Home Safety Apparel Saia’s 7.5% GRI latest in string of 2022 LTL rate hikes

Saia’s 7.5% GRI latest in string of 2022 LTL rate hikes

Less-than-truckload carrier Saia Inc. announced Tuesday a 7.5% general rate increase (GRI), which will apply to general tariff codes. A press release noted that select accessorial and minimum charges will be impacted as well. The changes went into effect Monday.

Carriers typically use GRIs to adjust base rates on an annual basis. The increases vary by lane and weight class. The announced percentage increase is the expected average change the GRIs will have. The increases are used to offset cost inflation and fund investment in the network.

“At Saia, we are committed to providing customers with leading on-time and claims-free delivery service, while keeping customers informed through our proactive customer service strategy,” said Matthew Batteh, VP of pricing and analytics. “At the same time, we continue to expand our national footprint by opening new terminals, as well as expanding or relocating terminals in existing markets.”

Saia’s (NASDAQ: SAIA) 7.5% rate bump was later than those of some carriers, which began implementing rate changes earlier than normal. The announcements and implementation dates usually land in the first quarter of each year, assuming the market is strong enough to absorb the change.

Yellow Corp. (NASDAQ: YELL) imposed a 5.9% increase on Nov. 1. ArcBest (NASDAQ: ARCB) and privately held Estes implemented increases of 6.9% and 5.9%, respectively, later that month.

FedEx Freight (NYSE: FDX) and Old Dominion (NASDAQ: ODFL) issued increases of 5.9% and 4.9%, respectively, at the beginning of the year. Forward Air’s (NASDAQ: FWRD) 7.9% increase takes effect on Feb. 1.

Carriers have seen costs jump throughout the P&L for more than a year now. Increased expenses for driver and dockworker sourcing, diesel fuel, and other supplies have coincided with the need for incremental investment in equipment, terminals and technology to meet robust demand.

“This appears to be the biggest GRI in at least 10 years for the company, and 200bps higher than the GRI this time last year,” Deutsche Bank (NYSE: DB) analyst Amit Mehrotra told clients in a note. “It also compares to Old Dominion’s 4.9% GRI announced in mid-December, which we believe reflects the idiosyncratic pricing opportunity at SAIA from improving service and better analytics around costs (ODFL already has industry-leading pricing due to its best-in-class service, which contextualizes its lower GRI off a much higher base).”

Saia opened seven service centers in 2021 and plans to open an additional 10 to 15 this year besides expanding existing facilities.

“These investments allow Saia to maintain a high level of service, while adding additional capacity to meet customer expectations,” Batteh continued. “The GRI is intended to partially offset the rising cost of investments in our employees, new equipment, technology, and real estate, all of which are critical success drivers for providing leading quality service.”

Chart: (SONAR: LCWTF.USA) – Final reporting of LTL rates. Seven-day moving average of daily median rate per 100 pounds. Reported on a 42-day lag. To learn more about FreightWaves SONAR, click here.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes: Saia (No. 16), Yellow Corp. (No. 5), ArcBest (No. 26), Estes (No. 12), FedEx (No. 1), Old Dominion (No. 9) and Forward Air (No. 37).

Click for more FreightWaves articles by Todd Maiden.

Watch: What is on the road map for 2022?

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