... What we're doing to satisfy the customer, and we look at that, and we say, "Listen, the pricing has got to be right based on what we're providing to the customer." That makes it critically important that we do not disrupt service. You only get paid when you provide a great service. So that's kind of our focus. Appreciate that. Maybe just a quick follow-up on the end market question, specifically underlying demand. I know you mentioned you're expecting normal seasonality from here. Just wondering, outside of, you know, the industry disruption, if you're seeing any kind of shifts on the horizon in terms of underlying demand, conversations from customers. Thanks. Yeah. Maybe, maybe there's a little bit of optimism out there, but I, you know, I think it's. Let's, let's kind of get a few months under our belt before we, you know, to think that we've steered through choppy waters. But I think that, you know, into next year, maybe it's a little bit of more optimism, but we'll see. I mean, I'm, I'm kind of. We're sort of show me. Okay, let's see the evidence of, you know, things being better. In the meantime, let's focus on handling the freight for the customer, so when the business does and the market does return, which I think whenever that is, be it next year or the year after, we need to be in a position where the customer says, "We got great service from Saia, so we're going to stay here," and that, you know, we continue to grow that relationship. So today, I don't know that there is a big call out there, but it's, you know, we've continued to operate through this. Thank you. Thank you. Your next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead. Thanks. Morning, guys. Apologies if I missed this earlier in the call, but did you say how much excess capacity you have right now in the network? Yeah, we think it's about 15%-20% across the whole network. Got it. So if you have 15%-20% on the door side, and obviously, like, not much of anything on the kind of variable side, kind of given what happened this quarter, I'm wondering kind of what happens next year when volumes come back with the upcycle, right? I mean, how do we ensure that there is operating leverage, and you guys can grow into that capacity? Is it just a case of really adding more resources now? Or kind of how do we think about operating leverage when the cycle turns up? Yeah, I mean, what we look at right now, we've had a pretty big step up in shipment counts. We've, you know, we've immediately, as we saw that develop, really ramped up our recruiting efforts. You know, we added 1,000 employees as a result of that. I think we'll be judicious about that, but I think as we continue to scale, we will continue to add resources where it's appropriate. I, you know, I think that we feel pretty good about our ability to do that. We've also, as we've opened facilities in new markets, done a good job around recruiting there. I think that's something that we've been successful with. I, you know, I don't necessarily... I think in the next year, I think we can continue to scale the business and look for opportunities as we build density. Maybe, you know, find that lower cost line haul option, and that's usually internally resource line haul. So if we make that happen, you know, I think we can continue to grow this and build density in the business. Very good. Thank you. Thank you. Your next question comes from the line of Jason Seidl with TD Cowen. Please go ahead. Thank you, operator. Gentlemen, good morning. Wanted to shift the focus back to the additional employees hired. I think you commented that 40% out of the 1,000 were drivers. Did you guys experience a little bit of a productivity shift downward if a bunch of them were from Yellow because you had to train them a little bit more in the quarter? Just curious. Yeah, anybody that we hire that comes into Saia, we're gonna focus on. You know, there's a principle that we have, which is we're gonna put the customer first. So that's the first kinda screen that we think about. We're gonna work in a collaborative environment. And then we have kinda how we operate and provide differentiated service, so that requires an appropriate level of training. And we do that with anybody that we bring through our recruiting process. The worst thing that we can do is to provide sorta uneven service to a customer. A customer can't. They're counting on us to provide the appropriate training and the team that will provide the high level of service. So that's kinda how we think about it. What percentage of the drivers did come from Yellow? Listen, what we focus on is, we recruit everywhere, and we take a whole range of candidates, and we put people through our process. And, you know, once we find the folks that meet those kind of core values, we're gonna operate from there. Fair, fair enough. And as we look at your sort of legacy terminal network, not the expansion areas, you know, are there any places you foresee that you might be trying to more aggressive at trying to get at terminals to expand? You know, the exciting thing when you're providing the service levels that we are, we have an opportunity, we think, to grow in just about every market that we're in, in the country. I mean, we're thrilled with what we've done in Atlanta. We've opened two terminals here in the last few years, and we've seen great success there. And you know, they're three of our highest performing terminals in the company now, in the Atlanta market. Historically, the one terminal we had, we struggled with. But you know, maybe there's an opportunity for us to add a fourth year, 'cause the customers are getting a good experience, and you have the opportunity to grow that. So in that case, it's not a capacity issue, it's really about just reach the customer. So, you know, I think that those opportunities are kind of around the country and, you know, it can be new markets we haven't been in long, and it can be ones we've been in for a long time. I think there's... That's what's exciting about where we are. Fair enough. You know, Jason, and just to follow up on that, I mean, I think if you were able to go forward and look back in a few years and say, "You know, where did all the growth come from?" I still think our biggest opportunity is in markets that we already have a presence, but we don't have, you know, a representative footprint to provide the same level of coverage as some of our peers. When I think of some of our legacy markets, you know, go down to our Gulf States routes and think about, you know, Louisiana and across through Texas, I mean, we have much higher market share there in terms of revenue share than we do in other parts of the country. So if I look at Texas, for example, you know, we've got probably close to a couple dozen terminals down there. We've got a representative footprint that matches some of our national peers. You know, we've got a double-digit revenue share there, and you compare that to our headline share in the industry, and you know, we're a 5% or 6% share of revenue. But in a market where we've got a similar footprint, our service, you know, allows us to go take share. So, you know, if we go do that in, you know, in the Northeast, we've grown from zero there, you know, to something like probably 3%-3.5% share these days in a matter of a few years. But there, there's you know, several regions in the country where, you know, we just, we just need to be closer to the customer. We say we cover the market, but if we had 2 or 3 more terminals, you know, we, we can get share. So it, it's an exciting time, and we look, we look forward to, you know, getting a more representative footprint and taking that share. Well, well, Doug, in terms of taking more share, you know, getting back to the hires that you had in the quarter, I mean, if 40% were drivers, I mean, 60% were, you know, potentially out there, that could be salespeople. So did you have a lot of sales hire in the quarter that could sort of ramp up and sort of give you some of that density that you're looking for in some of those areas? You know, we've certainly added a complement of sales folks as well in the quarter. You know, it's great to be in a position where you can attract salespeople 'cause they got a great product to sell. So that's been good. That built... And we've been able to add salespeople in not only developing markets, but ones that we've been in for a while. So it's a good place to be. Appreciate the color, guys, and the time. Thanks, Jason. Thank you. Your next question comes from the line of Tom Wadewitz with UBS. Please go ahead. Yeah, good morning. So I wanted to ask you a quick one on, on price, and then I have a question, on the terminals as well. What- how should we think about, you know, revenue, revenue per hundredweight ex-fuel? Pretty strong number, 8.4% in a quarter. Is that something that can build further, as you reprice more of the book, or is that kind of a good run rate that we should, look at going forward? Yeah, I mean, the yield calc itself, like, you know, is influenced a little bit by the, you know, the weight per shipment decline we saw. But, you know, I think, I mean, our revenue per shipment growth was, you know, was still positive at 3% ex-fuel. You know, with a 7.5% announced GRI and, you know, with growth in some of our national account customers, you know, that may not be operating as well with these new volumes, we're going to push for at least that. Our contractual renewals in the quarter were 5.6%, and, you know, that's stuff that was really started, you know, you know, leading up to the disruption in the industry. So they don't really even reflect the tightness that's going on post that event. So I mean, that rate was higher as we exited Q3 than the headline 5.6%. So our recent renewals are running higher than that, and you know, we continue to think there's an opportunity to you know, you know, raise rates, and the yield will be influenced a little bit by where the weight goes from here. Yeah. Okay. All right. And then I wanted to ask you, you know, kind of related to the growth in the terminal network, how we should think about your approach with the Yellow terminals. I guess it's kind of twofold. One would be, you know, how do you think we should measure success? So, you know, the results come out, you issue a 8-K, you know, if you get, you know, more terminals, is that a good thing? I would tend to think so. I don't know if, you know, if it's like, hey, you get five, that's kind of not as good, you get 30 terminals, that's great. So I guess, just kind of high level, how might we think about, you know, whether you're successful or not with the Yellow terminal bid process? And then, I guess, related to that, it does seem like you have a real opportunity to, you know, pull forward some of that or build the pipeline in future growth. And I think the market's got a lot of confidence, notwithstanding the, you know, some noise today, in your ability to execute. So can you think about, hey, we'll just really pull forward, and we'll kind of load up on future growth because we have the strategic opportunity, you know, to add a lot more terminals as opposed to doing, you know, kind of year by year? Yeah. So Tom, well, the way I would think about this is a little bit how we've been thinking about it ongoing, is that we are continuously looking at our pipeline of opportunities, which extends out for a couple of years. And we're very judicious about identifying locations, where they need to be, you know, what the profile of those facilities are, where are our customers, and making sure the facilities that we add are there. I think if you look back at our track record, we know how to open things organically. We know how to build facilities and open them, and do that in a pretty value-adding way. You know, as far as what is going on with, you know, in the Yellow process, I mean, I think that those are all facilities that are, you know, in some form, are going to be available to the market, right? You know, we consider anything that's out there, that those are facilities that we look at, and our position in the market are ones that, you know, we take it, you know, we, we're not, we're buying facilities from companies that are much larger than we are in our space. You know, if the available assets are there, and we have the opportunity to participate in those, or as others maybe pursue opportunities and need to vacate a facility, you know, those are things that we do pretty successfully. So, you know, I don't have a measurement around, you know, how many we need to have at any given point in time. I have a measurement that says we think we probably need to get to 240-250 facilities to provide apples to apples coverage and service to best in class. And, you know, I think we've built to that point. You know, we'll do it in a way that's judicious over time, in which we are not only creating value for our shareholders, but also for our customers. So, it, you know, it's still a multi-year process, however you think about it. Just one follow-up on that. Do you consider a bigger step up? Is that something that could make sense, or you want to keep it more smooth? Yeah, well, you know, it's all about what the opportunities are. So, you know, if the macro environment is favorable, you know, we've seen that we're pretty good at accelerating. If things are maybe a little bit softer, more tepid, we'll slow it down and be judicious about how we open it. You know, I know there are lots of outcomes that could come up in the real estate market, industrial real estate market in the next six months to a year. And so there are infinite number of variables there, and, you know, we'll see how it plays out and what the opportunity looks like. Okay, thanks. Bye. And you, and you see that in this year's activity as well, right? We've opened six terminals year to date. We'll have a seventh one open next week. ... And we've got a couple more that we could probably push over the fence, and they're kind of, in our view, new share opportunity markets. And we could probably get them over the fence in December, but we'll push them out into Q1. So, you know, we read the tea leaves, and we see what we all have going on in our business, and then we kind of flow them in as we think we can do it most smoothly. So, we should have a pretty exciting year next year in terms of openings. Okay, great. Yeah, that makes sense. Thank you. Thank you. Your next question comes from the line of Stephanie Moore with Jefferies. Please go ahead. Hi, good morning. Morning. Morning. I think, pretty much every topic has been well addressed here, so I'm going to ask just kind of one bigger picture question here. You know, maybe with just the benefit of hindsight now, as you kind of navigated this major disruption for the industry, in terms of how everything has panned out over the last couple of months, you know, maybe that's in terms of volume acceleration, month-over-month, pricing, capacity additions, service performance, is there anything that has surprised you? You know, one of the, one of the things about the LTL business that I would say is that it, there's never two days in a row that are the same. I, you know, I think we, we all saw kind of the, the what was going to come, potentially come in the early part of the year as, you know, read the news in the marketplace. The pace at which the competitor exited was probably, it was a little bit maybe surprising, but what was exciting about it is having lived through the last few years with the pandemic and all the challenges that came along with that, our team was ready to go, and we executed on taking care of the customer. So the pace probably surprised, surprised me and my kind of experience, but I was thrilled to see how we responded to it. So, you know, we'll see how the opportunity unfolds over the next, you know, several months to a year. Just as a follow-up, the pace of... meaning the amount of volumes initially, is what you're saying? Yeah, we went... How quickly. Basically, we went from sort of slow growth, no growth, limited growth in total, then all of a sudden, we have a 10, 11, 12% increase in shipments in a matter of days. And to watch our team respond to that was frankly, was awesome. And, so that, that was the exciting part. Got it. Thanks so much. Thank you. Your final question comes from the line of Chris Kuhn with The Benchmark Company. Please go ahead. Hey, operator- I do apologize. Sorry, go ahead. No, it doesn't look like Chris is able to join. Is there anything else? That concludes- Oops, is somebody there? Yes, go ahead. Yeah. Hi, guys. Sorry. Hey, Doug, Fritz, it's Chris. Can you hear me? Yes. Got it, Chris. Thanks, guys. Sorry. Just bigger picture, with the shipments up and the costs up in the short term, just given the higher step up in volume, if I just—if you think longer term, once things sort of settle in and get to normal seasonality, do you think you could get to that 70 OR handle faster than, than you might have thought? I know you didn't give a time frame on it, but just, just curious, just given the, the higher volume and maybe the increased density. Yeah, no, I think, I think that's very much in play. And, you know, you're going to need a little bit of a favorable macro environment, but I, you know, I think that the pace at which we can get there is absolutely in play. I think that the ability to maintain this stepped up volume at a high level of service is going to be critical to that, and, you know, I, I'm excited to see where we are right now. Appreciate it, guys. Thanks. Thank you. Your next question comes from the line of Bascom Majors with Susquehanna. Please go ahead. Fritz, wanted to follow up on Tom's question about the terminal auction, but from an industry perspective, you know, for Saia in the broader industry and you guys' eyes, what is a good outcome for the LTL industry on where these terminals end up and how they're redeployed? What is a bad outcome, and how are you kind of operationally preparing for a lot of different ways this can go? As you've already noted, a lot of different things can happen over the next six months with how this capacity is brought back into the market. Thank you. Yeah, my guess is what will happen there, you know, it's a pretty big footprint, and there will probably, it will be dispersed to the market, to other, you know, to all LTL operators who probably have some, you know, opportunity, either in the, you know, kind of how that process plays out or the secondary part of that process, as people maybe reposition their networks to match what, you know, what's available and what the new facilities are. So, you know, and there, there's going to be some cases that some of those don't get returned to the LTL business because it, you know, maybe the economics make more sense for that to turn into a, you know, warehouse or industrial real estate property of some kind. So I, you know, I think it remains to be seen what's going to happen to all of them. I, you know, my guess is that, you know, even if, even if, you know, one player gets them all, but I think that I, I'm not sure how likely of an outcome that is, but if it, if it is, what I think would happen then is even that those players or a player, that would still probably lead to facilities being shifted around, and some staying in service in the industry and others exiting. And, you know, I, I think what's important to note is that, you know, kinda ongoing, even without this, this current situation, I mean, these LTL assets are getting traded amongst competitors as it is now. You know, we've the facilities that we've opened this year, certainly we've opened new ones, but we've also, you know, purchased ones from, folks that are repositioning their footprints in our network. So I, you know, I think what's important is the ability to get those facilities and then replicate service. And I, I think as these, as facilities trade and move within the industry, I, I think you'll see that. So it'll be kind of a, probably a combination of all those things. So first would be whoever ends up, you know, if there's a one bidder that gets it all, and they probably reposition some of those, in their own, network. Others, maybe they sell, and they get traded amongst other competitors, and some will ultimately, probably exit the market entirely. The exit of that capacity tighten the market from a pricing perspective overnight. Do you have concerns that the redeployment, even if gradual, can loosen it, even as, you know, the economy is hopefully getting better next year and the year after? No, I think if I look at how the market has responded here in the last several years, I think that generally, this is a high-cost inflationary business that requires a lot of capital. And, you know, those, as facilities get redeployed and some get expanded, and as the macro economy grows, I think those things will all kinda match. I'm not really concerned about, significant changes in, you know, increases in capacity. Frankly, if you watch what's happened over time, it continues to shrink. And remember, Bascom, the industry was only able to absorb the, you know, the volume so relatively smoothly because as an industry, we'd all seen, you know, shipments and tonnage negative for, you know, the better part of a year, you know, when this event occurred. So, I mean, if you thought you had capacity the year before, you had more capacity after 12 or 15 months of down. So, you know, if your model says ISM is always gonna be negative and nearshoring benefits aren't gonna be a tailwind, then that's one thing. But remember, we've been in a freight slump here, so that's why we had capacity as a group to kinda, you know, fill in the holes for customers. If you get back to a more normalized industrial environment, we get some growth going again, you get port activity going again, you get benefits of nearshoring, well, then that's another kind of mode around pricing. Thank you, Doug. Thank you, Fritz. Thanks, Brian. Thank you. I will now turn the call over to Fritz Holzgrefe for closing remarks. Please go ahead. Thank you for everyone that called in to hear the update on the exciting opportunities at Saia and our look for success in the coming quarters, and look forward to giving everybody everybody an update next quarter. Thank you. Thank you, ladies and gentlemen. This concludes today's call. Thank you all for joining, and you may now disconnect your lines.