ArcBest’s second-quarter results showed operational improvement in both of its business segments. The company benefited from heavier shipment weights in its asset-based operation, while cost initiatives helped push its logistics business back into profitability. For a publicly traded less-than-truckload carrier, the report also offers a relatively rare look at how pricing, freight mix and network efficiency are moving in a part of trucking with limited public data.

Shipment weights rise as truckload freight returns

ArcBest’s (NASDAQ: ARCB) asset-based unit, which includes less-than-truckload subsidiary ABF Freight, reported a 10% year-over-year increase in revenue to $784 million. Tonnage per day rose 5%, as a 3% decline in shipments was more than offset by an 8% increase in weight per shipment.

Year-over-year tonnage growth was relatively steady throughout the quarter, rising 6.1% in April, 4.6% in May and 4.1% in June. On a two-year stacked basis, the comparisons were up 10%, 11% and 7%, respectively.

Tonnage growth accelerated in July, increasing 8% year over year, or 9.3% on a two-year stacked comparison. Management said on a Wednesday call with analysts that tonnage normally declines 4.6% from June to July, but this year it is down only 1%.

Some freight lost to a weak truckload market has returned as truckload spot rates have risen. That has driven average shipment weights higher. ArcBest is capturing low-double-digit rate increases on truckload shipments.

Revenue per hundredweight, or yield, increased 4% year over year. Gross yield growth was supported by higher fuel surcharge revenue, as diesel prices were 50% higher year over year in the quarter. Excluding fuel, yield was flat year over year, though heavier shipment weights weighed on the calculation. Yield excluding fuel was up by a low-single-digit percentage from the first quarter to the second quarter.

The heavier weight profile in July, with shipment weight up 11% year over year, pushed yield down 1% during the month, or down by a low-single-digit percentage excluding fuel.

Contractual rate increases averaged 5.8% during the period, up 9.8% on a two-year stacked basis.

ArcBest implemented a 5.9% general rate increase for LTL services in both of its business units on June 22. This year’s GRI came six weeks ahead of the 11-month cadence the company has followed in recent years. Management said the latest increase is “holding very well,” even though such moves can be difficult to pass through in soft markets.

The asset-based unit posted a 90.8% adjusted operating ratio, or inverse operating margin, which was 200 basis points better than a year earlier and 650 basis points better than the first quarter. The result matched management’s guidance for 600 to 700 basis points of sequential improvement. The company expects no material sequential change in adjusted OR in the third quarter, in line with historical seasonal patterns. That outlook implies 170 basis points of year-over-year improvement.

Asset-light business turns the corner

ArcBest’s asset-light segment, which includes truck brokerage, reported a 28% year-over-year increase in revenue to $439 million. Daily shipments rose 15%, while revenue per shipment increased 12%. The company’s managed transportation offering recorded record daily volumes during the period.

The segment generated adjusted operating income of $6.3 million, above recently raised guidance of $3 million to $5 million. Purchased transportation expense increased 210 basis points year over year to 86.5% of revenue as tighter capacity pushed spot rates higher. Selling, general and administrative expenses declined 12% because of productivity initiatives, and shipments per person per day increased 35%.

ArcBest is forecasting adjusted operating income of $6 million to $8 million for the third quarter.

Restructuring aimed at 2028 targets

Earlier this month, ArcBest announced a brand restructuring and said it was reducing its workforce by approximately 2%. The actions also include closing 10 LTL terminals, representing 1% of dock doors.

The company said the initiative is expected to create a $40 million cost-savings run rate by the first quarter. Those savings support ArcBest’s 2028 financial targets and are not incremental. About 75% of the cost actions are in the asset-based unit, with most of the remainder in the asset-light business. Roughly $2 million is tied to the shuttered Vaux business.

ArcBest also launched ArcBest View, a digital logistics platform designed to manage workflows while providing visibility across modes. The changes leave the company on track to meet the 2028 targets it outlined during its investor day last September.

Shares fall after earnings release

ArcBest reported a second-quarter headline net loss of $13.8 million, or 62 cents per share, on Wednesday before the market opened. Adjusted earnings per share were $2.38, excluding restructuring, impairment, technology and other nonrecurring costs. That was 12 cents ahead of consensus and $1.02 higher than a year earlier.

Consolidated revenue rose 16% year over year to $1.18 billion, slightly above the $1.17 billion consensus estimate.

Shares of ARCB were down 7.6% at 10:54 a.m. EDT on Wednesday, compared with a 0.8% decline in the S&P 500.

ArcBest is one of a small number of publicly traded less-than-truckload companies, and its quarterly results offer a look at a trucking subsegment for which there are limited public datasets.