Saia Lifts Target for 2024 Terminal Openings to 21
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Saia Inc. could open a large batch of terminals in 2024 as profits and revenue grow at the less-than-truckload carrier, largely on the back of facilities acquired from the estate of defunct one-time rival Yellow Corp.
After seeing a 12.3% year-on-year bump in second-quarter profits to $102.5 million amid its ongoing integration of the acquired facilities, Saia expects to open at least 18 and possibly as many as 21 terminals in 2024, it said in a statement.
Johns Creek, Ga.-based Saia opened just six terminals in 2023, and through late June of this year it publicly maintained that it expected to open 16 terminals at most in 2024. However, Saia CEO Fritz Holzgrefe told analysts during the company’s Q2 earnings call July 26 that Saia plans to open nine facilities in the third quarter of 2024 and as many as four in the final three months of the year. In the first six months of 2024, Saia opened eight terminals, according to company records.
The latest terminals to open were in Stockton, Calif., and Davenport, Iowa. “The Stockton terminal will significantly boost our service offering in Northern California, while the Davenport terminal will strengthen our operations in the Midwest,” Executive Vice President of Operations Patrick Sugar said in the July 22 statement.
Sugar
Earlier this year, Saia opened terminals near Anaheim, Calif. and Owatonna, Minn. “The terminal near Anaheim will significantly boost our service offering in Southern California, replacing our current Long Beach facility, while the Owatonna terminal will strengthen our operations in the Upper Midwest, as this is a new market for Saia,” Sugar said.
The Owatonna facility is part of an expansion of Saia’s Western U.S. operations. Earlier in 2024, the company opened terminals in St. George, Utah, and Missoula, Mont. Saia also opened a new terminal in Laredo, Texas, as a part of an upgrade for its Mexican services, plus Reading, Pa., Trenton, N.J., and Garland, Texas, facilities.
Holzgrefe told analysts July 26 that Saia was very pleased with its new terminals’ progress, but warned that such investments require training and onboarding to be successful.
Saia ranks No. 18 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and No. 6 among LTL players.
The terminals that opened in Q2 operated at a loss, the company’s top executive said, adding that terminals opened in the past two or three years averaged a 95 operating ratio while terminals operated longer than three years had an 82 OR.
Operating ratio provides insight on how well a company is balancing its costs and revenue generation. Typically, the lower the ratio, the better a company’s performance.
Holzgrefe said Saia will continue opening terminals because “having a comparable footprint to our peers is critical to our overall value proposition. Every new opening moves us closer to the customer, and provides an opportunity to better support their success, while creating long-term value in our core business.”
Saia expects its 2024 capital expenditure to total $1 billion, compared with $437.2 million in 2023.
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The company was the winning bidder for 17 terminals in the first auction of Yellow assets late last year, agreeing to pay a combined $235.7 million for the assets.
Those facilities were in: Fresno, Calif.; Seaford, Del.; Augusta, Ga.; Bowling Green and Paducah, Ky.; West Boston, Mass.; Grand Rapids and Grayling, Mich.; Duluth and Owatonna, Minn.; Trenton; Rochester, N.Y.; Akron and Youngstown, Ohio; Reading; Knoxville, Tenn.; and Laredo.
Saia then won the most properties on offer in the second round of the auction, agreeing to pay a combined $7.92 million for 11 properties across seven Western states.
Holzgrefe said Saia has added 50 facilities since 2017.
