Less-than-truckload carrier Saia saw tonnage flip back into negative territory in August.
The Johns Creek, Georgia-based company reported Friday a 2.2% year-over-year tonnage decline in August following a 0.9% increase in July. The August tonnage result was the combination of a 2.2% decline in shipments and a 0.1% increase in weight per shipment.
Saia (NASDAQ: SAIA) was one of the industry’s biggest market share winners following Yellow Corp.’s July 2023 collapse, however its 22-month streak of positive y/y tonnage results ended in May. The carrier is facing mid-single- to low-double-digit y/y comps in the last four months of this year.
(Saia’s two-year-stacked comparisons remain positive so far in the third quarter, with both July and August up 6%.)
Table: Company reports
In addition to the tough comps, Saia is also facing a difficult macro backdrop.
Data released Tuesday showed the manufacturing complex, which accounts for nearly two-thirds of LTL freight, remained in contraction territory again during August. The Purchasing Managers’ Index (PMI) registered a 48.7 reading for the month (50 is neutral), placing it in negative territory for 32 of the past 34 months. (The dataset typically leads inflections in LTL volumes by approximately three months.)
The PMI new orders subindex – a signal for future activity – moved into expansion territory (51.4) after six consecutive months of decline. However, the dataset remained below 52.1, which the report identifies as the required threshold for a sustained period to trigger an increase in manufacturing orders.
SONAR: Longhaul LTL Monthly Cost per Hundredweight, Class 50-65 Index. Less-than-truckload monthly indices are based on the median cost per hundredweight for four National Motor Freight Classification groupings and five different mileage bands. To learn more about SONAR, click here.
Saia didn’t alter its third-quarter margin outlook in the Friday report.
The company said on its second-quarter call in late July that it typically sees 100 to 200 basis points of operating ratio (inverse of operating margin) deterioration from the second to third quarter each year. It guided to just 100 bps of sequential degradation this year, which implies an 88.8% OR, 370 bps worse y/y. However, it flagged a potential 75-bp headwind to the guide as it contemplates a compensation increase.
The company’s yield comps get easier in the back half of the year and it continues to book mid-single-digit contractual rate increases. (Saia doesn’t provide revenue-based metrics like yields or revenue per shipment in its intraquarter updates.)
Saia reported 330 bps of sequential OR improvement during the second quarter as new terminals brought online experienced improved profitability and as the company executed other belt-tightening initiatives. Terminals that were open less than three years generated mid-90% ORs in the second quarter, an improvement from breakeven results in the first quarter.
Shares of SAIA were up 5% in early trading on Friday compared to the S&P 500, which was up 0.5%.
More FreightWaves articles by Todd Maiden:
- Old Dominion sees tonnage slide further in August
- XPO sees tonnage declines ease in August
- Yellow nets $176M for rolling stock while ex-employees await payouts
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