- Saia plans to open two additional terminals before the end of the year, which would bring the company to seven openings in 2021, CEO Fritz Holzgrefe said Thursday during an earnings call.
- Next year, Saia plans to open between 10 and 15 terminals and aims for "several relocations of existing terminals into larger or better-positioned facilities, as well," Holzgrefe said. Most of those additions will likely occur in the second half of 2022, he added.
- Saia's new terminals are strategically located to bring the company closer to the customer base, which reduces stem miles, provides cost-savings and even helps with recruitment, Holzgrefe said. The carrier is filling its real estate pipeline, positioning itself for growth over the next several years.
Saia's real-estate expansion comes at a time when e-commerce growth and expectations for fast delivery have pushed terminals, LTL centers and warehouses closer to the consumer. Additional facilities are a necessity when adding capacity in a new market, or growing a regional footprint.
"We're at the stage right now where we're adding terminals," Holzgrefe said. "We're moving closer to our customer, or moving to markets that we were attempting to reach with long stem times. So, you kind of have a little bit of a built-in cost savings as you move closer to the customer, in that regard."
Saia's growing terminal network
|Terminal count (by end of year)
Source: Saia earnings call
Holzgrefe gave the Atlanta market as an example. Opening facilities there allows trucks to avoid much of the traffic coming in and out of the city. Recruiting in Atlanta is also "a little bit easier," he added, so the facilities are less difficult to staff and bring up to speed. Though, he noted, entering a new labor market doesn't mean recruitment isn't a challenge.
In general, Saia doesn't view openings or relocations as a significant burden on the bottom line, Holzgrefe said.
"By doing this all organically, we understand how to pick the pace up, slow the pace down and do that in a way that's not disruptive to our own operation," he said.
But with real estate as trendy as it is, prices are high and availability is low. LTLs, including Old Dominion Freight Line, are contending with these roadblocks to expansion. In the past, Old Dominion had been able to pick up leftover real estate that other carriers sold.
"As time goes on, all of a sudden they're gone," CEO Greg Gantt told Transport Dive late last year.
Saia has at least found land in Virginia. Holzgrefe said the company opened a terminal in Fredericksburg in late September, which is the fourth it has in the state. In October, Saia opened terminals near New Haven, Connecticut, and Youngstown, Ohio.
And while the carrier adds facilities, it is also moving out of some. In Q3, Saia recorded a $4.3 million gain from selling a terminal. It's part of a strategy to expand door count by replacing a smaller facility with a larger facility, the company said.
"It's a focus on building density, making sure you've got the right route structures. You're not taking a scarce driver and have them ... try to serve a customer 100 miles from a terminal," CFO Douglas Col said during the earnings call. "You're focusing them into markets where you can best serve them, service the customers, but then, at the same time, best leverage their capabilities and their capacity."