ArcBest again swaps freight for better yields in February

Revenue declines ease in month as LTL carriers await market turn

Sideview of an ABF tractor and LTL trailer on a highway

ArcBest reports a 14% y/y tonnage decline in February following an 18% decline in January. (Photo: Jim Allen/FreightWaves)

ArcBest continued to execute a freight swap during February, replacing transactional shipments with more freight from key accounts. The actions led to another decline in tonnage, which was mostly offset by higher yields that are supportive of margins, a Friday filing with the Securities and Exchange Commission showed.    

The company’s asset-based unit, which includes less-than-truckload operations, reported a 3% year-over-year (y/y) decline in revenue per day during February, an improvement from a 7.3% decline in January. Tonnage was 14% in the month (down 18% in January), with revenue per hundredweight, or yield, increasing by 13% in both months. The yield increases were nearly double the increase the carrier booked in the fourth quarter.

Table: Company reports

By comparison, ArcBest’s (NASDAQ: ARCB) asset-based revenue was down just 0.2% y/y in the fourth quarter. However, the company has tougher first-quarter tonnage comparisons than other carriers after it onboarded spot business last year to keep its network full and maintain head count to avoid an arduous rehire process when the market turned. The LTL industry got a shot in the arm last summer when Yellow Corp. (OTC: YELLQ) shut down. Following Yellow’s exit, better freight opportunities have allowed ArcBest to replace those spot loads.

Severe winter storms in January as well as lower diesel fuel prices, which dictate fuel surcharge revenue, are also weighing on the y/y revenue comps.


Year-over-year volume growth at core accounts accelerated again in February.

“Despite the softer freight environment, core shipments and tonnage for February 2024 increased on a year-over-year basis by approximately 13% and 8%, respectively, an improvement compared to January 2024’s year-over-year results,” the filing read.

Shipments and tonnage from core accounts increased 8% and 6% y/y, respectively, in January.

Weight per shipment was down approximately 10% y/y in both months due to smaller order sizes and mix changes. Lower shipment weights are amplifying the higher yield metrics.


ArcBest normally sees 400 basis points of margin deterioration from the fourth to the first quarter. The company was noncommittal on the expected sequential progression this year given the harsh weather as well as several cost headwinds and tailwinds. It noted “strong” pricing discipline and “cost reduction efforts and productivity improvements” as favorable levers.

“While most of our February metrics have shown improvement on a year-over-year basis when compared to January, the freight environment remains soft,” the filing stated. “We are well-positioned to capitalize on opportunities as the freight market improves and demand increases.”

The company’s asset-light unit, which includes truck brokerage, reported a 10% y/y decline in revenue per day during February as shipments increased 13% but revenue per shipment was down 20%.

Revenue per day was down 15% y/y in January.

Board wants to make M&A easier

ArcBest’s board recently proposed an amended certificate of incorporation requiring just a simple majority approval from shareholders for mergers and acquisitions. The prior requirement was two-thirds approval. Shareholders will vote on the amendment at the company’s annual shareholders meeting on April 26, a Monday filing said.

The change would make it easier for ArcBest to be acquired or merge with another entity. A year ago, speculation ramped that the company may be an acquisition target after Montreal-based TFI International Inc. (NYSE: TFII) revealed it held a 4% equity stake in ArcBest.

Deutsche Bank (NYSE: DB) analyst Ben Mohr said it’s unlikely a deal is pending.

“The bottom line is we don’t think these developments have much, if any, read across implications with respect to M&A. But rather an evolution in corporate governance matters,” Mohr said in a note to clients Thursday evening.


ArcBest’s Monday filing also said the board already lowered the voting requirement to amend the bylaws from 75% to a majority.

More FreightWaves articles by Todd Maiden

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