Less-than-truckload carrier Saia reported year-over-year tonnage increases for the first two months of the third quarter on Friday.
The Johns Creek, Georgia-based carrier saw tonnage increase 12.6% year-over-year in July (shipments +3.4%, weight per shipment +9%) and 9.9% in August (shipments +1.9%, weight per shipment +7.9%). The increases compare to a 2.7% tonnage decline in July 2020 followed by a 0.5% increase in August as parts of the economy were still coming back online.
Saia (NASDAQ: SAIA) reported record results during the second quarter with tonnage climbing 23% year-over-year and revenue per hundredweight up 6% excluding fuel surcharges.
The company doesn’t provide revenue or pricing metrics in its intraquarter update, but the industry continues to see rates move higher.
Demand throughout the trucking sector remains high and the LTL carriers have seen freight pour in from multiple directions. The mode is experiencing a surge in e-commerce-related parcel shipments as more consumers buy from home. Also, heavier spillover freight that would normally move via full truckload but can’t because of capacity constraints is flooding into LTL networks..
The industrial economy, which accounts for as much as 80% of freight shipments for some LTL carriers, continues to step higher as well.
A Wednesday report showed the Manufacturing Purchasing Managers’ Index was up 40 basis points in August to 59.9%. A reading above 50% indicates the manufacturing sector is expanding. Historically, LTL shipments lag the data set by three months.
July industrial production was up 0.9% sequentially, 6.6% higher year-over-year. The index is now only 0.2% below pre-pandemic levels.
Addressing the surge in demand on its second-quarter earnings call, management from Saia (NASDAQ: SAIA) said they plan on adding up to seven service centers this year. The company plans to add 10 to 15 terminals a year moving forward as the competitive dynamics in the consolidated LTL sector remain favorable.
Saia has opened two terminals this year.
In May, the company embarked on an ambitious hiring plan as other carriers have. The recent hiring blitz called for the addition of 500 Class A CDL drivers and 300 dockworkers.