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DATE

Apr. 28, 2026 at 9:30 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Seth K. Runser
  • Chief Financial Officer — J. Matthew Beasley
  • Chief Operating Officer — Eddie Sorg

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TAKEAWAYS

  • Consolidated Revenue -- $1 billion, representing a 3% year-over-year increase, driven by both Asset-Based and Asset-Light segment growth.
  • Non-GAAP Operating Income -- $13 million, down from $17 million in the prior-year period, reflecting higher costs and a mix shift.
  • Adjusted EPS -- $0.32, compared to $0.51 in the same period last year.
  • Asset-Based Segment Revenue -- $655 million, up 2% on a per-day basis year over year.
  • Asset-Based Operating Ratio (ABS OR) -- 97.3%, which is 140 basis points higher year over year and 110 basis points higher sequentially, reflecting increased costs and a heavier shipment mix.
  • Daily Tonnage (Asset-Based) -- Up 7%, including a 2% rise in shipments per day and a 5% increase in weight per shipment.
  • Deferred Price Increases -- Averaged 6% for the quarter, marked as the company's "strongest result since 2022."
  • Dynamic Quote Pool -- Enabled greater real-time pricing selectivity, contributing to improved yield and profitability.
  • Annualized Cost Savings from Continuous Improvement Training -- $32 million, with further benefits anticipated as implementation continues.
  • AI-Enabled City Route Optimization Project -- $15 million in annualized savings to date, with the next deployment phases expected to be fully operational within months.
  • Asset-Light Segment Revenue -- $378 million, up 7% on a daily basis year over year.
  • Asset-Light Daily Shipments -- Increased 10%, with Managed Solutions delivering another record and offsetting reduced truckload volumes.
  • Asset-Light Non-GAAP Operating Income -- $3 million, a $4 million year-over-year improvement.
  • Asset-Light SG&A Expense per Shipment -- Down 15% to a record low, attributed to productivity initiatives and a higher managed business mix.
  • Asset-Light Employee Productivity -- Shipments per person per day improved 26% year over year.
  • Capital Return -- Over $10 million returned to shareholders year to date, through share repurchases and dividends.
  • Balance Sheet -- Net debt to EBITDA ratio remains "well below the S&P 500 average," providing "ample liquidity," per management's statement.
  • Q2 Outlook (Asset-Based Segment) -- Management projects sequential non-GAAP operating ratio improvement of approximately 400 to 500 basis points, citing continued momentum in the commercial pipeline and the effects of recent fuel changes.
  • April Asset-Based Metrics -- Shipments per day declined 1% year over year, weight per shipment rose 6%, and tonnage per day increased 5%.
  • April Revenue per Shipment (Asset-Based) -- Up 10% year over year, with a 4% increase in revenue per hundredweight, mainly due to higher fuel surcharge revenue; excluding fuel, revenue per hundredweight declined in the low single digits.
  • April Asset-Light Metrics -- Daily revenue up about 24% year over year, daily shipments up 17%, and revenue per shipment up 7%, reflecting higher fuel costs and tightening truckload capacity.
  • Asset-Light Q2 Guidance -- Non-GAAP operating income expected to range from $1 million to $3 million, with the outlook based on continued yield discipline, cost management, and productivity gains.
  • ArcBestView Platform Launch -- Scheduled for May, enabling customers to quote, book, and track shipments across logistics solutions from a single interface.
  • PMI Indicator -- Management reported three positive months for manufacturing PMI, indicating that Manufacturing PMI has moved into expansion territory these past three months, which is an important directional indicator for freight demand and a tailwind for freight.
  • Spot vs. Contract Mix (Asset-Light) -- Remained approximately 50/50 through the first quarter, according to management.
  • Dynamic Revenue per Shipment -- Since the inception of Dynamic, as the quote pool has expanded, revenue per shipment has improved over 50%, per management comment.

SUMMARY

ArcBest (ARCB +1.07%) delivered higher consolidated revenue and daily shipment counts across key segments, but operating margins were pressured by cost inflation, heavier shipment profiles, and increased fuel expenses. Pricing discipline, as evidenced by a 6% average deferred contract renewal increase, was highlighted as a primary lever in offsetting soft underlying demand and volatility in core verticals. Technology and AI-driven initiatives, including widespread continuous improvement training and city route optimization, produced substantial recorded cost savings. Management cited constructive manufacturing indicators and supply rationalization in truckload markets, laying out clear sequential profit improvement targets and affirming confidence in long-term Investor Day objectives despite the evolving macro backdrop.

  • Management directly linked April shipment and tonnage growth to heavier dynamic and truckload-rated shipments, supported by an expanding digital quote pool.
  • ArcBestView, the company's new digital logistics platform, is set to debut in May, promising expanded customer self-service and integration of booking and tracking solutions.
  • Asset-Light productivity surged, with record employee throughput and structural cost reduction as strategic levers for scalable earnings improvement when demand recovers.
  • Management articulated that incremental profits in truckload brokerage scale directly with margin expansion, quantifying a $3.5 million profit gain per $10 of margin per shipment growth.
  • CEO Seth K. Runser emphasized "practical and disciplined" AI deployment aligned with operational and financial returns, differentiating ArcBest's asset-backed model from competitors.

INDUSTRY GLOSSARY

  • Asset-Based Segment: Business unit operating company-owned transportation fleets, providing core less-than-truckload services and related logistics.
  • Asset-Light Segment: Business unit focused on brokerage, managed logistics, and non-asset-centric solutions relying on third-party carrier capacity.
  • Operating Ratio (OR): Operating expenses as a percentage of revenue; a lower ratio indicates better operating efficiency in transport/logistics businesses.
  • Dynamic Quote Pool: Digitally powered system generating real-time freight pricing options based on live network and market variables.
  • Managed Solutions: Integrated logistics services in which ArcBest provides planning, coordination, and execution, often encompassing third-party capacity and end-to-end supply chain management.
  • SG&A Expense per Shipment: Selling, general, and administrative costs divided by shipment volume, used as a benchmark for operational efficiency.
  • ArcBestView: ArcBest's forthcoming cloud-based platform for unified quoting, booking, and shipment visibility across logistics services.

Full Conference Call Transcript

Seth K. Runser: Thank you, Amy, and good morning, everyone. The first quarter brought a challenging operating environment with severe winter weather, higher fuel prices, and continued uncertainty. Even so, we remain focused on what we can control: executing our long-term strategy with discipline and advancing initiatives that support profitable growth, efficiency, and innovation. I am incredibly proud of how the ArcBest Corporation team responded in a dynamic environment. They stayed disciplined, remained close to our customers, and continued delivering flexible, efficient, and integrated solutions to meet evolving needs. Customer demand has remained steady, and we continue to see improvement in our pipeline. While the timing and pace of a broader recovery remains hard to predict, conditions are becoming more constructive.

Leading indicators of manufacturing activity have moved into expansion, which is supportive of future freight demand. At the same time, 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 our customer conversations, there is an increasing emphasis on execution, reliability, and visibility, and those priorities align closely with how ArcBest Corporation serves its customers. Against that backdrop, we will launch ArcBestView in May. This platform enables customers to quote, book, and track shipments across our logistics solutions through a single intuitive interface. We developed ArcBestView in close partnership with customers, and early feedback has been very encouraging.

Combined with our integrated solutions and continued progress in our digital capabilities, this platform enhances our ability to help customers respond quickly, manage complexity, and build more resilient supply chains. Importantly, this launch reflects a broader set of capabilities we have been intentionally building over time. Our investments in the network, technology, and operating tools have strengthened execution today while expanding what we can deliver for customers going forward. We continue to advance the initiatives we outlined at Investor Day, and our team remains focused and aligned on achieving our long-term targets. Let me walk you through our progress for the quarter. In the Asset-Based segment, daily shipments increased 2% year over year to nearly 20,000 shipments per day.

While severe winter weather affected volumes and service earlier in the quarter, service has since normalized and remains at a high level. The investments we have made in our network, equipment, and labor planning tools position us to sustain strong, consistent service through the summer months and across the balance of the year. We also remain disciplined on pricing. Deferred price increases averaged 6% in the first quarter, our strongest result since 2022. That reflects our continued focus on revenue quality. In addition, the expansion of our dynamic quote pool has given us greater ability to make real-time pricing decisions, allowing us to be more selective and further optimize yield and profitability.

Demand for our Managed Solutions offering continued to build during the quarter, resulting in another record performance and double-digit growth in daily shipments. This momentum reflects a stronger pipeline, deeper customer engagement, and the value our team brings as they help customers manage increasingly complex supply chains. In truckload, we remain focused on optimizing freight mix and maintaining pricing discipline. Revenue per shipment improved meaningfully both year over year and sequentially, driven by a tighter capacity market, higher fuel prices, and improved yield quality. Across the business, we continue to make progress on efficiency and innovation initiatives. Continuous improvement training has now been implemented across approximately 75% of the network.

Teams are focused on process discipline, safety, and adoption of new tools, and that work is producing tangible results. To date, these efforts have generated $32 million in annualized cost savings, with additional benefits expected as implementation continues through the remainder of the year. We are also making meaningful progress with our city route optimization project and remain on track to complete the latest phases of deployment. This AI-enabled initiative is reducing manual work, improving route planning, and increasing asset utilization across the network. Phases two and three are expected to be fully operational in the coming months. To date, the program has delivered $15 million in annualized savings while also improving network efficiency and service.

The success we are seeing with city route optimization reflects a broader philosophy at ArcBest Corporation. We start with strong ideas, test them in the business, learn quickly, refine what works, and then scale with discipline. That approach is shaping how we deploy AI and is guiding the next wave of initiatives across our technology roadmap. Our AI strategy is deliberate and closely aligned with our business priorities. We are deploying AI where it can create meaningful operational and financial benefits, and we are embedding AI capabilities in the core initiatives across the organization. Just as important, we are not forcing a single solution across a complex business. Instead, we are applying the right tools for the right needs.

This approach allows us to move with speed and purpose while maintaining the governance required to ensure these solutions are secure, responsible, and scalable. We believe AI delivers the most value when it strengthens our people and enables better decision-making. Our approach is practical and disciplined. We are investing in initiatives with clear return, partnering externally where it accelerates progress, and combining advanced technology with the network, processes, and expertise that already differentiate ArcBest Corporation. Most importantly, our customers remain at the center of this work. Digital tools are helping us serve them better, while the expertise, responsiveness, and reliability they expect from ArcBest Corporation remain unchanged.

Across our technology roadmap, including AI-driven initiatives, we are aligning resources, simplifying processes, and using data more effectively to help offset inflationary cost pressures, improve decision-making, and lower our cost to serve. That work is driving meaningful productivity gains across the business. In Asset-Light, for example, we continue to improve how we manage and optimize buy rates, particularly as market conditions shift. Initiatives such as offer collection, automated negotiation, and capacity sourcing augmentation are enabling faster, more informed decisions. Taken together, our technology and AI initiatives are strengthening our business. They are improving how we work, enhancing operational performance, and helping ArcBest Corporation execute effectively today while building for the long term.

Looking ahead, we remain focused on removing barriers and simplifying how work gets done across the organization. That means enabling teams to collaborate more effectively, move faster, and stay focused on what matters most to our customers. As we continue to align and streamline our operation, we are strengthening our execution today and building a more agile, scalable ArcBest Corporation for the future. With that, I will turn the call over to Matt to walk through the financial results.

J. Matthew Beasley: Thank you, Seth. Good morning, everyone. In the first quarter, disciplined execution, operational focus, and cost control enabled us to navigate the challenging environment while continuing to position the business for long-term success. On a consolidated basis, first quarter revenue was $1 billion, up 3% year over year. Non-GAAP operating income was $13 million, compared to $17 million in the prior-year period. Adjusted earnings per share were $0.32, compared to $0.51 in 2025. At the segment level, Asset-Based operating income declined by $9 million year over year, while Asset-Light generated non-GAAP operating income of $3 million, an improvement of $4 million from last year. Turning to the Asset-Based segment.

First quarter revenue was $655 million, up 2% on a per-day basis. The ABS operating ratio was 97.3%, which was 140 basis points higher than last year and 110 basis points higher sequentially. Daily tonnage increased 7%, reflecting a 2% increase in shipments per day and a 5% increase in weight per shipment. Our large and growing digital quote pool continues to improve our visibility into demand and expand our options within the network. That has allowed us to target certain heavier shipments that fit well operationally and generate attractive incremental profit contributions.

Revenue per shipment increased slightly, supported by the higher weight per shipment, but that was partially offset by a 4% decline in revenue per hundredweight, which primarily reflects the shift in freight profile toward heavier shipments. On the cost side, operating expenses increased for several reasons, including additional labor needed to support shipment growth, annual contract increases in union wage rates, higher fuel prices, and increased depreciation expense associated with our equipment investment. Turning to trends so far in April, shipments per day are down 1% year over year, while weight per shipment is up 6%, resulting in daily tonnage growth of 5%.

We are beginning to see modest improvement in truckload-rated shipments which, along with other changes in freight profile, is contributing to the higher weight per shipment. Revenue per shipment in April has increased 10% year over year, driven by the 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, primarily due to changes in freight profile. Sequentially, from March to April, weight per shipment is flat, shipments per day are up 1%, and tonnage per day is also up 1%.

Revenue per shipment has improved by about 4%, due to a 4% increase in revenue per hundredweight, largely reflecting higher fuel costs. Excluding fuel surcharge revenue, revenue per hundredweight was slightly positive on a sequential basis. Fuel impacts became more pronounced in April than they were in the first quarter, which included only one month of elevated fuel prices. Higher fuel costs increased fuel surcharge revenue, but they also raise operating costs for us across the network. While our fuel surcharge mechanisms are designed to recover higher fuel costs over time, periods of rapid fuel price movement can create short-term timing differences between when revenue is recognized and when those costs are incurred.

Historically, ABF’s non-GAAP operating ratio improved by approximately 350 basis points from the first quarter to the second quarter. Based on current trends, we expect second-quarter performance to improve sequentially by approximately 400 to 500 basis points. This outlook reflects continued momentum in our commercial pipeline, disciplined execution on pricing initiatives, and the impact of recent fuel price movements. Turning to the Asset-Light segment. First quarter revenue was $378 million, up 7% on a daily basis year over year. Shipments per day increased 10% and reached a new first-quarter record, as strong growth in Managed Solutions more than offset our strategic reduction of less-profitable truckload volumes.

Revenue per shipment declined 3% as higher rates associated with tightening capacity and increased fuel costs were more than offset by a greater mix of managed business, which typically involves smaller shipment sizes and lower revenue per shipment. We also made meaningful progress on the cost side. Selling, general, and administrative expense per shipment declined 15% to the lowest level on record, driven by productivity initiatives and a higher mix of managed business, which carries a lower cost to serve. Employee productivity also reached a record high, with shipments per person per day increasing 26%. As a result, the Asset-Light segment delivered non-GAAP operating income of $3 million in the first quarter. Turning to April trends for Asset-Light.

Daily revenue is up approximately 24% year over year, driven by 17% shipment growth led by our managed business. Revenue per shipment has increased 7%, reflecting higher fuel costs and early signs of tightening capacity in the truckload market. Looking ahead, we expect second-quarter non-GAAP operating income in Asset-Light to be in the range of approximately $1 million to $3 million. This outlook reflects continued yield discipline, active cost management, and improved productivity performance, which together provide a solid foundation for long-term profitable growth. Turning to capital allocation. We continue to take a balanced, long-term approach that supports growth while maintaining strong financial discipline.

Many of the network, technology, and productivity investments needed to support future growth are already in place. As market conditions improve, we believe the business is well positioned to benefit from improving demand without a meaningful increase in capital requirements, which should support attractive returns on invested capital. Returning capital to shareholders remains an important priority. In 2026, we returned more than $10 million through a combination of share repurchases and dividends. Looking ahead, we expect to remain opportunistic with repurchases based on share price while continuing to prioritize high-return organic investments and a disciplined approach to leverage. Our balance sheet remains a significant strength.

We have ample liquidity and a net debt to EBITDA ratio that is well below the S&P 500 average. This financial position provides flexibility to navigate uncertainty, invest where we see attractive returns, and respond quickly as opportunities emerge. As Seth said, we are staying focused on what we can control—executing our long-term strategy with discipline and advancing initiatives that support profitable growth, efficiency, and innovation. As we look ahead, we remain confident in our strategic direction and in our ability to deliver the long-term targets we outlined at Investor Day. We will now open the call for questions.

Operator: As a reminder, if you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. You will be limited to one question per participant. Your first question comes from the line of Ravi Shanker from Morgan Stanley. Your line is live.

Ravi Shanker: Great. Thanks. Good morning, everyone. At the top of the call you said you are seeing conditions becoming more constructive. Can you help unpack that a little bit—which end markets, maybe which parts of the country you are seeing that? And do you expect that to be fairly broad-based through the course of the year?

Seth K. Runser: Hey, Ravi. Thanks for the question, and good morning. We are seeing demand trends that have started to stabilize, though overall levels still remain below mid-cycle norms. Manufacturing and housing continue to pressure our volumes like we have talked about in the past, particularly around weight per shipment, which remains below normalized levels for the network. Despite these headwinds, we grew shipments by 2% in Asset-Based year over year, and our dynamic shipments are starting to trend heavier as well, reflecting improving freight selection. April tonnage and shipments have also increased sequentially and tracked in line with normal seasonality, which is an encouraging sign as we move through the rest of the year.

Our focus is on pricing discipline, service consistency, and cost control, while staying closely engaged with our customers during this volatile time with fuel prices and everything that is going on. Capacity fundamentals continue to move in a more constructive direction and provide the earliest sign of a more balanced market ahead. You have heard about ongoing truckload carrier exits, a tighter regulatory environment, and aging industry fleets—which makes me happy that we have invested in our fleet throughout this cycle. While the timing of the demand inflection remains uncertain, the supply rationalization is progressing. Manufacturing PMI has moved into expansion territory these past three months, an important directional indicator for freight demand.

Housing and automotive are still constrained but could improve if we get rate cuts later this year. As conditions normalize, our available network capacity, strong customer relationships, and pipeline position us well to capture incremental demand efficiently and effectively. I have spent a lot of time with customers over the last three months, and it is clear they are gravitating towards partners they trust—organizations that can bring consistency, insight, and stability during rapid change. We view markets like this as an opportunity, and we have made purposeful investments throughout this cycle to ensure we are positioned ahead of the next inflection. In short, we are investing, listening, and executing—delivering value for our customers and shareholders regardless of the broader environment.

Operator: Your next question comes from the line of Chris Wetherbee from Wells Fargo. Your line is live.

Christian F. Wetherbee: Hey. Thanks. Good morning. I wanted to pick up on some of the comments you made about TL-rated shipments and the broader truckload market—what it might mean in terms of volume shifting back over. It seems like on the margin you are seeing that. You noted regulatory tightening moving in your favor. As you think about the rest of the year beyond what you have seen so far in April, what does that opportunity look like? What would you expect to see in terms of a tailwind from a volume standpoint?

Seth K. Runser: Hey, Chris. Seth here. I will talk through the truckload side, and then Eddie can make some comments on truckload-rated business moving into Asset-Based. On the truckload side, most enterprise shippers are responding positively and granting increases where needed because they are seeing what is going on with capacity. We have seen a shift to shorter-term rate increases as well as mini-bids to mitigate our spot exposure while maintaining the service that our customers expect. Demand is more stable, but supply constraints continue due to increased costs and regulatory pressure. Spot rates are currently exceeding contract by 15% to 20%.

Normalized for fuel, we saw contract increases in the low- to mid-single digits in the first quarter year over year, and we expect low- to mid-double-digit increases as we move through the second and third quarters—this is on the truckload side. Moving forward, we will continue to optimize our truckload volumes, bring on profitable new business, and shed business that we cannot profitably execute. I have been really impressed by the team—Asset-Light delivered $3 million in profitability in the first quarter, versus $1.5 million for all of 2025. I will turn it over to Eddie to talk about truckload-rated shipments moving into the Asset-Based network.

Eddie Sorg: Yeah, Chris. This is Eddie. We have seen tighter truckload capacity producing higher spot rates, and combined with higher fuel prices, we are starting to see early signs of business push into our integrated logistics solutions and LTL. The first signs are in our transactional markets—we are up to over 250 thousand quotes a day—so we get early visibility into potential spillover from truckload to LTL. It is giving us a great opportunity to find the highest-quality revenue in those opportunities and then deploy dynamic pricing or one of our volume quote facilities to capture that business where it makes sense in our network.

I would not say it is a robust spillover yet, but there are early signs of some of that coming back to LTL and our integrated logistics offerings.

Operator: Your next question comes from the line of Jason Seidl from TD Cowen. Your line is live.

Jason H. Seidl: Thanks, operator. Good morning, gentlemen. I wanted to talk about your comment that we are not yet near mid-cycle. You are clearly getting much better pricing right now, which is pretty impressive. As we move towards mid-cycle demand, where do you see pricing going, all else being equal, in the truckload space?

Seth K. Runser: Hey, Jason. Good morning. Core LTL pricing continues to improve, supported by a rational market and the disciplined actions we have taken despite the softer environment. We expect that discipline to hold as market conditions evolve. Deferred contract renewals increased 6% in the quarter—our strongest result since 2022—and that reinforces the confidence and durability of our core customer relationships. Customers are still with us; they are just shipping less. As volumes recover and capacity tightens, we expect pricing discipline to persist and ultimately translate into further rate improvement. As volume improves, we also expect more core business from our current customers. Our strategy for dynamic quoted freight is unchanged, but its effectiveness improves as the quote pool expands.

A larger quote pool gives us more selection within the targeted freight universe, allowing us to choose what fits best in our network to deliver high-quality pricing and profitability. Those shipments have trended heavier as the pool has expanded over the past six months. As optionality increases, we get better pricing. Our core pipeline continues to strengthen, and as we get new wins, we gain flexibility to optimize mix and maximize incremental profit contribution. We have a long history of pricing discipline and evaluate books of business based on how each account performs in the network—not a single pricing metric. We remain focused on profitable growth, ensuring we are properly paid for the value we deliver.

We continue to make targeted investments in service and efficiency to enhance the customer value proposition while improving our cost structure. ArcBestView rolling out in May is another example. Feedback has been great, and we will continue to serve customers efficiently with pricing discipline through the cycle.

Operator: Your next question comes from the line of Scott Group from Wolfe Research. Your line is live.

Scott H. Group: Hey. Thanks. Good morning. With the OR guide for Q2 outperforming seasonality, can you add color on what is driving that—how much is flow-through from fuel versus tonnage getting better? And on fuel, in prior big diesel increases we have typically seen a bigger spike in revenue per shipment and revenue per hundredweight. Is there anything different about how we should think about fuel for you right now?

J. Matthew Beasley: Hey, Scott. As we think about first quarter moving to second quarter, the outperformance versus what we would expect is broad-based. If you look at revenue per day, shipments per day, daily tonnage, weight per shipment, revenue per hundredweight—across all of those, our current projection for the second quarter is outperforming the ten-year history. Fuel was a factor in the first quarter given volatility, and we still would have been within our guidance range even without the fuel changes. Fuel changes are not the primary driver of the second-quarter outperformance. They are a contributor, but the strength across the business—both on the commercial side and on the yield side—is driving the sequential OR performance.

Historically we see around 350 basis points of improvement moving from the first to the second quarter, but when you take into account the strength across revenue, shipments, tonnage, weight per shipment, and pricing, that puts us in the 400 to 500 basis points of improvement we are projecting.

Operator: Your next question comes from the line of Jordan Alliger from Goldman Sachs. Your line is live.

Jordan Robert Alliger: Hi. Morning. I wanted to come back to weight per shipment. You have mentioned your changing freight profile and mix is a big part of it. Historically, weight per shipment has often been correlated to improvement in the economy. Is some part of the weight per shipment strength you are seeing—even into April—related to the economy, or is it truly just mix shift?

Seth K. Runser: Hey, Jordan. Good morning. Our weight per shipment on core business is still impacted by the softer manufacturing economy, which can cause shippers to reduce shipment size. Our retention is in a great place, and we are starting to see core produce more. Dynamic shipments have been trending heavier, which impacts weight per shipment and is a direct result of expanding the quote pool—it allows us to be more selective in real time, optimizing yield, network, profile, and profitability. That increased visibility and optionality allow us to accept certain heavier shipments that fit well within our network.

In April, year-over-year weight per shipment is up about 6%, impacted by heavier dynamic shipments and a bit of truckload-rated shipments that Eddie mentioned earlier. We are beginning to see modest improvements, but it is still early. As a reminder, we are impacted a bit more than others on weight per shipment because our U-Pack service ties to the housing market. With housing where it is and interest rates elevated, it has resulted in fewer household goods moves—generally smaller in shipment count but heavier in nature. Normally, from first to second quarter, we see U-Pack improve, but it is still below historical norms, leaving operating leverage.

We believe more truckload freight will move back into LTL as capacity normalizes in truckload, and our managed pipeline continues to grow. As managed grows, it feeds other service lines and we can select the best freight for the network. We have been through many cycles. There is still uncertainty, but I am proud of the team’s execution, customer engagement, and pricing discipline. We are built for any environment, and customers appreciate partnering with us when fuel moves up or capacity tightens. We focus on saying “yes” and delivering.

Operator: Your next question comes from the line of Bruce Chan from Stifel. Your line is live.

J. Bruce Chan: Thanks, operator, and good morning. On the Asset-Light business, you have been focused on productivity. It seems like a good chunk is coming from the mix of managed business. Assuming we are kicking off the cycle here, how are you thinking about shipment growth and the need for additional headcount in truck brokerage? And what is the spot versus contract mix there?

Seth K. Runser: Hey, Bruce. I am really proud of the team for delivering $3 million in non-GAAP operating income in the first quarter—versus $1.5 million for all of 2025. We are encouraged by continued truckload capacity exits. We saw strong shipment growth led by Managed, which had another record quarter, reflecting investments we have made to position Managed as a truly integrated logistics company. Operating expenses were lower, and we ended with record-high productivity in Asset-Light and record-low SG&A cost per shipment, all contributing to improved productivity. This comes from technology investments to grow without adding headcount and developing our employees to be ready for the next cycle.

Shipments and revenue are strengthening in April—we noted our operating income range of $1 to $3 million for Q2 in our 8-K. We continue to align costs and resources to business levels. I am also excited that Mac has three months under his belt; he has been a huge addition. We are improving profitability of our account base and focused on productivity with technology deployments—we are still in the early stages of a lot of that.

J. Matthew Beasley: And, Bruce, on spot versus contract mix, over the last year it has been roughly a 50/50 split, and that is the level we saw as we moved through the first quarter as well.

Operator: Your next question comes from the line of Tom Wadewitz from UBS Financial. Your line is live.

Thomas Richard Wadewitz: Great. Good morning. Circling back on LTL pricing. In 2Q, revenue per shipment sounds like it is up nicely in April, but it also sounds like a lot of that is fuel. What is the lag we should consider with the stronger 6% contract renewals and also weight per shipment? Ex-fuel revenue per shipment sounded flattish in April versus March. When do we see improvement in ex-fuel revenue per shipment?

Seth K. Runser: Thanks, Tom. Fuel surcharge is one component of pricing and generally protects us as fuel prices increase and helps customers as prices decrease. Fuel surcharge covers more than just over-the-road fuel—there is propane for forklifts, rail, purchase transportation, and other costs—so it is not just on the freight we move. Eddie can talk about yield and timing.

Eddie Sorg: From a yield perspective, we really sharpened focus in the second half of last year, and we had a strong result in the first quarter with over 6% increases. We are building to a better overall mix in core LTL. With fuel moving up, it brings higher revenue but also higher cost, and the timing between fuel surcharge collections and underlying costs can make it harder to see the benefit in the near term. Overall, we feel good about the mix of business and our yield discipline. We are committed to continuing to improve LTL pricing.

Confidence comes from strong growth in 2025 that is continuing in 2026, a robust sales pipeline—especially in Managed Solutions—and our expanding quote pool, which lets us further adjust business mix to secure the most profitable freight for our systems and network. Even if fuel moves up or down, the yield fundamentals remain strong.

Operator: Your next question comes from the line of Brian Ossenbeck from JPMorgan. Your line is live.

Brian Patrick Ossenbeck: Good morning. Thanks for taking the question. On recent headlines in truckload brokerage—the risks of chameleon carriers, the Montgomery case, and potential extension of safety or liability risk to brokers—are you doing anything with your carrier base based on these headlines and potential regulatory or Supreme Court outcomes? And if liability is extended to brokers, what does that do for the industry?

Seth K. Runser: Thanks, Brian. Safety has always been fundamental to how ArcBest Corporation operates. While recent media attention has focused on specific situations, we remain focused on disciplined execution and consistent operating practices aligned with applicable laws and regulations. We use a structured, compliance-based process to select and monitor third-party carriers, with ongoing visibility into authority, insurance, and safety status. Carriers that do not meet requirements are not eligible to move freight for us. The FMCSA provides the national regulatory framework for carrier safety; we operate within that and invest in systems and processes to support disciplined risk management and operational consistency.

At this time, we do not expect these developments to change our outlook or approach to safety and compliance—it is already embedded in how we run the business. Customers expect us to operate safely and responsibly, and we maintain open, constructive dialogue to support their long-term goals. Regarding capacity, continued truckload exits due to bankruptcies and regulatory pressures—along with developments like Delilah’s Law and issues around non-domiciled CDLs—are constraining supply. We focus on what we can control and partner with customers to navigate uncertainty. With service in a great place, we feel positioned to lead and capture opportunities.

Operator: Your next question comes from the line of Stephanie Moore from Jefferies. Your line is live.

Stephanie Benjamin Moore: Hi. Good morning. I wanted to talk about your 2028 targets. When you originally gave those targets, the macro was in a different position than it seems to be today. Can you talk about progress toward those targets with a firmer freight environment and how you are thinking about them now?

Seth K. Runser: Hi, Stephanie. We have confidence in our long-term view and the targets we outlined at Investor Day. We did not expect a significant freight recovery in 2026 within those targets, so some of what we are seeing now is earlier than anticipated, but we still need more consistent demand. We are encouraged by truckload exits and three positive months of PMI readings. Geopolitical risk and higher fuel could impact inflation and rates, but supply-side effects are visible, and we are watching for further demand inflection. Across Asset-Based and Asset-Light, our focus is building a scalable, disciplined operation to fully capitalize on our initiatives and operating leverage.

Over the past several years, we invested in network, technology, and productivity, and remained disciplined on pricing. As the market improves, we expect those investments to translate into greater network density, better utilization of excess capacity, and more freight per stop, allowing incremental volume to flow through resources already in place. At Investor Day, we outlined earnings potential as the market inflects. In Asset-Based, we modeled about 100 basis points of non-GAAP OR improvement versus 2024, with upside up to 280 basis points if industrial production returns to trend, housing normalizes, and truckload spot rates improve.

In Asset-Light, we modeled a $10 million improvement in expedite and a $75 increase of net revenue per shipment per year, with upside of up to $30 million as expedite manufacturing recovers and truckload rates normalize. In truckload brokerage, every $10 of margin per shipment expansion equates to $3.5 million of incremental profit. As volumes inflect, we expect incremental margin to improve, and we feel good that we are on pace to achieve our long-term goals.

Operator: Your next question comes from the line of Ari Rosa from Citigroup. Your line is live.

Ariel Rosa: Hi. Good morning. The connection was not great there, so I may have missed a little bit earlier. Seth, you have now been in the CEO seat for a few months. The business is not new to you, but I would love to get your reflections after a few months—how you are thinking about potentially doing things differently from how Judy was running the business. You have the long-term targets, but broaden that out—how are you thinking about managing the business, and what objectives might differ from your predecessor?

Seth K. Runser: Thanks, Ari, and good morning. I believe in our company’s strategy and our ability to achieve the long-term targets we outlined at Investor Day in September. I always go back to the customer. In my conversations, our solutions resonate. We differentiate as a logistics partner with assets, which is different from much of the competition. By finding ways to say “yes,” we believe we will drive greater revenue, profit, and account retention. I have been focused on optimizing our sales resources, putting people in the best position to succeed, win and grow business, and deepen long-term relationships. We continue to optimize our cost structure and improve customer experience.

When ArcBestView launches in May, it will be differentiated and allow customers to self-serve key information. In my first three months, I believe accelerating our strategy will drive sustained value creation. The environment has been unpredictable for years, but I am confident: our strategy is sound; we navigated the downturn well; we have significant operating leverage when the market turns. This team focuses on what it can control and views these times as opportunities. We have positioned for growth and margin expansion with investments in Asset-Based, technology, and productivity. Our pipeline is strong; new business and cross-selling are accelerating; tech-enabled initiatives are progressing faster, and we continue to win external awards that validate the strategy.

My goal is to accelerate our progress. None of this is possible without our people—I spend a lot of time with employees and could not be more proud. We are positioned to deliver on our long-term targets, deliver value for customers, and translate that into shareholder value creation.

Operator: Your final question comes from the line of Ken Hoexter from Bank of America. Your line is live.

Kenneth Scott Hoexter: Great. Good morning, Seth and Matt. I want to talk about the stickiness of the dynamic freight. In the past, you had too much, and as you wanted to switch to your own capacity, it was tougher. Do you have a newer process that enables more fluidity? Maybe talk about excess capacity now. And given the rising ISM, when do you see that shipment growth? Are others being more competitive and impacting shipments near term?

Seth K. Runser: Thanks, Ken. Our business is primarily core, and that is where we spend most of our time. The dynamic mix has changed due to growth in the quote pool; the actual shipment count we target is relatively consistent, but with a bigger quote pool we can optimize the network. We optimize mix daily based on profit maximization, current market prices, and available capacity. As capacity tightens, we expect our optionality to improve. Since the inception of Dynamic, as the quote pool has expanded, our revenue per shipment has improved over 50%. Our peers often use 3PLs to make those adjustments—we are the 3PL with assets, which improves optionality for customers.

On excess capacity and ability to scale, we think in three buckets: people, equipment, and real estate. On people, we have invested in labor planning tools and feel positioned for strong service through the summer and the remainder of the year. We have one of the newest fleets on the road due to disciplined investment through the cycle. On real estate, we have added over $800 to the network, with enhancements ongoing. As optimization efforts improve productivity, when volumes inflect we will need to recruit fewer people, which allows us to say “yes” to customers.

Operator: That concludes the question-and-answer session. I would now like to turn the call over to Amy Mendenhall for closing remarks.

Amy Mendenhall: Thank you to everyone for joining us today. We certainly appreciate your interest in ArcBest Corporation and hope everyone has a great day.

Operator: That concludes today’s meeting. You may now disconnect.