ArcBest Q3 Profit Slumps 61% on Rising Costs, Softer Demand
Executives Say Remedies for October Weakness Are on the Way
Key Takeaways:
- ArcBest’s third-quarter 2025 profit fell 61% to $39.3 million as higher expenses and the absence of a prior-year accounting benefit weighed on results.
- Revenue was nearly flat at $1.05 billion while operating costs rose 7%, though less-than-truckload shipments and tonnage increased despite weaker revenue per shipment.
- Executives said October volumes were unusually soft but expressed optimism that lower interest rates, tariff clarity and housing recovery could boost freight demand in 2026.
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Profit at ArcBest fell 61% year over year in the third quarter of 2025 as expenses rose and the year-ago period benefited from a favorable accounting consideration related to the November 2021 MoLo Solutions brokerage acquisition.
Executives, meanwhile, told analysts Nov. 5 during the carrier’s earnings call that the fourth quarter started weakly, but expressed optimism about 2026.
ArcBest posted net income of $39.3 million in Q3, compared with $100.3 million in the year-ago quarter, which included a $69.1 million after-tax benefit from a reduction in the fair value of contingent consideration related to the MoLo deal.
The carrier reported Q3 revenue totaling $1.05 billion, compared with $1.06 billion in the prior-year period. However, operating expenses jumped 7% to $993.5 million from $928.1 million.
“ArcBest continues to deliver, even in this challenging freight environment,” said CEO Judy McReynolds. “We achieved growth in LTL shipments and tonnage, and our asset-light segment delivered record shipment volumes and productivity. These results underscore the strength of our customer relationships and the value of our integrated solutions.”
Fort Smith, Ark.-based ArcBest ranks No. 13 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 8 in the LTL segment.
LTL Revenue, Tonnage, Shipments Rise
The carrier’s asset-based division, including LTL unit ABF Freight, posted $726.5 million in revenue in the most recent quarter, a 1.6% increase compared with $709.7 million in the same period 12 months earlier.
Tonnage per day at the division increased 2.3% to 11,238 tons from 10,983 tons. Shipments per day rose 4.3% to 21,095 from 20,221.
To support the shipment growth, ArcBest added staff. The carrier’s salary and wage expenses increased 3.3% to $370.2 million in Q3 from $358.5 million in the year-ago period.
But revenue per hundredweight fell 1.1% year over year in Q3, which meant the division’s operating ratio was 92.5, compared with 91 in the year-ago period.
A carrier’s OR provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
ArcBest faced service challenges in the most recent quarter, CEO-elect Seth Runser told analysts, including higher-than-expected volumes in certain markets and greater interim volume changes than usual.
“Softness in industrial production and housing continues to pressure weight per shipment, reducing revenue per shipment without corresponding cost decreases,” said Chief Financial Officer Matt Beasley.
There is a lot of excess LTL capacity right now, Runser said, but because there is a lot less capacity than there was 10 years ago, when demand improves, it will be especially positive for pricing.
“We haven’t lost customers, they’re just shipping less,” Runser said, adding: “We’ve improved since the summer.”
October Weaker Than Usual
However, ArcBest saw atypical softness in October, with volume down 5% versus the usual 3% month-on-month decline compared with September.
“We want to say yes to customers and that’s the way we’re built. We’ve been doing this a long time,” Beasley said. “We’ve navigated this cycle very well and will continue to make adjustments as we move through the rest of this year and as we move into 2026.”
Runser said ArcBest was not expecting the softness of recent weeks to continue into the first quarter of 2026, citing the expected resolution of the federal government shutdown, greater clarity over tariffs and a growing impact from recent interest rate reductions.
“When I think about 2026, obviously no one has a crystal ball about what’s going to happen right now. There’s been a lot of changes in these last few years,” Runser said.
“So, when you think about it from a demand standpoint, we don’t see a lot improving on the demand side, right now, but lower interest rates could spur increased home building, manufacturing, auto, all those different things. We saw the tax bill get passed. That could drive renewed freight demand. The clarity over tariffs and the government shutdown. As those things get resolved, we think that could be a positive impact for us,” he said.
Still, Chief Commercial Officer Eddie Sorg said ArcBest is seeing a lot of volatility. “The macroeconomic environment is a big headwind,” Sorg said.
“We’re seeing continued weakness on the housing front,” Runser said. “We hope, with interest rate reductions that we’re seeing with the Fed right now take action, that that’s going to spur some demand. We do think there’s pent up demand in the housing market. It’s just been too expensive from an affordability standpoint. So, as we see those interest rates lower, that’s really going to help.”
More interest rate reductions will be needed, and when the housing market does turn, it will have an outsized impact on freight flows, he said.
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