ArcBest boosted profitability in the third quarter by selectively choosing higher-weight freight through its dynamic quote pool strategy, which increased revenue per shipment by 70% since 2019. The company's focus on heavier shipments and higher-margin business drove Q3 revenue to $1.21 billion and net income to $51.7 million, while capitalizing on a tighter truckload market.
- Q3 revenue reached $1.21 billion, up from $1.05 billion year-over-year, with net income climbing to $51.7 million
- ArcBest's dynamic quote pool, launched in 2019, increased revenue per shipment by 70% through selective freight strategy
- Weight per shipment rose 13% to 1,204 pounds while daily shipments declined 3%, pushing daily tonnage up 9.6%
- Billed revenue per shipment increased 14.2% to $610.78, demonstrating the success of targeting higher-margin freight
- October momentum continued with tonnage up 15% year-over-year and weight per shipment up 14%, outpacing typical seasonal decline
A tighter truckload market and a more selective freight mix are boosting margins at ArcBest (CCJ Top 250, No. 19).
Third-quarter revenue climbed to $1.21 billion from $1.05 billion a year earlier. Net income was $51.7 million compared with $39.3 million from the same period last year.
“We’re not assuming a significant freight recovery, but we’re seeing some early signs that are encouraging,” said President and CEO Seth Runser in a call with analysts. He cited early signs of improvement in building materials, automotive, food service and third-party logistics.
At ABF Freight, daily shipments slipped 3% to about 20,460, but weight per shipment rose 13% to 1,204 pounds, pushing daily tonnage up 9.6%. Billed revenue per shipment increased 14.2% to $610.78.
The company launched the dynamic quote pool in 2019 to help select freight to maximize profitability, and revenue per shipment in the pool has increased 70%.
The gains reflect the expansion of ArcBest’s dynamic quote pool and a more intentional approach to selecting freight, said Chief Financial Officer Matt Beasley.
The heavier freight profile pulled revenue per hundredweight, excluding fuel surcharge, down on the single digits, Beasley said. The 1.1% increase in revenue per hundredweight was attributed to fuel surcharges.
Chief Commercial Officer Eddie Surg said ArcBest’s 2025 growth was profitable but came with a different freight profile. Over the last four quarters, the company had focused on a more profitable mix into the less-than-truckload (LTL) network.
“That emphasis on larger weight shipments has kind of coincided with truckload tightening, which has given us some opportunities to really kind of, both from a transactional standpoint and a core standpoint to go after the business that we think produces the most profit for our system,” Sorg said.
Any improvement in demand should lift weight per shipment, he added, which would let ArcBest improve yield at a faster pace.
Executives also pointed to truckload spillover into LTL. “I think we’re still early stages into that, but we are seeing that continue,” Runser said.
Momentum carried to October, Beasley said. Tonnage rose about 15% year over year, with weight per shipment up 14% and shipments per day up 1%. Runser said this is ahead of typical seasonality: tonnage fell only about 1% from September to October, compared to a normal decline of roughly 3.4%.
Contract renewals averaged a 5.1% increase, and Sorg said pricing is improving from earlier this year and last year. “We did target some lower revenue business, which is generally tied to lower weight business, and so that's helping us really achieve a higher weight per shipment, higher revenue per shipment, and ultimately a higher profit per shipment,” he said.
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Labor and cost pressures
The company saw cost inflation across different areas of the business, Runser said. Wage and benefit increases averaged about 3.2% all-in for 2026, with wages rising in July and health, welfare and pension contributions in August. The 2027 increases are already negotiated, which Runser said gives certainty on labor inflation.
ABF salaries, wages and benefits fell to 48.1% of revenue from 51.0% a year earlier. Meanwhile, fuel, supplies and expenses rose to 12.8% from 11.3%, and rents and purchased transportation edged up to 11.6% from 11.2%. Shipments per dock, street and yard hour declined 2.1%.
Beasley said the carrier expects normal inflation-related cost increases in 2027 but plans to offset them through growth in its Asset-Light business, pricing strategy, technology and restructuring savings. The restructuring program is expected to reach its full $10 million in quarterly savings in the first quarter.
Matt Godfrey, president of ABF Freight, said hiring is on track to come in slightly below last year and above 2024, with recruiting costs has scaled with employees needed to be hired.
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Segment breakdown
- Asset-based segment: Revenue rose 9.9% per day to $798.6 million. Non-GAAP operating income was $76.3 million, up from $54.4 million. The GAAP operating ratio was 90.5%, compared with 90.3% a year earlier, which included a large gain on service center sales. Daily tonnage increased 9.6%, while shipments per day fell 3.0% and weight per shipment increased 13.0%.
- Asset-light segment: Revenue surged 25.4% per day to $446.3 million. Shipments per day rose 1.2%, and revenue per shipment jumped 23.8% amid tighter truckload capacity and higher fuel costs. Non-GAAP operating income was $14.4 million, up from $1.6 million.
Beasley said 2026 Asset-Based operating ratio will land around 92% and expects another year of improvement toward the company’s 2028 targets.
ArcBest repurchased $26 million of stock in the quarter and another $14 million in October.
