Saia’s tonnage declines carry into Q1

Less-than-truckload carrier Saia said Thursday the volume declines in the fourth quarter extended through the first two months of 2023.

Shipment and tonnage declines were in lockstep, down 4% year over year (y/y) in January and 8% lower in February as changes to weight per shipment were muted in both months.

February was up against a tough tonnage comp from a year ago (up 19.1%) while January’s year-ago comp was more subdued (up 7.6%). Further, severe winter weather in the latter part of December pushed some shipments into January, providing a tailwind for the month. The carrier normally sees a 2% sequential increase in tonnage from December to January. This year it was up 6%.

Saia’s (NASDAQ: SAIA) December tonnage was down 13.2% y/y. That could prove to be the trough of the cycle. However, smoothing the weather trend and looking at December and January collectively, it appears volumes were down by high-single-digit percentages in both months.

Saia logged a 7.1% y/y tonnage decline in November, which followed just a 3% dip in October. Tonnage for the entire fourth quarter was down 7.7%, which is in line with the February decline, suggesting not all that much has changed.

The downturn for the industry started in late summer after roughly two years of volume gains. However, carriers indicated recently that many of their retail customers are in the later stages of destocking bloated inventories and that volumes could start to turn higher in the back half of 2023.

Industrial-related freight demand, which accounts for up to two-thirds of total freight for some LTL carriers, has started to cool.

February data from the Institute for Supply Management showed contraction in the manufacturing sector for a fourth consecutive month. The Manufacturing Purchasing Managers’ Index registered a reading of 47.7, up 30 basis points from January, but remaining below the neutral level of 50.

Subcomponents like new orders, production and order backlog remained in contraction territory during the month, although the new orders subindex improved 450 bps to 47.

Saia doesn’t provide any revenue-based metrics in its intraquarter updates.

Several LTL carriers will provide similar first-quarter updates in the coming days.

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Editor: Todd Maiden