Trucking company Saia rolled into the US Northeast Monday, opening less-than-truckload (LTL) terminals in Pennsylvania and New Jersey that extend the multi-regional carrier’s reach. “Terminals to serve the markets around Pittsburgh, Philadelphia, and Harrisburg and Newark are fully staffed and equipment is in position,” President and CEO Rick O’Dell said Friday.
The US Northeast and the Northern Plains states are two areas where Saia has relied on partner carriers to pickup and deliver freight. Moving into the Northeast will eventually add 12 states to its 34-state LTL network. The regional expansion, announced last year, is expected to increase Saia’s reach by about 25 percent, filling in a large gap on its US LTL service map.
“We have a pipeline of revenue that we’re managing from a startup perspective, that will start in May,” O’Dell told Wall Street analysts in an earnings call transcribed by Seeking Alpha. The first four terminals are just a start. “We’re looking to open 15-ish more terminals up there,” O’Dell said during the call. ‘We've got a strategy to kind of look at four to five terminals a year.”
In the Northeast, Saia won’t only be going up against national carriers such as XPO Logistics, FedEx Freight, and YRC Freight, but a strong slate of regional carriers that includes New England Motor Freight, Pitt Ohio, New Penn, and A. Duie Pyle. O’Dell believes there’s room for competition without waging a rate war for Northeastern shippers’ business.
“We will be competitive,” O’Dell said, but “we're not going to chase the cheap regional freight in the Northeast … we are not going to play in that. We are going to leverage our existing customers relationship and the rest of our network and sell more into the regional, longer-haul inter-regional markets.” Apparently, there’s more LTL freight to compete for in 2017.
In the first quarter, Saia’s LTL revenue grew 9.4 percent to $317 million, LTL shipments rose 3.5 percent, and tonnage increased 2 percent, the carrier said Thursday. LTL yield rose 7.7 percent from a year ago. “The overall LTL pricing environment remains constructive, and our average agreed upon contractual renewals increased by 4.2 percent in the first quarter,” O’Dell said.
The company’s recent partnership with Canadian carrier TST Overland Express puts another piece of Saia’s freight puzzle in place, O’Dell said. The two LTL carriers announced a cross-border trucking pact effective May 22 in April. The alliance will benefit Saia’s northeastern expansion, O’Dell said. “The arrangement should give us a nice boost to our volumes in our newest terminals,” he said.