ARCB - Earnings call transcript Q3 2021

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Operator

Greetings, and welcome to the ArcBest Third Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to David Humphrey, Vice President of Investor Relations. Please go ahead.

David Humphrey

Thank you for joining us today. On today's call, we will walk you through the details of our record third quarter earnings.

of will of by David ArcBest; me, Financial morning President McReynolds, Cobb, this Chief CEO and and Officer presentation be Judy done Chairman, excuse Our ArcBest. David Humphrey; Q&A Also joining President Asset-Light and Logistics will Daniel Yield Loe, of Officer. period Chief us ArcBest be the for some call. help To results, better be could ArcBest understand statements you made its and forward-looking during this

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

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

slides that Judy this or As arcb.com the on us the you Exhibit follow website, referring the be found that here earlier reminder, and on ArcBest be David and of along with XX.X to was a filed you X-K will can can morning the webcast.

now will with begin We Judy.

Judy McReynolds

morning, you, David, and everyone. good Thank

quarter's logistics and of continuing additional open will key leading strategy by highlighting achievements questions. specifics finally, few performance for quarterly third our These record-breaking it highest as growth strategic the of financials bolster through the performance David history, take comments operating Cobb success in company. like for our greater this before income the and And Then integrated a and position the up strengthen I'll quarter momentum. achieved results revenue we quarter, This our detail. our an some cost our of vision I'd offer begin business record you some management validating to and XXXX powerhouse. we ArcBest demonstrating further and efforts in

Slide experiencing executing on the a other efforts strength MoLo, we legacy of the with by growth we profitability. on for financial ensure few paying addition to our and increased are noted driving drive consistency years, improvements and combined value we continue improve X, the last These profit and As our performance, of well-positioned stakeholders. are for underscored as our margin X-point off to growth strategy, revenue are in this business, of strategy we've the with our and clearly the advancing the creating and shareholders capabilities expectations customers our meeting gained been

to we who us the made quarter, are support proud allows of mix. listen toward balancing step and of asset-based to asset-light often our our our we agility the progress both need way, This revenue willingness our of goal customers and Each better solutions.

customers. our this technologies digital few offers that using our truly preferred partner because resources we're operate solid and ABF business customized been the our ArcBest as tenet innovative of us channels advantages worked These fashion. already adopting flourishes our alongside customers our that allow asset-based in the of an third customer business breadth are we their across strategy, years To we many advance our Our integrated solutions. asset-light industry-leading manage. in structure, and capabilities to the a seamless able make to assets over full more cost craft of intelligent we Freight have utilized have as help experience invaluable services serve options own the provide last when to solutions and optimizing

and partners advantage reducing to We stay connectivity customers expertise. provide services with in close our a they to costs in and need us carrier way significant them. the they to continue access want to human streamlining capabilities augmenting and processes, digital provide the them Our

to strategy areas the economy in customers each instrumental unlock are forward drive our and shareholders. for helping Our these advance incremental three of value in our efforts continuing to

X. Turning to Slide

performance operating quarter record-breaking income already our outpaced revenue and year-to-date results. third Our

customers For quarterly growing ArcBest revenue leader. logistics revenue an Solutions the delivered percentage time the exceeded family. by consolidated as strong first are the we segments. our We integrated $X serving the We momentum, operating Building year-over-year ever, of solutions all organization, significant remain across the to on challenging on billion. times. double-digit midst in added of and our MoLo in as increases with We customized laser-focused illustrated growth this very our expanding

market responding a the to -- critical at right business. our their our solutions customers' for meet to in agility, capacity needs expanding with a time time demands tight are We and investing critical

We ArcBest for to to are new of increase can company return entering we into share profitably excited better plans the flex the announced $XXX and a for creating shareholders and expanding capital value our our shareholders offering to clients, employees we program. serve same million time. our that Yesterday, our growing by accelerated opportunities our repurchase at

way prospects to and way flows, of to invest ArcBest growth us partners return needs long-term integrated illustrates logistics reflect the carrier in an stock, in to our enhancing every with balance our capital allows and intrinsic meeting our our With our belief and utilizing strategy in generate each cash a our of which this cash dividend the and strength as grow we doesn't resources portion solid value day. or ability customers have for value sheet Along this of company, creation. of in our our program, our the

acquisition day company to was serve broad suite efforts across customers successfully a in I as our announced our Slide best Chicago-based We of mentioned is fastest-growing logistics solutions. closed of America. truckload the for previously to the yesterday Turning X. monumental one earlier, Solutions, a of brokerages a in us MoLo And that

increasing delivering the our strategic by objectives acquisition growth scale two this truckload closer significantly I to truckload significantly with accelerates Bringing position broker management Together XX our XX,XXX us carrier services. is access over to transportation solidifying just our top growing the and of brokerage billion Importantly, our the partners, $XX MoLo, with moves ArcBest on together companies in market. U.S. a discussed. domestic

has that very a With now embarking leaders on positive. history, logistics to as of those MoLo in new innovative two of create our including the of industry ArcBest the chapter MoLo been We closed, The bring are look world-class all transaction thinking driven to forward stakeholders, team team these and integrated together our welcoming the reaction at an by people-first forward people. company's powerhouse. we leadership management members a can exciting

logistics better and MoLo logistics revenue slide, has and build of amplify expanding acquisition and an MoLo the us important As spend. customer of services, you step moved marketplace. in a our mix, us represents is this transportation The to ArcBest shipping which role the allow see already toward addition can portfolio more on continue to transportation powerful and balanced

and MoLo exciting team to we an ahead enthusiastically ArcBest. have future welcome the We

X. ASR, considering Slide making a this our a We in remain we solid to cash And sheet. investment Moving entered financial strong after cash payment the balance position. with transaction in and the closing

like more shareholders announced. resilient our we as plans to turn growing dealing Our flexibility basis. objectives, the firepower cash on sheet just it initiatives to and program to share and to we a have cash levels, we free reasonable support are and our as and capacity investment total our I'd debt to return invest are liquidity quarter continuing dividends through we third our flow, a accelerated well delays, and With details strong are at pro-forma programs net And while in some growth now provide and and Cobb external growth to asset-based expand shareholders. manufacturing to returns with currently him results. in capital we balance our to simultaneously David Though opportunities the to organic impressive position let over on repurchase are accelerating

David Cobb

quarter position. Thank with you, the morning, of Judy, and with of ended investments financial short-term our good $XXX everyone. unrestricted million. highlights cash and We some third Beginning

$XXX X.X%. Our primarily million all was borrowed debt of revolver rate payable, the at end of our interest $XX Composite for credit our asset-based and on of debt notes equipment quarter on of $XXX third million on million included operation. the

by EBITDA XXXX. growth XX months We operating The the XX, are an solid attractive business in strong generation cash our capacity the by us pursue external as demand, evidenced our enhancing enables accretive paying the MoLo in for to and cash sheet the flow like transaction, investments, share flow, opportunities ended balance combined dividend September repurchase $XXX trailing adjusted of with customer encouraged momentum organic value-enhancing our and million making while program.

as strategy, on allocation building our position leading integrated ArcBest's Our balanced logistics an company. growth plan capital advances

our for value. our does growth best Given and believes reflect current Board continued value intrinsic our price prospects creation, not stock the

XXXX. of Slide the settlement at repurchase end of addition a X, agreement. share note $XX our the On including liquidity final mentioned securitization earlier, third have payment a basis, The repurchase be is our million program, we position cash and remained available million, after quarter $XXX $XXX million considering completed our authorization in a share million share that with Judy existing first accelerated to on $XXX available the program. quarter that pro-forma repurchase As million our expected to under and $XXX the million we in our total receivable the with credit of $XXX would of with revolver and MoLo acquisition the associated announced million, $XXX position deducting cash net under accelerated debt the resources we and debt program

approximate capital is range net which full-year $XXX expect them expenditures, now than an of XXXX million to previous be lower million, in to our Regarding estimates. $XXX we

we in November. Our disruptions to of and early delays continued referenced part in there as have build equipment and equipment into the as orders revenue mentioned related Judy original asset-light But and schedules been quarter, that our have asset-based place. remain last shortages manufacturing

XXXX. As equipment that be will our revenue a portion a not XXXX result, expect planned delivered now of until we

addition, XXXX. estate expenditures to until our and approximately delayed that projects, carry miscellaneous year. be previously some capital research including In will Therefore, real over investments we XXXX of capital $XX intended expected into $XX of other for million million and expect other will capital development planned next items XXXX elements also expenditures,

are above our additions business. future to our improve These generate returns committed growth ability and real priorities serve revenue are facilitate As in estate and our levels normal us to and our opportunity solid upgrades investments increasing they in to the to to equipment customers. the Dave previously, offer we and

existing a of plan renovation facility We investments include of long-term have service new others. for and centers, expansion facilities that

expectation those long-term from information. our X, share these commitment highlight will Slide our quarter when plans, I'll $XXX of full-year million. XXXX is On capital our consolidated we earnings. We're part currently a and $XXX fourth million preliminary growth XXXX to to more investments, our details for As we announce expenditures and developing

billion, consolidated basis, million. operating On non-GAAP As increase income quarter the over revenues a than Judy consolidated period. to a reflecting XX% $X more third $XX XXXX mentioned were earlier, doubled prior

The $X.XX. EPS be to adjusted in rate effective our that And of Our the key occur XXX% calculate range tax in tax year-to-date earnings non-GAAP XXXX share rate third XX%. under the per during diluted to be The was effective full-year non-GAAP could provides year. XXXX Slide expect impacted of items used tax XX.X% to laws, quarter we business. XX.X%. X tax current rate grew was our that the Asset-Based by highlights to remainder of metrics our discrete the the may

million, was average Asset-Based year. XX% compared $XXX increase an third of last to quarter daily revenue

of XXX The and LTL good impacted The ratio our by reflected hundredweight quarter higher XXX non-GAAP in is improvement. third revenue improvement transactional were per of and household and quarter billed of serve of Revenue tonnage third number basis moderation a points asset-based year-over-year the asset-based hundredweight total handled surcharge, fuel on by The second versus shipment basis year. impacted on year-over-year core LTL-rated fuel in increases in customers. quarter U-Pack deliberate double-digit surcharges comparisons the percentage XXXX. we of a third shipments order to business, improvement XX.X% quarter of excluding increase a operating sequential shipments points last was a versus per

our We negotiated increase pricing also renewals quarter increase X.X% secured the deferred quarterly average asset-based of an in history. during was and customer any highest contract the agreements on which quarter,

and increases preliminary on October see As revenue average can continued tonnage for on shipments. Slide positive trends reflect XX, you business strong

in and been have by comparisons trends as year, As October year well we U-Pack fewer the quarter, experienced last asset-based third level shipment month. tonnage prior increasingly in as the stronger shipments impacted versus business

customer continue core have to our We strong in business. LTL demand

seasonal sequential quarter, digits third In third LTL and advancement in tonnage compared increased average over accounts. September Our of XX and decline there the daily prior shipments of changes shipments the best seen quarter were increasing double these in tonnage growth our during we typically versus with a to what year these core is published the core or have September the the demonstrating in continued strategy. October, and customers when years, last

the the trends the XXXX total, increased revenue the Form press segment Asset-Light Additional found ArcBest On X-K revenue details and ArcBest XX, Slide XX% the to in in segment. can business our reflecting businesses release. demand year events can see in per you exhibit FleetNet October in quarter, that and be strong our versus in prior improved event on

Asset-Light operating million million was to last quarter income compared year. Third $XX.X $X.X

million per EBITDA to in Third $XX.X press options quarter to equates October a the $X.X prior-year increase customer this revenue our was And net also to compared than been for for segment basis. solid filed with Preliminary evident Form XXXX. business quarter in the the on one XX% demand XXXX asset-light October be as million of for exhibit revenue month. Asset-Light third XXXX. ArcBest were this XX% increased trends on EBITDA morning. to day business FleetNet, was running that continues versus the less day Margins October have Asset-Light provided an X-K release, year, which of better capacity excluding

Now turn call to I'll the Judy.

Judy McReynolds

David. challenges. our actions second the which is positively and XXXX by produced and ESG The particularly the connect report progress people proud report to have single report showcases business. in logistics Slide you'll across quarter. and our released initiatives world that people response details solving note mission COVID-XX, grounded actions in how on third day. Thanks, of we've we've we it the our ArcBest was am the social put I highlights made first It and governance the first to corporate ESG impact environmental, On we our our XX, how every

community the and our into priorities, to procurement strong sustainable long of and and operating rights, creating human committed stakeholders. commitment includes Now future, on are all we advancing responsibly a ethics value long-term This including focus for involvement. key

we Schools diversity, efforts moving in we publicly our workforce peak and valued. feel opens among organization center recognized we're work The May, ESG partnered underway communities will regional that are the at As making Center million and recognized to sustainability progress our Smith tomorrow's journey. serve ESG and our report, ArcBest's made employers equity students this prepare XXXX On across our in of At April, school to inclusion rated welcomed of XX,XXX committed Public and We different consecutive report and success, each and that Statista. all our and demonstrates, formally districts committed the diversity with the people the our makes for bronze and everyone for EcoVadis world. inaugural significant XX year, embraces best third and a as the we the year in we've local half $X the awarded were help The a to announced across we're by to report careers. backgrounds ArcBest, level, performance year next forward. March heart of area. one our companies metal invested our across and Fort progress in was Innovation industries top on sharing in Forbes environment for America's are in us In providing the

portion close of I As the we of customer-led out strategy. some to today's advantages discuss this call, of our major want

We becoming well our asset-light provider services. a of are integrated on asset-based to unified and way

services of truly our our have great We -- We momentum. The demonstrates differentiate breadth of how results together. better are and are strength winning us

services, account cross-sell account revenue, we shown to increases, and As it's our profitability here, our customers. our retain when we easier enhance

lens our customers utilizing for business every worked Freight ArcBest, are services. also of research services through out ten of the more to we than our using also At customers. see LTL that Our our hard six shows asset-light ArcBest ABF

profitably creative, we their and are with tools we large understand shareholders. customers in trusted ourselves to are business value We place for As and solutions to put which people, and for the markets with resources our right work continue challenges The set supply them together opportunities and ensure the significant. advisers, customized needs. to directly put in and meet success to critical chain our up operate create we grow

to future also several our we and investments company date as creation. and to in We're sustainable afraid position we're move customers adjust team, a increase progress financial our shareholders efforts we'll integrated the enhancing Together as value hard the about those as investors. continue our we to invested continue excited our possibilities to the and to each who us. needed. returns change find when We've technology for our from with while into provider to people. our of a have not growth worked as logistics ahead last further well we years a the that position over as well our of As our innovation, every taken future, our secure long-term And benefit as and we and day, strength, as recent finally, expect steps way are an will

further scale investments years Thank confidence we've in facilitate Molo of we The in business. program to of by portion returns capital repurchase to in will make the increasing move the for you purchase our people, estate our we a yesterday Along Our future ArcBest. shareholders. that with increases continuing into the real in with future for forward prudent quarterly allowed of business. asset-based asset-light strength that continued announced are and -- actions have taken your and our us The purpose. interest recent equipment position the our our accelerates and in dividend, the growth of share accelerated expansion business

questions. some growth ready quarter about our our David, to we're the next and remarks, prepared continued I success. concludes road forward We are on That excited look think for reporting ahead and and

David Humphrey

Sylvana. Okay,

are I think questions. ready some we to take

Operator

our from first Cowen. Seidl comes [Operator with Jason Instructions] question And

Jason Seidl

last sequentially a and good But in XQ. to stepped side you least commentary, don't I but you historically, for of three wanted not in morning. the as best as we say a environment focus guys at down up look better look XX your years, been my almost between look we which to it's growth, bit. at on on has get I bit it I core How base marry as the should the here Thank XQ you, know asset the decades. David, but we little operator. and OR dates pricing at never think Judy, LTL David, your I customer that now, admit sort XQ? two companies, I the career, safe to back.

David Cobb

just David. as about pointed have you this say we think, we've the third Yes, I Historically, fourth just I OR seeing we're able increase an we're because Jason, from seeing provide accounts of basis the increased out, is than the that to one would more -- think all, service. our to are just quarter. retention of we customers strategy, of I just first in where endorsement seen points -- seeing we're XXX

our our I in think, I is that a as enhancing, showing that's up ability is core the And it business or talked way. in -- LTL October -- to great customers. that's so about, retain And of enhancing strength

think if so as near-term that only results for produce to but beyond quarter-to-quarter, these I opportunity quarters. there's continuing, we And move about think good you that just forward, not

a question we're usage, transportation optimistic higher we're what takes, but narrowing to year, obviously, see continuing kind the to just so those seeing puts serve And and of of lot those there's into it's And along some -- -- and customers. a your that's about we're lines. really enthusiastic and around lot of this purchase specifically down

taking in that's longer we And of getting are a probably the than successful term that's as period but would time we in compensated continue going so for just near like. that. to we're hiring, But

normally you're momentum in serving a parts be and costs the different at business we'll good, our in to than level customers. may PT be see past. There some But aware be so we supply higher and is could to seen probably pricing we've The a we're that And maintenance level environment by may that have. the some large, well there of constraints strong. -- is of, than due the see continue

that I So helps. hope

Jason Seidl

the on $XX marketplace? share million, my understand are guys repurchase, No. be complete opportunistic? it going but repurchase look No, be existing you trying of $XXX million to be at follow-up we is side. going does. your how in the you aggressive to to share going I that? Or, to And timing one the Are should

David Cobb

$XX Jason? the Regarding million,

Jason Seidl

Yes. Yes.

David Cobb

matures That ASR as will the quarter. complete, in once the in kick is first back mentioned, which, I

along opportunistic sort And lines so That's that at of point. the right. that would then be buys of

Jason Seidl

Okay. always Perfect. Guys, Those are quarter. congrats questions. appreciate the time my and in the

David Cobb

lot. a Thanks

Operator

comes BofA. question Hoexter from of next our Ken line And the with

Ken Hoexter

just, job innovative on What's quarter on the And Judy, talk of can that going ARAP of on acquisition? there is progress your guess Maybe left a the left accomplish mean else to ASR. spend? tech, just operating what And there? goals David, MoLo then I and that about Is scaled, the for on great David, and ratio? -- something what your just your the Or or factor is to -- there? just

David Cobb

Yes. yesterday. I'll hit the again, no. That's ARAP we closed just MoLo, that --

quarter is really our ARAP that the in not business. accounting. results. our in is be It growth in The fourth a So quarter third just will reflected

of You on statement. think, I of those year-end help, moving that both in cash tandem, Ken? our see from Does flow kind

Ken Hoexter

that's But large like an Yes. seemed but fine. gap, it outsized

Judy McReynolds

Okay.

think the technology asset-based that asking with the to I regard think, -- specifically you business. right Ken, piece? were were Is you I about

Ken Hoexter

Yes. Exactly.

Judy McReynolds

Yes. That's I thought. what

Okay.

in progress the City. mobile locations know, technology platform have about we are And Kansas and And seeing for those one there. being we so a that's as And our distribution I you locations, process. center three think in of new pilot

experimenting so and and software will be. different on what And narrowing we've approaches been good down lot ultimate progress the of making a with there the answer

in be Lake into move deployed. for technology are XXXX, we is distributions where planning the Salt end as another are this that's that going we XXXX, so towards of and City, And to

And And It on better our number claims that is expansion. do process as the encompassing. platform in the And the the -- as at, some for what's impact as software, we disclosed, better is have better down But larger operating say and think, narrow on we're flash just the and it's operating a and really the quarter scenarios to that it of period. all work operation. to results. designed planning, the suffice to about costs different well again, come positive over running on gives certainly expect move experience But are It going And then which are we benefits forward. a to it, excited We've it's of accumulated so us more we it to to positive. individual looking we positive workforce, the is I shipments. can a our happening It's and it, ability all facilities that as us are impacts we're of visibility we're to what on a it -- you of seeing be there's going those that which be answer, see the a to all really have gives it's greater begin we as how on impact.

whole has over think, X I basis XXX ABF yet not operating for the years, project could last the improved drastically pretty And have it have. that impact probably really this performance points. We the had

for contributor future labor June wages environment. increase X% well. contract David it margin of remember, well terms And through it's XXXX, And overall the of about as be an in so expansion going a and positive the benefits it's goes as yield as to talked got in our and what end to

growth and coming at improvement all too. us, think And I in mentioned for ABF. so that that's exciting, the also at pretty David And of comes then formula potential a continued good together

Ken Hoexter

on before like you with I there. just you per want day. growth MoLo then what in there's you from those what with just getting in give is quarter was out, for -- time And as to not Dave, clarify Obviously, look is is the MoLo that's day? still Yes, revenue at, there a my can per mentioned seems if your it XX% I the investments. upside of thought Do terms runs

David Cobb

like, around around stat have can and what for if don't some but MoLo about you, with is I he color but MoLo. million. add maybe here But year we've you'd XXXX we of also, a having Danny MoLo, about a talked Yes. revenue $XXX talked

So revenue one of mean, capturing added about you to if months probably fourth about a couple that's our to us of I that, quarter. think think way

I fair. think that's

So don't has any if know to color But... other to add I that. Dani

Daniel Loe

that. a I comments I think agree that they year growth No, David's through on on the trajectory. you with had would as think been

that of front think would the was think end it year your the back than the be through So towards end heavier when revenue model. the you in of year annual of it you the as

Operator

next Chris Wetherbee with comes question Our from Citi.

Chris Wetherbee

price actually quarters. Should that James on least that from there improve? I would at one given utilize do? sequentially six we continue I past strong Chris. mean, wanted revenue and allow improved underweight for mix and perspective to for the expect for like to to seems Is fuel condition anything not tailwinds.

to Just wanted that understand the puts on particularly? and takes

David Humphrey

really of just that didn't We first question. can hear I you repeat understand part the get going? us hardly sorry. we to Can you. so I'm -- can Yes. not the

Chris Wetherbee

Yes. that, to to thinking it's for I be been one way anything improving revenue Apologies wanted if want there's that. to better? per of actually just this mix be touch should Is considering of price quarters, of we I terms the over next on sequentially. is know is strong, we as fuel forward model that strong. be of aware moving to sort few in

Just there's mix from want to be to a considered anything know if perspective?

Daniel Loe

really customers. mean underway, Danny. But I from we've Judy This our and think core is say commented, we've would as growth piece revenue through seen this. as we've a through I seen gone when David the mix you that is

seen. the sequential can And we've -- so we strongest

that, view it. So as to we be now kind mix look -- from as seems that forward we of with a steady-state

this that. see that at a would standpoint don't anything change be mix So that point would I from

Chris Wetherbee

the Great. of that the an perspective you of environment, change? Is to that where Or, And from that commented you're work on could mix -- any step general of then there pricing off now? done OR any there pushing lead basically price? Is is Or, sort the there is of anything? it essentially in want sort that you on terms overall, of sort sort also lengthy just freight strength. is

Daniel Loe

Yes. I wouldn't target anything specifically.

of have and network I a what needs. costs and understanding visibility our think better we better our

in with the and And pricing, better understand have since what Dynamet us so when XXXX we tools needs. pricing help XXXX, just technology to really better introduced system space-based we

And so really right our on focus price the is on that needs what the and system freight. getting

Operator

with from question comes Stephens. next Our Atkins Jack

Jack Atkins

a on Congrats quarter. great

business So your going and line. comment accelerating both the back a top you're towards margin, the your of Judy, when moment double-digit that momentum operating feels kind seeing I'm business maybe about guess, asset-based just across ago to XXXX. a I moment, like the about sub-XX in bottom a it for in of the sort ratio curious, we're a operating be we to trending think really going

forward, mean, that? given ratio ratio of asset-based potential you over margin years? potential how about Just sort I of a the the business, operating you're that are now mid-XXs business As think you the seeing can is within thinking operating the thoughts the next about momentum several curious in sort as table you the if you're on thinking the operating around for provide some business? --

Judy McReynolds

business, of that LTL quarters, just a is. as solutions time there value last couple I the at that longer two One good account just we're is where case. look We the about the assets some asset-light And holistic it we over a momentum. on -- now our just because And and especially them. the more of customers of the account an it, to well. what offer. deploy I over it little a you're comments, experiencing at it come things. it provider the I of of combine the and with bit that mean certainty times network in have lot, Well, that as I of an works solution really overall we're is the a it to we just but just really talked asset-based with right to approach solutions growth in when there's absolutely can especially really think means that in prepared of mean you set. bringing periods

even industry. giving he managers may approach, helps that's that in Danny for I like best options of the a seeing feeling that be So I on economic workforce. we've our visibility past, I that us with feel have would And his with give in would so we're a mean here when best some that mean great feel and the the on yield compliment about we'll have But and anticipating consistency that as call, backdrop, which us lot going lot we answers deployed, been difficulty us. we've is a the help with us have do. in a think to conditions him we this hired technology and I people. we change, value team. in there our best that's the knowing -- to what And of like

overall environment -- same about in the net package want we a I have labor the to do that's I our what that at people we the industry. sure despite people And already make feel good benefit What that with have in XXX do then level. we time think to things move our the And an forward, I to changes term, predictable ability to do and wage is those that near think working. employees as those is we the people best provide that. have it, we increase And I've mentioned

spoke earlier, things that as again, further And of holistic so margin expansion. itself And with to with that to we opportunities our approach have combination the I customers. growth really lends

bullish, about we're it. excited So we're

Jack Atkins

guess some capacity door us you Could growth that we about that there are with outlined call? in XX outlook regard Cobb, hear. on Okay. for on Great. challenges How plans David that that conference expansion the That's follow-up And next I think my to XX as may to guys question, maybe maybe the next 'XX? update the fantastic of months you I'm over your to of for given everyone be impacted supply of. chain I think terminal out year? is the capacity aware curious, sort growth just last

David Cobb

about Jack. intentional talked Thank We've we Yes. expanding capacity. our about you, are and

than solid now a talked expansion certain others. of hiring of investment targeting adequate historical part more critical levels, our that's a for I plans. in we're all, from we've right the and First standpoint, certainly and big terms we're in pace. that's on of above But capital critical mean And growth locations, is a us about it's that. personnel fleet

a delay, deliveries of is of the in and some little supply think, putting constraints, we our mentioned You equipment. that

think expectation get our And anyway so XXXX. us orders see in in XXXX XXXX. we do point XXXX, we'll is our expected do least We to come And by at impacting this for a level then early some. that tractor higher at at

that grow. good it's properties. and a there So properties through on for more good the challenging manage From as adding Trailers tractor is a as that's we opportunity little a we're owned front. facility standpoint, some lease nevertheless, well us standpoint. But think to we

market those chain you environment a as projects got locations. real well, certain And tough nevertheless, these than supply one we've for plan X-year some would that the we as well. of -- estate so term And mentioned, But like. targeting is longer a is a as making little the impacting are this

ways. arrangements capacity. are in also some of they'll in help renovations efficiency feasible improving Other those number Some those more renovations some And Those that our are capacity, our get cases, work-life and we done. for a -- certain to of they're door people. will add energy cases,

So that's longer-term that's historical the around basis $XX of terms increasing, matter in done. million range. of those annual kind talked a an of I getting target just of increasing our above spend about just on of plans. always And of levels good. the still But our on It's level there

mid-single-digit our kind But strict to of or as Now so to some target, capex in not of I to we say would mentioned, add increased by end the reasonable it's the financial I a a XXXX on fall format kind percentage shipment existing capital, may, be range in statements. of may capacity think that easy that an I into as footprint the there. to opposed a -- of look terms it lease of

also revenue you per So an increase improvements provide about to productivity opportunity think could facility.

So but like situation opportunity added we've throughput an that. a to example add we've like necessarily in our talked the about adds Kansas it distribution doesn't that some City center, about, of it a is, increase doors, of configurations think warehouse that

number of to a you, there's So moving parts, obviously, but helpful that's hopefully, Jack.

Jack Atkins

really it. I appreciate

David Cobb

Jack. Thanks,

Operator

comes Shanker Morgan with next Stanley. Our question Ravi from

Ravi Shanker

killing business may cycle little of we the of environment leading and really business bit Judy, can a a it a industrial indicator looks Kind right little should Great. where that feel now the that's bit like be help also of where the be on more? and are you unpack kind like. in a expedited

maybe there a be right. would more detail So little

Judy McReynolds

But mentioned. Well, think, Sure. I doing our and Danny comments, doing of as very I'll the that well right significant business, can, is more this some for and great But now. a And little solution a of make we're in environment. a a of of excited forward. to most the as is kind it certainly supply about speak in and well and move got plans also expedite sustainability lot of to we've how bit all that challenges our couple we're chain parts works detail. And in we of then customers we just

So Danny, make that? about you to some want comments

Daniel Loe

customers. can our for think, when of think asset-light asset service business, the because with an provide like that I Judy, the those customers, exit we our many I the it's it's in of category. But of surety

have we thing demand industry moving area. so really for when think forward is it. really headwind this the there mentioned haven't with that think in And that is we in auto we environment, one that I some obviously, more But there

so really manufacturing. strength the is And coming from

interesting And of in be truckload that returns to as take capacity so well. as general it all scheme things, of the will will out

looking maintain And as forward. sustainability how Experis of Judy we're still So on bullish at the we expedite. we're as do we go said,

Ravi Shanker

the maybe little stuff bit That just well. been bigger that's makes a acquisitions, banner year follow-up. as Judy, in it. a you sense. of everything the for given happened it's a kind other picture macro, Got And of

next on I to are maybe about ArcBest this from Day. big time we X think missing years for that, you does of I the things like Analyst Kind short it's guys? build for of on? another pieces, mean what what's But now? call, look like

Judy McReynolds

Yes. need Well, of reset I question. you to get for targets And for to speaks and some results another Analyst do with whenever that agree that. certainly you Day the thank for need We that together to dates you. the see some our

we when that business, But about overall in offer. we much markets So do there's at I so I'm mean look we business $XXX excited opportunity. that potential with billion. what total our

our opportunity that customers. the additive embracing and excited of that's within Molo We next grow $XX I lot mean And that's mean much I is the annual logistics have an basis. domestic think of sense. to from lot team $X that what truckload there. management billion makes growing. we're business, acquisition there's runway that so a experienced and most to to doing. so about why the decade And we're loyal billion into the of A and and are I XX% comes transportation we predicted services on market feel XX% over bringing like

But And R&D about we're we've I But got earlier, that to another of talked of that our relates a toward so a there. efforts. part is mention bit -- our which lot we will opportunity -- working strategy little

also with lot mobile some innovation and customers business, thinking a we're and team platforms accelerator R&D process, our at flash our but for and We that to get that potential looking that within asset-based the there deployed our process that of the specifically. investments have a about as solution

are just some but us are impact things that help in also most our really for efficiency part, the the are solutions And business ways, that our so existing of potential they or growth these maybe of either adjacent it.

about the more as of of to for on And be opportunity our there investments I'm excited capital and that the those well. that available And well. dollars about types next XXXX. And of in months part so we're come into having as excited will

So thank you.

Operator

Group comes with Research. Our Scott next from Wolfe question

Scott Group

think Can the wage then just confirm to in, is teamsters next that? talked I the Judy, OR can from benefits? you year. gets any there's us, And payout but remind all I if you including X% don't inflation just the think, here, incremental you that about, better

Judy McReynolds

annual wage, the increase. we health talk welfare wage When that the X%, and Yes. is intention about the

our So an is that's as those you I if we've mentioned, all employees. for that. scale reproduced the encompassing addition, on there for you that. think incentive X-K, in plan -- And in then And

so And below. for GAAP a X% level and the there is of OR XX%

with from it. is X% this incentive the goes a that And so improve there's encouraging as point, thing things

observation. good yes, So

Scott Group

above go doesn't it X%? -- doesn't it meaning But

Judy McReynolds

we mean it's as But as at past paid, times to that's where look out, the at percentage. I X%. that Yes. ends far when scale we that point been

very about could the employees. our that provide So benefits excited to we're this

Scott Group

strikes it the right the almost now. to environment. core And tonnage Okay. it like really that And ask just about no volume tonnage sounds volume then I LTL And has other Do good right growth that me business disruptions has about place and now. right environment want benefiting issues the now? in growth these chain much something uniquely there's transportation is supply you think LTL

Judy McReynolds

mentioned this I type in LTL I just the Well, as networks earlier, well of environment. feel like work

the has you of it first, of think middle and and mile Some us, us the to I I also, those a LTL e-commerce portion three as certainty pickup of economy, think in optionality about of do the and effectively. I shipments. in think it, a lot the that dealing the provides become delivery, your speaking delivery for all But of was greater can last networks with participate customers. that, of the when And

situations with find other of for combined that one an solution utilizing overall really we customer. a segment so that And some that, where we're we facilitate do help modes

-- but with when what as it's truckload we the is case carriers saying of I to I situation LTL our our say Yes, David just with in comparison to it's think mean I it's also think turnover look And I Humphreys very it's retirements. certainly, to well. that's is to drivers, it -- a industry. there, me. David, the our the other want low low at six -- some that's benefit. growth But relative as a the

a customer certainty, you're helps. If wanting that

think I'll positive. that's so good there, but I And stop a

Operator

Jordan Our Sachs. with next from question Goldman comes Alliger

Jordan Alliger

and see -- curious I black. conference had an truck the is But MoLo market being And on you on then the thoughts back secondly, in the just closed, update while of to that now the where call the fundamentals. if or when think, they wanted your breakeven about talked, there's you brokerage thoughts on had I see Wondering timing that. a

Any quarter I -- operating think said update going know to the if the the fourth and was I on in by black until it great. then. fourth that be was had didn't income and you breakeven be quarter, would

Daniel Loe

previous quick a that XXXX. had Yes. target the in Danny. changed been a is fourth run as the they've be that we nothing for our since on that breakeven rate would our and We we Really I'll the around of is give on thing. they This that plan kind has see that. have quarter

an tight I not which break think tight. indicator of in index, at just, just rejection been market you what Capacity in there's of projection, overall, see a to as is look is -- really It's you me, the I tender kind the the is think the that overall area. the in market.

You the may see a week. returns weekly type softening next and then it

seen overall, what I a capacity than little that very is you've think a So there's just more in truckload consistent demand the area.

Operator

Our next question Stifel. comes from with Chan Bruce

Bruce Chan

should or capacity just arm's to little broadly, purely more preference interaction maybe think the just Is is that we little get as on right of then here we the sort the a of loads the the the the to now. all And kind thoughts your you talked see and length? about tightness to I ABF sense. pathway experience any Or LTL. picture? to enters between opportunity about? there of bit news. elevated Congrats better it of a asset-light David, when that? of in what's that market think of expedited on about you And trending of And procurement? the on for maybe all good a here that the makes both wanted get how Is results an PT pieces, Panther, and there MoLo bit lot priority given MoLo

Daniel Loe

is this Danny. Bruce,

biggest you is I at a look really looking when this. it customer angle from this think at we're piece the on

get and make too. those through decision decision the typically And logistics the for lines. for the best customers we the the down that's to the best we flows our that that best as for it have if decisions ArcBest are, business our make for well, best to so We But leases company decisions we customer, it's the we customer being options. make

just customers work there's both have and ability to priority-wise, options say make for -- it's a us. you that it's to the decisions really hard So single those the let priority. for It's

Judy McReynolds

that Bruce, Yes. is the we do think, there, made years customer. through ago highlighted means a of business mode-neutral, we I being we decision that our mean is I are the see several eyes what's this and which that

place we're that to trying So that decision, the better. it's force the Today, have the one. made make the not that's identify to other. was trying And a time more that mentality lot equipped, at to that place. them. in it's here, and easy We're and best it a that answer I But lot not one the and for or solution we're we right We're we glad think decision.

Bruce Chan

the my Got it. time. Appreciate Well, that's one --

Operator

Our with Todd comes Markets. from Capital next KeyBanc Fowler question

Todd Fowler

the from you the annual the in OR the and you Judy, this talked that the the ability Is to where to forward? OR in the your now think has Asset-Based How show see XXX in this or segment, think improvements kind peers continued basis show that XXX about going year. improvement step-up shifted about going points of of in with segment of forward? something that ability do business improvement. a here cyclicality improvement the the of profitability steady can have remove some you big Do some

Judy McReynolds

growing business that And yet forward. our are technology encountering move improve efficiency. to in have with on have connecting people a And that, optimization efforts we we've I talking people more the It's actions to retirements. us there's some we visibility the quoted we've that the ever And asset-based where this into history is you to within more. puts has in have kind really added of needs we obstacle a be talked taken good a of core more that a We've we've we But set depths about really going it's little I that consistently the of our yield -- the have, with that pricing the more I we've steps Yes. just that that to business. do grow asset-based the and operating for to about. been on to the net, bit then to business. XXX and people ability freight been but again, of feel company. we combined that approach cycles. flow of with I also some taken term from to our grow the And But going here, as put of instance, a earlier, -- of further more. the space-based but the mean the need in to continue I we've less throughput, hired in business, been go victim really and we're had work holistic improved we our then doing Those that and to the that of customers you need do number in add our But business, opportunity ability to be once when grow. than we've the the to not efficiency really think customers believe that position and good the defined near that to improve And what get like business. a

think that we and talked and in the should David we and I growth the get the as potential potential with has see then place them -- potential So trained about potential everything, our we in real And that equipment accelerate. have our already estate. throughput

So backdrop. good a

Todd Fowler

positioned certainly that you've Yes. No, sounds encouraging. going got really now like which is it everything forward,

a shipments where it kind all last moving home weighted heavier network with the for with of like at this follow-up to that is some quick feel just point. year, it want doing of to Does actions point, kind maybe be. the you supplement of So business some to of that

as we going normal core move into we're of this LTL tonnage of growth think in about so tonnage of growth we more growth, And kind from a when cadence 'XX? tonnage of kind forward, point

Judy McReynolds

changes view of in into point, in your business. seasonal it's see to the I mean other we system two spot opportunities it's But market us see imbalance I core that that's Yes. our and also as those both really and the from that as continuing. good demand we help think customers And is XXXX.

well. to that glad So we're have as

Todd Fowler

Yes. Congratulations.

David Humphrey

got for Sylvana, one And time think we've question. more I

Operator

comes from Moore Stephanie Truist. question with final Our

Stephanie Moore

bit little I follow up a wanted made comments Jack's a on actually to earlier. you little Judy, the question bit

holistic well, better taking often opportunity revenue about LTL of of talked there cost cross-selling isn't that needs, or just as asset-light one customer transportation. You these the and benefit which what servicing synergies But from that approach any associated opportunity some to customers from kind is providing just more maybe services? mode margin

Judy McReynolds

just that accounts. per to just that Stephanie, you I'll which I'll account have Well, profit Xx -- direct on presentation, our cross-sold higher back XX we the in Slide is

Xx higher, so percentage retention and that's is what revenue we look at. our higher. is X And points And per account

So going approach. that. what customer see those we support solid our again, are well know mean, I we really good, excited serve it. statistics that that about And And a we're -- this when that we're way doing work our we them and chain with and to them. supply is And what's base. partnering getting right customer involved now we're on their that's very with important actually for well them really understanding to

David Humphrey

Thank and everybody we right. much. call. our Well, joining today, to concludes this you very for thank want All us

Operator

you disconnect the thank lines. today. that conclude for your please and conference That ask your We does for call you participation

ArcBest (ARCB) 2 Nov 212021 Q3 Earnings call transcript