ArcBest (ARCB) 27 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

David Humphrey	executive
Judy McReynolds	executive
Matt Beasley	executive
Seth Runser	executive
Steven Leonard	executive
Ravi Shanker	analyst
Jason Seidl	analyst
Christopher Adkins	executive
Ken Hoexter	analyst
Scott Group	analyst
Jack Atkins	analyst
Chris Wetherbee	analyst
Thomas Wadewitz	analyst
Jordan Alliger	analyst
Jeffrey Kauffman	analyst
Stephanie Benjamin Moore	analyst
Andrew Baxter Cox	analyst
Dennis Anderson	executive

Call transcript

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Operator

Greetings, and welcome to the ArcBest Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Friday, October 27, 2023.I would now like to turn the conference over to Mr. David Humphrey, Vice President of Investor Relations. Please go ahead.

David Humphrey

Thank you for joining us.Today, we'll provide an update on our business, walk you through the details of our third quarter 2023 results and then answer some questions.

Freight; prepared ArcBest; Judy Officer of Matt Seth President, the and Chairman, and Asset-Light for Chief Runser, of Leonard, CEO Beasley, ABF Logistics. me remarks and McReynolds, are President Treasurer; Commercial Joining Officer Steven President and Chief Financial

Yield questions.To results, In Dennis help be understand and our President, you forward-looking Strategy Management statements are made. Christopher Adkins, Officer; better addition, and and available some could Chief Vice Anderson, Strategy to answer ArcBest

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

non-GAAP complete a described includes the on will conference affect meaningful of this are deck earnings that provide measures website, also X-K recent For financial non-GAAP the call section the factors ArcBest's a could most future discussion outlined filings.To call our discussed in tables call this our section more to exhibit in I of forward-looking arcb.com comparisons, opening earlier slides. ArcBest is was release. the measures measures presentation as that some certain financial results, turn earnings press of found in to our GAAP press public could be release information and please Judy and Information morning.Now the the Reconciliations the the over discussed refer that SEC this call to comments. additional filed related There in in the slide provided XX.X for statements also of in of

Judy McReynolds

their We customers, and trusted to every morning. extraordinary team some see be and and eyes suite the lightly. through advisers which to ArcBest's anniversary full an XXXth disruptions. logistics constantly the you, We most to world's ahead ArcBest include help Thank milestone, customer-focused of our businesses, work to to our and for and customers' our day celebrating critical shipping them been respond ArcBest's and testament and recognizable brands. changes a this David, the you our don't of strategy. strength solutions, market we take work anticipate Thank and which With joining is work of good world to us.We've is largest look year, that to the

we our chain. agility, fact, I In soft goods relationships an strategic we the ensure this differentiator.While our saw which benefited third of the uncertainty, as to market conversations competitive strategy and important as and strength collaborative logistics last customers on capacity customers customer our shipment through highly overall provided increased the improved continue time We In revenue encouraged our with Asset-Based integrated count navigate Asset-Light saw solution their of in and to in decade, customers ability and published flexible business They our their tripling in and our transportation the and had pricing improving significantly more in customers. reach our our been shipment reiterated profitability have has than drivers not managed exceeded all-time significantly sequential key high.Our commitment with and to logistics relationships needs. on I'm from close disruption. by with firsthand and business a our market We view our over relied remained we're done. quarter, met reacted help global that and expertise an supply the levels moving innovation basis, we the levels solutions, our we've

accelerate innovation invest unlock our and value areas moving We These and continue to and growth will team. additional in key facilities, technology forward.

customers a allows facilities footprint have service which to we efficiently. us of strong First, today, our

the accelerate further and expansion environment. in our in continue estate facility see to invest opportunity LTL current plan the We to real

robust to our company, enabled of has and we to our pursue a commitment deep us Second, technology set transform continue innovation initiatives. and to

ABF service that we this For performs every This interactions. addition, an removes which team tool efforts.In supports quickly sustainable Optimization to key team processes future. advance a tool City more hundreds and of our further leveraged reduce consumption, new this internal to these insights year, provides generative customer and improved AI year, project support points friction Route and fuel to of has a deployed mileage earlier quality our decrease example, audits AI

Looking ahead, to developing in continue we to service and support solutions our drive business investing customers and will best-in-class efficiencies.

wellness. culture creativity, growth, rooted Lastly, in values-driven collaboration, our deeply is integrity, excellence and

in our I'd are every We improved core the day.Before Asset-Based investing to each living are to people in our Matt, offer values LTL contributing call few we're current the over seeing observations a segment, of I dynamics market business segments. about like and committed In hand out to our what to our trends.

customer nimbly to real not base work most costs, volumes, down and fill our managed find to count. evolving we we dynamics market are Asset-Light the growing our immune customers our and shipment our respond growing and and shipment continue profitable of In way. network has pivoting conditions Our team have to in while to efficiencies.We market done time, in continues a business, job to to great team quickly are

demonstrated and turn in service now broad months Our take see you logistics to over a our ability of to the with past suite relationships I'll over from disruption supply to help the to detail. customers highly integrated their navigate it about holistically solutions. were help available chains greater We experienced our think continue customers of Matt has to not for strength team opportunities operators, the our them there market providing few we to and offering expand our through customers.And existing while pure-play quarter

Matt Beasley

our and operations down was $XX quarter, continuing Thank and good and from plans. billion consolidated basis, deployment update sheet income an XX% operating morning, quarter earnings down adjusted diluted $X.XX. revenue Consolidated $X.X a share quarter non-GAAP for and the On year-over-year. everyone.I'll the was you, Judy, overview X% provide per was million, capital third on an of give balance

the this have results serve our of results reflect Overall, and market events. benefited rational seen expertise X% revenue softer million, during period non-GAAP down right consolidated has disruption last business, and was than we customers efficiency and have and been $XXX was strengthened the savings on remains by our initiatives.In overall Asset-Based cost options recent daily from year, While pricing a market by having a market year-over-year capacity $XX basis, operating to income and also million.

agreement costs.The sequential For third quarter points third points contract of is second and compared ratio Asset-Based in second XXX of of efforts noteworthy labor non-GAAP during cost approximately transportation, a XXX and reduction particularly secured quarter. X% quarter, XX.X% operating the reflects basis new benefit quarter, customer we to to efficiency cost improvement because equipment negotiated deferred added segment relative our average basis a agreements included pricing cartage our rental a which Asset-Based and renewals in purchase increase. The of this

did focused our not by that was of improvement increase, customers a efficiency.I'm operating accident, impressive that way That while serve fourth market momentum quarter. into cost Excluding sequential carried remaining on months the points. few I'm our pleased of basis our proud also last came to report XXX the time happen during ratio disruption team together to the and approximately we and over result have this

periods to fourth of this from quarter Despite XX an points. operating the has to of considering Excluding is prior XXXX ratio during modestly the efforts, XXX to average historical market change Asset-Based the the decrease reduction expected from commercial increase quarter Asset-Based in impacts ArcBest recent sequential trend, cost general XXXX.Transitioning been years a operating the successes, the to third the XXX fourth disruption, rate ratio third pandemic, and quarter Asset-Light. to impacted the basis by after quarter increase

to provided currently slightly to segment last $XXX compared statistics and capital shipment. reflect This $XXX million X million. trends range to year, a Third expect year-over-year. The net of lower in previous that million We per for and morning, expenditures in the quarter and lower quarter. of continue Form operating the revenue October full business for X-K $X than loss due is filed exhibit to daily primarily the release first our which business revenue estimate capital expenditures had quarter Asset-Light softer year.Net preliminary $XXX million was we for decreased non-GAAP for operating last totaled press to XXXX months the XX% a the year, the market this the of

place, end tractors ordered at receive Class remained total and levels. cash and balance tractor we all liquidity remain strong currently the year.ArcBest's road orders Our the in X by of expect to

quarter, As composite at net end had end third since million X.X%. Total $XX of last cash of of end on quarter the was improvement And outstanding an of the liquidity debt million. the ArcBest a the approximately year. we the rising million, $XXX balance the interest rate rates, at of of recent $XX stands despite

strong well Our position sheet solid financial balance future. for the and position us

excellence which returning growth to now capital are upgrades investment capital monitoring purchases, will equipment and the continue opportunities us metrics. our strategy into customers to investment-grade serving shareholders business, for with real investments, enhance external enable targeting credit future.We capital includes new we the and Our market our organic to and estate are while and and additions allocation technology

So paid our dividends about shareholders. repurchase under I'm capital available conclusion, on Based those stock repurchases $XX $XX year returned million far and repurchases, through the future. our settled share to have yesterday, authorization remains purchases.In excited share this million common of approximately current for approximately future

our under experience guide belt. a We our through market are customers current of century the helping with

I'll search out, turn different Our are to and proven especially of strategy a business. to our stands our cycles discuss across robust sheet ability the call in and customers over excel uncertain Seth our resilience stability our is in times.Now Asset-Based testament to balance to when

Seth Runser

over action to our report reduce to are transportation, been reduced manner.As during transform innovation, rental customers investment This to the our Good purchased short, ABF improved continue an a daily freight came the most have shipments focus market, their we growth. while and said, mix more ABF for in leaders, aggressively costs business costs resources in dashboards network, large capacity to to quickly to costs, effective our we've equipment, provides through which quarter This to pleased visibility XXXst we while team we productivity levels. year, intense on Matt enter limiting using improving of and we enables of us enhance in efficiency X% our and leaving ensure In optimal and continue without in quality. real-time and morning.I amount our the able effectively profitability. to and managing a take which helped am grew we focusing keep With achieving service.As to on moving. year-over-year, freight cartage

X working some a completed our more improve in processes. For foundational years, systems been have many we and over to we've operation, initiatives to improve We've and the dozen past progress.

You the our improvement ratio, journey the these of is results continuous in improvement ongoing. can but operating sequential efforts see and our

our be still have shipment we levels want a but our to our managing to our that carrier, closing, our We progress, means high are optimizing more product high-quality quality. I and must and approach pleased work network. with highlight I'm to do.In

our the Through than and Our XXX third where year fill dynamic levers we optimize market and plan of and differentiators. added data the we sheer to between to And using investments, quarter, facility between to additional for of doors of long amount our make of empty XXXX. pricing have XXX us grateful U-Pack to the adapted now business using quarter to to first decisions quickly we teams and history more this our collaboration core enables our data are our I'm of the in business. increase capacity over key the strategic have mix daily. add

Our down.Now I'll and call the profitable growth, and we're not service, to slowing focus over turn on efficiency Steven. remains

Steven Leonard

remained everyone.In Matt morning, to and with mentioned, as soft, our weak strength managed market aggressively improve disruption, margins the and record a and levels of to for testament customer for navigate truckload customers Thanks, but managing to continue shipment we've the look relationships.As efficiency. our solutions good align levels and we costs achieved despite is ways demand costs we which grew been Asset-Light further business and business transportation deep help Seth, even shipments business,

While market integrated of our us customers. disruptions to solutions well continue, breadth serve positions

back supply -- others have chain transportation reduction partnered shippers were constraints to our capacity. in may were them our them the differentiators. who managed strength modes We experienced.We using and for can using we need disruptions to Our multiple offer customers' customers count our needs are for outcome our LTL keep seen have our are the capacity thoughts. on, to they understand the to and to And market, meet significant managed moving, supply in solutions avoid by better stability as well help able needs.Now chains resulting a with help a Customers some impacted positioned financial Judy transportation creative in partner their and in we final their solution, customer.

Judy McReynolds

ongoing to the as pursuit deeply disruptions. Thank quarter has responded our Steven.Our tied to of solving mission you, challenges. mission and the live successfully and we logistics this the fullest been connect navigated impact We success positively industry this to to to world

needs expertise and We are well customer address of to powerful capabilities trusted positioned a understand with and team. the deep

we look remarks, up pillars strategic strong our we innovation the and position concludes are the from call of to keen efficiency a to and As and we'll X will enable confident future, prepared us this for on focus open our accelerate that questions. now growth, here.This

David Humphrey

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

Operator

[Operator Instructions] Our with question Shanker comes Ravi Stanley. first Morgan from

Ravi Shanker

for when is So leverage crush you was everybody operating it little with a looking while? cost which the these were the costs, morning just question Was truly #X opportunities, is unpack there actions just volume Or volumes from guys is on to Are in that this? this people's think pipeline remarkable a asking and sustainable I more getting I to more come? the network? in see. So would the mind get love bit into coming space the how at density please? this there, on you that revenue Can to more explicit more?

Judy McReynolds

But we thanks one. saw and and good in were of of better We that economy years a Yes, adding thing. finalizing and as proficiency levels those cartage opportunity we quarter. some the at people Ravi. over needs. as a costs address that and them making that the answer of a costs the just labor and transportation, and growth experience we our of And were had people the reducing had right the proficient saw to as into purchase costs it's as rent the good opportunity better going third we our mix our sort XXXX And productivity always, the sure facilitate variable got were making looking we've our help question, used to past, the such deal, of sure and to and we on XXXX really the equipment level backdrop focused set, for business the variable and we

Ravi Shanker

Great.

And considered come more to kind of reset? you in so the pipeline? Or a is this do to think onetime there's be like

Judy McReynolds

to working make Well, of to think great resources our best sure see we're is that the that, also along focus adjusting, we're deploying always as yield right we sure we're And and the our Asset-Based what and on serving this and resources effective, managers. serving I business opportunities sales our wanting efficient well. think customers We are that the job that just really team I the effort most mix. an ongoing make a keen while have having our a with with does

Operator

question TD next Jason from comes with Cowen. Our Seidl

Jason Seidl

of in environment? I SDs? you a of see starting cost guys the to if any a question guys you I inflationary from some on of benefit And little then October wanted sort cyber a quick labor, to the bit deterioration ask Did are you at attack the if quickly, see look trends. real at exclude cost

Christopher Adkins

relates substantial influx we're from largely, business, is even ABF help that, growth seeing weeks carrier our them to gone did I'll the see couple of handling that first Since -- then, report core of customers, of of apart We the that we're was some this that our it But business. Adkins. disruption. time that cyber of on previously. that back during as an to still that existing to from October. of Christopher has business. that And able Jason, was customers largely the in

compared to in talked we've 'XX. up October XX% business is June that As still about, of and

Jason Seidl

good the color on and side? That's Okay. cost

Seth Runser

to things cost versus Seth. normalize, say example, a areas for say averages. the starting on trailers, the cost would we're we there's some see -- inflated quite side. but cost like this the seeing still other to start would on are or bit Yes, side, is is I I the some on But historical normalize things

Judy McReynolds

would I Yes. just in. I've been recent conversation -- one, that

pretty they're right hardened insurance the market, think now. I

there, that answer the through highlight just watching to that's be working to we're going so And it. we're but one

Operator

comes with BofA. Our Hoexter from next question Ken

Ken Hoexter

can the up to How doors just I X% handle 'XX?And then mean you by October. Shipments adding guess on gave and So talked X just OR side about see that basis capacity the financial yellow to XXX between asking cost targeting that your now. flat from question, up what Ravi's much questions. on your updates. wondering were which sustainability to now the Thoughts side, point you aside changed to just of availability XXX points? in permanency year-over-year on costs? you mid-quarter view, I growth of knew question he's changed you from those bankruptcy, I'm from point the what

Matt Beasley

Ken, Matt. this is

start question, saw I'll over with to I'll continued your part. the of then Certainly, last it first maybe quarter. Seth your So momentum the through turn to part cover and we

And so how see you in about it. that we talked could

really July, August, talking when after have Certainly, the OR the efficiency target we of were about update impact starting place. to impacts we really forward we and provided new were that being cost when we're see even call and the to So to Then to talking we market in are starting on in the the that's the the able that roll put contract. in a impacts be we felt. flat measures of

And overcome able we thought costs, saying could that September. only we so we carry And point be certainly, those to time, that the show continued OR. not but that modest to in were some just increased actually improvement momentum at should in into

quarter October resulted spells say improve points which of conjunction in we ability in a it put cover we with GRI by really over it what I'd kind see part. to sequentially to sequentially.And in the ultimately to think the can potentially progression decrease fourth turn that fourth that to to momentum XXX well.And why plus able in that's then the first that out Seth basis is so said be quarter, that into continue I'll And early the we then as us was for the into

Seth Runser

Yes.

I down think excess about to capacity when So really market, comes in X different it the things.

our continue we we're is for strategic first levels, to good that business and properly we pretty attrition people, staffed The and feel current in replace locations.

good have our of line pipeline. sight We on growth a

we thing. easier we than is labor did bring and good the which on pandemic, and a quicker -- throughout much feel So like we can

years. So for I continue front, we like feel we invest good the people.On in many the equipment pretty fleet, about to have

the have We on newest of fleets one the road.

Our fleet we the equipment units of for third could but or but X past on see is for long-term We've some estate real on and growth.The now, any getting really we're concerns pivot is X growth, estate. those working out higher-cost slightly bigger, I capacity don't plan real been on working years. our for

Hill, Camp opened You We a site. need estate we're lot estate facility the positioned well into be we have front. mature This in cycle in of perspective, we're up positioned Pennsylvania. on new to facility, of key we Phoenix our things well alone, year real a a a the expanded Antonio real new network. We so And we've believe San from and ahead a those moved markets. doing

good about productivity. and the we well.And is where fourth got then feel are as next we So more there year coming as well, we really

are, cost. for freight So the productive the the you can more handle you more same

at as comments, possible. opening as efficient I focused how about So the and in on technology and ABF that optimization really we're my ensure to talked we're transformation

we of initiatives, still but do. more to So a lot have lot completed a we

opportunities tool us. and what So markets with can set, we and up capacity for that we front the see down optimization have or and our investments do we the of on network growth, visibility in all based what in flex that said,

Ken Hoexter

I a Great. that. in to could And if squeeze follow-up

and as investment tech still those some be that are like It just are out point? at part Should business tech real investments continuous ongoing. quick. the seems ongoing one-timers. of Just The broken

Judy McReynolds

Well, Ken, I the that ABF. to spoke to respect in we think X-K with

conventional we've in And so there we've City, previously in City as team that is seeing Salt what Indianapolis. we're Kansas and done back to in moved the and Lake operation

piloting operations our as continue We in for we're out -- very type you regular no other forward, we're new where broken with with Vaux. will momentum because environments. We're have doing things innovations and just You in those it some that our costs customers treatment are piloting to in and new pilot same be that will do go some longer continue there gaining and innovative customers all areas.

the that at And we're so same more But telling and the you stream into a as time, about really for look from new prospects that we forward that continuing cost. about revenue business enter we're to excited XXXX.

Operator

Scott from Our Wolfe next comes Group Research. question with

Scott Group

on OR to want I So just the QX. commentary on ask

So Ken's point. back to

ended said So improvement improvement. points with basis you you XXX modest QX, up in of

just What sequential have finer to modest modest range -- you see point saying the you improvement? thinking to is that. again. that be You're if about want about right I when around what's talk a

Matt Beasley

Yes.

very So we're I quarter. a thanks, XXX, range. pleased specific we probably say We context as the that to into a in that Scott. But in really now, maybe range. with performance I say, Like think mentioned, we think the basis to momentum of the the in would point something were third carrying about didn't improvement, I we it XXX fourth. potentially of modest guide up

Scott Group

-- X%. And Very Okay. then X% renewals to when the improved from pricing helpful. I

think right accelerate feel much like the you'd number? really strategy get Is as I like trying changing? X% market now? Does pricing further how and that's QX number yellow to you this of that bankruptcy? a XXXX? deal big the expect is that What's How all out the into figure to is a we're right

Christopher Adkins

Christopher. Scott, this is

us productivity providing. prices is we maintain our really efficiency, at efficiently. disruption long of the that mix a was business and do that really our and really, handle the from for to to getting or really want us, mix place, we service and more the In business, good quarter to term, for X%, fair profitable the want tends from think we're profitable there there's that one offering and a benefit be business customers be more we core opportunities improvement it's to third to core to improving the for more for of reasons. of those, but annually which is Price many also So impact

inflation trying really to and through pricing So efficiency we're overcome through gains.

mix see know are get don't you'll core acceleration always best optimizing necessarily in business, our I the income result. to mix right the there So to get that the but we op

Operator

Atkins Our Jack next Stephens. with question comes from

Jack Atkins

I quarter, very double-click in the a to actions guess it's it I third I some through But would like about and to just little guess you the So line. improvements encouraging the you of bit us the maybe see you PT both to the on on me, flowing that specific when think of saw examples and improved side, give excuse were specifically there expenses rents those of -- transportation Judy, you couple purchased bottom Can took costs? pretty significantly to maybe actions sequentially. improve a

Judy McReynolds

let to Seth going that I'm answer Sure. question.

Seth Runser

Yes.

the of opening X say internal more we've City in pickup technology business side, a Optimization, comments. some optimize I city drivers. drivers still going We are using drivers our her also used, consistent type of machine a of which seen So mix AI, learning, We've freight that have out is pretty Route and those also coming and gave published that, on back and out mentioned that day, phases to productivity, full. going lot mentioned more that tech delivery greater to the Christopher every Judy full coming. cartage which in our from and return material us that's point but shift delivering that where would core

getting you by reduce to customers external and better and to service can freight. ABF up a our more So when delivering picking that's that are, their more you an you cost, the really, cartage, provide think about going the driver productive

continue we drivers cost.As a to changed mix the and just some PT was of and of So the able the that own we as we But a road, because were where that. into option better moving. as over that that move shift expect at of through really on have the the we core, look we quarter lanes we in that fourth to far were we swap know lot it when our future handling business it's

drivers well those tools way move the as visibility were optimize I road with mentioned. So able of to some we our that network

just the we the to as those So expect actions transform continue way continue we throughout to cost operate. quarter we fourth how

Jack Atkins

about mean, at the changes effort the seeing would you out And Typically, having over we That's a more in couple But pretty variable there what down do businesses these a to Asset-Light through cost lot generating about some start maybe cost I cost options quarter. think continues structure. as the challenging flex out point I just Asset-Light there. take given imagine encouraging last there And just asking curious, backdrop taking that segment fourth business structure? to an I costs maybe some the moment. there there know I'm see see. -- to is? I really sort are of are and should how there been gears we additional the Okay. I for fact have place think of of shifting of years a the into operating that acquisition MoLo. the an guys probably loss And you guess

Steven Leonard

Yes.

Asset-Light the seeing market we supply to are And prices we're Asset-Light, customers value that of chain. lot For are is space a what us the down obviously. do what now such I mean, their seeing on is really right bringing is in

to keep immune to a at turns. not in we're structure that. allows so time, we But And want when same us place the the to that capitalize market

can improve at view so the to be obviously we in our on responsive there we to trying and is But same cost. balanced balance. We the do times, we when look at improves. that the to we're want what for right So ways just market time, be efficiency reduce that strike

go way And rest it, how then about think so it and that's the into next of year. into as the we we'll that quarter we continue manage to and

Judy McReynolds

truckload side by our works customer a customers, of within it integrated well the very is just set. think solution I that our is and sought-after solution just the

said. we stay so well Steven as And to positioned, want

Operator

Wetherbee from with comes question next Our Chris Citigroup.

Chris Wetherbee

of I to approach ask on wanted pricing. the sort quickly to

book much as transactional So I I'm yellow more change to was relative guess the think curious, your activity And quite to shipments seen the at business? has part about transactional of of market going in is guess profile the we've probably time, there bankruptcy, bit a to It business. the prior same like mix core a how down. path you occur little the But there's I So improved being forward, contractual transactional come done of seems work occurring. the a sort bit sequentially. that's

to approach a want that going get of just how I forward? about sense think you So

Christopher Adkins

Sure, Chris, this is Christopher.

it say largely I So would depends.

So landscape. And depends making on into It decision-making our been the that competitive on our good a we're daily It investments it on thing All prices. the is basis. on process. is, our network, where where the play depends made. capacity decision those depends market a have factors

our coordinating and sales our regularly to of are that prepared and daily, so day-to-day, and to And customer. communicating is yield optimal to out in the the what agile the and mix respond teams changes needs figure we're operations, network,

Chris Wetherbee

Okay.

we -- that market the So in manage it's to if to I have to that fair suggest year of last approach half the it. guess try in -- slightly the we there maybe different the saw that softness first way see if you you were a

Or it approach to I a think time price add about? desire be of was Would dependent be in this still there market. would you challenging pretty that sort a volume think more the some that around?

Christopher Adkins

Yes.

quarter, cartage, and like all it of we done. third we've did think the I'd variable rental lot already about, has the like marketplace, I costs those depends, variable say but costs different in a I said, Seth on that So reduce with talked

on. monitor additional is that variable bringing transactional continuously that, costs we're and will business sure that make any So covering we that

Chris Wetherbee

quick That's on just helpful. one follow-up cost And side. the

going would what headcount that here? about be comments about forward? need? of think Or efficiencies think you sort you Do there's headcount general do guys going sort have you how Do great. forward potential just Just of you

Matt Beasley

Yes. we great provide growth to at our to strategic in I attrition industry. lowest as When see to and opportunities say we stats, customers. the in want hire we markets would the of continue where you service some our turnover they're look

a that's So great thing.

that is front long in based make for customers us. But for the around stay opportunities really great people we is this a and that Our people. decision our our of see we time, on a which location-by-location

that go. seen we're almost Christopher we challenging labor, so about of in. have labor with business mix we the bit.So a sidelines, So constantly looking our the and kind decisions in quite But it the that sitting talked ready that daily years, to bring at we positioned we're soften a and throughout more on bring have to pandemic, of pipeline X.X we've good last but was like

with need network labor, labor. tools where earlier, visibility about where we I talked advance So and we know we those know X we in months need

So us what different to see now the decision in gives a past. we coming we've that's in that make had let's for future. what from of lot say, And a the tools

Operator

Tom UBS. from comes with Wadewitz next Our question

Thomas Wadewitz

if see on to could freight of trends. underlying you some thoughts kind Wanted just offer

volume the on bit in October. seems I think deterioration and Asset-Light in LTL side both you're of further business, then in a seeing it like also the

I if change a don't And getting weaker so or in that's you function know if market that's of just any think approach.

thoughts So market yes, some on trends.

Matt Beasley

in lessen I say the one seen I'd we've manufacturing feel that the like seen I coming to overall been latest an decline, is decline. a destocking bit So end. the it's sector, little mean, that that that guess, cycle We is report. in We've the backdrop

still of so a softness. see that little And you bit

become then capacity see relates catalysts LTL potential had been to sector, forward, just towards that we that the restocking, the a tailwind I very additional think as we've Certainly, we across if the But say, I'd we a some specific more for catalyst. space a market tailwinds be could recovery see it the those there. to broadly see move had so And in in we business. move manufacturing

Thomas Wadewitz

seems truckload, and in at Asset-Light to looking -- What that shipments? a the bit about worse that's little October side getting seems spend in the the like trend be on it

Matt Beasley

we've but Steven talk increases market mean, can a share we increases in certainly and focused profitability. say, talk on seeing bit it can October? been more. overall, Maybe shipments, I like remain to about in little looking what I'd that's in Yes. Steven

Steven Leonard

Yes.

is of and We're that us new just we're of opportunities. seeing getting provide. function Some for sure we disciplined think that that lots opportunity business. just around careful we're on being bringing how tremendous value there's services about still there. making of about the price we We're a But

that's but in still we're growth, on. focused reflected we're in a opportunity what so of seeing and that's bit see And little what for October, lots

Thomas Wadewitz

Right.

one Okay. on price. follow-up quick And just

It of further reflected? it such how the on take long kind would seems get that momentum bit of book to you I be you're pricing through fully showing does stronger environment the think GRI. you like in little got where the of in that further know in I timing acceleration we you kind October. about price in But the do how see think the -- might price asset the business? LTL a

Christopher Adkins

Sure.

think is our contract to the is I a that of core annual this our Tom, portion business business way negotiations. in is that is subject the So Christopher, about large it,

those typically So X months. for that, year, are think as for XX agreements you about good

of that through So makes we'll quarter, each business if sense. around that work X/X

Thomas Wadewitz

for you potentially continue to accelerating So see price more couple could a quarters?

Christopher Adkins

goes think as I up, be of will Yes, that's doing increasing our fair. go The the up. always costs business cost Sure. prices

yes, to expect I continue. that so And would

Operator

question next with Goldman comes Jordan Sachs. Our from Alliger

Jordan Alliger

some struggling peers the opportunities there of was quarters think you is, too of maybe that or I for could could mean sort you perhaps pose you? I additional wondering service? if some took redistribution. the perhaps much discuss does What opportunity with you share in freight see out your I do mean, ahead, on competitors

Matt Beasley

Sure. Yes.

think pose the does with in an definitely service I'm I that know opportunity. big a seeing necessarily. don't issue I marketplace that

following the freight the it will landed disruption. that think the has with carriers I immediately

I that solutions really carriers and think getting working that an making they're sure leads one will We're those business diversifying carrier, carrier the each I our for well case-by-case shippers the which Asset-Based their sole continue sense player. our through, there's that's they and us into an those hands. are that managed that issues that right have shippers, seeing that not managed are and portfolio we're positions to really to just interest sure appropriately makes business. that a of service But well in sure shippers carriers carriers shippers through think their sure price the and fits network deals priced it's Now make the making and basis are the make with well with with sourcing relationships. solutions also of have work they in If

Jordan Alliger

a Okay. trends as you next weight business normalize right per maybe Can Does impacted mix. And freight transition bit follow-up this little a certain is characteristics, by rebalance? per to you year? like talk just your as just shipment or look LTL. that core shipment to weight then ahead factors start you Obviously, into on about now

Matt Beasley

Yes.

like how do good that a said, just question. we some freight I definitely works profitability based characteristics think there Christopher from it and target dynamics standpoint. that's a best on So are certain on the dynamic side,

probably in And just we transition a just again, there's little a has impact mix. anything if late.Christopher, little there macro then been bit a be the of the of going destocking of know those an I declines broadly probably and drivers. through as there's bit been a way that been bit that bit to on all broader contributes on So some as our a little add you'd overall weakening there'd manufacturing, little just in we've else don't backdrop

Christopher Adkins

pulling And impact Yes. shipment our tends it mix an business, heavier your as to dynamic stuff freight that heavier we've weight the about, core on to the and it stuff that per larger, transition lighter be have talked changes will down. from

Operator

Kauffman Our with comes next Vertical Jeff question Partners. from Research

Jeffrey Kauffman

A Congratulations questions. a solid quarter. couple on of very

on Tom clarification one Just Wadewitz's the question.

X%. in seem answer was August, the down getting after from about September was the drop trend but drops oh, it was to per up Asset-Light was, big things And July, suddenly what the X%. are October, destocking to better, going to in then that September X% that so day well doesn't to shipments explain business And think October. Tom I in ending,

is step because I bit surprised a be down was on caused to function it Asset-Light guess side? of was? the go-forward that a Is on this I market this the anomaly, little there restructuring wondering that that Asset-Light Or our of October that bit. we the and a So what was fourth you were October probably rate? me in quarter? really So just an read Is shouldn't way a doing material

Steven Leonard

mean, into I see We know us, We're in resonates tremendous again, where much service future we're still with it would Well, I customers. opportunity. that The don't in well. for too I terms headed quarters. maybe read well connecting of a

bottom kind to at at feel same like And the But we pricing at so the the of we're grow. bottom or opportunities we to market. -- we're continue see the of the near time,

be volume. bids we it's and And so I we're going we'll could grow going And opportunity we're doing up and kind feel a October, in better turn, you of being to see careful that's to that of come type show add thing. that like in about in what think to but and back,

work market. a given But don't the will within as to trend see that that got So I continue. we've

see other to so We're rate. forward.We've thinking how in services, higher of And volume managed that's about to Asset-Light. a add it also in some starting at kind more other the continued and we're going areas growth we're seeing our of

about think to going across that sure October. So I there's see the some again, things bringing about Asset-Light. price in good we that just bit a we're and me, we're little can of on how want you But for on, that and decisions making make good business

Judy McReynolds

don't One it. we is of for reflect the there, about. count talking there is note just referenced There you're clarity momentum. that shipment do that momentum thing is managed and that take We disclosed, part in that, We around to and of level. that's the the shipment

we're here about bit opportunities with some seeing bit robust at a you're the have what to the doesn't for business longer all that now doing is because trends, when there's and I see we're Steven sure point across excited the more of value these and us, the are little which And solutions, to right extent, truckload you in little less speak we making right them, customers for focused that is making being primarily challenging. over that think very we're And we're that. So all statistic is on expedite term that that our the are right and opportunity relationship. that

Jeffrey Kauffman

clarity. a lot you. Judy, And me more that gives thank

that. appreciate So I

on follow-up Just one on and Asset-Based. question then quick one Asset-Light

OR, XX% not, points about as best way and from about know we of the and positive going not XXX-ish whether that's to with decline think of look explain and great of the revenue. associated measure surprise do a or that? you that XXX was was it, this transportation? base as because basis a is the disappointment. Because much would as year-on-year we bit So at expedited down I that other is costs purchased the points? explained causing XXX quarter, that is Is What's transportation with can in Asset-Light XX% argue to basis related purchased it What asset overhead basis have point I XXX-ish down a to

Judy McReynolds

the think results, what growth that to I And overall just that as is, I in at resources people opportunity. said, serve mean, you Well, I Steven investments you think and continuing look just have as to we're that. doing see

Now you to that's second impact say about decisions we're thing and of business we and the yet We those, with ways improved more on impact of of on One extent there just the this, and that some segment. I'll our to And half to in be look we're the sight. we've real other the medium-sized it, for focus continuing and line XXXX, for growth some an see but small a see facility perhaps working efficient. Asset-Light. made, something in we've will this that addressed talked is margins both a in of be that. opportunity on That call haven't in

Jeffrey Kauffman

you talking about estate the XXXX, then with know big of XXX market. these properties real last I by to and there's follow-up. yellow some opportunity doors are And that a were Okay. coming

I And potential we estate a of we that you as know this for I CapEx, year, a on thinking As the to out real we're to but add in was I was from back real for this operating maybe probably it but about something $XX know pull come mid-XXXs if there the thinking Could could in year? opposed catch-up mentioned 'XX? year's number. see we closer 'XX -- in kind you XXXX, with about modeling, as think we're see capital haven't next million to was equipment spend little of that estate spending 'XX more normally,

Matt Beasley

Yes.

I I'd too probably coming opportunities together months, coming the picture overall early estate and this an point. the capital just over certainly, give XXXX on of will there be Jeff, space. are thoughts LTL to the still and real think our side that plan say at in on So generally,

Jeffrey Kauffman

Congratulations.

Operator

Jefferies. Moore Stephanie from comes question with next Our

Stephanie Benjamin Moore

So I kind shipments of your think the managing throughout job of you guys really good do a cycle.

LTL usage of about here Can market? to of guys? maybe mix you you talked day? optimal what for a think you Or do then an disruption do And regarding per obviously lot you're You represents kind more do you shipments dynamic the a about think the thinking the freight. XQ given there's normalized talk in

Christopher Adkins

start. I'll this Stephanie, is Yes. Christopher.

I think reference term. near I'll maybe

shipments think speak the per based week-to-week had to right some now, we're the plans term? longer-term capacity XX,XXX pipeline what Seth opportunities on a and I is.Seth, the you term, could but day day-to-day, want like on near do targeting But that current that again, you around to. speak daily situation the on are varies to basis, our in long

Seth Runser

Yes. I leave would optimize for just say also potential trying but to mix, we're growth. our constantly

you we're the position long-term efficiency talked that when to the investing growth. facilities we that to really that's people, the about, measures and open we're about us So growth all for in that we've growth, think taken,

continue there feel we and do as are long as we'll for like us. profitable that the to So opportunities

Stephanie Benjamin Moore

kind taking firing kind Got the it. this whether seem all And really follow-up a back step it's here, of of that quarter maybe guys a you demonstrates cylinders, mix. does and it on as just

pricing coming good have You in.

I a very see environment. You are nicely, of you we still And kind through network. already think noted, a clearly it's pretty all terminal last weak of we actions can agree obviously, freight have lot point, of this then kind mature can the these coming productivity while

all considered, those think OR do deliver these based going forward on kind a So factors? you of you sustainable things can just X-handled all

Judy McReynolds

that's what we're Yes. think targeting. Stephanie, I certainly mean, I

of Asset-Based the and of this from is but our unique XXXX. really helpful in the of we and rough the see that other things have you address some with it you bankruptcy the resulted the that underlying things 'XX, on macro some in through that's can have the yellow gone disruption that as that one is other customers pretty about can compare if to back back opportunity that at maybe as solutions the this interesting well solution, we to the marketplace. look comparisons think weakness, even hear periods, environment to you I spring And

not other this the like that really say And our we've but you some doing. runs that for dealing partners more business I this also feel might to it be that is with through we're which truckload a it a macro with customers of a to fit to for but disruption.And LTL to an optimization carrier seizing the just yes the period opportunity to or only good our it's comments, be Asset-Based often. so And help just of could happening highlight managed in disruption, work on prepared navigate want be runs model but lot better ability a a seems I in it's And weakness, highlighted a network, customer. that

of even excited on environment that We well, the other future, in with we quarter. in better. you execution and of an like all the that. very innovations if I'm this So have about of that hopefully And a XXs want navigate just know we're lot our our tech improvement. opportunities I to team we for and see we're focused getting in

David Humphrey

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

Operator

Stifel. question next from with Bruce Our Chan comes

Andrew Baxter Cox

of on the and do businesses wanted for to years? revenue from or ask are for we portfolio just Asset-Light hold Andrew add Asset and still to see and And change? portfolio is missing of where how services Bruce. are might between This some expect about sort you you about thinking guys should few Cox What be next current guys you breadth? expecting services? the Or the opportunities to mix the We

Dennis Anderson

of about we our Dennis. previous -- We that. mix this this like I quarters on call I that into Andrew, now. about capabilities mean that managed really in talked have think really leaning Great question. the is right and talked we've business and

asset out and out certainly growth truckload expect growth base as of well. of We

the other mix over we bring focused.And question evolve we So that how to investments And time. customers we're your mix then today. areas should where about certainly, to those are we like the in expect

We expect period to like of customers that look mix really over a time long our more spend.

that how to business transportation, continue we're when to expect freight size as grows. even you and the Asset-Light going customers of think grow on we toward and spend Asset-Based mix the about these that And so markets

to I looking what trajectory, like would have really happy capabilities the about and spend. the about long a So that's say that -- more more then expect and on we market start we

David Humphrey

you. thank Well, Okay.

call. much. very us. our you concludes Thank this appreciate We think you joining I

Operator

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

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