SAIA

• Core Operational Performance and Service Improvements

  • Record second quarter shipments per workday, up 4.4% YoY; tonnage per workday increased 8.4% YoY.
  • Weight per shipment increased 3.9% YoY and 4.9% sequentially from Q1 2026, marking the seventh consecutive month of improvement.
  • Revenue per shipment excluding fuel surcharge increased 1.5% YoY to $303.12, with June 2026 up 4% compared to June 2025 and 4% sequentially from April 2026.
  • Achieved a record low cargo claims ratio of 0.3%, and miles between preventable accidents improved over 45% YoY, with hours between lost-time injuries up 17% YoY.
  • One year after decentralizing customer service operations, average customer inquiry handling time improved by 50%, boosting responsiveness and customer experience.

• Network and Strategic Investments

  • Since 2022, SIA has deployed $1 billion in real estate investments, adding 33 new terminals and expanding/relocating 25 more, increasing operational door count by 25%.
  • Another $1 billion has been deployed to expand and enhance the fleet, resulting in a 20% increase in tractor and trailer counts, and line haul driver count is up 26% since Q2 2022.
  • Launched the SIA REV (Rapid, Expanded, Visible) company-wide customer initiative, which includes over 2,000 transit time improvements across the network, automated 10 a.m. guaranteed delivery (the earliest for any nationwide LTL carrier), and dynamic real-time shipment tracking with predictive insights.

• Pricing and Customer Adoption

  • Contractual renewal pricing averaged 10.7% in the quarter, and a 7.1% general rate increase (GRI) was implemented in early July 2026, with early indications of strong customer acceptance.
  • Contract volume remains disciplined: SIA prioritizes higher-value freight that aligns with its service value proposition, letting go of lower-margin commodity business where appropriate.

• Operating ratio (OR) sequential guidance for Q3 2026: Management expects 100 basis points of degradation from Q2 2026, which is better than the historical average 150-200 basis points of Q2-to-Q3 seasonal degradation. The larger than typical sequential decline is driven by two compounding company-wide wage increases (one in October 2025, one in July 2026) and near-term volume volatility associated with the early-July GRI.
• Full-year 2026 OR guidance is maintained for 100 basis points of YoY improvement. If volume ramps more strongly than expected in the second half of 2026, OR improvement could exceed this target.
• Management expects continued sequential improvement in revenue per shipment (ex-fuel) and core yield as mix headwinds from the Los Angeles region continue to abate, and service enhancements from the SIA REV initiative support further pricing realization.
• Long-term, management expects the company's mature national network can support an operating ratio below 80%, with the pace of improvement dependent on broader economic conditions.

SIA is a less-than-truckload (LTL) freight company and does not break out separate product segments in this earnings call. Overall company financial performance for Q2 2026: Total revenue hit a company record of $956.5 million, up 17.1% year-over-year (YoY). Fuel surcharge represented 22.3% of total revenue, compared to 14.6% in Q2 2025. Operating income increased 26% YoY to $125 million. Diluted earnings per share was $3.51, up 31.5% YoY. The operating ratio improved to 86.9% from 87.8% YoY, with a 480 basis point sequential improvement from Q1 2026, outpacing historical seasonality of 250-300 basis points. Terminals opened in 2023 and 2024 operated at a low 90s operating ratio, an improvement of nearly 300 basis points YoY. Five new terminals were opened in Q2 2026.

• Broader macroeconomic uncertainty: While customer sentiment has improved and volumes are stabilizing, management remains cautious about the pace of economic recovery and will wait for confirmed sustained demand improvement before updating long-term targets.
• Labor market tightness: The national driver population is aging and competitive, requiring ongoing focused recruiting and retention efforts, even with SIA's competitive advantages of daily home time and a strong company culture.
• Fuel price volatility: Higher than expected diesel prices would increase both direct fuel expense and purchased transportation costs, pressuring margins.
• New terminal ramp-up risk: While new terminals have improved operating performance by 300 basis points YoY, they are still not at full maturity and require ongoing sales effort to build local density, which could delay margin improvements.

Q: What are July 2026 shipment and tonnage trends, and what does that imply for Q3 2026 operating ratio seasonality?

A: With a few days remaining in July, shipments per day are tracking up ~1% and tonnage per day up ~7.5% YoY, with some shipment volatility expected after the 7.1% early July GRI, which is typical after a rate increase. Management expects 100 basis points of sequential OR degradation, which is better than the historical 150-200 basis point average, driven by strong operating execution. The larger than typical year-over-year OR increase this Q3 is due to the timing of two compounding wage increases.

Q: What was the issue in the Los Angeles region that created mix headwinds, and is that headwind now resolved?

A: Over a year ago, SIA exited a small number of large, low-margin customers in the Los Angeles region, which has the highest revenue per shipment of any SIA region. This created a sustained top-line and mix headwind that impacted results for five consecutive quarters. The headwind has now fully lapped, and management believes the region has reached a steady state and is positioned for growth moving forward.

Q: What gives management confidence the business is at an inflection point from network investment to realizing returns on those investments?

A: Several months of consistent positive volume performance and stable, improving customer sentiment have formed a pattern of firming demand that management views as a sustained trend. As new terminals opened since 2023 continue to mature, their operating ratios will converge toward the performance of SIA's best-in-class existing facilities, driving incremental margin improvement. Core execution has remained strong even during the network buildout, and the company is now positioned to capture growing returns as demand improves.

Q: Long-term, how should investors think about margin potential as the new network matures?

A: With the completed national network expansion, SIA can now operate with an OR below 80% long-term, with some mature regions and terminals already delivering operating ratios in the 70s and low 80s. The pace of improvement will depend on the strength of the economic backdrop, with stronger growth accelerating OR improvement. SIA is already generating strong free cash flow, and future network investments can be funded through operating cash flow, supporting sustained margin expansion.