ArcBest stems revenue declines in November, margin hurdles remain

Transportation and logistics provider ArcBest was able to stem daily revenue declines in November but maintained an unfavorable margin outlook for the fourth quarter, according to a Securities and Exchange Commission filing released on Monday.

ArcBest (NASDAQ: ARCB)’s asset-based unit, which includes results from less-than-truckload subsidiary ABF Freight, reported a 1% year-over-year increase in revenue per day in November compared to a 1.9% y/y decline in October.

(November 2025 included one fewer work day than November 2024.)

The November revenue result was driven by a 3% y/y increase in tonnage, which was partially offset by a 2% decline in revenue per hundredweight (yield), including and excluding fuel surcharges. The November tonnage increase was due to a 3% increase in shipments with no change in weight per shipment.

By comparison, the October revenue decline resulted from a 1.2% decline in tonnage and 0.7% dip in yield.

Asset-based tonnage flipped back into positive territory in November. On a two-year-stacked comparison, ArcBest’s November tonnage was down just 3.2%, the smallest decline in more than two years. The carrier has been focused on winning more shipments from core LTL customers, but softness across the manufacturing complex has resulted in lighter shipment weights.

November data provided on Monday showed the manufacturing sector has been in contraction for 35 of the past 37 months. The Purchasing Managers’ Index registered a 48.2 reading for the month, 50 basis points worse than the October level. (A reading above 50 signals expansion while one below 50 indicates contraction.) The new orders index fell two percentage points to 47.4.

ArcBest guided tonnage to be up slightly y/y in the fourth quarter on its third-quarter call last month. The carrier has the tailwind of a negative-7.3% tonnage comp from a year ago.

Yields have moved lower y/y so far in the fourth quarter even as the prior-year comps (-2.7% in October 2024 and -1% in November 2024) were manageable. It may be too early to gauge the impact the new business wins are having on yields and ultimately margins.

ABF implemented a 5.9% general rate increase across multiple tariff codes on Aug. 4, and the unit again averaged mid-single-digit contractual rate increases during the third quarter.

“The pricing environment continues to be rational,” ArcBest said in the filing.

The asset-based unit normally records 100 to 200 bps of sequential margin deterioration from the third to the fourth quarter. The company reiterated the expectation for 400 bps of sequential degradation this year, which is expected to be “driven by continued softness in the broader freight market and the impact of three fewer workdays compared to the third quarter.”

The guide implies a 96.5% adjusted operating ratio (inverse of operating margin), which would be 450 bps worse y/y.

ArcBest’s asset-light segment, which includes truck brokerage, saw revenue declines narrow in November. Revenue per day was off just 1% y/y in the recent month compared to a 10.3% decline in October. Revenue per day increased 12% from October to November as shipments were up by 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. The unit recorded a second straight operating profit in the third quarter after seven consecutive losses.

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