ARCB - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the ArcBest Third Quarter 2020 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards we'll conduct a question-and-answer session. [Operator Instructions] And as a reminder, this conference is being recorded Tuesday, November 3rd, 2020. I'd now like to turn it over to Mr. of President Vice Humphrey, Investor Relations. David ahead. go Please

David Humphrey

earnings Welcome XXXX to ArcBest third the conference call. quarter

Chief morning help forward-looking this made Chairman, Officer David today. results, We Chief presentation be some joining for understand President, Executive of this us Cobb, during ArcBest thank and its you ArcBest; order Our be of will better and statements McReynolds, to could done In Officer call. ArcBest. you Financial by Judy and

are statements, forward-looking uncertainties by know, subject all nature, to risks. very we As and their

For non-GAAP company's complete the In meaningful and to the provide outlined filings. discussion in statements to affect discussed described comparisons, a and of more in recent of factors public future the the could in that company's earnings order section measures call refer financial release most press release. tables as the earnings information press SEC includes our certain results, this please company's conference forward-looking

Judy. We will with begin now

Judy McReynolds

of and what come first of online. in contrast recession us a At proud employees Good into customers. indication filled examples responsive respond our quickly our morning is months. the provider everyone by year and our extremely for our our played our a our complexities logistics and talk in find to you hear year, half sit XXXX vision. customers has of in XXXX to effectiveness revenue team to for few needs earnings ArcBest, that I quarter pandemic; transformation We'll history. of for to is best industry on fighting of quarter further closed October, An about of associated their to the challenges accomplish. from being and is back what year like last percentage and We quarter a us third us our October and and going Asset-Light utilizing has solutions describes out XX% are is advantage, seeking and incredibly as this thank unique customer businesses through choice, third serving the leader the improved third preliminary way in in with our what our will faced that XX%. you over for are a basis good with appropriately am sequential revenues also integrated joining solutions faced customers' our been report. the ready in some weathering to trends, purposeful which of through the a the to demand an our everyone increased the out the also

Our that October more business when Asset-Based consider encouraging X%. progress is even growing is at you our

to We especially our during are times. volatile serve always, these proud but customers

going revenue XX% XX% to we non-GAAP with and the history. increased solid they forward are one In and by execution The of the by and addition improved and advancements third the in a of channels analytics customers best trends, to quarter you represents and technology more to encouraged responsiveness third results David year-over-year are through income our I employees that operational quarter third improving operating carriers today. detail performances desire. is increased number efficiencies enabled consolidated and in looking that quarter sequentially our our in

them truckload last they household for segment shipments LTL shipping and decreased and we on time, available driven their the on mix; our LTL spilling network goods versus increased Asset-Based the During the trends normal businesses. quarter, increased as this our recent were moving year's although the designed into serve customer daily On patterns needs, effectively the addition more over of returning impact third a traditional to and these in year-over-year demand quarter. our sequentially, economy; by third year-over-year able was customers' fill system; basis, economic factors: shipments average higher quarter, ABF improving from an shipments to sequentially are the positive weight larger our during capacity of resulting benefited declined from to our improving service. in network truckload are including per shipment not seeing several changes our shipments we impact in a At empty basis. Many

recent increases of we residential as use positive pricing our Though quarter. quarter previous period products was severe consumers mix per shipment year, solid that experienced shipment that Asset-Based consumer Strengthening was the in homes. increase total trends a fuel was in year-over-year prior below total The the As an was were rational in related pandemic, -- during continue of environment decrease the effects hundredweight third the size, housing revenue I also business to account generated in the their average third factor per for metric, during to yield quarterly changes the in but year, to the lower of most quarter revenue The compared and increase receive by e-commerce surcharge. moving another purchase our our offset remained and and shipment. was and a service. strong our reducing they in variety mentioned positive U-Pack, sequentially earlier, sequential factor both and that the

for times right pricing helps of solid in time, uncertain discipline, with adding the experienced year. that use during a Asset-Based lane-specific on, that right shipments like information place the at we've in traditional combined we this especially our lean foundation forms business Our needed evolving our

resulting measures downs counts quickly and that well metrics a has to months. operations match reduce resources presented certainly levels rapidly year-over-year very business labor swings managed labor proud quarter. all then of third during such during its to I follow. second ups closely the in Our them, had we most resources maintained the important only how period extremely We shipment to in and in a returned challenges. freight trying quarter in the have well an we've has business as when improvements we through increase extreme entire team of operational are six in am cycle and of executed The matter

period quarter, increased levels to shipment in tight growth. the income. operating during customer market of percentage total revenue, were higher business growth increases carrier expedite, of the drove highlighted slight and by capacity demand revenue Because revenue revenue began and thus contributed average a Despite transportation purchase truckload, costs the our daily need per transportation decrease As to services of at in pressuring topline greater for shipments a a higher for return Asset-Light during marketplace, and managed, the margins. services conditions,

expedite in demand customers' associated operating areas in and challenges efficient the from reliable, need capacity However, timely by with from other all of transportation equipment an environment profit. resulted business must benefited for the controls higher our they Grand cost securing advancement in they technology the by have. increase experienced enabled services created in

increasing the truckload growth, customer rapidly brokerage also positive of carrier of truckload charges rates Our was capacity a with but challenge quarter margins. pressured third matching for part revenue mileage the

As unique many of the trends to chain their our customers the to customers need help have their supply impact ways. we service in their of their from them to are continue and opportunities worst pandemic's businesses, navigate in in emerging on the changing

and Transportation we is on services profit income significant in Asset-Light managed revenue roadside so our was resulting strong this also the another area of growth As to far business, and a Managed positive reduced events, maintenance top the quarter. growth a during this from last contributed FleetNet, in year-over-year growth revenue year. operating result, to and revenue The recent third lower improvements in experienced both quarter. repair Reduced year, in to in the preventative contributor lower quarter reduction last contributed count to At year. demand primarily compared is event

Next, ask David operating I would to to earnings go and over like results statistics. Cobb the

David Cobb

morning everyone. Thank and you, Judy good

some Let me begin information. with consolidated

$XXX consolidated quarter per third was quarter, On basis, had a in year. $XXX to million XXXX net GAAP to last which per per of compared day diluted XXXX This quarter million income last we $X.XX revenues share third a were flat share. compares basis. on $X.XX Third year's

reconciliation while discrete $X.XX was our net our to of in rate items and per full period quarter rate million. the tax morning's per be non-GAAP GAAP release, tax expect ArcBest's the this XXXX cash by XX.X%. adjusted year. in rate our to release. our September, tax details included GAAP the basis, period. same share $X.XX rate effective diluted press $XXX the on was quarter was in end XX%, effective We At detailed balance the a the share quarter impacted table earnings Full year the approximately that and investments of As to third in XXXX non-GAAP our to may compared earnings totaled press flow third be third are effective quarter in currently short-term XXXX for income last cash fourth GAAP GAAP XX.X%

borrowing and existing cash $XXX our Our was total liquidity, including under facilities availability million.

and ratios continued during Our credit a position. facilities our improved quarter to in be under solid financial covenant the

$XX increase measure, additional million You'll recall and our beginning and borrowed our credit pandemic, that on to we that receivable to preserve an our million the facility the $XX proactive financial of flexibility all In $XX million back credit the AR in July, the paid August, eliminated under on securitization our In facility. $XXX we the additional AR million securitization. we million late repaid an we facility. from in consisted of accounts at million paid $XXX borrowed from September, cash March, as the borrowings the of and securitization, $XXX a position that

third these $XX net have million combined quarter of an $XXX on end net third rate ended our $XX result of quarter over the was with returns. AR purchases debt million made our primarily million at of this purchases, on actions, total second far the and Combined securitization our the shareholder was XXXX of quarter, our our third Asset-Based $XX our cash a composite during stock improvement million. quarter for our $XXX million, revolver, dividend cash of we end the year. the and million balances, compared $XX We of operation. notes to with payable, on at so on cash all enhanced treasury interest included our debt of quarterly These of the of $X.X stock equipment X.X%. repurchased with The the credit As no borrowings which our million

Our a Asset-Based quarter to was year, per third X%. of million revenue million last $XXX decrease compared day $XXX

X.X% the the in By month, for year total decreased September. in third third total increased day July, per X.X% quarter third X.X% X% increased Total last over in quarter. to increased by third quarter. in year's period by same decreased shipments Asset-Based X.X% quarter, August, year's quarterly the versus compared by tonnage and day Asset-Based last last per daily tonnage

last Third mix fuel quarter X.X% surcharges. changes lower to and year impacted and hundredweight Asset-Based total billed was on compared revenue shipments per by decreased freight

in increase average revenue percentage quarter, second point many contract in XXX published freight to On agreements single-digits. the compared LTL-rated laying X.X%. XX.X%, basis, deferred we Excluding third low third decrease traditional surcharge, driver during XX.X% and network. the and LTL-rated that to in quarter business to fuel year's on the surcharges, ABF Freight was versus sequential quarter, basis and on second XXXX's on levels per an pandemic, the the significant pricing operating point quarter, Asset-Based operating freight rapid improvement of throughout year, ratio billed actions Asset-Based does was this personnel handling and decrease LTL-rated a response was hundredweight to fuel customer increased piece of decisive not reduce an historical Asset-Based in off trends renewals versus took the Pricing a that transactional ratio this mid-single-digits. a growth improvement percentage include shipments, in this costs adjusted quarter. the related business, excluding included sequential Earlier the by basis negotiated the XX revenue outpacing our On our

of the business worst rapid April, in occurred that especially we As May monthly the through time the past period. experiencing sequential during we August declines increases, began move business

particularly locations. As undergone specific overall challenges network, staffing the a result, Asset-Based we in have certain in

in transportation delivery both hiring the in quarter, to thus service success city to maintain in the purchase levels, we we specific order we haul some need. pickup third of customer increase outside be But expenses. challenged, generally we seen increasing resources to operations, resources needed have locations, our and use needed adding continue line During in people local the

to that Moving purchase employee each that relative forward, our accordingly. use stabilize and of we levels continue customer will would other moderate resources business transportation expect and our will to

total tonnage as billed increased last XX%; preliminary billed total year X%; Asset-Based revenue the shipments follows: mix again versus by and decreased For total of X%, per increased per per Asset-Based shipments. hundredweight impacted increased October, are approximately day per changes heavier day day lower surcharges including fuel effect revenue the X%; freight statistics

while moving include transactional shipment -- percentage for XXXX, to single-digits reflecting which in compared traditional up does LTL-rated weight X% on goods XXXX shipments per household increased pricing not is a the LTL-rated business. October October the surcharge, by October, fuel business, Excluding total demand published in our low strong in

pricing our reflects per metric Our in a in change heavier shipment of per underweight driving environment. basis Asset-Light combined Asset-Light an million weight last is quarter $X.X LTL-rated lower certain increased in increased recent $X.X lanes. operating versus in increased rational last year's has with in ArcBest segment was shipments reflecting operating LTL to businesses change increase business. total, The third increase The strategic the total the at the versus our average data income the of a In points. and due business the historical business revenue Asset-Based third in to XX%. approximately revenue a year, quarter the X% ratio of fourth revenue our of compared midst in been particularly million income This FleetNet. In profile revenue total years, sequential XXX in expedite quarter, levels, primarily the increase conditions third lower quarter ArcBest operating

operations use data and controls of addition, were from efficient, technology. cost In benefiting more and

XX% truckload in revenue ArcBest For segment expedite October, brokerage the year Asset-Light from for excluding compared and ground basis resulting to higher prior current the by on services, a preliminary demand FleetNet, the availability our tight is driven October, month market. equipment high for of

for in month So, when in ago. far the margin business, compression to of purchased month, result total will percent Asset-Light a is transportation October year the overall expense a compared revenue which in the greater

employees due third compared of was first consolidated of the Regarding reflects Because our year of certain to comparison the the pandemic improved results, half of prior year to ArcBest for was million attribute quarter consolidated appropriately behind adaptability the changing of strong way have dedication on to the plans, results. financially, recognition the recognized set to expense accruals recognize by historical unites patterns. customers shared of performance-based year results, incentive a The values. as personally We results, more income and our people our third workforce the find XXXX, a during to our and impacted the COVID-XX solve culture the during were which but compared the our XXXX that the were timing and operating made serve operating to our quarter year-over-year both of by this success during is their by needs. through quarter. and costs nonunion We higher increase impacted incentive primarily $X.X sacrifices the pandemic

This to XX% onetime continued We the have by financial nonunion be quarter quarter, during recognized earnings have million wage financial XXXX and bonus hourly non-union XXXX during recovery that were of while release payments. discretionary time quarter we reduced a certain nonunion fourth the recent whose second with these information our expectations to a current financial cost ArcBest to exempt filed We third along employees will payments we results, has our some more providing the an along our economic provided actions with certain. our reduction additional accrued personnel employees metrics. incurred on savings included provide the hours reevaluate in X-K $X as morning, quarter in period. levels quarterly with that and about pandemic, the that and $X will business our future This expense to results exhibit be third progressed, our morning, same of become million the an announced our to related for

closing I'll to it some over turn Now, for comments. Judy

Judy McReynolds

made. six What months Thank you, David. difference has a

that customers is the what for want holds our ingrained culture here This and we grow is profitably the integrating by I data focus behind am conduct and ArcBest. sustain also opportunity over future is thing access recipient services. help we of way, know of this an to all us when why do built obsession, very choose get the right operations, in how I'll need because the is it for and workforce solutions customer be abilities to capacity customer when logistics the match their polls to The make same us the same their to cast but business one. what David to they on the the choose shipper loads in they company. similar providers ArcBest. a the at innovative in will upon about trust our to question-and-answer means when I of think good and is and and with for find for In our to It to may needs. and our way today, It and customer can't to And all are this now to it shippers it they a third and it that They solutions wherever experience session. their going seize capacity we they do have strength includes and ways unique so into driving a the be, with doing Regardless part providers of want as our our growth turn vote, utilizing ArcBest a to they have technology exists a team situation relationships, leadership to as for will a XXXX. people momentum there. honor need what they said deepening to get who best what company the quarter reason moved our to they can Humphrey our country our our As optimistic over for be be them goods opportunity to capacity be head Tremendous about them. continue the of

David Humphrey

some I Keith, questions. for Okay, we're think ready

Operator

Goldman Sachs. the first is ahead. line Our from from go Alliger Please Instructions] question of [Operator Jordan

Jordan Alliger

Yes, hi everyone. morning

David Humphrey

Jordan. Hey

Jordan Alliger

back assumes I'm you've sort manufacturing of about you think of but equation, wondering, said cost you look year? And talk of thus improve exclusive or maybe I another if upon done to look that. lies what we recovery controls. have just you way, and a the margin ahead can the year little the of the ratio, bit next about that far do could industrial XXXX bring know some of operating this the the side On as to still bulk How ahead. one we progression already sustainability you as into people,

Judy McReynolds

We certainly think what to Jordan question. been this different resources unfold customer that interesting improve we've for and Well, the flexibility And seen that provide currently our environments. we thing watch year has the strive really thanks of doing. I always just we're upon adaptability the in the employees and to needs is, to just as

sometimes And next on that that's by when we constantly be. but how it about that and just encouraged what particularly is are you in sector, because know talk encouraging we holds manufacturing that's at year where difficult And know the what's so we will are to, that. headed company, commented always to you about something what things think don't the about going

going retail e-commerce was housing are and five look so to commented we on. manufacturing sequentially that trends when we're better seeing network with the this employees but that the just the that's of encouraged our with our be seeing really some going the I'm visibility months, as optimize I within that we out the coordination encouraging. the same yesterday's And trends also, we've we've opportunities and that's environment And doing of well. then able I of on the see although, we partners to business on good the improving, four that be about PMI Asset-Based manage is we're needs that heightened some as a side, seeing that match to with businesses difficulty think, got by have backdrop results, how there's a business, units there, with more in I all then typically, and the or are well call some to come with positive. or And are level, at index customers that good positives impacting and our to know, carrier And greater at and the up that. that for think we for opportunity time, the work

lot So, we're to improve we've move into the opportunity foundation that, and use see forward here we we several constantly to working the laid do next a months. to to as of try that

Jordan Alliger

in to progression to atypical November, Just we how forward year-over-year, as tonnage one typically, [technical The a December, about tonnage typical year, trying though, I get and from of obviously But is a November real maybe sense a this quick strong. mean, or very from progression follow-up. I'm so October here, go think here difficulty] I or December? strength mean, just

Judy McReynolds

for, pandemic really, that something I the I think, think, tonnage And Well, David, David September, first a is with say when to some ever. strengthening. the certain I this then quarter in about are I'll take And period, back just the talk of think will and the then, in the I recovery interesting to of some compare revenue because you I'll it's in comparisons mean, the I that year. And add. that. long the areas again, but probably will of maybe decline last environment October, second had we've had think, trends that part have best and time you shipments to and there maybe a

David Cobb

we December. being November when down, I look that you if -- want say, some and David? had you Yes, comps around I think forward generally and right, sound to easier XX%, November into

David Humphrey

Yes.

Judy McReynolds

In tonnage. Yes.

David Cobb

In Yes, sorry. tonnage, yes. I'm

could happen. there's then an Obviously, there's -- but on that going by it's right momentum of pandemic, we're luck now. seeing encouraged a that election we're yes, and lot the So, the

Jordan Alliger

Okay. lot. Thanks a

David Humphrey

it. Appreciate

Operator

from The from Jason line the Please Seidl question Cowen. ahead. go of is next

Jason Seidl

Thank good you, David, operator, Everyone Judy, morning. David.

David Cobb

Hey Jason.

David Humphrey

Hi Jason.

Jason Seidl

said. I Judy, brought Jordan up. of little of kind mean, a is it bit This piggybacking you what

best -- amount sequential my as never basis, You at a have XQ, in tonnage if model looking of XX-some ever. you the least, And back been have tonnage might just same years. did XQ, the said, you -- you October total this in goes on

Judy McReynolds

Right.

be-- would that think I

Jason Seidl

David is -- that not in it, fact normal the see points, we're for How those that don't I going to I'm be move worse think, to but XXX your move mentioned logical going sequential also but should think see think again, is accrued mentioned to up David that in your and XXX on current I you it levels OR we I think million for the payments tonnage $X or employees based on mentioned saying and you the because XQ only about XQ XQ, to accrued trends? me, a given OR $X I bps some of in million XQ. like don't that, being

David Cobb

Well, I for appreciate I your revenue we're trend about a July, year's optimism, there's Jason. about Yes. you X% think, last Yes. instance, if It's was July. is per momentum -- something October July encouraging this from and down revenue versus in when that to mean think see, what I seeing continues. day that, there

place, have, as a by trends out, pointed and I and uncertainties up were astute but COVID -- per large, with of those some starting mentioned, and in that we've we're I the but you -- pick are the we're off to revenue got good impacts we favorable, environment, momentum. So, there's some yes, and but many as and you political the shipment good economy accruals did potential I think

Jason Seidl

seen and purchase some lot business. rate a other -- A thing them went the was lot that reported or quarter contractual the there. I where the lot brokers trying to for them look is, a transportation transactional worst speed I your I and they've just out that at, conceptually, of contractual direct commentary appreciate terms against want brought you to went guess, talked their of of that. me, for sort against of up excuse being of the Okay. in the their the I fish spot have about market XQ

of exactly that business levels in doesn't hockey up the versus XQ. XQ as did XQ? that so margins tick Is and in spot help it that in stick to sort And off going

David Cobb

to our business, catches capacity can think, Asset-Light it capacity able right. -- source we're That's at potential is as our customers pricing. that a the occur market or as that pricing to for capacity as that there's pricing That up In to happen. to I

Judy McReynolds

elements the thinking you know play is distribution well, that was we the in that that was when further. a I the Yes, capacity that ground that, of relax is about about, vaccine what interested thing in that the things overall expedite that tightness, about. thinking will that asking about capacity has We just you know. and though, question, role other fourth one tighten do or but impact don't were thing make in and that interesting that's to really And for our And as what and I'm quarter. to think business does instance, likely just I think an

got a think we relationship, with have perhaps customers. there And of you've So about at relationship, the we're what new and penetrate -- think a mature more, deeply but it's Asset-Light I opportunities, we it's another. one business our guess, thing. some with and customer new we're stages I that trying various business to as that with different is, really Whenever you've gain got relationships already

things as optimism but pandemic something think, some grow, on are I-- I pressure in coming they truckload, be, that in will about there think me particularly continue cautious I that unique this have an from for some we expedite, there's caused to, I that. opportunity So, better, to That margins, what the guess,

Jason Seidl

And Judy, do you guys have to contract move vaccine? a the

Judy McReynolds

then we're capacity still distributors and there's the And for business conversations Well, of lot customers, the overall the timing but the impact we're different and about source and no, have -- that plan, a and that. but with in would that, a about for on of I'm that again, think when capacity. and I expedite our ground readiness could mindful unknown I it of

Jason Seidl

all-- we think I

David Humphrey

All right Jason.

Jason Seidl

care it. guys. Take Appreciate

David Humphrey

Thanks a lot.

Operator

Stephens. with of the The line is ahead. Jack Atkins next question from Please go

Jack Atkins

everybody. Thank Great. taking you Good morning my questions. for

Judy McReynolds

Jack. Good morning

David Humphrey

jack. Hey

Jack Atkins

David, Hey David. hey hey Judy,

when out third of in back a quarter that you the made quarter, OR your kind So, tonnage bonus the have XXXX I gains I and strip third the improved at network getting are guys Judy, lower kind of to investments million in $X your you I prepared about drive in productivity efficiency. remarks going guess, the there guys to mean, comments back automation costs from that level. to

maybe you are XXXX? and you walk sort automation of can to those of So, of investments? terms through productivity in where come in And us kind what's

Judy McReynolds

to and And they about the we but And to lane, but last and the us this, XX%. from improving communicate about forward. XXXX. has dispatch those And and channels have it's those Yes, in by phases of we've too, I drivers helped that for really that was some instance, LTL for numbers, system route the it's kinds fourth productivity and software in the were, more point our extent, in also interesting to to mean, it tools transactional of the experience. again, and and automated customers to also, third we and with do we're certain quarter, also business, and at and work introduced quarter our I or responsive has there of been of the want through helped our reduce tightly look transpired, helped step alerts, us. close XXXX, thing, messaging to business we've is which that The I earlier the in improvements, projects customer it's two Asset-Based density. We miles manage software it's us, helped think city software network just on this us in light back more I think our empty the activities implemented mobile whether helping when yield been optimization with better business, late years, our a commented starting completed load what building we the has the of got some move as planning, really see just hopper,

about really efficiency. have at most of and we in of some pandemic. time, of And because and while the seen yield that those ups coordination again, had I'm creating downs of we've out same has, again, a the our positive pleased opportunities, things. customer impact played where extreme decisions addressing year some kinds the So, impact, All business operational in

Jack Atkins

Absolutely. that. It's to encouraging really see

some bit second very ask see look question, capacity LTL in to saw into So, commentary terms could obviously, about I that peers a expect number that's quarter it rate that a the follow-up versus yield we as I move saw the versus expecting the the little I renewals, guess out contractual my accelerating contractual what at you an you if was to on that of there and about deceleration talk quarter When XXXX? Would trends accelerate? about maybe everything in into we're Could and renewals you're there works what you of tight. see fourth hearing in trends.

Judy McReynolds

we really what the mean, conditions quarter of had customers you at that look the happened third where of place that weren't when or at lot I things. during think, quarter, activity I'd our in of of were we modes or a second remind I in businesses close were the some in. they just normal a Well, normal

being patient say, some naturally the months. quarter renewals waiting what were for And second and the during, doing so of was we arose that contractual

deferred And later some of were or year. those months the into pushed of out

And position some in great not of these a themselves. companies are

CMC actions and space that our used And been on which, have in so a paid of sure that over means we've have that's I then all part lot but mind, improvement with the pandemic the to that top actions of those what a trailer, of that I appropriate other and for taken that's believe, to price is all plus, in on and the years, we're you of environment on negotiations. make to place, the getting think,

a itself. results quarter's third take instruction lot by wouldn't from I so the just of And

our that to think over and time. I continue reviewing good customer like, agree appreciate a the as and disciplined I look in and I having what think this we part you that we we -- you quarter us And would have do know of long-term but profitability we're that of the think looks we're would what I was you them, we be. to third that, a opportunities look longer think always accounts the expect And results. have, at also at And very of periods you present to area.

David Humphrey

Jack, we'll along. this move

Jack Atkins

Thank you, Judy. Thanks David.

David Humphrey

Thanks a lot. it. Appreciate

Operator

go Please ahead. the question from from is of next The Citi. Wetherbee line Chris

Chris Wetherbee

guys. Good Thanks. morning

David Humphrey

Chris. Hi

Chris Wetherbee

touch the wanted to resources maybe particular. on headcount So, in and

historical for hire of you So, headcount I maybe you maybe to. a how the terms into of sort progression of a need specific fourth in sort sense that David, XQ. of for wanted and mentioned, bit of of OR the you more to sort people that quarter kind factors to you give And that XQ Can I generally us you XQ? what think seasonally of from able guess, little are getting

David Cobb

-- think the it's terms way I thing in the is elevated as increase. across And the some we were had that even about and When the handle. mentioned, not interesting decline our that that Well, rapid I of really you then other think as saw, system. business and back came business you PT the to about -- these volatile, volumes

have business others. words, return have a that in and bigger So, we geographic need bigger other locations resource certain volume than

to And network, to our of areas. across outside you so and resources have the it when us use imbalance serve serve requires customers just some that sort

so recruiting or on has to efforts, And the put our just find see... And pandemic a in challenge places. it's we'll different and easier people just -- normal appropriate certainly,

Judy McReynolds

than that highest this allocated in think, and is XX about number XX% well, that And double-digit point, advance was point, so. today, experienced for decline. double-digit the of or David's at employees statistics one to XXX centers swings less that to More service year-over-year in -- locations Yes, our on we we their growth I service labor of experienced levels. point, the But of experienced had, business centers of and gathered his: probably layoff. call X,XXX our double-digit weight XX around

interesting. story of that's really that's part this whole So, a

there, lot and certainly, are reflected been forward. levels of count, of looking but of move employee we the we've a where purchase see And you of need hiring we've terms the not is business it's hire, of so issue And had has places, because a that think declines, in as our in areas where transportation not the in ahead this that as seen. I as a that lot but utilization, issue overall imbalance think when of much. I we're to much those There's

through more and to rail ability of customers we balance. to our get as balance less time in on, use So, goodness, in have the things and balance, of it's and us help goes able through go hire, we including see that process more probably getting a we'll to we're here. but to trying we Thank lot that, to a work as road power be to have

David Cobb

I incremental those be your would more to as think, question cost would offsetting. kind your, of sequentially. in And terms It's of That's -- back view right. -- I those,

So, an overall per work shipment. us as able were do lower internally, we may be opportunity to for it cost that to actually

Judy McReynolds

I ideal. and It's stable more think -- certainly more Yes. more

David Humphrey

this along. Hey Chris, move we'll

Chris Wetherbee

Not a problem.

David Humphrey

it. Appreciate

Operator

is of from Please from the Ross next question Stifel. line David ahead. The go

David Ross

everyone. Yes, Humphrey good to morning hook. avoid I'll try

David Humphrey

The clock is ticking.

David Ross

I just want know, the to I I talk about know. network.

the down be that growing tonnage Now, or exercise that Where stand to XXXX? you're you again. it's not does number facility in today? And think of terminals do is up a count downsizing and on going

Judy McReynolds

I probably Dave, there, I'd there's what say. think relative stability is

maybe current I but is facilities, think think I count relative something there's stability that, our there. XXX like

was business is think, focused to to it's things grow. run I settled in if resources, the you're at until continuing, pandemic think you this Certainly, things. things, in to you've levels we years, we're a mode, XXX really more growth causes of we're we've lower on sort that, system. see to going a on some of we're have a see room what almost than been of sustained One period going in that I tonnage growth to we we I mentioned business become being through and when little more and be those these some and through see And hard longer-term a similar but bit like react -- for that perspective really of thing, it certainly, earlier invest but us that have

seen seen And a certainly we've but growth with than as are so others, declines where in equation, some tighter that's earlier, this imbalance -- business, part I of of mentioned and locations too. we've the and where

David Ross

David, preliminary be look at with it there Any CapEx? replacement need we than should otherwise the CapEx expansions So, number is I take may for, any of that as facility in would guess, a it fleet? more lumpiness on the higher year be XXXX, the that thoughts or

David Cobb

I And a good question. Yes. that's think,

I CapEx quarter our fourth when we XXXX original maybe results. as provide started think $XXX update we was -- normally around do, plans will an and We our our to in to -- when million released about million. -- $XXX guess we were plans of terms estimate on XXXX, CapEx that for

around from And million so of this those expectation plans lowered $XX is the the we beginning and to million original pandemic, current at that for $XX our year.

in of, to to continue revenue our We that want we want cycle and of equipment. strategic other So, I would maintain investments. items replacement maintenance on our terms think

point a that level be but than estimate maybe would the at higher a a be starting provided probably we is of And gauge So, will that it XXXX. point, beginning year to the about our consideration those certain and to is real you plan. that estate CapEx And Judy tightness finalize in plans then a there's and think develop certainly as areas. as said, we always

David Ross

Thank you. Excellent.

David Humphrey

man. We'll see you, Thank you.

Operator

Please Bank The ahead. Hoexter question go of the line Ken from with of next is America.

Ken Hoexter

morning. good Hey,

Judy McReynolds

Good morning Ken.

David Humphrey

Ken. Hi

Ken Hoexter

then have So, I that on the you truckload the do if cost? adjust? slowdown is capacity in what talk because that cost tight to will that if noted PT about how continues, from from I question maybe you asked thought capacity why up given down, following Chris, October, And Dave that just market? get just the PT you maybe the but subside. and growth absorb you that spot in XX%

Judy McReynolds

interesting at Yes, I planning, -- question. as our our have instance, for the Well, the or weight. not of look as some shipments labor up tonnage think we much moved whenever are

forward, that but your as to thing And remind that about think And And think helps interesting which power of road elevated move us and rail we're combination resource through we we is me utilizing okay. I I handle of like so question? that's part of that a from we can I transportation, talked think the handle ability that that a the again, already feel an there. that. to And purchase second --

Ken Hoexter

this The doesn't it of spillover? kind in truckload the market, usually get

Judy McReynolds

actually interesting the transactional it that have Yes, thing which here. experiencing Yes, We're is on more than bringing it story LTL really of is I that think, spillover. it on also truckload. an servicing to and then an seeing, more a we're of I opportunity the new focused shipments, we are availability think truckload the some and relationships existing is and some ones

we shipments, capacity LTL those transactional the that out, answer network needs we the with just had we and for and that, business at fill, the and that well sure year-over-year feel to to be more we that needs was which the that that of utilize as published results coordinates optimized just good needed overall the So, that we we're see because have. point wanted us empty have to looking about that to we how

Ken Hoexter

for Cobb, that scale seeing low tech quick your is then data And real staying investments. Dave we if CapEx here? thoughts on Are

Judy McReynolds

-- Ken's the investments. tech -- spend it the investments Well, think on I question about tech was was

David Cobb

Yes. No.

years that's to think, fully to invested we that. our we're mean continue the investments we're results, there -- do I want and we've So, I in made over results. seeing the of that

And and continue think both XXXX. items in our going in I so we software to hardware for be as and that's plan CapEx to invest we build,

Judy McReynolds

we call with our what's goes than is run our thing, what spend that strategic tech but that as One comparisons I compete more -- say what rather just feel par spend of other business. on revenue, That's would And of that Yes. companies feel a is Ken, like we investments with. percentage that to the our is, we show. about interesting like would we it

thing great So, a for that's that, and we're like really happy about we advancement. feel

David Humphrey

Thanks a lot Ken.

Ken Hoexter

very Appreciate. you much. Thank

Operator

next Research. Wolfe is of Please from line ahead. question from the Scott Group The go

Scott Group

Thanks. morning Good Hey. guys.

David Humphrey

Scott. Hi

Judy McReynolds

Scott. Hi

Scott Group

spillover. just that that TL go back is truckload spot Is point update last October shipments thought I spillover? quickly truckload to want up to about I So, were the double-digits. not that

Judy McReynolds

our the business? You're the Asset-Light about piece in talking of

Scott Group

the in rate at tonnage October. in spot I network double-digit in the moving thought, reading in just increase percentage I'm truckload Asset-Based

Judy McReynolds

rated. U-Pack business truckload that -- do U-Pack we business. We more that our is Well, is the of

Scott Group

Okay.

Judy McReynolds

about and that it's not truckload moving thought is -- that's is would spillover, be the what thought not business. conceived So, when it that think I U-Pack

David Cobb

driving what's that. So, yes, that's

Scott Group

picture a there cycle? never is in years LTL margins is we've think the is a your to period, presidential got for a what just you just Judy, on range good XX And memorandum a just guys new -- bigger in your then, pensions. to business. an a right separately, If XX a look than And OR. LTL we questions. couple the you the to And then -- wondering for and of row, you now And outcome three I there thoughts Okay. through think? better over had saw What XX had around do think I about think XX-year OR

Judy McReynolds

know Asset-Based Yes. business the would in XXX things all there for here since for difficult XXXX. we that noted results range. Well, is nearly I one improvement think certainly basis this We that that's period more certainly operating of the navigate of to the had OR but recession. sure, part a we've in have XXXX's that I And that than we agree point think what is was

think And that's very seasonality focused of an the more terms think in I'm visibility And quarter-to-quarter, strong management we've had the network. the that more execution, have And on contributor for the then cycles. and So, that's think a I And we analytics it's of noteworthy in improvement I the some that, technology, mentioned in consistent think the again, operating part as that's could that that of were for we advancements, there is together and further range I greater visibility in accomplish see that, business. And of strategy as terms of Asset-Based coordination results. in earlier always yield the I then to a we it business, is I opportunity be create tools to the the and consistency, great that create really, And comes could to Asset-Based best and I improvement trying thinking would as objective. think, whether think consistent. if performance if all on of for the optimization and of a really what the it's And it, or operating on in business with think, new for well us performance story. I does, business. top my I

Scott Group

Okay. Thank you.

David Humphrey

you. Appreciate Scott. lot a Thanks

Operator

is the question go next ahead. Please of KeyBanc. from Fowler line from The Todd

Todd Fowler

and morning. Great. Thanks good

Judy McReynolds

Todd. Morning

David Humphrey

Hey Todd.

Todd Fowler

everyone. morning Hey good

double-digit pricing. being guys really renewals job thoughts as what cycle more about in the do what done good a guys you And just as have the or just because some on then throughout maybe get past range with talked Is of consistent? over to the high the more about of dynamics? a a could just thoughts consistent. this the to but on an the contract Just your on we on you of you pricing typically if where on in in given just some How renewals and could GRI. I need, see dovetails opportunity dovetail know you some been Because it's also contract freight with where out being GRI, Scott this there something kind low freight. and you disciplined environment the think we've you've it Thanks. seen sooner is of next still cycle? is go of the high don't not course single Or really in

Judy McReynolds

unusual think show I Well, would you history or I think don't when be those you in -- we think the but about that contractual tell the to in me, of front single-digits. high you would be renewals, have pretty I -- the that on it it

we need as that's that -- I at think dramatic, think or look I their their profit check. are. we lot continue some one is range would our we And what's pretty that's in it they've of of costs progress to had when for although made logistics together logistics our I business the time do that; customers, the on comparisons that that circumstance us be customer costs of for got way strategy it, but reasons margins. and the like I cubic reduces maybe in given took, to would increased optimal as that's keep businesses think minimum level needs time we in as would well well I a of And of why and going I because being are be improvements action solution. it's the a that to companies or minds to for pre-XXXX, general as and perhaps look in And us responsive also well think unusual, period combination bring given a their upcoming the and what that that's a not able to I for think that over we've that us pretty at works back we've the but gives network to I charge to variety good overall, you the we're payment bring for have solutions here, a a of think

time, recognize And I longer And do year increases, a they're on over so focused for a year I that disrupted of them. and very it. logistics, I be periods good this for -- going they've pretty very our and to think size I strategic but is seen think, is customers for think weapon them,

going that that's, customer-focused integrated be goals, one profitability. focused a that's really of a to consistency trying focused on they're from I it always that we our bring So, or solutions why us we offer, in we helps from, to the those benefit like And bear creates place. greater other our better but business get again, customer, to which improvement that accomplish both in and and also costs on to that's

David Cobb

customer's and program Judy's I'd Todd, just in perspective, it from voice, think and -- here. why we the the our our just interest long-term see sustainability that's in hear a add, And you in Yes. vision I really reason

Todd Fowler

Yes.

share you on great? Okay. thoughts to That helps. And would a be GRI then Thanks. just care any

Judy McReynolds

Yes. comment about David, that? do want The yes, GRI, to you

David Cobb

of, February just X.X%, February had in back Yes, I -- around we a as a XX-- think, reminder,

David Humphrey

February. late It's

David Cobb

one February early Yes year. did did we -- then -- And of February, that. the previous this or the another before one

always -- we're side folks what it's are our customer So monitoring always the yield -- of that. relationship

right when marketplace the to announcement, going this decisions the at be point, try time in So typically we're the first about determine GRI. not made let's -- but that any to for timing. And to it's to haven't a we

and sales consider want to And in discussions we'll these our evaluate are evaluate that Judy decisions. all disruption customers experiencing, group this our all And so and as that input mentioned, with their we that customers. from

Todd Fowler

time the for enough. morning. fair right, Thanks this All

Judy McReynolds

you. Thank

David Humphrey

Todd. Thanks lot a

Operator

is Truist. from The with go Stephanie the of Please ahead. next question line Benjamin

Stephanie Benjamin

morning. Hi, David, hi David. Judy, hi Hi good

David Humphrey

Hi Stephanie.

Stephanie Benjamin

a Hi. Asset-Light to the improvement. little wanted margin talk bit I about

side? those particularly, little the I cost the think fourth costs. a about some Could given should efficient bit controls, purchase how controls, quarter the as guys we go about think transportation cost of demonstrated higher you that, sustainability of to you And made you pretty we side XXXX? the talk love behind into margin been the I -- Thanks. efforts have any Asset-Based a in improve and I'd lot to just on on on but efforts hear the scenes Asset-Light what's the know profile, going

David Cobb

some say that -- just place, systematically you a we're technology would we're that I in we number put is reflection in think how our I Yes, of Stephanie. there of doing and what see digital things tools

so to we helping sort -- And want of minimize the those loads. to And that's focus our us there. transaction cost related to is

just to. go it's full to And We've connecting all of advancements, there, a got would and automating just we've we've advanced, in I visibility for tracking get initiatives we've carriers have sort there. go with made loads transaction ways those that that around, long to that. good and our got so those we ways our shipment some Again, customers And to And touchless back-end see to want got and efforts but but-- this carriers say. electronically some

Judy McReynolds

our for it a we're of needed, without a complicated being addressed -- more that we helps a got enable our to trying that the sharing but where the can customer it's but a by another it quicker, that people, that is we're where better at the on and I technology that involvement minimum, strongly is, helps AI intervention acting the enablement number I've also, is doing worth or there think important, doing and example so us but in experience, we automation that's if of an an or that's categorize -- human with well. and if it's But relationships, e-mails document directed and to involvement that's value read -- believe we're it's example is think, answer customer have with us using involved. we're things what at routine to still I to people more e-mails human of in instance, human or just the deliver Yes, as of them our a be email

David Cobb

attracting that's Arcb.com but that's an our -- then obtaining more we've and APIs shipments, advance done -- Yes area and the just from at area mean, to quotes some as so going we're and that I an -- connection, of also those looking through our through and just that's on hopefully that, well. just those booking growing. customer

Judy McReynolds

of an is business Our do customers understanding, in And they direct resources our and too, channels way. the to appropriate advancing. want trying in we're to

David Cobb

of opportunity lot see for piece business grow. of We there a the to that

Stephanie Benjamin

Thanks appreciate so much. Really the it. all Got color.

Judy McReynolds

Stephanie. Thanks

David Humphrey

Okay, the Stephanie. Well, that all Thanks questions. got lot. a folks we've lined listen, up that's for

and So, this thank want us you morning. for this joining to ends We We concludes appreciate I guess call. our in call. your that our Thanks interest a ArcBest lot.

Operator

conclude for your That call We now thank for the will disconnect lines. conference you you today. your participation, and can

ArcBest (ARCB) 3 Nov 202020 Q3 Earnings call transcript