Saia Inc Q1 FY2025 Earnings Call

Please note this event is being recorded. I would now like to turn the conference over to Matt Petay, Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Michael. Good morning, everyone. Welcome to Saia, Inc.'s first quarter 2025 conference call. With me for today's call is Saia, Inc.'s President and Chief Executive Officer, Fritz Holzgrefe. Before we begin, you should note that during this call, we may make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and all other statements that might be made on this call that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. We refer you to our press release and our SEC filings for more information on the exact risk factors that could cause actual results to differ. I will now turn the call over to Fritz for some opening comments.

Good morning, and thank you for joining us to discuss Saia, Inc.'s first quarter results. To open the year, we experienced first quarter records for revenue, tonnage, and shipments on one less workday than in the first quarter of 2024, with growth driven primarily by ramping terminals opened in the last three years. Our first quarter revenue of $787.6 million increased from last first quarter by 4.3%. The growth we experienced was concentrated in our newer markets where we were pleased with customer acceptance. Going into the year, our business plans for 2025 are focused on execution and leveraging the investments we have made in our network over the last several years. We expect that the macro environment to be somewhat muted or at least as we approach the end of April, the backdrop is notably different. Historically, we have typically seen seasonal increases in shipments and tonnage of approximately in facilities open less than three years, we saw a 3% sequential improvement. In legacy facilities, shipments were actually down slightly in February, for the company were only modestly improved from March to April, which we attribute primarily to the uncertain macro environment. Customers, although satisfied with their service and value of our network expansion, appear cautious in the current backdrop and are taking a wait-and-see approach. We estimate the revenue impact of the sub-seasonal trends to be approximately $25 to $40 million. While the first quarter is typically impacted by adverse weather events, this year's disruptions proved more challenging in both magnitude and geographic location. Winter weather in the southern part of the country prompted closures and limited operations at some of our most dense and profitable regions. We experienced significantly more closures and terminals with limited operations in 2025 compared to the first quarter last year, with substantial impacts to our Atlanta, Dallas, and Houston markets in 2025. We estimate that the impact of weather on our operating ratio for the quarter was approximately 25 to 75 basis points. Our first quarter operating ratio of 91.1% deteriorated by 670 basis points compared to our operating ratio of 84.4% posted in the first quarter last year. We remain intently focused on our pricing and mix optimization initiatives. We are encouraged to see wafer shipment trends in a positive direction sequentially. Additionally, we saw proportionally more growth in our ramping markets or those opened since 2022, which while great to see can be challenging as they are relatively less profitable compared to the legacy markets. At this stage, it is critically important that we maintain and continue to improve our service levels. Customers value certainty and reliability in their supply chain, and we believe that we are well-positioned to provide that service. Contractual renewals averaged 6.1% in the quarter, reflecting our customer belief in the high quality of service that we continue to provide. However, as the environment has impacted our performance, we are focused on improving our service levels while also managing controllable costs and productivity. Moving forward, we will continue to do our part for customers by providing great quality differentiated service to justify pricing changes as are necessary to run our business. Now I will turn it back to Matt to walk us through some key expense items for the quarter.

Thanks, Fritz. First quarter revenue increased by $32.8 million to $787.6 million, a record for any first quarter in the company's history. Fuel surcharge revenue remained flat, increasing by 0.2% and was 15.1% of total revenue compared to 15.7% a year ago. Revenue per shipment, excluding fuel surcharge, increased 2.3% to $376 compared to $293.96 in the first quarter of 2024, an increase of 0.5% sequentially from the fourth quarter of 2024. Yield excluding fuel surcharge declined by 5.1% and yield decreased by 5.8% including fuel surcharge, reflecting the inverse relationship between weight per shipment and yield; a heavier weighted shipment typically drives a lower yield. Tonnage increased 11.0% attributable to a 2.9% shipment increase and a 7.8% increase in our average weight per shipment. Length of haul increased 1.9% to 905 miles. Shifting to the expense side for a few items to note in the quarter. Salaries, wages, and benefits increased 13.9%, which is primarily driven by a combination of our employee headcount growth of approximately 8% year over year and the result of our July 2024 wage increase, which averaged approximately 4.1%. The growth in headcount is primarily related to the opening of 21 new terminals resulting in over 500 new employees comprising more million dollars in additional wages and benefits for the first quarter compared to last year, in addition to the increase in volume compared to the prior year. Also impacting this line item was increased employee costs to keep the network fluid and provide service to our customers during the winter weather disruptions. During the quarter, we ran extra line haul miles and leveraged purchased transportation post-storms to keep the network running effectively. We also ran extra dock operations over some weekends to ensure customers' freight was minimally impacted by weather disruption. Additionally, other employee-related costs increased, including workers' compensation and healthcare costs. Purchase transportation expense, including both non-asset truckload volume and LTL purchased transportation miles increased by 14% compared to the first quarter last year and was 7.6% of total revenue compared to 7% in the first quarter of 2024. Truck and rail PT miles combined were 12.4% of our total line haul miles in the quarter. Fuel expense increased by 1.4% in the quarter while company line haul miles increased by 8.6%. The increase in fuel expense was primarily the result of an increase in line haul miles run partially offset by national average diesel prices decreasing by over 8% on a year-over-year basis. Claims and insurance expense increased by 23.4% year over year. The increase compared to the first quarter of 2024 was primarily due to increased claims as well as development of open claims and increased cost per claim. Depreciation expense of $59 million in the quarter was 20.9% higher year over year, primarily due to ongoing investments in revenue equipment, real estate, and technology. Compared to the first quarter of 2024, cost per shipment increased 9.4%, partially due to increased salaries, wages, and benefits to support a broader network of terminals in addition to the effect of sub-seasonal March impact on volumes. Additionally, cost per shipment was affected by the impacts from the winter storms on network operations including increased mileage and associated operating expenses to maintain network fluidity. In addition, a step-up in depreciation from the opening of 21 terminals and the largest equipment investment in company history over the last twelve months also contributed to the increased cost per shipment. Total operating expenses increased by 12.6% in the quarter and with the year-over-year revenue increase of 4.3%, our operating ratio deteriorated to 91.1 compared to 84.4 a year ago. Our tax rate for the first quarter was 24% compared to 23.7% in the first quarter last year. And our diluted earnings per share were $1.86 compared to $3.38 in the first quarter a year ago. I will now turn the call back over to Fritz for some closing comments.

Thanks, Matt. While there were challenges associated with the underlying environment and weather events in the first quarter, there are signs of continued progress being made as a trusted carrier for our customers as we continue to provide a high level of service across the network. As always, we remain intently focused on the long term. All the 21 terminals opened in 2024, have all been opened less than a year, we're beginning to see the benefit of a national network that allows us to serve our customers' needs more immediately than has been the case in the past. Evidenced by our shipment growth in those new markets. The markets opened in 2024 represented the majority of our shipment growth compared to last year, but these markets operated at roughly breakeven in Q1 of 2025. We do not open these terminals for growth in the next month or next quarter, rather these are long term investments that allow us to provide service to our customers nationwide. As each month passes, we continue to build density in these markets that will continue to drive long term value. As we look forward, we'll continue to manage through the macroeconomic environment looking to adjust our cost structure and adapt to the changing landscape across our network, all while maintaining our focus on the customer. Through discussions with our customers, it's no surprise to hear the hesitation and uncertainty around the macroeconomic backdrop. Remain close to our customers and feel strongly well positioned to provide solutions in the changing supply chain. The first quarter represents certain challenges that are somewhat out of our control. However, we do not see any evidence that would suggest that there's a significant long term opportunity for Saia, Inc. In this environment, we continue to commit to providing an exceptional product to our customers, while at the same time continuing to maintain and enhance a very competitive cost structure. Over the long term, we remain confident in our value proposition and the organic growth story that is Saia, Inc. as well as the benefits that we'll add to our customer and the growth and performance of our company over time. We're now ready to open the line for questions, operator.

The first question comes from Chris Wetherbee with Wells Fargo. Please go ahead.

Maybe the question, maybe first big picture on pricing, kind of want to get a sense of how you view the current pricing environment. Obviously, some of the yield metrics could be pressured by mix, but I'm kind of curious how you guys are thinking big picture about pricing first.

Hey, Chris. Yeah. I mean, important to note the weight per shipment impact on yield. I know we've talked before about our focus on revenue per shipment. So the yield metrics have that weight per shipment component. I mean, for us, we're focused on pricing no different than we have been in the past. Certainly, with you know, the capacity environment the way that it is, we see customers choosing other options in certain instances when we're taking rate increases. But we view the environment the same as it has been before. Everyone's acting as we would expect. We maintain our focus on it. So nothing different from us in that regard. Of course, customers always challenge the pricing increases that we propose, and with a looser capacity environment, that gets a little bit louder, but no difference in focus from our side.

And then maybe just a follow-up on that. So if we look at you know, weight per shipment was up sequentially, length of haul was up sequentially, and then revenue per shipment was kind of pretty close to flat. It was up a little bit from 4Q to 1Q. So I guess when you think about what are the drivers within mix there that are offsetting some of those what should be fairly positive factors to revenue per shipment ex fuel?

Well, as Fritz noted in his comments, the vast majority of the growth for us is coming from these ramping markets or those that have opened in the past three years. And the vast majority of that growth is coming from existing customers that we already work with. So there's rates in place with them. And each month that passes, we're finding out more about the mix that we handle for them and the pricing opportunities that we handle with them. So as we go into these markets, our lead list is our existing book of customers. And we're winning some heavier weighted share in those markets. And we understand where our opportunities are, and we're not going to handle business that doesn't work for us. But mix in those markets can be a little bit different than what we handle in our legacy, and that's something about the going into new markets and learning more about what we handle for customers in different geographical locations.

So it still feels like you have the opportunity to reprice that business after you onboard it, see what it is, then ultimately address it as we move forward through the rest of this year.

Chris, I think if you just look at our top line metrics, right, we recognize that the entire book of business, you know, relative to peers and folks that are you know, have mix of business, weight per shipment, like the haul, similar or even different than ours that there's an opportunity for us to continue to make sure that we get paid for all the service we're providing. Our service is really good. And, you know, we feel like we can we should be able to continue to push our, you know, let's get this to market. And we look around and we see that there are opportunities for us to continue to push that. We haven't we're unrelenting about that. Just this environment right now, people have choices. So, you know, we're we we haven't, you know, in for the balance of this year, and I'm sure to the next couple, we still have runway around that. And I we're we're focused on that opportunity. Appreciate the time. Thank you.

And your next question comes from John Chappell with Evercore ISI. Please go ahead.

Thank you. Good morning. Matt, trying to put a little bit of a pin on the sub-seasonal trends. So you were expecting thirty to fifty basis points of lower deterioration 4Q to 1Q. Fritz said weather was twenty-five to seventy-five. So let's call that fifty. So let's say weather, you know, strip all that other stuff out. It feels like the sub-seasonal trends was about three hundred basis points. So as we think about April to Q2 and really going forward for the rest of the year, absent some return to seasonality or even kind of a catch-up, is this Q1 OR kind of the starting point on how we think about, you know, the OR cadence going forward? Or do you think that, you know, this is a very low bar for Q1 and there's a lot to catch up in Q2 and going forward?

Well, I'll start here and then Fritz can chime in too. I mean, if you look at when we talked about January and February, we've talked along about how March is really the make or break month for the quarter. And historically, yes. You'll always have some weather. This year was more challenging just in magnitude and location, but there's always weather and typically March just makes up for it. And like Fritz said, we got that in those ramping markets in the new but when it doesn't come in the legacy markets, it's just tough to take the cost out in a quick thirty-day time period. Right? So we weren't expecting a lack of step up from that seasonal point. Obviously, there's a lot going on in the macro, and that remains uncertain. I wish we had a crystal ball to be able to say what that looks like. I mean, April to date, we're seeing sub-seasonal trends as well. So I don't think anything stands out to us that would say that that's better right now until we see more of that on the ground. But from our view, March sub-seasonal trends and how they're tracking in April is pretty similar. There's a lot going on from the customer side right now. I think I would clarify one point that we're making on the weather. The twenty-five to seventy-five basis points is really about what we would say. We always have weather in the first quarter. Twenty-five to seventy-five basis points is the sort of incremental impact of how much worse than normal impact. So it's always it's always there. And quite honestly, when you're in a freight business and you're running the network across the country, always going to have weather. This what was unusual about this is when you have when our best operating part of the company is shutdown, that's an impact for us. And that's what that's the only reason why we called that out. Sort of life in a big city for us. I think the challenge though from as Matt was pointing out, when we didn't see that sort of seasonal pickup from February to March, that didn't give us the opportunity pick that up, right, or to recover, if you will, from the January, February piece. As we look forward, as we plan and operate the business, we look strictly at sort of what March looked like; we said, alright, we got a our model around March going forward. We haven't really seen a step up into April. And I'm not going to predict May or June or frankly the rest of the year. So we're very focused on kind of getting this back to sort of some normalcy around this. So know, obviously, when you look at Q1 to Q2 and you take out the weather, you know, we're going to be at a run rate that I think is not where we want to be, but it's better. Right? So we operated in March sort of sub ninety, right around eighty-nine. On a sort of with no changes. I think that probably runs into Q2. That's kind of what we're managing. We like to get to that kind of a number for the full quarter, but we'll see how that plays out. Certainly, we're taking cost actions where we can. But, you know, at the same time, it's important that we maintain the long-term structure and opportunity for the business.

That leads right to my follow-up, Fritz. I mean, Matt did say, when you don't get that seasonal improvement in March, it's kinda too quick for you to make cost adjustments. But here we are now, almost through April. It sounds like it hasn't gotten any better. Of course, nobody knows where we're going from here, but certainly more concerned about the macro than three months ago. When do you start taking some of those cost actions? And what and what could they be? To maybe manage into a slower demand backdrop beyond just a two-month period.

Yes. So I mean we, those are the cost sort of actions are course, in flight. And you know, you've got one of the things you have to do in the LTL business, you have to match labor with what the available freight is, both in frankly, in our legacy markets and new markets both. If some of our network planning initiatives, we're we're pulling those forward and implementing those around how do we optimize that. And now Nash network. Those are in flight. We are looking at sort of what can we how can we reposition parts of our company to more closely and better serve customers. At the same time, there's a cost benefit that comes out of that. So that's kind of built into what our siding is right now. You know, we feel like, you know, we'll see those the fruits of those sorts of changes happen a little bit into this quarter and into the balance of the year. So I you know, it's just all about matching our cost structure at with what our customers need alongside of what we need to do to continue to drive performance in the company.

With Goldman Sachs. Please go ahead.

Yes. Hi, morning. I just have two questions. One, how far forward do you have visibility on volume and what based on whatever that visibility is, are your customers telling you? And then second, you still have thirteen percent or so tonnage growth in the quarter, which wasn't enough obviously. What as an entity kind of volumes on that front; how do we think about to get you back on track seasonally from an overall volume perspective? Thanks.

Hey, Jordan. I mean, to answer the first part, I mean we have a robust forecasting process, but I think as everybody well knows that the news changes frequently. And so when we hear from our customers, like Fred said in the script, there's no hesitancy. I mean, I think there's, you know, they're trying to understand how long the potential changes can be in place for. Supply chains are years in the making, so it's sometimes hard to flip overnight. I think it's that wait and see approach. So I think remains to be seen, but depending on how long impacts last, I think that's part of it. And we're planning. Right? We're understanding that. We're forecasting and doing scenario modeling just like everybody else is. And then on the tonnage side, the tonnage growth and the shipment growth really came from these new markets, those that have been open over the past three years. So those are operating roughly breakeven. We're not getting that seasonal lift in the growth from the legacy markets, which are our best operating. We've been in those markets for many years, really great density. So it's you can't just take the volume and the tonnage growth in isolation because of where it's coming from. That matters. And I think I would add, Jason, is that listen, we'll continue those new markets are going to continue to get better. And I would expect through Q2 that we'd start seeing some of those in the black as we're gonna be classed, you know, kind of going over, you know, the one-year mark for them. So that's great. So what you would expect, particularly in a tough environment. I think for the balance of the business, the focus has gotta be what's the available freight? What are we hearing from customers? Making sure that our sort of operating model matches that. When you don't have seasonal pickup, I mean, this may be hard to believe, but when you don't see volumes going from February to March, the ability to adapt to that within a matter of days, it's pretty challenging. Right? If you go to a customer and you're expecting three pallets of pickup and you get one, well, you have still the same driver that's there, and you have significantly less revenue. So you make the adjustments to how do you schedule your pickup and delivery operation to take care of that situation. Right? So you're reducing the number of hours, and also all things that we have to do and are doing March and April into the balance of the year. So as we look forward, you know, we hear what we see what our customers are telling us, but then it's, you know, it's like, alright. This is what they think right now. They're uncertain. They're making the aligned to that as well, which I think we are. And this be in a position to meet their expectations when they need it, depending on where it goes. I'll tell you what is really important to not lose sight of in this situation is when this the reason why we invested in the national network, when the economy does settle and things go spring the other way, we will be in a position to capitalize on this. And that we can't lose sight of that in a tough environment for two months.

Just a real quick follow-up. And I apologize if you've said this already. On the legacy terminals, the older terminals, can you give a sense of what was the year-over-year tonnage or shipment growth in those terminals year over year as opposed to seasonal sequential?

On the legacy ones, I mean, their shipments in those markets are down. I mean our legacy book of business is looking like the pure set in the macro right now. So year over year in February and March, our legacy shipments were down in those markets. Thank you. Sure.

And your next question comes from Fady Shimon with BMO Capital Markets. Please go ahead.

Thank you. Good morning. Wanted to dig a little bit into the mix because, you know, first, you know, last year for most part of it, it was lighter weight shipment mixed challenging. And then it feels like in Q4 and Q1, we very quickly switched into kind of very heavier type of weight per shipment, which supposed to be margin accretive typically, but it wasn't. And it looks like if I if I look at the revenue per shipment, the weight, the length of haul realized pricing into one was negative. And I know you mentioned renewal was plus six. I'm trying to reconcile these things. What how would you describe the characteristics of this freight that is entering the network? Right now. Heavy freight, but not a greener freight. I'm just trying to reconcile all of these things and why why we're not really seeing a much better effect overall on the gross and profitability.

Yes. So, Fahad, it's a good question. I mean, there's a variety of factors there. Right? So I think it's the wafer shipment is a positive trend for sure. But weight heavier weight per shipment in time at times does have higher or more difficult handling characteristics, so it does attract some additional costs. So it's not a complete flow through. But it's positive in general. So I think that's good. I think what impacted us probably more significantly in the quarter is that not seeing the step up in revenue in those legacy facilities. So we got all the growth, came from the new markets, right, which is good. Somewhat attractive way for shipment and margin structure. In immature facilities. So you have know, our line haul cost associated with those are higher than anything else, so that's the growth is all there. So the relative contribution of those of that new freight mix is not it not what we'd hope. Right? But that's part of startup. Meanwhile, the facilities that have been open for a three years or longer we actually saw declines in March. And a bit in February. Right? And those that's tough to overcome, and that's where we're trying to adjust the cost structure to make that to match that more closely and to build the efficiency more generally across the whole network. So I think there's several factors in there. I think the trends the top line trends are important and they're good, but when you're in, you know, big part of our sort of footprint is now in a sort of more startup mode. That that can be challenging to overcome on a margin side.

If you think about those locations, Todd, I mean, we're not running as many directs out of those new geographies. So higher way to shipments, generally, yes, we prefer those, but you also prefer them in the legacy markets because you get more efficiencies out of those. Our newly opened markets, they're often running back to a break consolidate freight. So there's typically more handling involved with them. So where it comes from matters. In in this instance, we just the legacy parts were down. So you you see from that.

So and when you take that expand that further, so if you take that run that through a legacy break operation. So that legacy brake operation is its core sort of local business is down year on year. You don't have the opportunity to optimize cost because you gotta keep your labor in place to be able to handle freight that goes actually passes through the facility rather than this picked up or delivered from that facility.

Okay. And you know, maybe you've answered it partially, but like, specifically, how should we interpret this realized pricing seems negative when in reality, you're saying pricing renewal is quite strong?

Well, keep in mind there's a really important point is that the contractual rules, that's a great sort of metric that's out there, but that assumes that that mix of business that came along with this contract contractual renewals is exactly what we get. And I think right now, what you see is customers have options so we don't necessarily our realization of what we're getting on contractual renewals is, you know, it's not one for one. It's obviously less. So it's that's we we provide that just to give you an indicative sort of view of what the pricing environment looks like. But our actual realization will likely always be different.

And your next question comes from Tom Wadewitz with UBS. Please go ahead.

I want to try to get a sense of I'm sure this is hard to do, but how much of the tasked to improvement in OR, I mean, you know, I'm sure you're not satisfied with the go forward of an eighty nine OR. And, you know, we want want to focus on improving that. You know, there are other factors like service you want to maintain, but how much is the path to improvement off of, you know, what you talked about with, I think, March is in eighty nine? Is purely driven by freight market improvement and they're not beyond your control. Obviously, you don't you don't control tariffs and freight economy and uncertainty and all of that. And how much do you think is in your control that it's like, hey, we just need a bit more time to know, right size the resources. Because I know, I think you guys are good at that historically managing your your cost structure and pick up and delivery route. And you know, that would be something that could be in your control. Maybe there's some other things on mix management that are in your control. So just wanna see if you could offer, you know, some thoughts on OR and, you know, what you're just waiting for freight and what maybe you can work on.

So, Tom, that's a great question. I mean, internally, the way we think about this, and this is important, is we're very, very focused on the things that we can control. Inside the company. So that's things like on time for the customer, claims ratios, all those things. Those are things that we can deal with. Cost structure are things that we can deal with. You know, do we get to a market in which, you know, we think the long term opportunity of businesses a seventy-five OR or better perhaps, right? We're gonna need market help for that. Right? In the environment that we're in right now, we're it's that's gonna be a long there's not a path on the cost side that gets us there. Yeah. Can we see continued OR improvement on a modest level from here? Into the balance of the year? Yeah. There's gonna be some cost levers that we're gonna take advantage of, and there are ones that you know, will hopefully be able to mat be able to improve service the same time that we reduce costs. Those are things that we could deal with, but they're not sequential. If you look at our cost structure relative to the competition or, you know, the public peers, that this this is a top line opportunity for us. And, yeah, there's some cost things we're gonna deal with. But I don't think that that's gonna be the path to the low OR that we would that we want and think we can achieve. You know, in the short term, there's certainly things we're gonna do. You know, that we're not quite ready to to identify kinda what the magnitude of that is. Largely because I think there's a fair amount of uncertainty around what we think the market's gonna do even through the quarter. We're focused right now on saying, listen, there's not a change from today around the market. We're not expecting some big step up in this second half of this quarter or the next ninety days or anything. We're just saying, listen, we gotta manage from this point and focus on the things that we can control.

Okay. Great. That makes a lot of sense. I think for the follow-up, I know you asked on pricing a bit, but just one I I guess, it seems to me like the kind of construct you could say, hey, LTL pricing, gonna be gonna be four percent to five percent this year and you know, weaker freight backdrop maybe it's lower than that. Maybe it's two to three. Maybe it's flat. I don't know. How how do you think about that? I mean, it does seem like the market that you compete in might market pricing price softer, but do you think that's the right way to look at it? Do you think it goes negative, or you think it just kinda you know, you you can't get as much price but still positive?

Oh, I think it's positive. Listen, it's a fundamentals. Even even in the fact that the tonnage profile across the industry right now is is soft. Right? I mean, you just look at what's been reported. The the cost structures are all still inflationary. Right? And I I think that there's not really a path that makes a lot of sense where you cut rates to try to fill up volume and all that sort of it. These businesses require their capital intensive. They were we talk require a return. So I would expect to see pricing environment to remain stable. People be rational around it. Now is that gonna maybe be know, kind of the stronger end of that? I think it's probably less likely just by the nature that folks have options right now. But I I don't I don't see a situation where that turns negative by any stretch. It just may not be what it has been at the same rates in the last number of years.

Right. Okay. Great. Thank you for the time.

And your next question will come from Scott Group with Wolfe Research. Please go ahead.

So I didn't hear yet the March and April tonnage. And then, you know, maybe I know you don't typically do this, but one of the other LTLs does, and I think it's helpful. Like, that eighty-nine sort of OR you're talking about for Q2, like, what's the revenue assumption, you know, embedded within that?

Hey, Scott. So I'll give the update on the shipments and tonnage for the month. So March was up on shipments 2.8 percent and tonnage up twelve point three percent. And then month to date in April, and this is not a good Friday adjustment just just overall. Shipments are tracking down about two percent, tonnage up five percent. And then on the second piece of it, we we don't give a revenue guy but what our assumption is right now is that we're not really seeing anything in April that would tell us that seasonality is back in or anything like that. So our modeling assumptions right now are what we're seeing in April and what we saw in March just continues on till we see otherwise on the ground floor. And we talked about we're stay very close to our customers. And conversations with them reflect that. Of understanding what the environment looks like, how to plan their supply chain. So that's what we think about right now, and we remain close to them. And to the extent that it changes up or down, obviously, we manage to that. But we're not seeing anything right now that would tell us to model anything substantially better.

Thanks, Fritz. First quarter revenue increased by $32.8 million to $787.6 million, a record for any first quarter in the company's history. Fuel surcharge revenue remained flat, increasing by 0.2% and was 15.1% of total revenue compared to 15.7% a year ago. Revenue per shipment, excluding fuel surcharge, increased 2.3% to $376 compared to $293.96 in the first quarter of 2024, an increase of 0.5% sequentially from the fourth quarter of 2024. Yield excluding fuel surcharge declined by 5.1% and yield decreased by 5.8% including fuel surcharge, reflecting the inverse relationship between weight per shipment and yield; a heavier weighted shipment typically drives a lower yield. Tonnage increased 11.0% attributable to a 2.9% shipment increase and a 7.8% increase in our average weight per shipment. Length of haul increased 1.9% to 905 miles. Shifting to the expense side for a few items to note in the quarter.

Well, as Fritz noted in his comments, the vast majority of the growth for us is coming from these ramping markets or those that have opened in the past three years. And the vast majority of that growth is coming from existing customers that we already work with. So there's rates in place with them. And each month that passes, we're figuring out more about the mix that we handle for them and the pricing opportunities that we handle with them. So as we go into these markets, our lead list is our existing book of customers. And we're winning some heavier weighted share in those markets. And we understand where our opportunities are, and we're not going to handle business that doesn't work for us. As each month passes, we continue to build density in these markets that will continue to drive long term value. As we look forward, we'll continue to manage through the macroeconomic environment looking to adjust our cost structure and adapt to the changing landscape across our network, all while maintaining our focus on the customer. Through discussions with our customers, it's no surprise to hear the hesitation and uncertainty around the macroeconomic backdrop.