ArcBest NASDAQ: ARCB reported first-quarter 2026 results against what management described as a “challenging operating environment,” citing severe winter weather, higher fuel prices and continued macro uncertainty. President and CEO Seth Runser told investors the company remained focused on executing its long-term strategy with discipline, while Chief Financial Officer Matt Beasley said “operational focus and cost control enabled us to navigate the challenging environment while continuing to position the business for long-term success.”
First-quarter results and segment performance
On a consolidated basis, ArcBest reported first-quarter revenue of $1.0 billion, up 3% year-over-year. Non-GAAP operating income was $13 million, down from $17 million a year earlier, and adjusted earnings per share were $0.32 compared with $0.51 in the prior-year period. Beasley said Asset-Based operating income declined $9 million year-over-year, while Asset Light generated non-GAAP operating income of $3 million, improving $4 million from last year.
In the Asset-Based segment, first-quarter revenue was $655 million, rising 2% on a per-day basis. The segment’s operating ratio was 97.3%, which Beasley said was 140 basis points higher than the prior year and 110 basis points higher sequentially. Daily tonnage increased 7%, driven by a 2% increase in shipments per day and a 5% increase in weight per shipment.
Beasley said revenue per shipment increased slightly, supported by higher weight per shipment, but noted revenue per hundredweight declined 4% primarily due to a shift in freight profile toward heavier shipments. On costs, he pointed to higher labor needs to support shipment growth, annual contract increases in union wage rates, higher fuel prices and increased depreciation tied to equipment investments.
In Asset Light, first-quarter revenue was $378 million, up 7% on a daily basis. Shipments per day increased 10% to a “new first quarter record,” as strong growth in managed solutions more than offset a strategic reduction in less profitable truckload volumes. Revenue per shipment declined 3%, which Beasley attributed to a greater mix of managed business, typically involving smaller shipment sizes and lower revenue per shipment, more than offsetting higher rates and fuel costs.
Beasley highlighted cost and productivity metrics in Asset Light, including a 15% decline in selling, general and administrative expense per shipment to “the lowest level on record” and record employee productivity, with shipments per person per day up 26%.
Demand, pricing, and early signs of tightening capacity
Runser said customer demand “has remained steady,” and management said it was seeing improving leading indicators. Runser pointed to manufacturing activity moving “into expansion,” and said truckload markets are showing “early signs of tightening as capacity continues to exit the industry,” driven in part by regulatory enforcement and higher operating costs.
In prepared remarks, Runser said Asset-Based daily shipments increased 2% year-over-year to nearly 20,000 per day, despite winter weather disruptions earlier in the quarter. He also emphasized pricing discipline, noting deferred price increases averaged 6% in the first quarter, which he described as the strongest result since the third quarter of 2022.
On the call, Runser told Morgan Stanley’s Ravi Shanker that demand trends have “started to stabilize,” though levels remain below mid-cycle norms. He said manufacturing and housing continue to pressure volumes, particularly weight per shipment, but added April tonnage and shipments increased sequentially and tracked “in line with normal seasonality.”
Management also discussed truckload market dynamics and potential “spillover” into LTL. Responding to Wells Fargo’s Chris Wetherbee, Runser said spot rates were exceeding contract rates by 15%-20%, and that contract increases normalized for fuel were in the low- to mid-single digits year-over-year in the first quarter. He added ArcBest expects contract increases in the low- to mid-double-digit range as it moves through the second and third quarter. Eddie, who spoke during the Q&A, said the company was seeing “early signs” of business pushing into integrated logistics solutions and LTL, particularly in transactional markets, while cautioning it was not yet “a robust spillover.”
April trends and second-quarter outlook
Beasley provided April trends for the Asset-Based segment, saying shipments per day were down 1% year-over-year, while weight per shipment was up 6%, producing daily tonnage growth of 5%. He said revenue per shipment in April increased 10% year-over-year, driven by heavier freight profile and a 4% increase in revenue per hundredweight largely reflecting higher fuel surcharge revenue. Excluding fuel surcharge, revenue per hundredweight declined in the low single digits, which he attributed primarily to changes in freight profile.
Sequentially from March to April, Beasley said shipments per day and tonnage per day were each up 1%, while revenue per shipment improved about 4% due to a 4% increase in revenue per hundredweight, again largely tied to higher fuel costs. He noted that “fuel impacts became more pronounced in April” and discussed timing differences in fuel surcharge mechanisms during periods of rapid price movement.
Beasley said ArcBest historically sees roughly 350 basis points of operating ratio improvement from the first to the second quarter. “Based on current trends,” he said the company expects second-quarter performance to improve sequentially by approximately 400-500 basis points, reflecting momentum in the commercial pipeline, pricing execution and fuel price movement impacts.
In Asset Light, Beasley said April daily revenue was up approximately 24% year-over-year, driven by 17% shipment growth led by managed business, and revenue per shipment increased 7% on higher fuel costs and early signs of tightening capacity. Looking ahead, ArcBest expects second-quarter non-GAAP operating income in Asset Light to be approximately $1 million to $3 million.
Technology initiatives, efficiency, and ArcBest View launch
Runser emphasized ongoing investments in technology, network and operating tools, and announced the company plans to launch “ArcBest View” in May. He described the platform as enabling customers to quote, book and track shipments across ArcBest logistics solutions through a “single intuitive interface,” adding that it was developed in close partnership with customers and early feedback has been “very encouraging.”
The company also highlighted productivity initiatives. Runser said continuous improvement training has been implemented across about 75% of the network, generating $32 million in annualized cost savings to date, with additional benefits expected as implementation continues. He said ArcBest’s AI-enabled city route optimization project has delivered $15 million in annualized savings so far and is expected to have phases two and three fully operational “in the coming months.”
Runser framed the company’s AI strategy as “practical and disciplined,” emphasizing governance, security and applying “the right tools for the right needs.” He said AI-driven initiatives and digital tools are intended to improve decision-making, lower cost to serve and offset inflationary cost pressures.
Capital allocation, balance sheet, and long-term targets
Beasley said ArcBest returned more than $10 million to shareholders in the first quarter through share repurchases and dividends and expects to remain opportunistic with repurchases while prioritizing high-return organic investments and maintaining a disciplined approach to leverage. He described the balance sheet as a “significant strength,” with ample liquidity and a net debt-to-EBITDA ratio “well below the S&P 500 average.”
Management reiterated confidence in long-term targets outlined at the company’s Investor Day. Runser told Jefferies’ Stephanie Moore that the company did not assume a significant freight recovery in 2026 when setting targets, but said ArcBest is seeing “some early signs of recovery before we anticipated,” while adding more consistent demand is still needed. He discussed operating leverage across both segments, and referenced Investor Day modeling for operating ratio improvement in Asset-Based and profit opportunities in Asset Light tied to improved market conditions, including expedite recovery and truckload rate normalization.
During the Q&A, Runser also addressed industry scrutiny around broker safety and compliance, saying safety is “fundamentally how ArcBest operates” and describing a structured compliance-based process used to select and monitor third-party carriers. He said the company does not expect recent developments to change its outlook or approach because safety and compliance are already embedded in operations.
About ArcBest NASDAQ: ARCB
ArcBest Corporation NASDAQ: ARCB is a transportation and logistics company that offers comprehensive freight and supply chain solutions across North America. Founded in 1923 as Arkansas Best Freight System, the company has evolved into a diversified service provider with both asset-based and asset-light operations. Its core businesses include less-than-truckload (LTL) shipping through ABF Freight, expedited full-truckload services via Panther Premium Logistics, and a range of logistics and supply chain management services under its ArcBest Integrated Logistics division.
The company's asset-based operations also encompass FleetNet America, a provider of emergency roadside assistance and maintenance services for heavy-duty vehicles.
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