Dive Brief:
- ArcBest’s asset-based trucking operating income fell 40% year over year to $52.3 million in the fourth quarter of 2024, the company reported Friday.
- ABF Freight President Matt Godfrey attributed the decline to ongoing industrial demand weakness, along with low housing inventory causing fewer household goods moves, which lightened the carrier’s weight per shipment.
- “Some higher-weight LTL shipments have also shifted to the truckload market, with its continued low rates and excess capacity,” Godfrey said — a continuation of a trend observed by several carriers in the past year.
Dive Insight:
Industrial demand weakness has plagued the industry through a two-year freight recession, prompting carriers to haul a larger-than-usual proportion of comparatively lighter retail shipments.
LTL carriers have faced increasing pressure in the market, chipping away at fuel cost discipline, with fuel surcharges decreasing sequentially by 3.4% on average in Q4, according to an industry report.
The LTL market has fared better than its truckload counterpart, helped in part by Yellow Corp.’s bankruptcy removing significant, low-priced capacity. But the pricing gap between the two sectors has led some shippers to consolidate LTL loads and move them to the truckload market to take advantage of lower rates.
Like others in the industry, ABF Freight is seeing glimmers of hope. The carrier secured an average price increase of 4.5% on contract renewals and deferred pricing agreements in Q4, Godfrey said. Shipment volumes remained relatively stable, with shipments per day dropping only 1% YoY, the company reported.
But pricing improvements were partially offset by declining fuel costs, excluding fuel surcharges, and the LTL carrier’s insurance costs rose by $9 million, weighing on its operating results.
“The pricing environment remains rational, and we are focused on using pricing and operational efficiency improvements to outpace rising costs,” Godfrey said.
