Saia is working to add more direct routes, rather than moving shipments through its hub-and-spoke system, to optimize its freight operations, CEO Frederick Holzgrefe said during an April 25 earnings call.
Holzgrefe’s comments were in response to an analyst’s question about how Saia is optimizing shipments when not seeing the freight market growth it expected.
“If you can figure out ways to go drive a little bit of volume, get those customers [to] consolidate that freight and build a direct route from, say, Atlanta all the way to California without having to break the freight through Dallas or Phoenix, that's actually a way for you to build scale,” Holzgrefe said.
This direct route moves freight from point to point, as opposed to freight that moves through two or three hubs, he said.
The hub-and-spoke system is traditionally used for LTL shipping, said Margaret Kidd, program director and associate professor of supply chain and logistics at the University of Houston.
“Freight is picked up and brought to a local hub, where it's sorted and transferred through a series of terminals until reaching its final destination,” Kidd told Trucking Dive in an email.
This method takes longer due to multiple stops at terminals, but for shippers, “it’s more cost-effective for smaller shipments, as you only pay for the trailer space your freight uses,” Kidd said.
Saia has been working on building out its network of terminals, making the move to direct routes more feasible for the carrier. It purchased several Yellow Corp. terminals. In 2024, the carrier opened 21 new terminals.
“The scale of building out their network is indicative of a well-developed strategy focused on developing a robust national network from West to East Coast,” Kidd said.
