Transportation holding company ArcBest rode a company-wide wave of freight demand in the second quarter, increasing revenue 5.7 percent year-over-year to $696.1 million. ABF Freight, ArcBest’s less-than-truckload subsidiary, increased revenue 2.3 percent to $504.4 million.
Higher pricing helped propel total sales to those heights, making this year’s second quarter the best in ArcBest’s history, revenue-wise. Although ABF represented the biggest share of ArcBest revenue, the company’s asset-light businesses, including Panther Premium Logistics, grew faster.
ArcBest’s asset-light group increased revenue 15 percent to $204.9 million, raising its percentage of total ArcBest revenue from 27 percent a year ago to 29.4 percent. The LTL business of ABF generated 72.5 percent of ArcBest’s total revenue, a drop of 2.3 percent from a year ago.
Fort Smith, Arkansas-based ArcBest, the 10th-largest U.S. trucking operator, according to SJ Consulting Group data, benefited from the mild boost in the U.S. economy during the second quarter, when real gross domestic product increased 2.3 percent, the Commerce Department said last week.
The company also benefited from a diversification strategy launched in 2012 with the purchase of Panther Premium Logistics. That strategy is meant to help ABF pursue a “rapidly evolving” shipper that wants more than traditional LTL service.
“I am pleased that our strategic investments in an expanded set of service offerings are resulting in a greater percentage of customers turning to the ArcBest companies for solutions to their supply chain challenges,” President and CEO Judy R. McReynolds said in a statement.
Shipper efforts to secure capacity through non-asset truck brokerage threw ABF Logistics into high gear: the division’s revenue up 42.1 percent to $50.4 million, according to data released by ArcBest Aug. 3. ABF Logistics’ operating profit soared 111.7 percent to $1.8 million.
ABF Moving increased revenue 41 percent to $32.2 million, but the household goods moving division’s profit rocketed 220.5 percent to $2 million. ABF Moving benefited from “increased market opportunities” associated with the beginning of the traditional summer moving season.
Revenue declined 1.4 percent at Medina, Ohio-based Panther Premium Logistics, the largest business in the asset-light group, falling to $80.3 million. The expedited carrier’s profit, however, rose 11 percent to $4.8 million, as shipment gross margins climbed from a year ago.
At ABF, the seventh-largest U.S. LTL carrier, operating profit rose 23 percent year-over-year to $28.1 million. Tonnage per day increased 1.9 percent in the quarter from a year ago. Revenue per hundredweight, or LTL yield rose 0.4 percent, despite a drop in fuel surcharge revenue.
Fuel costs declined 14.6 percent year-over-year to $79.6 million, while salaries, wages and benefit-related costs rose 8 percent to $301.6 million, an increase consistent with industry trends. Shipments per day climbed 4.5 percent, outpacing tonnage, pointing to an increase in lighter shipments as heavier shipments migrated back to truckload operators, also an industry trend.