Saia President and CEO Fritz Holzgrefe recently spoke with FreightWaves about the less-than-truckload (LTL) carrier's strategic network expansion, customer sentiment in the current freight market, and how investments in new terminals and workforce are reducing transit times and driving growth across competitive U.S. markets. Holzgrefe also addressed navigating inflationary costs and balancing wage increases while maintaining a focus on customer value.

LTL freight — shipments too large for parcel carriers but not large enough to fill a full truckload trailer — serves manufacturers, distributors, and retailers who need cost-effective movement of palletized goods. Network density is the economic engine of the model: more terminals in more markets mean fewer intermediate handling stops, shorter transit lanes, and better asset utilization.

Saia has opened 70 terminals since 2017 as part of a deliberate, multiyear organic expansion that Holzgrefe says is still far from reaching its full potential. Since 2023 alone, the carrier has added close to 40 new locations and replaced or relocated another 30 facilities — a pace of physical network transformation that Holzgrefe said no other LTL carrier has matched in the same period.

The buildout has unlocked transit lanes Saia could not previously offer. Customers can now ship freight from Trenton, New Jersey, to Texas markets in three days — a direct result of the denser footprint.

"Customers are coming to us and say, 'Oh, fantastic, you can now get my freight from Trenton, New Jersey to Texas markets in 3 days,'" Holzgrefe said. "That's significant. We couldn't do that historically."

"We are early innings of tapping the full potential of this business," he added, noting that the roughly 40 facilities opened since 2023 have not yet reached the profitability or density levels the company believes they can achieve.

The network strategy has coincided with market share gains in Saia's own backyard. The carrier added two terminals in the Atlanta metro following a customer-proximity model and has doubled its market share in that market over roughly five years. Saia's current operating ratio stands at 86 — a metric where lower is better in trucking — though Holzgrefe said that figure understates performance in the carrier's longer-established facilities and that the company has significant room to improve returns across its newer terminals.

On pricing, Saia pushed through a general rate increase in July. Holzgrefe described customer reaction as largely in line with expectations — frustration with inflation but acceptance tied to service quality.

"Customers are like, 'You're doing a great job. We don't like the inflationary nature of what you're having to do, but at the same time, we understand,'" he said.

The carrier also issued two wage increases over the past year, delaying the first to October 1 before returning to its normal schedule with a July 1 increase, which Holzgrefe framed as a necessary investment in retaining what he called the best team in the business.

Customer sentiment surveys Saia conducts each quarter show sustained optimism heading into the second half of the year. After the first quarter, customers polled by the carrier expected the back half of the year to strengthen — and that view had not changed in the survey conducted after the second quarter. Holzgrefe sees shippers moving from gauging market conditions to actively selecting which LTL partners they want to grow with.

Holzgrefe, who previously served as Saia's CFO before moving into the CEO role, said the transition gave him a fuller view of how sales, operations, and financial discipline interconnect. The 102-year-old carrier's expansion traces back to 2017, when it began pushing into the Northeast, and accelerated when Yellow Corporation — one of the largest LTL carriers in U.S. history — filed for bankruptcy and exited the market in 2023, creating what Holzgrefe described as a generational real estate opportunity that helped Saia speed up its terminal acquisition pace.

Full Interview Transcript

FreightWaves: We have the CEO of Saia coming to us from Atlanta, right up the street from Chattanooga, Fritz Holzgrefe. Welcome, Fritz. Welcome to FreightWaves Today. How are you?

Fritz Holzgrefe: Hey, great to be here. Doing well.

FreightWaves: Congratulations. You guys are continuing to do impressive stuff at Saia. You built out a pretty substantial network, took advantage of some consolidation that's happening in LTL. Right time to do that with everything that's happening in the freight market. What are you guys seeing right now?

Holzgrefe: I think the market feels pretty good. It's got room to grow from here. The biggest takeaway that I see as we talk to customers is that there is a certain level of consistency. People understand the markets in which we operate. They understand what the challenges might be, but most importantly, they know the rules of engagement right now. So I think that allows folks to invest in their business, grow their business, work on developing their supply chain. It's an interesting time. And we've seen pretty good growth as we've built out our national network.

FreightWaves: What are shippers seeing right now? LTL is always a little bit slower to recover than the truckload market. It's that second part of the cycle. Earlier this year, there was a belief among shippers that the market was turning. How are shippers reacting to the market right now?

Holzgrefe: It's interesting. We poll our customers every quarter and get a feel for what they think's going on, how they feel about their business, what their next steps are. When you look at the poll that we took back at the end of the first quarter, people were focused on the second half being better. There was optimism around that. And that hasn't really changed after the second quarter. We did our survey a few weeks ago, and I think that's important for the business. Customers are comfortable with where they are, and now they're looking at what LTL provider can I grow with and who can I partner with that meets their expectations in the second half. There's a consistency there. That's positive. And we're ready to see that growth.

FreightWaves: You certainly have built out your network. You've added a brand new expansion in terminals. Talk a little bit about what the network buildout has been like and what was the purpose of that?

Holzgrefe: The network buildout has been a many-year process. Our first real expansion started in 2017. The company's 102 years old at this point. By the time 2017 had come, we'd been through a period of challenges in the 2000–2010 period. We built through acquisition, got the business stabilized through 2017, and started in earnest expanding into the Northeast. And we've kept going. As the generational real estate opportunity came about, when one of our competitors exited the business a few years ago, that helped us accelerate that process.

We've opened 70 of these facilities since 2017. What you learn is the customer expects to have the exact same service everywhere we do business with them. That's critically important. For us, the biggest challenge in an organic expansion like that is you've got to build the team, develop those expectations right away, that leans into that historic Saia culture, which is a focus on the customer.

When you go through an organic expansion like that, it's really important that a new customer in Trenton, New Jersey has the exact same experience with Saia that they do in Dallas or one of the established markets. The success to date — and I think you see that in our volume numbers — is that customers say, look, I'm getting the same service across this national network now. That gives us some new opportunities. Customers are coming to us and say, oh, fantastic, you can now get my freight from Trenton, New Jersey to Texas markets in 3 days. That's significant. We couldn't do that historically. Now we can. Now we're providing those solutions to customers. The organic growth is really built around a great team and some great assets that we've accumulated over the last number of years.

FreightWaves: I love history — the history of Saia, the Jevic business, the connection to Yellow, rest in peace. It's been fun to watch what you guys have cooked over the last couple of years as you've built out this network and grown the business.

Holzgrefe: It's been exciting. What's really compelling to me is when you see what we can do for a customer now. There were times in Saia's history where we wanted to do a better job and we couldn't quite get it done. Now we feel like we're more and more in a position that we can do that. For our team that's focused on the customer, when you've got the ability to continue to match those customer needs, that's pretty exciting for us.

FreightWaves: I had the pleasure of speaking with Brad Hadley, your VP of National Accounts, last week on the show. We talked about general market health and general rate increases. I believe in July you guys did push out your general rate increase. How was that received and what are you hearing from shippers?

Holzgrefe: People don't like rate increases. People don't like inflationary cost increases. We understand that. Nobody is excited about it. You're in a better position to go recover those inflationary costs and put those rate increases in when you're doing a great job. First and foremost, you don't get the opportunity to go to a customer and say, hey, we need to put a general rate increase in because we're dealing with inflationary costs across our P&L. A customer has got plenty of problems. They don't need their LTL partner to be a problem. If you come in and say, look, this is the service we've been providing and you're creating a lot of value for the customer — you only get a chance to get those rate increases when you're providing value to the customer. And I think we are.

I don't know that people were excited about that, but I think they also would say that this is the best they've ever seen from Saia and that feels like a better investment for them. As far as the impact, it's been as we kind of expected. Customers are like, you're doing a great job. We don't like the inflationary nature of what you're having to do, but at the same time, we understand.

FreightWaves: Shippers need to pay up. They've enjoyed soft markets for the last couple of years. Capacity's consolidating. We've seen the economic challenges in this industry — theft, cargo theft requires substantial investments, investments in safety. Shippers have enjoyed it too soft, too long, where they've had an enormous amount of pricing power. This is changing.

FreightWaves: Speaking of investing in your company, your team, and the service you provide to your customers, you guys have rolled out two wage increases. Can you talk a little bit about that and how you're balancing that with margin pressure?

Holzgrefe: We've got the best team in the business. We've got to invest behind that team. A year ago, if we had this conversation, I would have felt like we had just gone through a really tough first quarter, a so-so second quarter, fair amount of uncertainty in the market. We have always been very focused on not getting out over our skis. We've got to be in a position that we pay as we go. So we delayed a wage increase a year ago to the 1st of October. When we felt better about the business, we were in a position to put that wage increase in in October, and we did. Then we got back on our normal schedule here the 1st of July.

That's important, because the company's doing well. But the only reason why the company's doing well is we've got that great team we've got to invest behind. We did it in a very pragmatic way. Our team understands that. They feel good about it. That's part of the inflationary costs in the business. We've got to continue to focus on recovering, getting a return on the significant capital we've deployed in the business and the heck of a team we've assembled to get the job done for our customers every day.

FreightWaves: The market conditions are enabling — shippers have gotten the memo. They now realize that they have to pay up for service. If I'm a shipper, I'm thinking about how do I protect the service providers that I depend on? LTL providers and now truckload are having to operate far more rationally than they have in the past because the market has consolidated. That has enabled you guys to achieve a really great operating ratio of 86. But that is actually understating how well you're performing in some of your existing legacy facilities.

Holzgrefe: We're not anywhere where we think we need to be in terms of a company and what the returns we should generate in this business. The potential of the facilities — particularly the last 40 or so that we have opened, dating back to 2023 — those are not where we think they can be from a profitability perspective. Even from a service perspective in terms of making sure that we've got the appropriate densities in those markets to drive the efficiencies that are needed for our customer set. We're early innings of tapping the full potential of this business.

I think people compare Saia to some of the other national carriers. One of the things that is important to note is that since '23, we have opened close to 40 facilities — new locations, new people, new teams, new markets for us. And at the same time, we've replaced or relocated another 30 or so facilities. I don't think anybody else has done that. How you measure success of a new facility is: do you get business? That's how customers vote.

FreightWaves: You served as CFO, you're now running the business. What's the biggest aha moment going from finance to CEO?

Holzgrefe: I always felt like I was a pretty good operating CFO, meaning I was close to the business, being part of the results, driving the value in the organization. Our CFO now, Matt Pate, does a great job with it. But one of the things you don't know when you move from the CFO seat to the CEO seat is there's just stuff you don't know about. It could be as simple as, well, there's nobody else I can ask, or there are certain things I didn't really know I was going to have to deal with, or geez, my phone really is on all the time. That's okay. That's part of it.

What's really exciting about it is you can see how it all comes together. You see how a team really gels together and you see that success. I don't think you have that appreciation when you're in that CFO chair — when you've got a great sales team fitting together with a great ops team delivering a great product and it's all profitable and you're getting a good return. You have that appreciation when you sit in my chair.

FreightWaves: Trucking is a very financially intensive business — every penny matters. Some of the best operators in the entire business have a finance background. When you're deciding to add a new terminal, what's the formula?

Holzgrefe: One of the things we've learned from this process over time is that at the beginning, it was a process. The first facility in our expansion, I think we opened in 2015. We started with: where could we find the most economically viable property where the build costs are low, maybe near a highway? That's a way you can do it, and it was very cost-driven. We've evolved that to be very market-driven.

When we look at a facility, it's all about what the addressable market is near that facility. What customers can we tap? Because when we deploy capital and get close to the customer, that's creating value. The analytics start there. We certainly care about the build costs, timing, how we deploy the capital behind it. But the fundamentals always start with: what does the customer need?

We had a facility we added in the Dallas Metroplex — it was our fourth facility. Before we put that facility in, the team got together and I said, there's no way we need another facility in Dallas Metroplex. We've got great market share. The data came back and said, look, this particular facility was within proximity to customers. Customers will value this. Okay, now we're talking. The model in that case was wholly predicated on what does the customer need and where does this asset need to be deployed.

The model when we look at adding a facility is a top-down focus: start with the customer and where's the value there. Then you build the team behind it, and the team that you bring in has to understand the reason why that facility is there is to serve the customers that are there. That's our formula.

FreightWaves: Atlanta is growing massively as well. Atlanta and Dallas are such ancestral cities — they're so much alike.

Holzgrefe: We under-market-shared Atlanta. We added two facilities following the principles I just described. And now we've doubled the market share in this market in a period of about five years. It's all about proximity to the customer and making sure people understand we're in business to take care of the customer's business.

FreightWaves: Fritz, really appreciate your time. Before you go, I've got to ask — Notre Dame going to have a good team this year?

Holzgrefe: I'm a homer. We're going to have a great team. Marcus Freeman is fantastic. We just got to make sure we beat Wisconsin.

Source: FreightWaves