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What changed in SAIA INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SAIA INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+293 added−258 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-23)

Top changes in SAIA INC's 2023 10-K

293 paragraphs added · 258 removed · 221 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+7 added−8 removed31 unchanged
Biggest changeThe Infrastructure Investment and Jobs Act signed into law in 2021 required the FMCSA to establish an apprenticeship pilot program that allows drivers between the ages of 18-20 with an intrastate commercial driver’s license to operate in interstate commerce under certain conditions. In response to this requirement, the FMCSA established the Safe Driver Apprenticeship Pilot Program (SDAP) in January 2022.
Biggest changeIn November 2023, the FMCSA issued a warning that by November 2024, drivers with a prohibited status in the DAC will lose or be denied their state issued commercial driving privileges. 8 The Infrastructure Investment and Jobs Act signed into law in 2021 requires the FMCSA to establish an apprenticeship pilot program that allows drivers between the ages of 18-20 with an intrastate commercial driver’s license to operate in interstate commerce under certain conditions.
Specifically, the EPA has issued regulations reducing sulfur content of diesel fuel and reducing engine emissions. These regulations increased the cost of replacing and maintaining trucks. Future environmental laws in this area could further increase our costs and impact our operations.
Specifically, the EPA has issued regulations reducing the sulfur content of diesel fuel and reducing engine emissions. These regulations increased the cost of replacing and maintaining trucks. Future environmental laws in this area could further increase our costs and impact our operations.
Future volume growth at Saia could result from improvements in the general economy, industry consolidation, geographic expansion and strategic acquisitions, as well as specific sales and marketing initiatives. 4 Continue to focus on delivering best-in-class service. The foundation of Saia’s growth strategy is consistent delivery of high quality service through on-time delivery and reduced claims for lost and damaged freight.
Future volume growth at Saia could result from improvements in the general economy, industry consolidation, geographic expansion and strategic acquisitions, as well as specific sales and marketing initiatives. Continue to focus on delivering best-in-class service. The foundation of Saia’s growth strategy is consistent delivery of high quality service through on-time delivery and reduced claims for lost and damaged freight.
We believe this differentiation provides stronger future growth prospects, improved efficiencies and customer service capabilities. Recruiting, Hiring, Training and Professional Development. We seek to hire employees with the desire they spend their career with us to retirement. With that in mind, identifying qualified candidates and attracting them with competitive compensation and benefits is key to our success.
We believe this differentiation provides stronger future growth prospects, improved efficiencies and customer service capabilities. 6 Recruiting, Hiring, Training and Professional Development. We seek to hire employees with the desire that they spend their career with us to retirement. With that in mind, identifying qualified candidates and attracting them with competitive compensation and benefits is key to our success.
Saia’s mission is to safely drive our customers' success with custom solutions built on the three pillars of our service-focused values: people, purpose and performance. Our core values place the Customer First as they are the heart of the business. Safety is a unifying fundamental behavior and practice that supports our Company’s purpose and goals.
Our mission is to safely drive our customers' success with custom solutions built on the three pillars of our service-focused values: people, purpose and performance. Our core values place the Customer First as they are the heart of the business. Safety is a unifying fundamental behavior and practice that supports our Company’s purpose and goals.
The larger the service area, the greater the barriers to entry into the LTL trucking segment due to the need for additional equipment and freight terminals associated with this coverage. The level of 7 technology investment required and density needed to provide adequate labor and asset utilization make larger-scale entry into the LTL market difficult.
The larger the service area, the greater the barriers to entry into the LTL trucking segment due to the need for additional equipment and freight terminals associated with this coverage. The level of technology investment required and density needed to provide adequate labor and asset utilization make larger-scale entry into the LTL market difficult.
The FDA has issued a final rule to establish certain requirements under the Sanitary Food and Transportation Act (SFTA) for vehicles and transportation equipment, transportation operations, training, recordkeeping and waivers. The rule is designed to promote the continuance of best practices in the industry concerning cleaning, inspection, maintenance, loading and unloading of, and operation of vehicles.
The FDA has issued a final rule to establish certain requirements under the Sanitary Food and Transportation Act (SFTA) for vehicles and transportation equipment, transportation operations, training, recordkeeping and waivers. The rule is designed to promote best practices in the industry concerning cleaning, inspection, maintenance, loading and unloading of, and operation of vehicles.
Ultimately, we seek and embrace our responsibility to the Community where we live and operate. The Company seeks to adhere to our core values by communicating with employees, providing long-term growth and by providing development opportunities and a leading and comprehensive employee compensation and benefits program.
Ultimately, we seek and embrace our responsibility to the Community where we live and operate. 7 The Company seeks to adhere to our core values by communicating with employees, providing long-term growth and by providing development opportunities and a leading and comprehensive employee compensation and benefits program.
These and other safety and security measures, such as rules for transportation of hazardous materials and cargo-security regulations, could increase the cost of operations, reduce the number of qualified drivers and disrupt or impede the timing of our deliveries to customers. 8 Environmental Regulations.
These and other safety and security measures, such as rules for transportation of hazardous materials and cargo-security regulations, could increase the cost of operations, reduce the number of qualified drivers and disrupt or impede the timing of our deliveries to customers. Environmental Regulations.
Saia LTL Freight picks up approximately 30,000 shipments per day, each of which has a shipper and consignee, and sometimes a third-party payor, all of whom need access to information in a timely manner. In addition to customer service, technology plays a key role in improving operations efficiency and compliance, safety and revenue management.
Saia LTL Freight picks up approximately 32,000 shipments per day, each of which has a shipper and consignee, and sometimes a third-party payor, all of whom need access to information in a timely manner. In addition to customer service, technology plays a key role in improving operations efficiency and compliance, safety and revenue management.
These initiatives help offset a variety of structural cost increases like wages, healthcare benefits, casualty insurance, workers’ compensation claims and casualty claims and parts and maintenance expense. Optimizing our linehaul scheduling and pick-up and delivery operations provides the opportunity to better utilize assets and thus reduce fuel consumption and carbon emissions.
These initiatives help offset a variety of structural cost increases like wages, healthcare benefits, casualty insurance, workers’ compensation claims, casualty claims and parts and maintenance expense. Optimizing our linehaul scheduling and pick-up and delivery operations provides the opportunity to better utilize assets and thus improve fuel consumption and carbon emissions.
We are also working to optimize our linehaul scheduling and pick-up and delivery operations to better utilize our assets and thus further reduce fuel consumption and carbon emissions. We are conducting pilot programs involving the use of alternative fuels for our operations, including testing of tractors powered by compressed natural gas and electricity.
We are also working to optimize our linehaul scheduling and pick-up and delivery operations to better utilize our assets and thus further improve fuel consumption and carbon emissions. We are conducting pilot programs involving the use of alternative fuels for our operations, including testing of tractors powered by compressed natural gas and electricity.
The Company has procedures that are designed to reduce the risk of spills of hazardous materials we transport and to quickly and efficiently react to any environmental incidents. At our terminals, we have implemented electricity-saving procedures and have conservation initiatives in place to recycle used oil, scrap metal, paper, tires and batteries.
We have procedures that are designed to reduce the risk of spills of hazardous materials that we transport and to quickly and efficiently react to any environmental incidents. At our terminals, we have implemented electricity-saving procedures, and we have conservation initiatives in place to recycle used oil, scrap metal, paper, tires and batteries.
Col has also served as the Company’s Secretary since February 2019. Patrick D. Sugar 35 Executive Vice President of Operations of Saia, Inc. since March 2021. Mr. Sugar joined the Company in December 2016 and served as Vice President of Linehaul and Industrial Engineering prior to his promotion in March 2021. Raymond R.
Col has also served as the Company’s Secretary since February 2019. Patrick D. Sugar 36 Executive Vice President of Operations of Saia, Inc. since March 2021. Mr. Sugar joined the Company in December 2016 and served as Vice President of Linehaul and Industrial Engineering prior to his promotion in March 2021. Raymond R.
Saia communication starts with an employee’s manager and is supplemented by a variety of means, including regular industry updates, a monthly magazine, reports on quarterly performance directly from the CEO and executive team and annual employee engagement surveys. Corporate Culture.
Our communication starts with an employee’s manager and is supplemented by a variety of means, including regular industry updates, a monthly magazine, reports on quarterly performance directly from the CEO and executive team and annual employee engagement surveys. Corporate Culture.
Holzgrefe has been a member of the Board of Directors of Saia, Inc. since January 2019. Douglas L. Col 58 Executive Vice President and Chief Financial Officer of Saia, Inc. since January 2020. Mr. Col joined the Company in 2014 as Treasurer and continued in that role until January 2020. Mr.
Holzgrefe has been a member of the Board of Directors of Saia, Inc. since January 2019. Douglas L. Col 59 Executive Vice President and Chief Financial Officer of Saia, Inc. since January 2020. Mr. Col joined the Company in 2014 as Treasurer and continued in that role until January 2020. Mr.
The two “for-hire” carrier groups, truckload and LTL, are defined by the typical shipment sizes handled by the transportation service companies. Truckload refers to providers generally transporting shipments greater than 10,000 pounds and LTL refers to providers generally transporting shipments less than 10,000 pounds. Saia is primarily an LTL carrier.
The two “for-hire” carrier segments, truckload and LTL, are defined by the typical shipment sizes handled by the transportation service companies. Truckload refers to providers generally transporting shipments greater than 10,000 pounds and LTL refers to providers generally transporting shipments less than 10,000 pounds. Saia is primarily an LTL carrier.
While more than 96% of our revenue is derived from transporting LTL shipments, we also offer customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across North America.
While more than 97% of our revenue is derived from transporting LTL shipments, we also offer customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across North America.
In addition to direct expansion through adding new terminals, management may consider acquisitions from time to time to help expand geographic reach and density while gaining the business base of the acquired entity. Continue to address environmental and social issues.
In addition to direct expansion through adding new terminals, we may consider acquisitions from time to time to help expand geographic reach and density while gaining the business base of the acquired entity. Continue to address environmental and social issues.
Norwood 56 Executive Vice President and Chief Human Resources Officer of Saia, Inc. since March 2022. Prior to joining Saia, Mr. Norwood was Vice President, Human Resources - Corporate for Trane Technologies from April 2020 to March 2022. Prior to that, Mr.
Norwood 57 Executive Vice President and Chief Human Resources Officer of Saia, Inc. since March 2022. Prior to joining Saia, Mr. Norwood was Vice President, Human Resources - Corporate for Trane Technologies from April 2020 to March 2022. Prior to that, Mr.
Holzgrefe, III 55 President and Chief Executive Officer of Saia, Inc. since April 2020. Mr. Holzgrefe served as President and Chief Operating Officer of Saia, Inc. from January 2019 to April 2020. Prior to this, Mr. Holzgrefe served as Executive Vice President and Chief Financial Officer since September 2014. Mr.
Holzgrefe, III 56 President and Chief Executive Officer of Saia, Inc. since April 2020. Mr. Holzgrefe served as President and Chief Operating Officer of Saia, Inc. from January 2019 to April 2020. Prior to this, Mr. Holzgrefe served as Executive Vice President and Chief Financial Officer since September 2014. Mr.
Our dock employees also receive onboarding instruction which is supplemented with on-going safety and job training. Employees who express an interest in a long-term driving career can enroll in a Company-sponsored dock-to-driver program to obtain the 6 necessary commercial driver certifications. Annual safety awards and recognition are given to both drivers and dock employees who qualify. Diversity and Inclusion.
Our dock employees also receive onboarding instruction which is supplemented with on-going safety and job training. Employees who express an interest in a long-term driving career can enroll in a Company-sponsored dock-to-driver program to obtain the necessary commercial driver certifications. Annual safety awards and recognition are given to drivers, mechanics and dock employees who qualify. Diversity, Equity and Inclusion.
There have been increased legislative and regulatory efforts regarding data protection and transparency in how customer data is used and stored in the U.S. and other countries. As a transportation and logistics provider, we collect and process significant amounts of customer data on a daily basis.
There have been increased legislative and regulatory efforts regarding data protection and transparency in how customer data is used and stored in the U.S. and other countries. As a transportation and logistics provider, we collect and process significant amounts of customer data.
We have regional recruiting managers across the Company to help meet our hiring needs. If necessary, and to attract the most qualified candidates, we offer periodic signing bonuses to new hires. We have more than 300 driver trainers, who assist in providing all new drivers with over 40 hours of training.
We have regional recruiting managers across the Company to help meet our hiring needs. If necessary, and to attract the most qualified candidates, we offer periodic signing bonuses to new hires. More than 300 of our drivers also serve as driver trainers to assist in providing all new drivers with over 40 hours of training.
The clearinghouse requires us to check for current and prospective employee’s drug and alcohol violations and annually query for violations of each driver we employ.
The DAC requires us to check for current and prospective employee’s drug and alcohol violations and annually query for violations of each driver we employ.
Ramu 54 Executive Vice President and Chief Customer Officer of Saia, Inc. since May 2015. Mr. Ramu joined Saia LTL Freight in December 1997 and served as Vice President of Sales - East from April 2007 to May 2015. Rohit Lal 62 Executive Vice President and Chief Information Officer of Saia, Inc. since August 2017. Anthony R.
Ramu 55 Executive Vice President and Chief Customer Officer of Saia, Inc. since May 2015. Mr. Ramu joined Saia LTL Freight in December 1997 and served as Vice President of Sales - East from April 2007 to May 2015. Rohit Lal 63 Executive Vice President and Chief Information Officer of Saia, Inc. since August 2017. Anthony R.
The evaluations are used to rank carriers and individual drivers and to select carriers for audit and other interventions. The FMCSA established the Commercial Driver’s License Drug and Alcohol Clearinghouse in 2020, which is a database that discloses drug and alcohol violations of commercial motor vehicle drivers.
The evaluations are used to rank carriers and individual drivers and to select carriers for audit and other interventions or enforcement action. The FMCSA established the Commercial Driver’s License Drug and Alcohol Clearinghouse (DAC) in 2020, which is a database that discloses drug and alcohol violations of commercial motor vehicle drivers.
Saia LTL Freight primarily provides its customers with solutions for shipments between 100 and 10,000 pounds. As of December 31, 2022, Saia LTL Freight operated a network comprised of 191 owned and leased facilities, including three general offices and one warehouse.
Saia LTL Freight primarily provides its customers with solutions for shipments between 100 and 10,000 pounds. As of December 31, 2023, Saia LTL Freight operated a network comprised of 198 owned and leased facilities, including three general offices and one warehouse.
Saia has also participated in the EPA’s SmartWay Program since 2006, which assists companies with advancing supply chain sustainability by measuring, benchmarking and improving freight transportation efficiency. We are focused on maintaining strong relationships with our employees.
We have also participated in the EPA’s SmartWay Program since 2006, which assists 5 companies with advancing supply chain sustainability by measuring, benchmarking and improving freight transportation efficiency. We are focused on maintaining strong relationships with our employees.
Saia annually trains drivers in defensive driving processes with emphasis on special operations in addition to weekly safety training through various mediums, including videos and group and individual presentations on diverse safety topics. Saia’s tractor fleet is equipped with extensive safety technology, including video recording systems which enable managers to provide coaching and feedback to drivers throughout the year.
We annually train drivers in defensive driving processes with emphasis on special operations in addition to weekly safety training through various mediums, including videos and group and individual presentations on diverse safety topics. Our tractor fleet is equipped with extensive safety technology, including video recording systems which enable managers to provide coaching and feedback to drivers throughout the year.
Additionally, for new construction terminals we are using best practices of including green initiatives where possible. Based on the most recently available rankings, for 2021, Saia continued to maintain high marks in the EPA’s SmartWay Carrier Performance Rankings for LTL carriers for carbon dioxide, nitrogen oxide and particulate matter emissions per ton-mile.
Additionally, we are using best practices of including green initiatives where possible in our newly constructed terminals. Based on the most recently available rankings, for 2022, Saia continued to maintain high marks in the EPA’s SmartWay Carrier Performance Rankings for LTL carriers for carbon dioxide, nitrogen oxide and particulate matter emissions per ton-mile.
We believe it is important to our success as an organization for our employees to understand how their work contributes to our overall performance. We communicate with our workforce through a variety of channels and encourage open and direct communication.
We focus on driving employee engagement throughout our organization. We believe it is important to our success as an organization for our employees to understand how their work contributes to our overall performance. We communicate with our workforce through a variety of channels and encourage open and direct communication.
Nevertheless, the trucking industry remains subject to regulation by many federal and state governmental agencies, and these authorities have broad powers over matters ranging from the authority to engage in motor carrier operations, motor carrier registration, driver hours of service, safety and fitness of transportation equipment and drivers, insurance requirements, fuel efficiency and emissions standards, and the transportation and handling of hazardous materials.
Nevertheless, the trucking industry remains subject to regulation by many federal, state and local governmental agencies, and these authorities have broad powers over matters ranging from the authority to engage in motor carrier operations, motor carrier registration, driver hours of service, safety and fitness of transportation equipment and drivers, insurance requirements, employment practices, taxation, data privacy and security, financial reporting, fuel efficiency and emissions standards and the transportation and handling of hazardous materials.
As a result, we plan to continue to invest in new terminals, in our tractor and trailer fleet and in new technology to enable us to efficiently handle the increased freight flows we anticipate to and from new and existing markets.
As a result, we plan to continue to invest in new terminals, in our tractor and trailer fleet and in new technology to enable us to efficiently handle the increased volume we anticipate within new and existing markets.
Norwood served in various executive roles from 2008 to 2020 at Ingersoll Rand, including as Vice President, Human Resources. Officers are appointed by the Board of Directors of Saia, Inc. (the Board) and serve at the discretion of the Board. With the exception of Mr.
Norwood served in various executive roles from 2008 to 2020 at Ingersoll Rand, including as Vice President, Human Resources. Officers are appointed by the Board of Directors of Saia, Inc. and serve at the discretion of the Board. With the exception of Mr. Holzgrefe, none of the officers of the Company are subject to an employment agreement with the Company.
Human Capital We believe our success depends on the strength of our workforce. Our Executive Vice President and Chief Human Resources Officer, reporting to our President and Chief Executive Officer, is responsible for developing and executing our human capital strategy. These responsibilities include recruiting, hiring, training and retention, as well as the development of our compensation and benefits programs.
Our Executive Vice President and Chief Human Resources Officer, reporting to our President and Chief Executive Officer, is responsible for developing and executing our human capital strategy. These responsibilities include recruiting, hiring, training and retention, as well as the development of our compensation and benefits programs.
In 2021, the average Saia LTL Freight shipment weighed approximately 1,397 pounds and traveled an average distance of approximately 913 miles. Industry The trucking industry consists of three segments: private fleets and two “for-hire” carrier groups. The private carrier segment consists of fleets owned and operated by shippers who move their own goods.
In 2022, the average Saia LTL Freight shipment weighed approximately 1,422 pounds and traveled an average distance of approximately 904 miles. Industry The trucking industry consists of three segments: a private fleet segment and two “for-hire” carrier segments. The private fleet segment consists of fleets owned and operated by shippers who move their own goods.
At the most basic level, a truckload carrier can be started with capital for rolling stock (a tractor and a trailer), insurance, a driver and little else. As truckload carriers become larger in scale, capital is needed for technology, infrastructure and some limited facilities.
The truckload segment is comprised of several major carriers and numerous small entrepreneurial players. At the most basic level, a truckload carrier can be started with capital for rolling stock (a tractor and a trailer), insurance, a driver and little else. As truckload carriers become larger in scale, capital is needed for technology, infrastructure and some limited facilities.
It is a corporate priority to continuously emphasize the importance of safe operations to reduce both the frequency and severity of injuries and accidents.
Our most valuable resource is our employees. It is a corporate priority to continuously emphasize the importance of safe operations to reduce both the frequency and severity of injuries and accidents.
Commitment to service quality is valued by customers and allows us to charge fair compensation for our services and positions us to improve market share. Continue to focus on improving operating efficiencies. Saia has operating initiatives focused on continuing to improve efficiency, including by optimizing our linehaul scheduling and pick-up and delivery operations.
Customers value commitment to service quality, which allows us to charge fair compensation for our services and positions us to improve market share. Continue to focus on improving operating efficiencies. We have operating initiatives focused on continuing to improve efficiency, including optimizing our linehaul scheduling and pick-up and delivery operations.
As an added benefit for employees, we offer a 401(k) savings plan with a Company match as well as paid vacation and personal days. These benefits are in addition to the Company’s market-based compensation program designed to maintain competitive compensation packages for all employees.
The program has an annual participation rate of approximately 78% of our employee base. As an added benefit for employees, we offer a 401(k) savings plan with a Company match as well as paid vacation and personal days. These benefits are in addition to the Company’s market-based compensation program designed to maintain competitive compensation packages for all employees.
Approximately 51% of all employees have self-identified as Hispanic or Latino, Native American, Pacific Islander, Asian, Black or African American, or of two or more races. Additionally, nearly 78% of our workforce is under the age of 55, while our driver average tenure is eight years.
Approximately 46% of our employees have self-identified as Hispanic or Latino, Native American, Pacific Islander, Asian, Black or African American, or of two or more races. Additionally, more than 75% of our workforce is under the age of 55, while our driver average tenure is seven years.
We assess the competitiveness of our compensation by principal job classifications in markets across the country through periodic compensation surveys. Company-wide wage increases are also implemented from time-to-time, including one during 2022, which awarded 4.3% to employees in July 2022. In recent years, due to competition for quality employees, the compensation divide between union and non-union carriers has closed dramatically.
We assess the competitiveness of our compensation by principal job classifications in markets across the country through periodic compensation surveys. Company-wide wage increases are also implemented from time-to-time, including an approximate 4.1% wage increase in July 2023, excluding executives. In recent years, due to competition for quality employees, the compensation divide between union and non-union carriers has closed dramatically.
CARB’s Advanced Clean Truck regulation is designed to ensure that zero-emission vehicles are brought to market in California. That regulation requires manufacturers to sell zero-emission trucks as an increasing percentage of their annual California sales starting with model year 2024. By 2035, zero-emission truck/chassis sales must account for 40% of truck tractor sales in the state.
That regulation requires manufacturers to sell zero-emission trucks as an increasing percentage of their annual California sales starting with model year 2024. By 2035, zero-emission truck/chassis sales must account for 40% of truck tractor sales in the state.
Our 12,300 union-free employees are comprised of about 50% licensed commercial drivers, about 24% dock workers (approximately one-quarter of whom are part-time) and the remaining 26% work in sales, technology and administration to support our business. Of Saia’s workforce, approximately 88% are male.
Our nearly 14,000 union-free employees are comprised of about 50% licensed commercial drivers, about 25% dock workers (approximately one-quarter of whom are part-time) and the remaining 25% work in sales, technology and administration to support our business. Approximately 88% of our workforce is male.
Although we have programs in place designed to monitor and control environmental risks and to promote compliance with applicable environmental laws and regulations, violations of applicable environmental laws or regulations or spills or other accidents involving hazardous substances can still occur and may subject us to cleanup costs, liabilities not covered by insurance, substantial fines or penalties and to civil and criminal liability, any of which could adversely affect our financial condition, results of operations, liquidity and cash flows.
Violations of applicable environmental laws or regulations or spills or other accidents involving hazardous substances may subject us to cleanup costs, liabilities not covered by insurance, substantial fines or penalties and to civil and criminal liability, any of which could adversely affect our financial condition, results of operations, liquidity and cash flows.
As part of our ongoing replacement and growth of the tractor fleet, we are adding accident avoidance technology in our new over-the-road tractors, including active braking assistance, adaptive cruise control, lane departure warning systems and roll stability control.
As part of our ongoing replacement and growth of our tractor fleet, we are adding accident avoidance technology in our new over-the-road tractors, including active braking assistance, adaptive cruise control, lane departure warning systems and roll stability control. This emphasis on safe operations is important to protect our employees and the communities in which we operate.
In 2022, Saia generated revenue of $2.8 billion and operating income of $470.5 million. In 2021, Saia generated revenue of $2.3 billion and operating income of $335.1 million. In 2022, the average Saia LTL Freight shipment weighed approximately 1,422 pounds and traveled an average distance of approximately 904 miles.
In 2023, Saia generated revenue of $2.9 billion and operating income of $460.5 million compared to revenue of $2.8 billion and operating income of $470.5 million in 2022. In 2023, the average Saia LTL Freight shipment weighed approximately 1,386 pounds and traveled an average distance of approximately 894 miles.
Customers tend to reduce shipments after the winter holiday season and our operating expenses tend to be higher as a percent of revenue in the winter months primarily due to lower capacity utilization and weather effects.
Customers tend to reduce shipments after the winter holiday season, and our operating expenses tend to be higher as a percent of revenue in the winter months primarily due to lower capacity utilization and weather effects. Generally, the first quarter is the weakest quarter while the second and third quarters are the strongest quarters in terms of revenue and profit.
Business Strategy Saia has grown historically through a combination of organic growth and geographic integration or “tuck-in” acquisitions of smaller trucking and logistics companies. More recently Saia has grown largely through organic growth. Key elements of our business strategy include: Continue to focus on operating safely. Our most valuable resource is our employees.
Business Strategy Saia has grown historically through a combination of organic growth and geographic integration or “tuck-in” acquisitions of smaller trucking and logistics companies. In recent years, Saia has largely grown through organic growth, which it intends to continue going forward. Key elements of our business strategy include: Continue to focus on operating safely.
As a result, LTL carriers require expansive networks of pick-up and delivery operations around local freight terminals and linehaul operations to transport freight between the local terminals. The truckload segment is the largest portion of the “for-hire” truck transportation market.
As a result, LTL carriers require expansive 3 networks of pick-up and delivery operations around local freight terminals and linehaul operations to transport freight between the local terminals. The truckload segment is the largest portion of the “for-hire” carrier market. Truckload carriers primarily transport large shipments from origin to destination with no intermediate handling.
CARB has also proposed the Advanced Clean Fleets regulation that would mandate that operators of 50 or more trucks must operate fleets comprised of an increasing percentage of zero-emission vehicles. As proposed, the phase-in period would be from 2027 to 2045, depending on the class of vehicle. 9 Food and Drug Administration.
In April 2023, CARB adopted the Advanced Clean Fleets regulation mandating that operators of 50 or more trucks must operate fleets comprised of an increasing percentage of zero-emission 9 vehicles. The regulation includes a phase-in period from 2027 to 2045, depending on the class of vehicle.
As a transportation provider of foodstuffs, we are subject to rules and regulations issued by the Food and Drug Administration (FDA) to provide for the security of food and foodstuffs throughout the supply chain.
Other states have signed a multi-state agreement to require 100% sales of zero-emission trucks by 2050. Food and Drug Administration. As a transportation provider of foodstuffs, we are subject to rules and regulations issued by the Food and Drug Administration (FDA) to provide for the security of food and foodstuffs throughout the supply chain.
Saia is committed to fostering a work environment that values and promotes diversity and inclusion. We pride ourselves in the fair treatment of our employees and strive to have a high level of employee satisfaction and productivity. We use periodic employee engagement surveys as well as compensation surveys to measure our success in meeting our employees' needs in the workplace.
We are committed to fostering a work environment that values and promotes diversity, equity and inclusion. We pride ourselves in the fair treatment of our employees and strive to have a high level of employee satisfaction and productivity.
As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being. We provide our employees with access to affordable and convenient medical programs intended to meet their physical and emotional needs and the needs of their families, with 94% of employees participating.
As the success of our business is fundamentally connected to the well-being of our people, we offer benefits that support their physical, financial and emotional well-being.
Holzgrefe, none of the officers of the Company are subject to an employment agreement with the Company. There are no family relationships between any executive officer and any other executive officer or director of Saia or its subsidiaries. 11
There are no family relationships between any executive officer and any other executive officer or director of Saia or its subsidiaries. 11
This element of our business strategy involves managing both the price we charge for our services and the mix of freight we transport to operate our network more profitably.
A safety first focus has the added benefit of helping to control inflationary insurance costs. 4 Manage pricing and business mix. This element of our business strategy involves managing both the price we charge for our services and the mix of freight we transport to operate our network more profitably.
We seek to promote workplace diversity and to create a spirit of inclusivity in our Company that encourages authenticity, celebrates our differences and supports collaborative effort gathered from the unique experiences and diverse perspectives of our employees. In 2021, we launched a Diversity Council offering a cross-functional employee perspective of diversity-related issues within our Company.
We use periodic employee engagement surveys as well as compensation surveys to measure our success in meeting our employees' needs in the workplace. We seek to promote workplace diversity and to create a spirit of inclusivity in our Company that encourages authenticity, celebrates our differences and supports collaborative effort gathered from the unique experiences and diverse perspectives of our employees.
Additionally, Saia strives to help employees lead healthier lives through a voluntary wellness program aimed at engaging employees to promote proactive evaluation, tracking and management of major health and wellness indicators, such as blood pressure, weight, and routine blood laboratory analysis. The program has an annual participation rate of approximately 74% of our employee base.
In addition to standard medical coverage, we offer eligible employees dental and vision coverage. Additionally, we strive to help employees lead healthier lives through a voluntary wellness program aimed at engaging employees to promote proactive evaluation, tracking and management of major health and wellness indicators, such as blood pressure, weight, and routine blood laboratory analysis.
Federal, state and municipal authorities have implemented and continue to implement anti-terrorism measures, including checkpoints and travel restrictions on large trucks. The Transportation Security Administration (TSA) and Customs and Boarder Protection (CBP) continue to focus on trailer security, driver identification, security clearance and border-crossing procedures.
The Transportation Security Administration (TSA) and Customs and Boarder Protection (CBP) continue to focus on trailer security, driver identification, security clearance and border-crossing procedures.
However, the lack of a network can subject their drivers to extended periods away from home, often resulting in higher driver turnover and periodic driver shortages. The truckload segment is comprised of several major carriers and numerous small entrepreneurial players.
Because truckload carriers do not require an expansive network to provide point-to-point service, the overall cost structure of truckload carriers is typically lower and more variable relative to LTL carriers. However, the lack of a network can subject their drivers to extended periods away from home, often resulting in higher driver turnover and periodic driver shortages.
We plan to further pursue geographic expansion and build additional density in markets to promote profitable growth and improve our customer value proposition over time.
We believe we continue to be well positioned to manage costs, utilize assets and explore additional opportunities for cost savings. Continue growing the organization through an enhanced geographic terminal footprint. We plan to further pursue geographic expansion and build additional density in markets to promote profitable growth and improve our customer value proposition over time.
To foster retention, employees with ten or more years of service do not pay premiums for participation in the medical program. In addition to standard medical coverage, we offer eligible employees dental and vision coverage.
We provide our employees with access to affordable and convenient medical programs intended to meet their physical and emotional needs and the needs of their families, with 95% of employees participating in our benefits programs. To foster retention, employees with ten or more years of service do not pay premiums for participation in the medical program.
In December 2021, the California Air Resources Board (CARB) adopted more stringent standards to reduce nitrogen oxide emissions by heavy-duty engines. CARB has also adopted regulations to accelerate large-scale transition in California to zero-emission medium and heavy-duty trucks, including trucks of a type used in our operations in California.
CARB has also adopted regulations to accelerate large-scale transition in California to zero-emission medium and heavy-duty trucks, including trucks of a type used in our operations in California. CARB’s Advanced Clean Truck regulation is designed to ensure that zero-emission vehicles are brought to market in California.
Generally, the first quarter is the weakest quarter while the second and 5 third quarters are the strongest quarters in terms of revenue and profit. Quarterly profitability is also impacted by the timing of salary and wage increases, and general rate increases, which have varied over the years.
Quarterly profitability is also impacted by the timing of salary and wage increases and general rate increases, which have varied over the years. Human Capital We believe our success depends on the strength of our workforce.
These investments have reduced the age of Saia’s fleet, improved fuel economy, reduced carbon emissions, enhanced safety and supported Saia’s plans for additional volume growth. Saia has also invested substantially in technology, training and business processes to enhance the Company’s ability to monitor and manage customer service, safety, operations and profitability.
The investments have provided us improved fuel economy, enhanced safety features across the fleet and reduced carbon emissions. We have also made investments in technology to support our growth, including investments in network optimization, data analytics around operations and profitability, customer service, training and business processes.
Although carriers are not currently mandated to participate, we may participate in SDAP to help address driver shortages in the future. Participation in the program may affect our delivery times, increase our cost of operations, and affect the costs of transportation to maintain compliance. Department of Homeland Security.
In response to this requirement, the FMCSA established the Safe Driver Apprenticeship Pilot Program (SDAP) in January 2022. Although carriers are not currently mandated to participate, we may participate in SDAP to help address driver shortages in the future.
The focus began with the Northeast and includes additional investments in density and service in our legacy geographies. Since that time the Company has opened 41 new terminals. Over the past five years, Saia has invested in excess of $1 billion in capital expenditures, primarily for revenue equipment, real estate and technology.
At December 31, 2023, Saia LTL Freight owned approximately 6,500 tractors and 22,100 trailers, including equipment acquired with finance leases. Over the past five years, Saia has invested in excess of $1.5 billion in capital expenditures, primarily for real estate, revenue equipment and technology.
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At December 31, 2022, Saia LTL Freight owned approximately 6,200 tractors and 20,800 trailers, including equipment acquired with finance leases. In May 2017, Saia initiated a strategy to provide direct service to the portions of the continental United States not then serviced by the Company.
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The real estate investments have been made to support Saia’s long-term strategy of expanding our footprint in both new and existing markets in order to be closer to our customers and support our goals to gain market share. Equipment and technology investments have been made to support this growth as well as improve our fleet.
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Truckload carriers primarily transport large shipments from origin to destination with no intermediate handling. 3 Because truckload carriers do not require an expansive network to provide point-to-point service, the overall cost structure of truckload carriers is typically lower and more variable relative to LTL carriers.
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In January 2024 Saia closed on the purchase of 17 freight terminals and acquired leases for an additional 11 terminals through the Chapter 11 bankruptcy proceedings of Yellow Corporation. Over time Saia intends to integrate these terminals into its network to allow for more direct service to the customer.
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This emphasis on safe operations is focused not only on protecting our employees and the communities in which we operate, but with the continued escalation of commercial insurance and healthcare costs, it is important to maintain and improve stockholder returns. Manage pricing and business mix.
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Saia's commitment to diversity, equity, and inclusion is a cornerstone of our organizational culture, exemplified by the establishment of the Diversity, Equity, and Inclusion Council in 2021 and later transitioning to a Diversity, Equity, and Inclusion Steering Committee emphasizing the enhancement of representation, retention, and overall engagement within Saia.
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We believe Saia continues to be well positioned to manage costs and utilize assets. We believe we will continue to see new opportunities for cost savings. Continue growing the organization through an enhanced geographic terminal footprint.
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Our Steering Committee embodies a cross-functional perspective on diversity-related issues, striving to promote a culture where individual differences are respected, and all employees are valued for their contributions. Through continuous examination of processes and systems, the Committee ensures the encouragement of attraction, engagement, development, and retention of a diverse workforce through inclusive leadership principles. Employee Engagement.
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The goal of the leaders in our Company and of the Council is to promote a culture where individual differences are respected and all employees are valued for the skills and contributions they bring to the business.
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Participation in the program may affect our delivery times, increase our cost of operations, and affect the costs of transportation to maintain compliance. Department of Homeland Security. Federal, state and municipal authorities have implemented and continue to implement anti-terrorism measures, including checkpoints and travel restrictions on large trucks.
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The Council is responsible for continually examining the processes and systems in place to ensure that attraction, engagement, development and retention of a diverse workforce is encouraged by inclusive leadership principles. Engagement. We focus on driving employee engagement throughout our organization.
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In April 2023, the EPA proposed a new rule under the Clean Trucks Plan that would implement more stringent standards to reduce greenhouse gas emissions from heavy-duty vehicles by reducing carbon emissions and increasing use of zero-emission vehicle technology.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, there does not appear to be sufficient infrastructure in place to support an electric vehicle fleet operation throughout our current terminal network. If zero-emission vehicles are not available or not commercially viable for the less-than-truckload market, we may be required to modify or curtail our operations in California.
Biggest changeAt this point, there are virtually no zero-emissions vehicles widely available that are suitable replacements for current technology used in less-than-truckload operations. In addition, there does not appear to be sufficient infrastructure in place to support an electric vehicle fleet operation throughout our current terminal network.
Factors that could cause fluctuation of our stock price include, but are not limited to, the following: • Actual or anticipated variations in our earnings, financial or operating performance or liquidity, or those of other companies in our industry; • Changes in recommendations or projections of research analysts who follow our stock or the stock of other companies in our industry; • Failure to meet the earnings projections of research analysts who follow our stock; • Changes in general economic and capital market conditions, including general market price declines or market volatility; • Reactions to our regulatory filings and announcements related to our business; • Operating and stock performance of other companies in our industry; • Actions by government regulators; • Litigation involving our company, our industry or both; • News reports or trends, concerns and other issues related to us or our industry, including changes in regulations; and • Other factors described in this “Risk Factors” section.
Factors that could cause fluctuation of our stock price include, but are not limited to, the following: • Actual or anticipated variations in our earnings, financial or operating performance or liquidity, or those of other companies in our industry; • Changes in recommendations or projections of research analysts who follow our stock or the stock of other companies in our industry; • Failure to meet the earnings projections of research analysts who follow our stock; • Changes in general economic and capital market conditions, including general market price declines or market volatility; • Reactions to our regulatory filings and announcements related to our business; • Operating and stock performance of other companies in our industry; • Actions by government regulators; • Litigation involving our company, our industry or both; • News reports or trends, concerns and other issues related to us or our industry; and • Other factors described in this “Risk Factors” section.
These factors include the following: • competition with many other transportation service providers of varying types including LTL carriers, TL and parcel carriers, as well as non-asset based logistics and freight brokerage companies, some of whom have more equipment, a broader coverage network, a wider range of services and greater capital resources than we do or have other competitive advantages; • transportation companies periodically reduce their prices to gain business, especially during economic recessions or times of reduced growth rates in the economy which may limit our ability to maintain or increase prices or grow our business; • many customers reduce the number of carriers they use by selecting approved transportation service providers, periodically accepting bids from multiple carriers for their shipping needs, or by developing their own or using alternative delivery mechanisms, and these practices may depress prices or result in the loss of business; • the trend towards consolidation in the surface transportation industry may create other large carriers with greater financial resources than us and other competitive advantages due to their size; • disruptive technologies, including driverless trucks, electric vehicles, alternative fuels, artificial intelligence applications and software applications to monitor supply and demand may significantly alter historical business models of the trucking industry, potentially leading to increased capital expenditures and emergence of new competitors, some of whom may have greater financial resources than us and other advantages due to their size; • the trend toward increased sales in the e-commerce sector as opposed to the traditional brick and mortar store model could threaten the continued operation of our retail customers, which could reduce the demand for our services and adversely impact our revenues; and 12 • technological advances require increased investments to remain competitive, and we may not utilize enough advanced technology, select the correct technology solutions or convince our customers to accept higher prices to cover the cost of these investments.
These factors include the following: • competition with many other transportation service providers of varying types including LTL carriers, truckload and parcel carriers, as well as non-asset based logistics and freight brokerage companies, some of whom have more equipment, a broader coverage network, a wider range of services and greater capital resources than we do or have other competitive advantages; • transportation companies periodically reduce their prices to gain business, especially during economic recessions or times of reduced growth rates in the economy which may limit our ability to maintain or increase prices or grow our business; • many customers reduce the number of carriers they use by selecting approved transportation service providers, periodically accepting bids from multiple carriers for their shipping needs, or by developing their own or using alternative delivery mechanisms, and these practices may depress prices or result in the loss of business; • the trend towards consolidation in the surface transportation industry may create other large carriers with greater financial resources than us and other competitive advantages due to their size; • disruptive technologies, including driverless trucks, electric vehicles, alternative fuels, artificial intelligence (AI) applications and software applications to monitor supply and demand may significantly alter historical business models of the trucking industry, potentially leading to increased capital expenditures and emergence of new competitors, some of whom may have greater financial resources than us and other advantages due to their size; • the trend toward increased sales in the e-commerce sector as opposed to the traditional brick and mortar store model could threaten the continued operation of our retail customers, which could reduce the demand for our services and adversely impact our revenues; and 12 • technological advances require increased investments to remain competitive, and we may not utilize enough advanced technology, select the correct technology solutions or convince our customers to accept higher prices to cover the cost of these investments.
Higher tax rates, claims, audits, investigations or legal proceedings involving taxing authorities could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. The FMCSA rules on motor carrier driver hours of service limit the maximum number of hours a driver may be on duty between mandatory off-duty hours.
Higher tax rates, claims, audits, investigations or legal proceedings involving 22 taxing authorities could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. The FMCSA rules on motor carrier driver hours of service limit the maximum number of hours a driver may be on duty between mandatory off-duty hours.
Severe weather events and natural disasters, such as harsh winter weather, floods, hurricanes, tornadoes or earthquakes could adversely impact our performance by increasing costs, reducing demand, disrupting our operations or the operations of our customers or damaging or destroying our assets, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
Severe weather events and natural disasters, such as harsh winter weather, floods, hurricanes, tornadoes, storms or earthquakes could adversely impact our performance by increasing costs, reducing demand, disrupting our operations or the operations of our customers or damaging or destroying our assets, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
We must maintain certain financial and other restrictive covenants under our credit agreement, including among others, a maximum consolidated net lease adjusted leverage ratio. If we fail to comply with any of the covenants under our credit agreement, we will be in default under the agreement which could cause cross-defaults under other financial arrangements.
We must maintain certain financial and other restrictive covenants under our credit agreements, including among others, a maximum consolidated net lease adjusted leverage ratio. If we fail to comply with any of the covenants under our credit agreements, we will be in default under the agreement which could cause cross-defaults under other financial arrangements.
Moreover, as a result of general macroeconomic factors and an increasingly competitive labor market, we are experiencing difficulty in hiring sufficient qualified employees to fill all available positions. The most illustrative example is the significant shortfall of qualified drivers in the trucking industry; however, the labor shortage is not limited to qualified drivers.
Moreover, as a result of general macroeconomic factors and the increasingly competitive labor market, we are experiencing difficulty hiring sufficient qualified employees to fill all available positions. The most illustrative example is the significant shortfall of qualified drivers in the trucking industry; however, the labor shortage is not limited to qualified drivers.
Age demographics, hours of service rules, the legalization and growing recreational use of marijuana and regulatory requirements, including the Compliance Safety Accountability program and the Commercial Driver's License Drug and Alcohol Clearinghouse of the FMCSA, have contributed to the reduction in the number of eligible drivers and may continue to do so in the future.
Age demographics, hours of service rules, the legalization and growing recreational use of marijuana and regulatory requirements, including the Compliance Safety Accountability program (CSA) and the Commercial Driver’s License Drug and Alcohol Clearinghouse of the FMCSA, have contributed to the reduction in the number of eligible drivers and may continue to do so in the future.
The regulations have increased prices for tractors and maintenance costs and may continue to do so in the future. In addition, as we purchase new revenue equipment as part of our normal replacement cycle each year, we rely on the used equipment market to dispose of our older equipment.
Current regulations have increased prices for tractors and maintenance costs and may continue to do so in the future. In addition, as we purchase new revenue equipment as part of our normal replacement cycle each year, we rely on the used equipment market to dispose of our older equipment.
In addition, we may not realize sufficient revenues or profits from our infrastructure investments. 16 Ongoing supply chain disruptions have delayed equipment deliveries and may increase costs or reduce operating capacity or expansion. We do not manufacture any of the equipment or technology hardware used in our business.
In addition, we may not realize sufficient revenues or profits from our infrastructure investments. Ongoing supply chain disruptions have delayed equipment deliveries and may increase costs or reduce operating capacity or expansion. We do not manufacture any of the equipment or technology hardware used in our business.
The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires our management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of income and expense during the reported periods.
The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires our management to make significant estimates and assumptions that affect the reported amounts 19 of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of income and expense during the reported periods.
This trend could adversely affect our ability to obtain suitable 20 insurance coverage, could significantly increase our cost of obtaining such coverage or could subject us to significant liabilities for which no insurance is in place, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
This trend could adversely affect our ability to obtain suitable insurance coverage, could significantly increase our cost of obtaining such coverage or could subject us to significant liabilities for which no insurance is in place, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
We have experienced, and may continue to experience, an inability to obtain, or delays in the delivery of, equipment necessary for operations, including tractors, trailers and other equipment that contain microchips, as a result of manufacturing delays, supply chain disruptions and microchip shortages.
We have experienced, and may continue to experience, an inability to obtain, or delays in the delivery of, equipment necessary for operations, including tractors, trailers and 17 other equipment that contain microchips, as a result of manufacturing delays, supply chain disruptions and microchip shortages.
In recent years, several insurance companies have completely stopped offering coverage to trucking companies, have significantly reduced the amount of coverage they offer or have significantly raised premiums as a result of increases in the severity of automobile liability claims and sharply higher costs of settlements and verdicts.
In recent years, several insurance companies have completely stopped offering coverage to trucking companies for automobile liability claims, have significantly reduced the amount of coverage they offer or have significantly raised premiums as a result of increases in the severity of automobile liability claims and sharply higher costs of settlements and verdicts.
Disasters created by extreme weather conditions could reduce the demand for our services, cause significant damage to or destruction of our facilities and equipment or the infrastructure we need to operate, which could result in temporary or long-term closures of our facilities and disruptions to our operations.
Disasters created by extreme weather or climate conditions could reduce the demand for our services and cause significant damage to or destruction of our facilities and equipment or the infrastructure we need to operate, which could result in temporary or long-term closures of our facilities and disruptions to our operations.
The continued impacts of climate change could materially adversely affect our financial condition, results of operations, liquidity and cash flows. We face risks related to the geographic concentration of our customers. We have operations throughout the South, Southwest, Midwest, Pacific Northwest, West and Northeast.
The continued impacts of climate change could materially adversely affect our financial condition, results of operations, liquidity and cash flows. 18 We face risks related to the geographic concentration of our customers. We have operations throughout the South, Southwest, Midwest, Pacific Northwest, West and Northeast.
Investors and customers are increasingly focused on non-financial factors when evaluating and selecting investments and companies with which to do business, the effect of which is demonstrated by the growth of Environmental, Social & Governance (ESG) metrics. This focus is rapidly growing and evolving.
Investors and customers are increasingly focused on non-financial factors when evaluating and selecting investments and companies with which to do business, the effect of which is demonstrated by the growth of Environmental, Social & Governance metrics. This focus is rapidly growing and evolving.
Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us. Our Restated Certificate of Incorporation and By-laws contain certain provisions which may have the effect of delaying, deferring or preventing a change of control of the Company.
Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of the Company. Our Restated Certificate of Incorporation and By-laws contain certain provisions which may have the effect of delaying, deferring or preventing a change of control of the Company.
The transportation industry is affected by business risks that are largely out of our control. Businesses operating in the transportation industry are affected by risks that are largely out of their control, any of which could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
The transportation industry is affected by business risks that are largely out of our control. Businesses operating in the transportation industry are affected by risks that are largely out of our control, any of which could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
This expansion has required and will continue to require significant investments in purchased or leased terminals, equipment (including the purchase of new tractors and trailers), technology, employees and other related start-up costs to facilitate our growth plans.
Our expansion has required and will continue to require significant investments in purchased or leased terminals, equipment (including the purchase of new tractors and trailers), technology, employees and other related start-up costs to facilitate our growth plans.
These regulations could increase the costs of replacing and maintaining tractors, cause us to incur additional taxes, direct costs and capital expenditures to make changes to our operations in order to comply with any new regulations and 22 customer requirements.
These regulations could increase the costs of replacing and maintaining tractors, cause us to incur additional taxes, direct costs and capital expenditures to make changes to our operations in order to comply with any new regulations and customer requirements.
An increase in the cost of healthcare benefits could have a negative impact on our business. We maintain and sponsor very competitive health insurance and other benefits for our employees and their dependents to attract and retain our employees.
An increase in the cost of healthcare benefits could have a negative impact on our business. We maintain and sponsor competitive health insurance and other benefits for our employees and their dependents to attract and retain our employees.
Complying with the new data protection laws may increase our compliance costs or require alterations to our data handling practices. The increasing scope and complexity and the uncertainty of the interpretation and enforcement of these laws create regulatory risk.
Complying with data protection laws may increase our compliance costs or require alterations to our data handling practices. The increasing scope and complexity and the uncertainty of the interpretation and enforcement of these laws create regulatory risk.
To the extent the Company incurs one or more significant claims not covered by insurance, either because the claims are within our self-insured layer or because they exceed our total insurance coverage, our financial condition, results of operation, and liquidity could be materially and adversely affected. 14 Furthermore, insurance companies, as well as certain states, require collateral in the form of letters of credit or surety bonds for the estimated exposure of claims within our self-insured retentions.
To the extent the Company incurs one or more significant claims not covered by insurance, either because the claims are within our self-insured layer or because they exceed our total insurance coverage, our financial condition, results of operations, and liquidity could be materially and adversely affected. 14 Furthermore, insurance companies, as well as certain states, require collateral in the form of letters of credit or surety bonds for the estimated exposure of claims within our self-insured retentions.
We cannot predict the impact that federal or state healthcare legislation or regulation could have on our operations, but it is possible that healthcare benefits and administration costs could 19 become increasingly cost prohibitive, either forcing us to reduce our benefits program (making it more difficult to attract and retain qualified employees) or require us to pay the higher costs.
We cannot predict the impact that federal or state healthcare legislation or regulation could have on our operations, but it is possible that healthcare benefits and administration costs could become increasingly cost prohibitive, forcing us to either reduce our benefits program (making it more difficult to attract and retain qualified employees) or pay the higher costs.
These risks include health of the economy, weather and other seasonal factors, excess capacity in the transportation industry, supply chain disruptions, labor shortages, decline in U.S. manufacturing, acts of terrorism, health epidemics, interest rates, inflation, fuel costs, fuel taxes, license and registration fees, healthcare costs, insurance premiums and coverage availability.
These risks include health of the economy, weather and other seasonal factors, excess capacity in the transportation industry, supply chain disruptions, labor shortages, decline in U.S. manufacturing, armed conflicts, acts of terrorism, health epidemics, interest rates, inflation, fuel costs, fuel taxes, license and registration fees, healthcare costs, insurance premiums and coverage availability.
A default under our credit agreement could cause a material adverse effect on our financial condition, results of operations, liquidity and cash flows. We are required to make significant estimates and assumptions in the preparation of our financial statements. These estimates and assumptions may not be accurate and are subject to change.
A default under our credit agreements could cause a material adverse effect on our financial condition, results of operations, liquidity and cash flows. We are required to make significant estimates and assumptions in the preparation of our financial statements. These estimates and assumptions may not be accurate and are subject to change.
The Company's operations are subject to a variety of other federal, state and local laws and regulations, including labor and employment, wage and hour and employee benefit laws and regulations, tax, environmental, health and safety, data privacy, anti-trust and securities laws and regulations. Compliance with these laws and regulations in onerous and expensive.
The Company’s operations are subject to a variety of other federal, state and local laws and regulations, including labor and employment, wage and hour and employee benefit laws and regulations, tax, environmental, health and safety, data privacy, anti-trust and securities laws and regulations. Compliance with these laws and regulations is onerous and expensive.
The CSA evaluations are used to rank carriers and individual drivers and to select carriers for audit and other interventions. If we receive unacceptable CSA scores, our relationships with our customers or our reputation could be damaged, which could result in decreased demand for our services.
The CSA evaluations are used to rank carriers and individual drivers and to select carriers for audit and other interventions or enforcement action. If we receive unacceptable CSA scores, our relationships with our customers or our reputation could be damaged, which could result in decreased demand for our services.
These provisions may inhibit fluctuations in the market price of our common stock that could result from takeover attempts. If we raise additional capital in the future, stockholders’ ownership in us could be diluted.
These provisions may inhibit fluctuations in the market price of our common stock that could result from takeover attempts. If we raise additional capital in the future, our stockholders’ ownership in the Company could be diluted.
If we are unable to attract and retain a sufficient number of qualified employees, we could be required to increase our compensation and benefits packages, or reduce our operations and face difficulty meeting customer demands, any of which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
If we are unable to attract and retain a sufficient number of qualified employees, we could be required to increase our compensation and benefits packages, amend our hiring standards or reduce our operations and face difficulty meeting customer demands, any of which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.
Damage caused by disasters could cause the 17 Company to incur significant expense for repair or replacement of damaged or destroyed facilities and equipment and increases in diesel fuel prices and insurance costs. This could also result in loss or damage to employee homes or being unable to relocate key employees.
Damage caused by disasters or climate conditions could cause the Company to incur significant expense for repair or replacement of damaged or destroyed facilities and equipment and increases in diesel fuel prices and insurance costs. This could also result in loss or damage to employee homes or being unable to relocate key employees.
State governments have enacted data protection laws, including the State of California’s California Consumer Privacy Act of 2018 as amended and extended by the California Privacy Rights Act in November of 2020. As a transportation and logistics provider, we collect and process significant amounts of customer data on a daily basis.
State governments have enacted and may enact in the future data protection laws, including the State of California’s California Consumer Privacy Act of 2018 as amended and extended by the California Privacy Rights Act in November of 2020. As a transportation and logistics provider, we collect and process significant amounts of customer data on a daily basis.
It is possible the increasing focus on social and sustainability matters could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Certain provisions of our governing documents and Delaware law could have anti-takeover effects. As a Delaware corporation, we are subject to certain Delaware anti-takeover provisions.
The increasing focus on social and sustainability matters could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Certain provisions of our governing documents and Delaware law could have anti-takeover effects. As a Delaware corporation, we are subject to certain Delaware anti-takeover provisions.
Each acquisition has numerous risks including: • difficulty in integrating the operations and personnel of the acquired company or unanticipated costs to support new business lines or separate legal entities; • disruption of our ongoing business, distraction of our management and employees from other opportunities and challenges due to integration issues; • additional indebtedness or the issuance of additional equity to finance future acquisitions, which could be dilutive to our stockholders; • potential loss of key customers or employees of acquired companies along with the risk of unionization of employees; • temporary depression in prices we charge certain customers in order to match existing customer pricing in the acquired company’s markets; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • potential impairment of tangible and intangible assets and goodwill acquired as a result of acquisitions; and • potential failure of the due diligence processes to identify significant issues with legal and financial liabilities and contingencies, among other things.
Each acquisition has numerous risks including: • difficulty in integrating the operations and personnel of the acquired company or unanticipated costs to support new business lines or separate legal entities; • unanticipated issues in the assimilation and consolidation of IT, communications, and other systems, including additional systems training and other labor inefficiencies; • disruption of our ongoing business, distraction of our management and employees from other opportunities and challenges due to integration issues; • additional indebtedness or the issuance of additional equity to finance future acquisitions, which could be dilutive to our stockholders; • potential loss of key customers or employees of acquired companies along with the risk of unionization of employees; • temporary depression in prices we charge certain customers in order to match existing customer pricing in the acquired company’s markets; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • potential impairment of tangible and intangible assets and goodwill acquired as a result of acquisitions; and • potential failure of the due diligence processes to identify significant issues with legal and financial liabilities and contingencies, among other things.
We also may not achieve the benefits that we anticipate from any new system or technology and a failure to do so could result in higher than anticipated costs or could impair our operating results. Technology and new market entrants may also disrupt the way we and our competitors operate.
We also may not achieve the benefits that we anticipate from any new system or technology and a failure to do so could result in higher than anticipated costs or could impair our results of operations. Technology and new market entrants may also disrupt the way we and our competitors operate.
Rapid and significant fluctuations in diesel fuel prices would reduce our profitability unless we are able to make the appropriate adjustments to our pricing strategy. Business and Operational Risks Ongoing insurance and claims expenses could significantly reduce and cause volatility in our earnings.
Rapid and significant fluctuations in diesel fuel prices could reduce our profitability unless we are able to make the appropriate adjustments to our pricing strategy. Business and Operational Risks Ongoing insurance and claims expenses could materially reduce and cause volatility in our earnings.
If internal funds are not available from our operations, we may be required to rely on the capital and credit markets to meet our financial commitments and short-term liquidity needs. Disruptions in the capital and credit markets could adversely affect our ability to draw on our bank revolving credit facility and obtain letters of credit required for our insurance programs.
If internal funds are not available from our operations, we may be required to rely on the capital and credit markets to meet our financial commitments and short-term liquidity needs. Disruptions in the capital and credit markets could adversely affect our ability to draw on our credit facilities and obtain letters of credit required for our insurance programs.
These include recessionary economic cycles and downturns in customer business cycles, global uncertainty and instability, inflation, changes in U.S. social, political, and regulatory conditions, tariff and trade discussions and/or a disruption of financial markets.
These conditions include recessionary economic cycles and downturns in customer business cycles, labor and supply shortages, global uncertainty and instability, inflation, changes in U.S. social, political, and regulatory conditions, tariff and trade discussions and/or a disruption of financial markets.
If acceleration occurs, we may have difficulty borrowing sufficient additional funds to refinance the accelerated debt or obtain required letters of credit, or we may have to issue securities which would dilute stock ownership. Even if new financing 18 is made available to us, it may not be available on acceptable terms.
If acceleration occurs, we may have difficulty borrowing sufficient additional funds to refinance the accelerated debt or obtain required letters of credit, or we may need to issue securities which would dilute stock ownership. Even if new financing is made available to us, the terms may not be acceptable.
There is no assurance that we will be successful at adding new markets or terminals as planned or that such markets or terminals will be profitable.
There can be no assurance that we will be successful at adding new markets or terminals as planned or that such markets or terminals will be profitable.
This unfavorable publicity could result in damage to our reputation and therefore materially adversely impact our operations and profitability. We may not make future acquisitions or, if we do, we may not realize the anticipated benefits of future acquisitions and integration of these acquisitions may disrupt our business and management. We may acquire additional businesses and operations in the future.
This unfavorable publicity could result in damage to our reputation and therefore materially adversely impact our operations and profitability. 20 We may not make future acquisitions or, if we do, we may not realize the anticipated benefits of future acquisitions and integration of these acquisitions may disrupt our business and management.
This could result in adverse impact to the available workforce, damage to or destruction of freight and tractors and trailers, cancellation of orders, and breaches of customer contracts leading to reduced revenue. The Company has previously experienced severe weather events, including hurricanes, floods and unseasonal snowstorms. Similar events could disrupt our facilities or operations.
Such events could result in a material adverse impact to the available workforce, damage to or destruction of freight and tractors and trailers, cancellation of orders, and breaches of customer contracts leading to reduced revenue. The Company has previously experienced severe weather events, including hurricanes, floods, storms and unseasonal snowstorms. Similar events could disrupt our facilities or operations.
Any of these could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Our credit agreement contains financial and other restrictive covenants and we may be unable to comply with these covenants. A default could cause a material adverse effect on our business.
Any of these could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Our credit agreements contain financial and other restrictive covenants and we may be unable to comply with these covenants. A default could cause a material adverse effect on our business.
The immediacy of certain social media outlets precludes us from having real-time control over postings related to Saia, whether matters of fact or opinion. Information distributed via social media could result in immediate unfavorable publicity for which we, like our competitors, do not have the ability to reverse.
The immediacy of certain social media outlets precludes us from having real-time control over postings related to the Company, whether matters of fact or opinion. Information distributed via social media could result in immediate unfavorable publicity that we, like our competitors, do not have the ability to reverse.
The Bureau of Labor Statistics reported that the Consumer Price Index increased 6.5 percent in 2022. Most of our operating expenses are sensitive to increases in inflation, including equipment prices, diesel fuel costs, insurance costs, real estate costs, employee wages and purchased transportation. Furthermore, inflation may generally increase costs for materials, supplies and services and capital.
The Bureau of Labor Statistics reported that the Consumer Price Index increased 3.4 percent in 2023. Most of our operating expenses are sensitive to increases in inflation, including equipment prices, diesel fuel costs, insurance costs, real estate costs, employee wages and purchased transportation. Furthermore, inflation may generally increase costs for materials, supplies and services and capital.
Historically, we have been able to offset significant diesel fuel price volatility through fuel surcharges and other pricing adjustments but we cannot be certain that we will be able to do so in the future. Fluctuations in our fuel surcharge recovery may result in fluctuations in our revenue.
Historically, we have been able to offset significant diesel fuel price volatility through fuel surcharges and other pricing adjustments but we may not be able to do so in the future. Fluctuations in our fuel surcharge recovery may result in fluctuations in our revenue.
We may experience shortages of qualified employees that could result in us not meeting customer demands, upward pressure on wages and benefits, underutilization of our truck fleet and/or use of higher cost purchased transportation which could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
We may experience shortages of qualified employees that could result in failure to meet customer demands, upward pressure on wages and benefits, underutilization of our truck fleet and/or use of higher cost purchased transportation, any of which could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
However, there is no assurance that we will be successful in identifying, negotiating, consummating or integrating any future acquisitions. Additionally, we may not realize the anticipated benefits of any future acquisitions.
We may acquire additional businesses and operations in the future. However, there is no assurance that we will be successful in identifying, negotiating, consummating or integrating any future acquisitions. Additionally, we may not realize the anticipated benefits of any future acquisitions.
We are dependent on cost and availability of qualified employees and purchased transportation. There is significant competition for qualified drivers within the trucking industry and attracting and retaining qualified drivers has become more challenging as the available pool of qualified drivers has been decreasing in recent years.
We are dependent on cost and availability of qualified employees and purchased transportation. There is significant competition for qualified drivers within the trucking industry and attracting and retaining qualified drivers has become more challenging as the available pool of qualified drivers has decreased.
Additionally, we anticipate net capital expenditures in 2023 in excess of $400 million, subject to the ongoing evaluation of market conditions. We depend on cash flows from operations, borrowings under our credit facilities and operating and finance leases.
Additionally, we anticipate net capital expenditures in 2024 in excess of $1 billion, subject to the ongoing evaluation of market conditions. We depend on cash flows from operations, borrowings under our credit facilities and operating and finance leases.
Our stock price, financial condition, results of operations, liquidity and cash flows could be materially adversely affected by an unfavorable outcome resulting from these risks and uncertainties. 25 Item 1B. Unresolved Staff Comments None.
Our stock price, financial condition, results of operations, liquidity and cash flows could be materially adversely affected by an unfavorable outcome resulting from these risks and uncertainties. 26 Item 1 B. Unresolved Staff Comments None. Item 1 C.
The price of such equipment may increase as a result of inflation, increased demand for or decreased supply of such equipment or because of regulations on newly manufactured tractors, such as regulations issued by the Environmental Protection Agency (EPA) and by various state agencies, particularly the California Air Resources Board (CARB), requiring progressive reductions in exhaust emissions.
The price of such equipment may increase as a result of inflation, increased demand for or decreased supply of such equipment, increased cost of materials and labor or because of current or potential future regulations on newly manufactured tractors, such as regulations issued by the Environmental Protection Agency (EPA) and by various state agencies, particularly the California Air Resources Board (CARB), requiring progressive reductions in exhaust emissions and a transition to zero-emission vehicles.
The Company and our customers are also vulnerable to the increasing impact of climate change and the potential impact of global warming. Volatile changes in weather conditions, including extreme heat or cold, could increase the risk of wildfires, floods, blizzards, hurricanes, tornadoes and other weather-related disasters.
The Company and our customers are also vulnerable to the increasing impact of climate change. Climate change may have an influence on the severity or frequency of extreme weather conditions. Volatile changes in weather conditions, including extreme heat or cold, could increase the risk of wildfires, floods, blizzards, hurricanes, tornadoes, storms and other weather-related disasters.
The extent to which the COVID-19 pandemic may impact the Company’s operational and financial performance remains uncertain and will depend on many factors outside the Company’s control, including the timing, extent and duration of the pandemic, the emergence of new variants, the development, availability, distribution and effectiveness of vaccines and treatments, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for products and services.
The extent to which a health epidemic, pandemic or outbreak may impact the Company’s operational and financial performance is uncertain and will depend on many factors outside the Company’s control, including the timing, extent and duration of the health event, the development, availability, distribution and effectiveness of vaccines or treatments, the imposition of protective public safety measures, and the impact of the outbreak on the global economy and demand for products and services.
Commencing in 2017 and continuing through 2022, we implemented a strategy of significantly expanding our geographic and terminal network. Over the past two years, we opened 18 new terminals, including 11 new terminals in 2022 and intend to open five new terminals during the first part of 2023.
Commencing in 2017 and continuing through 2023, we implemented a strategy of significantly expanding our geographic and terminal network. Over the past two years, we opened 18 new terminals, including 7 new terminals in 2023. We intend to open 15-20 new terminals in 2024.
Our expansion into new geographic territory, including the Northeast, could increase our overall risk of unionization. There can be no assurance that further unionization efforts will not occur in the future and that such efforts will be defeated.
Our expansion into new geographic territory, including the Northeast, and our acquisition of additional terminals previously operated by Yellow Corporation and its subsidiaries could increase our overall risk of unionization. There can be no assurance that further unionization efforts will not occur in the future and that such efforts will be defeated.
Our cybersecurity and technology infrastructure (including technology products and services provided to us for use in our business by outside providers, including software as a service, and cloud-based products and services) may experience errors, interruptions, delays or damage from a number of causes, including power and internet outages, hardware, software and network failures, computer viruses, malware or other destructive software, internal design, manual or usage errors, cyber-attacks, terrorism, workplace violence or wrongdoing, catastrophic events, natural disasters and severe weather conditions.
Our cybersecurity and technology infrastructure may experience errors, interruptions, delays or damage from a number of causes outside of our control including power and internet outages, hardware, software and network failures, computer viruses, malware or other destructive software, internal design, manual or usage errors, cyber-attacks, terrorism, workplace violence or wrongdoing, catastrophic events, natural disasters and severe weather conditions.
We have significant ongoing cash requirements that could limit our growth and affect profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms. Our business is highly capital intensive. Our net capital expenditures for 2022 were approximately $365.5 million inclusive of equipment acquired with finance leases.
We have significant ongoing cash requirements that could limit our growth and affect profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms. Our business is highly capital intensive. Our net capital expenditures for 2023 were approximately $437.2 million.
If our underlying estimates and assumptions prove to be incorrect or if events occur that require us to revise our previous estimates or assumptions, our financial condition and results of operations may be materially and adversely affected.
If our underlying estimates and assumptions prove to be incorrect or if events occur that require us to revise our previous estimates or assumptions, our financial condition and results of operations may be materially and adversely affected. If we are unable to retain our key employees, our business could be materially adversely impacted.
We have in the past been the subject of unionization efforts which have been defeated. However, the U.S. Congress could pass labor legislation or the National Labor Relations Board or other federal agencies could issue regulations or administrative changes, which could make it significantly easier for unionization efforts to be successful.
Congress could pass labor legislation, or the National Labor Relations Board or other federal agencies could issue regulations or administrative changes, which could make it significantly easier for unionization efforts to be successful.
CARB has also proposed the Advanced Clean Fleets regulation that would mandate that operators of 50 or more trucks must operate fleets comprised of an increasing percentage of zero-emission vehicles. As proposed, the phase-in period would be from 2027 to 2045, depending on the class of vehicle.
In April 2023, CARB adopted the Advanced Clean Fleets regulation, mandating that operators of 50 or more trucks must operate fleets comprised of an increasing percentage of zero-emission vehicles. The regulation includes a phase-in period from 2027 to 2045, depending on the class of vehicle.
In addition, we face other risks associated with international operations and relationships, which may include restrictive trade policies, anti-corruption law enforcement, the renegotiation of international trade agreements, and imposition of duties, taxes or government royalties imposed by foreign governments. Our results of operations may be affected by seasonal factors, harsh weather conditions and disasters caused by climate change.
In addition, we face other risks associated with international operations and relationships, which may include restrictive trade policies, anti-corruption law enforcement, the renegotiation of international trade agreements, and imposition of duties, taxes or government royalties imposed by foreign governments, any of which could adversely affect our business.
Costs we incur to defend or to satisfy a judgment or settle claims may not be covered by insurance or could exceed the amount of that coverage or increase our insurance costs and could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
Costs we incur to defend or to satisfy a judgment or settle claims may not be covered by insurance or could exceed the amount of that coverage or increase our insurance costs and could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. 21 The engines in our newer tractors are subject to emissions-control regulations that could substantially increase operating expenses and future regulations concerning emissions or fuel-efficiency may have a material adverse impact on our business.
Economic conditions, global political events, acts of terrorism, cyber security incidents, inflation, federal, state and local laws and regulations, natural or man-made disasters, adverse weather conditions and other external factors could adversely affect the cost and availability of diesel fuel.
General economic conditions, global political events, armed conflicts, acts of terrorism, cybersecurity incidents, inflation, federal, state and local laws and regulations, world supply and demand imbalances, changes in refining capacity, public and investor sentiment, natural or man-made disasters, adverse weather conditions and other external factors could adversely affect the cost and availability of diesel fuel.
Our operations are subject to seasonal trends and fluctuations common in the transportation industry, which can impact our revenues and operating results in one or more quarterly periods.
Our results of operations may be affected by seasonal factors, harsh weather conditions and disasters caused by climate change. Our operations are subject to seasonal trends and fluctuations common in the transportation industry, which can impact our revenues and operating results in one or more quarterly periods.
An economic downturn could lower demand for our services, decrease the price we can charge for our services, increase the incidence of customers’ inability to pay their accounts, or increase insolvency of our customers, any of which could materially adversely affect our financial condition, results of operations, liquidity and cash flows. 24 Disruptions in the credit markets, including in the availability and cost of short-term funds for liquidity and letter of credit requirements, may adversely affect our business and our ability to meet long-term commitments.
An economic downturn could lower demand for our services, decrease the price we can charge for our services, increase the incidence of customers’ inability to pay their accounts, or increase insolvency of 25 our customers, any of which could materially adversely affect on our financial condition, results of operations, liquidity and cash flows.
Additional future impacts on the Company may include material adverse effects on demand for the Company’s services, supply chain disruptions, the Company’s ability to execute its operating and strategic plans, and the Company’s profitability and cost structure.
Additional future effects on the Company could include material adverse impacts on demand for the Company’s services, the Company’s ability to execute its operating and strategic plans, the Company’s profitability and cost structure, and supply chain disruptions. 24 The Company faces risks from certain international conflicts that could adversely impact our business and financial results .
The regulations could also cause delays in our operations if they require the Company to be subject to a maximum emissions allowance and could result in losses to our revenue. We could also lose revenue if our customers divert business from us because we have not complied with their sustainability requirements.
The regulations could also cause delays in our operations if they require the Company to be subject to a maximum emissions allowance and could result in losses to our revenue.
Any disruption, failure or breach to our technology infrastructure (including technology products and services provided to us for use in our business by outside providers, including software as a service, and cloud-based products and services), including those impacting our computer systems and website, could adversely impact our customer service and revenues and result in increased risk of litigation or other costs.
Any disruption, failure or breach to our cybersecurity processes, technology controls or information technology infrastructure, including those impacting our computer systems and website, could adversely impact our customer service and revenues and result in increased risk of litigation or other costs.
If the Company is found to have violated laws and regulations, it could materially adversely affect the Company's business, reputation, results of operations and financial condition. We may incur unforeseen costs from new and existing data privacy laws. Our business is subject to increased legislative and regulatory efforts regarding data protection and transparency in how data is used and stored.
We may incur unforeseen costs from new and existing data privacy laws. Our business is subject to increased legislative and regulatory efforts regarding data protection and transparency in how data is used and stored.
These types of standards, practices and regulations could have a material adverse impact on our financial position, results of operations, liquidity and cash flows. Other Risks The Company's business, results of operations, financial condition and stock price have been adversely affected and could in the future be materially adversely affected by the COVID-19 pandemic.
These types of standards, practices and regulations could have a material adverse impact on our financial position, results of operations, liquidity and cash flows. Other Risks Health epidemics, pandemics and similar outbreaks have had, and may continue to have, material adverse effects on the Company’s business, results of operations, financial condition and stock price.
We are subject to increasing investor and customer sensitivity to social and sustainability issues and our failure to address these issues could impact the price of our stock and the demand for our services.
Ultimately, these or other factors associated with international conflicts could materially adversely affect our financial condition, results of operations, liquidity and cash flows. We are subject to increasing investor and customer sensitivity to social and sustainability issues and our failure to address these issues could impact the price of our stock and the demand for our services.
In the past, we have been able to obtain diesel fuel from various sources and in the desired quantities, but there can be no assurance that this will continue to be the case in the future and any shortage or interruption in the supply or distribution of diesel fuel could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
In the past, we have been able to obtain diesel fuel from various sources and in the desired quantities, but there can be no assurance that this will continue to be the case in the future.
There can be no assurance that 21 such taxes will not substantially increase or that new or revised forms of operating taxes or tax laws or regulations, such as those included in the Tax Cuts and Jobs Act, will not be imposed on the industry.
In addition, various federal and state authorities impose significant operating taxes on the transportation industry, including fuel taxes, tolls, excise and other taxes. There can be no assurance that such taxes will not substantially increase or that new or revised forms of operating taxes or tax laws or regulations, will not be imposed on the industry.
Either outcome could materially adversely impact our financial condition, results of operations, liquidity and cash flows. Our business depends in part on our strong reputation. We believe that Saia’s corporate reputation is a valuable asset. As use of social media becomes more prevalent, our susceptibility to risks related to adverse publicity, whether or not justified, increases.
Either outcome could materially adversely impact our financial condition, results of operations, liquidity and cash flows. Our business depends in part on our strong reputation. We believe that the Company’s corporate reputation and the positive image of our brand is a valuable asset.
The consequences of the Russia-Ukraine conflict such as embargoes, regional instability, geopolitical shift, access to natural gas, higher energy prices, potential retaliatory action by the Russian government, including nationalization of foreign businesses, increased tensions between the U.S. and other countries, and the extent of the conflict’s effect on the global economy, cannot be predicted, including the extent to which the conflict may heighten other risks disclosed herein.
The consequences of such conflicts include embargoes, regional instability, supply chain disruptions, disruptions of global financial markets, reduced access to natural gas and higher energy prices. The extent of a conflict's effect on the global economy cannot be predicted, including the extent to which the conflict may heighten other risks disclosed herein.
The future success of our business will continue to depend in part on our ability to retain our current management team and to attract, hire, develop and retain highly qualified personnel in the future. Competition for senior management is intense, and most members of our senior management do not have employment agreements.
We depend on the efforts and abilities of our senior management, and we believe their knowledge would be difficult to replicate. The future success of our business will continue to depend in part on our ability to retain our current management team and to recruit, hire, develop and retain highly qualified personnel in the future.
These costs, changes and loss of revenue could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. CSA could adversely affect our results of operations and ability to maintain or grow our business.
We could lose revenue if our customers divert business from us because we have not complied with their sustainability requirements. These costs, changes and loss of revenue could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
The Company has implemented policies and procedures designed to ensure compliance but there can be no assurance the Company's employees, contractors or agents will not violate such laws and regulations or the Company's policies and procedures.
There can be no assurance the Company’s employees, contractors or agents will not violate such laws and regulations or the Company’s policies and procedures. If the Company is found to have violated laws and regulations, it could materially adversely affect the Company’s business, reputation, results of operations and financial condition.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTop 20 Saia Terminals by Number of Doors at December 31, 2022 Location Own/Lease Doors Houston, TX Own 234 Atlanta, GA Own 217 Memphis, TN Own 200 Dallas, TX Own 174 Fontana, CA Own 162 Chicago, IL Lease 153 Indianapolis, IN (1) Own 147 Garland, TX Own 145 Harrisburg, PA (1) Own 130 Phoenix, AZ (1) Own 121 Nashville, TN Own 116 Cleveland, OH Lease 115 Charlotte, NC Own 108 Kansas City, MO (1) Own 102 Newburgh, NY Lease 101 Newark, NJ Lease 101 Grayslake, IL (1) Own 100 St.
Biggest changeTop 20 Saia Terminals by Number of Doors at December 31, 2023 Location Own/Lease Doors Houston, TX Own 234 Atlanta, GA Own 217 Memphis, TN Own 200 Salt Lake City, UT Own 185 Dallas, TX Own 174 Fontana, CA Own 162 Chicago, IL Lease 153 Buford, GA Own 152 Indianapolis, IN Own 147 Garland, TX Own 145 Edwardsville, KS Lease 134 Harrisburg, PA Own 130 Phoenix, AZ Own 121 Nashville, TN Own 116 Cleveland, OH Own 115 Charlotte, NC Own 108 Kansas City, MO Own 102 Newburgh, NY Lease 101 Newark, NJ Lease 101 Grayslake, IL Own 100
Item 2. Properties Saia is headquartered in Johns Creek, Georgia and has additional general offices in Houma, Louisiana, Boise, Idaho and Dallas, Texas. At December 31, 2022, Saia owned 98 service facilities, including the Houma, Louisiana general office, and leased 93 service facilities, including the Johns Creek, Georgia corporate office and the Boise, Idaho general office.
Item 2. Properties Saia is headquartered in Johns Creek, Georgia and has additional general offices in Houma, Louisiana and Boise, Idaho. At December 31, 2023, Saia owned 111 service facilities, including the Houma, Louisiana general office, and leased 87 service facilities, including the Johns Creek, Georgia corporate office, the Boise, Idaho general office and the Dallas, Texas warehouse.
Saia owns 51 percent of its service facilities, accounting for 62 percent of its door capacity. This mix follows Saia’s strategy of seeking to own strategically-located facilities that are integral to its operations and lease service facilities in smaller markets to allow for more flexibility.
At December 31, 2023, Saia owned 56 percent of its service facilities, accounting for 66 percent of its door capacity. This mix follows Saia’s strategy of seeking to own strategically-located facilities that are integral to its operations and lease service facilities in smaller markets to allow for more flexibility.
Removed
As of December 31, 2022, Saia owned approximately 6,200 tractors and 20,800 trailers, inclusive of equipment acquired with finance leases. At December 31, 2022, the Company had pledged certain land and structures, tractors and trailers, accounts receivable and other assets to secure the Company’s obligations under its revolving credit agreement.
Added
As of December 31, 2023, Saia owned approximately 6,500 tractors and 22,100 trailers, inclusive of trailers acquired with finance leases.
Removed
All terminals shown in the table below as owned by the Company were subject to liens pursuant to the revolving credit agreement, except where noted. On February 3, 2023, the Company entered into a new unsecured credit agreement that replaced the prior agreement. As a result, these liens were terminated at such date.
Removed
See “Financial Condition, Liquidity and Capital Resources” under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information about these credit agreements.
Removed
Louis, MO (1) Own 99 Toledo, OH Own 96 Philadelphia, PA Lease 90 (1) Not subject to a lien.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable and estimable losses and that the ultimate outcome of these actions will not have a material adverse effect 26 on its financial condition but could have a material adverse effect on its results of operations in a given quarter or annual period.
Biggest changeThe Company believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable and estimable losses and that the ultimate outcome of these actions will not have a material adverse effect on its financial condition but could have a material adverse effect on its results of operations in a given quarter or annual period.
Item 4. Mine Safety Disclosures Not applicable. 27 PART II.
Item 4. Mine Safety Disclosures Not applicable. 28 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCompanies included in the 2022 peer group are: ArcBest Corp., Hub Group Inc., J B Hunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Landstar System Inc., Old Dominion Freight Line Inc., Saia Inc., Schneider National Inc., TFI International Inc., Werner Enterprises Inc. and XPO Inc. 29 Cumulative Total Return Period Ending Index 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Saia, Inc. $100.00 $78.90 $131.62 $255.55 $476.37 $296.37 Russell 2000 100.00 88.99 111.70 134.00 153.85 122.41 NASDAQ Transportation 100.00 84.30 103.87 110.40 125.06 101.32 2021 Peer Group 100.00 79.44 110.82 148.81 248.46 199.31 2022 Peer Group 100.00 79.89 109.75 148.44 244.65 200.20 30 Item 6 . [Reserved] 31
Biggest changeHunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Landstar System Inc., Old Dominion Freight Line Inc., Saia Inc., Schneider National Inc., TFI International Inc., Werner Enterprises Inc. and XPO Inc. 30 Cumulative Total Return Period Ending Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Saia, Inc. $100.00 $166.82 $323.90 $603.78 $375.64 $785.06 Russell 2000 $100.00 $125.52 $150.58 $172.90 $137.56 $160.85 NASDAQ Transportation $100.00 $123.21 $130.96 $148.36 $120.19 $161.24 Peer Group $100.00 $137.29 $185.35 $305.09 $249.52 $347.38 31 Item 6 . [Reserved] 32
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Information Saia’s common stock is listed under the symbol “SAIA” on the Nasdaq Global Select Market. Stockholders As of January 31, 2023, there were 818 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Information Saia’s common stock is listed under the symbol “SAIA” on the Nasdaq Global Select Market. Stockholders As of January 31, 2024, there were 738 holders of record of our common stock.
Executive Capital Accumulation Plan were open market purchases. For more information on the Saia, Inc. Executive Capital Accumulation Plan, see the Registration Statement on Form S-8 (No. 333-155805) filed on December 1, 2008. (2) The Saia, Inc. Executive Capital Accumulation Plan had no sales of Saia stock during the period of October 1, 2022 through October 31, 2022.
Executive Capital Accumulation Plan are open market purchases. For more information on the Saia, Inc. Executive Capital Accumulation Plan, see the Registration Statement on Form S-8 (No. 333-155805) filed on December 1, 2008. (2) The Saia, Inc. Executive Capital Accumulation Plan had no sales of Saia stock during the period of October 1, 2023 through October 31, 2023.
Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet be Purchased under the Plans or Programs October 1, 2022 through October 31, 2022 — (2) $— (2) — $— November 1, 2022 through November 30, 2022 — (3) $— (3) — $— December 1, 2022 through December 31, 2022 390 (4) $214.88 (4) — $— Total 390 — (1) Shares purchased by the Saia, Inc.
Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (or Unit) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet be Purchased under the Plans or Programs October 1, 2023 through October 31, 2023 390 (2) $374.31 (2) — $— November 1, 2023 through November 30, 2023 — (3) $— (3) — $— December 1, 2023 through December 31, 2023 — (4) $— (4) — $— Total 390 — (1) Any shares purchased by the Saia, Inc.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2017 and its relative performance is tracked through December 31, 2022.
Individual companies within the custom peer group are listed below. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock, in each index and in each of the peer groups on December 31, 2018 and its relative performance is tracked through December 31, 2023.
Executive Capital Accumulation Plan sold 506 shares of Saia stock at an average price of $219.66 per share on the open market during the period of December 1, 2022 through December 31, 2022. 28 Performance Graph The graph below compares the cumulative five year total stockholder return on Saia, Inc. common stock relative to the cumulative total stockholder returns of the Russell 2000 index, the NASDAQ Transportation index and two customized peer groups of eleven companies each, which individual companies are listed below.
Executive Capital Accumulation Plan sold 400 shares of Saia stock at an average price of $454.00 per share on the open market during the period of December 1, 2023 through December 31, 2023. 29 Performance Graph The graph below compares the cumulative five year total stockholder return on Saia, Inc. common stock relative to the cumulative total stockholder returns of the Russell 2000 index, the NASDAQ Transportation index and a customized peer group of eleven companies.
Dividends We have not paid a cash dividend on our common stock. Any payment of dividends in the future is dependent upon our financial condition, capital requirements, earnings, cash flow and other factors. The payment of dividends was restricted under the Company's previous credit agreement and remains restricted under the credit agreement entered into on February 3, 2023.
Dividends We have not paid a cash dividend on our common stock. Any payment of dividends in the future is dependent upon our financial condition, capital requirements, earnings, cash flow and other factors.
(3) The Saia, Inc. Executive Capital Accumulation Plan sold 480 shares of Saia stock at an average price of $248.45 during the period of November 1, 2022 through November 30, 2022. (4) The Saia, Inc.
(3) The Saia, Inc. Executive Capital Accumulation Plan had no sales of Saia stock during the period of November 1, 2023 through November 30, 2023. (4) The Saia, Inc.
See Note 2 of the accompanying audited consolidated financial statements for more information on the credit agreements.
The payment of dividends was restricted under the Company's previous credit agreement and remains restricted under the credit agreement entered into on February 3, 2023 as well as the private shelf agreement entered into on November 9, 2023. See Note 2 of the accompanying audited consolidated financial statements for more information on the credit agreements and the private shelf agreement.
Removed
The Company modified the peer group in 2022 to maintain the comparability of peers as measured by total revenue and/or market capitalization.
Added
Companies included in the peer group are: ArcBest Corp., Hub Group Inc., J. B.
Removed
Companies included in the 2021 peer group are: ArcBest Corp., Covenant Logistics Group Inc., Heartland Express Inc., J. B. Hunt Transport Services Inc., Knight-Swift Transportation Holdings Inc., Marten Transport Ltd., Old Dominion Freight Line Inc., Pam Transportation Services Inc., Saia Inc., Werner Enterprises Inc. and Yellow Corp.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+23 added−13 removed26 unchanged
Biggest changeOur business also is impacted by a number of other factors as discussed under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A., “Risk Factors.” The key factors that affect our operating results are the volumes of shipments transported through our network, as measured by our average daily shipments and tonnage; the prices we obtain for our services, as measured by revenue per hundredweight (a measure of yield) and revenue per shipment; our ability to manage our cost structure for capital expenditures and operating expenses such as salaries, wages and benefits; purchased transportation; claims and insurance expense; fuel and maintenance; and our ability to match operating costs to shifting volume levels. 35 Results of Operations Saia, Inc. and Subsidiaries Selected Results of Operations and Operating Statistics For the years ended December 31, 2022, 2021 and 2020 (in thousands, except ratios, workdays, revenue per hundredweight, revenue per shipment and length of haul) Percent Variance 2022 2021 2020 '22 v. '21 '21 v. '20 Operating Revenue $2,792,057 $2,288,704 $1,822,366 22.0 % 25.6 % Operating Expenses: Salaries, wages and employees’ benefits 1,169,539 1,063,703 963,260 9.9 10.4 Purchased transportation 315,896 249,710 141,369 26.5 76.6 Fuel and other operating expenses 678,931 498,450 402,761 36.2 23.8 Depreciation and amortization 157,203 141,700 134,655 10.9 5.2 Operating Income 470,488 335,141 180,321 40.4 85.9 Operating Ratio 83.1% 85.4% 90.1% Non-operating Expenses, Net 2,440 2,368 4,043 3.0 (41.4) Working Capital (as of December 31, 2022, 2021 and 2020) 256,801 94,907 (4,058) Net Acquisitions of Property and Equipment 365,512 277,348 218,817 Saia LTL Freight Operating Statistics: Workdays 253 252 254 LTL Tonnage 5,473 5,401 4,842 1.3 11.5 LTL Shipments 7,697 7,730 7,371 (0.4) 4.9 LTL Revenue per hundredweight $24.70 $20.68 $18.33 19.4 12.8 LTL Revenue per shipment $351.27 $289.00 $240.86 21.5 20.0 LTL Pounds per shipment 1,422 1,397 1,314 1.8 6.3 LTL Length of haul 904 913 879 (1.0) 3.9 Year ended December 31, 2022 as compared to year ended December 31, 2021 Revenue and volume Consolidated revenue increased 22.0 percent to $2.8 billion primarily as a result of pricing actions, increased fuel surcharge revenue and improvements in mix of business.
Biggest changeOur business also is impacted by a number of other factors as discussed under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A., “Risk Factors.” The key factors that affect our operating results are the volumes of shipments transported through our network, as measured by our average daily shipments and tonnage; the prices we obtain for our services, as measured by revenue per hundredweight (a measure of yield) and revenue per shipment; our ability to manage our cost structure for capital expenditures and operating expenses such as salaries, wages and benefits; purchased transportation; claims and insurance expense; fuel and maintenance; and our ability to match operating costs to shifting volume levels. 35 Results of Operations Saia, Inc. and Subsidiaries Selected Results of Operations and Operating Statistics For the years ended December 31, 2023 and 2022 (in thousands, except ratios, workdays, revenue per hundredweight, revenue per shipment, pounds per shipment and length of haul) Percent Variance 2023 2022 '23 v. '22 Operating Revenue $2,881,433 $2,792,057 3.2 % Operating Expenses: Salaries, wages and employees’ benefits 1,301,280 1,169,539 11.3 Purchased transportation 238,688 315,896 (24.4) Fuel and other operating expenses 702,124 678,931 3.4 Depreciation and amortization 178,845 157,203 13.8 Operating Income 460,496 470,488 (2.1) Operating Ratio 84.0% 83.1% Non-operating (Income) Expenses, Net (5,731) 2,440 (334.9) Working Capital (as of December 31, 2023 and 2022) 326,638 256,801 Net Acquisitions of Property and Equipment 437,152 365,512 Saia LTL Freight Operating Statistics: Workdays 252 253 LTL Tonnage 5,543 5,473 1.3 LTL Shipments 7,997 7,697 3.9 LTL Revenue per hundredweight $25.38 $24.70 2.8 LTL Revenue per hundredweight, excluding fuel surcharges $20.99 $19.63 6.9 LTL Revenue per shipment $351.90 $351.27 0.2 LTL Revenue per shipment, excluding fuel surcharges $291.00 $279.16 4.2 LTL Pounds per shipment 1,386 1,422 (2.5) LTL Length of haul 894 904 (1.1) Year ended December 31, 2023 as compared to year ended December 31, 2022 Revenue and volume Consolidated revenue increased 3.2 percent to $2.9 billion primarily due to increased volume and yield, excluding fuel surcharges.
The credit agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments. The credit agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement.
This credit agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments. This credit agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement.
Estimates included in the recognition of revenue and accounts receivable are continuously evaluated and updated; however, changes in economic conditions, customer creditworthiness, pricing arrangements and other factors may significantly impact these estimates. • Depreciation of Assets . 40 o Description : Under the Company’s accounting policy for property and equipment, management establishes depreciable lives and salvage values for the Company’s revenue equipment (tractors and trailers) based on their estimated useful lives and estimated residual values to be received when the equipment is sold or traded in.
Estimates included in the recognition of revenue and accounts receivable are continuously evaluated and updated; however, changes in economic conditions, customer creditworthiness, pricing arrangements and other factors may significantly impact these estimates. • Depreciation of Assets . o Description : Under the Company’s accounting policy for property and equipment, management establishes depreciable lives and salvage values for the Company’s revenue equipment (tractors and trailers) based on their estimated useful lives and estimated residual values to be received when the equipment is sold or traded in.
A significant number of these claims typically take several years to develop and even longer to ultimately settle. These accruals have been reasonably accurate over time; however, changes to estimates and assumptions regarding severity of claims, medical cost inflation, as well as specific case facts can create short-term volatility in these accruals.
A significant number of these claims typically take several years to develop and even longer to ultimately settle. These accruals have been reasonably accurate over time; however, changes to 41 estimates and assumptions regarding severity of claims, medical cost inflation, as well as specific case facts can create short-term volatility in these accruals.
Conversely, should the economy continue to soften, the Company plans to match resources and capacity to shifting volume levels to lessen unfavorable operating leverage. The success of cost improvement initiatives is impacted by a number of factors, including the cost and availability of drivers, dock workers and personnel, and purchased transportation, diesel fuel and insurance costs and inflation.
Conversely, should the economy soften, the Company plans to match resources and capacity to shifting volume levels to lessen unfavorable operating leverage. The success of cost improvement initiatives is impacted by a number of factors, including the cost and availability of drivers, dock workers and personnel, and purchased transportation, diesel fuel and insurance costs and inflation.
Billing adjustments are primarily made for discounts and billing corrections. o Sensitivity of Estimate to Change : Since the cycle for pick-up and delivery of shipments is generally one to five days, typically less than five percent of a total month’s revenue is in transit at the end of any month.
Billing adjustments are primarily made for discounts and billing corrections. o Sensitivity of Estimate to Change : Since the cycle for pick-up and delivery of shipments is generally one to five days, typically less than ten percent of a total month’s revenue is in transit at the end of any month.
We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the consolidated financial statements. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information.
We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the consolidated financial statements. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. 42
The Company looks for opportunities to improve safety, cost effectiveness and asset utilization (primarily tractors and trailers). Pricing initiatives have had a positive impact on yield and profitability. The Company continues to execute targeted sales and marketing programs along with initiatives to align costs with volumes and improve customer satisfaction.
The Company looks for opportunities to improve safety, cost effectiveness and asset utilization (primarily tractors and trailers). Pricing initiatives have had a positive impact on yield and profitability. The Company continues to execute targeted sales and marketing programs along with initiatives to align 34 costs with volumes and improve customer satisfaction.
This program is designed to reduce the Company’s exposure to fluctuations in diesel fuel prices by adjusting total freight charges to account for changes in the price of diesel fuel. The Company’s fuel surcharge is generally based on the average national price for diesel fuel and is reset weekly.
This program is designed to reduce the Company’s exposure to fluctuations in diesel fuel prices by adjusting total freight charges to account for changes in the price of diesel fuel. The Company’s fuel surcharge is generally based on the average national price for diesel fuel and is typically reset weekly.
Planned revenue initiatives include building density in our current geography, targeted marketing initiatives to grow revenue 37 in more profitable areas, further expanding our geographic and terminal network, as well as pricing and yield management.
Planned revenue initiatives include building density in our current geography, targeted marketing initiatives to grow revenue in more profitable areas, further expanding our geographic and terminal network, as well as pricing and yield management.
Discussions of our 2020 results and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 23, 2022.
Discussions of our 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 23, 2023.
While more than 96% of its revenue is derived from transporting LTL shipments across 45 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across the United States. Our business is highly correlated to non-service sectors of the general economy.
While more than 97% of its revenue is derived from transporting LTL shipments across 45 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across the United States. Our business is highly correlated to non-service sectors of the general economy.
There have been no material effects of changes to judgments related to depreciation expense for the year ended December 31, 2022. These accounting policies and others are described in further detail in the Notes to the audited Consolidated Financial Statements included in this Form 10-K.
There have been no material effects of changes to judgments related to depreciation expense for the year ended December 31, 2023. These accounting policies and others are described in further detail in the Notes to the audited Consolidated Financial Statements included in this Form 10-K.
Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals. The Company was in compliance with its debt covenants at December 31, 2022.
Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals. The Company was in compliance with its debt covenants at December 31, 2023.
These factors, risks, uncertainties and assumptions include, but are not limited to, the following: • general economic conditions including downturns or inflationary periods in the business cycle; • operation within a highly competitive industry and the adverse impact from downward pricing pressures, including in connection with fuel surcharges, and other factors; • industry-wide external factors largely out of our control; • cost and availability of qualified drivers, dock workers, mechanics and other employees, purchased transportation and fuel; • inflationary increases in operating expenses and corresponding reductions of profitability; • cost and availability of diesel fuel and fuel surcharges; • cost and availability of insurance coverage and claims expenses and other expense volatility, including for personal injury, cargo loss and damage, workers’ compensation, employment and group health plan claims; • failure to successfully execute the strategy to expand our service geography; • costs and liabilities from the disruption in or failure of our technology or equipment essential to our operations, including as a result of cyber incidents, security breaches, malware or ransomware attacks; • failure to keep pace with technological developments; • labor relations, including the adverse impact should a portion of our workforce become unionized; • cost, availability and resale value of real property and revenue equipment; • supply chain disruption and delays on new equipment delivery; • capacity and highway infrastructure constraints; • risks arising from international business operations and relationships; • seasonal factors, harsh weather and disasters caused by climate change; • economic declines in the geographic regions or industries in which our customers operate; • the creditworthiness of our customers and their ability to pay for services; • our need for capital and uncertainty of the credit markets; • the possibility of defaults under our debt agreements, including violation of financial covenants; 32 • inaccuracies and changes to estimates and assumptions used in preparing our financial statements; • failure to operate and grow acquired businesses in a manner that support the value allocated to acquired businesses; • dependence on key employees; • employee turnover from changes to compensation and benefits or market factors; • increased costs of healthcare benefits; • damage to our reputation from adverse publicity, including from the use of or impact from social media; • failure to make future acquisitions or to achieve acquisition synergies; • the effect of litigation and class action lawsuits arising from the operation of our business, including the possibility of claims or judgments in excess of our insurance coverages or that result in increases in the cost of insurance coverage or that preclude us from obtaining adequate insurance coverage in the future; • the potential of higher corporate taxes and new regulations, including with respect to climate change, employment and labor law, healthcare and securities regulation; • the effect of governmental regulations, including hours of service and licensing compliance for drivers, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, regulations of the Food and Drug Administration and Homeland Security, and healthcare and environmental regulations; • unforeseen costs from new and existing data privacy laws; • changes in accounting and financial standards or practices; • widespread outbreak of an illness or any other communicable disease, including the COVID-19 pandemic; • the conflict between Russia and Ukraine; • relations between China and Taiwan; • increasing investor and customer sensitivity to social and sustainability issues, including climate change; • provisions in our governing documents and Delaware law that may have anti-takeover effects; • issuances of equity that would dilute stock ownership; • weakness, disruption or loss of confidence in financial or credit markets; and • other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC filings.
These factors, risks, uncertainties and assumptions include, but are not limited to, the following: • general economic conditions including downturns or inflationary periods in the business cycle; • operation within a highly competitive industry and the adverse impact from downward pricing pressures, including in connection with fuel surcharges, and other factors; • industry-wide external factors largely out of our control; • cost and availability of qualified drivers, dock workers, mechanics and other employees, purchased transportation and fuel; • inflationary increases in operating expenses and corresponding reductions of profitability; • cost and availability of diesel fuel and fuel surcharges; • cost and availability of insurance coverage and claims expenses and other expense volatility, including for personal injury, cargo loss and damage, workers’ compensation, employment and group health plan claims; • failure to successfully execute the strategy to expand our service geography; • unexpected liabilities resulting from the acquisition of real estate assets; • costs and liabilities from the disruption in or failure of our technology or equipment essential to our operations, including as a result of cyber incidents, security breaches, malware or ransomware attacks; • failure to keep pace with technological developments; • liabilities and costs arising from the use of artificial intelligence; • labor relations, including the adverse impact should a portion of our workforce become unionized; • cost, availability and resale value of real property and revenue equipment; • supply chain disruption and delays on new equipment delivery; • capacity and highway infrastructure constraints; • risks arising from international business operations and relationships; • seasonal factors, harsh weather and disasters caused by climate change; • economic declines in the geographic regions or industries in which our customers operate; • the creditworthiness of our customers and their ability to pay for services; 33 • our need for capital and uncertainty of the credit markets; • the possibility of defaults under our debt agreements, including violation of financial covenants; • inaccuracies and changes to estimates and assumptions used in preparing our financial statements; • failure to operate and grow acquired businesses in a manner that support the value allocated to acquired businesses; • dependence on key employees; • employee turnover from changes to compensation and benefits or market factors; • increased costs of healthcare benefits; • damage to our reputation from adverse publicity, including from the use of or impact from social media; • failure to make future acquisitions or to achieve acquisition synergies; • the effect of litigation and class action lawsuits arising from the operation of our business, including the possibility of claims or judgments in excess of our insurance coverages or that result in increases in the cost of insurance coverage or that preclude us from obtaining adequate insurance coverage in the future; • the potential of higher corporate taxes and new regulations, including with respect to climate change, employment and labor law, healthcare and securities regulation; • the effect of governmental regulations, including hours of service and licensing compliance for drivers, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, regulations of the Food and Drug Administration and Homeland Security, and healthcare and environmental regulations; • unforeseen costs from new and existing data privacy laws; • costs from new and existing laws regarding how to classify workers; • changes in accounting and financial standards or practices; • widespread outbreak of an illness or any other communicable disease; • international conflicts and geopolitical instability; • increasing investor and customer sensitivity to social and sustainability issues, including climate change; • provisions in our governing documents and Delaware law that may have anti-takeover effects; • issuances of equity that would dilute stock ownership; • weakness, disruption or loss of confidence in financial or credit markets; and • other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC filings.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our 2022 and 2021 results and year-to-year comparisons between 2022 and 2021.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our 2023 and 2022 results and year-to-year comparisons between 2023 and 2022.
There have been no material changes in the development factor for the year ended December 31, 2022. • Revenue Recognition and Related Allowances . o Description : Revenue is recognized over the transit time of the shipment as it moves from origin to destination while expenses are recognized as incurred.
There have been no material changes in the development factors for the year ended December 31, 2023. • Revenue Recognition and Related Allowances . o Description : Revenue is recognized over the transit time of the shipment as it moves from origin to destination while expenses are recognized as incurred.
The extent of success of this revenue initiative is impacted by what proves to be the underlying economic trends, competitor initiatives and other factors discussed under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A., “Risk Factors.” Effective July 2022, the Company implemented a salary and wage increase of approximately 4.3 percent for all of its employees.
The extent of success of this revenue initiative is impacted by what proves to be the underlying economic trends, competitor initiatives and other factors discussed under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A., “Risk Factors.” 37 Effective July 2023, the Company implemented a salary and wage increase of approximately 4.1 percent for all of its employees, other than executives.
The total cost of the compensation increases is expected to be approximately $32.2 million annually, and the Company anticipates the impact will be partially offset by productivity and efficiency gains. If the Company builds market share, including through its geographic and terminal expansion, it expects there to be numerous operating leverage cost benefits.
The total cost of the compensation increase is expected to be approximately $46.1 million annually, and the Company anticipates the impact will be partially offset by productivity and efficiency gains. If the Company builds market share, including through its geographic and terminal expansion, it expects there to be numerous operating leverage cost benefits.
On January 30, 2023 and January 24, 2022 Saia implemented 6.5 and 7.5 percent general rate increases, respectively, for customers comprising approximately 25 percent of Saia’s operating revenue.
On January 30, 2023 and December 4, 2023 Saia implemented 6.5 and 7.5 percent general rate increases, respectively, for customers comprising approximately 25 percent of Saia’s operating revenue.
See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the credit agreements. Finance Leases The Company is obligated under finance leases with seven-year terms for revenue equipment totaling $31.0 million and $50.4 million as of December 31, 2022 and 2021, respectively. Amortization of assets held under the finance leases is included in depreciation expense.
See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the Shelf Agreement. Finance Leases The Company is obligated under finance leases with seven-year terms for revenue equipment totaling $16.5 million and $31.0 million as of December 31, 2023 and 2022, respectively. Amortization of assets held under the finance leases is included in depreciation expense.
Salaries, wages and employees’ benefits expense increased $105.8 million in 2022 compared to 2021 largely due to increased head count to support ongoing business growth and network expansion. Additionally, in July 2022 the Company implemented a salary and wage increase of approximately 4.3 percent.
Salaries, wages and employees’ benefits expense increased $131.7 million in 2023 compared to 2022 largely due to increased head count to support increased volumes, ongoing business growth and network expansion. Additionally, in July 2023 the Company implemented a salary and wage increase of approximately 4.1 percent.
Technology continues to be an important investment as we work towards improving customer experience, operational efficiencies and Company image. 33 Overview. The Company’s operating revenue increased by 22.0 percent in 2022 compared to 2021.
Technology continues to be an important investment as we work towards improving customer experience, operational efficiencies and Company image. The Company’s operating revenue increased by 3.2 percent in 2023 compared to 2022.
The Company’s strategy is to improve profitability by increasing yield while also increasing volumes to build density in existing geography and to pursue geographic and terminal expansion to promote profitable growth and improve our customer value proposition over time. The Company’s business is labor intensive, capital intensive and service sensitive.
The Company’s strategy is to improve profitability by increasing yield while also increasing volumes. Components of this strategy include building density in existing geography and pursuing geographic and terminal expansion in an effort to promote profitable growth and improve our customer value proposition over time. The Company’s business is labor intensive, capital intensive and service sensitive.
Financial Condition, Liquidity and Capital Resources The Company's liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements.
The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. Financial Condition, Liquidity and Capital Resources The Company's liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements.
The timing of capital expenditures can largely be managed around the seasonal working capital requirements of the Company. The Company believes it has adequate sources of capital to meet short-term liquidity needs through its cash on hand, operating cash flows and availability under its revolving credit agreement, which was $268.8 million at December 31, 2022.
The timing of capital expenditures can largely be managed around the seasonal working capital requirements of the Company. The Company believes it has adequate sources of capital to meet short-term liquidity needs through its cash on hand and its operating cash flows.
The 2023 Credit Agreement contains an accordion feature that allows the Company to increase the size of the facility by up to $150 million, subject to certain conditions, for a total borrowing capacity of up to $450 million.
The 2023 Credit Agreement contains an accordion feature that allows the Company to increase the size of the facility by up to $150 million, subject to certain conditions and availability of lender commitments.
For further information see the Notes to the accompanying audited Consolidated Financial Statements in this Form 10-K. As of December 31, 2022 there was no outstanding principal balance under the credit agreement. Other commercial commitments of the Company typically include necessary letters of credit and surety bonds required for collateral under insurance agreements, and the outstanding available line of credit.
For further information see the Notes to the accompanying audited Consolidated Financial Statements in this Form 10-K. Other commercial commitments of the Company typically include letters of credit and surety bonds required for collateral under insurance agreements. As of December 31, 2023 the Company had total outstanding letters of credit of $33.9 million and $56.7 million in surety bonds.
For customers subject to general rate increases, Saia implemented a 7.5 percent general rate increase on January 24, 2022. Competitive factors, customer turnover and mix changes, among other things, impact the extent to which customer rate increases are retained over time. 36 Operating revenue includes fuel surcharge revenue from the Company’s fuel surcharge program.
Competitive factors, customer turnover and mix changes, among other things, impact the extent to which customer rate increases are retained over time. 36 Operating revenue includes fuel surcharge revenue from the Company’s fuel surcharge program.
Fuel surcharge revenue increased to 19.9 percent of operating revenue in 2022 compared to 14.0 percent in 2021 primarily as a result of increases in the cost of diesel fuel. Operating expenses and margin Consolidated operating income was $470.5 million in 2022 compared to $335.1 million in 2021.
Fuel surcharge revenue decreased to 16.9 percent of operating revenue in 2023 compared to 19.9 percent in 2022 primarily as a result of decreases in the cost of diesel fuel. Operating expenses and margin Consolidated operating income declined to $460.5 million in 2023 compared to $470.5 million in 2022.
Net capital expenditures, inclusive of equipment acquired using finance leases, are summarized in the following table (in millions): Years ended 2022 2021 2020 Land and structures: Additions $163.5 $124.8 $75.0 Sales — (6.0) (5.9) Revenue equipment, net 168.6 130.0 131.9 Technology and other 33.4 28.5 17.8 Total $365.5 $277.3 $218.8 In addition to the amounts disclosed in the table above, the Company had an additional $19.5 million in capital expenditures for revenue equipment that was received but not paid for prior to December 31, 2022.
Net capital expenditures are summarized in the following table (in millions): Years ended 2023 2022 2021 Land and structures: Additions $267.3 $163.5 $124.8 Sales (0.1) — (6.0) Revenue equipment, net 133.3 168.6 130.0 Technology and other 36.7 33.4 28.5 Total $437.2 $365.5 $277.3 In addition to the amounts disclosed in the table above, the Company had an additional $50.9 million in capital expenditures for revenue equipment that was received but not paid for prior to December 31, 2023. 39 Credit Agreements At December 31, 2022 the Company was party to a credit agreement with a banking group that provided for a $300 million line of credit with a term ending February 2024.
This includes operating leases with original maturities of less than one year, which are not recorded in our consolidated balance sheet in accordance with U.S. generally accepted accounting principles. Contractual obligations in the form of finance leases were $32.5 million at December 31, 2022, which include both principal and interest components. Purchase obligations at December 31, 2022 were $118.9 million.
Total contractual obligations for operating leases at December 31, 2023 totaled $142.6 million. This includes operating leases with original maturities of less than one year, which are not recorded in our consolidated balance sheet in accordance with U.S. generally accepted accounting principles.
Net capital expenditures pertain primarily to investments in tractors and trailers and other revenue equipment, information technology, land and structures. Projected net capital expenditures for 2023 are expected to exceed $400 million, subject to ongoing evaluation of market conditions, compared to 2022 net capital expenditures of $365.5 million.
Net capital expenditures pertain primarily to investments in tractors and trailers and other revenue equipment, information technology, land and structures. Projected net capital expenditures for 2024 are expected to be approximately $1 billion compared to 2023 net capital expenditures of $437.2 million.
In addition to any principal amounts disclosed, the Company has interest obligations of approximately $2.0 million for 2023 and decreasing for each year thereafter, based on borrowings and commitments outstanding at December 31, 2022.
In addition to any principal amounts disclosed, the Company has interest obligations of approximately $1.4 million for 2024, based on borrowings and commitments outstanding at December 31, 2023. The Company has accrued approximately $4.7 million for uncertain tax positions and accrued interest and penalties of $0.5 million related to the uncertain tax positions as of December 31, 2023.
Critical Accounting Policies and Estimates The Company makes estimates and assumptions in preparing the consolidated financial statements that affect reported amounts and disclosures therein.
At December 31, 2023, the Company has $103.0 million accrued for claims, insurance and other liabilities. Critical Accounting Policies and Estimates The Company makes estimates and assumptions in preparing the consolidated financial statements that affect reported amounts and disclosures therein.
Contractual Obligations Contractual obligations for the Company are comprised of lease agreements, purchase obligations and long-term debt obligations related to any outstanding balance under the Company’s line of credit. Total contractual obligations for operating leases at December 31, 2022 totaled $141.2 million.
The weighted average interest rates for the finance leases at December 31, 2023 and 2022 were 3.95% and 3.74%, respectively. Contractual Obligations Contractual obligations for the Company are comprised of lease agreements, purchase obligations and long-term debt obligations related to any outstanding balance under the Company’s 2023 Credit Agreement or Shelf Agreement.
Outlook Our business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures, as well as the success of Company-specific improvement initiatives. Our outlook is dependent on a number of external factors, including strength of the economy, inflation, labor availability, diesel fuel prices and supply chain constraints.
Our outlook is dependent on a number of external factors, including strength of the economy, inflation, labor availability, diesel fuel prices and supply chain constraints.
Projected 2023 capital expenditures include a normal replacement cycle of revenue equipment and technology investments for our operations. In addition, the Company plans to add revenue equipment and real estate investments to support our growth initiatives.
Estimated 2024 capital expenditures include $235.7 million to acquire Yellow Corporation terminals, a normal replacement cycle of revenue equipment and technology investments for our operations, and additional revenue equipment and real estate investments to support our growth initiatives.
See “Financial Condition, Liquidity and Capital Resources” for a more complete discussion of these agreements. 34 General The following Management’s Discussion and Analysis describes the principal factors affecting the results of operations, liquidity and capital resources, as well as the critical accounting policies of Saia, Inc. and its wholly-owned subsidiaries (together, the Company or Saia).
The Company used $448.7 million of net cash in investing activities during 2023 compared to $365.5 million during 2022. General The following Management’s Discussion and Analysis describes the principal factors affecting the results of operations, liquidity and capital resources, as well as the critical accounting policies of Saia, Inc. and its wholly-owned subsidiaries (together, the Company or Saia).
The increase in 2022 operating income resulted primarily from pricing actions and fuel margin, partially offset by salary and wage increases, higher purchased transportation costs, higher vehicle maintenance costs and increased depreciation expense. The Company generated $473.0 million in net cash provided by operating activities in 2022 versus $382.6 million in 2021.
The decrease in 2023 operating income resulted primarily from increases in salaries, wages and benefits and depreciation expense which was partially offset by increased revenue and decreased purchased transportation. The Company generated $577.9 million in net cash provided by operating activities in 2023 versus $473.0 million in 2022.
For 2022, net cash used in investing activities was $365.5 million versus $277.8 million in 2021 primarily due to increased capital expenditures for revenue equipment, real estate and technology during 2022.
For 2023, net cash used in investing activities was $448.7 million versus $365.5 million in 2022 primarily due to increased capital expenditures during 2023 as the Company continues to expand its footprint and add density in markets.
The effective income tax rate was 23.6 percent and 23.9 percent for the years ended December 31, 2022 and 2021, respectively. Working capital Working capital at December 31, 2022 was $256.8 million compared to $94.9 million at December 31, 2021.
Working Capital and Capital Expenditures Working capital at December 31, 2023 was $326.6 million compared to $256.8 million at December 31, 2022.
For 2022 and 2021, approximately 75 percent of Saia’s operating revenue was subject to specific customer price adjustment negotiations that occur throughout the year. The remaining 25 percent of operating revenue was subject to a general rate increase which is based on market conditions.
The remaining 25 percent of operating revenue was subject to a general rate increase which is based on market conditions. For customers subject to general rate increases, Saia implemented 6.5 and 7.5 percent general rate increases on January 30, 2023 and December 4, 2023, respectively.
Favorable economic conditions, along with improved customer service and targeted marketing initiatives, have positively impacted the Company's ability to implement measured pricing actions to improve yield. As a result of these increased rates, Saia’s LTL revenue per hundredweight (a measure of yield) increased 19.4 percent to $24.70 for 2022.
These increases were the result of a redistribution of freight due to industry consolidation mid-year, as well as pricing actions and changes in business mix. Improved customer service and targeted marketing initiatives have positively impacted the Company's ability to implement measured pricing actions to improve yield.
In summary, these results were favorably impacted by pricing actions and fuel margin, partially offset by salary and wage increases, higher purchased transportation costs, higher vehicle maintenance costs and increased depreciation expense. The 2022 operating ratio (operating expenses divided by operating revenue) improved to 83.1 percent as compared to 85.4 percent in 2021.
The decrease in 2023 operating income resulted primarily from increases in salaries, wages and benefits and depreciation expense which was partially offset by increased revenue and decreased purchased transportation. The 2023 operating ratio (operating expenses divided by operating revenue) was 84.0 percent as compared to 83.1 percent in 2022.
See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the credit agreements. The Company used $26.7 million of net cash in financing activities during 2022 compared to $23.5 million of net cash used in financing activities during 2021.
At December 31, 2023 and 2022, the Company had no outstanding borrowings and outstanding letters of credit of $32.1 million and $31.2 million, respectively, under the credit agreements. See Note 2 of the accompanying audited Consolidated Financial Statements for more information on the credit agreements.
The increase resulted primarily from pricing actions, including a 7.5 percent general rate increase taken on January 24, 2022, for customers subject to general rate increases, in addition to an increase in fuel surcharge revenue and improvements in mix of business. Consolidated operating income was $470.5 million for 2022 compared to $335.1 million in 2021.
The increase was due to increased yield, excluding fuel surcharges, as a result of pricing actions and changes in business mix, which included 6.5 and 7.5 percent general rate increases on January 30, 2023 and December 4, 2023, respectively, for customers subject to general rate increases.
The weighted average interest rates for the finance leases at December 31, 2022 and 2021 were 3.74% and 3.55%, respectively. 38 Cash Flows and Expenditures The Company has historically generated cash flows from operations to fund a large portion of its capital expenditure requirements.
Net cash used in financing activities was $20.4 million in 2023 versus $26.7 million in 2022 as a result of decreased finance lease payments during 2023. The Company has historically generated cash flows from operations to fund a large portion of its capital expenditure requirements.
Purchased transportation expense increased $66.2 million in 2022 compared to 2021 primarily due to higher rates for purchased miles during 2022. Fuel and other operating expenses increased by $180.5 million primarily driven by increases in underlying diesel fuel prices and miles driven and increased maintenance spend to ensure fleet availability to meet customer demand.
Purchased transportation expense decreased $77.2 million in 2023 compared to 2022 primarily due to both a decrease in miles utilized and a decrease in cost per mile. Fuel, operating expenses and supplies increased by $5.2 million primarily driven by increased repairs, maintenance and facility costs in addition to investments in information technology network support.
Removed
The Company used $365.5 million of net cash in investing activities during 2022 compared to $277.8 million during 2021. At December 31, 2022 the Company was party to a credit agreement with a banking group that provided for a $300 million line of credit with a term ending February 2024.
Added
Additionally, the Company experienced year over year increases in shipments and tonnage partially as a result of the redistribution of freight due to industry consolidation mid-year. These increases were offset by a decrease in fuel surcharge revenue, resulting from lower diesel fuel prices. Consolidated operating income declined to $460.5 million for 2023 compared to $470.5 million in 2022.
Removed
On February 3, 2023, the Company entered into a new unsecured credit agreement with its banking group that replaced the prior agreement. Among other items, the new credit facility maintains the size of the previous line of credit of $300 million, expands the accordion feature to $150 million and extends the maturity to a term ending February 2028.
Added
As a result of these increased rates, Saia’s LTL revenue per hundredweight (a measure of yield), excluding fuel surcharges, increased 6.9 percent to $20.99 for 2023. Saia’s LTL tonnage also increased 1.3 percent while LTL shipments increased 3.9 percent for 2023.
Removed
The Company had zero net borrowings under its revolving credit facility during 2022 and 2021 and made scheduled principal payments for finance lease obligations of $19.5 million during 2022. Outstanding letters of credit were $33.0 million and the Company had cash and cash equivalents of $187.4 million as of December 31, 2022.
Added
Overall LTL revenue per shipment, excluding fuel surcharges, increased 4.2 percent in 2023 due to the yield improvements discussed above. For 2023 and 2022, approximately 75 percent of Saia’s operating revenue was subject to specific customer price adjustment negotiations that occur throughout the year.
Removed
The Company had $268.8 million in remaining availability under its revolving credit facility and $31.0 million in obligations under finance leases at December 31, 2022. The Company was in compliance with the debt covenants under its debt agreements at December 31, 2022.
Added
These changes were partially offset by decreases in costs of fuel during the period. In addition, claims and insurance expense in 2023 was $11.4 million higher than 2022 largely due to increased premiums, claim development and claim costs in 2023.
Removed
Saia’s LTL tonnage also increased 0.9 percent per workday while LTL shipments decreased 0.8 percent per workday for 2022. Overall LTL revenue per shipment increased 21.5 percent in 2022 due to the yield improvements discussed above. Additionally, LTL weight per shipment increased 1.8 percent during 2022.
Added
The Company experiences volatility in accident expense from time to time as a result of utilizing self-insurance as a part of its risk management program. Depreciation and amortization expense increased $21.6 million in 2023 compared to 2022 primarily due to ongoing investments in revenue equipment and network expansion.
Removed
In addition, claims and insurance expense in 2022 was $4.7 million lower than 2021 largely due to positive claims development and settlements in 2022. The Company can experience volatility in accident expense as a result of its self-insurance structure.
Added
Other Interest expense in 2023 was $0.1 million less than 2022 due to decreased finance lease obligations in 2023. Interest income in 2023 was $6.0 million greater than 2022 due to increased interest rates on higher average deposit balances during the period.
Removed
Depreciation and amortization expense increased $15.5 million in 2022 compared to 2021 primarily due to revenue equipment, real estate and technology investments. Other Substantially all non-operating expenses represent interest expense. Interest expense in 2022 was $0.6 million less than 2021 due to decreased average borrowings in 2022.
Added
The effective income tax rate was 23.9 percent and 23.6 percent for the years ended December 31, 2023 and 2022, respectively. Outlook Our business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures, as well as the success of Company-specific improvement initiatives.
Removed
This increase is primarily due to an increase in cash and cash equivalents and income tax receivable and decreases in accounts payable. Cash flows from operating activities were $473.0 million for 2022 versus $382.6 million for 2021 largely driven by increased profitability.
Added
Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures .” Under this ASU, interim and annual segment disclosures are expanded primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.
Removed
Net cash used in financing activities was $26.7 million in 2022 versus $23.5 million in 2021 as a result of equity based compensation shares withheld for taxes, partially offset by increased proceeds from stock option exercises during 2022.
Added
Additionally, the standard requires all entities with a single reportable segment to apply all segment disclosure requirements. This standard is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
Removed
Credit Agreements At December 31, 2022 the Company was party to a credit agreement with a banking group that provided for a $300 million line of credit with a term ending February 2024. This credit agreement also had an accordion feature that allowed for an additional $100 million availability, subject to certain conditions and availability of lender commitments.
Added
In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 326): Improvements to Income Tax Disclosures. ” Under this ASU income tax disclosures are expanded primarily by requiring the disaggregation of the rate reconciliation and income taxes paid disclosures. This standard is effective for annual reporting periods beginning after December 15, 2024.
Removed
This credit agreement provided for a pledge by the Company of certain land and structures, accounts receivable and other assets to secure indebtedness under this agreement. At December 31, 2022 and 2021, the Company had no borrowings outstanding under its credit agreement and outstanding letters of credit of $31.2 million and $29.3 million, respectively, under the credit agreement.
Added
This increase is primarily due to an increase in cash and cash equivalents and accounts receivable, partially offset by an increase in accounts payable. 38 A summary of our cash flows is presented below: Years ended 2023 2022 (in thousands) Cash and Cash Equivalents, beginning of period $187,390 $106,588 Net Cash flows provided by (used in): Operating activities 577,945 473,026 Investing activities (448,696) (365,512) Financing activities (20,424) (26,712) Net Increase in Cash and Cash Equivalents 108,825 80,802 Cash and Cash Equivalents, end of period $296,215 $187,390 Cash flows from operating activities were $577.9 million for 2023 versus $473.0 million for 2022 largely driven by changes in net operating assets and liabilities.
Removed
As of December 31, 39 2022 the Company had total outstanding letters of credit of $33.0 million and $73.7 million in surety bonds. Additionally, the Company had $268.8 million available under its credit facility at December 31, 2022.
Added
Additionally, as of December 31, 2023, the Company has $267.9 million of availability under its 2023 Credit Agreement, $100 million of committed financing and $250 million of uncommitted financing under the Company's Private Shelf Agreement, subject to certain conditions.
Removed
The Company has accrued approximately $3.9 million for uncertain tax positions and accrued interest and penalties of $0.4 million related to the uncertain tax positions as of December 31, 2022. At December 31, 2022, the Company has $105.9 million accrued for claims, insurance and other liabilities.
Added
Borrowings under the 2023 Credit Agreement bear interest at the Company’s election at a variable rate equal to (a) one, three or six month term SOFR (the forward-looking secured overnight financing rate) plus 0.10%, or (b) an alternate base rate, in each case plus an applicable margin.
Added
The applicable margin will be between 1.00% and 1.75% per annum for term SOFR loans and between 0.00% and 0.75% per annum for alternate base rate loans, in each case based on the Company’s consolidated net lease adjusted leverage ratio.
Added
The Company also accrues fees based on the daily unused portion of the credit facility, which will be between 0.0125% and 0.025% based on the Company’s consolidated net lease adjusted leverage ratio.
Added
Private Shelf Agreement On November 9, 2023, the Company entered into a $350 million uncommitted Private Shelf Agreement (the Shelf Agreement), by and among the Company, PGIM, Inc.
Added
(Prudential), and certain affiliates and managed accounts of Prudential (the Note Purchasers) which allows the Company, from time to time, to offer for sale to Prudential and its affiliates, in one or a series of transactions, senior notes of the Company, through November 9, 2026.
Added
Pursuant to the Shelf Agreement, the Company agreed to sell up to $100 million aggregate principal amount of senior notes (the Initial Notes) to the Note Purchasers. The Initial Notes will bear interest at 6.09% per annum and will mature five years after the date on which the Initial Notes are issued, unless repaid earlier by the Company.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed1 unchanged
Biggest changeThe fair value of the fixed rate debt (in millions) was estimated based upon level two in the fair value hierarchy, respectively. The fair value of the finance leases is based on current market interest rates for similar types of financial instruments.
Biggest changeThe estimated fair value of the fixed rate debt (in millions), which is comprised of finance leases, is based on current market interest rates for similar types of financial instruments, reflective of level two inputs.
To help mitigate our exposure to rising diesel fuel prices, the Company has an established fuel surcharge program. The following table provides information about the Company’s debt as of December 31, 2022. The table presents cash flows for principal payments (in millions) and related weighted average interest rates by contractual maturity dates.
To help mitigate our exposure to rising diesel fuel prices, the Company has an established fuel surcharge program. The following table provides information about the Company’s debt as of December 31, 2023. The table presents cash flows for principal payments (in millions) and related weighted average interest rates by contractual maturity dates.
Expected maturity date As of December 31, 2022 2023 2024 2025 2026 2027 Thereafter Total Fair Value Fixed rate debt $14.5 $10.2 $5.3 $1.0 $— $— $31.0 $31.2 Average interest rate 3.7% 3.7% 3.7% 3.7% — — 41
Expected maturity date As of December 31, 2023 2024 2025 2026 2027 2028 Thereafter Total Fair Value Fixed rate debt $10.2 $5.3 $1.0 $— $— $— $16.5 $16.1 Average interest rate 3.9% 4.1% 3.5% — — — 43

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