Saia’s shares up after tonnage turns positive in November

Less-than-truckload carrier Saia announced that tonnage moved back into positive territory on a year-over-year comparison in November. The Tuesday update reversed a three-month slide in volumes.

Johns Creek, Georgia-based Saia (NASDAQ: SAIA) said November tonnage per day improved 1.8% y/y as a 2.6% increase in shipments was only partially offset by a 0.8% decline in weight per shipment.

Final October metrics were also slightly better than expected. Tonnage was off just 3.3% y/y in the month, versus the company’s initial expectation for a 4% decline, which it provided on its third-quarter call in October.

Saia’s November tonnage was up 7.5% on a two-year-stacked comparison, the highest increase since June. However, it faces more formidable comps starting in December (December 2024 tonnage was up 13.5% y/y).

Shares of SAIA were up 4.4% at 1:51 p.m. EST on Tuesday, outpacing a 0.1% increase in the S&P 500 and declines seen by other LTL carriers. XPO (NYSE: XPO) was off 8.4% and ArcBest (NASDAQ: ARCB) was down 2.8%. Both carriers reported lackluster results, but largely in line with previously issued guidance, on Monday after the market closed.

November manufacturing data provided on Monday showed the sector has been in contraction for 35 of the past 37 months. The Purchasing Managers’ Index (PMI) registered a 48.2 reading for the month, 50 basis points worse than the October level. (A reading above 50 signals expansion while one below 50 indicates contraction.) The new orders index fell two percentage points to 47.4.

The quality of Saia’s fourth-quarter update remains to be seen. The carrier doesn’t provide revenue-based metrics, like changes in yield, in its intraquarter reports.

The company reported no y/y change to revenue per hundredweight (excluding fuel) in the third quarter, which lagged yield results provided by other carriers. However, it’s working off a favorable yield comp from the 2024 fourth quarter (negative-2.3%). Also, contractual rate increases averaged 5.1% in the third quarter and it implemented a 5.9% general rate increase on Oct. 1.

Saia normally sees 250 to 350 bps of margin degradation from the third quarter to the fourth quarter, but management previously guided to 300 to 400 bps of deterioration this year given subseasonal demand trends. The guide implies a 91% operating ratio (inverse of operating margin), roughly 400 bps worse y/y. However, with tonnage turning positive and volume growth occurring on more profitable 1-day and 2-day lanes (Saia disclosed this on the third-quarter call), the result may not be as bad as feared.