ArcBest (ARCB) 2 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. My name is Danica, and I will be your conference operator today. At this time, I would like to welcome everyone to the ArcBest Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Amy Mendenhall, Vice President, Treasury and Investor Relations. Please go ahead.

morning. Good be Runser, Judy Beasley, our Officer. to and our Chief today Seth CEO; President; here pleased McReynolds, with Chairman Financial I'm and Matt

also executive of the We session. other available Q&A team for our several have leadership members

financial non-GAAP measures we press of in in Before make the comparisons, comments of the will that also the subject forward-looking today non-GAAP of that uncertainties, and and earnings statements we'll to forward-looking section Reconciliations discuss the meaningful risks presentation provided section are provide described that certain we release our of To be outlined which the measures in release. note filings. earnings information begin, are please slides. and GAAP some SEC will additional to are our described are

the webcast. website you morning this in You at filed the the on or of can our on arcb.com X-K along find XX.X Exhibit early can follow slides

the David contributions XX grateful would our call invaluable, ArcBest, I including Relations over years Judy, his Before am I and dedicated been to for call of His seamless. in team. to work retires us transition my support for I this is over end years of continue into the Investor Humphrey hand service with to now thank have leading to at his personally like the the in Judy. together will room today, role turn will making we he XX and David to until month. I the

by Thank and morning, thanking you, good begin like our everyone. I'd and employees. Amy, to David, congratulations again,

thanks customers on insights change truly solutions freight we're and more progress provide strategy today, on pleased spent to while efficiency needs. will much our by innovation. trusted disciplined needs their demand modes strength focus people, execution with relationships strategy. cycle, They excellence their priorities face into as perfectly our challenging Matt a our supply ArcBest and commitment listen drive in our making. The our Seth and long-term appreciated. Reflecting our customers, growth, grow. of meet reaffirmed of customers Despite stronger our chain pursuit and cycles, is investing our efforts with been are moving past position are to a to tireless I've navigating technology our constant for to efficiencies and thinking how of advancing delivering of to global using leveraging multiple strategy the Your to we ArcBest's adaptability and time of in strategic remains has unwavering in the results, and services relentless the of I'm keep our seek for and freight transportation. continues and aligned is and your

since nearly stages. Our XX% and into continues sales pipeline January is progress later and expand to up

their in customers of relationships are our solution, had which years. Our had demand for solid. over revenue. Customer retention is double-digit both optimize revenues with helps XX from we've growth managed transportation and chains supply Over XX% customers

and We are enhance value to our to chains. utilize their solutions our customers our trusted advisers who supply offerings

second quarter, results, take our will the saw improved in delivering you are while Asset-Based a detail benefit we our financial years. initiatives In performance X on-time business our driving moment, through implementing that they've best performance. bottom efficiency that Additionally, significant the we Seth in line. how will these In programs improvements the and

the for All of volumes. in this work eventual positions recovery freight ArcBest well

succession him will planning organization. highlight over on These has want Seth, it our recent to and Matt talent promotions Runser underscore as President across deliberate our that development Godfrey I to succeed Before Seth promoted ArcBest President. ABF of ArcBest, I focus to hand been announcement and

has of ArcBest. Many initiatives record successful overseeing X-year successful been of these a right renewal why Godfrey appointments Seth. leader are led and so confident I'm quarter and and for the ABF of He the quarters for have this years, X our Matt delivering the key labor results steps union results Our Seth you at demonstrate know agreement.

of logistics integrated As President, operations solutions. responsibility has our Seth assumed day-to-day and our for execution

graduate and facility of at and our leaders him. continue have to excited transformation enhance Seth Academy, deep to will projects working impressive Seth's Runser. years innovation transformational drive customers, shareholders the to and success me. it turn on our clear After further driving will remain the I'm is developing for closely the lead was of leadership, we confident and role, the achievements has Seth shareholders. of his to he spearheaded including growth right underscore it. Leadership for ABF relationships our under with ArcBest, employees. Matt been operations enhancement focused He no spirit is started ABF's building plans Board, CEO doubt ABF ArcBest to progress, his plans, XXXX, advancing from effectiveness him now performance of investing many I example new commitment the report will innovative for our and operational I ABF business of Matt to and our real on he In the Godfrey's a is program. Our and where and this going I'll over help a efficiencies. directly development are also that of estate His knowledge customers employees, now and Chairman of special first benefits person long-term people take the has our on in his and and and at forward. And with long-term President to us will strategy, and promotion power continue improving one

proposition mentioned, position to increasing growth, help to as and value continues and gratitude customers committed I'm uniquely I'm efficiency in with innovation. excited their Judy's morning. I my logistics to serve employees to solutions our Thank new our expressing good and and mindset vision customers. innovative start you, role, customers for and to complex integrated And by of and this driving most accelerating strategy want challenges. solve resonate ArcBest's us Judy leadership. ArcBest's Judy, fully

some our with our facility Now driving let's delivering initiatives are across discuss ArcBest and results the customers. key plans. gains Starting that of efficiency for

strategically well, are We and efficiency improving service. adding increasing progressing capacity,

newest opened in up capacity June adding capacity our freeing transfer key city Our in Atlanta, facility Metro and markets network. in in

expected, As X these to we locations. seeing We in productivity Yellow and XX% after up this X from we're are facilities. quarter complete. as those of added improvements other current X the facilities last open already for month, auction expect renovations the replacements opened

early in Additionally, XX planned fourth to Chicago more XX California in expect another add we San Bernardino, doors quarter, the XXXX. in with in

to productivity. adding we improve line to direct addition these of a doors, see In projects sight for significantly

speak was experts This to into and XXXX. move deployed facilities, team's to largest operation and focusing will continue heard savings also ABF yielded and this on continual us about has our nearly have throughout improvement the they what projected, work our cost year Xx You operational excellence. network

advancing technology projects. are innovation also and We our

flow active progress. We a of pilots and have new projects numerous in

project, project Our City efficiency additional uses significant Route into expanding phases. gains, to we're to AI map Optimization which this our and continues routes deliver

Our and innovation are paying off direct shareholders. in our creation investments with customers value results and for

better Our chains. visibility their customers they supply into tell us need

things a now few As evolved, even that to ago. just possible do years able technology we're weren't has

their portal have and This data, carrier our beginning receive large arrival In enhancements are up. of real LTL will to Over about digital focus our before months, in and shipment of and shipment tools momentum. growing month, shipment to our even data has volumes quoting more been visibility we controlling have how our visibility, and database with example provide and maintained expanding With we've driving on our customers. this is we several the made investments the cost. gaining Shipment information. the another Asset-Light, shipments improvements increased, technology providing value service customers more our accurate are customers last picked shipment

XX% a over employee result, year-over-year. As productivity improved

costs, solutions We will technology transform committed from innovation partner innovation leverage payment we we believe allow continue leveraging to in and value. ArcBest to implement productivity improve tasks and us technology, carrier drive which third this invoice experience. our for industry, expect future and continue and is potential reduce improve TriumphPay. to gains. In and fewer added manual to By will carrier will to create reduce growth grow the our efficiency, investing quarter, auditing to We fraud future that will with

Matt I'll the to detail. go over to through financials turn in greater it Now

that the softer despite and billion, Thank a versus second pleased solid morning. Seth, good XXXX second level, quarter $X.X year. environment. On consolidated I'm report delivered financial ArcBest a results to you, market of for slight decrease quarter last was revenue X% the

operating business $XX $XX second period related income quarter contract, share to our to However, our of $X.XX last in additional million from earnings non-GAAP per $X.XX, saw and the revenue year. up the XXXX. in increased rose continuing million. XX% increase Despite Asset-Based operations income lower Adjusted costs labor the a operating compared from to by new non-GAAP same to

decline current Our due in non-GAAP Asset-Light income, truckload million business experienced primarily operating a market $X conditions. to

in about segments business. Starting our with Now X more our let's talk detail. Asset-Based

revenue per Asset-Based led XX.X%, This points quarter quarter the of second second-best second XXX million, in segment's last was our XXX and ratio of from improvement Second X%. the first an improvement $XXX was The to year. an the quarter income decrease operating points day operating of basis of to non-GAAP compared this improvement a of quarter year basis for history.

took our the half day labor daily below XX% first capacity during on transactional more levels. and we To of tonnage X% quarter maintain and per year prior Second business. were shipments decreased in XXXX, consistent by levels network

in increased discipline. By As of and improved on which shipments, basis our half revenue. the costs, shift in core results. Year-over-year and higher freight favor operating continued day, contract during productivity transactional quarter, revenue we and second LTL achieving higher proportion increase price the improving illustrate second a the XXXX, billed XX% XX% on market the higher driven core to On conference higher improved deck, customer of has on our lowering LTL per first X.X% the saw productivity contract our second revenue demonstrating for a hundredweight. and per actions to the improvements pricing our despite and pricing increases revenue per in tons transactional second slide core Sequentially, strategic Page shipments by year-over-year business, hundredweight these call shipments financial percentage we of optimizing mid-single-digit We resulting lower offset and reduced costs, quarter in hundredweight business union to compared of quarter. an in XX mix, shipments of renewals agreements income increase tonnage average results. over revenue per quarter, secured the of we deferred better on the quarter This our and segment of a by in conditions per core contributed shipment. in significant low revenue, year, growth impact second XX%

our of beyond year major implementation X cost of our events, freight labor a management start including now and the mix initiatives. and are contract bankruptcy, We several savings competitor's new the

year-over-year day a optimize core the core some began business business the in the preliminary per shipments last our the was and trailing year. X, revenue wage The change quarter XX, for peaked mid-July increased We months the rate third X Pricing our our per the rate flat shifted of health, levels XX on rate both June and operating XXX ratio be to the rational ranged to pension was other prices third July XXXX, from providers tonnage increased has effectiveness Historically, XXX contractual will basis allows non-GAAP second to average points year's strategy. and over the XXXX, and prior the and point business combined increased year our impact of ending business. On from that increase project-related, August results, to improvement. strength past basis from of welfare the X.X%. through of remains the as increased For quarter ratio the that improvement and for under transactional contract sequential for us union total in July an below daily XX.X%, approximately Asset-Based on XXXX disruptions quarter increase XXXX market operating benefit August XXXX, day has of spot the October. Based X% began July. of anticipate in XXXX from in demonstrating since some

XXXX and market third to the quarter With XXXX. second outlook third backdrop cost ratio mentioned increase, with operating the expect contractual wage quarter including consistent and current quarter, the for be benefit previously we the

our on Moving Asset-Light segment. to

daily year-over-year. approximately $XXX was a revenue of quarter decrease Second X% million,

margins XXXX, has their to of XX% shipments While by soft day our decreased decreased to per experienced the day revenue operating the sizes market our due in shipment Compared margins and shipment levels. purchased in was per truckload due which transportation the increased for freight in which customers growth first demand quarter The due loss business, lower the to in using slightly per but non-GAAP January of revenue costs, businesses. per winter largely to and weather. Shipments revenue $X.X shipment was XX%, million current due managed improved smaller as increased to market. quarter solutions per day flat, lower asset-light lower lower

integral long-term seek in offerings role overall logistics needs. transportation all their partners as our for play an asset-light Our customers strategy

of larger there's tremendous Our for and asset-light solutions to and a us serve our truckload also portion spend, transportation market a allow our solutions. managed much customers' opportunity

In addition, XX% use also our Asset-Light our solutions. LTL customers of Asset-Based

the needs Our key to value customers' at reflects ability we offer a meet differentiator. price is our a that

reflecting due revenue our customers, due lower Looking July. XX% managed at macroeconomic decreased for shipment have growth recently from results this moderated to demand shipment, year-over-year lower solution Revenue current existing increased, preliminary day for volumes conditions. per to per while has

we has revenue rates throughout profitable increased truckload and truckload slowed as reduced reduced a as quarter transportation freight. have percentage Additionally, the of costs sequentially higher into Purchased carrier contract margins business. rose. less as These strategically our brokerage volume for July second expense

focus to and productivity improving shipment. per continue reducing We cost on

impacted near by the brokerage term in current However, market profit will operating conditions. segment truckload remain

quarter third operating non-GAAP with consistent XXXX, levels second loss be to expect quarter we XXXX. the For the of of

For through shareholders we half of share to $XX dividends. returned buybacks the and first million XXXX,

million cash and in We net available have liquidity. $XX $XXX a million position

remains $XXX million Our capital in million the for expenditure range. the plan $XXX year to

position. quarter are our second proud and our We solid of performance financial

our pursue delivering customers service initiatives, value continued in are to and Judy operating costs shareholders. positioned while As superior for continue efficiency the future. our to to emphasis we said, improvements innovation and and productivity With on and we growth well growth,

final Now I'll turn some comments. for the call back to Judy

Matt. you, Thank

chain been dedication good stewardship want our excellence highlight wrap logistics their commitment that of our again in sustainability. to customers advance inbound an green to recognized of has achievements once XXXX. and ArcBest sustainability helping and as I underscores our I This partner supply Before reflect our some up, recent honor efforts. our legacy to

to We one U.S. Companies Work For proud named be are to also Best the by of

place grateful News and ongoing a Team testament World from are These as to the publications. Leadership a ArcBest awards recognition Report leading a to make efforts and to these Comparably. be work, to we're ranked for Best our by and

ahead, that cost Looking the turn our on it prepared remains management questions. operational to profitable excellence, remarks, disciplined continuing team for and ongoing deliver innovation. And I'll to our operator focused growth concludes through and over

from Yes. [Operator Seidl Jason comes Instructions] Your TD first with Cowen. question

Judy, Seth rest of and Amy, the team. the

quick One, project tonnage that, talk And X last that general, of about lot in just XQ? there's a in Just of we potential here. recession. exclude your Judy, if things projected a that positive if business you in would year, we then, now as look at July right mentioned be

economy are as telling carrier. a What get you? You look good the a into your national customers

on Jason, this comment the year. from Christopher. is I'll last just business project

good is not the business definitely part but we said, a was decline the market like for all the That did due us. tonnage July, bring for story year-over-year, you it. of of last some it's to of So that disruption. just on That

was it time But just for of that the core of honestly, of it to there by they able of the of us are shipped in business some that to went for Some customers. onboarding year. lower-cost our end we were that providers that disruption us some

but perspective, we terms we're freight in just the be profitability business. quarter year-over-year make the our continue good to decisions selection third still will just a for tonnage challenged and from So -- of

Okay.

to quarter year. moderate drop that and rest from moderate, just it continue expect And I that of through starting per it's would just the perspective, to shipment July, yes, a the you've from second weight into just seen to

part missed we that. Jason, Sorry, of

had you follow-up. a If

said on asking a given into that since Yes, her your... such wondering was there's I you a was recession economy overall a Judy no, No. I of the of good thoughts lot macro, I the fear look what have guys

challenges. Yes. think that by those I Well, certainly being affected Jason, we're

and that environment well. really well here, we're of environment since we that we what opportunities the increased we're kind way really feel we that more we work as truckload across company that got for the the we're of looking to structured LTL, with think beginning this pipeline excited year includes do any managed shifts And ball across cost the efficiencies will customers really positioned in in have the to that really that that a XX% working crystal succeed. that's a and addresses like We've don't about. inflect. which is to I But of see and kind that bottom we've just at them the when

ability choppy feel feel have But settle to regardless. we so environment. the navigate normal they confident our well we we we're a ball, down can hopefully And while to positioned in and move crystal don't as more a waters like through

Okay.

cause not So is shipment then? that that much rate of of per lowering a concern

macro there. challenges have We been a was saw and nearly a XX% in of operating efforts great operation and was And efforts as face cost the improve navigated some that it's the Well, our but that in have. of some second completion efficiency challenges, the improvement We've quarter. X in that projects seen income well we to that pretty well. technology as relate overcome lot by some of to Tier

everyone. Sounds the as good. time, Appreciate always,

Daniel question with next comes Stephens. Imbro Our from

revenue I per XQ. pricing was want start hundredweight, side. down was up guess but the on at looking second to to including I the quarter, XQ fuel sequentially, fuel,

actually pricing So how just the your the you from about back core the read And about guess talk core trends in into right XQ can is that accelerated here level? ex fuel I pricing business? thinking you're

Daniel, is Christopher. this Sure.

that pricing core quarter we our increase sure challenged providing, good a back Like our this in on to making gotten customers. get the able we're just honestly say get X.X% negotiations, proud over got would and and team that's are freight the increase we just recognizing disciplined and getting years value looking the second annual on we the of our of over talked best trends, environment increases those deferred just last that second about, that quarter. from I our that in business. take on that was that's customers we in XX we're that, we're in our to we've the that really I'm terms increases. I in remain sales So pricing the environment, actually increases fourth despite history, result

that's and the result, great really as continue So that year well. of through the will rest something that

some to there rest you increases second. So well. good to of progression from like was said, first throughout as We'll the continue the get year

And I maybe can the think in if outlook, then OR on XQ half up, you Matt, flattish follow from XQ. back said I OR

I inflation a little moderating think is cost bit.

you guess is remind I growth that what then XQ XQ and better? from pricing if as wouldn't about normal revenue us why you is improving, that? to can little So And OR a think is just bit improving get on seasonality

Yes, absolutely.

say but X considering an that August, looking goes did for just considering then to So goes I bit seasonality at, that at are it's do that outside are our a in benefit been third generally, our higher points When little would sequentially, XXX of moderate the are to quarter, than cost contract look union third in, quarter, levels, a -- increase a environment we in wage and year. looking of quarter and the last we're that revenue think from mix on things considering which basis for still has talk rate just our increase do kind freight July X fairly at what we're at we second the profile have of consistent of levels the about we range that improvement. we and the

of expectation account a our where very I And we We've quarter puts mean, in to flat. compared and quarter. the metrics, about are all the company's strong had so our certainly, in into highest taken at an roughly those second very metrics execution currently us history, approach recent operational productivity talked of those and efficiency service some metrics history. strong just

few for to then continue we if there's as say that that in if productivity momentum with But performance we an years. been think That that you the initiatives we efficiency off quarter performance the can the third you and third more I'd got some I so look has the and strong that some to I strong network, the opportunity up the think pipeline the quarter fourth when lot with from from XXX quarter quarter, talked to the of certainly, ratio basis fourth that over the a some with you're third just than our revenue we've see an potential in outlook. And quarter, years. third better last work improvement had of looking do points flat from about to a consistent past the for the quarter. into typically, and we've in increase fourth And of operating result move we've the seen

Our Jordan next question from with Goldman Alliger comes Sachs.

I Sorry up follow out put ago, distort I just a days there about of wanted a Yes, couple growth. day of in maybe per for the to operating a there of the more versus that. little year had you some was that July think some trends on July. sort bit And

look just taking that. how tonnes revenue the into Just but curious, day, some there or terms of if and account both to to on basis look those per relative sort a start any for sense per broadly I'm in thoughts days. have August suspect way should it to on for better can day I might of you a September curious is July, year-over-year give

Jordan.

think typical I business we of our So the just seasonality see.

be to know, has we it. As in strongest month July as progression from the September growth the we to end September, -- typically quarter. of being see tends July the you the of to in just that And August all quarter holiday a

just moved the sequentially upside just quarter. day, as and shipments of per So terms see day in through per tonnage we you

out I would year pretty price. of do like bunch Okay. is seem enter a we And some the you know industry ago around opening. industry And there's of comps wasn't particularly keep there's core for index, of orders I been strong, the a industry pretty take still continues pricing do post discipline sort the to into which firm? the new like but readings these came It which period ability same soft. pretty good. of about some to now does terminals industry's be account with color openings you and ISM And thing, think gave to that recently how difficult I terminal guess yesterday, how start sort these tougher the Yellow. mean

it's Seth. Jordan,

really So disruption mentioned. what's a sequentially things view we're looking of on think you to going at better kind way we that's because market with all that the

So seen we're when into declined X.X% and you well shipments going what X% think July. was on history of normally, down we've Christopher, tonnage. about, June about actually to down increase X%, about and only we're about as the type Normally, result. XX-year he talking in about We've from they that as seen same July, a

from So and you the in think down see what's Yellow still in capacity, terminals real when about industry coming being when market. the capacity was overall, a standpoint, in we net from estate

this So been look we've in, investments really years. when don't our on strategic. road and we on we've it's we map what had at for we've overspend investing think working that capacity, been our long-term many and I

productivity, XX% opportunities of that example So improvements. investing comments, where Springs that in improvement almost a A mentioned opened. growth we I or productivity overnight. Lithia my in we great opening we're was see

focusing some we're think do the facilities awards. on going overall service term seeing we there, some customer, half believe lead of amazing this online. to their think position that's continue we So But value. we're back over really capacity. down still by what's be that's is to But well. about industry And with going on long to to I improvements not going Yellow win customer external focused the numbers because capacity the long-term us There's to

right. All

comes Our Ken next Bank with Hoexter from call America. of

in Dave, new your taking comment and see Dave, Seth on on share. ] and on Matt [ Matt positions. moving that it and throughout more were Congrats, there You Seth peers -- your the

you I just define what aggressive somewhere price? questions I also that think price that being moving to winning about think on maybe it's more price -- competition different how get that share can the to Judy being providers. we're at to last if few -- they're mentioned trying not Because in asking

can you the share. maybe the about So peers compare, comment taking contrast

Ken, this again. Christopher is

year. the late clarify, comment was about Just to disruption last that really from

are So we in second then find August But moving that the that was there time Yellow days, options substantially business were of prices XX, that We what core was cheaper forward. it onboarded our some there that And frame. there higher able for quickly that And customers. customers of than some providing in be were were able July, were was them. to late That to the honestly, course over out. -- a more year. see settled much that's next of consistent there. now XX all probably settled at the half last basis I those and

up want I you're has think, just then much XX-plus and volumes, but the yet on follow-up can is thing caused losing when your to -- pricing confusion, understand kind volumes, scared XX%. is right? your I I if with hills, percent the just transactional get I company normally, a Then Great. right. a for All running of mean, so

keep such to volume. you're maybe missing huge and if transactional in that created But not kind volume more taking what's there of XX% the such on So is pricing, core filling that opportunity really seeing accommodative it why taking volumes and -- that you're such your variable, swings a do if you we're that is that were that it transactional it systems off here. maybe the move down up tells you kind still could vicious of with

Yes.

the XX -- I back weakness the macro. So continue to I think you that we the go in got on to rewind tape kind XXXX, to see of because

working. very fill you find So we use about network throughout and the qualified employees. pandemic, think CDL years challenging that to the When transactional to employees our keep tonnage

right at our through negotiations contractual the So a time. as well, as thought the strategy going just also were that we was We reminder.

So see to we play started out. the Yellow story

to we happen. could that, saw potentially also working, people wanted So but our we keep that

I Yellow, come the consistency, on better our plan our got cost allows really us what contract, of we on core what we better serving after demise labor more core those more shifting mix costs. worth think customers million focused consistently of just think worked margin, second strategies that our well with which it productivity top at with So less you're in truly to $XX a op more to quarter, was price, of ratification clarity some it $XX we generating did, business. And business, the really our and much income million contractual and when you almost extra why I look But line in the at gains. is revenue a of more seeing

think daily But target capacity handled way and we really on decision I maximization profit transactional is very network. a the well. based it's that business in we the

now the Yellow I going think still swings. and the the I Christopher consistency year probably and situation, till it's a was wild sorting move to. that to more the as just Yellow good like through with of So in feel these to to everything take year, about get then out just the November in of But because event rest see the like there pointed later have we cyber spot we demise, you're is going less our core of

we've trends, sequential we about the that's like made. look and at why feel progress So we good pretty to

of total base Can left versus you clarify the transactional or that's what core contract sorry? percentage is

mainly number, Yes. changes often. because that provide We so don't it

market you business consistency when in -- So to positioned Transactional when much we change. be the the feel did to what doing is the think first maintain does forward, the you'll our allow us help to network business to the ]. When moving like see mix we're and better is core. network primarily really is in that a we half in place and [ about what

comes Our with Chan Bruce next from Stifel. question

on Milask for Matt is Bruce. This

comment on you transaction at can the business, versus the mix Asset-Light moment? spot the of On

on for Asset-Light mean, about business, in I The that's business, you overall, we're current think But the if several spot. mix on on range services. that truckload truckload XX-XX versus contract us roughly

productivity the the through at in of that's and The continuing and year-over-year, doing to we're truckload, if opportunities work you really other improvements we're improves. positioned thing on see well going and grow to looking strong a market future what continuing to of in as look kind pipeline to

the gross for and expecting more terms of out some OR any, guide the compression, margin maybe to mechanics opportunities Can of being in you some maybe brokerage walk us flat, through take if what the you're costs.

the just We'll there attributed work mentioned the basically and to a strong not we the our in that market guidance pipeline. in second The opportunities a seeing improvement strong continue indicator to conditions through is of half. Yes.

We also that and have efficiency a out good road gains new can map technology we as process. of implement see we play

advantage So we efficiency improve. of But the most market year. and to through the to that start we move market and be the we to rest grow importantly, we for the will positioned improve to as to see take continue want as of improve

way might Great. tell down where And you can to lastly, transactional capacity remind what to a there X? is us are if of the wound door that terms spot business you And of utilization? in you be

right like now, what feel We Yes. asking? our as excess is as capacity far you're

Sure.

Okay. Yes.

our equipment. So bit. real we our to about excess in that have people, plan now. estate XX% We've about we capacity a that real talked XX% includes estate, right quite And estimate network

adjust we up be continuously our long-term really like and the service to built and we off we have better customers. to here. opportunities So feel a eventual this based handle outlook able We the that network optimize see swing, to market we

to want that the making, So when we that's does throughout we've potential our continued make and market to why don't turn, limit our network. the growth we're investments made we've

the we our optimize like network for way So are. transactional market to grow is based prices does more we if freight want and what think to the better balance get and what turn, market on business demand that. that with the is we we a daily core And us feel

a optimization So the benefit turns, when daily it us. really and market should it's

Tom UBS. from Wadewitz comes question with next Your

mentioned a going project Just is function project per on thought that the could versus business were away? in of, little Was and see sure asked you you a per I weight if little economy wanted some a softness think, is a of perspective the perspective. little Do understand to what in that the see July I'm like about June. you bit? getting a shipment kind the to shipment July, lighter on bit if more you or But lighter got business versus heavier? I -- not June. kind give of mix, that's wanted weight Or July I think little

softer just Tom, obviously, than being it's both. it's Christopher. to like the I'd It's economy we'd say see.

than per a I a past And the have weight transactional perspective, an our lower per corner majority think to is moving a really higher core business. business. turned of even shipment at towards tends it's management, about that core economy. year-over-year in just shipment that on the sign from we've weight of more this hasn't improving all mix length And about really this the the talked it's yet business -- then mix

is the August, that moved XQ? in business just Or trending had terms kind look you think right that of mix look per look? representative weight think you in September, well kind of as of, as do business of I lighter terms of Is the guess, shipment it's away. So do the and some as you further stable to July of

Obviously, view I would but could to -- market I gives things forward, see right positioned seen the anything don't there. what whatever And to respond moving us consistent. we're from changing say we've feels love we'd well improve, still we're that July our significantly now. to but June see obviously, to within change,

Right.

saw a Asset-Light you're bit July? softer? on in then sounded just the like Asset-Light too. little it July, on what And softening freight getting as the in side Or activity that well, market of Okay. what's Is seeing you read

Yes.

as selections and that lot with add continue we was of month drop first in as that on holiday. make of work week we A sure thing And impacted that we're the customers. that shipments the making the We good that current and just from the opportunities then well. are of some with demand type associated to through seeing

Wells from next Our comes Wetherbee question Fargo. Chris with

of your I come strategy. I maybe guess volume maybe to and to back wanted overall sort

So if relatively may low, not XXXX. I time, seen we look but some at as be outside levels tons in quite still that maybe maybe down per day quite of shipments low at haven't

hasn't I are of But guess, during where I I seemingly it I'm is a sense is as under market into have dynamic. appropriate on this improving business, And that profitability mix of the we're comes level So volume. But of suffered market obviously, the in the softer where now. we at know would back, point a of to capacity. getting because low, a just you grow kind this? know year-over-year be some fairly basis. the numbers you looking but sort are still pressure the of

the sense what going want Just a to get strategy of is forward.

Yes.

in capacity profitability trying for to second growth. I We're the there. results quarter kind of enhance doing while what think to having the we're speak

sequential to So seeing improvements per talked just in look earlier, the weight better we're like mentioned and that. numbers, I at it's we shipment, core our about

on expect Most and market it conditions to of of due sequentially. kind what's We there. flat the going that is

So we you were first the increases to year got overcome of to wage able and pretty contractual were the that. large, think

the cost did. productivity we saw things You

reasonable forward. year feel at, like we X.X% that good about all So wages this moving a for HWP. in rate It's in is increase only much more a

that's So business to knew post that and to disruption. shift growth would on gains us make continue to going allow We some yield. this

of in opening our service what future to about customer kind pipeline But mentioned sequential that and We've heart. over numbers and we're going going XX% our celebrating be customers. our her some last in We've resonate environment we're of high. believe our really and providing to retention We've the in X there. value had increase our is why seen PMI XX-year -- for that's is that us saying what's the efficiencies have people a We've history. We sales So with our comments. a heard that hitting that it's of the best multiyear Judy to anniversary, so taken numbers quality look the as gives continue lot confidence be at unpredictable. January, since on better to years, been

and impacts for measure it bottom capacity service, improve to as line us the allows just growth well. that cost So

those So forward that benefits continue for see continued going feel take the and growth, it. and to like capacity I build is for we to us momentum we

So we're that what doing. while core business on transactional optimizing continuing to execute mix is on the growing market our based

that. That's think answer. I bit couple little of lens if and the a a helpful next could appreciate I about really years. And the industry zoom out over the maybe

in changing to public of market you kind we move tighter I XX% freight some the much, next more down, dynamics a in, now. of noted, I do of that sort outside how market guess, other in it all for maybe is the capacity, capacity cases, carriers, back Just the out excess you there's horn XX% get cut in some a and around So I you to extra at having half in Yellow growth see Or comes of of market there guess kind the capacity, sort profitable if you from of think perspective or go I have is forward? terms the that ability maybe cycle that price the industry? as in improvements play the curious see of mix environment? enough that's the might

Yes.

we're a that that onboard of from year our similar missing were think had had standpoint. I a quickly well and beat And the at demands the business excess we really think capacity, positioned to when middle without able last I meet that we customers able of really We we demonstrated for to growth. were that disruption. service

played same playing So that year. playbook the we last really, we're

grows that further business could have even We have lever transactional core if further. still the excess capacity. needed, the that down We tampen we

So I available. growth feel on great it's bring when to about our additional position

Our next with Brian JPMorgan. Ossenbeck question comes from

Let's go the back on improvements. service

Just improving point customers the been couple wanted Mastio is it's of to now, going I see a last from far. so again the survey focal over right know what's the years. feedback on but that of

along improve? things can of an start to So something year either would continue mix what are And see right in freight help bounce do bottom? the the you this the pricing, saying to if or start you customers that up that service next cycle now? Or think does be to kind if improve monetize of sort really you need when to

lot have We've continued levels, to have one we historically, our -- to customers really on spot improvements improved you scores efficiency, internal optimization execution, really out. own that excellence. a our since generates internal We efforts of NPS And about service I efforts, think that in which commitment to visibility. your good well a improve Yes. customers. shipment seeing throughput, improve my and because the opening we've our a internal as in and our made in And made when the surveys we're for last survey. service lot in area. measure comments, metrics our turn you quarter-after-quarter, Mastio you all our the consistently improve mentioned to with improve better of tactical when own came We do been a we've we've in

issues. network we better So visibility have into

and we much do popping And customers. whatever that infrastructure faster it we an around built if visibility. because that we network data can react those impacts the we it's see all all and the it whether of have So that's before is, resolve up, our issue labor, issues

estate real to service our level. I being our customers. NPS our plan, obviously the to a But second feel continue to we the like internal customers quarter, improvement, for difference long-term more with like metrics I've feel benefit capacity. we So high, throughout gives the our in they that's think a continued time service spent at And with and communicated that X-year customers of lot customers. that back value our translates feel just they've going

Yes.

describing improve price really, time. where our from just into is a we standpoint price. we're standpoint And -- a price be management over and cost to consistent our at op a income cost yes, obviously, winning through prop that price perspective, that the is plays place increases outperforming from from value to our both Just want a so Seth

just big we So retaining the is play of have. in definitely a prop the that there value and terms the getting increase customers

thing our would that just the comment in other The the market. is is on highest I price

a our So is really price already good place. at

opportunity a up on are we an other there's where so carriers And catch basis. with likely for price to

That's helpful. Okay.

market, sound improvement switch much doesn't an seeing expecting from that you're it broader to or to perspective. Just of like truckload the

how impact you some more general, of side? little maybe the offset July that the a on and here Asset-Light in would wanted get how to and typical peak freight seeing commentary the be some what just on spillover into in that that, you're of might ABF Just to truckload in and able season

indicator we overall really that space, MoLo bottom, we're our NPS. the at team, customers we're we appreciate great in perspective, things in team one lot things provide. and moving the have a we're we rapidly. we're provide not But see service. feel bottom that with truckload towards we a of how strong are improve confident like anything improvement. the Yes. the We're like truckload that seeing the high of I just a of telling a positioned, one of but job just and specifically mentioned that at mean, We kind That's there the feel service. great a others, from doing really are the time like we're an that's service of we going Seth is our points continuously and us value to

a we're So the now, that positioned market tells us coming seeing anything as lot in that improvement, we're dramatic recovers. like quarter. the well not a that there's of just for but third But others, right we're improvement looking

Moore Stephanie comes with from Jefferies. question next Our

place I initiatives the I second productivity initiatives some in quarter expectations that the to I And some year and both and mentioned give you touch Asset-Light actions business? of of think into on continue could progresses. you both the examples on Asset-Based wanted as so on the -- other that clearly cost and putting think driving maybe been you've the some side, of sides us more

go field, out we how history to challenging have through, And really Yes, Stephanie. have employees, When environments. shapes customers get people, listen do we've better. from service what long our cycles really to been think and what feedback you about to a and we the many that adapting our to we of to

better They've for in our that of invested labor I network We largest earlier. mentioned experts those those operational X far. to been visibility, so built only planning. we So tools locations

third going the year. X, well, to that visit throughout are they're centers distribution So as large throughout we'll quarter, the which next very continue and the

phases year. the We're last We We been in that, saw X that. mode benefit also rolled out from city rolling the have throughout pilot optimization quarter. out that material next second of a

finish creates people, have and We're in in those XXXX. I rollout what in and we rolling first we and process also we us Lithia levels, quarter customers that the saw to productivity software and in productivity out operationalize visibility XX we'll the better Olathe new employee, So and get the our we'll to think at improvements the the we that and that of of Springs quarter. in allows by fourth. mentioned see, dock third first think in for locations, implemented our

So to these see productivity online. we'll continue as real come initiatives estate

lot We pilot throughout now projects back phase also operationalize will the we have a of that in expect right half.

the innovation through we're of the pipeline That's projects of going half our that the about move efficiency as excited we really Matt to year. of upside talked and we're back about. see some So the gains

just for cycle you're us to out business. time to And of an Great. I really this. extent magnitude overall I'd from some that standpoint, we've the but would or of the not gears what side thoughts love heard switching we the to truckload freight get that hear exits the then now, hearing your of hope capacity on think to

So supply exits I'd side love to equation. hear thoughts on your overall capacity of the just on the

the Yes. what just a pace. I is slow at seeing coming the market. we're is mean It's capacity of out

kind seeing towards a a capacity a that a we for without more that of it's slow are the increase in so And out balance. But balanced right dramatic it's movement time the of market, taking movement market. to in is said, direction. get slow movement Like in coming some -- which to I just just demand,

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

it's When congratulations, per increases and per about the we Humphrey's the big contract. and X wage shifted Matt. versus David negative think pound in to because been best questions. the revenue Seth union And Really dynamic, of cost pound

that flip we more in pound? in the the to start Do could or that a that wait increase X? an And see it relationship do you with positive? something the When August to when for July, increases. the to January quarter? per GRI we Is chance Now get have revenue happen have to offset we fourth the do

Christopher. it's Jeff, Yes.

our was -- October October perspective, Just early of from last a year. last GRI GRI so

XX-month that I think XX- our normal trends are cycle. to in

kind close you would cycle if we're So do GRI there, up have. of that getting the normally we math to that

but we for wait don't little at still January this a probably But Okay. announcement that's see to to a away, haven't GRI, you have hopefully. ways made point any

said, does, plays XX, And anything history like If normally like out XX we I it yes, Yes. haven't months. yet, formally announced Jeff.

Okay. on great. it doing it that business doesn't question make My the thought for Asset-Light. be rocks feels to No, sense the but big Asset-Light business here, to LTL do looked is practice. like And and not we're I throwing with

recognize the I for million difference accounted swing. about the contingent consideration $XX the of Now in

us understand odd. we call not How would a argue we challenged. issue contingent just contingent we So little the because consideration consideration a of losses? businesses. thought business. because that's the the in bit business, losses a maybe business Or I little to of at? bigger what's these one looking the we better on on are there it's do quarter? shipments is going series no not headwind are it's used Why these that with Do is the going an we just emergency third I another ever raising getting that might Asset-Light have for so be at How all with But loss that and Asset-Light corner Panther down turn there's the Asset-Light MoLo on, side Because think than we'd see on? do we break

Yes.

But certainly, the walk about purchased the just I'll some Maybe revalue relates that I'll quarter. to little look like we we through business value, Matt. on that I about just do under outcomes structured every that and additional performance I standards for were the earnout we when potential your simulation it's consideration Jeff, entered well at the that that right. a something at bit you're that's business, a mean We we of touch some contingent accounting level. some because as made mean So there. high a feel we've business. positioned we're that questions metrics met into it comments

as you're as change year-over-year at at that. a we've on look there right, basis, so And that, we looked a was

that some do to potential of to the just with And getting just earn-out closer has period.

when that been the been that a coming would about results, is of we the that quarter third that that really outlook business, or not forward there's time -- the considering got I value efficiency as kind we're impact. then third certainly, results period from that giving quarter the have think impact. productivity exclusive projecting flat something the we're with just the terms second on we're That's that the say into I payout getting expectations to mean being closer. effect we're the in done great That's of not that about. impact of talking I we've to quarter. And But the doing. we've talking in and job dynamics work You

seen in You've that results. the

now our our appreciating. they're we delayed steps where if think good provide in lot to be different of and part to the business a you is mix there. with as does. certainly make to industry different it kind you're services been along the a those we're of is they that mean wins good and are comes bouncing a profitable business that, do late-stage when about period, in level, right keeping the that just are efficiency going mean of with businesses shift is business from I large think that significant international, I significant customers. and at the I some we're a know that more on pipeline is managed come we the but I customer turn than customer I having forecast, But Certainly, transportation and on little and well, technology very of growth that do that that a right. others And we're The spot. And the continued satisfaction very all again, business in good so of solution, Expedite talked right sure and service to we that has discussions wins part with bottom anticipating. mean is will that solutions part of that bit customers we're I taking earlier truckload look in there. that are going that prioritizing business in come turn. the the here, to chunks, were very maybe business side has business in we multiple on a that position when mean, seeing in we're interest board. of the there's the relationships

Yes.

asset-light Matt I just talking a logistics solutions important strategic Jeff, that managed decision just with speak this be about. I business the that to the our solutions is able company have. to It's extremely -- the to was want ground Judy. truckload, do own that solution expedite, to customers we like has to with we to do just

market have the changes turns when I all execute because are positioned to when do of part is right helped I us -- better carrier mean we set that integrated conversations. but spot environment. in solution right with is this demand of that. We're customers -- well of story well customer that it about. these here, well some be to no with that that's feel we we the a our value. I'm we the conversations, of And market go us unusual, that do that and seen. so and conversations to a it's the And And to a have the through -- when we great in market that's customers, really positioned it's with market capacity we've able And have again, we into shareholder disruptions

so other had And change. just report I've performing Judy. quarter, terms worst much asset-light than to -- operating that. this yours by in get consideration. a just contingent I But done It's XX historically, that's divisions it's and of the margin is far of that better lot

just [indiscernible] what's little weighing I'm this to trying out a more on So figure else's...

a -- story all that look all agree, you're of can what those And business. saying, in help not results But on have that would I I told the dollars know price, way operational something that's none are be in when just the we price the that will we That's of to the I And for a XXXX. there. as what wouldn't which operation purchase we as us operationally, we it. the part put of for to of overall account saying we're that, but know that liability the because the part I think means clarify. to Yes. put you're company, purchase pay able that contingent if -- Jeff,

the get Can operating margin? the we Are loss? saying When think specifically you say dollar I should versus that's that revenues? one loss be XQ When clarification. I heard. amount just operating you of the you flat Are what we're operating say what flat, XQ, saying I saying Are you is talking about?

Yes. I think... mean I

improve talking particularly We're second We about $X.X loss had. operating hopeful now, quarter. we the We're million loss had that, Yes. to but on right the non-GAAP in based that operating a sorry, we're expecting that move July, quarter. same as we be the seeing to as the trends we we're third -- that saying in the roughly to we're at level move that to on

Thanks, in we got Jeff. can we've more so looks take it one like question. the more queue, one Operator,

Perfect.

Morgan Ravi Stanley. today comes Our with final from question for Shanker

macro? those industry-leading initiatives Great. it industry? bit little Maybe can ahead going be initiatives. from to up the kind and a a initiatives Or to to of we with much going lift up up quantify you you're there OR these way rest And follow are the on of also, get switch Is to pulling of catching the irrespective here? initiatives would as characterize how productivity an you alone, of

years. guidance to really there And towards. OR that's the XX% we're We leaning few and tried we've where to our past provide Yes. consistently XX% get margin, of the long-term over

Page of last improvement the the point that So over if we've few had believe XX presentation, XXX I look you it's at, years. basis earnings

like we've step we've leadership ABF about. made President we the talked really the we saw, feel the but a of because that's about in into role right and OR, coming plan those the excited direction Matt's estate work that he I why on lot more efficiency to improvements real spearheaded so of do, So a I'm got

we talked well. of depend with a runway things still of things that the lot need we the on So a of side efficiency obviously, We others top growth, about a have macro. feel like of the we've on in amount of the projects But line lot and have we hopper. as lot have

of future terms hard of good it's get but we're give about where phase, we and what some on to in going that's guidance this to through going. feel pilot So until we OR our to translate

follow-up. Got as it. Maybe a

long-term you I that there Or we that read the pipeline is what what sales by opened looks of that X, the in of months? like call XX means just think, can cycle kind next statistic? X, into anything for saying your kind XX%. Judy, up Is is the

good a necessarily that it year. Well, of the those were they the longer on a covers getting is where what sales we're But like although what's that from it's span it managed cycle the term, of that stages at -- but time, elements part into opportunities it's there later seeing I statistic of wouldn't characterize beginning as of it. are about longer-term we're the

that when I I of about maybe go the our what always fourth is latter So just XXXX. the team think quarter into into how see part wanted what it's and And I've we'll terms own the the which at do, the to is to really what's our company. outpace of to destiny on and going have that in growth if it's in negative particularly macro, control we

about though, think I And term day. it. the replenishing we anything, is super not that's think are or way It so I long it every

I closing back for turn call the will to over remarks. now Amy

day. for Have appreciate in We your interest Thanks a joining great us ArcBest. to today. everyone