- Earnings call transcript Q3 2022

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Operator

Greetings and welcome to the ArcBest Third Quarter 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded on Tuesday November 01, 2022. I would now like to turn the conference over to Mr. of President Vice Humphrey, Investor Relations. David ahead. go Please

David Humphrey

results call, Thank an provide the of quarter today's some walk you joining us. details XXXX third recent for we our then update through answer questions. will you On and on business, our

on ArcBest Judy McReynolds, Customer today's Officer; Logistics Chief President of of and could Chairman, of Officer as is you Chief better its and be forward-looking call. help Dennis To Yield Chief Cobb, made Asset-light Officer. David Financial call Anderson, well ArcBest; me during this President CEO ArcBest Joining ArcBest; Danny ArcBest some as Loe, & understand results, statements

their risk. nature, statements, subject to very by uncertainties and Forward-looking are

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

there you or webcast. Exhibit of morning, the XX.X along slide reminder, deck was the in arcb.com, earlier that follow is this call a a conference on on X-K As website can be ArcBest found can filed the that

now We Judy. begin will with

Judy McReynolds

at every supply keep leaders and moving. hard global I ArcBest, Thank here you our and start work chain good dedication want by to team hard the of day work who the everyone. morning to and entire recognizing

our at and point in next the grounding back our and an our remains forward look three to North environment. uncertain quarter Star we As growth strategy year, third

are sustained foundation into investing a people, performance, customers We future. Because well value today to to our long shareholders that approach solutions of the balance our to better sheet solid back are ArcBest changing facilities market and is allocation, than for with positioned our and disciplined positioned create throughout we ever our into strong serve confident and capital conditions. continue

are people our come our to and because for ArcBest efforts from of and hiring others company industry. apart stand our of the enable the business in on Our continue to culture we based our heart focus to at People the long-term. stay and value

that the and every We technology are supply We for solutions, flexibility processes leading their our known providing customers partnership, need capabilities in building business. bring edge to of easier to efficient more stay business mindset future. the innovative it chains. parts in integrated our they and and do and in digital now make to We these succeed investments ahead and our prioritize critical

and our remain our As facilities we we improving on XXXth approach focused anniversary, equipment.

XXXX in this and new We opened a and while ArcBest we and in have a expansions Salt recently ensure completed new Indiana position We our planned and customers' expectations to early improvements we'll City network meet year more to to leading maintaining facility to exceed warehouse in come. add work. place facility with a Lake as our

A the This customer our working trust toward billion A first help a invested right also capacity. billion they due time over $X distribution emissions of partnered nearly most by that what of the achieving complex $X in significantly XXX to $X find our opportunity And develop a in billion is one this with struggling customers. customers is year LTL time remains from cross-selling target to tremendous with long loyal most growth to in and financial equipment have including was deliver solutions to on longstanding track We helping solve perfect us solution, in year. them road our history, last current $X example supply challenges. increase revenue big chain billion per to team of exciting needed. of to growth year long-term billion that fleets with opportunity almost to fleet result for a We our estimate is and partnerships XXXX. $X that maintenance the year with reduce this with came them our of their us We this have newest part find into and our helped get a based capacity the asset they earlier pool truckload a costs. revenue on we the as our are year have

As Xx customer our asset-based this solutions a customer shipment for volumes and this total Xx. business result, across increased all with our over XXXX increased

to expansion technology. customer's our employees, an shippers addition are this tremendous to leveraging history ArcBest efficiently this of more and a business now we serve has opportunity exploring into capacity a continue of and growth, innovation In more to see effectively by rich providers units. we and

expected half technology drive additional efficiencies. are over fact, our to top tier of projects In business

and As industry we and them to than company that have advanced backdrop, understand navigate leaders better help ever access costs performance tools before. economic reporting changing a

We seeing based facilitate the we've network encouraged previously pilot provide efficiency David you our work investments growth an pricing turn are we're optimization to enhancing through with the by and utilization who like both revenue growth. mentioned on dynamic our it and take financial and that results Cobb, over locations with I'll of to long-term levers update route now will asset gains. our And

David Cobb

in reflecting versus highlighting third I'll begin an On increased the business operating consolidated $XXX million. year's segments. third reported last results. $X.X of by consolidated Thank billion, increase you, quarter, Judy. growth non-GAAP year income over We to revenue of basis XX% all quarter our XX% a prior quarter

to impacted items. diluted comparable share the be quarter, the fourth XX% third EPS third we that discrete used was quarter grew XX.X%. rate third earnings XXXX The $X.XX. be use adjusted laws, rate quarter the Under rate per quarter tax calculate Our to by XXXX effective expect to tax current was the in may we non-GAAP non-GAAP which to our

generated ended in quarter year this improving solid deposition quarter. from business a in position a pricing for of net demand the benefiting cash our third million cash services customer logistics second the from strong flows of environment. at net $XX a favorable Our end We

Our composite total X.X%. our we month million our interest remains rate level a $XXX existing end and Last was at of at very the on healthy quarter the the facility debt the liquidity of extending third facility, senior including and agreement through credit revolver terms which a a credit unsecured reflects to XXXX profile. facility ArcBest the of it October term the converting secured amended from strong improving

business, In sulfur year of to million, rate a quarter borrowing to for discontinuation our the was $XXX increase third compared revenue to quarter. moved asset-based also the prepare planned XX% an based of We LIBOR. prior

XXX of points. The based quarter non-GAAP is asset third ratio a year-over-year of XX.X operating basis improvement

receive total The fuel resulted and ownership of during sale including tractors of quarter timing We quarter, in recent of purchases third year on and high the maintenance to income had gains the however currently by statement. property expect some of the our results expense. elevated equipment in by plan fleet end offset The the quarter, in asset-based are line XXXX portion transactions which of sales impacted the cost accelerated tractor earlier tractor and deliveries business. from delays the by cost in we areas were the all sold in expenses a supplies the of revenue our costs maintenance increased fourth a of tractor

their favorable the fleet than equipment disposition contributing of in our short a current but gains, sales normal average term those cycle However, produced slightly was age. timing market, the trade earlier to higher

constraints by repairs inflationary addition, supply have and maintenance and impacted parts, been In costs.

in maintenance As normal as hiring new onboarded late cartage is into impacted have usage above some to we our as our time. throughout added lower positively have in our replacement year in equipment had the locations and XXXX we equipment over network. expense employees asset-based new expect of in productivity overall the Though levels efforts the well success be XXXX, cost

optimizing on – expense usage and uses impacts the focused is reducing team expense, which purchase transportation rents this Our and line. cartage

increased of increase the to revenue XXXX. third third and increased Third This back per percentage and build XX% per shipments over fuel the hundredweight quarter quarter surcharges. price prior of increased third and build quarter total revenue the the in year X.X% compares higher impact in hundredweight tonnage increase XX.X% quarter included X.X%

figures our While X% that of while was the year prior period the just last below ended approximately daily indicate running the year tonnage initial period. in October same month shipments X% yesterday, have increased

shipment in optimize based revenue LTL shipments rated to weighted growth, October heavier September Our revenue basis, average sequential drove actions and network and in and per as LTL-rated a weight On the line core change market increasing. with the rated truckload historical tonnage XXXX change asset from which is of shipment is the our change. mix by offset business conditions business our to reflects the was in fewer This lower truckload shipments. partially

found on in trends Additional our file morning. October business preliminary the exhibit be X-K this details XXXX can

prior versus FleetNet Moving to the and in per Asset-Light, the event addition of the year revenue events XX% MoLo and third higher more segment. period quarter revenue increased reflecting

non-GAAP and truckload from managed Asset-Light solutions. quarter XX% our increased operating last Third for over year, demand income benefiting

changes market of quarter, combined and quarters. last business year-over-year to compared to the This second resulted year’s have reflected mentioned income a in publicized quarter revenue As softened, lower effect and rates. in mix according this rates and level are in information, lower with growth industry monthly initiatives operating growth third investments which sequential first

Asset-Light XX% business versus an period over the The Third for October October year. trends also quarter the provided XXXX same Asset-Light Preliminary last same EBITDA period preliminary been morning’s increased million, in was XXXX. of revenue have in daily X-K exhibit. $XX this XX% increase

earlier through MoLo. year, today, they by reflecting comparison range revenue growth $XXX will million of million to and prior We capital be to September, totaled million to expenditures $XXX Net changes. see and year. the of continue the the mix some compression include market and end in $XXX the should margin relative conditions moderate the Beginning in business

upgrading to that of network into real earlier, expect A mentioned revenue receive we we projects to and I and XXXX. and we continue our I ABF a equipment some plan make further to estate, tractor on addition Class earlier Capital investments. our mentioned shifted have for currently XXXX the have in future orders, As real expenditures estate progress multi-year expanding all on

earnings a the We quarter at a release. result, As higher be our capital in business generating fourth we details solid more XXXX than allocation will our with provide investments return for plan to level expect XXXX.

sheet growth, resources of capital could the balance economic of approximately capital through of But that mindful service enhancing our evaluating our multiple year-to-date Our including allocation offerings our investing $XX in value M&A are the cash and strategies, and we million us to potentially have enhance environment. repurchases. and returning allowed pursue share changing dividend and strength opportunities organic industry shareholders

positions customer well. strategy us Our and focused financial strength

credit metrics. pursue to approach we to enhance long-term We through are continue value financial which solid and targeting economic are balanced cycles grade pleased to Overall, of seeks quarter for a results manage capital allocation, investment another the shareholder to while deliver we growth. positioned to

the to turn I’ll Danny. Now call

Danny Loe

Thanks, the MoLo MoLo David. Today high of seeing provide on what and the we marks integration since one closed give an level on year I’ll overview update the side. yield we’re acquisition. a

XX schedule. last a the made, progress completing on Over pleased have with been integration I’m including successful integration. team has months, of our the systems we the focused ahead

our operational being MoLo’s from truckload to platform carrier and benefits approach seeing We’re and service adopting truckload one a management. customer business

and prior of before, and mentioned are market years MoLo double-digit recent their still contractual solved pursuit [ph] seeing MoLo our low mix Despite of increased the we we’ve the better conditions. business, combined performs acquisition which truckload industry changes, shipments. growth an As Lexie over accelerate

through Overall, be track buy with our as care the to the by continue MoLo’s we have opportunity investments a to we opportunity to approach. with of Asset-Light business better previously related the from margins see. and in And of this for we ability acquisition. improved acceleration our stated on We out growth in to remain our double-digit earn drive plenty result rates based encouraged the goals deliver on continued financial segment management continued market

our high Now the of integration X%. of we for more the us, we to MoLo working X% are opportunities that strengths ready MoLo out to transportation and parts and our all target focused largest demand on margin system, behind run. Asset-Light managed of growth us truckload our the of of long-term And solution margins are one are are team achieving ArcBest with gives Combining and improvement. from members

the side, remained has a quarter agreements. rational. our on finished pricing third by securing pricing the increase On deferred X.X% the We asset-based environment

it Now over I’ll turn to Dennis.

Dennis Anderson

you, Danny. Thank

work. often center talk hear about we and work us of the our because to a lot You our operating hear our them our We model. from of drives customers do what make customers listening we

LTL on optimize focusing when few build which echoes This needing years years their help their ESG glad by because how working our services I managed that customer, This them. real automation. scarce them their me for to their solutions supply LTL has managed is it on as solution, because they management listen, last customers costs help modes customer to adapt, shift deal it it service from reach has seen to we our All focus is securing reminded chain truckload. other win. to after to person part were shifted heard with the a business to XXXX ago, a that XXX a expanding who their customer continually utilizing again, efficiency. objectives, to customers. to wins differentiator We parcel. freight customers chains. months, like led A transportation sustainability outgrew are few than team growth a as solution we took for came for supply of provides be place clear customer and a has have tripled technology uses on We revenues we this like great us visit us then reduce years true our their this of story. since And allowed we relatively ago, became in providing few our solution our began managed of Over partnership complete chain We philosophy this been. our stronger which customers supply capacity we’ve more our Having grow. is to transportation one to prioritizing and pipeline our and And needs services in-house ever recently focus approach. our solution, new what was a customers transportation

routing, point a customer. us which auto no auto where now touch business we’re at or and for We’re means tendering the

business to do data double all their forecast head we’ve because without any to customer Our entry. count, adding their need eliminated

we modes flexible. chain grows, and can supply ways their while As carriers them for looking business and efficient their optimize continually to make help more

to have of and tenured partner we supply though youngest in of proud the vendor action. are even chain like only stories we one one recognized, because our We’re that were We prouder received strategy awards they even this their their suppliers. show love coveted

last next has to double months, grown a this almost and As of this expect result partnership, XX% over with the we our revenue business customer the year. XX in

the for to company but on Fame best we the our the last day, recent based over comparably that best Congratulations in and employee and focused others. her that this Because year by the provide feedback on in proud more benefits. work we And of That see on sentiment third people every We’re all when reward recognized our so Judy. our commitment we we’re experience our amount class than heart. at their technology a to it’s Arkansas across week state testament compensation substantial culture, and and Judy day. named to a hire absolutely to it’s and to to and evident and our turn right that organization of help XXXX a have feel business and people, every for of the Hall the ArcBest are they were of who term. that especially industry awards our affirm ways it’s we of drive is people without solutions grow customers do and their we culture We awards provide Nothing them of honor, rewarding for by Arkansas. our in focused forward. XXXX is enable are customer long of see excellent perks We XX,XXX possible organization. last quarter These this Business throughout we focused contributions companies, great and experiences because recognition on

it Now over turn I’ll you. back to

Judy McReynolds

you, really that. I Thank appreciate Dennis.

conclude, we with progress Before our to want I efforts. mention ESG continue

development more which has strategy industry of to roadmap, and a solutions Integrate, team impact and milestone help around three guide five-year the understand partnership journey. neurodivergent that third-party We organization will an help and sustainable on to environment focused initiatives ESG We impact. our to operations. in DEI emissions and detail specific We our a a have advisory further talent. our engaged our want onboard higher with the helps are reduce recognize announced I also that developing on that reduction recently

employees to team forward look in our reviewing inclusive, We’re identify all they’re These supply to ways Investments our inclusive day-to-day strategy a distinct providing easier solutions serve hire those talent. and facilities in procedures a and stakeholders turn, our and can can workplace recruiting, as advisors. a employees uncertainty. hiring, chain more our to bring throughout and company’s for efforts in trusted actively be support our for onboarding resulting neuro to our navigating In make it empower working continues unique organization. more In we both We to to closing, perspective in creative to able make growth we’ll serve and members. well. processes operations more technology customers their

proud While are several last the what years, we of not we we’ve done. in accomplished are

now We’re growth. committed our prepared up Humphrey, the goals to driving open delivering questions. our can That supply remarks. David we and to keeping global the on moving, chain call concludes

David Humphrey

think we’re some questions. take ready I to Frank, Okay,

Operator

you. question [Operator Instructions] comes Chris first Our with Wetherbee Please Thank from Citigroup. proceed.

Chris Wetherbee

guys. morning Good thanks. Hi,

Judy McReynolds

morning. Good

Chris Wetherbee

relative the of running to of X%, high We've cost guess, think start environment, I sense that cost how let's in work that ex-fuels maybe if your need felt you wanted type as Or of to think you rate it, to call the can particularly I So, next range. for inflation competitors heard do pricing I wanted you Do of inflation and that of do the from roll more a get to offset we on or that was guess into cost with productivity? do I of when year, get pricing inflation? asset a most X% think digit couple a kind the and inflation? sense. kind kind about right of pricing single you to based you all about business like

David Cobb

that on be that in and from Yes, a direct can costs our expense an then demand inflation here. but the and our with comments Yes. the fuel in to see of others But board also the inflationary issues diesel that impact there and being then the even that of the that has I'll start labor areas. cost is Chris, fuel really of reduction with consumers. – the see from some impacts maintenance we we'll us fuel propane inflationary But just number well. But mentioned elevated costs, from and good vendors the for do getting some shortages having our and repairs along were that business But shortages of parts and quarter outside had delivered. across as impacts and is vendors, we I across not the morning. impact probably Certainly have things. a other some do tires – also that supply mechanic that with chain and a

– percent big mentioned as that's impact on that. productivity, is said, increase. And we parts think of improve there, certainly saw There for maintenance and our I us. probably that in to increase then double-digit you I So a part of in of on opportunity those kind kinds coming the around items, equipment a for kind basis

we've on our under the XX instance are for employees a months. As in dock about of that that of operation coming and that's hiring a experience earlier, – the third had third our now because retirements, some about new got have we and we've employees mentioned got I

be drive improvement efficiency, as an the that in to of so cost opportunity terms know equation. we some there can some gain of which can out And that's

Danny Loe

Chris, this Danny. Yes. is

freight Just in that David cost day, our the the cost to cost environment continue on we that our customers at inflation. is we we do of see for there said, services And things we're and the feel what to cover inflation. to to said, that to but us our price have I feel control that that of ultimately that We we we providing yes, like and the end is for can pressure rational there's can top can do. value of the inflation the that, we opportunities cover still of

Chris Wetherbee

sort a I XQ you in on That's noted you environments. up sort XXX about you XXX typically Okay. XQ a I around during economic of environment color don't to think help it. how experienced range? the Can helpful. basis economic appreciate think just an and X-K quick points. you what as the you increase you that? think declining noted describe the bit with know little follow that or of if you ratio is I think And between is just about high end of how this declining operating of I us

David Cobb

Yes, thanks.

soften indicates are that macro the of ahead cycles. confident and optimistic us I'm the softened manage think to economic that evidence about and environment has But all predicting and I experts further. will opportunities through strategy in the our it our ability in

outset the we management improve technologies at mentioned, data Judy today, as available business better. think, more our to have and tools and manage of the yield I strategies call,

and the I better. a is OR There is softer our end I that environment quarter. any positioned in a the manage would range to like in economic really the of we're that environments environment and economic that pointing I takes that said, I So to puts say, those economic declining evidence range just has higher past always in is been think stated. through of on

to maintenance that. some improve, on certainly got out third improving repairs and have some quarter including including those will time we've to that of in We cartage, work a on including that I productivity, pointed that areas but path the take to the

Chris Wetherbee

Thank the it. Appreciate time. Okay. for you

Operator

question Goldman with proceed. Alliger Jordan Sachs. next from Please comes Our

Jordan Alliger

slow color color down in customers it maybe perhaps you I on say you're are them the Thank basis. quarter yields you terms of time less maybe me just over more wondering give than perhaps Yes. what talk we're pricing. about to truckload your given Good some in morning. I sort on on or seeing of of of as looking What put cover October was sort little could know things pricing a ex-fuel inflation. seeing the an at doing? then type And third you. the

David Cobb

the still One we very our of kind thing deferreds Jordan. talked third X.X% I'll and Hi, strong. increase just about the is – quarter in

go of historically our one with it's third quarters you back, – better with If quarters X.X%.

still there's in alone fact that We're that in So, confidence the there's that value. pressure industry. cost customers recognize inflationary on this not

and we're chain solutions to And that. going be that capacity about We've when costs talk And rely side so, again, – the logistics, having them manage back market model what our that for we successful to if integrated come tight. we'll customers in that when cost reduce supply that come to our go you of and was successful on I'm for they're approach to if can values confident up. continue if you our as produces is model. been flip when we'll But and the increases, too to to to addressing in take well us customers market

difference And so for our regardless that that's of the model the that answer the an today we're we environment customers. is in have facing, we have

Jordan Alliger

expect then the cost something I noted out of dropped would the to you the in if right. sort selling And that of quarter balance faster thanks. I normalize is in asset-light or mean, Okay, I on side, you think that got that the prices transport, quarters? that coming than the

David Cobb

deflationary are faster. a Market Obviously market. rates we do. dropping – is don't it We

There expertise do. that – our navigating to MoLo this balanced can different we approach in a we with has carriers. pieces also as market. are We their have added

better this. we We in are than the past at doing significantly were

we then the that positioned grow truckload right we Our faster turn area. to others in. to that than continue know invest starts confidence now, and market to growth extreme platform have as can in we're that for We

Jordan Alliger

Thank great. you. Okay,

Operator

question with comes Incorporated. next Our from Stephens Jack proceed. Atkins Please

Jack Atkins

Judy, great. and to for of Fame. Hall Good echo thank congratulations on the questions. want morning And my you the Business Arkansas I just taking Okay,

Judy McReynolds

thank Oh, Jack. Thank nice. you. you, Very

Jack Atkins

a So, think a business? think maybe around sort you. the my PT put with guess And asset employment on being about to there, first going of maybe Could you my David, think within next, of first costs of of that for year and about the can question Cobb, we that? and David and question kind of I down color is just of normalized truckload little kind rents the more help expense coming based of half, us tailwind as cartage kind if guess, what's timeline you year, kind it's over returning about on I a can little kind more levels? don't a we know bit the What's –

David Cobb

the – there, transportation purchase the the well, is two items. really and costs. two issues One issue surcharge Yes, over those road cartage is with there's then rail fuel associated

of inflated of So drivers challenge the cartage on in look locations. that local delivery a our that right year-over-year out getting all we've that at basis, when had you with hiring those and stems usage. coming sort this And were pickup along from – of – the

that where can vary can And challenges with be you that location so have by that. –

level we cartage where in So the than that's would of came the usage kind really about higher of like.

the opportunity you there clip cartage actually year-over-year. PT, that I'll when have line declined, is that the the to road sequentially look which over kind in same so cost higher did XX% It And probably of say And but just as year-over-year. the third – it the itself quarter. cartage was increased has sequentially from we that second

I that I as timing some you And drivers to on opportunity area bring in really that. to and doing lot hesitate the actions reduce about an we've well that's we've that. tell we so, done on already have that, taken know of we a recently. And as here

that. a doing quarter a in reduction on lot we of sequentially. in great We're military particularly the veterans around So work fourth see should a focus bringing on

Our military well, our who are veterans, really who are team in that. own to bring drivers good do and focused drivers and disciplined, is developing to as help

we've all this talked we program, those of our before contributing program problem are and app development to about solving driver team our So then that have.

And so, yes, thank you.

Jack Atkins

Okay.

ramping where No, investments, the Okay. hoping those up few be we question, think sort curious and in place on some that to sort that you you. guess show can I'm could commercialize do and point – XXXX? last at for that up? is that my And that something see going of of the follow up been Thank for just I some know technology we've the begin David. I you've investing At of those helpful, something of we're maybe the to across and take materialized Or years. on Judy, over a what the longer that's impacts could P&L? Is been for

Judy McReynolds

also and we've in longer fourth all to think that could and little signs mentioned the to in we like particular City, equipment. on Kansas seen Indiana live second we next currently opening that into as is be good thing Kansas bit where improvement and work but we than efficiencies. next a in to early And issue the piece pilot platform some metrics as the, environment we go that up Lake technology should that in on We Salt and of injuries a together. equipment in in that equipment on eliminated. wanted riding will have I that's year to and be we're But technology locations and I quarter going seeing year of of it's City, be running related terms of to It used. of then another we of the certainly we're the in to relate sort the really it that for being and distribution well of to as the customer key things we that the to a City. go as being that caused seeing mobile this the see with some have in claims early, think, center that a equipment little we the is expect met some of from where we We're bit production and which as come that. well delays a results would suffering we're locations warehouse, go have And

we've we work take that to applying some it go from but time that, into done Lake in faster. locations will And so knowledge City, the all we're so should the Salt gained these other pilot get

part how talk I as middle to internally, make tangible going beneficial, and well. that XXXX also And other beneficial decisions our we go able stakeholders will think but to that of to it's of the in all I'm So certainly about be results expecting and be forward. about investors be some to

Jack Atkins

great. Thank very you That's much. Okay.

Judy McReynolds

problem. no Yes,

Operator

comes question proceed. Please question. Seidl is your with Cowen. proceed line open. from Jason, next Please Our Jason with your

Jason Seidl

that. about Sorry now? Can hear everyone me

Judy McReynolds

Yes, we morning. can. Good

Jason Seidl

perfect. Yes,

wanted Sorry honor. I as my extend to you about well. that. That's congratulations great morning, Good a Judy. to

Judy McReynolds

Thank you.

Jason Seidl

slowdown focus weight business this of up the per been the are and shipment we on LTL mix some in than per you in really we some mean, some then business getting a is bit more of shipment and trends? on a see some little more there business? of the shift fading – Can Has going business weight of what side. typically is a mentioned yours related your industrial the truckload of doing better that those away from some of consumer maybe I

Danny Loe

Danny. Jason. This Hi, is

talk right asset down that our about goes to more it think a based that the optimization within back we We're to for shift shipments into into just put with made the LTL We we had shipments. we're what we've as trailers truckload could than network. tools, compared fits that some let's of before. the and decisions. the we models through our because shift That's to and That dropping when you about telling you more bit had That's – when look truckload I it optimization these market just heavy mentioned weekly weighted us. decisions in market that were is that through revenue talk We helped, the happens through we little more visibility that. when rates a the people do October of ever wasn't talk the and able to that network making that. decision see the what it, daily, have you able

doing to I shows to network so it's what of we're it. don't our know into much about that And what needs want too some optimize read the because and profile you really

Jason Seidl

for That you your ton have now think you resources. wanted a margins, I to of talked something makes that network Okay. up right And basis impacting follow the on more – mentioned, you should provide your much provide to of positive tools guys to ArcBest? on if peak and the How sense. sort fingertips a of Judy, about will, then about freight sort you trough at right we

Judy McReynolds

talked can our business. years. level, a the just with and been Danny On have you're those but customers And our this think, that predict focused business we customers customers, their the I XX to core that's of we kind what clearly in environment for us trying whenever published one know, about of great consistent our on network. ones, main Well, can't but you are that specifics asset-based a customers LTL evaluate think, have I fact into even of just XX%

business to quote to informed and supplement have and And we with related some to of daily about the thing. in handle that that talking certain sort both what's know of with And as that, the our based that make some choices nimble and coming. on the opportunities were these long then can in order to which we that shipments and earlier, visibility we technology we we of that's we and especially from to that be we gain takes just we information knowing some have network basis, workforce it and on have flexible mentioned, asset – of so, be we how have our a the

shipments. as that on those that of got we've work overall as So typical the as we an well kind do input dimensional

grown see take need we've business. well. level you're together consistent more access going that as can we comes to opportunities of And more All of know to into capacity, account freight where areas And to I way us great have a of all we and that where in think some as go allows that a we into we that, that. because

that. you're And can just the And know also even the evaluate on about and you targeting good so feel when you business pricing that as I as much profitability I better. know that think we

you improve And are, lag of though we've as lot And for for on have information did well, but tell customers we still but a a comes let of during being we able the what some we and pandemic the hire we to together experience on so this me very just it opportunity to looking many When to our lot internal efficiency, to, a forward glad have both have communications, needed people to I'm I'm that. as and to lot needs with we improve. where also improve. we

Jason Seidl

you the that in it Well, downturn. now than last with sounds position better like made the were sort improvements you of during you're a

Judy McReynolds

see through mentioned the When world going we eyes, to Danny thing overall and better more their Well, absolutely. the successful. with you're approach have, our Oh, was just the are. more customers. the you that already And other be information we

Jason Seidl

always. the as listen. time Clearly, I appreciate

Judy McReynolds

Thanks.

Operator

with question next BofA. Hoexter comes from Our proceed. Ken Please

Ken Hoexter

great. morning. Hi, Good

look like… So

Judy McReynolds

Ken. Hi,

Ken Hoexter

Hi, Judy. as well. Good morning. Congrats

at X% some X% obviously talk and pace in over face forward accelerated more September down few Maybe tonnage the on October. going we muted declined in your comps Your peak about digit had you next single maybe as months. now upper the and thoughts

pace pricing that that maybe if want thoughts on the don't your talk know then about – face your on I David of of declines. to So given – you in or chime that, volume in

Dennis Anderson

Dennis Anderson. in I'll start Hi, others Ken. jump This can and maybe is here.

the really happened year's of a the could look on question muted you about as that challenges. going to retail pulling the see peak. asked and what's certainly at forward in think last And demand environment You response I

got customer supply base we've across exist. but across and retail, our talked certainly, we've seen as about earlier chain in diversified so And business, still that a challenges here, we've manufacturing

there demand. need of some that soften there the is be are that need conspiring in met. to people chain So we're macro and are – And needs while supply is the them. There fact to I moving business factors moved is goods still think

And getting chains so supply complex. not are also less

deliver a the these feel even softening. be to to customers where And services to having so period appears in about great macro we to be able

Danny Loe

is of on add is we Danny. think about I kind that just this [indiscernible] I really what that, see. what about saying, talking Dennis Ken, it’s you're to what opportunities Yes, about

so is of was of And to examples, wins model had back one just just managed go our thing looking and kind point kind freight those and to of that our three we to most ABF. I back recent each I want recently went

opportunities the look think it there, talked so we business. came to customers you've is model out asset different that more the customers. – Asset-Light stat for produces a we’ve the that talking story a And why also is the more the the we but creates that more XX% what And about at are with past is LTL logistics part just it's our an opportunities of our not opportunities for to story, to asset Asset-Light, for that both uses customers, don’t asset I also is in us the that talk that's seen for it's of business. than me

successful. data that to and that’s so it about why model And our just we me another point talks being see

Ken Hoexter

Great. And different completely – a different then just on subject.

Are you thoughts to into is on Danny, customer’s the you to I back, I time So there, upper tougher understand, tonnage, guess if Is the even answer I the quarter? of single comps full likely are terms that see that sustain? just are coming understand want digit? then given going to giving but outlook if the in an

Judy McReynolds

Judy. now. indication and to point it, a And the an I that asset-based capability pipeline of our about MoLo’s we’re It’s or strength into that in shipments, that they that we food is you recessionary-type that. in is just and are shipment. year One with serve is set business, a encouraged environments. interestingly, that that LTL-rated we to our category being about also encouraging we strength the of have thing stability we’ve can And show in by One there elements I regard had but then was when offering encouraged also I’m think side that example it’s things trade we’re our other pretty in were thinking businesses. wafer in strength managed in not is just something that very And got guidance. Well, give of has I’ll related in truckload business. I’d We that’s September, our are the thinking our – And then up lot. October is service beverage serve future, of guidance, looked Ken, when the giving some say really is don’t thing had increase this relative say we which when at that whether we

And industrial manufacturing maybe is or us so help really activity. mitigate the will retail softness things of there some that less are if there some

we the think equipment that that to on as that unseen our we need backdrop, of we I side have deal tell go thinking to it. going we remains is But a many orders that’s economic hang lot there because our be unfilled and opportunity toward XXXX. despite I’m Although to in what there’s team look with so that we pursue

Ken Hoexter

That’s helpful.

subject three my these keep different you was now. innovative of So question tech the for years taking costs on kind other

there non-union one you’re vacation out in pulling that timers. costs as have now You

ongoing? want at understand, is in become keeping? Or in that were make to It a decision they OpEx year OpEx XXXX? talking some don’t becomes on terms of you [ph] point Just as to next what about Jack you

Judy McReynolds

operating to costs there. Well, end in I which or show what you what want like if on don’t leave we this, general talking tends Ken, call What a like you you’re up making is. those statement company them happen is But is the one to the offs, about we do performance there. a the true of we know to try do feel operating

technology view So unusual and words, of those our it’s can we Once our go the facilities, changing, performing. and characterize they’re how that talk about business those just you not have certainly, that’s and those using being and innovations locations, as related need that what’s not what some we question a so the But is costs. show other we’re like fair approach operational, in. we’re to piloted in in we we feel to

of two operational. as had the our we’ve one So facilities Indianapolis of considered

to different equipment related approach be pilot, one again, of we’re in a opening using as of that to location going will City, other pilot there delays But still certainly considered be non-GAAP be if and new to expect in Lake the because is a that had XXXX we we’re some Salt likely item. that partly will that. a City the We Kansas

we’ve so And to got that. we’re methodology that applying a

yes, of We’re folded operationalized, you see will answer as in be things in. constructive those And what the what’s be trying terms with they to operational. is

Ken Hoexter

Great. Appreciate it. the time. Thanks for

Operator

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

Todd Fowler

good Thanks morning. and Great.

Judy McReynolds

Todd. Hi,

Todd Fowler

of that the have, on good can biggest environments, next prolonged you morning. do at year probably tonnage specifically think And more Can help bucket softer a maybe labor us, around future? we if you expense. some flexibility asset-based the it’s mean, help hey, Maybe you the in about us I enter if the side. point that’s some

variable So tonnage labor variability to have how would headcount with we think the attrition you if or about costs maybe continue trends moderate?

Judy McReynolds

we I David labor equipment, mentioned transportation. purchase will cartage our other what that than category I Well, so earlier more rented more how about That’s think the manage guess – and better It to the be honestly lever, get people these hired. of people the right has efficient. kind get really takes main because to while it difficult a been to trained and very

through. of we’re And to hired setting well, We’ve we’ve hiring. areas especially. we there companies efficiency we’ve So into that mentioned other greater more never we’ll people. aside these hired. with months, some the that hired retirements category to XX or the workforce but we’ve little of manage when driver going labor to have better have minute, great to because situation company. And go those in the our that in people we David sure labor a the hearing over opportunities But gain XXXX is because you’re a on thousand out as people the stingy last opportunity because use big those other levers to category, as have that you that continue back a of I’m costs, that do about say suboptimal what been had bit for be

we’ll to – continuing so that those continue thing. one have going to is We’re

there. And in end of we it this, the but in this be. of not like no different of in one so it I some by to really think we’ve the might the locations is But is hiring up way through just you it’s and of lots course less the about place don’t one mean need is than people that maybe these others, predictability you need aggressive natural just be just to been we things, that scenarios

some to just to the the I along and important help us you business of flexible an And our optimize way fact That’s be so to opportunities too. like to quoted use have nimble. And network. our

Todd Fowler

within Maybe a Asset-Light Loe, that where to That’s percent is it. comment business, I there X% is quick then where helpful X% go it contract what know follow-up, PT helpful. is you where a that context. and year XXXX for you margin a forward? was so lot talk now see and Danny on of right going got Okay, can could is range. about in trending brokerage the that’s And versus where spot

kind on where you’re moving the Thanks. want got platform be? you’ve to you one Now that and of it integration

Danny Loe

back. Yes, start the Todd. with I’ll

to is for You mentioned financial our the that. target as we X% to X%, still point long-term that that

those between that actually the of shifting you lower that now, where the get that rates I And is and as the won’t have kind disparity costs. you’re just seeing there. of more talk I cycle longer contractual and shippers are that at talk than specifically So cycle you contract pressure and through into that more now go spot of overall And at I’ll is kind we’re goal spot look When the been business, past. in I heavily business just on contract seeing now. when pointed leave that’s the it rates contractual in rates to brokerage. I the the think we’ve you’re look XXXX, shippers right and there’s won’t to you in kind the you that that

a you with to see lower maybe contract kind now. seeing seen haven’t rate. go that completely of but fluid you that the business, you can that’s And it’s see So numbers, back the of spot contract you’re and to kind in what

into So to gives just are some shippers as what the in best choices that kind there’s the they moving. is find as contract get market I to hopefully won’t current you the that trying rates but fluidity the flavor are a the the make spot, of of overall of that specifics

Todd Fowler

Yes.

morning. Okay. Understood. Thanks for the time this

Operator

from Group with next a question Scott proceed. comes Wolfe Our Research. Please

Scott Group

Hey, morning. thanks. Good

Judy McReynolds

Good Scott. morning,

Scott Group

March I worse. year, – decade worse XXX Judy, been I about to points go quarter’s the last the commentary, because back morning, to Good been XQ. – I went the basis And since it, points a back it’s than want being XQ XQ normal it’s you the guess basis to fourth talked been XXX seasonality sequential

the the good the to place. point that really to changed XXX so I I in of upper and And you us language thinking basis want you to like, be of get of should really, that model feel range just a about the end we closer Like deterioration? want do sort

David Cobb

quarter one, the strategy that Yes. Hey, give those has just got as we back in cost opportunity, said, Scott. of wanted like move I environment. but that. fourth quarter. to fewer to will lower think you of we that we’ve just revenue number fourth got like great are right? don’t And achieve total history the improve so, have time to certainly I a some have go that, for right executing from and And pointed evident some out. do of the to I days. to we’re through but lots third a the those I into things we execute on items it’s take And we’re that a course just of number of softer the quarter We’ve given

obviously revenue, some of well depreciation. a so as And you like fixed costs you don’t your move lower when have – things

aren’t fourth to lots think XXXX time given many We supervision, revenue benchmark a any move [ph] move. year the half So of element as guess Facility the things another a GRI that’s reduced be I in quickly The as and those a equipment, can on as would third fourth it be again, – quarter the and puts our the fixed or maintenance, the some the year said, we this cost in or kind depreciation but heavier quarter. bring was takes quarter early I had this the the of depreciation to as might, we’re sequential in new of basis like XXX loaded point equipment, little in well. to back the of going I period. in is as that on particular. quarter taking in of that’s kind of

So as reference. matter a that’s of just

helps. that hopefully So

Scott Group

range X% Okay. near QX. on Asset-Light know bit X% in below below we margin, the little Do of that QX? And think to that I the the term in the stay fell a sort then in should targets you is

David Cobb

our execute – through talked we’ve see, progress about positioned invested to you we’ve on the year grow the really and can made great MoLo we’ve what we’re we’ve platform, we’ve financials integration. As operating got with And here And of front to again, me in one what on from as – on We’ve the us. brokerage opportunity opportunity this here. productive – will got on I got our to in more agree really floor. Danny execution, be think our productive of we’ve more with

And so both there’s we’re in – as better market on opportunity level. of and looking on developing our that near will the we a But near at productivity But margin may again, the a margins, combination as term, term, be part the this It’s to dynamics gross operate this side. in and the long-term a it’s pressured by growth margin also we’re play it ability of a at from but But standpoint. improvement. there. so

the operating as term, that growth operating and So near overall toward could head margins. longer-term pressured margins be we

Judy McReynolds

costs the to yield combination add is about revenue that influence the also our of net leadership like how acquisition But thing one really this MoLo knowledge I overall carrier calculation. in has But the by the that. of team of kind just I’ll manage effectively

agree to I’m combination knowledge a built this. through got and looking XXXX us I those we’ve think there business and for navigate we’re about encouraged And best-in-class we’re targets. I David, more But with So toward help that.

Danny Loe

echo it can be is know than said, more today. Judy our floor productive Yes, what we just to

but be more grow, is more shipments add is floor. to have initiatives way productive key to the We to to formal truckload the productive, the best the make to ship

the And as strong in we’re is to model so but we, is long-term we’re again, our as goals And there on truckload when point maybe that. our short-term on again, pressure, never it has focused we been confidence today. focused XXXX,

Scott Group

guys. Thank you Very helpful.

Operator

with Suisse. Our comes next Ari from Credit proceed. question Rosa Please

Ari Rosa

morning, good everyone. Hey,

wanted that. stick So to actually I on

Judy McReynolds

morning. Good

Ari Rosa

well. Hi, Judy, as and congrats

Judy McReynolds

Thanks.

Ari Rosa

theme the about were we about stick of against to growth balancing wanted of what I thinking kind there on talking margins. about

that you kind you’re put One slowing out But that because doing I’ve all kinds it’s noticed, releases see environment. in macro hiring slowing of – just guys And I country. guys a around and this. that of you things a doing about are of events press the the maybe

Or of maybe been the in somehow, have able work being online not hiring has Does growth? of you with is Because going show that the and kind suggests margin how you’re for concern around initiatives that volume about that versus maybe model rethinking talked ArcBest investors gains. downturns it reason hold justifies about kind So, deterioration of that before hiring make worth like margin sense the it maybe often onto make growth to these seems to it on equation? actually and we’re you pipeline, refocusing which maybe something that sense aware initiatives? the there earlier these is coming a can like not which those margin

Judy McReynolds

an that. in add aware workforce hiring we’re input because work or issues. to example which is regarding in Well, rates. areas, of the I’ll – cost, retirements experiencing targeted or there instance, into most we Cartage important there’s already is do hiring if efficient you doing in those thing to share keep in great absolutely to there mind these very upcoming we locations that through is with some those we’ve because natural are a turnover we we’re But results need where for you’re got the able to know, retirements the of very knew, that we’re that what other initiatives either you

can. customers approach and want we cost in do most to to that our it trained and through that people, want to we great give we do we So, to efficient service effective overall want

in haven’t those set ability what so downturn. that It’s And in downturns is had have that cost a add need of much or way we just top shipments to those it. the we the targeted make as locations efficient the where consistent. really structure And might trailers in we a last we’ve experienced be suboptimal or that and is of that tool on someone tool that again, hiring to more to not a a more add to

are toward And in at and mind. I that things list place place headed efficiency so more the we’re think a of sustainable of consistent – there’s more that has and top one the

Ari Rosa

then about think on where given kind are? maybe your about you it. Can to price Got pressure resilient of XXXX? given to ability you And Understood. continue the continue how talk or pretty going we declining see environment be volume could into take of volumes, to some kind service levels pricing

Danny Loe

been say the What we’ve rational. environment’s that again, I’ve seen,

I think of the industry that have disciplines. seen pieces We’ve gone the pricing last extreme through it. we’ve

seeing for these the price to cost pieces the whether of the it’s of with I inflationary the think we’re cost if the environment inflationary it’s you have you our From think increases employees cover to in have micro – standpoint, – cost, the costs. different with that.

in of is that we’ll of that we’ll really And usually offer turns lowering our able is we’re us, the the different for that about their them. part a business, have their on the we’re comes price if that work to network, supply point case is cost we supply of the asset at side And results we’ll a price pushing our works business have flip asset to is that sustainable chain. rely not in for a so and but into and conversation providing business back that are to customers. value we chain out the go type to continue what whole conversation we on that Again, our think that customers

Ari Rosa

Okay, makes for time. a sense. lot of Thanks the

Danny Loe

Ari. Thanks,

David Humphrey

get Hey Frank, we’ve I for in. time to think got one one more more

Operator

Our with last Research question comes Vertical Jeff Partners. Please proceed. from Kauffman

Jeff Kauffman

you. me Judy, Thanks and in, for Congratulations. fantastic Thank everybody. squeezing Hey a honor. that’s

Judy McReynolds

you much, you Jeff. to Thank It’s talk today. good to so

Jeff Kauffman

on be call. to the Good

been lot answered. So a questions my have of

this included do anniversary the little to today. And MoLo. with day MoLo but because Asset-Light, So mentioned I want was an you rev business, per in focus on we a up bit for comp XX% that uneven

talking did – day quarter? unusual LTL. the the excluding that of I did about of So negatively that that Asset-Light temporary negatively this I there in one, like, any Was costs were impacting you the per a impact two And questions. October. what MoLo great guess impacted job revenue Number or some of growth look

Danny Loe

Jeff, this is Danny.

comp mention that I seeing there the double-digit businesses would both consider the back did in we’re business, when that. We legacy point haven’t MoLo. shipment without that past. you I provided in to growth

that revenue be becomes shipment question think And volume that not per what happens so, to a on And your I forecast give to going going growth? what compared I’m situation. what’s in revenue to

on think I this, talked that. that time inflationary and when you’re rates think ordinary on the environment it’s getting management same pressure costs, you like you’re an lowering of do your at to other before other inflationary because trying about, tough piece I in care

trough some built I some the trough answer have when in. don’t that is, there definitely for environment of of inflationary their but you the just current that kind is in there because So other in. Where’s are temporary of costs you’re that? of the of there

Jeff Kauffman

That’s Thank everyone. my one. you,

David Humphrey

a our us this joining Thank and everybody we appreciate morning interest lot we this And your concludes ArcBest. Thanks and call. appreciate you. in

Operator

We please day call for and thank you today. disconnect your a that the great conclude for Have conference everyone. does you participation as That your line.

ArcBest (ARCB) 1 Nov 222022 Q3 Earnings call transcript