Transportation and logistics provider ArcBest managed to avoid a drop in daily revenue in November, but maintained an unfavorable margin outlook for the fourth quarter, according to a Securities and Exchange Commission report released Monday.
Asset-based unit ArcBest (NASDAQ: ARCB ), which includes results from its less-than-truckload subsidiary ABF Freight, reported a 1 percent year-over-year increase in daily revenue in November, compared with a 1.9 percent year-over-year decline in October.
(November 2025 included one less business day than November 2024.)
November’s earnings result was driven by a 3 percent year-over-year increase in tonnage, partially offset by a 2 percent decline in earnings per hundredweight, or yield, including and excluding fuel surcharges. The tonnage increase in November was due to a 3% increase in shipments with no change in weight per shipment.
By comparison, October’s revenue decline was driven by a 1.2 percent decline in tonnage and a 0.7 percent decline in performance.
Asset-based tonnage returned to positive territory in November. In a two-year comparison, ArcBest’s November tonnage fell just 3.2 percent, the smallest decline in more than two years. The carrier is focused on winning more shipments from its core LTL customers, but the softness in the production mix has led to lower shipment weights.
November data released on Monday showed that the manufacturing sector contracted in 35 of the past 37 months. The PMI registered 48.2 for the month, 50 basis points worse than October’s level. (A reading above 50 indicates expansion, while a number below 50 indicates contraction.) The new orders index fell two percentage points to 47.4.
ArcBest slightly increased guided tonnage in the fourth quarter from its third quarter last month. This aircraft carrier has a negative tail wind of 7.3% of tonnage compared to last year.
Yields have fallen so far in the fourth quarter, even though year-ago comparisons were manageable (-2.7% in October 2024 and -1% in November 2024). It may be too early to assess the impact that winning new business will have on profitability and ultimately margins.
ABF imposed a general rate increase of 5.9 percent across several tariff codes on August 4, and the unit again raised mid-single-digit average contract rates in the third quarter.
“The pricing environment remains reasonable,” ArcBest said in the filing.
The asset-based unit typically posts 100-200 bps of sequential margin decline from Q3-Q4. The company reiterated its expectation of a 400 bps sequential decline this year due to “continued softness in the broader freight market and the impact of three fewer business days than in the third quarter.”
The guidance points to an adjusted operating ratio of 96.5% (the inverse of the operating margin), which would be 450 bps worse year-over-year.
ArcBest’s asset-light division, which includes truck brokerage, saw revenue decline in November. Daily earnings were down just 1% year-on-year in the latest month, compared to a 10.3% drop in October. Daily revenue rose 12% from October to November as shipments rose 12% and revenue per shipment was flat.
The company reiterated its outlook for an adjusted operating loss of $1 million to $3 million in the unit during the fourth quarter. After seven consecutive losses, this unit recorded the second consecutive operating profit in the third quarter.
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