ArcBest Corp.
Arcb Trucks 2

ArcBest shows shipments boost post-Yellow

Aug. 29, 2023
The No. 29 FO500 carrier’s executives say they are shifting capacity toward core less-than-truckload business and boosting their profitability after Yellow, the third-largest LTL, ceased operations and filed for bankruptcy this month.

Time to count ArcBest Corp. as one of the beneficiaries of the demise of Yellow Corp.

Executives for Fort Smith, Arkansas-based ArcBest, which is No. 29 on the 2023 FleetOwner 500 list of the top for-hire carriers, told investors on Aug. 28 that shipment volumes at their asset-based segment have surged 20% since June, thanks to a less-than-truckload segment that “is changing each day.”

The ArcBest execs said they’ve been able to push through price increases for customers coming over from Yellow, once the third-largest LTL in the country, and shrink their allocation to lower-margin business booked through its dynamic pricing platform.

See also: Can smaller fleet operators gain any of the freight left by Yellow?

“Recent changes in LTL market dynamics have contributed to improved revenue trends,” ArcBest executives wrote in a filing with the U.S. Securities and Exchange Commission. “We are adapting and responding to achieve growth in our core business while maximizing profitability.”

Yellow's exit improves other fleets' LTL business

A month ago, Chief Financial Officer Matt Beasley told analysts and investors that ArcBest had seen core LTL shipments climb 10% from June levels after Yellow executives in late July ordered their trucks to no longer haul freight, closed the company’s terminals, and began laying off around 30,000 employees. On the heels of reporting their second-quarter earnings, ArcBest's Beasley and Chairman, President and CEO Judy McReynolds and other leaders at that company said they were targeting 19,500 total shipments per day, down from nearly 21,000 during Q2.

ArcBest's target now is 20,000 per day—and includes more shipments that are more profitable—in the wake of Yellow's exit from the marketplace. Yellow, the former No. 6 FleetOwner 500 for-hire carrier, saw its 40,000 daily shipments depart over the course of a week after the International Brotherhood of Teamsters threatened a strike over payments that Yellow had missed to the union's pension and health care benefits fund.

See also: Old Dominion jumps into Yellow bidding with $1.5B for terminals

In detailing an upswing in their business on Aug. 28, ArcBest executives joined their peers at Saia Inc. and XPO Inc., among others, in realizing improved business.

One distinction: ArcBest is on productive terms with the Teamsters union, having last month finalized a new five-year contract that McReynolds said in late July “sets the stage for future growth and investment.” In their Aug. 28 SEC filing, ArcBest execs said that labor deal has increased costs in their asset-based division by three to four percentage points.

Also detailed in the filing is the impact on shipment weights of Yellow customers’ migration. Defunct Yellow's average shipment weight was lower than most of its competitors, and ArcBest said Aug. 28 that its weight per shipment this month has been 9% lower than in August 2022. This June, the year-over-year decline was 5.3%; in July, it was 6.5%.

Shares of ArcBest (Ticker: ARCB) slipped slightly Aug. 28 to close at $103.48. They have risen nearly 10% over the past six months, growing the company’s market capitalization to nearly $2.5 billion. Those of Yellow (Ticker: YELLQ), which were delisted by the Nasdaq earlier this month and now trade over the counter, lost nearly 20% of their value on the day to close around $2.03 per share.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare InnovationIndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.

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