2024 Annual Report
As ArcBest begins
its second century,
the Company is
better positioned
than ever to
capitalize on its
market leadership
in supply chain
logistics and deep
relationships with
customers to solve
their most complex logistics challenges.
Despite continued soft freight markets and
a challenging industrial economy in 2024, we
navigated these conditions with resilience
and agility, demonstrating the power of our
strategy and commitment to customers.
As a result, we achieved customer growth,
realized significant operational efficiencies
and introduced award-winning innovations.
We also set records in our Managed
Transportation business, and once again, ABF
Freight exceeded Mastio’s industry benchmark
for service.
Our achievements in 2024 were due to the
hard work and dedication of our talented
employees. Their continued effort and
expertise, combined with ArcBest’s spirit of
innovation and breadth of solutions, is what
continues to set the Company apart — in the
trucking and logistics industries and beyond.
This year reinforced our belief in our Mission:
To connect and positively impact the world
through solving logistics challenges.
ArcBest’s Strategy and Strength
More than 100 years ago, ArcBest began as a
local Arkansas freight company. Today we are
a logistics powerhouse, using differentiated
technology, expertise and scale to connect
shippers with the solutions they need. Our
strategy — centered on growth, efficiency
and innovation — combined with financial
stability, strong customer relationships
and investments in people, solutions
and technology, have established a solid
foundation for continued profitable growth.
We have consistently focused on long-
term strategy, disciplined cost control and
balanced capital allocation and revenue
mix. This approach enabled us to end the
year in a position of financial strength,
poised to continue navigating market
challenges effectively while creating value
for our customers, stockholders and other
stakeholders.
“We’ll find a way” is the motto everyone at
ArcBest lives by. It embodies our commitment
to doing hard things well and is deeply
embedded in our culture. This commitment,
along with our ability to provide multiple
transport mode options and the best logistics
solutions with an optimal balance of speed,
cost and reliability, enables us to deliver
industry-leading service and foster trusted
partnerships that deliver long-term value.
Investing in Innovation, Equipment
& Facilities to Accelerate Growth
Innovation is a key pillar of our strategy
to maintain and accelerate growth. We’re
developing leading-edge solutions focused
on meeting customers’ needs, enhancing
employee efficiency and preparing every
facet of our organization for the future.
In 2024, we made great progress in this area.
We improved shipment visibility, achieving
approximately 30% better accuracy in our
ETA calculations. We also launched the
beta testing phase of ArcBest View™, our
new digital platform designed to make it
easier than ever for customers to manage
their shipments. Additionally, we launched
Vaux Smart Autonomy™, our groundbreaking
autonomous material handling technology.
We continue to implement new ways to
further enhance efficiency through the use
of various forms of AI, including generative
AI. Building on our City Route Optimization
project, in 2024 we began using a new city
pick-up augmentation process to predict
daily demand, optimize pickup routes and
respond to quote requests.
To further enhance our service excellence,
we’ve implemented new dock management
software and advanced labor planning tools,
striving to ensure optimal staffing to support
growth objectives.
We’ve also progressed on our long-term
ABF facility roadmap and strategically added
capacity. We completed more than 30
remodel projects and added approximately
300 new doors, expanding our door count to
9,500 — strengthening our ability to handle
more freight with greater productivity.
And we aren’t stopping there. We are
investing in equipment to maintain one of
the youngest and most efficient fleets in
the industry. A modern fleet reduces our
total cost of ownership and underscores our
commitment to operational excellence and
long-term sustainability.
In 2025, we intend to continue investing
in technology, facilities and equipment,
enhancing the efficiency of our customers’
businesses and our own.
Our People-First Culture
Our ability to navigate even the most
challenging markets reflects the talent and
commitment of ArcBest’s people. We strive
to foster a supportive work environment to
ensure that all employees are equipped to do
their jobs well and serve our customers with
excellence.
By providing the right tools, training and
support, we enhance our employees’ ability
to deliver exceptional value to our customers
and can also achieve significant cost savings.
Last year alone, the operations experts
deployed to our largest ABF facilities saved
the company $12.4 million, and we expect
even more savings as we expand these efforts
into 2025.
In terms of leadership, we continue
to enhance our strong bench talent at
ArcBest. Seth Runser’s promotion to
President of ArcBest and Matt Godfrey’s
promotion to President of ABF Freight
highlight our confidence in their ability to
drive the Company’s continued success.
Additionally, Dennis Anderson’s new role
as Chief Innovation Officer emphasizes our
commitment to forward-thinking leadership
and value creation through innovation.
2025 and Beyond
We remain focused on managing what is
within our control, providing industry-
leading service and operating efficiently.
The market opportunity for ArcBest is
significant, and with our skilled team,
leading-edge technology, financial strength
and commitment to excellence, I’m confident
in the Company’s future. ArcBest is well
positioned to navigate market challenges
while also pursuing our proven strategy for
long-term growth and sustained profitability.
Judy R. McReynolds
Chairman &
Chief Executive Officer
Message from the Chairman
Certain statements contained herein may be considered
“forward-looking statements.”
See “Forward-Looking Statements” in ArcBest’s 2024 Annual
Report on Form 10-K for additional information.
Our Company
ArcBest® is a multibillion-dollar integrated
logistics company that leverages
technology and a full suite of shipping and
logistics solutions to meet our customers’
supply chain needs and help keep the
global supply chain moving.
Using our technology, expertise and scale,
we connect shippers with the solutions
they need — from ground, air and ocean
transportation to fully managed supply
chain solutions — serving our customers
as a single logistics resource.
We started in 1923 as a local Arkansas
freight hauler. Today, we are
a publicly traded logistics
powerhouse with global reach
and 14,000 employees across
250 campuses and service
centers. This transformation is
the result of organic growth,
strategic acquisitions, visionary
leadership and skilled, resilient
people who are driven to find
a way to get the job done.
ArcBest is a trusted advisor to some of
the world’s largest and most recognizable
brands. Our Vision is to be the leading
logistics partner and innovator, working
with customers to build better supply
chains across the globe. We put ourselves
in our customers’ shoes, get to know
their business, and constantly look for
opportunities to optimize. The solutions
and strategies we recommend align with
their goals. And when the unexpected
happens, we’re there to help them quickly
pivot to overcome disruptions and keep
their supply chain moving.
Our long history of innovation enriches
these deep customer relationships. With
innovation as a pillar of our strategy, we’re
committed to helping our customers
navigate their logistics challenges now
and in the future, and we encourage
our employees to think creatively and
challenge the status quo.
Our people are at the heart of our
success, and we are deeply focused on a
culture that is grounded in the company’s
core values of Creativity, Integrity,
Collaboration, Growth, Excellence and
Wellness. We support employees by
providing a workplace where people with
unique experiences and perspectives can
grow and make a lasting impact.
Welcome to ArcBest.
Our Commitment to
Sustainability
In pursuit of our Mission to connect
and positively impact the world through
solving logistics challenges, ArcBest
leverages sustainability-related data
to increase operational
efficiency. This allows us to
better meet our customers’
needs and solve their
most complex logistics
challenges, all while
reducing our collective
environmental impact. By
harnessing the power of
innovation and prioritizing
responsible business practices, we create
long-term value while building a safer,
more resilient company.
Some of the
environmental progress
we’ve made in 2024
includes:
Added over 700 new
Class 7 and 8 trucks,
replacing older models
to improve overall
fuel efficiency and
reduce greenhouse
gas emissions (GHG),
striving to ensure our fleet remains one
of the youngest and most efficient in the
industry
Expanded our electric fleet with additional
forklifts and yard tractors
Advanced our Facility Enhancement and
Growth Roadmap, completing over 30
additional remodels and renovations.
Upgrades include LED light replacement
to reduce electricity consumption and
new fixtures to reduce water usage. Our
facility expansion also allows us to handle
more freight with improved productivity
and better service
Partnered with FoodLoops for the second
year to reduce waste at corporate events,
diverting over 1,400 lbs. of waste from
landfills through recycling and composting
Selected as a 2024 Inbound Logistics
Green (G75) Supply Chain Partner for the
13th time
Named a 2024 BNSF Railway Sustainability
Award winner
Held our 2nd annual Earth Day campus
clean-up event, expanding to a second
corporate campus
Some of the Corporate Social
Responsibility (CSR) progress we made in
2024 includes:
Supported communities across the
country by partnering with disaster
relief organizations and participating in
community wellness initiatives including
Toys for Tots, Almost Home Shelter and
Rescue and more
Invested in our employees and their
families through financial support for higher
education by launching
our Employee
Dependent Scholarship
Program in partnership
with Scholarship
America
Broadened our talent
pipeline through events
like ABTech School
Days, encouraging local
students to pursue careers in STEM fields
Named a 2024-2025 U.S. News & World
Report Best Company to Work for in the
transportation category and one of America’s
Most Responsible Companies 2025 by
Newsweek and Statista
The comparisons assume $100 was invested on
December 31, 2019, in ArcBest’s Common Stock with
reinvestment of dividends. All calculations have been
prepared by Zacks Investment Research, Inc. The
stockholder return shown on the graph is not necessarily
indicative of future performance.
ArcBest is an integrated logistics company that provides
freight transportation services and logistics solutions.
Accordingly, it is important that ArcBest’s performance
be compared to that of other companies with similar
operations. Therefore, the new peer group (used for
2024) includes the following diversified mix of ArcBest’s
transportation and logistics related competitors:
Covenant Logistics Group, Inc., Forward Air Corporation,
Hub Group, Inc., J.B. Hunt Transport Services, Inc.,
Knight-Swift Transportation Holdings Inc., Landstar
System, Inc., Old Dominion Freight Line, Inc., RXO, Inc.,
Saia, Inc., Schneider National, Inc., TFI International Inc.,
Werner Enterprises, Inc., and XPO, Inc. As compared to
the old peer group (used for 2023), the new peer group
reflects the addition of RXO, Inc. and XPO, Inc.
Stock Performance Graph
The following graph and data table show a comparison of
the cumulative total return for ArcBest, the Russell 2000®
Index and a peer group index selected by ArcBest for the
five-year period ending December 31, 2024:
ASSUMES $100 INVESTED ON DEC. 31, 2019
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2024
Cumulative Total Return
12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24
ArcBest Corporation . . . . . . $ 100.00 $ 156.55 $ 441.63 $ 259.47 $ 447.38 $ 348.68
Russell 2000
® Index . . . . .. . $ 100.00 $ 119.96 $ 137.74 $ 109.58 $ 128.14
$ 142.92
New Peer Group. . . . . . . . . . $100.00 $ 133.23 $ 209.49 $ 172.36 $ 234.79 $ 226.81
Old Peer Group. . . . . . . . . . . $ 100.00
$ 130.88 $ 216.63 $ 180.19 $ 235.83 $ 216.56
2024 2023
($ thousands, except per share data)
Operations for the Year (Continuing Operations)
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,179,019 $ 4,427,443
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 244,434 $ 172,619
Non-GAAP Operating income(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 203,007 $ 258,312
Earnings per diluted common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.28 $ 5.77
Non-GAAP Earnings per diluted common share(1) . . . . . . . . . . . . . . . . . . . . . . $ 6.28 $ 7.88
Information at Year End
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,429,731 $ 2,485,094
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 63,978 $ 66,948
Long-term debt (including notes payable, excluding current portion). . . . . . . $ 125,156 $ 161,990
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,314,362 $ 1,242,363
Number of common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,287 23,564
(1) See reconciliations of GAAP to Non-GAAP financial measures on the inside back cover.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2024.
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from to .
Commission file number 0-19969
ARCBEST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
71-0673405
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
8401 McClure Drive, Fort Smith, Arkansas
72916
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code 479-785-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 Par Value
ARCB
The Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the Common Stock held by nonaffiliates of the registrant, based on the closing price of the shares of Common Stock on
the Nasdaq Global Select Market as of June 30, 2024, was $2,496,196,931.
The number of shares of Common Stock, $0.01 par value, outstanding as of February 27, 2025, was 23,150,276.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934 in connection with
the registrant’s Annual Stockholders’ Meeting to be held April 25, 2025, are incorporated by reference in Part III of this Form 10-K.
2
ARCBEST CORPORATION
FORM 10-K
TABLE OF CONTENTS
ITEM
PAGE
NUMBER
NUMBER
PART I
Forward-Looking Statements
3
Item 1.
Business
4
Item 1A. Risk Factors
18
Item 1B. Unresolved Staff Comments
32
Item 1C. Cybersecurity
32
Item 2.
Properties
34
Item 3.
Legal Proceedings
34
Item 4.
Mine Safety Disclosures
34
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
35
Item 6.
[Reserved]
35
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
36
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
62
Item 8.
Financial Statements and Supplementary Data
63
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
103
Item 9A. Controls and Procedures
103
Item 9B. Other Information
106
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
106
PART III
Item 10. Directors, Executive Officers and Corporate Governance
106
Item 11. Executive Compensation
106
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
106
Item 13. Certain Relationships and Related Transactions, and Director Independence
106
Item 14. Principal Accountant Fees and Services
106
PART IV
Item 15. Exhibits and Financial Statement Schedules
107
Item 16. Form 10-K Summary
111
SIGNATURES
112
3
PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains certain “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements, other than statements of historical fact, included or incorporated by reference in
this Annual Report on Form 10-K, including, but not limited to, those in Item 1 (Business), Item 1A (Risk Factors), Item 3 (Legal
Proceedings), and Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations), are
forward-looking statements. Terms such as “anticipate,” “believe,” “could,” “designed,” “estimate,” “expect,” “forecast,”
“foresee,” “intend,” “likely,” “may,” “plan,” “predict,” “project,” “scheduled,” “seek,” “should,” “would,” and similar
expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on
management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future
performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the
expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that
our expectations will prove to be correct and caution the reader not to place undue reliance on our forward-looking statements.
Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a
number of factors, including, but not limited to:
•
data privacy breaches, cybersecurity incidents, and/or failures of our information systems, including disruptions or
failures of services essential to our operations or upon which our information technology platforms rely;
•
interruption or failure of third-party software or information technology systems, including but not limited to licensed
software;
•
untimely or ineffective development and implementation of, or failure to realize the potential benefits associated with,
new or enhanced technology or processes;
•
the loss or reduction of business from large customers or an overall reduction in our customer base;
•
the timing and performance of growth initiatives and the ability to manage our cost structure;
•
the cost, integration, and performance of acquisitions and the inability to realize the anticipated benefits of the
acquisition within the expected time period or at all;
•
unsolicited takeover proposals, proxy contests, and other proposals or actions by activist investors;
•
maintaining our corporate reputation and intellectual property rights;
•
establishing and maintaining adequate internal controls financial reporting;
•
nationwide or global disruption in the supply chain resulting in increased volatility in freight volumes;
•
competitive initiatives and pricing pressures;
•
increased prices for and decreased availability of equipment, including new revenue equipment, and higher costs of
equipment-related operating expenses such as maintenance, fuel, and related taxes;
•
availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing
increases in base freight rates, and the inability to collect fuel surcharges;
•
relationships with employees, including unions, and our ability to attract, retain, and upskill employees;
•
unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce
stoppage by our employees covered under ABF Freight’s collective bargaining agreement;
•
union employee wages and benefits, including changes in required contributions to multiemployer plans;
•
availability and cost of reliable third-party services;
•
our ability to secure independent owner-operators and/or operational or regulatory issues related to our use of their
services;
•
litigation or claims asserted against us;
•
the effects, costs and potential liabilities related to changes in and compliance with, or violation of, existing or future
governmental laws and regulations, including, but not limited to, environmental laws and regulations, such as
emissions-control regulations and fuel efficiency regulations;
•
default on covenants of financing arrangements and the availability and terms of future financing arrangements;
•
our ability to generate sufficient cash from operations to support significant ongoing capital expenditure requirements
and other business initiatives;
•
self-insurance claims, insurance premium costs, and loss of our ability to self-insure;
•
potential impairment of long-lived assets and goodwill and intangible assets;
•
the effects of a widespread outbreak of an illness or disease or any other public health crisis, as well as regulatory
measures implemented in response to such events;
•
external events which may adversely affect us or the third parties who provide services for us, for which our business
continuity plans may not adequately prepare us, including, but not limited to, the occurrence of natural disasters, health
epidemics, geopolitical conflicts, acts of war, cybersecurity incidents, or trade restrictions;
•
general economic conditions and related shifts in market demand that impact the performance and needs of industries
we serve and/or limit our customers’ access to adequate financial resources;
4
•
seasonal fluctuations, adverse weather conditions, natural disasters, and climate change; and
•
other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest Corporation’s public
filings with the Securities and Exchange Commission (“SEC”).
For additional information regarding known material factors that could cause our actual results to differ from those expressed in
these forward-looking statements, please see Item 1A (Risk Factors). All forward-looking statements included or incorporated
by reference in this Annual Report on Form 10-K and all subsequent written or oral forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. The forward-looking
statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
ITEM 1.
BUSINESS
ArcBest Corporation
ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest,” “we,” “us,” and “our”) is a
multibillion‑dollar integrated logistics company that leverages technology and a full suite of solutions to meet our
customers’ supply chain needs. With the ability to optimize, connect, and deliver across various modes of transportation,
we serve as a single logistics resource with global reach. This integrated approach, combined with our technology,
expertise, scale, and resilient people who are driven to always find a way to get the job done, ensures our customers have
the right solutions and capacity to meet their constantly evolving needs.
The Company, which was incorporated in Delaware in 1966 and is headquartered in Fort Smith, Arkansas, started over a
century ago as a local Arkansas freight hauler. Today, as a result of organic growth, strategic acquisitions, and visionary
leadership, we are a logistics powerhouse with 14,000 employees across 250 campuses and service centers. Our customers
are at the center of our strategy. We listen and thoughtfully analyze how our processes, services, and technologies impact
their businesses. Through meaningful investments in strategic initiatives and a strong emphasis on disruptive technology
and advanced analytics, we deliver customized solutions that meet our customers’ needs and, aligned with our values-
driven culture, create a safer, more sustainable, and inclusive company and world.
Business Description
United as ArcBest, we are a growth-oriented, digitally enabled integrated logistics company that delivers reliable,
innovative solutions through a variety of ground, air, and ocean transportation solutions, including our less-than-truckload
(“LTL”) carrier – ABF Freight®, our truckload brokerage provider – MoLo®, and our ground expedite fleet – Panther
Premium Logistics® (“Panther”). Through our managed transportation solutions, we partner with customers to create and
execute logistics strategies that increase operational efficiencies, reduce costs, and give customers better insights into their
supply chains. We also offer household goods moving through U-Pack®. Our technology and innovations team provides
custom-built solutions, leading-edge technology, and advanced analytics that help support our customers and optimize
supply chains.
Our operations are conducted through our two reportable operating segments, which are described further in the
Asset‑Based Segment and Asset-Light Segment sections below:
•
Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”), and
•
Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther, and certain other subsidiaries.
With a relentless focus on customer needs and unique access to assured transportation capacity, which includes more than
40,000 owned and operated assets, we create solutions for even the most complex and demanding supply chains. We strive
to help customers solve their logistics challenges by efficiently providing a best-in-class experience with easy access to
our integrated solutions.
For the year ended December 31, 2024, no single customer accounted for more than 3% of our consolidated revenues, and
the ten largest customers, on a combined basis, accounted for approximately 13% of our consolidated revenues.
5
Vision and Values
Our vision is to be the leading logistics partner and innovator, working with customers to build better supply chains across
the globe. “We’ll Find a Way” is our motto. It is a testament to what our customers say about us — that we’re the kind of
company that partners with them to solve problems and make things happen. Our integrated logistics approach and
innovative technology enable our vision, but it’s our people who ensure our customers’ solutions and capacity needs are
met. We support our employees by providing a workplace where people with diverse experiences, needs, and perspectives
can grow and make a lasting impact.
We carry out our vision by exemplifying our corporate values:
•
Creativity – We create solutions.
•
Integrity – We do the right thing.
•
Collaboration – We work together.
•
Growth – We grow our people and our business.
•
Excellence – We exceed expectations.
•
Wellness – We embrace total health.
Strategy
Our customer-led strategy is to produce long-term value by delivering a premium experience and growing informed,
trusted and innovative relationships. This value is produced by focusing on three key components — accelerate growth,
increase efficiency, and drive innovation.
We work to build long-term value for our customers, employees and shareholders by:
•
Expanding our revenue opportunities. We expand our revenue opportunities by deepening our existing customer
and carrier relationships and securing new ones. We build connections that last for decades, and our customers
assign a high degree of value to the capacity options, high level of service, and professionalism we provide. We
increase these capacity options and enable high service levels by growing mutually beneficial relationships with
our carrier partners and enhancing our capabilities through strategic acquisitions and organic investments.
•
Optimizing our cost structure. We are focused on profitable growth, which requires continually reviewing our
costs and investment decisions. Our technology infrastructure drives improved cost efficiency through the
streamlining of business processes and related insights and analytics that allow us to optimize our cost structure,
transform our business, and enhance the customer experience.
•
Building a resilient business. Over our 100+ year history, we have evolved tremendously and are now a global,
integrated logistics leader. We have differentiated ourselves from our competition with our ability to offer full-
service logistics solutions with a wide variety of fulfillment options, which can include our own assets. This more
balanced mix of revenue better reflects our customers’ spending on these services and drives long-term financial
sustainability for us by making our business less capital-intensive relative to our size.
Quality is top-of-mind to us. In 2024, we celebrated the 40th anniversary of our Quality Process, which guides employees
in implementing creative solutions in a collaborative environment utilizing a 5-step problem solving elimination process.
The process includes defining and quickly fixing the problem, identifying the root cause, and taking corrective action,
along with follow-up until the issue is resolved. This year, we received “Quest for Quality” awards from Logistics
Magazine in the category of Household Goods & High Value Goods for the third time and in the National LTL Carriers
category for the eighth time, in addition to being named Total Quality Logistics’s “Carrier of the Year”, reflecting our
commitment to service excellence. In 2024, we were also recognized by Mastio for exceeding industry benchmarks as
further detailed under “Reputation and Responsibilities” in this Business section.
Asset-Based Segment
Our Asset-Based segment provides LTL services through the motor carrier operations, ABF Freight. Asset-Based revenues
accounted for approximately 64% of our total revenues before other revenues and intercompany eliminations in 2024. For
the year ended December 31, 2024, no single customer accounted for more than 3% of revenues in the Asset-Based
segment, and the segment’s ten largest customers, on a combined basis, accounted for approximately 16% of its revenues.
Note N to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K contains
additional segment financial information, including revenues and operating income for the years ended
December 31, 2024, 2023, and 2022.
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ABF Freight has been in continuous service since 1923 and is one of North America’s largest LTL motor carriers,
providing direct service to more than 98% of U.S. cities with a population of 30,000 or more. ABF Freight offers interstate
and intrastate services to approximately 51,000 communities in all 50 states, Canada, and Puerto Rico through 241 service
centers. ABF Freight also provides motor carrier freight transportation services to customers in Mexico through
arrangements with trucking companies in that country.
Our Asset-Based segment offers transportation of general commodities through standard, time-critical, and guaranteed
LTL services. General commodities include all freight except hazardous waste, dangerous explosives, commodities of
exceptionally high value, commodities in bulk, and those requiring special equipment. Shipments of general commodities
differ from shipments of bulk raw materials, commonly transported by railroad, truckload tank car, pipeline, and water
carrier. General commodities transported by our Asset-Based operations include, among other things, food, textiles,
apparel, furniture, appliances, chemicals, non-bulk petroleum products, rubber, plastics, metal and metal products, wood,
glass, automotive parts, machinery, and miscellaneous manufactured products.
The LTL transportation industry, which requires networks of local pickup and delivery service centers combined with
larger distribution facilities, is significantly more infrastructure-intensive than truckload operations and, as such, has higher
barriers to entry. Costs associated with an expansive LTL network, including investments in or costs associated with real
estate and labor costs related to local pickup, delivery, and cross-docking of shipments, are primarily fixed unless service
levels are significantly changed.
Labor costs, which amounted to 50.5% of Asset-Based revenues for 2024, are the largest component of the segment’s
operating expenses. As of December 2024, approximately 82% of the Asset-Based segment’s employees were covered
under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2023 ABF NMFA”), with the
International Brotherhood of Teamsters (the “IBT”), which was ratified on June 30, 2023 by a majority of ABF Freight’s
IBT member employees. A majority of the 2023 ABF NMFA supplements also passed. The remaining supplements were
ratified on July 7, 2023. The 2023 ABF NMFA was implemented on July 16, 2023, effective retroactive to July 1, 2023,
and will remain in effect through June 30, 2028. The major economic provisions of the 2023 ABF NMFA include wage
rate or per mile increases in each year of the contract, with the initial increase effective retroactive to July 1, 2023; profit-
sharing bonuses upon the Asset-Based segment’s achievement of certain annual operating ratios for any full calendar year
under the contract; an additional paid holiday; two additional paid sick days; and a new non-CDL employee classification.
The 2023 ABF NMFA and the related supplemental agreements also provide for annual contribution rate increases to
multiemployer health and welfare and pension plans maintained for the benefit of ABF Freight’s employees who are
members of the IBT. Under the 2023 ABF NMFA, the contractual wage and benefits top hourly rates are estimated to
increase approximately 4.2% on a compounded annual basis through the end of the agreement, with potential profit-sharing
bonuses representing additional costs under the 2023 ABF NMFA. A 1% profit-sharing bonus under the 2023 ABF NMFA
was earned for the year ended December 31, 2024 as a result of the operating ratio achieved in 2024. While a profit-sharing
bonus was not applicable in 2023 during the partial calendar year of the 2018 and 2023 agreements, ABF Freight paid its
qualified union-represented employees a profit-sharing bonus in all four eligible years under the prior 2018 ABF NMFA,
including the 3% maximum bonus amount for the operating ratios achieved in 2021 and 2022.
ABF Freight contributes to multiemployer pension and health and welfare plans, which have been established pursuant to
the Labor Management Relations Act of 1947 (the “Taft-Hartley Act”), to provide benefits for its contractual employees.
Amendments to the Employee Retirement Income Security Act of 1974 (“ERISA”), pursuant to the Multiemployer Pension
Plan Amendments Act of 1980 (the “MPPA Act”), substantially expanded the potential liabilities of employers who
participate in multiemployer pension plans. Under ERISA, as amended by the MPPA Act, an employer who contributes
to a multiemployer pension plan and the members of such employer’s controlled group are jointly and severally liable for
their share of the plan’s unfunded vested benefits in the event the employer ceases to have an obligation to contribute to
the plan or substantially reduces its contributions to the plan (i.e., in the event of a complete or partial withdrawal from
the multiemployer pension plans). ABF Freight’s funding obligations to the multiemployer pension plans to which it
contributes are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 (the “PPA”), which
was permanently extended by the Multiemployer Pension Reform Act of 2014 (the “Reform Act”) included in the
Consolidated and Further Continuing Appropriations Act of 2015. Through the term of its current collective bargaining
agreement, ABF Freight’s multiemployer pension plan contribution obligations generally will be satisfied by making the
specified contributions when due. However, we cannot determine with any certainty the contributions that will be required
under future collective bargaining agreements for ABF Freight’s contractual employees. See Note J to the consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more specific disclosures regarding
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the multiemployer pension plans to which ABF Freight contributes, and discussion of legislation impacting funding for
multiemployer pension plans.
ABF Freight operates in a highly competitive industry comprised primarily of nonunion motor carriers. Nonunion
competitors have a lower fringe benefit cost structure and less stringent labor work rules, and certain carriers also have
lower wage rates for their freight-handling and driving personnel. ABF Freight has continued to address the effect of the
wage and benefit cost structure on its operating results with the IBT. Under the 2023 ABF NMFA, ABF Freight continues
to pay some of the highest benefit contribution rates in the industry and through this contract, ABF Freight is allowed to
implement location-specific wage increases in areas where hiring has been challenging. Due to the joint and several
liability of multiemployer plans, a portion of ABF Freight’s multiemployer plan contributions are used to fund benefits
for individuals whom ABF Freight never employed.
Asset-Light Segment
Our Asset-Light segment is a key component of our strategy to offer customers a single source of integrated logistics
solutions, designed to satisfy the complex supply chain needs and unique shipping requirements that our customers
encounter. By leveraging technology and third-party service providers, our Asset-Light team provides various logistics
services without significant investment in revenue equipment or real estate.
For the year ended December 31, 2024, the revenues of our Asset-Light segment have decreased to approximately 36% of
our total revenues before other revenues and intercompany eliminations, versus 37% for 2023, reflecting the continued
softer market. For the year ended December 31, 2024, no single customer accounted for more than 5% of the Asset-Light
segment’s revenues, and the segment’s ten largest customers, on a combined basis, accounted for approximately 19% of
its revenues. Note N to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form
10-K contains additional segment financial information, including revenues and operating income for the years ended
December 31, 2024, 2023, and 2022.
Our Asset-Light segment originated with the formation of ABF Logistics in July 2013, when we aligned the sales and
operations functions of our organically developed logistics businesses. The Asset-Light segment includes the ground
expedite services of Panther; our truckload operations, including the truckload brokerage services of MoLo; household
goods moving services under the U-Pack brand, for which the majority of the moves are provided with our Asset-Based
operations; and our managed transportation solutions. Under our enhanced market approach to offer customers a single
source of integrated logistics solutions, the service offerings of the Asset-Light segment have become more integrated,
particularly through our growing managed transportation solutions. The decision was made to reduce our Asset-Light
segment’s large trailer pools operations during fourth quarter 2024. Management’s operating decisions are focused on the
Asset-Light segment’s combined operations rather than individual service offerings within the segment’s operations.
Truckload
Our truckload service provides third-party transportation brokerage services by sourcing various capacity solutions,
including dry van over-the-road, temperature-controlled and refrigerated, flatbed, intermodal or container shipping, and
specialized equipment, coupled with strong technology and carrier- and customer-based Web tools. Through our truckload
service, we offer a growing network of more than 100,000 approved contract carriers, with service to all 50 states, Canada,
and Mexico. Additional value is created for customers through seamless access to the ABF Freight network.
Managed Transportation
Through our managed transportation solutions, we partner with customers to increase operational efficiencies, reduce
costs, and give better insight into supply chains by providing customized solutions utilizing technology. Additional value
is created for customers through seamless access to our ABF Freight network, our Panther fleet, and our MoLo truckload
brokerage operations, offering strategic supply chain solutions with unique access to assured capacity.
Expedite
Leveraging our best-in-class Panther fleet, we offer expedite freight transportation services to commercial and government
customers. We also offer premium logistics services that involve the rapid deployment of highly specialized equipment to
meet precise linehaul requirements, such as temperature control, hazardous materials, geofencing (routing a shipment
across a mandatory, defined route with satellite monitoring and automated alerts concerning any deviation from the route),
specialized government cargo, security services, and life sciences.
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We rely on third-party carriers for most of the network capacity for our expedite operations, including owner-operators,
ground linehaul providers, cartage agents, and other transportation asset providers. We choose carriers based on how well
they can meet our customers’ needs in terms of price, technology capabilities, geographic coverage, and service quality.
Third party-owned vehicles are driven by independent contract drivers and drivers engaged directly by independent owners
of multiple pieces of equipment, commonly referred to as fleet owners. Our expedite operations own a fleet of trailers, the
communication devices used by its owner-operators, and certain highly specialized equipment, primarily temperature-
controlled and temperature-validated trailers to meet the service requirements of certain customers.
International
Our international shipping and logistics services provide global ocean and air shipping solutions by partnering with ocean
shipping lines and air freight carriers worldwide, as well as cross-border shipping and ground transportation to and from
ports. As a non-vessel operating common carrier, we provide less-than-container load and full container load service,
offering ocean transport to approximately 90% of the total ocean international market to and from the United States. We
also offer warehousing and distribution services to and from major global ports to streamline our customers’ ocean
shipping processes.
Moving
Our moving services offer flexibility and convenience for how people move through targeted service offerings for the
“do-it-yourself” consumer. We offer these targeted services at competitive prices that reflect the additional value customers
find in our convenient, reliable moving service offerings.
Other Logistics Services
We also provide other services to meet our customers’ logistics needs, such as final mile, time-critical, product launch,
warehousing and distribution, retail logistics, supply chain optimization, brokered LTL, and trade show shipping services.
Our Retail+ compliance solution is designed to help vendors better meet large retailers’ stringent shipping and delivery
requirements by combining innovative software solutions with enhanced operations processes.
Competition, Pricing, and Industry Factors
Competition
Our Asset-Based segment actively competes for freight business with other national, regional, and local motor carriers
and, to a lesser extent, with private carriage, domestic and international freight forwarders, railroads, and airlines. The
segment competes most directly with nonunion and union LTL carriers, including FedEx Freight Corporation, the LTL
reporting segment of FedEx Corporation; the LTL segment of Knight-Swift Transportation Holdings Inc.; Old Dominion
Freight Line, Inc.; Saia, Inc.; the U.S. LTL operating segment of TFI International Inc.; and the North American LTL
segment of XPO, Inc. Our Asset-Based segment’s U-Pack business also competes with self-move businesses that offer
moving and storage container services. Competition is based primarily on price, service, and availability of flexible
shipping options to customers. The Asset‑Based segment’s careful cargo handling, access to other ArcBest logistics
solutions, and use of technology, both internally to manage its business processes and externally to provide shipment
visibility to its customers, are examples of how we add value to our services.
Our Asset-Light segment operates in a very competitive asset-light logistics market that includes approximately 27,500
active brokerage authorities, as well as asset-based truckload carriers; logistics companies including large and small
expedite carriers; foreign and U.S.-based non-vessel-operating common carriers; freight forwarders; internal shipping
departments at companies that have substantial transportation requirements; smaller niche service providers; and a wide
variety of other solution providers, including large integrated transportation companies as well as regional warehouse and
transportation management firms. The segment competes most directly with logistics companies, including the North
American Surface Transportation segment of C.H. Robinson Worldwide, Inc.; Covenant Logistics Group, Inc.; Hub
Group, Inc.; the Integrated Capacity Solutions segment of J.B. Hunt Transport Services, Inc.; the Logistics segment of
Knight-Swift Transportation Holdings Inc.; Landstar System, Inc.; the truck brokerage and complementary service
offerings of RXO, Inc.; and the Freight segment of Uber Technologies, Inc. Our Asset-Light segment’s moving services
compete with truck rental, self-move, and van line service providers, and several emerging self-move competitors who
offer moving and storage container service. Quality of service, technological capabilities, and industry expertise are critical
differentiators among the competition. In particular, companies with advanced systems that offer optimized shipping
solutions, reliable access to capacity, real-time visibility of shipments, verification of chain of custody procedures, and
advanced security have significant operational advantages and create enhanced customer value.
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Pricing
Approximately 20% of our Asset-Based business is subject to base LTL tariffs, which are affected by general rate
increases, subject to individually negotiated discounts. Rates on the remaining Asset-Based business, including business
priced in the spot market, are subject to individual pricing arrangements negotiated at various times throughout the year.
Most of the business that is subject to negotiated pricing arrangements is associated with larger customer accounts with
annually negotiated pricing arrangements. The remaining business is priced on an individual shipment basis considering
each shipment’s unique profile, the value we provide to the customer, network capacity, and current market conditions.
We allow shippers without negotiated published rates to obtain LTL rates for their shipping needs with ABF Freight’s
reliable service and capacity options through a dynamic pricing option. This innovative pricing mechanism enables
customers to instantly access LTL rates online, by phone, or through application programming interface (“API”)
technology, for shipments within the United States, Canadian cross-border, Mexico, and Puerto Rico. We can offer
customers our best price on each shipment by leveraging available capacity within the ABF Freight network at the time of
the quote. The market has been receptive to this dynamic pricing option for transactional LTL shipments, and the program
has been beneficial in optimizing our business levels.
We also utilize a space-based pricing approach for shipments subject to LTL tariffs to better reflect freight shipping trends,
including the overall growth and ongoing profile shift to bulkier shipments across the entire supply chain, the acceleration
in e-commerce, and the unique requirements of many shipping and logistics solutions, such as accommodating the growing
demand for smaller LTL shipments. We are experienced in handling complicated freight and offer logistics solutions that
respond to the unique shipment characteristics of our customers’ various products and commodities. An increasing
percentage of freight is taking up more space in trailers without a corresponding increase in weight. Traditional LTL
pricing is generally weight-based, while our linehaul costs are generally space-based (i.e., costs are impacted by the volume
of space required for each shipment). Space-based pricing involves the use of freight dimensions (length, width, and
height) to determine applicable cubic minimum charges (“CMC”) that supplement weight-based metrics when appropriate.
We believe space‑based pricing better aligns our pricing mechanisms with the metrics affecting our resources and,
therefore, our costs to provide logistics services. CMC is an additional pricing mechanism to better capture the value we
provide in transporting these shipments.
Our Asset-Based and certain operations within our Asset-Light segment assess a fuel surcharge based on the index of
national on-highway average diesel fuel prices published weekly by the U.S. Department of Energy. While the fuel
surcharge is one of several components in our overall rate structure, the actual rate paid by customers is governed by
market forces and the overall value of services provided to the customer.
Industry Factors
According to management’s estimates, and market studies by Armstrong & Associates, Inc. and the U.S. Department of
Commerce during 2024, the total market potential in the industry segments we serve is approximately $359 billion. The
LTL industry has significant barriers to entry and is highly competitive, as previously discussed in “Asset-Based Segment”
within this Business section. Our Asset-Light market share represents a small portion of the total market, which evidences
the significant growth opportunity for us in this segment. More sophisticated supply chain practices are required as supply
chains expand and become more complex, product and service needs continue to evolve, and companies look for solutions
to their logistics challenges and lower-cost supply chain alternatives.
The transportation industry is subject to numerous laws, rules, and regulations, as further discussed below within
“Environmental and Other Government Regulations,” and carriers are required to obtain and maintain various licenses and
permits, some of which are difficult to obtain. The trucking industry faces rising costs of compliance with government
regulations on safety, equipment design and maintenance, driver utilization, climate-related impact, and fuel economy, as
well as increasing costs in certain areas that are not industry-specific, including health care and retirement benefits. Higher
compliance costs will continue to impair the competitiveness of smaller carriers in the logistics market, which may lead
to tighter capacity or consolidation within certain sectors. In addition, disruptions from unexpected events such as natural
disasters and geopolitical conflicts could result in further utilization of expedited shipping and premium logistics services
and cause companies to focus on risk management within their supply chains.
Seasonality
Our reportable operating segments are impacted by seasonal fluctuations that affect tonnage, shipment levels, and demand
for our services, which in turn may impact our revenues and operating results. Inclement weather conditions can adversely
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affect freight shipments and operating costs of our Asset-Based and Asset-Light segments. Shipments may decline during
winter months because of post-holiday slowdowns and during summer months due to plant shutdowns affecting
automotive and manufacturing customers of our Asset-Light segment; however, weather or other disruptive events can
result in higher short-term demand for our expedite services depending on the impact to customers’ supply chains.
Historically, the second and third calendar quarters of each year usually have the highest tonnage and shipment levels. In
contrast, the first quarter generally has the lowest, although other factors, including the state of the U.S. and global
economies; available capacity in the market; the impact of yield initiatives, and external events or conditions may influence
quarterly business levels. Our yield initiatives, along with increased technology‑driven intelligence and visibility with
respect to demand, have allowed for shipment optimization in non-peak times, reducing our susceptibility to seasonal
fluctuations in recent years, including during the years ended December 31, 2024, 2023, and 2022.
Technology
Rooted in a strong history of innovation, technology is a significant driver of our strategy — it differentiates us in the
marketplace and allows us to continuously evolve. Much of the technology used at ArcBest has been developed internally
and is tailored specifically for customers, capacity suppliers and internal business processing needs. Through the
implementation of custom-built solutions and leading-edge technologies, we help our customers successfully navigate the
complex logistics landscape so they can use their supply chain as a competitive advantage.
During 2024, we made additional technology investments to improve both customer experience and carrier capacity
experience while continuing to optimize costs. Some examples of these investments include:
•
After the successful rollout of the first phase of City Route Optimization technology at our service centers during
2023, we began piloting the second phase in 2024. The first phase resulted in improved efficiencies and lowered
costs addressing the environmental impact of our fuel emissions in our city operations through the use of
algorithms created using historical shipment and geographic data. With the second phase, we are now focusing
on enhancing technology through dynamic routing optimization. Alongside the second phase of City Route
Optimization, we are also utilizing a new city pick-up augmentation process – providing our city dispatchers with
augmented support in predicting daily demand and optimizing pick-up routes, thus minimizing route costs and
maximizing trailer usage.
•
We began beta testing ArcBest ViewTM, which was released to the public in February 2025. ArcBest View is our
new digital platform designed to make shipments easier to manage with multi-mode quoting and booking and an
easy-to-use visibility tool called ViewPointTM, which combines several tools on the Company’s website into one
user-friendly experience.
•
We continue to invest in ArcBest Virtual Agent (AVA), which uses automation to quickly schedule shipment
pickups, supply tracking information, and address other questions through email, phone, and web chat.
•
We continue to release features to our carrier-facing portal to grow usage of this digital channel. These
enhancements increase efficiencies for our carriers and our internal team. We have also enhanced our capacity
sourcing tools to generate proactive notifications to carriers when available loads meet their desired needs leading
to increased digital engagement and coverage as well as improved carrier experience.
•
In February 2024, we announced the next step in our Vaux suite – Vaux Smart AutonomyTM, which combines
autonomous mobile robot forklifts and reach trucks, intelligent software, and remote teleoperation capability to
autonomously handle materials movement within warehouses, distribution centers, and manufacturing facilities,
while being monitored by humans. In 2024, we received SupplyTech Breakthrough’s “Robotics Innovation of
the Year” award for Vaux Smart Autonomy, recognizing the technology as a breakthrough product in the crowded
supply chain and logistics technology markets. Vaux Smart Autonomy was also named within Fast Company’s
annual “Next Big Things in Tech” list as an emerging technology having a profound impact.
•
In February 2025, we announced another addition to our Vaux suite – Vaux VisionTM, which is a 3D perception
technology designed to streamline material handling by providing precise, real-time freight measurements
directly on a forklift. With sensors placed strategically on the forklift that activate upon picking up the freight,
the technology captures dimensions, images, and deep shipment insight on the go, identifying revenue
opportunities and enhancing operational efficiencies without disrupting workflow. Operators receive real-time
feedback on a tablet, allowing for immediate adjustments, and data is stored securely in the cloud. The technology
can handle freight of various shapes and sizes, not limited to standard pallets.
Typically, freight transportation customers communicate their freight needs, on a shipment-by-shipment basis, by using
telephone, email, web, mobile applications, electronic data interchange (“EDI”), or API. In the Asset‑Light segment, the
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information about each shipment is entered into an operating system that facilitates the selection of a contracted carrier or
carriers based on the carrier’s service capability, equipment availability, freight rates, and other relevant factors. Once the
carrier is selected, the cost for the transportation has been agreed upon, and the carrier has committed to providing the
transportation, we are in contact with the carrier to continually update the position of equipment to meet customers’
requirements, tracking the status of the shipment from origin to delivery. The various tracking methods automatically
update our fully integrated internal software and provide customers real-time electronic updates.
We make information readily accessible to our customers through various electronic pricing, billing, and tracking services,
including mobile-responsive websites that allow customers to access information about their shipments, request shipment
pickup, and utilize various other digital tools. Online functions tailored to the services requested by customers include bill
of lading generation, pickup planning, customer-specific price quotations, proactive tracking, customized email
notification, logistics reporting, dynamic rerouting, and other connectivity tools. This technology allows customers to
directly incorporate data from our systems into their websites, transportation management systems, or other information
systems using EDI standards and secure API. As a result, our customers can provide shipping information and support
directly to their own customers.
ArcBest has an Innovation Ambassador Program to encourage new, transformative ideas. This program includes a team
of employees from across the organization who work closely with executive leadership to identify opportunities for
disruptive innovation within our company and to evaluate potential external innovation partners. During 2024, ArcBest
Technologies sponsored its fifth annual Imagine competition, which asked teams of employees across the organization to
collaborate and work on innovative ideas on how we can provide our customers with everyday excellence through the use
of the Quality Process, which has been a guiding force behind ArcBest’s success for the past 40 years.
Insurance
Generally, claims exposure in the freight transportation and logistics industry consists of workers’ compensation,
third‑party casualty liability, and cargo loss and damage. We maintain insurance that we believe is adequate to cover losses
in excess of self-insured amounts or deductibles. However, we cannot provide assurance that our insurance coverage will
provide adequate protection under all circumstances or against all potential losses. We have experienced situations where
excess insurance carriers have become insolvent or are not willing to write liability coverage for brokerage liability. We
pay assessments and fees to state guaranty funds in states where we have workers’ compensation self-insurance authority.
In some of these states, depending on the specific state’s rules, the guaranty funds may pay excess claims if the insurer
cannot pay due to insolvency. However, there can be no certainty of the solvency of individual state guaranty funds.
We have been able to obtain what we believe to be adequate insurance coverage for 2025 and are not aware of any matters
which would significantly impair our ability to obtain adequate insurance coverage at market rates for our operations in
the foreseeable future. A significant increase in the frequency or severity of accidents, cargo claims, or workers’
compensation claims or the significant unfavorable development of existing claims could have a material adverse effect
on our cost of insurance and results of operations.
We also maintain property and cyber insurance which would offset losses up to certain coverage limits in the event of a
catastrophe or certain cyber incidents, including certain business interruption events related to these incidents; however,
losses arising from a catastrophe or significant cyber incident may exceed our insurance coverage and could have a material
adverse impact on our results of operations and financial condition. We do not have insurance coverage specific to losses
resulting from a pandemic or geopolitical conflict.
Environmental and Other Government Regulations
Various international, federal, state and local agencies exercise broad regulatory powers over the transportation industry,
generally governing such activities as operations of and authorization to engage in motor carrier freight transportation,
operations of non-vessel-operating common carriers, operations of ocean freight forwarders and ocean transportation
intermediaries, indirect air carriage, safety, contract compliance, insurance and bonding requirements, tariff and trade
policies, customs, import and export, food safety, employment practices, licensing and registration, taxation,
environmental matters, data privacy and security, and financial reporting. Compliance with future modifications to the
regulations impacting the transportation industry may impact our operating practices and costs, which could have a
material adverse impact on our financial condition, results of operations, and cash flows. Other carriers would be similarly
affected by changes in industry regulations.
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Environmental Regulations
We are subject to federal, state, and local environmental laws and regulations relating to, among other things: emissions
control, transportation or handling of hazardous materials, underground and aboveground storage tanks, stormwater
pollution prevention, contingency planning for spills of petroleum products, and disposal of waste oil.
In August 2016, the U.S. Environmental Protection Agency (the “EPA”) and the National Highway Traffic Safety
Administration (the “NHTSA”) jointly finalized a national program establishing a second phase of greenhouse gas
(“GHG”) emissions (“EPA/NHTSA Phase 2”), through their authorities under the Clean Air Act, as amended, imposing
new fuel efficiency standards for medium- and heavy-duty vehicles and engines, such as those operated by our Asset-
Based segment, for model years 2021-2027 and also instituting fuel efficiency improvement technology requirements for
trailer model years 2018-2027. In March 2024, the EPA finalized a rule for a third phase of the GHG emissions
(“EPA/NHTSA Phase 3”), which includes more stringent standards to reduce GHG emissions from heavy-duty vehicles
beginning with model year 2027 beyond the current standards applicable under the EPA/NHTSA Phase 2. Similarly, the
EPA finalized more ambitious emissions reduction standards for light- and medium-duty vehicles starting with model year
2027 in March 2024.
In September 2019, the state of California signed legislation which directs the California Air Resources Board (the
“CARB”) and other state agencies to develop and implement a comprehensive inspection and maintenance program for
heavy-duty vehicles. A number of states have individually enacted, and California and certain other states may continue
to enact, legislation relating to engine emissions, trailer regulations, fuel economy, and/or fuel formulation, such as
regulations enacted by the CARB. This legislation, now known as the Clean Truck Check Program, combines periodic
vehicle testing requirements with other emissions monitoring techniques, in an effort to provide significant reductions in
pollution necessary to achieve federal air quality mandates in California. The program requirements also include annual
compliance reporting for self-propelled vehicles registered for on-road use, along with annual per vehicle compliance fees
beginning in 2024. In August 2021, CARB adopted the Advanced Clean Truck Regulation, which requires manufacturers
to sell a growing percentage of zero-emission medium and heavy-duty trucks. As a result, ABF Freight will not be able to
register new 2025 tractors in certain states, including California, as OEM’s are regulated on an increasing percentage of
new truck sales that must be zero emission vehicles from 2024 to 2035.
In October 2023, the state of California signed legislation under the Climate Corporate Data Accountability Act requiring
reporting of direct and indirect greenhouse gas emissions starting in 2026 and 2027 for U.S. companies with annual
revenues of $1 billion or more doing business in the state of California and under the Greenhouse Gases: Climate-Related
Financial Risk Act requiring companies generating $500 million or more in total annual revenue doing business in the
state of California to report financial risks related to climate change and related plans for risk mitigation. In September
2024, the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act were amended through
the Greenhouse Gases: Climate Corporate Accountability: Climate-Related Financial Risk Act, which requires CARB to
specify a schedule for reporting of scope 3 indirect emissions and eliminates the annual fee to the state of California upon
filing climate-related disclosures required under the initial acts. In December 2024, CARB released an enforcement notice
related to the Climate Corporate Data Accountability Act that encouraged entities to move towards full compliance as
quickly as possible while also acknowledging that meeting the statutory deadlines would be difficult and indicating that
companies should demonstrate a good faith effort to retain the required emissions data necessary for reporting. Also in
December 2024, CARB began soliciting feedback from the public on how to approach implementation of the California
bills. The public comment period closed in mid-February 2025.
In June 2024, CARB approved for adoption the Zero-Emission Forklift Regulation which requires the phase-out of forklifts
using large spark ignition engines in 2028 with a goal of shifting the forklift segment in California to zero-emission
technology by 2038. As a result of this regulation, ABF Freight purchased nine zero-emission forklifts in 2024.
In November 2018, the EPA launched the “Cleaner Trucks Initiative” (the “CTI”) which includes plans for future
rulemaking to reduce nitrogen oxide emissions. In January 2020, the EPA published an Advanced Notice of Proposed
Rulemaking to solicit pre-proposal comments on the CTI. One planned feature of the initiative is to coordinate emissions
standards nationwide in an effort to make compliance easier for the industry by preventing a further patchwork of state
and local emissions regulations. In August 2021, the EPA announced the “Clean Truck Plan,” a series of rulemakings over
the next three years, the third and final was announced in March 2024, to set new emissions standards to reduce nitrogen
oxide emissions from heavy-duty vehicles beginning with model year 2027. The passage of these additional rulemakings
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takes into consideration the Inflation Reduction Act of 2022 which seeks greater application of zero-emission vehicle
technologies.
While fuel consumption and emissions may be reduced under the new standards, emission-related regulatory actions have
historically resulted in increased costs of revenue equipment, diesel fuel, and equipment maintenance, and future
legislation, if enacted, could result in increases in these and other costs for which the amounts cannot be determined at this
time. The future of “cap and trade” programs or measures is unknown, and the potential costs of such programs or similar
future legislative or regulatory measures are uncertain. We are unable to determine with any certainty the effects of any
future climate change legislation beyond the currently enacted regulations, and there can be no assurance that more
restrictive regulations than those previously described will not be enacted either federally or locally.
At certain facilities of our Asset-Based operations, we store fuel and oil in underground and aboveground tanks for use in
tractors and trucks. Maintenance of our tanks is regulated by the EPA and, in most cases, by state agencies. Management
believes we are in substantial compliance with all such regulations. The underground storage tanks are required to have
leak detection systems, and we are not aware of any leaks from such tanks that could reasonably be expected to have a
material adverse effect on our operating results. Notwithstanding current compliance, including under a consent decree
with the EPA, as discussed below, we are subject to on-going environmental remediation obligations concerning historical
underground storage tank releases, for which the resolutions are not expected to have a material adverse effect on our
financial condition, results of operations, or cash flows.
Certain of our Asset-Based service center facilities operate with no exposure certifications or stormwater permits under
the federal Clean Water Act (the “CWA”), as amended. The no-exposure certification and stormwater permits may require
periodic facility inspections and monitoring and reporting of stormwater sampling results. Management believes we are in
substantial compliance with all stormwater laws, maintenance and standard operating procedures of such regulations,
including the consent decree entered into on March 20, 2023.
We have received notices from the EPA and others that we have been identified as a potentially responsible party under
the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, or other federal or state
environmental statutes, at several hazardous waste sites. After investigating our subsidiaries’ involvement in waste
disposal or waste generation at such sites, we have either agreed to de minimis settlements or determined that our
obligations, other than those specifically accrued with respect to such sites, would involve immaterial monetary liability,
although there can be no assurance in this regard.
It is anticipated that the resolution of our environmental matters could take place over several years. Our reserves for
environmental compliance matters and cleanup costs are estimated based on management’s experience with similar
environmental matters and testing performed at certain sites.
Other Government Regulations
We operate in the United States and, for international transportation, from the United States, pursuant to federal operating
authority granted by the U.S. Department of Transportation (the “DOT”) and the U.S. Federal Maritime Commission. Our
operations are subject to cargo security and transportation regulations issued by the Transportation Security Administration
and regulations issued by the U.S. Department of Homeland Security.
We operate under the Occupational Safety and Health Act of 1970 (the “OSH Act”). Under the OSH Act, ArcBest has a
responsibility to provide employees a safe workplace. This includes, but is not limited to:
•
Providing a workplace free from serious recognized hazards and complying with standards, rules, and regulations
issued under the OSH Act;
•
Examining workplace conditions to make sure they conform to applicable Occupational Safety and Health
Administration Standards; and
•
Ensuring employees have and use safe tools and equipment and properly maintain this equipment.
Our Asset-Based operations and our Asset-Light segment’s network of third-party contract carriers must comply with
industry regulations, including the electronic logging devise mandate of the Federal Motor Carrier Safety Administration
(the “FMCSA”) for interstate commercial trucks and hours of service, safety and fitness, and other regulations of the DOT,
including requirements related to drug and alcohol testing. We are subject to the hazardous materials regulations of the
FMCSA for our transportation and arrangement for transportation of hazardous materials and explosives, as well as our
disposal of hazardous waste.
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We provide transportation and logistics services to and from a number of international locations and are, therefore, subject
to a wide variety of domestic and international laws and regulations, including export and import laws. We are also subject
to compliance with the Foreign Corrupt Practices Act of 1977, as amended and hold Customs-Trade Partnership Against
Terrorism status for businesses within our Asset-Based and Asset-Light segments.
If we were to violate the government regulations under which we operate, we may be subject to substantial fines or
penalties or our business operations could be restricted, which could have a material adverse impact on our financial
condition, results of operations, and cash flows.
Human Capital Resources
Our people are at the heart of our success, and we provide a workplace that respects all cultures, perspectives, and
experiences. As of December 2024, we had 14,000 employees, of which approximately 57% were members of labor
unions. As previously described in the “Asset-Based Segment” within this Business section, as of December 2024,
approximately 82% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA, the collective
bargaining agreement with the IBT, which will remain in effect through June 30, 2028.
Employee Attraction, Development, and Retention
Our business results and future growth opportunities depend on our ability to successfully manage our human capital
resources, including attracting, developing, retaining, and upskilling our personnel. We strive to recruit people with the
skills, experience, and potential needed for each position and maintain a culture of continuous growth and professional
development. Our diverse hiring initiatives, including our commitment to hiring veteran and military-connected
individuals, continue to remain a top focus within our organization. We provide intentional training and development plans
throughout each stage of career progression that accelerate job mastery and development for future roles. Our
comprehensive learning program offers classroom, virtual, and web-based training options. In 2024, we were listed among
other Training APEX Awards recipients, marking our fifteenth year to be recognized.
We also offer a tuition reimbursement program and partner with a private university to provide onsite and virtual classes
for employees to further their education. In 2024, we announced the launch of ArcBest’s Employee Dependent Scholarship
Program with initial scholarships awarded for the 2024-2025 school year.
We utilize a customized performance management system that incorporates goals and development planning to better
position employees in their career paths. We provide career path visibility through our job architecture framework, and
employees participate in annual career conversations with their direct supervisor. We also have a robust succession
planning program to ensure continuity in critical roles. We regularly evaluate our compensation and benefits package to
ensure it remains competitive, including insurance and retirement. We offer an array of programs to support the four pillars
of wellness for our employees – physical, financial, emotional/social, and developmental. Employee feedback is obtained
through an annual survey as well as periodic pulse surveys to help us assess and improve engagement and implement
changes to enhance our work environment.
At ArcBest and ABF Freight, addressing the ongoing driver shortage is a top priority for our business. To attract and retain
qualified truck drivers, we have developed a range of initiatives to both recruit new drivers and upskill our existing
workforce. One of our key programs is the Driver Development Program, a six-week paid training initiative that helps
individuals earn their CDL-A license and launch their careers as professional drivers. Additionally, we host on-site hiring
events at critical locations to connect with potential candidates and meet immediate staffing needs. To address the driver
shortage, we continue to invest in programs designed to support the development and retention of qualified drivers,
including veterans and military-connected individuals, ensuring that we meet the growing demand in the freight
transportation industry. As a result of our efforts, ArcBest was recognized as a 4-Star Employer Designation under the
2024 VETS Indexes Employer Awards, amongst 285 of the nation’s top veteran employers.
Belonging
We are dedicated to fostering an inclusive, diverse atmosphere where all cultures, perspectives and experiences are
respected. This commitment is lived out by our people through our mission and values — extending to each other, our
customers, carriers, suppliers and all other business relationships. Our Belonging strategy is divided into four main
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areas — workforce, workplace, community, and marketplace. ArcBest earned a spot among Forbes Best Large Employers
in both 2025 and 2024. The Company was also named to the “Elite 30” list of the 2024 Top Companies for Women to
Work in Transportation by the Women in Trucking Association and listed as a “Best Company to Work For” by U.S.
News & World Report in the transportation category. ArcBest also holds an A+ culture rating by employees via
Comparably. These distinctions consider factors such as quality of pay and benefits, corporate culture and belonging,
development and advancement opportunities, and more. In addition, we support our employees as they carry out our
wellness value by participating in healthy workplace initiatives and representing our company in wellness events in their
local communities.
We continue to invest in personnel and partnerships to lead and execute ArcBest’s Belonging strategy led by our Corporate
Social Responsibility team, reporting quarterly to the Nominating/Corporate Governance Committee of our Board of
Directors. Our Belonging Advisory Board is responsible for providing recommendations to attract, hire, and retain a broad
talent pool, supporting spaces for employee connections, and helping develop relationships with community organizations.
Our voluntary, employee-led Employee Resource Groups (“ERGs”) promote networking and mentorship for career
development in an open and welcoming space while fostering community building for employees’ shared identities,
experiences and interests. ERGs are open to all employees for participation. We now have six ERGs available to
employees, including ERGs focused on women in the supply chain industry; neurodivergent employees or employees
caring for neurodivergent loved ones; employees of color; employees who are military veterans or currently serving
military members or family members; LGBTQ+ employees or allies; and a welcoming network for new employees or
employees who have recently relocated and are looking for support in making connections within ArcBest.
We are intentional in our efforts to attract, hire, retain, and upskill through a diverse pipeline and historically
underrepresented talent, including those within the neurodivergent community. In addition, our Neurodivergent Project
Team has helped develop neuroinclusive awareness materials, educating co-workers and engaging with department leaders
about positions that may be particularly well-suited for individuals on the autism spectrum.
Our corporate Code of Conduct sets forth our general business conduct and ethics principles. Our nonunion employees are
required to participate in annual Code of Conduct training, which also covers our anti‑discrimination and anti-harassment
policies to further educate our employees about prohibited behaviors that undermine diversity. Our new hires complete
anti-harassment training, and workplace belonging training options are available to all employees.
As a result of our efforts to create positive work experiences while ensuring our people feel supported in the workplace,
we were also named as one of America’s “Most Responsible Companies 2025” by Newsweek and Statista, demonstrating
our commitment to being a responsible corporate citizen.
Health, Safety, and Security
The health and well-being of our employees is a priority, and we have numerous programs to support our people in
embracing total health. In addition to health benefits and voluntary insurance options, we also offer a wellness program
through which employees may receive reduced premiums, deductibles, and out-of-pocket expenses for their insurance by
completing certain preventative health requirements. We offer a digital health platform, life coaching services, behavioral
health support, and a weight loss program, and we encourage healthy behaviors throughout the year through regular
communications, educational sessions, wellness challenges, and other incentives.
Safety is critical to our business. We have safety procedures and guidelines, as well as required training and certification
programs, for our drivers and freight-handling personnel to promote safety on and off the road. We also have safety
measures and policies that apply to all independent contractors, owner-operators, and fleet owners in our Panther fleet, for
whom we have provided safety programs to heighten awareness, promote safe driving behaviors, and reduce violations
and accidents. Additionally, all of our company campuses, including corporate offices, are subject to safety and security
policies and procedures to ensure the health, safety, and welfare of all employees. Based on employee feedback, several
ArcBest teams collaborated to create new, more durable forklift attachments, designed to make freight handling safer and
easier while reducing damage.
Our Asset-Based segment is dedicated to safety and security in providing transportation and freight-handling services to
its customers. ABF Freight is the only ten-time winner of the Excellence in Security Award and a seven-time winner of
the President’s Trophy for Safety from the American Trucking Associations. In January 2024, three ABF Freight drivers
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were named by the American Trucking Associations as captains of the 2024-2025 “America’s Road Team,” continuing
the long-time tradition of ABF Freight’s representation in this select program based on the drivers’ exceptional safety
records and their strong commitment to safety and professionalism.
We expect all employees to obey and respect human rights laws, and we will not tolerate conduct that violates these laws.
We set the same expectations for our vendors, suppliers, and service providers through our Supplier Code of Conduct.
Given the nature of our industry, we are in a critical position to help raise awareness of human trafficking to potentially
disrupt these networks. Through partnerships with TAT® (formerly known as Truckers Against Trafficking) and Polaris,
we educate our employees and drivers on the realities of modern-day slavery and how they can play a role in the fight
against human trafficking.
Reputation and Responsibility
Our Company and our brands are consistently recognized for best-in-class performance and leading-edge technology.
Brands
The value of our brands is critical to our success. ArcBest is recognized as a leading integrated logistics company with
creative problem solvers who deliver innovative logistics solutions. Beyond this fundamental marketplace recognition of
our collective brand identity, our other key brands represent additional unique value in their target markets.
We have registered or are pursuing registration of various marks or designs as trademarks in the United States, including,
but not limited to “ArcBest,” “ABF Freight,” “Panther,” “MoLo,” “U-Pack,” “Vaux,” and “More Than Logistics.” For
some marks, we also have registered or are pursuing registration in certain other countries.
Other Intellectual Property
Additionally, our business and operations utilize and depend upon both internally developed and purchased technology.
We have obtained or are pursuing patent protection on internally developed and certain purchased technology, including
equipment and process patents in connection with the previously disclosed Vaux freight handling program.
Commitment to Environmental Responsibility
We are focused on understanding the potential impact and related risks of environmental factors on our business and the
impact of our operations on the environment. We continually seek more sustainable approaches across our business and
partner with customers to meet sustainability needs in their supply chains. We have voluntarily published an annual report
over the last five years that details our responsible business focal points, sustainability approaches, investments in
operational efficiencies and innovation, safety standards, and community-based partnerships. We use the ArcBest
Sustainability Roadmap and the priority assessment we conducted in 2021 as a guide for the sustainability topics our
stakeholders care most about, so that we can take appropriate actions to drive positive change. We also remain dedicated
to supporting and advancing the United Nations Global Compact’s Sustainable Development Goals (“SDGs”). Focusing
on SDGs that align with our mission and business strategies, we’ve taken action in four areas:
•
Good health and well-being
•
Decent work and economic growth
•
Climate action
•
Peace, justice, and strong institutions
We actively promote a cleaner environment by reducing both fuel consumption and emissions. For nearly two decades,
ArcBest, including ABF Freight, Panther, and MoLo, has participated in the EPA’s SmartWay Transport Partnership, a
collaboration between the EPA and the freight transportation industry that helps freight shippers, carriers, and logistics
companies reduce GHGs and diesel emissions. ArcBest was recognized as a 2024 and 2023 SmartWay Leader for our City
Route Optimization technology that enables ABF Freight to run fewer miles during pickup and delivery runs, creating
efficiencies while also reducing emissions. ABF Freight has also participated in opportunities to address environmental
issues in association with the Sustainability Task Force of the American Trucking Associations. For more than 40 years,
ABF Freight has partnered with BNSF Railway to provide intermodal shipping solutions, using stackable containers,
wheeled vans and pup trailers to ship freight, improve transportation efficiency and reduce emissions output. Through this
partnership, ABF Freight has added 500 stackable rail containers to its operations since 2019 and increased usage to nearly
50% in the first half of 2024, moving more freight at once while reducing emissions. As a result, ABF Freight received a
2024 BNSF Railway Sustainability Award. ArcBest’s commitment to sustainability has been recognized by various
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outlets, including as one of Inbound Logistics’s 2024 G75 Green Supply Chain Partners, marking our thirteenth year on
the list, and the EcoVadis Commitment Badge, demonstrating a concrete commitment to sustainability.
In 2024, we continued collaboration with a third-party consultant to help identify and prioritize our responsible business
initiatives. During 2023 and into 2024, our sustainability dashboard was used to track quantitative metrics related to the
environmental impact of our operations, including emissions. This dashboard has been utilized, along with qualitative
analysis, to identify areas for improvement, track our Scope 1 (direct) and Scope 2 (indirect) GHG emissions. During
2024, we transitioned to a third-party platform that will enable us to estimate Scope 3 (indirect) emissions.
For many years, ABF Freight has voluntarily limited the maximum speed of its trucks, thereby reducing fuel consumption
and emissions and contributing to an excellent safety record. ABF Freight utilizes engine idle management programming
to automatically shut down engines of parked tractors. Fuel consumption and emissions have also been minimized through
a strict equipment maintenance schedule. To further enhance fuel economy and reduce emissions, ABF Freight voluntarily
installs aerodynamic aids on its fleet of over-the-road trailers. We continue to replace aging equipment models with clean,
fuel-efficient equipment. In our dock operations, we utilize forklifts with engines powered by liquefied petroleum gas,
which the EPA recognizes as a clean, alternative fuel, and we have invested in a small number of electric forklifts, electric
yard tractors, and electric Class 6 straight trucks to replace diesel-burning equipment. Additionally, MoLo leases a LEED
Gold-certified office facility in Chicago, which was constructed to include a green roof, smart lighting, energy-efficient
HVAC units, and additional eco-friendly features.
Contributions & Awards
Our culture is focused on quality service and responsibility, and our employees are committed to the communities in which
they live and work. We make financial contributions to a number of charitable organizations, many of which are supported
by our employees. These employees volunteer their time and expertise, and many serve as officers or board members of
various philanthropic organizations. To help guide our actions in our giving efforts, we have outlined our three
philanthropic pillars — Community, Education and People. During 2023, we celebrated our 100th anniversary by giving
over $1 million to organizations that align with our philanthropic pillars and continued these efforts in 2024. In our
corporate headquarters’ local community, we have long supported the United Way of Fort Smith Area and its partner
organizations. In 2024, with employee support, we once again are a United Way Pacesetter, setting the standard for
leadership and community support, and we earned the Chairman’s Award for 2023-2024 campaign efforts. Our employees
are also great contributors of time to our local community through various volunteer activities.
In addition to the recognitions and awards previously mentioned in the Business section, ArcBest has been recognized
with the following awards:
•
Inbound Logistics’ 2024 list of “Top 100 Truckers;”
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Named to the 2024 “FleetOwner 500 For-Hire Fleets” list ranking No. 27, up two spots from 2023;
•
Fortune 1000 List of Top Companies, ranking No. 689 in 2024;
•
15th in the Commercial Carrier Journal’s 2024 list of “Top 250 For-Hire Carriers;”
•
Named to Financial Times’ and Statista’s list of “The Americas’ Fastest Growing Companies of 2024;”
•
Transport Topic’s 2024 list of “Top 100 For-Hire Carriers” for our eleventh consecutive year;
•
Ranked No. 40 on Transport Topics “2024 Top 100 Logistics List;”
•
Named a FourKites Premier Carrier for the first half of 2024; and
•
Inbound Logistics’ 2024 “Top 100 3PL Providers” as one of the best of the best third-party logistics companies.
Asset-Based Segment
Our Asset-Based carrier, ABF Freight, has received various awards since 2023 demonstrating ABF Freight’s commitment
to quality and excellence, along with sustainability awards and recognitions, as previously detailed in the Business section.
•
Named a Logistics Management “2024 Quest for Quality Award” winner in the National LTL Carriers category
for the eighth time;
•
Ranked No. 1 in the industry for the most useful website and No. 2 in the industry for proactive communications
by Mastio; and
•
Ranked No. 8 in the Journal of Commerce list of top 40 LTL Carriers.
Asset-Light Segment
Asset-Light received the following recognitions since 2023, in addition to those previously detailed in the Business section:
•
Named among the 100 “Top Freight Brokerage Firms” in Transport Topics for 2024;
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•
MoLo was honored in January 2025, for the fifth consecutive year, as part of Built In’s “2025 Best Places to
Work For” awards, earning a place in the “Best Places to Work in Chicago” and the “Best Midsize Places to
Work in Chicago” categories;
•
MoLo recognized as a 2024 top “3PL & Cold Storage Provider” by Food Logistics;
•
MoLo and Panther were included in Project44’s “2024 Preferred Carriers” list as gold-tier carriers in the truckload
and LTL categories, respectively, for providing exceptional real-time visibility; and
•
MoLo was named a “2024 Top Food Chain Provider” by Food Chain Digest, the official magazine of Food
Shippers of America.
Available Information
We file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments
to those reports, proxy and information statements, and other information electronically with the SEC. All reports and
financial information filed with, or furnished to, the SEC can be obtained, free of charge, through our website located at
www.arcb.com or through the SEC’s website located at www.sec.gov as soon as reasonably practical after such material
is electronically filed with, or furnished to, the SEC. The Annual Report on Form 10-K and other information may also be
obtained without charge by writing to ArcBest Corporation, Attention: Investor Relations, 8401 McClure Drive, Fort
Smith, AR 72916; or by telephone at 479-785-6000. The information contained on our website does not constitute part of
this Annual Report on Form 10-K, nor shall it be deemed incorporated by reference into this Annual Report on Form 10‑K.
In addition to its reports filed or furnished with the SEC, the Company publicly discloses material information from time
to time in our press releases, at annual meetings of shareholders, in publicly accessible conferences and investor
presentations, and through our website (principally in its News and Events section of our Investor Relations page).
ITEM 1A.
RISK FACTORS
Our business is subject to a variety of material risks about which we are aware and could also be affected by additional
risks and uncertainties not currently known to us or that we currently deem to be immaterial. This Risk Factors section
discusses the material risks relating to our business activities, including those affecting the transportation industry and our
Company that are largely out of our control. If any of these risks or circumstances actually occur, it could materially harm
our business, results of operations, financial condition, and cash flows; impair our ability to implement business plans or
complete development activities as scheduled; and/or result in a decline in the market price of our common stock.
Risks Related to Cybersecurity, Data Privacy, and Information Technology
We depend on our Information Technology (“IT”) systems as well as software programs and applications provided
by third parties, and a systems failure, perceived or actual data privacy breach, or cybersecurity incident could
have a material adverse effect on our business, results of operations, and financial condition.
We depend on the proper functioning, availability, and security of our IT systems, including communications, data
processing, financial, and operating systems, as well as proprietary software programs and certain software applications
provided by third parties that are integral to our business operations. Such third parties may host, store, transmit data or
have access by means of connected IT systems to information about our business, customers, employees, and vendors.
Our IT systems and third-party applications that we utilize are vulnerable to interruption by adverse weather conditions or
natural disasters; power loss; telecommunications failures; terrorist attacks; internet failures and other disruptions to
technology, including computer viruses and cybersecurity incidents such as denial of service, intentional or inadvertent
acts by employees or vendors with access to our systems or data, phishing, disruption by malware, attacks enabled by AI,
or other security or data breach; and other events beyond our control. Any significant failure or other disruption in critical
IT systems that impacts the availability, reliability, speed, accuracy, or other proper functioning of these systems or that
results in proprietary information or sensitive or confidential data, including information of customers, employees and
others, being compromised could interrupt or delay our operations, damage our reputation, result in a loss of customers,
cause errors or delays in financial reporting, result in violation of privacy laws, expose us to potential loss or litigation,
and/or cause us to incur significant time and expense to remedy such an event. New or enhanced technology that we
develop and implement may also be subject to cybersecurity attacks and may be more prone to related incidents.
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A portion of our employee population operates under remote and hybrid work arrangements, which has increased demand
for IT resources and our exposure to cybersecurity risks, including an increased risk of unauthorized access to proprietary
information or sensitive or confidential data and cybersecurity incidents, such as phishing. As AI capabilities improve and
are increasingly adopted, we may see cybersecurity attacks perpetrated through AI, including an increase in the speed,
scale, and automation of such attacks. While we maintain property and cyber insurance, losses arising from a significant
disaster or cyber incident may exceed our insurance coverage and could have a material adverse impact on our results of
operations and financial condition. Although we have implemented measures to mitigate our exposure to the heightened
risks of cybersecurity incidents, we cannot be certain that such measures will be effective to prevent a cybersecurity
incident from materializing.
We have experienced incidents involving attempted denial of service attacks, malware attacks, and other events intended
to disrupt information systems, wrongfully obtain valuable information, or cause other types of malicious events that could
have resulted in harm to our business. To our knowledge, the various protections we have employed have been effective
to date in identifying such events at points when the impact on our business could be minimized. Despite our efforts to
monitor and develop our IT networks and infrastructure, due to the increasing sophistication of cyber criminals and the
development of new techniques for attack, we may be unable to anticipate, promptly detect, or timely implement adequate
protective or remedial measures against cybersecurity attacks or recover use of our IT networks and infrastructure timely.
Interruptions or failures in third-party systems, including licensed software, that we utilize to meet certain IT needs,
could adversely affect our business.
The IT systems and operations of our third-party service providers are vulnerable to interruption by events beyond our
control, as previously described. We have limited control over the operation, quality, maintenance, or continued
availability of services provided by our vendors that are essential to our business. Disruptions or failures in the services
upon which our IT platforms rely, or in other third-party services upon which we rely to operate our business and report
financial results, may adversely affect our operations or the services we provide, as well as increase our costs or result in
a loss of customers. We also license a variety of software that provide critical support for our operations. There is no
guarantee that we will be able to continue these licensing arrangements with the current licensors, or that we can replace
the functions provided by these licenses, on commercially reasonable terms or at all.
We rely on the suitability of the design and operating effectiveness of internal controls maintained by our third-party
software providers and obtain related assurance reports from independent service auditors engaged by our third-party
software providers for all in-scope systems. However, we cannot ensure that controls identified and performed by our
third-party software providers are adequate to prevent, detect or correct misstatements in processing or reporting
transactions, or to adequately limit or eliminate system or operational vulnerabilities.
If we are unable to timely and effectively develop and implement new or enhanced technology or processes, or if
we fail to realize the potential benefits thereof, we may suffer competitive disadvantage, loss of customers, or other
consequences that could negatively impact our business, results of operations, and financial condition.
The industry has experienced, and will likely continue to experience, rapid changes in technology, including the
development of new technology; the deployment of emerging technology, such as generative AI and machine learning;
and enhancements in existing technology. With industry advancements in technology, our customers may find alternatives
to our services to meet their freight transportation and logistics needs. New entrants to the market, including technology-
centric or technology-enabled start-ups and emerging business models, have also expanded the field of competition and
increased pressure for innovation in the industry.
Technology and new market entrants may also disrupt the way we, and our competitors, operate to provide freight logistics
services. We expect our customers will continue to demand more sophisticated technology-driven solutions from their
suppliers, including advancements in processes, equipment, and facilities to build automation and address concerns over
business efficiency, supply chain effectiveness, and climate change. To improve efficiencies and meet our customers’
needs, we have made, and continue to make, significant investments in the enhancement of existing technology and in the
development of new and innovative solutions, such as software and physical assets that are in various stages of
development and implementation. Our investments in technology are further described in “Technology” within Part I,
Item 1 (Business) of this Annual Report on Form 10-K. A number of factors are involved in determining proof of concept,
and there can be no assurance that our technology implementations will be successful.
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Our efforts and investments in technology innovation, including the development, adoption and use of generative AI
technologies, may continue to require significant ongoing research and development and implementation costs and may
involve new or unforeseen risks and challenges, including heightened risks for data and information security, privacy,
protection, and copyright infringement and, in the case of generative AI, potential compliance gaps in an emerging but
fragmented regulatory environment. The success of our approach to technology innovation depends on market acceptance
of our solutions and other factors, including our ability to:
•
deploy funds and resources for investment in technology and innovation;
•
achieve the right balance of strategic investments in existing or developing technology and innovation;
•
timely and effectively develop and implement new or enhanced technology, including integration into current
operations and interaction with existing systems;
•
train our employees to operate the technology and/or achieve appropriate customer, carrier, or other desired user
adoption of the technology;
•
adequately anticipate challenges and respond to unforeseen challenges;
•
detect and remedy defects in enhanced or new technology; and
•
recover costs of investment through increased business levels, higher prices, improved efficiencies, or other
means, such as licensing or disposing of the developed technology.
We are still in the early stages of developing and deploying generative AI, a process that is particularly complex. This
complexity arises from the use of sensitive, proprietary, and confidential data that could be leaked, as well as the potential
flaws in algorithms and models, which may include biases, errors, and limitations in handling certain data types or
scenarios, ultimately affecting outputs. If we do not pursue technological advances or engage in innovation; if we fail to
successfully or timely develop and deploy enhanced or new technology; if any enhanced or new technology does not yield
the results we expect, or is developed by others; or if the decisions are made by us or our customers based on flawed AI
or model outputs, we may be placed at a competitive disadvantage; lose customers; be led to make decisions that could
bias certain individuals or classes of individuals and adversely impact their rights; incur higher than anticipated costs,
including the possible impact of asset impairment or the write-off of software development costs; or fail to meet the goals
of our internal growth strategy, any one of which could materially adversely impact our financial condition and results of
operations.
Risks Related to Our Business
The loss of or reduction in business from one or more large customers, or an overall reduction in our customer
base, could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
We do not have a significant customer concentration. However, our customer relationships are generally not subject to
long-term contractual obligations or minimum volume commitments, and we cannot ensure that our current customer
relationships will continue at the same business levels or at all. If we were to lose all or a portion of the business of some
of our large customers to our competitors or if our customers were to demand pricing concessions for our services, require
us to provide enhanced services at lower prices, or develop their own shipping and distribution capabilities, our business,
results of operations, and cash flows could be materially adversely impacted. A reduction in our customer base or difficulty
in collecting, or the inability to collect, payments from our customers due to pricing changes, economic hardship, or other
factors could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
Our initiatives to grow our business operations or to manage our cost structure to business levels may take longer
than anticipated or may not be successful.
Developing our service offerings requires ongoing investment in personnel and infrastructure, including operating and
management information systems. Depending upon the timing and level of revenues generated from our growth initiatives,
the related results of operations and cash flows we anticipate from these initiatives and additional service offerings may
not be achieved.
Our growth plans place significant demands on our management and operating personnel, and we may not be able to hire,
train, upskill, and retain the appropriate personnel to manage and grow our services. We have incurred increased costs
associated with long-term investment in the development of our owner-operator fleet and contract carrier capacity for our
Asset-Light segment. As we focus on market opportunities for our asset-light solutions, we may also encounter difficulties
in adapting our corporate structure or in developing and maintaining effective partnerships among our operating segments,
which could hinder our operational, financial, and strategic objectives. Furthermore, we may invest significant resources
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to enter or expand our services in markets with established competitors and new competitive challenges, and we may not
be able to successfully gain market share.
We also face challenges and risks in implementing initiatives to manage our cost structure to business levels or changing
market demands, as portions of salaries, wages, and benefits are fixed in nature, and adjustments otherwise needed to align
the labor cost structure to corresponding business levels are limited as we strive to maintain service quality. It is more
difficult to match our staffing levels and purchased transportation resources to our business needs in periods of rapid or
unexpected change. We may, in the future, incur additional costs related to purchased transportation and/or experience
labor inefficiencies in training new employees who are hired in response to growth. Such additional costs could be
disproportionate to our business levels and may adversely impact our operating results. A prolonged labor shortage or
significant labor inefficiencies could result in lower levels of service, including timeliness, productivity and/or quality of
service. While we regularly evaluate and modify the network of our Asset-Based operations to reflect changes in customer
demands and to reconcile the segment’s infrastructure with tonnage and shipment levels and the proximity of customer
freight, there can be no assurance that any given network change will result in improvement in our Asset-Based segment’s
results of operations.
We may be unsuccessful in realizing all or any part of the anticipated benefits of acquisitions within the expected
time period or at all. The cost, integration, and performance of any such acquisition may adversely affect our
business, results of operations, financial condition, and cash flows.
We may be unable to generate sufficient revenue or earnings from the operations of MoLo, which we acquired on
November 1, 2021, or any future acquired business, to offset our acquisition or investment costs, and the acquired business
may otherwise fail to meet our operational or strategic expectations. Difficulties encountered in combining operations,
including underestimation of the resources required to support an acquisition, could prevent us from realizing the full
anticipated benefits, and within the anticipated timeframe, and could adversely impact our business, results of operations,
and financial condition. If acquired operations fail to generate sufficient cash flows, we may incur impairments of
goodwill, intangibles, and other assets in the future.
The possible risks involved in acquisitions include, among others:
•
potential loss of customers, key employees, and third-party service providers;
•
difficulties synchronizing operations of the companies, including the integration of workforces, while continuing
to provide consistent, high-quality service to customers;
•
unanticipated issues in the assimilation and consolidation of IT, communications, and other systems, including
additional systems training and other labor inefficiencies;
•
potentially unacceptable qualification requirements for contract carriers or other third-party vendors;
•
potentially unfavorable, or adverse changes to, pre-existing contractual relationships;
•
delays in consolidation of corporate and administrative infrastructures;
•
difficulties and costs of synchronizing our policies, procedures, business culture, and benefits and compensation
programs;
•
inability to apply and maintain our internal controls and comply with regulatory requirements;
•
difficulties related to additional or unanticipated regulatory and compliance issues;
•
adverse tax consequences associated with the acquisition; and
•
other unanticipated issues, expenses, and liabilities, including previously unknown liabilities, or legal proceedings
which may arise, associated with the acquired business for which we have no, or are unable to secure, recourse
under applicable indemnification or insurance provisions.
We continue to evaluate acquisition candidates and may acquire assets and businesses that we believe complement our
existing assets and business or enhance our service offerings. The complex and time-consuming processes of evaluating
acquisitions and performing due diligence procedures include risks that may adversely impact the success of our selection
of candidates, pricing of the transaction, and ability to integrate critical functional areas of the acquired business. Future
acquisitions, if any, may require substantial capital or the incurrence of substantial indebtedness or may involve the dilutive
issuance of equity securities, which may negatively impact our capitalization and financial position. Further, we may not
be able to acquire businesses or assets in the future, or acquire them on terms favorable to us, even though we may have
incurred expenses in evaluating and pursuing strategic transactions.
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Unsolicited takeover proposals, proxy contests and other proposals or actions by activist investors may adversely
affect our business and our stock price.
We could become subject to unfavorable advances by investor activists or receive unsolicited takeover proposals at an
undervalued stock price. In the event that a third party makes an unsolicited takeover proposal or otherwise attempts to
gain control of our Company, our review and consideration of such proposals may be a significant distraction for our
management and may require us to expend significant time and resources away from our primary operations. Such
proposals may disrupt our business by causing uncertainty among current and potential employees, customers, and other
stakeholders, which could negatively impact our business, results of operations, and financial condition. Any perceived
uncertainties as to our future direction also may adversely affect the market price and lead to pronounced volatility in the
price of our common stock.
Damage to our corporate reputation may cause our business to suffer.
Our business depends, in part, on our ability to maintain the image of our brands. Service, performance, and safety issues,
whether actual or perceived, and whether as a result of our actions or those of our third-party service providers, could
adversely impact our customers’ image of our brands, including ArcBest, ABF Freight, Panther, MoLo, and U-Pack, and
result in the loss of business or impede our growth initiatives. Adverse publicity regarding labor relations, legal matters,
cybersecurity and data privacy concerns, social and sustainability issues, and similar matters, whether or not justified,
could have a negative impact on our reputation and may result in the loss of customers and our inability to secure new
customer relationships. Despite our efforts to adapt to and address these concerns, our efforts may be insufficient.
Additionally, the implementation of initiatives, including our sustainability initiatives, may increase our costs. It is difficult
to predict how our efforts with respect to sustainability matters will be evaluated by current and prospective investors or
by our customers or business partners, and our industry may be generally disfavored by the investing community at large.
Our business is increasingly dependent on the internet for attracting and securing customers, and the possibility that
fraudulent behavior may confuse or deceive customers, including through use of AI, heightens the risk of damage to our
reputation and increases the time and expense required to protect and maintain the integrity of our brands. With the
increased use of social media outlets, adverse publicity, even when based upon incorrect information or false statements,
can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond. Damage to our
reputation and loss of brand equity could reduce demand for our services and, thus, have an adverse effect on our business,
results of operations, financial condition, and the market price of our stock, as well as require additional resources to
rebuild our reputation and restore the value of our brands.
Our corporate reputation and business depend on a variety of intellectual property rights, and the costs and
resources expended to enforce or protect our rights or to defend against infringement claims could adversely impact
our business, results of operations, and financial condition.
We have registered or are pursuing registration of various marks and designs as trademarks in the United States. For some
marks, we also have registered or are pursuing registration in certain other countries. At times, competitors may adopt
service or trade names, logos, or designs similar to ours, thereby impeding our ability to build brand identity and possibly
leading to market confusion. We have obtained or are pursuing patent protection on internally developed and certain
purchased technology, including equipment and process patents in connection with Vaux. Competitors or other third
parties could attempt to reproduce or reverse-engineer our patented technologies, or we could be subject to third-party
claims of infringement. Any of our intellectual property rights related to trademarks, trade secrets, domain names,
copyrights, patents, or other intellectual property, whether owned or licensed, could be challenged, invalidated,
misappropriated, or infringed upon by third parties. Our efforts to obtain, enforce, or protect our proprietary rights, or to
defend against third-party infringement claims, may be ineffective and could result in substantial costs and diversion of
resources and could adversely impact our corporate reputation, business, results of operations, and financial condition.
Ineffective internal controls could negatively impact our business, results of operations, and reputation.
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal
controls over financial reporting, even if effective, only provide reasonable, not absolute, assurance with respect to the
preparation and fair presentation of financial statements and may not prevent or detect misstatements because of their
inherent limitations, including the possibility of human error, failure or interruption of information technology systems,
the circumvention or overriding of controls, or fraud. If we are unable to establish adequate internal controls or if our
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internal controls do not consistently operate as designed, our business, operating results, and reputation could be harmed,
and we could fail to meet our financial reporting obligations.
Risks Related to Our Industry
A nationwide or global disruption in the supply chain could increase volatility in freight volumes and materially
impact our business.
Our business may be materially impacted by the cyclical nature of the supply chain industry and the related changes in
consumer spending, which impacts our freight volumes. We have experienced, and may continue to experience, an
inability to obtain, or delays in the delivery of, equipment necessary for operations, including tractors, trailers, and other
equipment, as a result of manufacturing delays, supply chain disruptions, parts shortages, and equipment design changes
due to upcoming federal and/or state emissions standards. The extent to which we are vulnerable to and may be negatively
impacted by supply chain disruptions is uncertain and dependent upon the duration and severity of supply shortages or
decreased consumer demand, as well as other factors beyond our control. Supply chain disruptions have and may continue
to have a significant impact on consumer prices and demand, and create or exacerbate bottlenecks in production, which
may negatively impact our freight volume, operating costs, and ability to serve our customers.
We operate in a highly competitive and fragmented industry, and our business could suffer if we are unable to
adequately address factors that could affect our profitability, growth prospects, and ability to compete in the
transportation and logistics market.
We face significant competition in local, regional, national, and, to a lesser extent, international markets. We compete with
union and nonunion LTL carriers of varying sizes and, to a lesser extent, with truckload carriers and railroads. We also
compete with domestic and global logistics service providers, including asset-light logistics companies, integrated logistics
companies, and third-party freight brokers that compete in one or more segments of the transportation industry.
Numerous factors could adversely impact our ability to compete effectively in the transportation and logistics industry,
retain our existing customers, or attract new customers. The competitive factors material to our business are the following:
•
Our Asset-Based segment competes primarily with nonunion motor carriers who generally have a lower fringe
benefit cost structure than union carriers for freight-handling and driving personnel and have greater operating
flexibility as they are subject to less-stringent labor work rules.
•
Some of our competitors periodically reduce their prices to gain business, especially during times of reduced
growth rates in the economy, which limits our ability to maintain or increase prices. If customers select
transportation service providers based on price alone rather than the total value offered, we may be unable to
maintain our operating margins or to maintain or grow tonnage levels.
•
Enhanced visibility of capacity options in the marketplace is increasing, and customers may seek bids from
multiple carriers for their shipping needs, which may generally depress prices or result in the loss of some business
to our competitors.
•
In an excess capacity market, we may be unable to maintain the higher market-driven prices we obtained for our
services in the tighter capacity environment, especially if there is a prolonged recessionary period in the freight
environment as there was during 2023 and 2024. Alternatively, as market capacity tightens, customer demand
may exceed available carrier capacity in the industry.
•
Customers may reduce the number of carriers they use by selecting “core carriers” as approved transportation
service providers, and in some instances, we may not be selected.
•
Customers are increasingly focused on environmental concerns, including emissions, and may select
transportation providers that are able to reduce emissions more readily or effectively through efficiency
improvements to existing and emerging technologies, adoption of alternative fuels, or through carbon offsetting
mechanisms.
•
Shippers may choose to build their own logistics capabilities reducing or eliminating need for these services from
our Asset-Based segment.
Additionally, as the retail industry continues its trend toward increases in e-commerce at an unprecedented rate, the manner
in which our customers source or utilize our services will continue to evolve. If we are unable to successfully adapt and
implement appropriate measures in response to these changes, our operating results could be adversely affected.
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Increased prices for, or decreases in the availability of, equipment, including new revenue equipment, as well as
higher costs of related operating expenses, could adversely affect our results of operations and cash flows.
In recent years, original equipment manufacturers (“OEMs”) have significantly raised the prices of equipment, including
new revenue equipment, due to supply chain disruptions and other challenges beyond our control, including, but not limited
to geopolitical conflicts; increased costs of materials and labor, above normal inflation levels; and high interest rates, which
impact equipment financing. Manufacturers have also raised prices, in part, to offset their costs of compliance with new
tractor engine and emissions system design requirements intended to reduce emissions, which have been mandated by the
EPA, the NHTSA, and various state agencies as described in “Environmental and Other Government Regulations” within
Part I, Item 1 (Business) of this Annual Report on Form 10-K. GHG emissions regulations are likely to continue to impact
the design and cost of equipment utilized in our operations as well as fuel costs. Additional state-mandated
emission‑control requirements could increase equipment and fuel costs for entire fleets that operate in interstate commerce.
If new equipment prices increase more than anticipated, we could incur higher depreciation and rental expenses than
anticipated. Our third-party capacity providers, including owner-operators for portions of our Asset-Light segment
operations, are also subject to increased regulations and higher equipment and fuel prices, which will, in turn, increase our
costs for utilizing their services or may cause certain providers to exit the industry, which could lead to or exacerbate a
capacity shortage and further increase our costs of securing third-party services. If we are unable to fully offset any such
increases in expenses with freight rate increases and/or improved fuel economy, our results of operations could be
adversely affected.
We depend on suppliers for equipment, parts, and services that are critical to our operations, which may be difficult to
procure in the event of decreased supply or other supply chain disruptions. From time to time, some OEMs of tractors and
trailers may reduce their manufacturing output due to, for example, lower demand for their products in economic
downturns or a shortage of component parts. Component suppliers may either reduce production or be unable to increase
production to meet OEM demand, creating periodic difficulty for OEMs to react in a timely manner to increased demand
for new equipment and/or increased demand for replacement components as economic conditions change, as experienced
through the first half of 2023 due to significant shortages of semiconductor chips, which forced manufacturers to curtail
or suspend their production, leading to lower supply of tractors and trailers, higher prices and lengthened trade cycles. We
have and may continue to face reduced supply levels and/or increased acquisition costs for new tractors or trailers, as well
as related parts and services, for our Asset-Based operations.
Fuel shortages, changes in fuel prices, or the inability to collect fuel surcharges, could have a material adverse effect
on our business, results of operations, financial condition, and cash flows.
The transportation industry is dependent upon the availability of adequate fuel supplies. Fuel represents a significant
operating expense for us, and we do not have any long-term fuel purchase contracts or hedging arrangements to protect
against fuel price increases. The supply and price of fuel fluctuates greatly due to factors beyond our control, such as
global supply and demand for crude oil and diesel, political events, legislation and regulation, military conflicts, price and
supply decisions by oil producing countries and cartels, terrorist activities, and natural or man-made disasters. Significant
increases in fuel prices or fuel taxes resulting from these or other economic or regulatory changes that are not offset by
base freight rate increases or fuel surcharges or a disruption in our fuel supply could have a material adverse impact on
our results of operations.
We also pay independent contractor drivers a fuel surcharge that increases with the increase in fuel prices in our Asset-
Light segment. A significant increase or rapid fluctuation in fuel prices could cause the fuel surcharge we pay to
independent contractors to be higher than the revenue we receive under our customer fuel surcharge programs, which
could adversely impact our results of operations.
Our Asset-Based segment and certain operations of our Asset-Light segment assess a fuel surcharge based on an index of
national diesel fuel prices. When fuel surcharges constitute a higher proportion of the total freight rate paid, our customers
are less receptive to increases in base freight rates. Prolonged periods of inadequate base rate improvements could
adversely impact operating results as elements of costs, including contractual wage rates, continue to increase. In periods
of declining fuel prices, fuel surcharge percentages also decrease, which negatively impacts the total billed revenue per
hundredweight or revenue per shipment measure and, consequently, our revenues, and the revenue decline may be
disproportionate to the corresponding decline in our fuel costs, as experienced in 2023.
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Risks Related to Employees and Benefits
Difficulty attracting, retaining, and upskilling employees, or ABF Freight’s inability to reach agreement on future
collective bargaining agreements, could result in labor inefficiencies, disruptions, stoppages, or delayed growth.
In certain markets, we continue to experience challenges with hiring an adequate number of qualified drivers and
freight‑handlers. Although these hiring difficulties were tempered by the shutdown of a large LTL competitor in 2023, the
available pool of drivers has been declining in recent years and may continue to decline, which has caused and may in the
future cause difficulty in retaining and hiring qualified drivers. Government regulations or legislative actions that result in
shortages of qualified drivers could also impact our ability to grow. The expansion of flexible work options in recent years
has also provided more employment opportunities for those in professional roles, including our IT roles, making attraction
and retention more complex. If wage inflation continues for noncontractual professional roles, our labor costs will increase.
If we encounter difficulty in attracting, retaining, and upskilling employees, including qualified drivers, freight-handlers,
and professional personnel, we could incur higher recruiting expenses or a loss of business, and our profitability and ability
to grow could be adversely affected.
A significant portion of the employees in our Asset-Based segment are covered under the collective bargaining agreement
between ABF Freight and the IBT. If we are unable to effectively manage our relationship with the IBT, we could be less
effective in ongoing relations and future negotiations, which could lead to operational inefficiencies and increased
operating costs. There can be no assurance that our future collective bargaining agreements will be renewed on terms
favorable to us. The terms of any future collective bargaining agreements or the inability to agree on acceptable terms for
the next contract period may also result in higher labor costs, insufficient operational flexibility, a work stoppage, the loss
of customers, or other events that could have a material adverse effect on our business. We could also experience a loss of
customers or a reduction in our potential share of business in the markets we serve if shippers limit their use of unionized
freight transportation service providers because of the risk of work stoppages.
We could be obligated to make additional significant contributions to multiemployer pension plans.
ABF Freight contributes to multiemployer pension and health and welfare plans to provide benefits for its contractual
employees. These multiemployer plans, established pursuant to the Taft-Hartley Act, are jointly trusteed and cover
collectively bargained employees of multiple unrelated employers. Due to the inherent nature of multiemployer pension
plans, there are risks associated with participation in these plans that differ from single‑employer plans. Assets received
by the plans are not segregated by employer, and contributions made by one employer can be and are used to provide
benefits to current and former employees of other employers. If a participating employer in a multiemployer pension plan
no longer contributes to the plan, the unfunded obligations of the plan may be borne by the remaining participating
employers. If a participating employer in a multiemployer pension plan completely withdraws from the plan, it owes to
the plan its proportionate share of the plan’s unfunded vested benefits, referred to as withdrawal liability. A complete
withdrawal generally occurs when the employer permanently ceases to have an obligation to contribute to the plan.
Withdrawal liability is also owed in the event the employer withdraws from a plan in connection with a mass withdrawal,
which generally occurs when all or substantially all employers withdraw from the plan in a relatively short period of time
pursuant to an agreement. Were ABF Freight to completely withdraw from certain multiemployer pension plans, whether
in connection with a mass withdrawal or otherwise, under current law, we would have material liabilities for our share of
the unfunded vested liabilities of each such plan.
The multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. ABF Freight’s
obligations to these plans are generally specified in the 2023 ABF NMFA and other related supplemental agreements, as
further discussed in Note J to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K. These pension plans provide the best retirement benefits in the industry. However, when compared to
competitors, ABF Freight pays some of the highest benefit contribution rates in the industry and continues to address the
effect of the Asset-Based segment’s wage and benefit cost structure on its operating results in discussions with the IBT.
Through the term of its current collective bargaining agreement, ABF Freight’s multiemployer pension obligations
generally will be satisfied by making the specified contributions when due. Future contribution rates will be determined
through the negotiation process for contract periods following the term of the current collective bargaining agreement.
Certain legislative actions that became effective in recent years include provisions to improve funding for multiemployer
pension plans, as further discussed in Note J to our consolidated financial statements included in Part II, Item 8 of this
Annual Report on Form 10-K. However, despite such legislative actions, we may still trigger withdrawal liability through,
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among other things, mergers and other fundamental corporate transactions and as a result of operational changes, site
closures and job losses. We continue to monitor the impact these legislative actions have on the funding status of the
multiemployer pension plans to which ABF Freight contributes; however, we cannot determine with any certainty the
minimum contributions that will be required under future collective bargaining agreements or the impact they will have
on our results of operations and financial condition.
Risks Related to Third Parties
We depend on services provided by third parties and could be adversely impacted by increased costs or disruption
of these services, and claims arising from these services.
A reduction in the availability of rail services or services provided by third-party capacity providers to meet customer
requirements; higher prices, including fuel surcharges; as well as higher utilization of third-party agents to maintain service
levels in periods of tonnage growth or higher shipment levels, could increase purchased transportation costs which we may
be unable to pass along to our customers. If a disruption or reduction in transportation services from our rail or other
third‑party service providers were to occur, we could be faced with business interruptions that could cause us to fail to
meet the needs of our customers, which could result in loss of business or customer loyalty. In addition, third-party
providers can be expected to increase their prices based on market conditions or to cover increases in their operating
expenses. If we are unable to correspondingly increase the prices we charge to our customers, or if we are unable to secure
sufficient third-party services to expand our capacity, add additional routes, or meet our commitments to our customers,
there could be a material adverse impact on our operations, revenues, profitability and customer relationships.
Our ability to secure the services of third-party service providers is affected by many risks beyond our control, including
unfavorable pricing conditions; the shortage of quality third-party providers, including owner-operators and drivers of
contracted carriers for our Asset-Light segment; shortages in available cargo capacity of third parties; equipment shortages
in the transportation industry, particularly among contracted truckload carriers; changes in government regulations
affecting the transportation industry and their related impact on operations, such as hours-of-service rules and the ELD
mandate; labor disputes; or a significant interruption in service or stoppage in third-party transportation services. Each of
these risks could have a material adverse effect on the operating results of our Asset-Light segment.
In addition, we may be subject to claims arising from services provided by third parties, particularly in connection with
the operations of our Asset-Light segment, which are dependent on third-party contract carriers. From time to time, the
drivers who are owner-operators, independent contractors, or employees working for third-party carriers that we contract
with are involved in accidents or incidents that may result in cargo loss or damage, other property damage, or serious
personal injuries including death. As a result, claims may be asserted against us for actions by such drivers or for our
actions in contracting with them initially or retaining them over time. We or our subsidiaries could be held directly
responsible for these third-party claims and, regardless of ultimate liability, may incur significant costs and expenses in
defending these claims or through settlements, even in cases where we believe we have meritorious claims or defenses.
Our third-party contract carriers and other vendors may not agree to bear responsibility for such claims, or we may become
responsible if they are unable to pay the claims, for example, due to bankruptcy proceedings, and such claims may exceed
the amount of our insurance coverage or may not be covered by insurance at all.
Our engagement of independent contractor drivers to provide a portion of the capacity for our Asset-Light segment
exposes us to different risks than we face with our employee drivers, which could have an adverse effect on our
business.
The driver fleet for portions of our Asset-Light segment is made up of independent owner-operators and individuals. We
face intense competition in attracting and retaining qualified owner-operators from the available pool of drivers and fleets,
and we may be required to increase owner-operator compensation or take other measures to remain an attractive option
for owner-operators. If we are not able to maintain our delivery schedules due to a shortage of drivers or if we are required
to increase our rates to offset increases in owner-operator compensation, our services may be less competitive.
Furthermore, as these independent owner-operators and individuals are third-party service providers, rather than our
employees, they may decline loads of freight from time to time, which may impede our ability to deliver freight in a timely
manner or result in increased expenses to do so.
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If the independent contractors with which we contract are deemed by regulators or judicial process to be employees,
or if we experience operational or regulatory issues related to our use of these contract drivers, our financial
condition, results of operations, and cash flows could be adversely affected.
Class actions and other lawsuits have arisen in the transportation and logistics industry seeking to reclassify independent
contractor drivers as employees for a variety of purposes, including workers’ compensation, wage‑and‑hour, and health
care coverage. Many states have enacted restrictive laws that make it difficult to successfully prove independent-contractor
status, and all states have enforcement programs to evaluate the classification of independent contractors. In the event of
such reclassification of our owner-operators, we could be exposed to various liabilities and additional costs, for both future
and prior periods, under federal, state, and local tax laws, and workers’ compensation, unemployment benefits, labor, and
employment laws, as well as potential liability for penalties and interest and under vicarious liability principles.
Risks Related to Legal and Regulatory Matters
We are subject to litigation risks, and at times may need to initiate litigation, which could result in significant costs
and have other material adverse effects on our business, results of operations, and financial condition.
The nature of our business exposes us to the potential for various claims and litigation, including class-action litigation
and other legal proceedings brought by customers, suppliers, employees, or other parties, related to labor and employment,
including wage and hour claims; competitive matters; personal injury; property damage; cargo claims; safety and contract
compliance; environmental liability; and other matters, such as the matters, if any, described in Item 3 (Legal Proceedings)
included in Part I of, or otherwise disclosed in, this Annual Report on Form 10-K. We are subject to risk and uncertainties
related to liabilities, including damages, fines, penalties, and substantial legal and related costs, that may result from these
claims and litigation. Some or all of our expenditures to defend, settle, or litigate these matters may not be covered by
insurance or could impact our cost of, and ability to obtain, insurance in the future. Litigation can be disruptive to normal
business operations and could require a substantial amount of time and effort from our management team. Further, because
of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we
believe that we have meritorious claims or defenses. Any material litigation or a catastrophic accident or series of accidents
could have a material adverse effect on our business, results of operations, and financial condition. Our business reputation
and our relationship with our customers, suppliers, and employees may also be adversely impacted by our involvement in
legal proceedings.
We establish reserves based on our assessment of known legal matters and contingencies. New legal claims or subsequent
developments related to known legal claims asserted against us may affect our assessment and estimates of our recorded
legal reserves and may require us to make payments in excess of our reserves, which could have a material adverse effect
on our financial condition or results of operations.
Our business operations are subject to numerous governmental regulations in the transportation industry, and
costs of compliance with, or liability for violations of, existing or future regulations could have a material adverse
effect on our financial condition and results of operations.
Various international, federal, state, and local agencies exercise broad regulatory powers over the transportation industry,
such as those described in “Environmental and Other Government Regulations” within Part I, Item 1 (Business) of this
Annual Report on Form 10-K. We could become subject to new or more restrictive regulations, and the costs to comply
with such regulations could increase our operating expenses. Such regulations could also influence the demand for
transportation services. Failure to comply with laws and regulations can result in penalties, revocation of our permits or
licenses, or both civil and criminal actions against us, in addition to potentially harming our reputation and brands.
Failures by us, or our contracted owner-operators and third-party carriers, to comply with the various applicable federal
safety laws and regulations, or downgrades in our safety rating, among other things, could cause us to lose customers and
our ability to self-insure. The loss of our ability to self-insure for any significant period of time could materially increase
insurance costs, or we could experience difficulty in obtaining adequate levels of insurance coverage.
Our Asset-Light segment utilizes third-party service providers who are subject to similar regulatory requirements. We
could be materially adversely affected if the operations of these providers are impacted by regulatory actions to the extent
that a shortage of quality third-party service providers occurs. Also, activities by these providers that violate applicable
laws or regulations could result in governmental or third-party actions against us. Although third-party service providers
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with whom we contract agree to comply with applicable laws and regulations, we may not be aware of, and may therefore
be unable to address or remedy, violations by them.
We are also subject to stringent and changing privacy laws, regulations and standards as well as policies, contracts, and
other obligations related to data privacy, including customer and employee data. As a provider of worldwide transportation
and logistics services, we collect and process significant amounts of customer data on a daily basis. In recent years, there
have been global efforts by governments and consumer groups for increased transparency in how customer data is utilized
and how customers and employees can control the use and storage of their data. Complying with existing or new data
protection laws and regulations may increase our compliance costs or require us to modify our data handling practices.
Non-compliance could result in governmental or consumer actions against us and even perceived non-compliance may
otherwise adversely impact our reputation, operating results and financial condition. The uncertainty of the interpretation
and enforcement of these laws, and their increasing scope and complexity, create regulatory risks that will likely increase
over time. Additionally, if third parties or others violate obligations and restrictions with respect to data privacy and
security, such violations may also put our customers’ or employees’ information at risk and could in turn have a material
and adverse effect on our business.
Our operations are subject to various environmental laws and regulations, the violation of which could result in
substantial fines or penalties. The costs of compliance with current and future environmental laws and regulations
may be significant and could adversely impact our results of operations.
At certain facilities of our Asset-Based operations, we store fuel and oil in underground and aboveground tanks and other
containers. In connection with these operations, we are subject to federal, state and local environmental laws and
regulations relating to, among other areas: underground and aboveground storage tanks, stormwater pollution prevention,
contingency planning for spills of petroleum products, and disposal of waste oil. We may be subject to substantial fines,
civil penalties, or litigation if we fail to obtain proper certifications or permits or if we do not comply with required
environmental inspections, testing provisions, and consent decrees. Under certain environmental laws, we could be subject
to strict liability for any clean-up costs relating to contamination at our past or present facilities, including those occurring
prior to ownership or use of such facilities, and at third-party waste disposal sites.
We routinely transport or arrange for the transportation of hazardous materials and explosives. The transportation of
hazardous materials or explosives also involves the risks of, among others, leakage, environmental damage, a spill or
accident involving hazardous substances, and hazardous waste disposal, as well as costs associated with the environmental
clean-up of fuel spillage from our vehicles. In addition, if any damage or injury occurs as a result of these operations, we
may be subject to claims from third parties and bear liability for such damage or injury.
Although we have instituted programs to monitor and control environmental risks and promote and maintain compliance
with applicable environmental laws and regulations, violations of applicable laws or regulations may subject us to clean‑up
costs and liabilities not covered by insurance or in excess of our applicable insurance coverage, including substantial fines,
civil penalties, or civil and criminal liability, as well as bans on making future shipments in particular geographic areas,
any of which could adversely affect our business.
Concern over climate change, including the impact of global warming, has led to significant legislative and regulatory
efforts to limit carbon and other GHG emissions, and some form of federal, state, and/or regional climate change legislation
is possible in the future. Emission-related regulatory actions have historically resulted in increased costs of revenue
equipment, diesel fuel, and equipment maintenance, and future legislation, if enacted, could impose substantial costs on
us that may adversely impact our results of operations. Such regulatory actions may require changes in our operating
practices, impair equipment productivity, or require additional reporting disclosures. Compliance with laws and
regulations related to climate risk may also increase our exposure to litigation or governmental investigations or
proceedings. We may also encounter difficulties in collecting and managing data that impact timely compliance or incur
significant costs to comply with increased regulation regarding environmental monitoring and financial reporting
disclosure requirements, including those described in “Environmental and Other Government Regulations” within Part I,
Item 1 (Business) of this Annual Report on Form 10-K. We are subject to increasing investor and customer sensitivity to
sustainability issues, and we may be subject to additional requirements related to shareholder proposals, customer-led
initiatives, or our customers’ efforts to comply with environmental programs. Until the timing, scope, and extent of any
future regulation or customer requirements become known, we cannot predict their effect on our cost structure, business,
or results of operations.
29
Risks Related to Financial Considerations
We are subject to interest rate risk and certain covenants under our financing arrangements. A default under these
financing arrangements or changes in regulations could impact the availability of funds or our borrowing costs.
We are affected by the instability in the financial and credit markets, which from time to time has created volatility in
various interest rates and returns on invested assets. We are subject to market risk due to variable interest rates on
borrowings on our accounts receivable securitization program (“A/R Securitization”) and the revolving credit facility
(“Credit Facility”) under our Fourth Amended and Restated Credit Agreement (the “Credit Agreement”). Changes in
interest rates may increase our financing costs related to future borrowings under our Credit Facility, future borrowings
against our A/R Securitization, new notes payable or finance lease arrangements, or additional sources of financing.
Interest rates are highly sensitive to many factors, including inflation, governmental monetary policies, domestic and
international economic and political conditions and other factors beyond our control. Furthermore, future financial market
disruptions may adversely affect our ability to refinance, maintain our letter of credit arrangements or, if needed, secure
alternative sources of financing. If any of the financial institutions that have extended credit commitments to us are
adversely affected by economic conditions, disruption to the capital and credit markets, or increased regulation, they may
become unable to fund borrowings under their credit commitments or otherwise fulfill their obligations to us, which could
have an adverse impact on our ability to borrow additional funds, and thus have an adverse effect on our operations and
financial condition. See Note H to our consolidated financial statements included in Part II, Item 8 of this Annual Report
on Form 10-K for further discussion of our financing arrangements.
Our Credit Agreement and A/R Securitization contain customary financial and other restrictive covenants that may limit
our future operations. Failing to achieve certain required financial ratios could adversely affect our ability to finance our
operations, make strategic acquisitions or investments, or plan for or react to market conditions or otherwise execute our
business strategies.
If we default under the terms of the Credit Agreement or our A/R Securitization and fail to obtain appropriate amendments
to or waivers under the applicable financing arrangement, any borrowings under such facilities could be immediately
declared due and payable. An event of default under either of these facilities could constitute automatic default on the
other facility and could trigger cross-default provisions in our outstanding notes payable and other financing agreements
unless the lenders to these facilities choose not to exercise remedies or to otherwise allow us to cure the default. If we fail
to pay the amount due under our Credit Facility or A/R Securitization, the lender of the A/R Securitization could proceed
against the collateral by which that facility is secured, our borrowing capacity may be limited, or one or both of the facilities
could be terminated. If acceleration of outstanding borrowings occurs or if one or both of the facilities is terminated, we
may have difficulty borrowing additional funds sufficient to refinance the accelerated debt or entering into new credit or
debt arrangements, and, if available, the terms of the financing may not be favorable or acceptable. A default under the
Credit Agreement or A/R Securitization, changes in regulations that impact the availability of funds or our borrowing
costs, or our inability to renew our financing arrangements with terms that are acceptable to us, could have a material
adverse effect on our liquidity and financial condition.
Our business is capital intensive. If we are unable to generate sufficient cash from operations, our growth and
profitability could be limited due to significant ongoing capital expenditure requirements.
Our business requires significant capital expenditures, which we finance through various sources, including cash flows
from operations, borrowings under our Credit Facility and A/R Securitization, and notes payable. We continue to invest
significantly in our revenue equipment fleet. If we are unable to generate sufficient cash over an extended period of time
from operations to fund our capital requirements, we may have to limit our growth, including our ability to invest in
technological initiatives that drive business efficiencies; utilize our existing liquidity or enter into additional financing
arrangements, including leasing arrangements; or operate our revenue equipment for longer periods resulting in increased
maintenance costs, any of which could negatively impact our financial condition and results of operations.
Claims expenses, the cost of maintaining our insurance, or the loss of our ability to self-insure could have a material
adverse effect on our results of operations and financial condition.
Claims may be asserted against us for cargo loss or damage, property damage, personal injury, and workers’ compensation
related to accidents or events occurring in our operations. Claims may also be asserted against us for accidents involving
the operations of third-party service providers that we utilize, for our actions in retaining their services, or for loss or
30
damage to our customers’ goods or other damages for which we are alleged or may be determined to be responsible. Such
claims against us and associated costs and legal expenses may not be covered by insurance policies or may exceed the
amount of insurance coverage or our established reserves. Trends of higher third-party casualty claims exposure, in recent
years, have increased and may continue to increase our claims costs. If the frequency and/or severity of claims increase,
as experienced in recent years, our operating results could be adversely affected. The timing of the incurrence of these
costs could significantly and adversely impact our operating results.
We are primarily self-insured for workers’ compensation, third-party casualty loss, and cargo loss and damage claims for
the operations of our Asset-Based segment and certain of our other subsidiaries. We also self-insure for medical benefits
for our eligible nonunion personnel. Because we self-insure for a significant portion of our claims exposure and related
expenses, our insurance and claims expense may be volatile. If we lose our ability to self-insure for any significant period
of time, insurance costs could materially increase, and we could experience difficulty in obtaining adequate levels of
insurance coverage. Our self-insurance program for third-party automobile casualty claims is conducted under a federal
program administered by a government agency. If the government were to terminate the program or if we were to be
excluded from the program, our insurance costs could increase. Additionally, if our third-party insurance carriers or
underwriters leave the trucking/logistics sector, our insurance costs or collateral requirements could materially increase,
or we could experience difficulties in finding insurance in excess of our self-insured retention limits. In recent years, many
insurance companies have completely stopped offering coverage to trucking and logistics companies or have significantly
reduced the amount of coverage they offer or have significantly raised premiums or retention levels as a result of increases
in the severity of automobile liability claims and sharply higher costs of settlements and verdicts. Our insurance premiums,
deductibles, and self-insurance retention levels, which are discussed in “Insurance” within Part I, Item 1 (Business) of this
Annual Report on Form 10-K, have increased and could further increase in the future due to market conditions or if our
claims experience worsens. The impact of climate change, including its effect on weather-related events which may disrupt
our operations or damage our property and equipment, may increase our claims liabilities and the cost to obtain adequate
insurance coverage for our business. If our insurance or claims expense increases, or if we decide to increase our insurance
coverage in the future, and we are unable to offset any increase in expense with higher revenues, our earnings could be
adversely affected. In some instances, certain insurance could become unavailable or available only for reduced amounts
of coverage. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse
effect on our results of operations and financial condition.
We have programs in place with multiple surety companies for the issuance of unsecured surety bonds in support of our
self-insurance program for workers’ compensation and third-party casualty liability. Estimates made by the states and the
surety companies of our future exposure for our self-insurance liabilities could influence the amount and cost of additional
letters of credit and surety bonds required to support our self-insurance program, and we may be required to maintain
secured surety bonds in the future, which could increase the amount of our cash equivalents and short-term investments
restricted for use and unavailable for operational or capital requirements.
Future impairment, if any, of our long-lived assets and our goodwill and intangible assets could adversely affect
our financial condition and results of operations.
Long-lived assets, including operating right-of-use assets, are reviewed for impairment whenever events or changes in
circumstances indicate the carrying value of an asset may not be recoverable. Determination that certain long-lived assets
are no longer needed for the strategic growth of our business may result in impairment charges, such as those incurred
during the fourth quarter of 2024 for revenue equipment and certain other long-lived assets which were determined to no
longer be needed in our business, and those incurred in third quarter of 2023 as certain long-lived operating right-of-use
assets were made available for sublease. See Note C and Note G to our consolidated financial statements included in Part
II, Item 8 of this Annual Report on Form 10-K for further discussion of our lease-related impairment charges.
Our goodwill and intangible assets are primarily associated with acquisitions in the Asset-Light segment. Our annual
impairment evaluations for goodwill and indefinite-lived intangible assets in 2024, 2023, and 2022 produced no indication
of impairment of the recorded balances; however, there can be no assurance that an impairment will not occur in the future.
Given the uncertainties regarding the economic environment, there can be no assurance that our estimates and assumptions
made for purposes of impairment evaluations and accounting estimates will prove to be accurate. Significant declines in
business levels or other changes in cash flow assumptions, or other factors that negatively impact the fair value of the
operations of our reporting units, could result in impairment and noncash write-off of a significant portion of our long-
lived assets, goodwill, and intangible assets.
31
Risks Related to Other External Conditions
The widespread outbreak of an illness or disease or any other public health crisis, as well as regulatory measures
implemented in response to such events, could negatively impact the health and safety of our employees and/or
adversely affect our business, results of operations, financial condition, and cash flows.
We may, in the future, be negatively impacted by a widespread outbreak of illness or disease, or any other public health
crisis. The effects of an outbreak and future measures intended to prevent the spread of a health epidemic, including
regulatory measures and our efforts and costs incurred to comply with them, could negatively impact our employees and
operational efficiency and that of our third-party capacity providers, as well as demand for our services. We do not have
insurance coverage specific to losses resulting from a pandemic. Many of the other risks discussed in this Risk Factors
section may be heightened by such an outbreak or health epidemic, including those impacted by U.S. and global economic
outlook.
We, or the third parties who provide services for us, may be adversely affected by external events for which our
business continuity plans may not adequately prepare us.
External events, including, but not limited to, the occurrence of natural disasters, health epidemics, geopolitical conflicts,
acts of war, cybersecurity incidents, and trade restrictions that impact us or our third parties who provide services for us
could significantly impact our ability to conduct business. Although we have business continuity plans in place, there is
no guarantee that our plans have adequately addressed every possible risk and can be successfully or timely implemented.
We may incur substantial expenses in the implementation of our business continuity plans, and there is no guarantee that
our business, financial condition, and results of operations will not be materially impacted.
We are subject to general economic factors and instability in financial and credit markets that are largely beyond
our control.
Our business is cyclical in nature and tends to reflect general economic conditions, which can be impacted by government
actions, including changes in tax laws, suspension of government operations and imposition of trade tariffs. Our
performance is affected by recessionary economic cycles, inflation, labor and supply shortages, downturns in customers’
business cycles, and changes in their business practices, which may be impacted by factors such as higher inflation and
interest rates. Our tonnage and shipment levels are directly affected by industrial production and manufacturing,
distribution, residential and commercial construction, and consumer spending, in each case primarily in the North
American economy, and capacity in the trucking industry as well as our customers’ inventory levels and freight profile
characteristics. We are also subject to risks related to disruption of world markets that could affect shipments between
countries and could adversely affect the volume of freight and related pricing in the markets we serve. Further changes to
U.S. or international trade policy or other global trade impacts could result in increased cost for goods transported globally,
which may lead to reduced consumer demand, or trading partners could limit trades with countries that impose anti-trade
measures, which may lead to a lower volume of global economic trading activity. International security concerns,
geopolitical tensions, and potential actions or retaliatory measures taken in respect thereof, could continue to have a
material adverse effect on global trade and economic activity.
Recessionary economic conditions may result in a general decline in demand for freight transportation and logistics
services. The pricing environment generally becomes more competitive during periods of slow economic growth and
economic recessions, which may adversely affect the profit margin for our services. If we are unable to respond timely
and effectively to changes in the pricing environment or if our strategies for customer retention and margin optimization
are unsuccessful, our business, financial condition, and results of operations could be adversely impacted. Our operations
and the rates we obtain for our services may also be negatively impacted when economic conditions lead to a decrease in
shipping demand, which, in turn, results in excess equipment capacity in the industry. In certain market conditions, we
may have to accept more freight from freight brokers, where freight rates are typically lower, or we may be forced to incur
more non-revenue miles to obtain loads. Conversely, during times of higher shipping demand, tight market capacity may
negatively impact the service levels we are able to provide to our customers.
Economic conditions could adversely affect our customers’ business levels, the amount of transportation services they
require, and their ability to pay for our services, which could negatively impact our working capital and our ability to
satisfy our financial obligations and covenants of our financing arrangements. Customers encountering adverse economic
32
conditions or facing credit issues could experience cash flow difficulties and, thus, represent a greater potential for payment
delays or uncollectible accounts receivable, and, as a result, we may be required to increase our allowances for
uncollectible accounts receivable. Our obligation to pay third-party service providers is not contingent upon payment from
our customers, and we extend unsecured credit to these customers, which increases our exposure to uncollectible
receivables.
Our business and results of operations could be impacted by seasonal fluctuations, adverse weather conditions,
natural disasters, and climate change.
Our operations are, and may in the future be, impacted by seasonal fluctuations and, at times, inclement weather conditions
that affect employee working conditions, tonnage and shipment levels, demand for our services, and operating costs, which
in turn may impact our revenues and operating results, as further described in “Seasonality” within Part I, Item 1 (Business)
of this Annual Report on Form 10-K. Climate change may have an influence on the severity of weather conditions. Severe
weather events and natural disasters could disrupt our operations or the operations of our customers or third-party service
providers, damage existing infrastructure, destroy our assets, affect regional economies, or disrupt fuel supplies or increase
fuel costs, any of which could adversely affect our business levels and operating results.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 1C.
CYBERSECURITY
Risk Management and Strategy
We prioritize the management of cybersecurity risk and the protection of information across the Company by embedding
data protection and cybersecurity risk management in our operations. The Company follows the National Institute of
Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”) and other industry standards and applicable laws
and regulations to assess and manage cybersecurity risks within our services, infrastructure, and corporate resources. Our
processes for assessing, identifying, and managing material risks from cybersecurity threats have been integrated into our
overall risk management system and processes through a layered governance structure.
The Company maintains an enterprise-wide risk management (“ERM”) process to identify, assess and monitor risks that
are or may become material to our business. Our ERM process includes participation by senior management, other leaders,
and employees across the business in surveys and discussions about the risk environment with certain members of senior
management and management level leaders meeting quarterly to discuss the Company’s top risks as identified through our
ERM process.
Our cybersecurity policies and controls encompass incident response procedures, information security, and IT vendor risk
management. We monitor the cybersecurity laws, regulations, and guidance applicable to us in the maintenance of these
policies and procedures, including, but not limited to, regulations issued by the U.S. Department of Homeland Security,
as further described in Item 1 (Business) of this Annual Report on Form 10-K, as well as proposed laws, regulations,
guidance, and emerging risks.
We utilize various tools and security technology to help us deter, detect, identify, and respond to potential cybersecurity
threats. Annually, we undergo external evaluations by third-party consulting services, including the performance of
penetration testing and vulnerability scanning. With respect to third-party service providers, we generally require our
vendors to maintain security controls to protect our confidential information and data, and we perform risk assessments of
IT vendors, including their ability to protect data from unauthorized access. When the Company learns of a cybersecurity
incident at a third-party service provider, the Company’s respective department contacts maintain communication with the
third-party service provider and communicate the incident to our Chief Technology Officer (“CTO”).
As described in Part 1, Item 1A (Risk Factors), our operations rely on the secure processing, storage, and transmission of
confidential and other information in our IT systems and networks. Computer viruses and other events beyond our control,
including cybersecurity attacks and other cyber incidents such as denial of service, system failure, security breach,
33
intentional or inadvertent acts by employees or vendors with access to our systems or data, or disruption by malware, could
expose our IT systems and those of our vendors to system interruptions, impacting the availability, reliability, speed,
accuracy, and other proper functioning of these systems or result in the release of proprietary information or sensitive or
confidential data, any of which could materially and adversely affect our business. Because the sophistication of
cybersecurity threats is increasing and new techniques for attack are being developed rapidly, including attacks enabled
by artificial intelligence, we cannot be certain that the controls and preventative actions that we have implemented to
reduce the risk of cybersecurity incidents and to protect our systems will be effective in preventing a cybersecurity incident
from materializing. While we have experienced minor cybersecurity incidents, we are not aware of any material
cybersecurity incidents that occurred during the year ended December 31, 2024.
Governance
Our Audit Committee, with delegated authority from our Board of Directors, has primary oversight of cybersecurity risks.
Our CTO and Director of Information Security are responsible for oversight of the Company’s cybersecurity program,
implementation and compliance of our information security standards, and mitigation of information security-related risks.
Our CTO, with 38 years of IT experience and an undergraduate degree in Computer and Information Science, has served
in his current role for five years and previously served as our director of infrastructure management for 12 years. Our CTO
reports directly to the Company’s Chief Innovation Officer and indirectly to the Company’s President of ArcBest
Technologies, who directly reports to the Chief Executive Officer. Our Director of Information Security, reports to our
CTO, has 33 years of IT experience, including over 20 years in information security; a Master of Business Administration;
an undergraduate degree in Computer Information Systems and Quantitative Analysis; and is a Certified Information
Systems Security Professional.
We also have management-level committees who support our processes to assess and manage cybersecurity risk and
related incidents as follows:
•
The Information Security Committee, chaired by our Director of Information Security, includes IT, legal,
compliance and other business leads. The Information Security Committee provides a forum for these cross-
functional members of management to consider existing and emerging cybersecurity risks; review cybersecurity
regulations; determine cybersecurity project prioritization; approve, review, and update policies and standards,
as appropriate; and promote cross-functional collaboration to manage cybersecurity risks across the enterprise to
support the Company’s goals and address cybersecurity risks.
•
The Risk Management Committee, comprised of senior IT, operations, risk, legal, and compliance leaders across
business segments, monitors enterprise risk management for the Company, including all subsidiaries. Among
other processes, this committee reviews the Company’s programs and processes related to information security,
third-party risks, vendor management, business disruption, business continuity, and disaster recovery, identifying
gaps in the current risk management processes and considering potential risks due to changes in laws or the
regulatory environment.
•
The Cybersecurity Incident Response Team, which includes representatives from our information security and
technical services departments, in addition to company management and executives across the Company, is
activated when a suspected incident is reported or discovered and is responsible for dissemination of information
and coordination of personnel efforts required to successfully respond to an incident.
•
The Cybersecurity Incident Reporting Committee was formed to assess the materiality of cybersecurity incidents
from a Securities and Exchange Commission reporting standpoint. In the event this committee determines a
cybersecurity incident is material, committee members, as delegated, will notify the Audit Committee.
The CTO provides a quarterly cybersecurity risk update and presents an annual cybersecurity review to our Board of
Directors.
We also conduct mandatory company-wide security awareness training and periodic phishing tests and generally seek to
promote awareness of cybersecurity risks through regular communication and education of our employees.
34
ITEM 2.
PROPERTIES
The Company believes that its facilities, including owned and leased properties, are suitable and adequate and that the
facilities have sufficient capacity to meet current business requirements. The Company owns two office facilities in Fort
Smith, Arkansas, which provide space for corporate and certain subsidiary functions. The Company also leases an office
building and an innovation lab in Fort Smith, Arkansas for certain subsidiary functions.
Asset-Based Segment
The Asset-Based segment operates out of its general office building located in Fort Smith, Arkansas and 241 revenue
producing facilities, 10 of which also serve as distribution centers. The Company owns 119 of these Asset-Based segment
facilities and leases the remainder from nonaffiliates. Asset-Based distribution centers are as follows:
No. of Doors
Owned:
Carlisle, Pennsylvania
333
Dayton, Ohio
330
South Chicago, Illinois
274
Kansas City, Missouri
252
Atlanta, Georgia
226
North Little Rock, Arkansas
196
Dallas, Texas
196
Winston-Salem, North Carolina
150
Albuquerque, New Mexico
85
Leased from nonaffiliate:
Salt Lake City, Utah
89
Asset-Light Segment
The Asset-Light segment owns a general office building and service bay in Medina, Ohio and leases five additional office
and warehouse locations, including an office and warehouse location in Sparks, Nevada and an office location in Chicago,
Illinois.
ITEM 3.
LEGAL PROCEEDINGS
Various legal actions, the majority of which arise in the normal course of business, are pending. The Company maintains
liability insurance against certain risks arising out of the normal course of business, subject to certain self-insured retention
limits. The Company has amounts accrued for certain legal, environmental, and self-insurance exposures. These exposures
and legal actions which arise in the normal course of business are not expected to have a material adverse effect,
individually or in the aggregate, on the Company’s financial condition, results of operations, or cash flows. For additional
information related to our environmental and legal matters and other events, see Note O to our consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
35
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information, Dividends and Holders
The common stock of ArcBest Corporation trades on the Nasdaq Global Select Market under the symbol “ARCB.” As of
February 27, 2025, there were 23,150,276 shares of the Company’s common stock outstanding, which were held by
169 stockholders of record. A substantially greater number of holders of ArcBest Corporation common stock are “street
name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
On January 28, 2025, the board of directors of the Company (the “Board of Directors”) declared a quarterly dividend of
$0.12 per share to stockholders of record as of February 11, 2025. The Company expects to continue to pay quarterly
dividends in the foreseeable future, although there can be no assurance in this regard since future dividends will be at the
discretion of the Board of Directors and will depend upon the Company’s future earnings, capital requirements, and
financial condition, contractual restrictions applying to the payment of dividends under the Company’s Fourth Amended
and Restated Credit Agreement, and other factors.
Issuer Purchases of Equity Securities
The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions.
The program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. The Board of
Directors has authorized extensions of the common stock repurchase program since it was first authorized in 2003. Most
recently, in February 2024, the Board of Directors reauthorized the program and increased the total amount available for
purchases of the Company’s common stock under the program to $125.0 million.
During 2024, the Company purchased 654,707 shares of its common stock for an aggregate cost of $74.4 million, including
331,887 shares for an aggregate cost of $37.7 million under Rule 10b5-1 plans, which allowed for stock repurchases during
closed trading windows. During the three months ended December 31, 2024, the Company purchased 176,392 shares,
leaving $56.6 million remaining under the Company’s share repurchase program.
Total Number of
Maximum
Shares Purchased
Approximate Dollar
Total Number
Average
as Part of Publicly
Value of Shares that
of Shares
Price Paid
Announced
May Yet Be Purchased
Period
Purchased Per Share(1)
Program
Under the Program
(in thousands, except share and per share data)
10/1/2024-10/31/2024
62,544 $
103.58
62,544 $
68,413
11/1/2024-11/30/2024
38,620
107.44
38,620 $
64,264
12/1/2024-12/31/2024
75,228
102.20
75,228 $
56,575
Total
176,392 $
103.84
176,392
(1)
Represents the weighted average price paid per common share including commission.
ITEM 6.
[RESERVED]
36
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion-
dollar integrated logistics company that leverages technology and a full suite of solutions to meet our customers’ supply
chain needs. Our operations are conducted through two reportable operating segments:
•
Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”); and
•
Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther Premium Logistics®, and certain other
subsidiaries.
For more information, see additional segment descriptions in Part I, Item 1 (Business) and in Note N to our consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary of the Company,
for an aggregate adjusted cash purchase price of $100.9 million, including post-closing adjustments. Following the sale,
FleetNet® was reported as discontinued operations. As such, historical results of FleetNet have been excluded from both
continuing operations and segment results for all periods presented. Unless otherwise indicated, all amounts in this Annual
Report on Form 10-K refer to continuing operations, including comparisons to the prior year. For more information on our
discontinued operations, see Note D to our consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K.
ORGANIZATION OF INFORMATION
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided to assist
readers in understanding our financial performance during the periods presented and significant trends which may impact
our future performance, including the principal factors affecting our results of operations, liquidity and capital resources,
and critical accounting policies. MD&A includes additional information about significant accounting policies, practices,
and the transactions that underlie our financial results. This discussion should be read in conjunction with our consolidated
financial statements and the related notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. MD&A
includes forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from
the statements made in this section due to a number of factors that are discussed in Part I (Forward-Looking Statements)
and Part I, Item 1A (Risk Factors) of this Annual Report on Form 10-K. MD&A is comprised of the following:
•
Results of Operations includes:
•
an overview of consolidated results with 2024 compared to 2023, and a consolidated Adjusted Earnings
Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) reconciliation to net income;
•
a financial summary and analysis of our Asset-Based segment results of 2024 compared to 2023, including
a discussion of key actions and events that impacted the results;
•
a financial summary and analysis of our Asset-Light segment results for 2024 compared to 2023, including
a discussion of key actions and events that impacted the results; and
•
a discussion of other matters impacting operating results, including effects of inflation, current economic
conditions, environmental and legal matters, and information technology and cybersecurity.
•
Liquidity and Capital Resources provides an analysis of key elements of the cash flow statements, borrowing
capacity, and contractual cash obligations, including a discussion of financing arrangements and financial
commitments.
•
Income Taxes provides an analysis of the effective tax rates and deferred tax balances, including deferred tax
asset valuation allowances.
•
Critical Accounting Policies and Estimates discusses those accounting policies that are important to
understanding certain material judgments and assumptions incorporated in the reported financial results.
•
Recent Accounting Pronouncements discusses accounting standards that are not yet effective for our financial
statements but may have a material effect on our future results of operations or financial condition.
37
RESULTS OF OPERATIONS
This Results of Operations section of MD&A generally discusses 2024 and 2023 items and year-to-year comparisons
between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not
included in this Form 10-K can be found in the Results of Operations section of MD&A in Part II, Item 7 of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2023.
Consolidated Results
Year Ended December 31
2024
2023
2022
(in thousands, except per share data)
REVENUES
Asset-Based
$
2,750,134 $
2,871,004 $ 3,010,900
Asset-Light
1,552,936
1,680,645
2,139,272
Other and eliminations
(124,051)
(124,206)
(121,164)
Total consolidated revenues
$
4,179,019 $
4,427,443 $ 5,029,008
OPERATING INCOME (LOSS)
Asset-Based
$
242,603 $
253,152 $
381,133
Asset-Light
58,444
(12,271)
52,725
Other and eliminations
(56,613)
(68,262)
(39,332)
Total consolidated operating income
$
244,434 $
172,619 $
394,526
NET INCOME FROM CONTINUING OPERATIONS
$
173,361 $
142,164 $
294,648
INCOME FROM DISCONTINUED OPERATIONS, net of tax(1)
600
53,269
3,561
NET INCOME
$
173,961 $
195,433 $
298,209
DILUTED EARNINGS PER COMMON SHARE
Continuing operations
$
7.28 $
5.77 $
11.55
Discontinued operations(1)
0.03
2.16
0.14
Total diluted earnings per common share
$
7.30 $
7.93 $
11.69
(1)
Discontinued operations represents the FleetNet segment, which sold on February 28, 2023, as previously discussed. The year
ended December 31, 2024 represents adjustments related to the prior year gain on sale of FleetNet. The year ended
December 31, 2023 includes the net gain on sale of FleetNet of $52.3 million (after-tax) or $2.12 diluted earnings per share.
Discontinued operations are further described within Note D to our consolidated financial statements included in Part II, Item 8 of
this Annual Report on Form 10-K.
Our consolidated revenues, which totaled $4.2 billion for 2024, decreased 5.6% compared to 2023. The revenue decline
is primarily attributable to lower market rates for our Asset-Light shipping and logistics services in a soft market
environment and a decrease in our Asset-Based daily tonnage levels. The lower tonnage levels are primarily due to lower
weight per shipment, compared to the prior-year period, despite an increase in demand for LTL-rated shipments following
market disruption in 2023, as further discussed below. The year-over-year decrease in consolidated revenues for 2024
reflects a 4.2% decrease in our Asset-Based revenues and a 7.6% decrease in our Asset-Light revenues. The elimination
of revenues reported within the “Other and eliminations” line of consolidated revenues increased 1.6% for 2024, compared
to 2023, reflecting year-over-year changes in intersegment business levels among our operating segments.
Our Asset-Based revenue decline reflects a 14.3% decrease in tonnage per day, partially offset by a 11.7% increase in
billed revenue per hundredweight, including fuel surcharges, in 2024, compared to 2023. The decrease in tonnage per day
is a result of a softer market environment driven in part by a weaker manufacturing sector. The increase in total billed
revenue per hundredweight, including fuel surcharges, was driven by lower weight per shipment, a general rate increase
implemented in third quarter 2024 and increases to deferred pricing agreements, partially offset by a decrease in fuel
surcharge revenue associated with lower fuel prices and changes in business mix.
The decrease in revenues of our Asset-Light segment for 2024, compared to 2023, was impacted by a 12.8% decline in
revenue per shipment associated with soft market conditions and a higher mix of managed transportation business, which
has smaller shipment sizes and lower revenue per shipment metrics, partially offset by a 5.5% increase in shipments per
38
day. Our Asset-Light segment generated approximately 36% and 37% of total revenues before other revenues and
intercompany eliminations for 2024 and 2023, respectively.
Consolidated operating income increased by $71.8 million year-over-year reflecting the $90.3 million reduction in the
contingent earnout consideration accrual during 2024 and a decrease in operating expenses due to lower purchased
transportation costs in both of our operating segments and lower employee costs in the Asset-Light segment from continued
alignment of costs to the market environment, offset partially by lower revenues in both the Asset-Light and Asset-Based
segments and higher employee costs in the Asset-Based segment due to union wage and benefit rate increases. Segment
operating expenses are further described in the Asset-Based Segment Results and Asset-Light Segment Results sections
of Results of Operations. In addition to the results of our operating segments, the year-over-year comparison of
consolidated operating income was also impacted by items described in the following paragraphs.
Innovative technology costs impacted our consolidated segment results during 2024 and 2023. In February 2024, we
announced the next step in our Vaux suite – Vaux Smart Autonomy™, which combines autonomous mobile robot forklifts
and reach trucks, intelligent software, and remote teleoperation capability to autonomously handle materials movement
within warehouses, distribution centers, and manufacturing facilities, while being monitored by humans. In March 2023,
we launched our customer offering of VauxTM – the innovative suite of hardware and software which modernizes and
transforms how freight is loaded, unloaded, and transferred in warehouse and dock operations. Certain costs related to our
growing number of Vaux pilot programs in customer test locations and other initiatives to optimize performance through
technological innovation are reported in the “Other and eliminations” line of consolidated operating income. For the year
ended December 31, 2023, innovative technology costs also impacted our Asset-Based segment and included our freight
handling pilot test program at ABF Freight, as further discussed in the Asset-Based Segment Results section. These
combined costs decreased consolidated results by $34.1 million (pre-tax), or $26.1 million (after-tax) and $1.10 per diluted
share, for 2024, compared to $52.4 million (pre-tax), or $39.7 million (after-tax) and $1.61 per diluted share, for 2023.
The liability for contingent earnout consideration recorded for the MoLo® acquisition is remeasured at each quarterly
reporting date, and any change in fair value as a result of the recurring assessments is recognized in operating income.
Consolidated operating results increased by $90.3 million (pre-tax), or $67.9 million (after-tax) and $2.85 per diluted
share, for 2024 and by $19.1 million (pre-tax), or $14.4 million (after-tax) and $0.58 per diluted share for 2023, in each
case due to quarterly remeasurements which resulted in a lower liability of the contingent earnout consideration.
Remeasurement of the contingent earnout consideration is further discussed in Note C to our consolidated financial
statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The Company recognized asset impairment charges for certain revenue equipment and software during the fourth quarter
of 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. These asset impairment charges
reduced operating results by $1.7 million (pre-tax), or $1.3 million (after-tax) and $0.05 per diluted share, for the year
ended December 31, 2024. The Company recognized lease-related impairment charges during the third quarter of 2023
for a freight handling pilot facility, an Asset-Based service center, and certain Asset-Light office spaces that were made
available for sublease, as further described within Note G to our consolidated financial statements included in Part II,
Item 8 of this Annual Report on Form 10-K. Asset impairment charges reduced operating results by $30.2 million (pre-
tax), or $22.6 million (after-tax) and $0.92 per diluted share for the year ended December 31, 2023. Remeasurement of the
long-lived assets, operating right-of-use assets, and leasehold improvements is further discussed within Note C to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Legal settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards
Act reduced operating results by $0.3 million (pre-tax), or $0.2 million (after-tax) and $0.01 per diluted share in 2024,
compared to $9.5 million (pre-tax), or $7.1 million (after-tax) and $0.29 per diluted share in 2023. Legal settlement
expenses are further discussed within Note O to our consolidated financial statements included in Part II, Item 8 of this
Annual Report on Form 10-K.
During 2024, consolidated net income and earnings per share were impacted by a one-time, noncash impairment charge
of $28.7 million (pre-tax), or $21.6 million (after-tax) and $0.91 per diluted share, to write off our equity investment in
Phantom Auto, a provider of human-centered remote operation software, which ceased operations during the first quarter
of 2024. We recorded an adjustment to the fair value of our equity investment in Phantom Auto based on an observable
price change during 2023, which increased consolidated net income by $3.7 million (pre-tax), or $2.8 million (after-tax)
and $0.11 per diluted share, for 2023. These charges were recognized in “Other, net” within “Other income (costs).” The
39
write-off of our equity investment is further described within Note C to our consolidated financial statements included in
Part II, Item 8 of this Annual Report on Form 10-K.
In addition to the above items, the year-over-year changes in consolidated net income and earnings per share were impacted
by changes in the cash surrender value of variable life insurance policies, tax benefits from the vesting of share-based
compensation awards, and other changes in the effective tax rate as described within the Income Taxes section of MD&A
and in Note F to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. A
portion of our variable life insurance policies have investments, through separate accounts, in equity and fixed income
securities and, therefore, are subject to market volatility. Changes in the cash surrender value of life insurance policies,
which are reported below the operating income line in the consolidated statements of operations, increased consolidated
net income by $3.3 million and $0.14 per diluted share in 2024, and $4.6 million and $0.19 per diluted share in 2023. The
vesting of restricted stock units resulted in a tax benefit of $11.3 million and $0.47 per diluted share for 2024, compared
to a tax benefit of $5.3 million and $0.21 per diluted share in 2023.
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”)
We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However,
management believes that certain non-GAAP performance measures and ratios, such as Adjusted EBITDA, utilized for
internal analysis provide analysts, investors, and others the same information that we use internally for purposes of
assessing our core operating performance. These measures provide meaningful comparisons between current and prior
period results, as well as important information regarding performance trends. Accordingly, using these measures
improves comparability in analyzing our performance because it removes the impact of items from operating results that,
in management’s opinion, do not reflect our core operating performance. Management uses Adjusted EBITDA as a key
measure of performance and for business planning. The measure is particularly meaningful for analysis of our operating
performance, because it excludes amortization of acquired intangibles and software of the Asset-Light segment, changes
in the fair value of contingent earnout consideration and our equity investment, asset impairment charges, legal settlement
expenses of the Asset-Light segment, and gain on sale of subsidiary, which are significant expenses or gains resulting from
strategic decisions or other factors rather than core daily operations. Additionally, Adjusted EBITDA is a primary
component of the financial covenants contained in our Fourth Amended and Restated Credit Agreement (see Note H to
our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K). Other companies
may calculate Adjusted EBITDA differently; therefore, our calculation of Adjusted EBITDA may not be comparable to
similarly titled measures of other companies. Non-GAAP financial measures should be viewed in addition to, and not as
an alternative for, our reported results. Adjusted EBITDA should not be construed as a better measurement than operating
income, net income (loss), or earnings per share, as determined under GAAP. The following table presents a reconciliation
of Adjusted EBITDA to our net income, which is the most directly comparable GAAP measure for the periods presented.
Year Ended December 31
2024
2023
2022
($ thousands)
Net Income from Continuing Operations
$ 173,361 $ 142,164 $ 294,648
Interest and other related financing costs
8,980
9,094
7,726
Income tax provision
45,353
44,751
93,655
Depreciation and amortization(1)
149,087
145,349
138,159
Amortization of share-based compensation
11,355
11,385
12,470
Change in fair value of contingent consideration(2)
(90,250)
(19,100)
18,300
Asset impairment charges(3)
1,700
30,162
—
Legal settlement(4)
274
9,500
—
Change in fair value of equity investment(5)
28,739
(3,739)
—
Gain on sale of subsidiary(6)
—
—
(402)
Consolidated Adjusted EBITDA from Continuing Operations
$ 328,599
$ 369,566
$ 564,556
(1)
Includes amortization of intangibles associated with acquired businesses.
(2)
Represents change in fair value of the contingent earnout consideration recorded for the MoLo acquisition, as previously discussed.
(3)
The 2024 period represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth
quarter of 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. The 2023 period represents
noncash lease-related impairment charges for a freight handling pilot facility, a service center, and office spaces that were made
available for sublease.
(4)
Represents settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act,
which were paid during first quarter 2025.
40
(5)
For 2024, represents a noncash impairment charge to write off our equity investment in Phantom Auto and, for 2023, represents
increase in fair value of our investment in Phantom Auto, as previously discussed.
(6)
Gain relates to the contingent amount recognized in second quarter 2022 when the funds were released from escrow relating to the
sale of the labor services portion of the Asset-Light segment’s moving business.
Asset-Based Operations
Asset-Based Segment Overview
The Asset-Based segment consists of ABF Freight System, Inc., a wholly owned subsidiary of ArcBest Corporation, and
certain other subsidiaries. Our Asset-Based segment provides freight transportation services through one of North
America’s largest less-than-truckload (“LTL”) carriers. Our customers trust the LTL solutions ABF Freight has provided
for over a century and rely on our unwavering commitment to quality, safety, and customer service to solve their
transportation challenges through market disruptions and rapidly changing economic conditions. We are strategically
investing in our Asset-Based operations to utilize technology to drive efficiency and productivity. We are also committed
to our deepening customer relationships to navigate challenges now and in the future.
Our Asset-Based operations are affected by general economic conditions, as well as a number of other competitive factors
that are more fully described in Item 1 (Business) and in Item 1A (Risk Factors) of Part I of this Annual Report on Form
10-K. See Note N to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K
for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses,
and operating income for the years ended December 31, 2024, 2023, and 2022.
The key indicators necessary to understand the operating results of our Asset-Based segment are outlined below. These
key indicators are used by management to evaluate segment operating performance and measure the effectiveness of
strategic initiatives in the results of our Asset-Based segment. We quantify certain key indicators using key operating
statistics, which are important measures in analyzing segment operating results from period to period. These statistics are
defined within the key indicators below and referred to throughout the discussion of the results of our Asset-Based
segment:
•
Overall customer demand for Asset-Based transportation services, including the impact of economic factors.
•
Volume of transportation services provided and processed through our network which influences operating
leverage as the level of tonnage and number of shipments vary, primarily measured by:
Tonnage per day (average daily shipment weight) – total weight of shipments processed during the period in U.S.
tons divided by the number of workdays in the period.
Shipments per day – total number of shipments moving through the Asset-Based freight network during the period
divided by the number of workdays in the period.
Weight per shipment – total weight of shipments processed during the period in U.S. pounds divided by the number
of shipments during the period.
Average length of haul (miles) – total miles between origin and destination service centers for all shipments
(including shipments moved with purchased transportation) during the period.
•
Prices obtained for services, including fuel surcharges, primarily measured by:
Billed revenue per hundredweight, including fuel surcharges (yield) – revenue per 100 pounds of shipment weight,
including fuel surcharges, systematically calculated as shipments are processed in the Asset-Based freight network.
Revenue for undelivered freight is deferred for financial statement purposes in accordance with our revenue
recognition policy. Billed revenue used for calculating revenue per hundredweight measurements is not adjusted
for the portion of revenue deferred for financial statement purposes.
Billed revenue per shipment, including fuel surcharges – Asset-Based freight revenue, including fuel surcharges,
divided by the number of shipments that are processed in the Asset-Based freight network. Revenue for
41
undelivered freight is deferred for financial statement purposes in accordance with our revenue recognition policy.
Billed revenue used for calculating revenue per shipment measurements is not adjusted for the portion of revenue
deferred for financial statement purposes.
•
Ability to manage cost structure, primarily in the area of salaries, wages, and benefits (“labor”), with the total cost
structure primarily measured by:
Operating ratio – the percent of operating expenses to revenue levels.
We also quantify certain key operating statistics, which are used by management to evaluate productivity of
operations within the Asset-Based freight network and to measure the effectiveness of strategic initiatives to
manage the segment’s cost structure from period to period. These measures are defined below and further discussed
under Asset-Based Operating Expenses within the Asset-Based Segment Results section:
•
Shipments per dock, street, and yard (“DSY”) hour – total shipments (including shipments handled by
purchased transportation agents) divided by DSY hours. This metric is used to measure labor efficiency in the
segment’s local operations. The shipments per DSY hour metric will generally increase when more purchased
transportation is used; however, the labor efficiency may be offset by increased purchased transportation
expense.
•
Pounds per mile – total pounds divided by total miles driven during the period (including pounds and miles
moved with purchased transportation). This metric is used to measure labor efficiency of linehaul operations,
although it is influenced by other factors including freight density, loading efficiency, average length of haul,
and the degree to which purchased transportation (including rail service) is used.
Other companies within our industry may present different key performance indicators or operating statistics, or they
may calculate their measures differently; therefore, our key performance indicators or operating statistics may not
be comparable to similarly titled measures of other companies. Key performance indicators or operating statistics
should be viewed in addition to, and not as an alternative for, our reported results. Our key performance indicators
or operating statistics should not be construed as better measurements of our results than operating income, operating
cash flow, net income, or earnings per share, as determined under GAAP.
Tonnage
The level of freight tonnage managed by the Asset-Based segment is directly affected by industrial production and
manufacturing; distribution; residential and commercial construction; consumer spending, primarily in the North
American economy; and capacity in the trucking industry. Operating results are affected by economic cycles and
conditions, customers’ business cycles, and changes in customers’ business practices. The Asset-Based segment actively
competes for freight business based primarily on price, service, and capacity availability.
Pricing
The industry pricing environment, another key factor impacting our Asset-Based results, influences the ability to obtain
appropriate margins and price increases on customer accounts. Generally, LTL freight is rated by a class system, which is
established by the National Motor Freight Traffic Association, Inc. Light, bulky freight typically has a higher class and is
priced at a higher revenue per hundredweight than dense, heavy freight. Changes in the rated class and packaging of the
freight, along with changes in other freight profile factors, such as average shipment size; average length of haul; freight
density; and customer and geographic mix, can affect the average billed revenue per hundredweight measure.
Approximately 20% of our Asset-Based business is subject to base LTL tariffs, which are affected by general rate
increases, subject to individually negotiated discounts. Rates on the remaining Asset-Based business, including business
priced in the spot market, are subject to individual pricing arrangements negotiated at various times throughout the year.
The majority of the business that is subject to negotiated pricing arrangements is associated with larger customer accounts
with annually negotiated pricing arrangements. The remaining business is priced on an individual shipment basis
considering each shipment’s unique profile, value provided to the customer, network capacity, and current market
conditions. Since pricing is established individually by account, the Asset-Based segment focuses on individual account
profitability rather than a single measure of billed revenue per hundredweight when considering customer account or
market evaluations.
42
We allow shippers with established accounts and without negotiated published rates, instant access to competitive LTL
rates through an online portal and API connectivity, matching their shipping needs with capacity available in the ABF
Freight network at the time of the quote. The market has been receptive to this dynamic pricing option for transactional
LTL shipments, and this program has been beneficial in optimizing our business levels by improving capacity utilization
in the Asset-Based network. In the current soft market environment, our dynamic pricing option has allowed us to
strategically fill empty capacity, enabling us to reduce the need for employee furloughs or layoffs and be better positioned
for a market rebound of higher freight demand, as well as provide a more sustainable service offering by reducing “empty
miles” (or the number of miles we move empty or near-empty equipment for repositioning purposes). Although we
continually evaluate our business mix to ensure revenue optimization, any resulting increase in revenues could be offset
partially or entirely by the related increase in expenses needed to service higher shipment volumes.
We also utilize a space-based pricing approach for shipments subject to LTL tariffs to align our pricing with freight
shipping trends in the industry, including the overall growth and ongoing profile shift to bulkier, yet often lighter,
shipments across the supply chain, the acceleration in e-commerce, and the unique requirements of many shipping and
logistics solutions, such as accommodating for smaller LTL shipments. An increasing percentage of freight is taking up
more space in trailers without a corresponding increase in weight. Traditional LTL pricing is generally weight-based, while
our linehaul costs are generally space-based (i.e., costs are impacted by the volume of space required for each shipment).
Space-based pricing involves the use of freight dimensions (length, width, and height) to determine applicable cubic
minimum charges (“CMC”) that supplement weight-based metrics when appropriate. We believe space-based pricing
better aligns our pricing mechanisms with the metrics which affect our resources and, therefore, our costs to provide
logistics services. We seek to provide logistics solutions to our customers’ businesses and the unique shipment
characteristics of their various products and commodities, and we believe that we are particularly experienced in handling
freight that is generally considered difficult to handle. CMC is an additional pricing mechanism to better capture the value
we provide in transporting these shipments.
Fuel
The transportation industry is dependent upon the availability of adequate fuel supplies. The Asset-Based segment assesses
a fuel surcharge based on the index of national on-highway average diesel fuel prices published weekly by the U.S.
Department of Energy. To better align fuel surcharges to fuel- and energy-related expenses and provide more stability to
account profitability as fuel prices change, we may, from time to time, revise our standard fuel surcharge program, which
impacts approximately one-third of Asset-Based shipments and primarily affects noncontractual customers. While fuel
surcharge revenue generally more than offsets the increase in direct diesel fuel costs when applied, the total impact of
energy prices on other nonfuel-related expenses is difficult to ascertain. Management cannot predict, with reasonable
certainty, future fuel price fluctuations, the impact of energy prices on other cost elements, recoverability of fuel costs
through fuel surcharges, and the effect of fuel surcharges on the overall rate structure or the total price that the segment
will receive from its customers. While the fuel surcharge is one of several components in the overall rate structure, the
actual rate paid by customers is governed by market forces and the overall value of services provided to the customer.
During periods of changing diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs also vary by
different degrees. Depending upon the rates of these changes and the impact on costs in other fuel- and energy-related
areas, operating margins could be impacted. Fuel prices have fluctuated significantly in recent years. Whether fuel prices
fluctuate or remain constant, operating results may be adversely affected if competitive pressures limit our ability to
recover fuel surcharges. Throughout 2024, the fuel surcharge mechanism generally continued to have market acceptance
among customers; however, certain nonstandard pricing arrangements have limited the amount of fuel surcharge
recovered. The negative impact on operating margins of capped fuel surcharge revenue during periods of increasing fuel
costs is more evident when fuel prices remain above the maximum levels recovered through the fuel surcharge mechanism
on certain accounts. In periods of declining fuel prices, fuel surcharge percentages also decrease, which negatively impacts
the total billed revenue per hundredweight measure and, consequently, revenues. The revenue decline may be
disproportionate to our fuel costs. Asset-Based revenues for 2024, compared to 2023, were negatively impacted by lower
fuel surcharge revenue due to a decrease in the nominal fuel surcharge rate, while total fuel costs also decreased. The
segment’s operating results will continue to be impacted by further changes in fuel prices and the related fuel surcharges.
Labor Costs
Our Asset-Based labor costs, including retirement and healthcare benefits for contractual employees that are provided by
a number of multiemployer plans (see Note J to our consolidated financial statements included in Part II, Item 8 of this
Annual Report on Form 10-K), are impacted by contractual obligations under the 2023 ABF National Master Freight
Agreement (“2023 ABF NMFA”), the collective bargaining agreement with the International Brotherhood of Teamsters
43
(“IBT”), which will remain in effect through June 30, 2028, and other related supplemental agreements. Total salaries,
wages, and benefits, amounted to 50.5% and 48.1% of revenues for 2024 and 2023, respectively. Changes in salaries,
wages, and benefits expense and shared services expenses, which include labor costs related to ABF Freight’s portion of
company-wide functions, as a percentage of revenues are discussed in the Asset‑Based Segment Results section.
ABF Freight operates in a highly competitive industry comprised primarily of nonunion motor carriers. Nonunion
competitors have a lower fringe benefit cost structure and less stringent labor work rules, and certain carriers also have
lower wage rates for their freight-handling and driving personnel. ABF Freight has continued to address with the IBT the
effect of the segment’s wage and benefit cost structure on its operating results. As of December 2024, approximately 82%
of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA. The terms of the 2023 ABF NMFA
continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined
contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis
through the end of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF
NMFA.
Under the 2023 ABF NMFA, ABF Freight continues to pay some of the highest benefit contribution rates in the industry,
and through this contract, ABF Freight may implement location-specific wage increases in areas where hiring has been
challenging. ABF Freight’s benefit contributions for its contractual employees include contributions to multiemployer
plans. These contributions to multiemployer pension plans and health and welfare plans totaled $157.9 million and
$218.5 million, respectively, in 2024, and $162.5 million and $215.6 million, respectively, in 2023. ABF Freight’s latest
labor agreement with IBT requires wage rates and health, welfare, and pension contribution rates for most plans to increase
annually in accordance with the terms of the 2023 ABF NMFA. Union wages increased 13.0% effective July 1, 2023
related to contractual wage and mileage rate increases under the 2023 ABF NMFA, the contractual wage rate increased
effective July 1, 2024, and the health, welfare, and pension benefit contribution rate increased effective primarily on
August 1, 2024, resulting in a combined contractual wage and benefits top hourly rate increase of approximately 2.7%.
The 2023 ABF NMFA provides for:
•
wage rate or per mile increases in each year of the contract, with the initial increase effective retroactive to
July 1, 2023;
•
continued annual contribution rate increases to multiemployer health and welfare and pension plans to which
ABF Freight contributed under the 2018 ABF NMFA;
•
an additional paid holiday;
•
two additional paid sick days;
•
a new non-CDL employee classification; and
•
profit-sharing bonuses for qualifying contractual employees based upon the Asset-Based segment’s
achievement of certain annual operating ratios for any full calendar year during the contract period.
Through the term of the 2023 ABF NMFA, which extends through June 30, 2028, ABF Freight’s multiemployer pension
contribution obligations generally will be satisfied by making the specified contributions when due. Future contribution
rates will be determined through the negotiation process for contract periods following the term of the current collective
bargaining agreement. While we cannot determine with any certainty the contributions that will be required under future
collective bargaining agreements for ABF Freight’s contractual employees, our future contribution rates to multiemployer
pension plans may be less likely to increase as a result of legislation in recent years that has provided funding relief to
many underfunded plans (see Note J to our consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K). If ABF Freight were to completely withdraw from certain multiemployer pension plans, under
current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan.
Further, ABF Freight could also trigger complete or partial withdrawal liability from certain multiemployer pension plans
through, among other things, mergers and other fundamental corporate transactions and as a result of operational changes,
site closures and job losses, which could result in material liabilities.
44
Asset-Based Segment Results
The following table sets forth a summary of operating expenses and operating income as a percentage of revenue for the
Asset-Based segment:
Year Ended December 31
2024
2023
2022
Asset-Based Operating Expenses (Operating Ratio)
Salaries, wages, and benefits
50.5 %
48.1 %
43.0 %
Fuel, supplies, and expenses
11.5
12.6
12.6
Operating taxes and licenses
2.0
1.9
1.7
Insurance
2.6
1.8
1.6
Communications and utilities
0.7
0.7
0.6
Depreciation and amortization
4.0
3.6
3.2
Rents and purchased transportation
10.0
11.8
14.6
Shared services
9.8
9.7
9.4
(Gain) loss on sale of property and equipment and asset impairment charges
—
—
(0.4)
Innovative technology costs(1)
—
0.8
0.9
Other
0.1
0.2
0.1
91.2 %
91.2 %
87.3 %
Asset-Based Operating Income
8.8 %
8.8 %
12.7 %
(1)
Represents costs associated with the freight handling pilot test program at ABF Freight, as further discussed in the Asset-Based
Operating Income section.
The following table provides a comparison of key operating statistics for the Asset-Based segment, as previously defined
in the Asset-Based Segment Overview:
Year Ended December 31
2024
2023
% Change
Workdays(1)
252.5
251.5
Billed revenue per hundredweight, including fuel surcharges
$
49.68 $
44.46
11.7 %
Billed revenue per shipment, including fuel surcharges
$
548.81 $
554.53
(1.0)%
Tonnage per day
10,968
12,803
(14.3)%
Shipments per day
19,856
20,529
(3.3)%
Shipments per DSY hour
0.444
0.425
4.5 %
Weight per shipment
1,105
1,247
(11.4)%
Pounds per mile
18.11
18.87
(4.0)%
Average length of haul (miles)
1,126
1,092
3.1 %
(1)
Workdays represent the number of operating days during the period after adjusting for holidays and weekends.
Asset-Based Revenues
Asset-Based segment revenues totaled $2.8 billion and $2.9 billion for the years ended December 31, 2024 and 2023,
respectively. The decrease in revenue compared to the prior year primarily reflects a decrease in tonnage per day and
weight per shipment. Billed revenue (as described in the Asset-Based Segment Overview section) decreased 4.3% on a
per-day basis in 2024, compared to 2023, primarily reflecting a 14.3% decrease in tonnage per day, partially offset by a
11.7% increase in billed revenue per hundredweight, including fuel surcharges. There was one more workday in 2024
versus 2023.
The decrease in tonnage per day for 2024, compared to 2023, is primarily related to the soft market environment resulting
from prolonged weakness in industrial production, which has resulted in lower average weight per shipment levels as well
as lower daily shipment levels. Total shipments, which decreased 3.3% on a per-day basis for 2024, compared to 2023,
were impacted by changes in the Asset-Based business mix as well as the softer freight environment.
The increase in total billed revenue per hundredweight for 2024, including fuel surcharges, compared to 2023, was driven
by the lower weight per shipment, which generally increases revenue per hundredweight, and pricing increases, offset
partially by lower fuel surcharge revenue associated with lower fuel prices, compared to 2023. The pricing environment
45
for LTL shipments continues to be rational. Excluding the impact of fuel surcharges, the percentage increase in billed
revenue per hundredweight on our traditional LTL-rated freight was in the low-single digits for 2024, compared to 2023.
Prices on accounts subject to deferred pricing agreements and annually negotiated contracts which were renewed during
2024 increased an average of 4.9%, compared to the prior year. The Asset-Based segment implemented nominal general
rate increases on its LTL base rate tariffs of 5.9% effective on September 9, 2024, October 2, 2023, and November 7, 2022,
although the rate changes vary by lane and shipment characteristics.
Current economic conditions and the Asset-Based segment’s pricing approach, as previously discussed in the Pricing
section of the Asset-Based Segment Overview within Results of Operations, will continue to impact the segment’s tonnage
levels and the prices it receives for its services and, as such, there can be no assurance that our Asset-Based segment will
maintain or achieve improvements in its current operating results. The industry pricing environment remains rational,
which has benefited our efforts to secure needed price increases; however, the competitive environment could limit the
Asset-Based segment from securing adequate increases in base LTL freight rates and could limit the amount of fuel
surcharge revenue recovered in future periods.
Asset-Based Operating Income
The Asset-Based segment generated operating income of $242.6 million in 2024, compared to $253.2 million in 2023,
with an operating ratio of 91.2% in both periods. The Asset-Based segment’s operating ratio was impacted by the decline
in revenues, offset by lower operating expenses, reflecting primarily cost control efforts to reduce utilization of outside
resources and optimize internal resources, and the pausing of the freight handling pilot test program at ABF Freight during
third quarter 2023, as discussed in the following paragraphs.
Asset-Based Operating Expenses
Labor costs, which are reported in operating expenses as salaries, wages, and benefits, amounted to 50.5% and 48.1% of
Asset-Based segment revenues for 2024 and 2023, respectively. Salaries, wages, and benefits increased $7.7 million for
2024, compared to 2023, primarily due to contract rate increases under the 2023 ABF NMFA, as previously discussed in
the Asset-Based Revenues section. Wage rates increased 2.5% on July 1, 2024, and health, welfare and benefits rates
increased 2.9% on August 1, 2024, for a blended increase of 2.7% in 2024. Wage rates increased 13.1% on July 1, 2023,
and the health, welfare and benefits rates increased 4.0% on August 1, 2023, for a blended increase of 9.1% in 2023. The
increases in salaries, wages and benefits from the union contract rates were offset in part, by improved productivity, as
measured by shipments per DSY hour, a decrease in headcount to align with lower shipment levels, and by lower utilization
of purchased transportation as discussed later in this section.
The Asset-Based segment manages costs with shipment levels; however, a number of factors impact DSY productivity,
including the effect of freight profile and mix changes, utilization of local delivery agents, and efficiency of personnel.
Shipments per DSY hour improved 4.5% for 2024, compared to 2023, primarily due to City Route Optimization
technology implemented in 2023, the separation of city operations from certain distribution centers in late 2023, and
training and development at certain key locations, as the ABF Freight process compliance team continues to reinforce
operational best practices throughout the Asset-Based network. Pounds per mile decreased 4.0% for 2024, compared to
2023, reflecting lower weight per shipment, partially offset by an improvement in linehaul productivity and an increase in
the average length of haul.
Fuel, supplies, and expenses as a percentage of revenue decreased 1.1 percentage points in 2024, compared to 2023. Fuel
expense decreased during 2024, as the Asset-Based segment’s average fuel price per gallon (excluding taxes) decreased
approximately 14% during 2024, compared to 2023. Lower city tractor age contributed to the decrease in costs to repair
and maintain revenue equipment units during 2024, compared to 2023.
Rents and purchased transportation as a percentage of revenue decreased 1.8 percentage points in 2024, compared to 2023,
primarily due to focused reduction in the utilization of local delivery agents and linehaul purchased transportation and a
decrease in rail fuel surcharge cost per mile. Rail miles decreased approximately 9% in 2024, compared to 2023.
Insurance as a percentage of revenue increased 0.8 percentage point in 2024, compared to 2023, primarily due to an
increase in the severity of third-party casualty claims, including an increase in the number of large claims in recent years
and higher retention limits.
We paused the hardware portion of the pilot at ABF Freight distribution centers in Kansas City, Missouri and Salt Lake
City, Utah during third quarter 2023. The Asset-Based segment did not incur innovative technology costs during the year
46
ended December 31, 2024, while these costs reduced operating results of the Asset-Based segment by $21.7 million for
2023, resulting in a 0.8 percentage point decrease in expenses as a percentage of revenue in 2024, compared to 2023.
Asset-Light Operations
Asset-Light Segment Overview
Our Asset-Light segment is a key component of our strategy to offer a single source of integrated logistics solutions,
designed to satisfy customers’ complex supply chain needs and unique shipping requirements. We are focused on growing
and making strategic investments in our Asset-Light segment that enhance our service offerings and strengthen our
customer relationships. Throughout our operations, we are seeking opportunities to expand our revenues by deepening
existing customer relationships, securing new customers, and adding capacity options for our customers.
As supply chains become more complex, most shippers use a mix of modes to keep their supply chains moving, and our
managed transportation solutions seamlessly connects these modes to build better supply chains. We continue to develop
our managed transportation solutions as part of our strategic efforts to cross-sell our service offerings and meet the demand
for these services that increase operational efficiencies, reduce costs, and give better insights into their supply chain. We
expect to benefit from these and other strategic initiatives as we continue to deliver innovative solutions to customers.
Our acquisition of MoLo, which was completed on November 1, 2021, accelerated the growth of our company by
increasing the scale of truckload brokerage services offered within our Asset-Light segment and expanding our access to
truckload capacity partners. Our acquisition of MoLo, including detail regarding the initial consideration payment and
provision for certain additional cash consideration based on the achievement of certain targets, is discussed further in
Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that
are more fully described in Part I, Item 1 (Business) and in Part I, Item 1A (Risk Factors) of this Annual Report on
Form 10-K. See Note N to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K for descriptions of the Asset-Light segment and additional segment information, including revenues, operating
expenses, and operating income (loss) for the years ended December 31, 2024, 2023, and 2022.
The key indicators necessary to understand our Asset-Light segment operating results are outlined below. These key
indicators are used by management to evaluate segment operating performance and measure the effectiveness of strategic
initiatives in the results of our Asset-Light segment. We quantify certain key indicators using key operating statistics which
are important measures in analyzing segment operating results from period to period. These statistics are defined within
the key indicators below and referred to throughout the discussion of the results of our Asset-Light segment:
•
Customer demand for logistics and premium transportation services, primarily measured by:
Shipments per day – total shipments divided by the number of working days during the period, compared to the
same prior-year period.
•
Prices obtained for services, primarily measured by:
Revenue per shipment – total segment revenue divided by total segment shipments during the period, compared
to the same prior-year period.
•
Availability of market capacity and cost of purchased transportation to fulfill customer shipments, with a measure
of purchased transportation cost expressed as:
Purchased transportation costs as a percentage of revenue – the expense incurred for third-party transportation
providers to haul or deliver freight during the period, divided by segment revenues for the period, expressed as a
percentage.
•
Management of operating costs, primarily in the area of purchased transportation, with the total cost structure
primarily measured by:
47
Operating ratio – the percent of operating expenses to revenue levels.
We also evaluate productivity of operations within the Asset-Light segment and labor efficiency through the following
key operating statistic, which, as defined below, is further discussed under Asset-Light Operating Expenses within the
Asset-Light Segment Results section:
•
Shipments per employee per day – total shipments divided by the number of employees divided by the number
of working days during the period, compared to the same prior-year period. This metric is used to measure the
effectiveness of strategic initiatives to manage the segment’s cost structure from period to period.
Other companies within our industry may present different key performance indicators or they may calculate their key
performance indicators differently; therefore, our key performance indicators may not be comparable to similarly titled
measures of other companies. Key performance indicators should be viewed in addition to, and not as an alternative
for, our reported results. Our key performance indicators should not be construed as better measurements of our results
than operating income, net income, or earnings per share, as determined under GAAP.
Asset-Light Segment Results
The following table sets forth a summary of operating expenses and operating income (loss) as a percentage of revenue
for the Asset-Light segment:
Year Ended December 31
2024
2023
2022
Asset-Light Segment Operating Expenses (Operating Ratio)
Purchased transportation
86.3 %
85.4 %
83.4 %
Salaries, wages, and benefits(1)
7.7
7.7
7.0
Supplies and expenses
0.6
0.7
0.6
Depreciation and amortization(2)
1.3
1.2
1.0
Shared services(1)
4.4
3.9
3.2
Contingent consideration(3)
(5.8)
(1.1)
0.9
Asset impairment charges(4)
0.1
0.9
—
Legal settlement(5)
—
0.6
—
Other
1.6
1.4
1.4
96.2 %
100.7 %
97.5 %
Asset-Light Segment Operating Income (Loss)
3.8 %
(0.7)%
2.5 %
(1)
For 2023 and 2022, certain expenses have been reclassified to conform to the current year presentation, including amounts
previously reported in “Shared services” that were reclassified to present “Salaries, wages, and benefits” expenses in a separate
line item.
(2)
Includes amortization of intangibles associated with acquired businesses.
(3)
Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition, as further discussed
in the Asset-Light Operating Expenses section below.
(4)
The 2024 period represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth
quarter of 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. The 2023 period represents
noncash lease-related impairment charges for certain office spaces that were made available for sublease, as further discussed in
the Asset-Light Operating Expenses section below.
(5)
Represents settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act,
which were paid during first quarter 2025, as further discussed in the Asset-Light Operating Expenses section below.
(6)
The 2022 period includes a gain of $0.4 million recognized when funds were released from escrow in second quarter 2022, relating
to the May 2021 sale of the labor services portion of the Asset-Light moving business.
48
A comparison of key operating statistics for the Asset-Light segment, as previously defined in the Asset-Light Segment
Overview section, is presented in the following table:
Year Over Year % Change
Year Ended December 31,
2024
2023
Revenue per shipment
(12.8%)
(25.3%)
Shipments per day
5.5%
5.3%
Shipments per employee per day
24.2%
12.5%
Asset-Light Revenues
Asset-Light segment revenues totaled $1.6 billion and $1.7 billion in 2024 and 2023, respectively. The 7.6% decrease in
2024 revenues, compared to 2023, primarily reflects the impact of lower average revenue per shipment associated with a
soft market environment and a higher mix of managed transportation business, which has smaller shipment sizes and lower
revenue per shipment metrics. Excess capacity in the truckload market continues to impact spot market rates resulting in
lower revenue per shipment and compressed margins. Despite an increase in average daily shipment levels for the year
ended December 31, 2024, driven by growth in managed transportation service offerings, lower revenue per shipment
levels resulted in an overall revenue decline, compared to the same period of 2023.
Asset-Light Operating Income (Loss)
The Asset-Light segment generated operating income of $58.4 million in 2024 and operating loss of $12.3 million in 2023.
The year-over-year improvement in operating results reflects the changes in fair value of contingent earnout consideration
related to the MoLo acquisition and decreases in operating expenses discussed in the following paragraphs, partially offset
by lower revenues. Changes in the fair value of contingent earnout consideration reduced expenses by $90.3 million for
the year ended December 31, 2024, compared to $19.1 million the same period of 2023. The year ended
December 31, 2024 was also impacted by $1.7 million in asset impairment charges related to adjusting our capacity within
Asset-Light operations during the fourth quarter of 2024 and $0.3 million in legal settlement expenses, compared to the
year ended December 31, 2023, which was impacted by $14.4 million in lease-related asset impairment charges and
$9.5 million in legal settlement expenses.
Asset-Light Operating Expenses
Operating expenses decreased $198.4 million, or 11.7%, and decreased as a percentage of revenue by 4.5 percentage
points. Excluding the change in fair value of contingent earnout consideration and lower asset impairment charges and
legal settlement expenses in 2024, as previously discussed, the decrease in operating expenses, compared to 2023, is due
primarily to lower outside service costs and employee-related cost reductions in relation to lower business levels.
Purchased transportation costs as a percentage of revenue increased by 0.9 percentage point for 2024, compared to 2023,
reflecting lower revenue outpacing the $95.8 million reduction of purchased transportation costs in 2024. Changes in
market capacity impact the cost of purchased transportation and may not correspond to the timing of revisions to customer
pricing and changes in revenue per shipment. There can be no assurance that we will be able to secure prices from our
customers that will allow us to maintain or improve our margins on the cost of sourcing carrier equipment capacity.
Contingent earnout consideration, as previously described, decreased as a percentage of revenue by 4.7 percentage points
for 2024, compared to 2023. The contingent earnout consideration is discussed further in Note C to our consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Salaries, wages, and benefits were consistent as a percentage of revenue in 2024, compared to 2023, but decreased
$10.1 million year-over-year as the segment continued efforts to align resources with business levels. Shipments per
employee per day improved 24.2% for 2024, compared to 2023, as a result of these efforts, combined with technology
advancements from the digital roadmap initiatives.
Shared service costs as a percentage of revenue increased 0.5 percentage point for 2024, compared to 2023, primarily
reflecting the impact of lower revenues during 2024.
Asset impairment charges, as previously described, of $1.7 million recorded in the fourth quarter of 2024 and $14.4 million
recorded in the third quarter of 2023 were 0.1 percentage point for 2024 and 0.9 percentage point of revenue for 2023. The
lease-related impairment charges are discussed further in Note C and Note G to our consolidated financial statements
included in Part II, Item 8 of this Annual Report on Form 10-K.
49
During the first quarter of 2025, the Company settled a claim related to the classification of certain Asset-Light employees
under the Fair Labor Standards Act. The Asset-Light segment recorded legal settlement expenses of $0.3 million in the
fourth quarter of 2024 and $9.5 million in the fourth quarter of 2023 related to this claim. These settlement expenses are
discussed further in Note O to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K.
Asset-Light Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Asset-Light Adjusted
EBITDA”)
We report our financial results in accordance with GAAP. However, management believes that certain non-GAAP
performance measures and ratios, such as Asset-Light Adjusted EBITDA, which is utilized for internal analysis, provide
analysts, investors, and others the same information that we use internally for purposes of assessing our core operating
performance and provides meaningful comparisons between current and prior period results, as well as important
information regarding performance trends. The use of certain non-GAAP measures improves comparability in analyzing
our performance because it removes the impact of items from operating results that, in management’s opinion, do not
reflect our core operating performance. Management uses Asset-Light Adjusted EBITDA as a key measure of performance
and for business planning. This measure is particularly meaningful for analysis of our Asset-Light segment, because it
excludes amortization of acquired intangibles and software, changes in the fair value of contingent earnout consideration,
asset impairment charges, and legal settlement expenses, which are significant expenses or gains resulting from strategic
decisions or other factors rather than core daily operations. Management also believes Asset-Light Adjusted EBITDA to
be relevant and useful information, as EBITDA is a standard measure commonly reported and widely used by analysts,
investors, and others to measure financial performance of asset-light businesses and the ability to service debt obligations.
Other companies may calculate adjusted EBITDA differently; therefore, our calculation of Asset-Light Adjusted EBITDA
may not be comparable to similarly titled measures of other companies. Non-GAAP financial measures should be viewed
in addition to, and not as an alternative for, our reported results. Asset-Light Adjusted EBITDA should not be construed
as a better measurement than operating income (loss), net income, or earnings per share, as determined under GAAP.
Asset-Light Adjusted EBITDA
Year Ended December 31
2024
2023
2022
($ thousands)
Operating Income (Loss)(1)
$ 58,444 $ (12,271) $ 52,725
Depreciation and amortization(2)
20,062
20,370
20,730
Change in fair value of contingent consideration(3)
(90,250) (19,100)
18,300
Asset impairment charges(4)
1,700
14,407
—
Legal settlement(5)
274
9,500
—
Gain on sale of subsidiary(6)
—
—
(402)
Asset-Light Adjusted EBITDA
$ (9,770) $ 12,906 $ 91,353
(1)
The calculation of Asset-Light Adjusted EBITDA as presented in this table begins with operating income as the most directly
comparable GAAP measure. Other income (costs), income taxes, and net income are reported at the consolidated level and not
included in the operating segment financial information evaluated by management to make operating decisions. Consolidated
Adjusted EBITDA is reconciled to consolidated net income in the Consolidated Results section of Results of Operations.
(2)
Includes amortization of intangibles associated with acquired businesses. Amortization of acquired intangibles totaled
$12.8 million, $12.8 million, and $12.9 million for 2024, 2023, and 2022, respectively, and is expected to total approximately
$13.0 million for 2025.
(3)
Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition. The liability for
contingent consideration is remeasured at each quarterly reporting date, and any change in fair value from recurring assessments
is recognized in operating income. See Note C to our consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K.
(4)
The 2024 period represents noncash asset impairment charges for certain revenue equipment and software recognized during the
fourth quarter of 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. The 2023 period represents
noncash lease-related impairment charges for certain office spaces that were made available for sublease. See Note C and Note G
to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
(5)
Represents expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act, which were
paid during first quarter 2025, as previously described. See Note O to our consolidated financial statements included in Part II,
Item 8 of this Annual Report on Form 10-K.
(6)
Gain relates to the contingent amount recognized in second quarter 2022 related to the sale of the labor services portion of the
Asset-Light segment's moving business in second quarter 2021, when the funds were released from escrow.
50
Current Economic Conditions
Economic conditions continue to be influenced by higher interest rates, supply chain disruptions, and a slowing labor
market. Additionally, ongoing tensions in the Middle East, trade disputes, potential changes in trade policies, and other
geopolitical conflicts present uncertain and potentially increasing economic impacts going into 2025. Despite relatively
high interest rates and rising unemployment, recession risk is estimated to be low for 2025. The housing market, which is
another near-term recession indicator, remains relatively steady with home prices moderating during the second half of
2024, despite an overall significant decline since 2022. The recent improvement in the housing market is in response to
the U.S. Federal Reserve easing monetary policy through interest rate cuts beginning in the third quarter of 2024.
Although inflation is easing, the manufacturing sector, as measured by the Purchasing Managers’ Index (“PMI”), expanded
in January 2025. The growth follows a period of continuous contraction since November 2023, except for a brief expansion
in March 2024. This trend has contributed to a decrease in freight volumes. In 2024, the economy grew at a slower pace
than 2023 as measured by U.S. real gross domestic product (“real GDP”), with the fourth quarter 2024 annual real GDP
rate increase being primarily driven by increased consumer and government spending, partially offset by a decrease in
investment.
Although we implemented a general rate increase and secured increases on deferred pricing agreements and annually
negotiated contracts during the year ended December 31, 2024, the Asset-Based segment has seen lower tonnage levels as
a result of the soft market environment and lower shipment levels as a result of changes in the Asset-Based business mix.
There can be no assurance that the economic environment, including the impact of interest rates on consumer demand,
will be favorable for our freight services in future periods.
Given the uncertainties of current economic conditions, there can be no assurance that our estimates and assumptions
regarding the pricing environment and economic conditions, which are made for purposes of impairment tests related to
operating assets and deferred tax assets, will prove to be accurate. Extended periods of economic disruption and resulting
declines in industrial production and manufacturing and consumer spending could negatively impact demand for our
services and have an adverse effect on our results of operations, financial condition, and cash flows. The soft freight
environment, which we experienced during 2024, resulted in a year-over-year decline in market pricing for many of our
Asset-Light services, as compared to 2023. There can be no assurance that we will be able to secure adequate prices from
this new business or from our existing customers to maintain or improve our operating results. Significant declines in our
business levels or other changes in cash flow assumptions or other factors that negatively impact the fair value of the
operations of our reporting units could result in impairment and a resulting noncash write-off of a significant portion of
the goodwill and intangible assets of our Asset-Light segment, which would have an adverse effect on our financial
condition and operating results.
Effects of Inflation
Inflation remains above the Federal Reserve’s long-term target inflation rate of 2%. Global supply chain volatility and
labor and energy shortages, in addition to the impact of federal monetary policy, have elevated costs higher across a broad
array of consumer goods. The consumer price index (CPI) increased 3.0%, before seasonal adjustment, year-over-year in
January 2025 and 0.7% from December 2024. While CPI has declined from the level reached in June 2022 due to market
response to the Federal Reserve’s tighter monetary policy implemented in March 2022, recent CPI readings continue to
indicate an ongoing challenge in achieving the Federal Reserve’s target inflation rate. Inflation is impacted by energy
prices, including petroleum products; housing prices; and insurance services, which have increased in recent months. Most
of our expenses are affected by inflation, which generally results in increased operating costs. As such, there can be no
assurances of the potential impact of inflationary conditions on our business, including demand for our transportation
services.
Generally, inflationary increases in labor and fuel costs as they relate to our Asset-Based operations have historically been
mostly offset through price increases and fuel surcharges. In periods of increasing fuel prices, the effect of higher
associated fuel surcharges on the overall price to the customer influences our ability to obtain increases in base freight
rates. In addition, certain nonstandard arrangements with some of our customers have limited the amount of fuel surcharge
recovered. Our Asset-Based segment’s ability to fully offset inflationary and contractual cost increases can be challenging
during periods of recessionary and uncertain economic conditions.
51
Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been
offset through price increases. The pricing environment, however, generally becomes more competitive during economic
downturns, which may, as it has in the past, affect the ability to obtain price increases from customers both during and
following such periods. The pricing environment remains competitive, and we believe that Asset-Light pricing has
stabilized at the bottom of the truckload market cycle.
During 2024, the market slowly began to overcome the impact of supply chain disruptions and component shortages that
limited the availability and production of certain revenue equipment and certain other equipment used in our business
operations. The prices for these items have also increased. Partly as a result of inflationary pressures, our revenue
equipment (tractors and trailers) has been and will very likely continue to be replaced at higher per-unit costs, which could
result in higher depreciation charges on a per-unit basis. We consider these costs in setting our pricing policies, although
the overall freight rate structure is governed by market forces. In addition to general effects of inflation, the motor carrier
freight transportation industry faces rising costs related to insurance claims, compliance with government regulations on
safety, equipment design and maintenance, driver utilization, emissions, and fuel economy.
Environmental and Legal Matters
We are subject to federal, state, and local environmental laws and regulations relating to, among other things: emissions
control, transportation or handling of hazardous materials, underground and aboveground storage tanks, stormwater
pollution prevention, contingency planning for spills of petroleum products, and disposal of waste oil. We may transport
or arrange for the transportation of hazardous materials and explosives, and we operate in industrial areas where truck
service centers and other industrial activities are located and where groundwater or other forms of environmental
contamination could occur. In 2023, ABF Freight entered into a Consent Decree with the Environmental Protection
Agency (the “EPA”) to resolve alleged compliance issues under the federal Clean Water Act, agreeing to certain
compliance tasks. See Note O to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K for further discussion of the environmental matters to which we are subject, including additional detail on ABF
Freight’s Consent Decree with the EPA.
Physical effects from climate change, including more frequent and severe weather events, have the potential to adversely
impact our business levels and employee working conditions, cause shipping delays or disruption to our operations,
increase our operating costs, and cause damage to our property and equipment. Due to the uncertainty of these matters, we
cannot estimate the impact of climate-related developments on our operations or financial condition at this time. These
and other matters related to climate change and the related risks to our business are further discussed in Part I, Item 1
(Business) and Part I, Item 1A (Risk Factors) of this Annual Report on Form 10-K. We continue our commitment to
advance sustainability issues that are critical to our business and our customers’ businesses by investing in innovative
technologies, developing our employees, and enhancing our capabilities and services for customers.
We are involved in various legal actions, the majority of which arise in the ordinary course of business. We maintain
liability insurance against certain risks arising out of the normal course of our business, subject to certain self-insured
retention limits. We routinely establish and review the adequacy of reserves for estimated legal, environmental, and self-
insurance exposures. While management believes that amounts accrued in the consolidated financial statements are
adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal
matters are not expected to have a material adverse effect on our financial condition, results of operations, or cash flows.
In January 2023, we and MoLo were named as defendants in lawsuits related to an auto accident involving one of MoLo’s
contract carriers, which occurred prior to our acquisition of MoLo. During the fourth quarter of 2024, a settlement and
release agreement was executed by MoLo and three respective insurers responsible for settling the claim. See Note O to
our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion
of the legal matters in which we are currently involved.
Also disclosed in Note O to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K, we settled a claim for $9.8 million related to the classification of certain Asset-Light employees under the
Fair Labor Standards Act. The claim, which was paid in January 2025, had been tentatively settled for $9.5 million in
2023 with an additional $0.3 million recognized in 2024 upon final settlement. The reserve for this claim was maintained
within accrued expenses in the consolidated balance sheet at December 31, 2024 and 2023.
52
Information Technology and Cybersecurity
We depend on the proper functioning, availability, and security of our information technology (“IT”) systems, including
communications, data processing, financial, and operating systems, as well as proprietary software programs and certain
software applications provided by third parties that are integral to our business operations. Any significant failure or other
disruption in critical information systems, such as denial of service, intentional or inadvertent acts by employees or vendors
with access to our systems or data, phishing, disruption by malware, ransomware, and other cybersecurity attacks and
incidents that impact the availability, reliability, speed, accuracy, or other proper functioning of these systems or that result
in proprietary information or sensitive or confidential data, including information of customers, employees and others,
being compromised could have a significant impact on our operations. New or enhanced technology that we develop and
implement may also be subject to cybersecurity attacks and may be more prone to related incidents. Although we strive to
carefully select our third-party vendors, we do not control their actions and any problems caused by or impacting these
third parties, including cybersecurity attacks and security breaches at a vendor, could result in claims, litigation, losses,
and/or liabilities and materially adversely affect our ability to provide service to our customers and otherwise conduct our
business.
Our IT systems are protected through physical and software safeguards as well as backup systems considered appropriate
by management. However, these systems are vulnerable to interruption by adverse weather conditions or natural disasters;
power loss; telecommunications failures; terrorist attacks; internet failures and other disruptions to technology, including
computer viruses; and other events beyond our control. It is not practicable to fully protect against the possibility of these
events or cybersecurity attacks and other cyber events in every potential circumstance that may arise. To mitigate the
potential for such occurrences at our primary data center, we have implemented various systems, including redundant
telecommunication equipment; replication of critical data to an offsite location; fire suppression systems to protect our on-
site data centers; and electrical power protection and generation facilities. We also have a catastrophic disaster recovery
plan and alternate processing capability available for our critical data processes in the event of a catastrophe that renders
one of our data centers unusable.
A portion of our office personnel work remotely through hybrid and remote work arrangements, which may increase the
demand for IT resources and our exposure to cybersecurity risks, including increased risks of unauthorized access to
proprietary information or sensitive or confidential data and other cybersecurity incidents, such as phishing. As a
component of our cyber risk management program, we periodically engage a third-party provider to assess our cyber
posture and assist us in improving our security profile. We review our processes around cybersecurity risk management
and related governance framework and perform materiality assessments. Although we have implemented measures to
mitigate our exposure to the heightened risks of cybersecurity incidents, we cannot be certain that such measures will be
effective to prevent a cybersecurity incident from materializing.
Our property and cyber insurance would offset losses up to certain coverage limits in the event of a catastrophe or certain
cyber incidents, including certain business interruption events related to these incidents; however, losses arising from a
catastrophe or significant cyber incident may exceed our insurance coverage and could have a material adverse impact on
our results of operations and financial condition. We do not have insurance coverage specific to losses resulting from a
pandemic or geopolitical conflict. A significant disruption in our IT systems or a significant cybersecurity incident,
including denial of service, system failure, security breach, intentional or inadvertent acts by employees or vendors with
access to our systems or data, disruption by malware, or other damage, could interrupt or delay our operations, damage
our reputation, cause a loss of customers, cause errors or delays in financial reporting, result in violation of privacy laws,
expose us to a risk of loss or litigation, and/or cause us to incur significant time and expense to remedy such an event.
We have experienced incidents involving attempted denial of service attacks, malware attacks, and other events intended
to disrupt information systems, wrongfully obtain valuable information, or cause other types of malicious events that could
have resulted in harm to our business. To our knowledge, the various protections we have employed have been effective
to date in identifying such events at a point when the impact on our business could be minimized. We continuously monitor
and develop our IT networks and infrastructure to prevent, detect, address, and mitigate the risk of unauthorized access,
misuse, computer viruses, and other events that could have a security impact. We have made and continue to make
significant financial investments in technologies and processes to mitigate these risks. We are still in the early stages of
utilizing generative AI, a process that is particularly complex as it uses sensitive, proprietary, and confidential data that
could be leaked, as well as having potential flaws in algorithms and models that could ultimately affect outputs. We provide
employee awareness training around cybersecurity risks. Despite our efforts, due to the increasing sophistication of cyber
criminals and the development of new techniques for attack, including those enabled through artificial intelligence, we
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may be unable to anticipate or promptly detect, or implement adequate protective or remedial measures against the
activities of perpetrators of cybersecurity attacks. Management is not aware of any current cybersecurity incident that has
had a material effect on our operations, although there can be no assurances that a cyber incident that could have a material
impact to our operations could not occur.
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash, cash equivalents, and short-term investments; cash generated by continuing
operations; and borrowing capacity under our revolving credit facility (“Credit Facility”) under our Fourth Amended and
Restated Credit Agreement (the “Credit Agreement”) or our accounts receivable securitization program (“A/R
Securitization”).
This Liquidity and Capital Resources section of MD&A generally discusses 2024 and 2023 items and year-to-year
comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022
that are not included in this Form 10-K can be found in the Liquidity and Capital Resources section of MD&A in Part II,
Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Cash Flow and Short-Term Investments
Components of cash and cash equivalents and short-term investments, which are further described in Note C to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, were as follows:
Year Ended December 31
2024
2023
2022
(in thousands)
Cash and cash equivalents
$ 127,444 $ 262,226 $ 158,264
Short-term investments
29,759
67,842
167,662
Total
$ 157,203 $ 330,068 $ 325,926
Cash, cash equivalents, and short-term investments decreased $172.9 million from December 31, 2023 to
December 31, 2024. primarily due to capital expenditures, including service center remodels; paydown of long-term debt;
treasury share repurchases; and the impact of lower business levels, partially offset by accounts receivable collections.
Our consolidated statements of cash flows presented for the years ended December 31, 2024 and 2023, include cash flows
from continuing operations and the discontinued operations of FleetNet, which sold on February 28, 2023. Our discussions
below segregate cash flows from continuing operations from those of discontinued operations for 2024 and 2023.
Cash Flows from Continuing Operations
Cash provided by operating activities during 2024 was $285.8 million compared to $321.4 million in 2023. Changes in
operating assets and liabilities, excluding income taxes, increased cash provided by operating activities by $1.9 million
and $40.7 million during 2024 and 2023, respectively. Excluding the first quarter 2024 settlement by an insurer of the
receivable (and offsetting liability) for insured third-party casualty claims recorded at December 31, 2023, the year-over-
year decreases in accounts receivable and prepaid expenses were partially offset by year-over-year increases in accounts
payable and accrued expenses. The remainder of the change in operating assets and liabilities was primarily related to a
lease buyout during the first quarter of 2024 of a property made available following the bankruptcy of a competitor in
2023.
During 2024, we spent $207.7 million on capital expenditures, net of proceeds from asset sales and equipment financings,
including property purchases and the renovation of properties for our Asset-Based network, compared to $211.2 million
spent in 2023. See Capital Expenditures below for estimated annual expenditure amounts for 2025. Cash provided by
investing activities during 2023 was impacted by $100.9 million of proceeds from the sale of FleetNet, as further discussed
in MD&A.
Cash used to repay the Credit Facility and promissory note payments during 2024 was $120.5 million. During 2024, we
repurchased 654,707 shares of our common stock under our share repurchase plan for an aggregate cost of $75.2 million,
including excise taxes. We also continued to return capital to our shareholders with our quarterly dividend payments,
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which totaled $11.3 million during 2024. Our dividends and share repurchase programs are further discussed in the Other
Liquidity section below.
Cash Flows from Discontinued Operations
We did not have any cash activities from discontinued operations during the year ended December 31, 2024. Net cash
provided by operating activities of discontinued operations was $0.8 million during the year ended December 31, 2023,
reflecting the routine operations of FleetNet. Net cash used in investing and financing activities of discontinued operations
was $0.4 million and $0.5 million for the year ended December 31, 2023, respectively. Net cash of discontinued operations
for both investing and financing activities did not have a material effect on operations as disclosed in Note D to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Net cash activity for
FleetNet has not materially impacted our operations in recent years, nor is the absence of cash flows from the discontinued
operations of FleetNet expected to affect future liquidity or capital resources.
Financing Arrangements
We financed the purchase of $80.7 million of revenue equipment through notes payable during the year ended
December 31, 2024. Future payments due under notes payable totaled $205.5 million, including interest, as of
December 31, 2024, for an increase of $13.6 million from December 31, 2023.
We repaid the outstanding obligation under our Credit Facility of $50.0 million during the third quarter of 2024, increasing
the borrowing availability at December 31, 2024, to $250.0 million, the initial maximum credit amount of the Credit
Facility. Subsequent to December 31, 2024, we borrowed $25.0 million on the Credit Facility reducing our borrowing
availability to $225.0 million.
Our A/R Securitization program was amended during second quarter 2024 to extend the maturity date to July 1, 2025,
among other things. As of December 31, 2024, standby letters of credit of $15.3 million have been issued under the A/R
Securitization which reduced our available borrowing capacity to $34.7 million.
See Note H to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for
further discussion of our financing arrangements and presentation of the scheduled maturities of our long-term debt
obligations.
Contractual Obligations
In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future.
In addition to the obligations discussed within the preceding Financing Arrangements section, we have contractual
obligations as described in the following paragraphs. Certain contractual obligations are also further disclosed in the notes
to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
While we own the majority of our larger service centers, distribution centers, and administrative offices, we lease certain
facilities and equipment. As of December 31, 2024, contractual obligations for operating lease liabilities, primarily related
to our Asset-Based service centers, totaled $267.6 million, including imputed interest, for a decrease of $8.2 million from
December 31, 2023. Operating lease payments due within one year total $43.7 million. The scheduled maturities of our
operating lease liabilities as of December 31, 2024 are disclosed in Note G to our consolidated financial statements
included in Part II, Item 8 of this Annual Report on Form 10‑K.
We sponsor an insured postretirement health benefit plan that provides supplemental medical benefits and dental and
vision care to certain executive officers. As of December 31, 2024, estimated projected payments, net of retiree premiums,
related to postretirement health benefits total $0.8 million for the next year and $8.6 million for the next 10 years. These
projected amounts are subject to change based upon increases and other changes in premiums and medical costs and
continuation of the plan for current participants. The accumulated benefit obligation of the postretirement health benefit
plan accrued in the consolidated balance sheet totaled $13.8 million as of December 31, 2024 (see Supplemental Benefit
and Postretirement Health Benefit Plans within Note J to our consolidated financial statements included in Part II, Item 8
of this Annual Report on Form 10-K).
We have purchase obligations, consisting of authorizations to purchase and binding agreements with vendors, relating to
revenue equipment used in our Asset-Based operations, other equipment, facility improvements, software, service
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contracts, and other items for which amounts were not accrued in the consolidated balance sheet as of December 31, 2024.
These purchase obligations totaled $195.8 million as of December 31, 2024, with $180.4 million expected to be paid within
the next year, provided that vendors complete their commitments to us. As of December 31, 2024, the amount of our
purchase obligations has increased $14.5 million from December 31, 2023, primarily related to ABF Freight revenue
equipment. We have no investments, loans, or any other known contractual arrangements with unconsolidated
special‑purpose entities, variable interest entities, or financial partnerships and have no outstanding loans with our
executive officers or directors.
ABF Freight has a withdrawal liability that was triggered when its multiemployer pension plan obligation with the New
England Teamsters Trucking Industry Pension Fund was restructured under a transition agreement in 2018. As of
December 31, 2024, payments due within one year under the withdrawal liability settlement total $1.6 million and total
payments, which are due over the next 17 years, total $26.6 million. As of December 31, 2024, the outstanding withdrawal
liability recognized in the consolidated balance sheet for this obligation totaled $18.7 million. ABF Freight contributes to
other multiemployer health, welfare, and pension plans based generally on the time worked by their contractual employees,
as specified in the collective bargaining agreement and other supporting supplemental agreements (see Multiemployer
Plans within Note J to our consolidated financial statements included in Part II, Item 8 of this Annual Report on
Form 10-K).
Capital Expenditures
The following table sets forth our capital expenditures for the periods indicated below:
Year Ended December 31
2024
2023
2022
(in thousands)
Capital expenditures, gross including notes payable(1)
$
303,817 $
252,516 $
230,648
Less financing from notes payable
80,714
33,495
82,425
Capital expenditures, net of notes payable
223,103
219,021
148,223
Less proceeds from asset sales
15,373
7,763
19,691
Total capital expenditures, net
$
207,730 $
211,258 $
128,532
(1)
Actual capital expenditures in 2024, 2023 and 2022 fell below our estimates due to delays in the original build schedules of our
Asset-Based and Asset-Light revenue equipment caused by parts shortages and manufacturing disruptions and, for 2023 and 2024,
delays in some real estate facility projects.
For 2025, our total capital expenditures, including amounts financed, are estimated to range from $225.0 million to
$275.0 million, net of asset sales. These 2025 estimated net capital expenditures include revenue equipment purchases of
$130.0 million to $140.0 million, primarily for our Asset-Based operations. The remainder of our 2025 expected capital
expenditures includes $60.0 million to $80.0 million of investments in real estate and facility upgrades to support our
growth plans, as well as other investments across the enterprise, such as technology-related items and miscellaneous dock
equipment upgrades and enhancements. We have the flexibility to adjust certain planned 2025 capital expenditures as
business levels dictate. Depreciation and amortization expense, excluding amortization of intangibles, is estimated to be
approximately $164.0 million in 2025. The amortization of intangible assets is estimated to be approximately $13.0 million
in 2025, primarily related to purchase accounting amortization associated with the MoLo acquisition.
Other Liquidity Information
General economic conditions are currently being impacted by geopolitical conflicts, competitive market factors, higher
interest rates as a result of monetary policy, and volatile energy prices, among other factors. These conditions and the
related impact on our business (primarily tonnage and shipment levels and the pricing that we receive for our services in
future periods) could affect our ability to generate cash from operating activities and maintain cash, cash equivalents, and
short-term investments on hand. Our Credit Facility and A/R Securitization provide available sources of liquidity with
flexible borrowing and payment options. We believe these agreements provide borrowing capacity necessary for growth
of our business. During the next twelve months and for the foreseeable future, we believe existing cash, cash equivalents,
short-term investments, cash generated by operating activities, amounts available under our Credit Facility, including
amounts borrowed in February 2025, and A/R Securitization will be sufficient to finance our operating expenses; fund our
ongoing initiatives to grow our business, including investments in technology; repay amounts due under our financing
arrangements; and pay contingent earnout consideration related to the MoLo acquisition if it is earned. Notes payable,
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finance leases, and other secured financing may also be used to fund capital expenditures, provided that such arrangements
are available, and the terms are acceptable to us.
The Agreement and Plan of Merger (the “Merger Agreement”) for our acquisition of MoLo provides for additional cash
consideration ranging from 44% to 212% of the target payment relative to the achievement of incremental adjusted
EBITDA targets of 80% to 300% for years 2023 through 2025. The adjusted EBITDA metrics were below target for 2023
and 2024, resulting in no earnout payment for 2023 and 2024. The cumulative additional consideration through 2025
would be $215.0 million at 100% of the target, including catch-up provisions. As of December 31, 2024, the fair value of
contingent earnout consideration is estimated to be $2.7 million (see Assets and Liabilities Measured at Fair Value on a
Recurring Basis within Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report
on Form 10-K).
We continue to return capital to shareholders with our quarterly dividend payments and treasury stock purchases. On
January 28, 2025, we announced our Board of Directors declared a dividend of $0.12 per share payable to stockholders of
record as of February 11, 2025. We expect to continue to pay quarterly dividends on our common stock in the foreseeable
future, although there can be no assurance in this regard since future dividends will be at the discretion of the Board of
Directors and are dependent upon our future earnings, capital requirements, and financial condition; contractual restrictions
applying to the payment of dividends under our Credit Facility; and other factors.
In February 2024, our Board of Directors increased the total amount available for purchases of our common stock under
our share repurchase program to $125.0 million. We purchased 654,707 shares of our common stock during 2024 for an
aggregate cost of $74.4 million, including shares purchased under Rule 10b5-1 plans. As of December 31, 2024,
$56.6 million remained available for repurchase under the share repurchase program (see Note K to our consolidated
financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K).
Financial Instruments
We had an interest rate swap agreement that terminated on October 1, 2024, which is further discussed in Note H to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K. As of
December 31, 2024, we have no derivative or hedging arrangements outstanding.
Balance Sheet Changes
Accounts Receivable
Accounts receivable, less allowances, decreased $35.3 million from December 31, 2023 to December 31, 2024, reflecting
improved collections and lower revenue levels.
Other Accounts Receivable
Other accounts receivable decreased $16.1 million from December 31, 2023 to December 31, 2024, reflecting the first
quarter 2024 settlement by the insurer of the receivable (and offsetting liability) for insured third-party casualty claims
recorded at December 31, 2023, offset partially by insured third-party casualty claims recorded at December 31, 2024
which were settled in first quarter 2025 and the settlement of the previously disclosed auto accident legal expense involving
a MoLo carrier, which is further discussed in Note O to our consolidated financial statements included in Part II, Item 8
of this Annual Report on Form 10-K.
Property, Plant, and Equipment Net
The increase in property, plant, and equipment, net of $151.2 million from December 31, 2023 to December 31, 2024, was
primarily due to the purchase of three service center properties, planned service center remodels, construction of a new
service center, and the purchase of revenue equipment used in our Asset-Based operations.
Prepaid Expenses
Prepaid expenses increased $10.8 million from December 31, 2023 to December 31, 2024, as prepayments outpaced
amortization, including for various licenses and insurance.
Intangible Property, Net
Intangible property, net decreased $12.5 million from December 31, 2023 to December 31, 2024, as the Company
continued to amortize amounts primarily related to the MoLo acquisition.
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Operating Right‑of‑Use Assets and Operating Lease Liabilities
The increase in operating right-of-use assets of $22.8 million and in operating lease liabilities, including current portion,
of $15.5 million from December 31, 2023 to December 31, 2024, was primarily due to new leases, a lease buy-out, and
lease renewals during 2023.
Accounts Payable
Accounts payable decreased $41.2 million from December 31, 2023 to December 31, 2024, primarily due to the decrease
in business levels and timing of payables.
Accrued Expenses
Accrued expenses increased $16.9 million from December 31, 2023 to December 31, 2024, primarily due to higher third-
party casualty insurance and workers’ compensation reserves due to higher average claim costs and increased retention
levels. Accrued expenses also increased due to the union profit sharing bonus accrual in 2024, while there was no profit-
sharing bonus in 2023, as 2023 was not considered a full calendar year under the 2023 ABF NMFA for payment of the
bonus. These amounts were partially offset by decreases in accruals for certain performance-based incentive plans due to
lower operating results in 2024, compared to 2023.
Long-term Debt
The $39.8 million decrease in long-term debt, including current portion, from December 31, 2023 to December 31, 2024,
is primarily due to payments on notes payable of $70.5 million and the $50.0 million paydown of the Credit Facility, net
of equipment financed of $80.7 million.
Contingent Consideration
The contingent earnout consideration related to the MoLo acquisition, as previously described within the Other Liquidity
section above, is remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring
assessments is recognized in operating income (loss). The liability for contingent earnout consideration decreased
$90.3 million from December 31, 2023 to December 31, 2024, due to the reduction in the probability of an earnout based
on 2024 results and projections of 2025 adjusted EBITDA as defined in the Merger Agreement.
Deferred Income Taxes
The $22.9 million increase in deferred income taxes is primarily due to tax differences related to depreciation, the decrease
in contingent earnout consideration and restricted stock units vested, offset by increases in third-party casualty claims, and
the deferred tax benefit from the capital loss on an equity investment in Phantom Auto.
INCOME TAXES
This Income Taxes section of MD&A generally discusses 2024 and 2023 items and year-to-year comparisons between
2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in
this Form 10-K can be found in the Income Taxes section of MD&A in Part II, Item 7 of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023.
Our effective tax rate on continuing operations was 20.7% and 23.9% of pre-tax income for 2024 and 2023, respectively.
The rates for 2024 and 2023 were primarily impacted by state income taxes, non-deductible compensation under IRC
Section 162(m), and the settlement of share-based payment awards. The settlement of share-based awards resulted in tax
benefits of $9.2 million and $4.0 million in 2024 and 2023, respectively.
For 2024, our U.S. statutory tax rate was 21.0%. Our average state tax rate, net of the associated federal deduction, was
approximately 5%. However, various factors, including the amount of pre-tax income as well as benefits recognized in the
income statement upon settlement of share-based payment awards, caused our full year 2024 effective tax rate to vary
significantly from the statutory rate. Due to the impact of non-deductible expenses, lower levels of pre-tax income result
in a higher tax rate on income and a lower benefit rate on losses. As pre-tax income or pre-tax losses increase, the impact
of non-deductible expenses on the overall rate declines.
We had net deferred tax liabilities after valuation allowances of $69.1 million and $47.6 million at December 31, 2024
and 2023, respectively. We evaluated the need for a valuation allowance for deferred tax assets at December 31, 2024 by
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considering the future reversal of existing taxable temporary differences, future taxable income, and available tax planning
strategies. Valuation allowances for deferred tax assets totaled $1.7 million and $1.8 million at December 31, 2024 and
2023, respectively. As the Canadian tax rate is higher than the U.S. tax rate, it is unlikely that foreign tax credit
carryforwards will be useable, as U.S. taxes paid will be at a lower rate than the tax rates in Canada. Thus, the foreign tax
credit carryforwards were fully reserved, resulting in valuation allowances of $1.0 million at December 31, 2024 and 2023.
At December 31, 2024, we had gross state net operating loss carryforwards of $101.4 million. These state net operating
loss carryforwards were reserved by valuation allowances of $0.7 million. A valuation allowance was established at
December 31, 2024 on less than $0.1 million of the gross federal net operating loss carryforwards that could not be used.
The need for additional valuation allowances is continually monitored by management.
Financial reporting income differs significantly from taxable income because of items such as contingent earnout
consideration, accelerated depreciation for tax purposes, gains and losses on sale of assets, and a significant number of
liabilities, including workers’ compensation reserves and third-party casualty claims, and operating leases, which, for tax
purposes, are generally deductible only when paid. For the years ended December 31, 2024 and 2023 financial reporting
income exceeded taxable income.
We made $71.1 million of federal, state, and foreign tax payments during the year ended December 31, 2024, and received
refunds of $33.1 million of federal, state, and foreign taxes that were paid in prior years.
Management expects the cash outlays for income taxes will be less than reported income tax expense in 2025 due primarily
to the effect of 40% bonus depreciation on qualified depreciable assets in 2025 as allowed under the Tax Reform Act of
1986 (the “Tax Reform Act”), as amended. However, in the event we were to become unprofitable, net operating loss
carrybacks allowed under the provisions of the Tax Reform Act could be limited in certain circumstances.
The Company's total effective tax rate was 20.8% and 24.4% for 2024 and 2023, respectively, including discontinued
operations, which are further discussed in Note D to our consolidated financial statements included in Part II, Item 8 of
this Annual Report on Form 10-K. Income tax expense reflected in discontinued operations, which primarily consisted of
federal and state income taxes on the gain on the sale of FleetNet, was $0.2 million for 2024 and $18.3 million for 2023,
or an effective tax rate of 25.5% for both periods.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are based on
prior experience and other assumptions that management considers reasonable in our circumstances. Actual results could
differ from those estimates under different assumptions or conditions, which would affect the related amounts reported in
the financial statements.
The accounting policies and estimates that are “critical” to understanding our financial condition and results of operations
and that require management to make the most difficult judgments are described as follows.
Revenue Recognition
Revenues are recognized when or as control of the promised services is transferred to our customers, in an amount that
reflects the consideration we expect to be entitled to in exchange for those services. Our performance obligations are
primarily satisfied upon final delivery of the freight to the specified destination. Revenue is recognized based on the
relative transit time in each reporting period with expenses recognized as incurred using a bill-by-bill analysis or standard
delivery times to establish estimates of revenue in transit for recognition in the appropriate period. This methodology
utilizes the approximate location of the shipment in the delivery process to determine the revenue to recognize, and
management believes it to be a reliable method.
Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. We
estimate these amounts based on the expected discounts earned by customers, and revenue is recognized using these
estimates. Revenue adjustments may also occur due to rating or other billing adjustments. We estimate revenue
adjustments based on historical information, and revenue is recognized accordingly at the time of shipment. We believe
that actual amounts will not vary significantly from estimates of variable consideration.
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Revenue, purchased transportation expense, and third-party service expenses are reported on a gross basis for certain
shipments and services where we utilize a third-party carrier for pickup, linehaul, delivery of freight, or performance of
services, but we remain primarily responsible for fulfilling delivery to the customer and maintain discretion in setting the
price for the services. Purchased transportation expense is recognized as incurred.
Payment terms with customers may vary depending on the service provided, location or specific agreement with the
customer. The time between invoicing and when payment is due is not significant. For certain services, we require payment
before the services are delivered to the customer.
We expense sales commissions when incurred because the amortization period is one year or less.
Impairment Assessment of Long-Lived Assets
We review our long-lived assets, including property, plant and equipment and operating right-of-use assets, for impairment
whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If
such an event or change in circumstances is present, we will estimate the undiscounted future cash flows expected to result
from the use of the asset and its eventual disposition. If the sum of the undiscounted future cash flows is less than the
carrying amount of the related assets, we will determine the fair value of the assets and will recognize an impairment loss
if the fair value of the assets is less than the recorded value. The evaluation of future cash flows requires management’s
judgment and the use of estimates and assumptions. Assumptions require considerable judgment because changes in broad
economic factors and industry factors can result in variable and volatile values. Economic factors and the industry
environment were considered in assessing recoverability of long-lived assets, including revenue equipment (primarily
tractors and trailers used in our Asset-Based operations and trailers used in our Asset-Light operations). Our strict
equipment maintenance schedules have served to mitigate declines in the value of revenue equipment.
Assets meeting the held-for-sale criteria at period end are evaluated for impairment by comparing the fair value of the
assets to the carrying values. Due to a strategic decision to align capacity with current business levels during the fourth
quarter of 2024, certain revenue equipment within the Asset-Light reporting segment met the held-for-sale criteria. After
determining the carrying values of these assets were less than fair value, impairment was measured as the amount by which
the carrying value exceeded the fair value of the assets. We also identified $0.3 million of capitalized software associated
with the Asset-Light reporting segment that was no longer in use and fully impaired the software. Asset impairment charges
related to the revenue equipment and capitalized software of $1.7 million were recognized as a component of operating
expenses in the consolidated statements of operations for the year ended December 31, 2024.
During the third quarter of 2023, the Company evaluated certain long-lived operating right-of-use assets for impairment
that were made available for sublease. After determining the carrying values of these asset groups were not recoverable,
impairment was measured as the amount by which the carrying value exceeded the fair value of the asset groups. Future
cash flows used to determine fair value of the asset groups were discounted at estimated market-participant rates, which
ranged from 7.5% to 9.5%. The discount rates were determined with the assistance of a third-party valuation firm based
on property-specific risk factors and cash flow assumptions, as well as other market factors, in comparison to average
surveyed market discount rates in similar markets. As a result of the impairment measurement, lease impairment charges
of $30.2 million were recognized as a component of operating expenses in the consolidated statements of operations for
the year ended December 31, 2023.
Contingent Consideration
We record the estimated fair value of contingent earnout consideration at the acquisition date as part of the purchase price
consideration. The fair value of the contingent earnout consideration liability for the MoLo acquisition was determined
with the assistance of an independent third-party valuation firm who utilized a Monte Carlo simulation with Level 3 inputs
including scenarios of estimated revenues and expenses or adjusted earnings before interest, taxes, depreciation and
amortization (“EBITDA”) to be achieved for the applicable performance periods, volatility factors applied to the
simulations, and the discount rate applied, which was 12.9% and 13.3% as of December 31, 2024 and 2023, respectively.
As of December 31, 2024, the fair value of the outstanding contingent earnout consideration of $2.7 million related to the
acquisition of MoLo was recorded in long-term liabilities as the 2024 target was not achieved.
The liability for contingent earnout consideration is remeasured at each quarterly reporting date, and any change in fair
value as a result of the recurring assessments is recognized in operating income. We recognized a gain of $90.3 million
related to the net decrease in the fair value changes in the liability of contingent earnout consideration for the year ended
December 31, 2024. Inputs that could impact the measurement of contingent earnout consideration include revised
60
projections of revenue and expenses or adjusted EBITDA; changes in the discount rate due to changes in market interest
rates, equity valuations and other factors; changes in volatility factors based on equity market conditions; and other relevant
factors. The revenue, expenses, and EBITDA inputs drove the decrease in fair value of the contingent earnout consideration
as of December 31, 2024, compared to the valuation at December 31, 2023, reflecting lower earnings than anticipated for
2024, resulting in no earnout payment for the year, and revised assumptions for the impact of business growth in 2025.
Impairment of Goodwill and Intangible Assets
Our consolidated goodwill balance of $304.8 million at December 31, 2024 is primarily related to acquisitions of MoLo
and Panther in the Asset-Light segment. Goodwill is recorded as the excess of an acquired entity’s purchase price over the
value of the amounts assigned to identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but rather
is evaluated for impairment annually on October 1, or more frequently if indicators of impairment exist. As a result of the
continuing soft market conditions and lower business levels in the Asset-Light segment during 2024, the Company
performed an interim impairment testing on the goodwill balances as of September 1, 2024. A third-party valuation
specialist was utilized in performing the impairment analysis. Management considered current and forecasted business
levels and estimated future cash flows over several years, using the reporting units weighted average cost of capital.
Management’s assumptions included a truckload market recovery beginning in mid-2025 and continuing into 2026. Based
on the analysis performed, management determined it was more likely than not that the goodwill and indefinite-lived
intangible assets were not impaired as of September 1, 2024. Our annual evaluation typically includes an analysis of
qualitative factors to determine if it is more likely than not the fair value of the reporting unit is less than its carrying value.
If we determine it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative
valuation of the reporting unit is performed and compared to the carrying value to determine if the reporting unit is impaired
and to measure impairment loss, if any. For annual and interim impairment tests, we are required to record an impairment
charge, if any, by the amount a reporting unit’s fair value is exceeded by the carrying value of the reporting unit, limited
to the carrying value of goodwill included in the reporting unit.
The evaluation of goodwill impairment requires management’s judgment and the use of estimates and assumptions to
determine the fair value of the reporting unit. Assumptions require considerable judgment because changes in broad
economic factors and industry factors can result in variable and volatile fair values. Changes in key estimates and
assumptions that impact the fair value of the operations could materially affect the impairment analysis.
The fair value estimated for this evaluation is derived with the assistance of a third-party valuation firm and utilizing the
present value of discounted cash flows (income approach). The EBITDA and revenues multiples (market approach)
valuation method was also considered to support the reasonableness of conclusions reached. The discounted cash flow
models utilized in the income approach incorporate discount rates, terminal multiples, and projections of future revenue,
operating margins, and net capital expenditures. The projections used have changed over time based on historical
performance and changing business conditions. Assumptions with respect to rates used to discount cash flows are
dependent upon market interest rates and the cost of capital for our company and the industry at a point in time. We include
a cash flow period of five years with a terminal value in the income approach. Cash flow projections for the forecast period
generally reflect the cyclical nature of the industry. Changes in cash flow assumptions or other factors that negatively
impact the fair value of the operations would influence the evaluation and could lead to impairment charges in the future.
Our assessment of the qualitative factors as of October 1, 2024, determined it was not more likely than not that the fair
values of the reporting units were less than the carrying value. Key qualitative considerations included the interim
quantitative analysis performed as of September 1, 2024, macroeconomic conditions, industry considerations and the
market capitalization of the Company.
In the impairment assessment of goodwill, management also considered the total market capitalization, which was noted
to be consistent the prior assessment date of October 1, 2023. We believe that there is no basis for adjustment of our
goodwill asset value based on the impairment evaluation performed.
Our indefinite-lived intangible asset, which is the Panther Premium Logistics trade name, totaled $32.3 million as of
December 31, 2024. Indefinite-lived intangible assets are not amortized but rather are evaluated for impairment annually
on October 1, or more frequently if indicators of impairment exist. If the carrying amount of the intangible asset exceeds
its fair value, an impairment loss shall be recognized in an amount equal to that excess. As a result of the continuing soft
market conditions and lower business levels in the Asset-Light segment during 2024, the Company performed an interim
impairment testing on the Panther trade name balance as of September 1, 2024, and it was determined that the fair value
61
of the Panther trade name was greater than the recorded balance by more than 30%, indicating there is no basis for
adjustment of the asset value.
The Panther trade name valuation model utilizes the relief from royalty method, whereby the value is determined by
calculating the after-tax cost savings associated with owning the trade name and, therefore, not having to pay royalties for
its use for the remainder of its estimated useful life. The evaluation of intangible asset impairment requires management’s
judgment and the use of estimates and assumptions to determine the fair value of the indefinite-lived intangible assets.
Assumptions require considerable judgment because changes in broad economic factors and industry factors can result in
variable and volatile fair values. Changes in key estimates and assumptions that impact the operations and resulting
revenues, royalty rates, and discount rates could materially affect the intangible asset impairment analysis.
Our finite-lived intangible assets consist primarily of customer relationship, carrier list, and trademark intangible assets
and are amortized over their respective estimated useful lives. Finite-lived intangible assets are also evaluated for
impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In
reviewing finite-lived intangible assets for impairment, the carrying amount of the asset or asset group is compared to the
estimated undiscounted future cash flows expected from the use of the asset and its eventual disposition. If such cash flows
are not sufficient to support the recorded value, an impairment loss to reduce the carrying value of the asset to its estimated
fair value will be recognized in operating income.
Our assessment of the qualitative factors as of October 1, 2024, determined it was not more likely than not that the fair
values of the trade name was less than the carrying value. Key qualitative considerations included the interim quantitative
analysis performed as of September 1, 2024, macroeconomic conditions, industry considerations and other factors.
Insurance Reserves
We are self-insured up to certain limits for workers’ compensation and certain third-party casualty claims. Our self-
insurance limits are effectively $2.0 million, for each workers’ compensation loss occurring after November 1, 2023 and
$1.0 million for each loss occurring prior to November 1, 2023. Effective November 1, 2024, our self-insured limits for
each loss are generally $5.0 million for each third-party casualty or general liability claim and auto liability claim, up from
self-insured limits of $3.0 million for third-party casualty or general liability claims and auto liability claims prior to
November 1, 2024 and $2.0 million for claims prior to November 1, 2023. For our third-party casualty or general liability
claims and auto liability claims, we also have a $5.0 million corridor aggregate on our excess policies, whereby we could
incur additional liability on claims in excess of our general self-insurance limits. Workers’ compensation and third-party
casualty claims liabilities, which are reported in accrued expenses, totaled $211.2 million and $181.8 million at
December 31, 2024 and 2023, respectively. The reserve at December 31, 2024 includes an insured liability settlement for
third-party casualty claims, for which the related receivable is recognized in other accounts receivable as of
December 31, 2024. We do not discount our claims liabilities.
Liabilities for self-insured workers’ compensation and third-party casualty claims are based on the case-basis reserve
amounts plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from
an independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves
an evaluation of claim frequency and severity, claims management, and other factors. Case reserves established in prior
years are evaluated as loss experience develops and new information becomes available. Adjustments to previously
estimated case reserves are reflected in financial results in the periods in which they are made. Aggregate reserves represent
the best estimate of the costs of claims incurred, and it is possible that the ultimate liability may differ significantly from
such estimates, as a result of a number of factors, including increases in medical costs and other case-specific factors. A
10% increase in the estimate of IBNR would increase the total 2024 expense for workers’ compensation and third-party
casualty claims by approximately $9.7 million. The actual claims payments are charged against our accrued claims
liabilities which have been reasonable with respect to the estimates of the related claims.
RECENT ACCOUNTING PRONOUNCEMENTS
New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of
financial statements. Accounting pronouncements which have been issued but are not yet effective for our financial
statements are disclosed in Note B to our consolidated financial statements in Part II, Item 8 of this Annual Report on
Form 10-K.
62
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in certain interest rates, prices of diesel fuel, prices of equity and debt
securities, and foreign currency exchange rates. These market risks arise in the normal course of business, as we do not
engage in speculative trading activities. Further discussion of risks can be found in Item 1A (Risk Factors) included in
Part I of this Annual Report on Form 10-K.
Interest Rate Risk
We have exposures to changes in interest rates as follows:
Cash, cash equivalents, and short-term investments. At December 31, 2024 and 2023, cash, cash equivalents, and short-
term investments totaled $157.2 million and $330.1 million, respectively. Substantially all cash equivalents were in
demand accounts with financial institutions. Our short-term investments were composed of certificates of deposit at
December 31, 2024 and 2023. Although the fair values of these instruments can fluctuate, we believe that the short-term,
liquid nature of these instruments and our ability to hold these instruments to maturity reduces our risk for potential
material losses.
Debt. Our debt portfolio includes notes payable to finance the purchase of certain revenue equipment and other equipment
with a fixed rate of interest, which mitigates the impact of fluctuations in interest rates. Future issuances of notes payable
could be impacted by increases in interest rates, which could result in higher interest costs. Future borrowings, if any,
under our Credit Facility and A/R Securitization are at a SOFR based variable interest rate and expose us to the risk of
increasing interest rates. Our Credit Facility, A/R Securitization and notes payable are further described in Note H to our
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Liabilities associated with the supplemental benefit plan and the postretirement health benefit plan are remeasured on an
annual basis (and upon curtailment or settlement, if applicable) using the applicable discount rates at the measurement
date. The discount rates are determined by matching projected cash distributions from the plans with the appropriate high-
quality corporate bond yields in a yield curve analysis. Changes in high-quality corporate bond yields will impact interest
expense associated with these benefit plans as well as the amount of liabilities recorded.
Other Market Risks
A portion of the cash surrender value of variable life insurance policies, which are intended to provide funding for long-
term nonunion benefit arrangements such as the supplemental benefit plan and certain deferred compensation plans, have
investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market
volatility. The portion of cash surrender value of life insurance policies subject to market volatility was $28.1 million and
$25.7 million at December 31, 2024 and 2023, respectively. A 10% change in market value of these investments would
have a $2.8 million impact on income before income taxes.
We are subject to market risk for increases in diesel fuel prices; however, this risk is mitigated somewhat by fuel surcharge
revenues, which are charged based on an index of national diesel fuel prices. When fuel surcharges constitute a higher
proportion of the total freight rate paid, customers are less receptive to increases in base freight rates. Prolonged periods
of inadequate base rate improvements adversely impact operating results, as elements of costs, including contractual wage
rates, continue to increase annually. We have not historically engaged in a program for fuel price hedging and did not have
any fuel hedging agreements outstanding at December 31, 2024 and 2023.
Operations outside of the United States are not significant to total revenues or assets, and, accordingly, we do not have a
formal foreign currency risk management policy. Revenues from non-U.S. operations amounted to less than 2% of total
consolidated revenues for both 2024 and 2023. Foreign currency exchange rate fluctuations have not had a material impact
on our consolidated financial statements, and they are not expected to in the foreseeable future. We have not entered into
any foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse
fluctuations in foreign currency exchange rates.
63
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information is included in this Item 8:
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)
64
Consolidated Balance Sheets as of December 31, 2024 and 2023
66
Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022
67
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022
68
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023, and 2022
69
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022
70
Notes to Consolidated Financial Statements
71
64
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of ArcBest Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ArcBest Corporation (the Company) as of December
31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement
schedule listed in Part IV, Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated March 3, 2025, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Insurance reserves
Description
of the matter
At December 31, 2024, the Company’s aggregate insurance reserves were $211.2 million, which is
related to workers’ compensation and third-party casualty claims, inclusive of amounts expected to be
paid by the Company’s insurers above its self-insured retention limits. As discussed in Note B of the
financial statements, liabilities for self-insured workers’ compensation and third-party casualty claims
are based on the case reserve amounts plus an estimate of loss development and incurred but not
reported (“IBNR”) claims, which is developed from an independent actuarial analysis.
Auditing the Company's insurance reserves is complex as the estimate includes significant
measurement uncertainty, involves the application of significant management judgment, and employs
the use of various actuarial methods. In addition, the estimate for insurance reserves is sensitive to
significant management assumptions, including the frequency and severity assumptions used to derive
the computation of the IBNR reserve and loss development factors for reported claims.
65
How we
addressed the
matter in our
audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
over the insurance reserves process, including management’s assessment of the assumptions and data
underlying the IBNR reserve estimate.
To evaluate the insurance reserves, our audit procedures included, among others, testing the
completeness and accuracy of the underlying claims data used by management and provided to the
third-party actuarial specialist by performing test of details over a representative sample. Furthermore,
we involved our actuarial specialist to assist in our evaluation of the methodologies applied and
significant assumptions used in determining the estimated reserve. We compared the Company’s
reserve amount to an estimated range developed by our actuarial specialist.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1972.
Rogers, Arkansas
March 3, 2025
66
ARCBEST CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31
2024
2023
(in thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
127,444
$
262,226
Short-term investments
29,759
67,842
Accounts receivable, less allowances (2024 – $8,257; 2023 – $10,346)
394,838
430,122
Other accounts receivable, less allowances (2024 – $648; 2023 – $731)
36,055
52,124
Prepaid expenses
47,860
37,034
Prepaid and refundable income taxes
28,641
24,319
Other
11,045
11,116
TOTAL CURRENT ASSETS
675,642
884,783
PROPERTY, PLANT AND EQUIPMENT
Land and structures
520,119
460,068
Revenue equipment
1,166,161
1,126,055
Service, office, and other equipment
351,907
319,466
Software
182,396
173,354
Leasehold improvements
32,263
24,429
2,252,846
2,103,372
Less allowances for depreciation and amortization
1,186,800
1,188,548
PROPERTY, PLANT AND EQUIPMENT, net
1,066,046
914,824
GOODWILL
304,753
304,753
INTANGIBLE ASSETS, net
88,615
101,150
OPERATING RIGHT-OF-USE ASSETS
192,753
169,999
DEFERRED INCOME TAXES
9,536
8,140
OTHER LONG-TERM ASSETS
92,386
101,445
TOTAL ASSETS
$ 2,429,731
$
2,485,094
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
$
172,763
$
214,004
Income taxes payable
—
10,410
Accrued expenses
394,880
378,029
Current portion of long-term debt
63,978
66,948
Current portion of operating lease liabilities
34,364
32,172
TOTAL CURRENT LIABILITIES
665,985
701,563
LONG-TERM DEBT, less current portion
125,156
161,990
OPERATING LEASE LIABILITIES, less current portion
189,978
176,621
POSTRETIREMENT LIABILITIES, less current portion
13,361
13,319
CONTINGENT CONSIDERATION
2,650
92,900
DEFERRED INCOME TAXES
78,649
55,785
OTHER LONG-TERM LIABILITIES
39,590
40,553
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares;
issued 2024: 30,401,768 shares; 2023: 30,024,125 shares
304
300
Additional paid-in capital
329,575
340,961
Retained earnings
1,435,250
1,272,584
Treasury stock, at cost, 2024: 7,114,844 shares; 2023: 6,460,137 shares
(451,039)
(375,806)
Accumulated other comprehensive income
272
4,324
TOTAL STOCKHOLDERS’ EQUITY
1,314,362
1,242,363
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 2,429,731
$
2,485,094
The accompanying notes are an integral part of the consolidated financial statements.
67
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31
2024
2023
2022
(in thousands, except share and per share data)
REVENUES
$
4,179,019
$ 4,427,443
$ 5,029,008
OPERATING EXPENSES
3,934,585
4,254,824
4,634,482
OPERATING INCOME
244,434
172,619
394,526
OTHER INCOME (COSTS)
Interest and dividend income
11,618
14,728
3,873
Interest and other related financing costs
(8,980)
(9,094)
(7,726)
Other, net
(28,358)
8,662
(2,370)
(25,720)
14,296
(6,223)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
218,714
186,915
388,303
INCOME TAX PROVISION
45,353
44,751
93,655
NET INCOME FROM CONTINUING OPERATIONS
173,361
142,164
294,648
INCOME FROM DISCONTINUED OPERATIONS, net of tax
600
53,269
3,561
NET INCOME
$
173,961
$
195,433
$
298,209
BASIC EARNINGS PER COMMON SHARE
Continuing operations
$
7.36
$
5.92
$
11.98
Discontinued operations
0.03
2.22
0.14
$
7.39
$
8.14
$
12.13
DILUTED EARNINGS PER COMMON SHARE
Continuing operations
$
7.28
$
5.77
$
11.55
Discontinued operations
0.03
2.16
0.14
$
7.30
$
7.93
$
11.69
AVERAGE COMMON SHARES OUTSTANDING
Basic
23,553,410
24,018,801
24,585,205
Diluted
23,820,175
24,634,617
25,504,508
The accompanying notes are an integral part of the consolidated financial statements.
68
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31
2024
2023
2022
(in thousands)
NET INCOME
$
173,961
$ 195,433
$ 298,209
OTHER COMPREHENSIVE INCOME (LOSS), net of tax
Postretirement benefit plans:
Net actuarial gain (loss), net of tax:
(2024 – $41; 2023 – $294; 2022 – $1,144)
(116)
(847)
3,298
Amortization of unrecognized net periodic benefit cost (credit), net of tax:
(2024 – $257; 2023 – $342; 2022 – $195)
Net actuarial gain
(742)
(988)
(562)
Interest rate swap and foreign currency translation:
Change in unrealized gain (loss) on interest rate swap, net of tax:
(2024 – $447; 2023 – $475; 2022 – $812)
(1,263)
(1,341)
2,295
Change in foreign currency translation, net of tax:
(2024 – $683; 2023 – $141; 2022 – $576)
(1,931)
397
(1,627)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax
(4,052)
(2,779)
3,404
TOTAL COMPREHENSIVE INCOME
$
169,909
$ 192,654
$ 301,613
The accompanying notes are an integral part of the consolidated financial statements.
69
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated
Additional
Other
Common Stock Paid-In
Retained
Treasury Stock Comprehensive
Total
Shares Amount Capital Earnings Shares Amount
Income
Equity
(in thousands)
Balance at December 31, 2021
29,360
$ 294
$ 318,033
$ 801,314 4,493
$ (194,273)
$
3,699
$ 929,067
Net income
298,209
298,209
Other comprehensive income, net of tax
3,404
3,404
Issuance of common stock under share-
based compensation plans
399
4
(4)
—
Shares withheld for employee tax
remittance on share-based compensation
(16,222)
(16,222)
Share-based compensation expense
12,775
12,775
Purchase of treasury stock
822
(65,002)
(65,002)
Forward contract for accelerated share
repurchase
25,000
214
(25,000)
—
Dividends declared on common stock
(10,830)
(10,830)
Balance at December 31, 2022
29,759
298
339,582
1,088,693 5,529
(284,275)
7,103
1,151,401
Net income
195,433
195,433
Other comprehensive loss, net of tax
(2,779)
(2,779)
Issuance of common stock under share-
based compensation plans
265
2
(2)
—
Shares withheld for employee tax
remittance on share-based compensation
(10,311)
(10,311)
Share-based compensation expense
11,692
11,692
Purchase of treasury stock
931
(91,531)
(91,531)
Dividends declared on common stock
(11,542)
(11,542)
Balance at December 31, 2023
30,024
300
340,961
1,272,584 6,460
(375,806)
4,324
1,242,363
Net income
173,961
173,961
Other comprehensive loss, net of tax
(4,052)
(4,052)
Issuance of common stock under share-
based compensation plans
378
4
(4)
—
Shares withheld for employee tax
remittance on share-based compensation
(22,737)
(22,737)
Share-based compensation expense
11,355
11,355
Purchase of treasury stock
655
(75,233)
(75,233)
Dividends declared on common stock
(11,295)
(11,295)
Balance at December 31, 2024
30,402
$ 304
$ 329,575
$ 1,435,250 7,115
$ (451,039)
$
272
$ 1,314,362
The accompanying notes are an integral part of the consolidated financial statements.
70
ARCBEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
2024
2023
2022
(in thousands)
OPERATING ACTIVITIES
Net income
$
173,961
$
195,433
$
298,209
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
136,265
132,900
127,119
Amortization of intangibles
12,822
12,829
12,920
Share-based compensation expense
11,355
11,438
12,775
Provision for losses on accounts receivable
4,834
3,630
6,955
Change in deferred income taxes
22,437
(5,566)
(6,250)
(Gain) loss on sale of property and equipment
(2,176)
4,797
(11,650)
Gain on sale of subsidiary
—
—
(402)
Pre-tax gain on sale of discontinued operations
(806)
(70,201)
—
Asset impairment charges
1,700
30,162
—
Change in fair value of contingent consideration
(90,250)
(19,100)
18,300
Change in fair value of equity investment
28,739
(3,739)
—
Changes in operating assets and liabilities:
Receivables
45,499
41,189
(10,349)
Prepaid expenses
(11,214)
2,563
(410)
Other assets
(4,120)
3,830
(2,941)
Income taxes
(14,956)
(10,657)
(5,041)
Operating right-of-use assets and lease liabilities, net
(7,205)
2,920
2,952
Accounts payable, accrued expenses, and other liabilities
(21,039)
(10,261)
28,632
NET CASH PROVIDED BY OPERATING ACTIVITIES
285,846
322,167
470,819
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings
(223,103)
(219,021)
(148,223)
Proceeds from sale of property and equipment
15,373
7,763
19,691
Proceeds from sale of discontinued operations
—
100,949
—
Business acquisition, net of cash acquired
—
—
2,279
Proceeds from the sale of subsidiary
—
—
475
Purchases of short-term investments
(29,236)
(96,537)
(182,352)
Proceeds from sale of short-term investments
66,584
198,120
64,329
Capitalization of internally developed software
(16,897)
(12,977)
(17,282)
NET CASH USED IN INVESTING ACTIVITIES
(187,279)
(21,703)
(261,083)
FINANCING ACTIVITIES
Borrowings under credit facilities
—
—
58,000
Proceeds from notes payable
—
—
14,206
Payments on long-term debt
(120,518)
(69,180)
(115,540)
Net change in book overdrafts
(3,504)
(14,101)
8,356
Deferred financing costs
(62)
55
(952)
Payment of common stock dividends
(11,295)
(11,542)
(10,830)
Purchases of treasury stock
(75,233)
(91,531)
(65,002)
Payments for tax withheld on share-based compensation
(22,737)
(10,311)
(16,222)
NET CASH USED IN FINANCING ACTIVITIES
(233,349)
(196,610)
(127,984)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(134,782)
103,854
81,752
Cash and cash equivalents of continuing operations at beginning of period
262,226
158,264
76,568
Cash and cash equivalents of discontinued operations at beginning of period
—
108
52
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
127,444
$
262,226
$
158,372
NONCASH INVESTING ACTIVITIES
Equipment financed
$
80,714
$
33,495
$
82,425
Accruals for equipment received
$
463
$
1,727
$
4,337
Lease liabilities arising from obtaining right-of-use assets
$
49,452
$
62,425
$
87,294
The accompanying notes are an integral part of the consolidated financial statements.
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NOTE A – ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT
PRESENTATION
Organization and Description of Business
ArcBest Corporation™ (the “Company”) is a multibillion-dollar integrated logistics company that leverages technology
and a full suite of shipping and logistics solutions to meet customers’ supply chain needs. The Company, which started
over a century ago as a local freight hauler, is now a logistics powerhouse with global reach. The Company’s operations
are conducted through its two reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc.
and certain other subsidiaries (“ABF Freight”), and Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther
Premium Logistics® (“Panther”), and certain other subsidiaries. References to the Company in this Annual Report on Form
10-K are primarily to the Company and its subsidiaries on a consolidated basis.
The Asset-Based segment represented approximately 64% of the Company’s 2024 total revenues before other revenues
and intercompany eliminations. As of December 2024, approximately 82% of the Asset-Based segment’s employees were
covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2023 ABF NMFA”),
with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2028.
On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary and reportable
operating segment of the Company. The sale of FleetNet was a strategic shift for the Company as it exited the fleet roadside
assistance and maintenance management business; therefore, the sale was accounted for as discontinued operations. As
such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods
presented. For more information on the Company’s discontinued operations, see Note D.
Financial Statement Presentation
Consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. All
significant intercompany accounts and transactions are eliminated in consolidation.
Segment Information: The Company uses the “management approach” for determining its reportable segment
information. The management approach is based on the way management organizes the reportable segments within the
Company for making operating decisions and assessing performance. See Note N for further discussion of segment
reporting.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in
the United States requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual amounts may differ from those estimates.
Reclassifications: For the years ended December 31, 2023 and 2022, certain reclassifications have been made between
operating expenses lines of the Asset-Light segment to conform to the current-year presentation (see Note N). There was
no impact on Asset-Light operating expenses as a result of these reclassifications. The Company also made
reclassifications for the years ended December 31, 2023 and 2022, to conform to the current-year presentation by
combining immaterial amounts within the tax reconciliation table and the deferred tax asset components table for
December 31, 2023. (see Note F).
NOTE B – ACCOUNTING POLICIES
Cash, Cash Equivalents, and Short-Term Investments: Short-term investments that have a maturity of ninety days or
less when purchased are considered cash equivalents. Short-term investments consist of FDIC-insured certificates of
deposit with original maturities greater than ninety days and remaining maturities less than one year. Certificates of deposit
are valued at cost plus accrued interest, which approximates fair value. Interest and dividends related to cash, cash
equivalents, and short-term investments are included in interest and dividend income.
Concentration of Credit Risk: The Company is subject to concentrations of credit risk related to the portion of its cash,
cash equivalents, and short-term investments, which is not federally insured, as further discussed in Note C.
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The Company’s services are provided primarily to customers throughout the United States and, to a lesser extent, Canada,
Mexico, and other international locations. On a consolidated basis, the Company had no single customer representing more
than 3% of its revenues in 2024, 2023, or 2022 or more than 7% of its accounts receivable balance at December 31, 2024
and 2023. The Company performs ongoing credit evaluations of its customers and generally does not require collateral.
Historically, credit losses have been within management’s expectations.
Receivable Allowances: The Company maintains allowances for credit losses and revenue adjustments on its trade
receivables. The Company estimates the allowance for credit losses based on historical write-offs, factors surrounding the
credit risk of specific customers, and forecasts of future economic conditions. In order to gather information regarding
these trends and factors, the Company performs ongoing credit evaluations of customers, an analysis of accounts receivable
aging by business segment, and an analysis of future economic conditions at period end. The allowance for revenue
adjustments is an estimate based on historical revenue adjustments and current information regarding trends and business
changes. Actual write-offs or adjustments could differ from the allowance estimates due to a number of factors, including
future changes in the forecasted economic environment or new factors and risks surrounding a particular customer.
Accounts receivable are written off when the accounts are turned over to a collection agency or when the accounts are
determined to be uncollectible. Actual write-offs and adjustments are charged against the allowances for credit losses and
revenue adjustments. The allowance for credit losses on the Company’s trade accounts receivable totaled $4.4 million and
$5.5 million at December 31, 2024 and 2023, respectively. During 2024, the allowance for credit losses increased
$4.8 million and was reduced $5.9 million by write-offs, net of recoveries.
Property, Plant and Equipment, Including Repairs and Maintenance: Purchases of property, plant and equipment are
recorded at cost. For financial reporting purposes, property, plant and equipment is depreciated principally by the
straight-line method, using the following useful lives: structures – primarily 15 to 60 years; revenue
equipment – 3 to 22 years; and other equipment – 2 to 16 years. The Company utilizes tractors and trailers in its
operations. Tractors and trailers are commonly referred to as “revenue equipment” in the transportation business. The
Company periodically reviews and adjusts, as appropriate, the residual values and useful lives of revenue equipment and
other equipment. For tax reporting purposes, accelerated depreciation or cost recovery methods are used. Gains and losses
on asset sales are reflected in the year of disposal. Exchanges of nonmonetary assets that have commercial substance are
measured based on the fair value of the assets exchanged. Tires purchased with revenue equipment are capitalized as a
part of the cost of such equipment, with replacement tires being expensed when placed in service. Repair and maintenance
costs associated with property, plant and equipment are expensed as incurred if the costs do not extend the useful life of
the asset. If such costs do extend the useful life of the asset, the costs are capitalized and depreciated over the appropriate
remaining useful life.
Computer Software for Internal Use, Including Web Site Development and Cloud Computing Costs: The Company
capitalizes the costs of software acquired from third parties and qualifying internal computer software costs incurred during
the application development stage, or during the implementation stage for cloud computing or hosting arrangements. Costs
incurred in the preliminary project stage and postimplementation-operation stage, which includes maintenance and training
costs, are expensed as incurred. For financial reporting purposes, capitalized software costs are amortized by the
straight-line method generally over 2 to 7 years. Capitalized costs related to cloud computing and hosting arrangements
are presented within prepaid expenses in the accompanying consolidated balance sheets. The amount of costs capitalized
within any period is dependent on the nature of software development activities and projects in each period.
Impairment Assessment of Long-Lived Assets: The Company reviews its long-lived assets, including property, plant
and equipment, capitalized software, finite-lived intangible assets and right-of-use assets held under operating leases,
which are held and used in its operations, for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. If such an event or change in circumstances is present, the Company
will estimate the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition.
If the sum of the undiscounted future cash flows is less than the carrying amount of the related asset, the Company will
record the asset at the lesser of its carrying amount or fair value and recognize an impairment loss, if any, in operating
income. During 2024 and 2023, the Company evaluated certain long-lived assets for impairment (see Note C).
Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost
to sell. Assets held for sale primarily represent certain properties, revenue equipment, and other equipment. Adjustments
to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are
expected to be disposed of by selling the assets within the next 12 months. Gains and losses on sales of property and
equipment are reported in operating income. Assets held for sale of $18.4 million and $1.5 million were reported within
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other long-term assets as of December 31, 2024 and 2023, respectively. As of December 31, 2024, assets held for sale
primarily include real estate properties and certain Asset-Light revenue equipment which were classified as held for sale
in the fourth quarter of 2024. The real estate consists of two parcels of land with a combined carrying amount of
$12.8 million for which plans to sell were entered in the fourth quarter of 2024 following the Company’s determination
that the properties will not be utilized in its Asset-Based service center operations. The Asset-Light revenue equipment
consists of trailers with a carrying amount of $4.6 million, which are being marketed for sale as a result of a strategic plan
to adjust capacity within Asset-Light's operations (see Note C). The fair value of these held for sale assets as of
December 31, 2024 and 2023, were determined using Level 2 inputs.
Contingent Consideration: The Agreement and Plan of Merger for our acquisition of MoLo provides for additional cash
consideration based on the achievement of certain incremental targets of adjusted earnings before interest, taxes,
depreciation, and amortization (“adjusted EBITDA”) for each of the years ended December 31, 2023, 2024, and 2025. The
adjusted EBITDA metrics were below target for 2023 and 2024, resulting in no earnout payment for 2023 and 2024. The
Company records the estimated fair value of contingent earnout consideration at the acquisition date as part of the purchase
price consideration for an acquisition. The fair value of the contingent earnout consideration liability is determined using
a Monte Carlo simulation with Level 3 inputs including volatility factors, projected revenue and expenses or adjusted
EBITDA, and the discount rate. The liability for contingent earnout consideration is remeasured at each quarterly reporting
date and any change in fair value as a result of the recurring assessments is recognized in operating income (see Note C).
Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price in a business combination over the
fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is evaluated for impairment
annually as of October 1 or more frequently if indicators of impairment exist (see Note E). The Company typically assesses
qualitative factors but may also use a quantitative analysis to determine whether it is more likely than not that the fair value
of the reporting unit is less than its carrying amount. If the Company determines it is more likely than not that the fair
value of the reporting unit is less than its carrying value, a quantitative valuation of the reporting unit is prepared to measure
the amount of goodwill impairment, if any.
Indefinite-lived intangible assets are also not amortized but rather are evaluated for impairment annually or more
frequently if indicators of impairment exist. Consistent with goodwill, the Company typically assesses qualitative factors
but may from time to time perform a quantitative assessment to determine if it is more likely than not that the fair value
of indefinite-lived intangible assets is less than its carrying value; if applicable, a quantitative analysis is performed if it is
determined it is more likely than not the indefinite-lived intangible is impaired.
The Company amortizes finite-lived intangible assets over their respective estimated useful lives.
Income Taxes: The Company accounts for income taxes under the asset and liability method. Under this method, deferred
tax assets and liabilities, which are recorded as noncurrent by jurisdiction, are recognized based on the temporary
differences between the book value and the tax basis of certain assets and liabilities and the tax effect of operating loss
and tax credit carryforwards. Deferred income taxes relate principally to asset and liability basis differences resulting from
the timing of depreciation deductions and to temporary differences in the recognition of certain revenues and expenses.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized as income or expense in the period that includes the enactment date. The Company
classifies any interest and penalty amounts related to income tax matters as operating expenses.
Management applies judgment in determining the consolidated income tax provision, including valuation allowances on
deferred tax assets. The valuation allowance for deferred tax assets is determined by evaluating whether it is more likely
than not that the benefits of deferred tax assets will be realized through future reversal of existing taxable temporary
differences, taxable income in carryback years in jurisdictions in which they are allowable, projected future taxable
income, or tax-planning strategies. Uncertain tax positions, which also require significant judgment, are measured to
determine the amounts to be recognized in the financial statements. The income tax provision and valuation allowances
are complicated by complex and frequently changing rules administered in multiple jurisdictions, including U.S. federal,
state, and foreign governments.
74
Long-Term Investments: The Company’s long-term investments are recorded in other long-term assets and represent
equity investments in private entities without readily determinable fair values. The investments are recorded using the
measurement alternative in which the Company’s equity interests are recorded at cost and adjusted for any impairments
or for observable price changes identified in orderly transactions of similar investments of the same issuers. As of
December 31, 2023, the carrying amount of the investment in Phantom Auto totaled $28.7 million, which was written off
during the year ended December 31, 2024 (see Note C). The changes in fair value of the equity investments are recognized
below the operating income line in “Other, net” within “Other income (costs).”
Book Overdrafts: Issued checks that have not cleared the bank as of December 31 result in book overdraft balances for
accounting purposes which are classified within accounts payable in the accompanying consolidated balance sheets. Book
overdrafts amounted to $15.6 million and $19.2 million at December 31, 2024 and 2023, respectively. The change in book
overdrafts is reported as a component of financing activities within the statement of cash flows.
Insurance Reserves: The Company is self-insured up to certain limits for workers’ compensation, certain third-party
casualty claims, and cargo loss and damage claims. Amounts in excess of the self-insured limits are fully insured to levels
which management considers appropriate for the Company’s operations. The Company’s claims liabilities have not been
discounted.
Liabilities for self-insured workers’ compensation and third-party casualty claims are based on the case reserve amounts
plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from an
independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves an
evaluation of claim frequency and severity, claims management, and other factors. Case reserves are evaluated as loss
experience develops and new information becomes available. Adjustments to previously estimated aggregate reserves are
reflected in financial results in the periods in which they are made. Aggregate reserves represent an estimate of the costs
of claims incurred, and it is possible that the ultimate liability may differ significantly from such estimates.
The Company develops an estimate of self-insured cargo loss and damage claims liabilities based on historical trends and
certain event-specific information.
Claims liabilities are recorded in accrued expenses and are not offset by insurance receivables which are reported in other
accounts receivable.
Loss Contingencies: The Company is involved in various legal actions arising in the ordinary course of business. The
Company assesses loss contingencies by estimating the likelihood of loss or the incurrence of a liability. The Company
records a liability and expense for loss contingencies when it is both probable that a liability has been incurred and the
amount of the loss can be reasonably estimated. The Company’s legal matters are discussed in Note O.
Interest Rate Swap Derivative Instrument: The Company accounts for derivative instruments as either assets or
liabilities and carries them at fair value. The Company’s interest rate swap was designated as a cash flow hedge. To receive
hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows
on hedged transactions. The effective portion of the gain or loss on the interest rate swap instrument was reported as
unrealized gain or loss as a component of accumulated other comprehensive income or loss, net of tax, in stockholders’
equity and the change in the unrealized gain or loss on the interest rate swap was reported in other comprehensive income
or loss, net of tax, in the consolidated statements of comprehensive income. The unrealized gain or loss is reclassified out
of accumulated other comprehensive loss into income in the same period or periods during which the hedged transaction
affects earnings. There was no unrealized gain or loss reclassified to earnings from accumulated other comprehensive loss
upon termination of the interest rate swap on October 1, 2024.
Leases: The Company leases, primarily under operating lease arrangements, certain facilities used primarily in the Asset-
Based segment service center operations, certain facilities and revenue equipment used in the Asset-Light segment
operations, and certain other facilities and office equipment. Right-of-use assets and lease liabilities for operating leases
are recorded on the balance sheet and the related lease expense is recorded on a straight-line basis over the lease term in
operating expenses. Included in lease expense are any variable lease payments incurred in the period that were not included
in the initial lease liability.
The Company elected the practical expedient for leases with a term of 12 months or less exempting balance sheet treatment
for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company
75
adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-
lease component(s) as a single lease component. In determining the discount rate, the Company uses ArcBest
Corporation’s incremental borrowing rate unless the rate implicit in the lease is readily determinable when entering into a
lease as a lessee. The incremental borrowing rate is determined by the price of a fully collateralized loan with similar terms
based on current market rates.
An assessment is made on or after the effective date of newly signed contracts as to whether the contract is, or contains, a
lease at the inception of a contract. The operating right-of-use asset is measured as the initial amount of the operating lease
liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received.
The operating lease liability is initially measured at the present value of the lease payments, discounted using the
Company’s secured incremental borrowing rate for the same term as the underlying lease unless the interest rate implicit
in the lease is readily determined, then the implicit rate will be used. Lease payments included in the measurement of the
lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional
renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination
options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or
rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the
initial lease liability. Variable lease cost for operating leases consists of subsequent changes in the consumer price index,
rent payments that are based on usage, and other lease related payments which are subject to change and not considered
fixed payments. Additional payments based on the change in an index or rate are recorded as a period expense when
incurred. Lease modifications result in remeasurement of the lease liability.
Supplemental Benefit and Postretirement Health Benefit Plans: The Company recognizes the funded status of the
supplemental benefit plan (the “SBP”) and postretirement health benefit plan in the consolidated balance sheet and
recognizes changes in the funded status, net of tax, in the year in which they occur as a component of other comprehensive
income or loss. The benefit obligations of the SBP and postretirement health benefit plan represent the funded status, as
these plans do not have plan assets. Amounts recognized in other comprehensive income or loss are subsequently expensed
as components of net periodic benefit cost by amortizing unrecognized net actuarial losses over the average remaining
active service period of the plan participants and amortizing unrecognized prior service credits over the remaining years
of service until full eligibility of the active participants at the time of the plan amendment which created the prior service
credit. A corridor approach is not used for determining the amounts of net actuarial losses to be amortized.
The Company has not incurred service cost under the SBP since the accrual of benefits under the plan was frozen on
December 31, 2009. The Company incurs service cost under the postretirement health benefit plan which is reported within
operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (credit)
of the SBP (including pension settlement expense) and the postretirement health benefit plan are reported within the other
line item of other income (costs).
The expense and liability related to the postretirement health benefit plan are measured based upon a number of
assumptions and using the services of a third-party actuary. Assumptions are made regarding the discount rate, expected
retirement age, mortality, employee turnover, and future increases in health care costs. The discount rates used to discount
the SBP and postretirement health benefit plan obligations are determined by matching projected cash distributions with
appropriate high-quality corporate bond yields in a yield curve analysis. The assumptions used directly impact the net
periodic benefit cost (credit) for a particular year. An actuarial gain or loss results when actual experience varies from the
assumptions or when there are changes in actuarial assumptions. Actuarial gains and losses are not included in net periodic
benefit cost (credit) in the period when they arise but are recognized as a component of other comprehensive income or
loss and subsequently amortized as a component of net periodic benefit cost (credit).
The Company uses December 31 as the measurement date for the SBP and postretirement health benefit plan. Plan
obligations are also remeasured upon curtailment and upon settlement. Benefit distributions under the SBP individually
exceed the annual interest cost of the plan, which triggers settlement accounting. The Company records the related
settlement expense when the amount of the benefit to be distributed is fixed, which is generally upon an employee’s
termination of employment. The SBP has not incurred pension settlement expense since 2020.
Revenue Recognition: Revenues are recognized when or as control of the promised services is transferred to the customer,
in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue
adjustments occur due to freight bill rating or other billing adjustments. The Company also estimates revenue adjustments
based on historical information and current trends, and revenue is recognized accordingly.
76
Asset-Based Segment
Asset-Based segment revenues consist primarily of less-than-truckload freight delivery. Performance obligations are
satisfied upon final delivery of the freight to the specified destination. Revenue is recognized in each reporting period
based on the expense incurred relative to each shipment’s transit time. A bill‑by‑bill analysis is used to establish estimates
of revenue in transit for recognition in the appropriate period. Because the bill‑by‑bill methodology utilizes the
approximate location of the shipment in the delivery process to determine the revenue to recognize, management believes
it to be a reliable method.
Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. The
Company estimates these amounts based on a historical expectation of discounts to be earned by customers, and revenue
is recognized based on the estimates. Management believes that actual amounts will not vary significantly from estimates
of variable consideration.
Revenue, purchased transportation expense, and third-party service expenses are reported on a gross basis for shipments
and services where the Company utilizes a third-party carrier for pickup, linehaul, delivery of freight, or performance of
services but remains primarily responsible for fulfilling delivery to the customer and maintains discretion in setting the
price for the services.
Asset-Light Segment
Asset-Light segment revenues consist primarily of asset-light logistics services using third-party vendors to provide
transportation services. Asset-Light segment revenue is recognized based on the relative transit time in each reporting
period using estimated standard delivery times for freight in transit at the end of the reporting period. Purchased
transportation expense is recognized as incurred consistent with the recognition of revenue.
Revenue and purchased transportation expense are reported on a gross basis for shipments and services where the Company
utilizes a third-party carrier for pickup and delivery but remains primarily responsible to the customer for delivery and
maintains discretion in setting the price for the service.
Other Recognition and Disclosure
Payment terms with customers may vary depending on the service provided, location or specific agreement with the
customer. Payment terms generally vary between 30 to 90 days. For certain services, payment is required before the
services are provided to the customer.
The Company expenses sales commissions when incurred because the amortization period is one year or less.
Comprehensive Income or Loss: Comprehensive income or loss consists of net income and other comprehensive income
or loss, net of tax. Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are not included
in net income for the period, but rather are recorded directly to stockholders’ equity. The Company reports the components
of other comprehensive income or loss, net of tax, by their nature and discloses the tax effect allocated to each component
in the consolidated statements of comprehensive income. The accumulated balance of other comprehensive income or loss
is displayed separately in the consolidated statements of stockholders’ equity and the components of the balance are
reported in Note K. The changes in accumulated other comprehensive income or loss, net of tax, and the significant
reclassifications out of accumulated other comprehensive income or loss are disclosed, by component, in Note K.
Earnings Per Share: Basic earnings per share is calculated by dividing net income by the daily weighted number of shares
of the Company’s common stock outstanding for the period. Diluted earnings per share is calculated using the treasury
stock method. Under this method, the denominator used in calculating diluted earnings per share includes the impact of
unvested restricted equity awards.
Share-Based Compensation: The fair value of restricted stock awards is determined based upon the closing market price
of the Company’s common stock on the date of grant, adjusted for the present value of dividends which are not payable
with respect to unvested restricted stock units (“RSUs”). The RSUs generally vest over a specified time beginning on the
grant date. RSUs granted in 2024, 2023 and 2022 follow a three-year ratable vesting schedule with one-third of the grants
vesting each year. Awards granted to non-employee directors typically vest at the end of a one-year period, subject to
accelerated vesting due to death, disability, retirement, or change-in-control provisions. When RSUs become vested, the
Company issues new shares in settlement of the RSU award. The Company recognizes the income tax benefits of dividends
77
on share-based payment awards as income tax expense or benefit in the consolidated statements of operations when awards
vest or are settled.
Share-based awards are amortized to compensation expense on a straight-line basis over the vesting period of awards or
over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated
upon death or disability. The Company recognizes forfeitures as they occur, and the income tax effects of awards are
recognized in the statement of operations when awards vest or are settled.
Advertising: The Company expenses advertising costs as incurred. These costs totaled $22.3 million, $27.8 million, and
$28.7 million for 2024, 2023, and 2022, respectively.
Fair Value Measurements: The Company discloses the fair value measurements of its financial assets and liabilities. Fair
value measurements are disclosed in accordance with the following hierarchy of valuation approaches based on whether
the inputs of market data and market assumptions used to measure fair value are observable or unobservable:
•
Level 1 – Quoted prices for identical assets and liabilities in active markets.
•
Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar
assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by
observable market data.
•
Level 3 – Unobservable inputs (based on the Company’s market assumptions) that are significant to the valuation
model.
Environmental Matters: The Company expenses environmental costs related to existing conditions resulting from past
or current operations and from which no current or future benefit is discernible. Expenditures which extend the life of the
related property or mitigate or prevent future environmental contamination are capitalized. Amounts accrued reflect
management’s best estimate of the future undiscounted exposure related to identified properties based on current
environmental regulations, management’s experience with similar environmental matters, and testing performed at certain
sites. The estimated liability is not reduced for possible recoveries from insurance carriers or other third parties.
Adopted Accounting Pronouncements
In the fourth quarter of 2024, the Company adopted an amendment to Accounting Standards Codification (“ASC”)
Topic 280, Segment Reporting, which required, among other things, enhanced disclosures of significant segment expenses
on an annual and interim basis, the title and position of the Chief Operating Decision Maker (“CODM”), and how the
CODM uses the reported measures of a segments profit or loss to assess performance and allocate resources. The adoption
did not have a significant impact on the Company’s disclosures.
Accounting Pronouncements Not Yet Adopted
ASC Topic 740, Income Taxes, was amended in December 2023 through the issuance of Accounting Standards Update
(“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), to improve income tax disclosures
primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years
beginning after December 15, 2024, while early adoption is permitted. This ASU is not expected to have a significant
impact on the Company’s disclosures.
In March 2024, the SEC adopted final rules under SEC Release Nos. 33-11275 and 33-99678, The Enhancement and
Standardization of Climate-Related Disclosures for Investors, that will require registrants to provide certain climate-
related information in their registration statements and annual reports. Subsequent to issuance, the rules became the subject
of litigation, and the SEC has issued a stay to allow the legal process to proceed.
ASC Topic 220, Disaggregation of Income Statement Expenses, was amended in November 2024 through the issuance of
ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (“ASU
2024-03”), which requires additional disclosure of specified information about certain costs and expenses. ASU 2024-03
is effective for fiscal years beginning after December 15, 2026, while early adoption is permitted. The Company is
currently assessing the amendment’s impact on the Company’s disclosures.
78
NOTE C – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Instruments
The components of cash and cash equivalents and short-term investments as of December 31 are presented in the following
table:
2024
2023
(in thousands)
Cash and cash equivalents
Cash deposits(1)
$
83,048
$
168,472
Money market funds(2)
44,396
93,754
Total cash and cash equivalents
$
127,444
$
262,226
Short-term investments
Certificates of deposit(3)
$
29,759
$
67,842
(1)
Recorded at cost plus accrued interest, which approximates fair value.
(2)
Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities
measured at fair value within this Note).
(3)
Recorded at cost plus accrued interest, which approximates fair value due to its short-term nature and is categorized in Level 2 of
the fair value hierarchy.
The Company’s long-term financial instruments are presented in the table of financial assets and liabilities measured at
fair value within this Note.
Concentrations of Credit Risk of Financial Instruments
The Company is subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments.
The Company reduces credit risk by maintaining its cash deposits and short-term investments in accounts and certificates
of deposit which are primarily FDIC-insured or in direct obligations of the U.S. government. However, certain cash
deposits and certificates of deposit may exceed federally insured limits. At December 31, 2024 and 2023, cash deposits
and short-term investments totaling $51.7 million and $76.3 million, respectively, were not FDIC insured. The Company
also holds money market funds, which are invested in U.S. government securities and repurchase agreements collateralized
solely by U.S. government securities.
Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table:
2024
2023
(in thousands)
Carrying
Fair
Carrying
Fair
Value
Value
Value
Value
Credit Facility(1)
$
— $
— $ 50,000 $ 50,000
Notes payable(2)
189,134
187,675
178,938
177,149
New England Pension Fund withdrawal liability(3)
18,671
16,783
19,402
18,220
$ 207,805
$ 204,458
$ 248,340
$ 245,369
(1)
The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on Secured Overnight Financing Rate
(“SOFR”), plus a margin, priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the
fair value hierarchy). The Company paid down the $50.0 million debt under the Credit Facility during the third quarter of 2024.
(2)
Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending
institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy).
(3)
ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the
“New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a
related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future
withdrawal liability payments, discounted at an interest rate of 6.0% and 5.3% at December 31, 2024 and 2023, respectively,
determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of December 31, 2024, the
outstanding withdrawal liability totaled $18.7 million, of which $0.8 million was recorded in accrued expenses and the remaining
portion was recorded in other long-term liabilities.
79
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The assets and liabilities that are measured at fair value on a recurring basis as of December 31 are presented in the
following table:
2024
Fair Value Measurements Using
Quoted Prices Significant Significant
In Active
Observable Unobservable
Markets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
(in thousands)
Assets:
Money market funds(1)
$
44,396
$
44,396
$
—
$
—
Equity, bond, and money market mutual funds held in trust related to the Voluntary
Savings Plan(2)
5,570
5,570
—
—
$
49,966
$
49,966
$
—
$
—
Liabilities:
Contingent consideration(3)
$
2,650
$
—
$
—
$
2,650
2023
Fair Value Measurements Using
Quoted Prices Significant Significant
In Active
Observable Unobservable
Markets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
(in thousands)
Assets:
Money market funds(1)
$
93,754
$
93,754
$
—
$
—
Equity, bond, and money market mutual funds held in trust related to the Voluntary
Savings Plan(2)
4,627
4,627
—
—
Interest rate swap(4)
1,710
—
1,710
—
$ 100,091
$
98,381
$
1,710
$
—
Liabilities:
Contingent consideration(3)
$
92,900
$
—
$
—
$
92,900
(1)
Included in cash and cash equivalents.
(2)
Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and
corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other
long-term assets, with a corresponding liability reported within other long-term liabilities.
(3)
The estimated fair value of contingent consideration related to the acquisition of MoLo (see Note B) is determined by assessing
Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues
and expenses or adjusted EBITDA to be achieved for the applicable performance periods, volatility factors applied to the
simulations, and the discount rate applied, which was 12.9% and 13.3% as of December 2024 and 2023, respectively. Changes in
the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The decrease in
fair value of contingent earnout consideration as of December 31, 2024, compared to December 31, 2023, reflects the reduction in
the probability of payout based on 2024 results and projections of 2025 adjusted EBITDA.
(4)
The Company’s interest rate swap terminated on October 1, 2024. The fair value of the interest rate swap at December 31, 2023
was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate
curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty,
which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as
insignificant to the valuation at December 31, 2023 and considered the interest rate swap valuation in Level 2 of the fair value
hierarchy.
80
The following table provides the change in fair value of the liabilities measured at fair value using inputs categorized in
Level 3 of the fair value hierarchy:
Contingent Consideration
(in thousands)
Balance at December 31, 2023
$
92,900
Change in fair value included in operating expenses
(90,250)
Balance at December 31, 2024
$
2,650
Assets Measured at Fair Value on a Nonrecurring Basis
The Company remeasures certain assets on a nonrecurring basis upon events or changes in circumstances that indicate the
carrying amount may not be recoverable. The following table provides the changes in long-lived assets measured on a
nonrecurring basis during the years ended December 31:
2024
2023
(in thousands)
Equity investment(1)
$
(28,739)
$
3,739
Revenue equipment(2)
$
(1,393)
$
—
Software(2)
$
(307)
$
—
Operating right-of-use assets(3)
$
—
$
(28,124)
Leasehold improvements(3)
$
—
$
(2,038)
(1)
In November 2021, the Company recorded an equity investment for $25.0 million in Phantom Auto, a startup provider of human-
centered remote operation software, and became a lead investor in their Series B Preferred offering. The equity investment was
accounted for as a nonmarketable equity security without a readily determinable value using the measurement alternative, which
allowed the investment to be recorded at cost, less any impairment and adjusted for observable price changes. During 2023, the
fair value of the Company’s investment in Phantom Auto increased based on an observable price change upon the closing of
Phantom Auto’s Series B-2 funding round as of April 26, 2023. During the first quarter of 2024, the Company was notified that
Phantom Auto was ceasing operations due to liquidity concerns from failing to secure additional funding from investors or lenders.
As a result, the Company assessed the likelihood of recovering its investment as remote and recorded a pre-tax, noncash impairment
charge, to write off the equity investment in Phantom Auto, which was recognized below the operating income line in “Other, net”
within “Other income (costs)” using inputs categorized in Level 3 of the fair value hierarchy.
(2)
During the fourth quarter of 2024, the Company recorded impairment charges for certain revenue equipment and software as part
of a strategic decision to adjust capacity within Asset-Light’s operations. The impairment charges were reported in operating
expenses in the consolidated statements of operations for the year ended December 31, 2024. Inputs used in the fair value
measurements of these assets were categorized in Level 2 of the fair value hierarchy. The software was impaired after it was
determined it was no longer going to be utilized and the revenue equipment was written down to fair value, less cost to sell, of
$4.6 million when it was reclassified to assets held for sale at fair value, which is reported within other long-term assets as of
December 31, 2024.
(3)
During the third quarter of 2023, the Company recorded impairment charges related to operating right-of-use assets and leasehold
improvements associated with a freight handling pilot facility, a service center, and office spaces that were made available for
sublease. The lease impairment charges were recognized as a component of operating expenses in the consolidated statement of
operations for the year ended December 31, 2023. The fair value of these asset groups was estimated at September 1, 2023, using
inputs categorized in Level 3 of the fair value hierarchy, such as discounted cash flow method utilizing market-participant discount
rates ranging from 7.5% to 9.5% and certain unobservable inputs, including estimated cash flows based on anticipated future
sublease terms as determined using third-party real estate broker quotes. See Note G for additional discussion related to these
impairment charges.
81
NOTE D – DISCONTINUED OPERATIONS
On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary of the Company, for an initial aggregate
cash purchase price of $101.1 million, which was subject to certain tax and other customary adjustments, and recorded a
pre-tax gain on sale of $69.1 million, or $51.4 million, net of tax. The purchase price was adjusted during the second
quarter of 2023, resulting in an aggregate adjusted cash purchase price of $100.9 million. After adjustments, the pre-tax
gain recognized in 2023 and 2024 totaled $70.2 million and $0.8 million, respectively. The financial results of FleetNet
have been accounted for as discontinued operations for all periods presented.
The financial results from discontinued operations for the years ended December 31 are summarized in the following table:
2024
2023
2022
(in thousands)
Revenues
$
—
$ 55,929
$ 295,043
Operating expenses
Gain on sale of business(1)
(806)
(70,201)
—
Other
—
54,623
290,300
(806)
(15,578)
290,300
Operating income
806
71,507
4,743
Other income, net(2)
—
17
109
Income from discontinued operations before income taxes
806
71,524
4,852
Income tax provision
206
18,255
1,291
Income from discontinued operations, net of tax
$
600
$ 53,269
$
3,561
(1)
The 2024 period includes the reversal of an employee-related contingent liability that expired one year after disposition, per the
purchase agreement. The 2023 period includes transaction costs of $3.8 million consisting of consulting fees, professional fees,
and employee-related expenses, as well as the resolution of certain post-close contingencies in the second quarter of 2023.
(2)
The 2023 and 2022 periods include interest expense, which is immaterial.
Cash flows from discontinued operations of FleetNet for the years ended December 31 were as follows:
2024
2023
2022
(in thousands)
Net cash provided by operating activities(1)
$
—
$
762
$
2,825
Net cash used in investing activities(2)
—
(397)
(3,329)
Net cash provided by (used in) financing activities
—
(473)
560
Net increase (decrease) in cash and cash equivalents
$
—
$
(108)
$
56
(1)
Includes depreciation and amortization expense of $0.4 million and $1.9 million for the years ended December 31, 2023 and 2022,
respectively. Also includes share-based compensation expense for the year ended December 31, 2023 of $0.3 million, which is
included in the “Pre-tax gain on sale of discontinued operations” line of the consolidated statements of cash flows.
(2)
Includes purchases of property, plant and equipment of $0.1 million and $1.4 million for the years ended December 31, 2023 and
2022, respectively. Excludes the proceeds from the sale of discontinued operations, which are included in cash flows from
continuing operations.
NOTE E – GOODWILL AND INTANGIBLE ASSETS
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. The
goodwill balance of $304.8 million at December 31, 2024 and 2023 relates to the Asset-Light segment. The accumulated
impairment of goodwill at December 31, 2024 and 2023 totaled $20.0 million.
Goodwill and indefinite-lived intangible assets are not amortized but evaluated for impairment annually as of October 1,
or more frequently if indicators of impairment exist. The annual impairment evaluation of the goodwill and indefinite-
82
lived intangible assets of the Asset-Light reporting unit were performed as of October 1, 2023, and it was determined that
there was no impairment of the recorded balances.
As a result of the continuing soft market conditions and lower business levels in the Asset-Light segment into the third
quarter of 2024, the Company performed an interim quantitative analysis as of September 1, 2024 on the fair value of its
goodwill and indefinite-lived intangible assets. A third-party valuation specialist was utilized in performing the interim
impairment analysis. Management considered current and forecasted business levels and estimated future cash flows over
several years, using the reporting unit’s weighted average cost of capital. Based on the analysis performed, management
determined it was more likely than not that the goodwill and indefinite-lived intangible assets were not impaired as of
September 1, 2024.
The annual impairment evaluation of the goodwill balance and the indefinite-lived intangible assets was performed
qualitatively as of October 1, 2024, considering an assessment of performance of the reporting unit for the period
subsequent to the interim analysis as well as macroeconomic factors, industry considerations, and the Company’s market
capitalization. The Company determined that there was no impairment to the recorded balances as of the October 1, 2024,
and no new indicators of impairment were identified as of December 31, 2024.
The evaluation of goodwill impairment requires management’s judgement and the use of estimates and assumptions to
determine if indicators of impairment exist at an interim date. Assumptions require considerable judgement because
changes in broad economic factors and industry factors can result in variable and volatile fair values. Changes in key
estimates and assumptions that impact the fair value of the operations, including the impact of having excess capacity and
a soft rate truckload environment, could materially affect future analyses and result in material impairments of goodwill
and indefinite-lived intangible assets.
Intangible assets as of December 31 consisted of the following:
2024
2023
Weighted-Average
Accumulated
Net
Accumulated
Net
Amortization Period
Cost
Amortization Value
Cost Amortization Value
(in years)
(in thousands)
(in thousands)
Finite-lived intangible assets
Customer relationships
12
$ 99,579
$
59,782
$ 39,797
$ 99,579
$
51,357
$ 48,222
Other
8
30,438
13,920
16,518
30,151
9,523
20,628
11
130,017
73,702
56,315
129,730
60,880
68,850
Indefinite-lived intangible asset
Trade name
N/A
32,300
N/A
32,300
32,300
N/A
32,300
Total intangible assets
N/A
$ 162,317
$
73,702
$ 88,615
$ 162,030
$
60,880
$ 101,150
As of December 31, 2024, the future amortization for intangible assets acquired through business acquisitions were as
follows:
Amortization of
Intangible Assets
(in thousands)
2025
$
12,800
2026
8,693
2027
7,269
2028
7,269
2029
7,222
Thereafter
13,062
Total amortization
$
56,315
83
NOTE F – INCOME TAXES
Significant components of the provision for income taxes for the years ended December 31 were as follows:
2024
2023
2022
(in thousands)
Current provision on continuing operations:
Federal
$
18,195
$
38,860
$
79,477
State
3,793
10,949
19,713
Foreign
928
508
869
22,916
50,317
100,059
Deferred provision (benefit) on continuing operations:
Federal
17,532
(4,882)
(5,591)
State
5,058
(682)
(793)
Foreign
(153)
(2)
(20)
22,437
(5,566)
(6,404)
Total provision for income taxes on continuing operations
$
45,353
$
44,751
$
93,655
Current provision on discontinued operations:
Federal
$
169
$
14,656
$
901
State
36
3,599
236
205
18,255
1,137
Deferred provision on discontinued operations:
Federal
—
—
114
State
—
—
40
—
—
154
Total provision for income taxes on discontinued operations
$
205
$
18,255
$
1,291
Total provision for income taxes
$
45,558
$
63,006
$
94,946
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the
deferred tax assets and liabilities of continuing operations at December 31 were as follows:
2024
2023
(in thousands)
Deferred tax assets:
Accrued expenses
$
66,211
$
60,842
Operating lease right-of-use liabilities
56,119
53,589
Multiemployer pension fund withdrawal
4,688
4,871
Postretirement liabilities other than pensions
3,428
3,389
Share-based compensation
2,239
5,249
Federal and state net operating loss carryovers
4,383
1,511
Receivable allowances
2,666
1,951
Other(1)
2,580
794
Total deferred tax assets
142,314
132,196
Valuation allowance
(1,731)
(1,751)
Total deferred tax assets, net of valuation allowance
140,583
130,445
Deferred tax liabilities:
Amortization, depreciation, and basis differences for property, plant and equipment, and other
long-lived assets
121,400
118,211
Operating lease right-of-use assets
48,271
43,938
Intangibles
33,680
10,256
Prepaid expenses
6,345
5,685
Total deferred tax liabilities
209,696
178,090
Net deferred tax liabilities
$
(69,113)
$
(47,645)
1)
For 2023, certain reclassifications have been made to conform to the current year presentation, including combining immaterial
amounts in “Other.”
84
Reconciliation between the effective income tax rate, as computed on income from continuing operations before income
taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table:
2024
2023
2022
(in thousands, except percentages)
Income tax provision at the statutory federal rate of 21.0%
$
45,930 $
39,252 $
81,544
Federal income tax effects of:
State income taxes
(1,859)
(2,156)
(3,973)
Settlement of share-based compensation(1)
(9,169)
(3,989)
(6,693)
Non-deductible compensation under IRC Section 162(m)(2)
3,668
3,103
5,174
Other(2)
(2,843)
(2,232)
(2,166)
Federal income tax provision
35,727
33,978
73,886
State income tax provision
8,851
10,267
18,920
Foreign income tax provision
775
506
849
Total provision for income taxes
$
45,353
$
44,751
$
93,655
Effective tax rate
20.7 %
23.9 %
24.1 %
(1)
Increase in tax benefit from vested RSUs for 2024, compared to 2023 and 2022, is primarily due to the vesting of RSUs granted in
2020 and 2021 at the end of a four-year and three-year period, respectively. RSUs granted subsequent to 2021 follow a graded
vesting schedule, with RSUs vesting incrementally over a specified period of time, rather than fully vesting at the end of the vesting
period.
(2)
For 2023 and 2022, certain reclassifications have been made to conform to the current year presentation, including combining
immaterial amounts in “Other” and breaking out non-deductible compensation under IRC Section 162(m), which was previously
reported in “Non-deductible expenses.”
The Company's total effective tax rate was 20.8%, 24.4% and 24.1% for 2024, 2023 and 2022, respectively, including
discontinued operations which are further discussed in Note D. The effective tax rate from discontinued operations was
25.5%, 25.5% and 26.6% for 2024, 2023 and 2022, respectively. State tax rates vary among states and average
approximately 6.0%, although some state rates are higher, and a small number of states do not impose an income tax.
Income taxes paid, excluding income tax refunds, totaled $71.1 million, $115.7 million, and $148.7 million in 2024, 2023,
and 2022, respectively. Income tax refunds totaled $33.1 million, $36.4 million, and $42.3 million in 2024, 2023, and
2022, respectively.
Under Accounting Standards Codification Topic 718, Compensation – Stock Compensation, the Company may experience
volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income
statement upon settlement of awards, which occurs primarily during the second quarter of each year. The 2024, 2023, and
2022 tax rates reflect a tax benefit of 5.2%, 2.8%, and 2.1%, respectively.
At December 31, 2024, the Company had gross federal net operating loss carryforwards of $0.5 million, with a valuation
allowance of less than $0.1 million that could not be used. At December 31, 2024, the Company had total gross state net
operating losses of $101.4 million. Gross state net operating losses of $9.8 million are for subsidiaries that have had taxable
losses for three or more prior tax years or have other nexus issues that reduce the likelihood of the utilization of the losses.
These net operating loss carryforwards have been fully reserved with valuation allowances of $0.7 million and $0.8 million
at December 31, 2024 and 2023, respectively.
As the Canadian tax rate is higher than the U.S. tax rate, it is unlikely that foreign tax credit carryforwards will be useable,
as U.S. taxes will be paid at a lower rate than the tax rates in Canada. Thus, the foreign tax credit carryover is fully reserved,
resulting in valuation allowances of $1.0 million at December 31, 2024 and 2023.
Consolidated federal income tax returns filed for tax years through 2020 are closed by the applicable statute of limitations.
The Company is currently under examination by one state and one foreign taxing authority at December 31, 2024. No
federal examination is in process at December 31, 2024.
NOTE G – LEASES
The Company has operating lease arrangements for certain facilities and revenue equipment used in the Asset-Based and
Asset-Light segment operations and certain other facilities and office equipment. Current operating leases have remaining
85
terms of 11.5 years or less, some of which include one or more options to renew, with renewal option terms up to ten years.
There is one early termination option available on an operating lease as of December 31, 2024, provided notification is
given 24 months prior to the end of the lease term, which is included in the right-of-use assets and liabilities as of
December 31, 2024.
The components of operating lease expense for the years ended December 31 were as follows:
2024
2023
2022
(in thousands)
Operating lease expense
$ 42,772
$ 38,794
$ 31,790
Variable lease expense
7,183
6,804
4,188
Sublease income
(2,631)
(246)
(391)
Total operating lease expense
$ 47,324
$ 45,352
$ 35,587
The operating cash flows from operating lease activity for the years ended December 31 were as follows:
2024
2023
2022
(in thousands)
Noncash change in operating right-of-use assets
$ 34,445 $ 33,470 $ 27,465
Cash payments to obtain right-of-use assets
(7,752)
—
—
Change in operating lease liabilities
(33,898) (30,550) (24,513)
Changes in operating right-of-use assets and lease liabilities, net
$ (7,205) $ 2,920 $ 2,952
Supplemental cash flow information
Cash paid for amounts included in the measurement of operating lease liabilities
$ 42,173 $ 35,759 $ 28,830
Right-of-use assets obtained in exchange for operating lease liabilities
$ 49,452 $ 62,425 $ 87,294
The weighted-average remaining lease term for our outstanding operating lease obligations was 7.4 years as of both
December 31, 2024 and 2023. As of December 31, 2024 and 2023, the weighted-average discount rate was 4.59% and
4.29%, respectively. Maturities of operating lease liabilities at December 31, 2024 were as follows:
Operating
Lease
Liabilities
(in thousands)
2025
$
43,660
2026
40,800
2027
33,992
2028
30,325
2029
25,307
Thereafter
93,557
Total lease payments
267,641
Less imputed interest
(43,299)
Total
$
224,342
Lease Impairment Charges
In 2023, lease impairment charges totaling $30.2 million were recognized as a component of operating expenses for
impairment of certain long-lived operating right-of-use assets that were made available for sublease and continued to be
classified as held and used. The fair value measurements related to the impairment are further discussed in Note C.
86
NOTE H – LONG-TERM DEBT AND FINANCING ARRANGEMENTS
Long-Term Debt Obligations
Long-term debt consisted of notes payable related to the financing of revenue equipment (tractors and trailers used
primarily in Asset-Based segment operations) and certain other equipment at December 31, 2024 and 2023 and, at
December 31, 2023, borrowings outstanding under the Company’s revolving credit facility, as follows:
2024
2023
(in thousands)
Credit Facility(1)
$
—
$
50,000
Notes payable (weighted-average interest rate of 4.6% at December 31, 2024)
189,134
178,938
189,134
228,938
Less current portion
63,978
66,948
Long-term debt, less current portion
$ 125,156
$ 161,990
(1)
The interest rate swap mitigated interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility
from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of the Credit Facility at
December 31, 2023 and during 2024 through the paydown of the $50.0 million outstanding balance under the Credit Facility on
September 30, 2024.
Scheduled payments of long-term debt obligations as of December 31, 2024 were as follows:
Notes
Payable
(in thousands)
2025
$
71,471
2026
59,898
2027
43,637
2028
19,930
2029
10,587
Total payments
205,523
Less amounts representing interest
16,389
Long-term debt
$
189,134
Assets securing notes payable, primarily consisting of revenue equipment, which were included in property, plant and
equipment, totaled $333.5 million and $339.1 million at December 31, 2024 and 2023, respectively.
The Company paid interest of $8.5 million, $8.7 million, and $7.1 million in 2024, 2023, and 2022, respectively, net of
capitalized interest which totaled $0.4 million for 2024 and $0.3 million for both 2023 and 2022.
Financing Arrangements
Credit Facility
The Company has a revolving credit facility (the “Credit Facility”) under its Fourth Amended and Restated Credit
Agreement (the “Credit Agreement”), with an initial maximum credit amount of $250.0 million, including a swing line
facility in an aggregate amount of up to $40.0 million and a letter of credit sub-facility providing for the issuance of letters
of credit up to an aggregate amount of $20.0 million. The Company may request additional revolving commitments or
incremental term loans thereunder up to an aggregate amount of up to $125.0 million, subject to the satisfaction of certain
additional conditions as provided in the Credit Agreement. On September 30, 2024, the Company voluntarily paid down
the $50.0 million outstanding on the Credit Facility and had no borrowings outstanding as of December 31, 2024.
Subsequent to December 31, 2024, the Company elected to borrow $25.0 million on the Credit Facility, at an interest rate
of 5.5% (SOFR plus a spread), to support the Company's working capital needs and general corporate purposes.
Principal payments under the Credit Facility are due upon maturity of the facility on October 7, 2027; however, borrowings
may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice
periods and compliance with minimum prepayment amounts. Borrowings under the Credit Agreement can either be, at the
Company’s election: (i) at an Alternate Base Rate (as defined in the Credit Agreement) plus a spread ranging from 0.125%
to 1.00%, and SOFR adjustment of 0.10% per annum; or (ii) the Adjusted Term SOFR Screen Rate (as defined in the
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Credit Agreement) plus a spread ranging from 1.125% to 2.00%. The applicable spread is dependent upon the Company’s
Adjusted Leverage Ratio (as defined in the Credit Agreement). In addition, the Credit Facility requires the Company to
pay a fee on unused commitments. The Credit Agreement contains conditions, representations and warranties, events of
default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a
minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments,
liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, and sales of
assets. The Company was in compliance with the covenants under the Credit Agreement at December 31, 2024.
Interest Rate Swap
The Company had an interest rate swap agreement with a $50.0 million notional amount, which terminated on
October 1, 2024. As of December 31, 2023, the fair value of the interest rate swap of $1.7 million was recorded in other
long-term assets (as further discussed in Note C). Through its term, the interest rate swap qualified for cash flow hedge
accounting (as further discussed in Note B). The unrealized gain or loss on the interest rate swap instrument in effect at
the balance sheet date was reported as a component of accumulated other comprehensive income, net of tax, in
stockholders’ equity at December 31, 2023, and the change in the unrealized gain or loss on the interest rate swap was
reported in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income during
2023 and 2024.
Accounts Receivable Securitization Program
During June 2024, the Company amended and restated its accounts receivable securitization program (“A/R
Securitization”), extending the maturity date to July 1, 2025. The amendment also, among other things, added a conduit
lender party with language to address potential loans funded through the issuance of notes; added provisions relating to
erroneous payments; modified the calculation of certain ratios, as defined in the agreement; and modified limitations
regarding the concentration of certain obligors of receivables pledged under the program. The program provides available
cash proceeds of $50.0 million and has an accordion feature allowing the Company to request additional borrowings up to
$100.0 million, subject to certain conditions. As of December 31, 2024 and 2023, the Company had no borrowings
outstanding under the A/R Securitization.
Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables
to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. The A/R Securitization does not
qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the Company’s
consolidated balance sheets. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its
assets would be available only to satisfy the claims related to the lenders’ interest in the trade accounts receivables.
Borrowings under the A/R Securitization bear interest based upon SOFR, or, to the extent funded by the conduit lender
through the issuance of notes, at the commercial paper rate as defined in the agreement, plus a margin in each case, and
an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative
covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage
ratio covenant. The Company was in compliance with the covenants under the A/R Securitization at December 31, 2024.
The A/R Securitization includes a provision under which the Company may request and the letter of credit issuer may
issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in
various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of
borrowings under the program. As of December 31, 2024, standby letters of credit of $15.3 million have been issued under
the program, which reduced the available borrowing capacity to $34.7 million.
Letter of Credit Agreements and Surety Bond Programs
As of both December 31, 2024 and 2023, the Company had letters of credit outstanding of $15.9 million and $17.4 million,
respectively (including $15.3 million and $16.8 million, respectively issued under the A/R Securitization). The Company
has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance
program. As of December 31, 2024 and 2023, surety bonds outstanding related to the self-insurance program totaled
$63.2 million and $65.2 million, respectively.
Notes Payable
The Company has financed the purchase of certain revenue equipment through promissory note arrangements totaling
$80.7 million and $33.5 million during the year ended December 31, 2024 and 2023, respectively. Subsequent to
December 31, 2024, the Company has financed the purchase of $15.3 million of revenue equipment through promissory
note arrangements.
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NOTE I – ACCRUED EXPENSES
December 31
2024
2023
(in thousands)
Workers’ compensation, third-party casualty, and loss and damage claims reserves
$ 217,161
$ 189,948
Accrued vacation pay
63,437
63,183
Accrued compensation, including retirement benefits
75,900
87,851
Taxes other than income
9,924
10,743
Other
28,458
26,304
Total accrued expenses
$ 394,880
$ 378,029
NOTE J – EMPLOYEE BENEFIT PLANS
Supplemental Benefit and Postretirement Health Benefit Plans
The Company has an unfunded supplemental benefit plan (the “SBP”) which was designed to supplement benefits under
the Company’s legacy nonunion defined benefit pension plan (for which plan termination and liquidation was completed
in 2019) for designated executive officers. The SBP was closed to new entrants, and a cap was placed on the maximum
payment per participant in the SBP effective January 1, 2006. In place of the SBP, eligible officers of the Company
appointed after 2005 participate in a long-term cash incentive plan (see Cash Long-Term Incentive Compensation Plan
section within this Note). Effective December 31, 2009, the accrual of benefits and the valuation inputs for calculating
SBP benefits to be paid to participants, including final average salary and the interest rate, were frozen, with the exception
of early retirement penalties that may apply in certain cases. The SBP has not incurred pension settlement expense since
2020.
The Company sponsors an insured postretirement health benefit plan that provides supplemental medical benefits and
dental and vision benefits primarily to certain officers of the Company and certain subsidiaries. New entrants have not
been added to the postretirement health benefit plan since January 1, 2017.
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The following table discloses the changes in benefit obligations and plan assets of the Company’s nonunion defined benefit
plans for years ended December 31, the measurement date of the plans:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024
2023
2024
2023
(in thousands)
Change in benefit obligations
Benefit obligations, beginning of year
$
358
$
338
$ 13,668
$ 12,534
Service cost
—
—
60
78
Interest cost
15
16
632
599
Actuarial (gain) loss (1)
(5)
4
162
1,137
Benefits paid
—
—
(697)
(680)
Benefit obligations, end of year
368
358
13,825
13,668
Change in plan assets
Fair value of plan asset, beginning of year
—
—
—
—
Employer contributions
—
—
697
680
Benefits paid
—
—
(697)
(680)
Fair value of plan assets, end of year
—
—
—
—
Funded status at period end
$ (368)
$
(358)
$ (13,825)
$ (13,668)
Accumulated benefit obligation
$
368
$
358
$ 13,825
$ 13,668
(1)
The actuarial gain on the SBP for 2024, versus an actuarial loss for 2023, was related to a year-over-year increase in the discount
rate used to remeasure the plan obligation at December 31, 2024, compared to a year-over-year decrease in the discount rate at
December 31, 2023. The lower actuarial loss on the postretirement health benefit plan for 2024, compared to 2023, was related to
the impact of higher plan cost assumptions being partially offset by a year-over-year increase in the discount rate used to remeasure
the plan obligation at December 31, 2024, compared to the higher actuarial loss for 2023 driven by a year-over-year decrease in
the discount rate at December 31, 2023.
Amounts recognized in the consolidated balance sheets at December 31 consisted of the following:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024
2023
2024
2023
Current portion of pension and postretirement liabilities
$
—
$
—
$
(832) $
(707)
Pension and postretirement liabilities, less current portion
(368)
(358)
(12,993)
(12,961)
Liabilities recognized
$
(368)
$
(358)
$ (13,825) $ (13,668)
The following is a summary of the components of net periodic benefit cost for the Company’s nonunion benefit plans for
the years ended December 31:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024
2023
2022
2024
2023
2022
(in thousands)
Service cost
$
—
$
—
$
—
$
60
$
78
$
156
Interest cost
15
16
7
632
599
441
Amortization of net actuarial (gain) loss(1)
(2)
(4)
8
(997)
(1,326)
(765)
Net periodic benefit cost (credit)
$
13
$
12
$
15
$
(305)
$
(649)
$
(168)
(1)
The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and
does not use a corridor approach.
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Included in accumulated other comprehensive income at December 31 were the following pre-tax amounts that have not
yet been recognized in net periodic benefit cost:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024
2023
2024
2023
(in thousands)
Unrecognized net actuarial gain
$
(12)
$
(9)
$
(5,647) $
(6,806)
The discount rate is determined by matching projected cash distributions with appropriate high-quality corporate bond
yields in a yield curve analysis. Weighted-average assumptions used to determine nonunion benefit obligations at
December 31 were as follows:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024 2023 2024 2023
Discount rate
4.8 %
4.3 %
5.5 %
4.8 %
Weighted-average assumptions used to determine net periodic benefit cost for the Company’s nonunion benefit plans for
the years ended December 31 were as follows:
Supplemental
Postretirement
Benefit Plan
Health Benefit Plan
2024 2023 2022 2024 2023 2022
Discount rate
4.3 % 4.6 %
1.8 %
4.8 %
5.0 %
2.7 %
The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as
follows:
2024
2023
Health care cost trend rate assumed for next year(1)
7.0 %
7.0 %
Rate to which the cost trend rate is assumed to decline
4.5 %
4.5 %
Year that the rate reaches the cost trend assumed rate
2036
2035
(1)
At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully
insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of
December 31, 2024 and 2023 are for 2026 and 2025, respectively.
Estimated future benefit payments from the Company’s SBP and postretirement health benefit plans, which reflect
expected future service as appropriate, as of December 31, 2024 are as follows:
Supplemental Postretirement
Benefit
Health
Plan
Benefit Plan
(in thousands)
2025
$
—
$
832
2026
$
—
$
832
2027
$
—
$
842
2028
$
424
$
853
2029
$
—
$
899
2030-2034
$
—
$
4,346
Voluntary Savings Plan
The Company maintains a Voluntary Savings Plan (“VSP”), a nonqualified deferred compensation program for the benefit
of certain executives of the Company and certain subsidiaries. Eligible employees may defer receipt of a portion of their
salary and incentive compensation into the VSP by making an election prior to the beginning of the year in which the
salary compensation is payable and, for incentive compensation, by making an election at least six months prior to the end
of the performance period to which the incentive relates. The Company credits participants’ accounts with applicable rates
of return based on a portfolio selected by the participants from the investments available in the plan. The Company match
related to the VSP was suspended beginning January 1, 2010. All deferrals, Company match, and investment earnings are
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considered part of the general assets of the Company until paid. Accordingly, the consolidated balance sheets reflect the
fair value of the aggregate participant balances, based on quoted prices of the mutual fund investments, as both an asset
and a liability of the Company. As of December 31, 2024 and 2023, VSP balances of $5.6 million and $4.6 million,
respectively, were included in other long-term assets with a corresponding amount recorded in other long-term liabilities.
Defined Contribution Plans
The Company and its subsidiaries have defined contribution 401(k) plans that cover substantially all nonunion employees.
The plans permit participants to defer a portion of their salary up to a maximum of 69% as determined under Section
401(k) of the IRC. For certain participating subsidiaries, the Company matches 50% of nonunion participant contributions
up to the first 6% of annual compensation. The Company’s matching expense for the nonunion 401(k) plans totaled
$9.2 million, $7.1 million, and $9.4 million for 2024, 2023, and 2022, respectively. The plans also allow for discretionary
401(k) Company contributions determined annually. The Company recognized expense of $11.5 million, $13.1 million,
and $19.1 million in 2024, 2023, and 2022, respectively, related to its discretionary contributions to the nonunion defined
contribution 401(k) plans. Discretionary contribution expense was higher in 2022, primarily due to an increase in
discretionary contribution rate based on the Company’s higher operating results for the year. Participants are fully vested
in the Company’s contributions under the defined contribution 401(k) plans after three years of service.
Long-Term Incentive Compensation Plan
The Company maintains a performance-based Long-Term Incentive Compensation Plan (“LTIP”) for certain officers of
the Company or its subsidiaries. The LTIP incentive, which is earned over three years, is based, in part, upon a
proportionate weighting of return on capital employed and shareholder returns compared to a peer group, as specifically
defined in the plan document. As of December 31, 2024, 2023, and 2022, $21.0 million, $26.3 million, $29.5 million,
respectively, were accrued for future payments under the plans.
Other Plans
Other long-term assets include $51.7 million and $48.5 million at December 31, 2024 and 2023, respectively, in the cash
surrender value of life insurance policies. These policies are intended to provide funding for certain of the Company’s
long-term nonunion benefit plans. A portion of the Company’s cash surrender value of variable life insurance policies
have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market
volatility. The Company recognized a gain of $3.3 million and $4.6 million for 2024 and 2023, respectively, and a loss of
$2.7 million for 2022, associated with changes in the cash surrender value and proceeds from life insurance policies,
included below the operating income line in “Other, net” within “Other income (costs).”
Multiemployer Plans
ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF
Freight”) contribute to multiemployer pension and health and welfare plans, which have been established pursuant to the
Labor Management Relations Act of 1947 (the “Taft-Hartley Act”) to provide benefits for its contractual employees. ABF
Freight’s contributions generally are based on the time worked by its contractual employees, in accordance with the 2023
ABF NMFA and other related supplemental agreements. ABF Freight recognizes as expense the contractually required
contributions for each period and recognizes as a liability any contributions due and unpaid.
The multiemployer plans to which ABF Freight primarily contributes are jointly trusteed (half of the trustees of each plan
are selected by the participating employers, the other half by the IBT) and cover collectively bargained employees of
multiple unrelated employers. Due to the inherent nature of multiemployer plans, there are risks associated with
participation in these plans that differ from single-employer plans. Assets received by the plans are not segregated by
employer, and contributions made by one employer can be and are used to provide benefits to current and former
employees of other employers. If a participating employer in a multiemployer pension plan no longer contributes to the
plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating
employer in a multiemployer pension plan completely withdraws from the plan, it owes to the plan its proportionate share
of the plan’s unfunded vested benefits, referred to as a withdrawal liability. A complete withdrawal generally occurs when
the employer permanently ceases to have an obligation to contribute to the plan. Withdrawal liability is also owed in the
event the employer withdraws from a plan in connection with a mass withdrawal, which generally occurs when all or
substantially all employers withdraw from the plan pursuant to an agreement in a relatively short period of time. Were
92
ABF Freight to completely withdraw from certain multiemployer pension plans, whether in connection with a mass
withdrawal or otherwise, under current law, ABF Freight would have material liabilities for its share of the unfunded
vested liabilities of each such plan.
Pension Plans
The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status.
Contributions to these plans are based generally on the time worked by ABF Freight’s contractual employees, at rates
specified in the 2023 ABF NMFA, which will remain in effect through June 30, 2028. The funding obligations to the
pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 (the “PPA”), which
was permanently extended by the Multiemployer Pension Reform Act of 2014 (the “Reform Act”) included in the
Consolidated and Further Continuing Appropriations Act of 2015. Through the term of its current collective bargaining
agreement, ABF Freight’s contribution obligations generally will be satisfied by making the specified contributions when
due. However, the Company cannot determine with any certainty the contributions that will be required under future
collective bargaining agreements for ABF Freight’s contractual employees.
The PPA requires that “endangered” (generally less than 80% funded and commonly called “yellow zone”) plans adopt
“funding improvement plans” and that “critical” (generally less than 65% funded and commonly called “red zone”) plans
adopt “rehabilitation plans” that are intended to improve the plan’s funded status over time. The Reform Act includes
provisions to address the funding of multiemployer pension plans in “critical and declining” status, including certain of
those in which ABF Freight participates. Critical and declining status is applicable to critical status plans that are projected
to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next
19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s
funded percentage is less than 80%. Provisions of the Reform Act include, among others, providing qualifying plans the
ability to self-correct funding issues, subject to various requirements and restrictions, including applying to the U.S.
Department of Treasury (the “Treasury Department”) for the reduction of certain accrued benefits.
The American Rescue Plan Act of 2021 (the “American Rescue Plan Act”) includes the Butch Lewis Emergency Pension
Plan Relief Act of 2021 (the “Pension Relief Act”). The Pension Relief Act includes provisions to improve funding for
multiemployer pension plans, including financial assistance provided through the Pension Benefit Guarantee Corporation
(the “PBGC”) to qualifying underfunded plans to secure pension benefits for plan participants. Without the funding to be
provided by the Pension Relief Act, many of the multiemployer pension funds to which ABF Freight contributes could
become insolvent in the near future; however, ABF Freight would continue to be obligated to make contributions to those
funds under the terms of the 2023 ABF NMFA.
In July 2021, the PBGC announced an interim final rule implementing a Special Financial Assistance Program (the “SFA
Program”) to administer funds to severely underfunded eligible multiemployer pension plans under the Pension Relief
Act. Certain multiemployer pension plans to which ABF Freight contributes, including the Central States, Southeast and
Southwest Areas Pension Plan (the “Central States Pension Plan”) and the New England Teamsters Pension Fund, have
received funds under the SFA Program which could allow them to avoid insolvency and improve their funded status.
Under the American Rescue Plan Act and in accordance with regulations of the PBGC, the plans receiving funding under
the SFA Program are not permitted to reduce employer contributions to their funds. The Company will continue to evaluate
the impact of the assistance provided by the SFA Program on ABF Freight’s multiemployer pension plan contributions.
Through the term of the 2023 ABF NMFA, ABF Freight’s multiemployer pension contribution obligations generally will
be satisfied by making the specified contributions when due. Future contribution rates will be determined through the
negotiation process for contract periods following the term of the current collective bargaining agreement. While the
Company cannot determine with any certainty the contributions that will be required under future collective bargaining
agreements for ABF Freight’s contractual employees, management believes future contribution rates to multiemployer
pension plans may be less likely to increase as a result of the provisions of the Pension Relief Act.
Based on the most recent funding information the Company has received, approximately 4% of ABF Freight’s
multiemployer pension plan contributions for the year ended December 31, 2024 were made to plans that are in “critical
and declining status;” approximately 54% were made to plans that are in “critical status,” including the Central States
Pension Plan and New England Teamsters Pension Fund discussed below; and no contributions were made to plans that
are in “endangered status,” each as defined by the PPA. ABF Freight’s participation in multiemployer pension plans is
summarized in the table below. The multiemployer pension plans listed separately in the table represent plans that are
individually significant to the Asset-Based segment based on the amount of plan contributions. The Central States Pension
Plan and the New England Teamsters Pension Fund are the only funds individually listed in the table which received
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financial assistance from the SFA Program. The severity of a plan’s underfunded status considered in the analysis of
individually significant funds to be separately disclosed was after the financial assistance from the SFA Program.
Significant multiemployer pension funds and key participation information were as follows:
Pension
FIP/RP
Protection Act
Status
Contributions(d)
EIN/Pension
Zone Status(b)
Pending/
(in thousands)
Surcharge
Legal Name of Plan
Plan Number(a)
2024
2023
Implemented(c)
2024
2023
2022
Imposed(e)
Central States,
Southeast and
Southwest Areas
Pension Plan(1)(2)
36-6044243
Critical
Critical
Implemented(3) $ 75,004
$ 77,708
$ 75,306
No
Western Conference of
Teamsters Pension
Plan(1)(2)
91-6145047
Green
Green
No
27,701
29,540
28,051
No
Central Pennsylvania
Teamsters Defined
Benefit Plan(1)(2)
23-6262789
Green
Green
No
15,261
15,540
14,421
No
I. B. of T. Union Local
No. 710 Pension
Fund(4)(5)
36-2377656 Green(6)
Green(6)
No
11,560
10,676
9,838
No
New England
Teamsters Pension
Fund(7)(8)
04-6372430
Critical and
Declining(9)
Critical and
Declining(9) Implemented(10)
4,548
4,636
4,449
No
All other plans in the
aggregate
23,818
24,384
22,493
Total multiemployer
pension contributions
paid(11)
$ 157,892
$ 162,484
$ 154,558
Table Heading Definitions
(a)
The “EIN/Pension Plan Number” column provides the Federal Employer Identification Number (“EIN”) and the three-digit plan
number, if applicable.
(b)
Unless otherwise noted, the most recent PPA zone status available in 2024 and 2023 is for the plan’s year-end status at
December 31, 2023 and 2022, respectively, and prior to financial assistance from the Pension Relief Act. The zone status is based
on information received from the plan and was certified by the plan’s actuary. Green zone funds are those that are in neither
endangered, critical, or critical and declining status and generally have a funded percentage of at least 80%.
(c)
The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”),
if applicable, is pending or has been implemented.
(d)
Amounts reflect contributions made in the respective year and differ from amounts expensed during the year.
(e)
The surcharge column indicates if a surcharge was paid by ABF Freight to the plan.
Table Footnotes
(1)
ABF Freight System, Inc. was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years
ended December 31, 2023 and 2022.
(2)
Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500
filed for the plan years ended December 31, 2023 and 2022.
(3)
Adopted a rehabilitation plan effective March 25, 2008 as updated. Utilized amortization extension granted by the IRS effective
December 31, 2003.
(4)
The Company was listed by the plan as providing more than 5% of the total contributions to the plan for the plan year ended
January 31, 2024 and 2023.
(5)
Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500
filed for the plan years ended January 31, 2024 and 2023.
(6)
PPA zone status relates to plan years February 1, 2023 – January 31, 2024 and February 1, 2022 – January 31, 2023.
(7)
Contributions include $1.6 million each year for 2024, 2023, and 2022, related to the multiemployer pension fund withdrawal
liability. ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension
Fund was restructured under a transition agreement effective on August 1, 2018, which triggered a withdrawal liability settlement
94
to satisfy ABF Freight’s existing potential withdrawal liability obligation to the fund. ABF Freight recognized a one-time charge
of $37.9 million (pre-tax) to record the withdrawal liability in second quarter 2018; partially settled the withdrawal liability through
the initial lump sum cash payment of $15.1 million made in third quarter 2018; and will settle the remainder with monthly payments
over a remaining period of 17 years.
(8)
Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500
filed for the plan years ended September 30, 2023 and 2022.
(9)
PPA zone status relates to plan years October 1, 2023 – September 30, 2024 and October 1, 2022 – September 30, 2023.
(10) Adopted a rehabilitation plan effective January 1, 2009. The plan has been subsequently reviewed and restated effective
January 1, 2023. On November 19, 2024, the rehabilitation plan was amended and restated, setting contribution and benefit
structures that are intended to enable the fund to emerge from critical status, which took effect on January 1, 2025.
(11) Contribution levels can be impacted by several factors such as changes in business levels and the related time worked by contractual
employees, contractual rate increases for pension benefits, and the specific funding structure, which differs among funds. The
current and prior collective bargaining agreements and the related supplemental agreements provided for contributions to
multiemployer pension plans to be frozen at the current rates for each fund, although certain funds have imposed contribution
increases under their rehabilitation or funding improvement plans. The year-over-year changes in multiemployer pension plan
contributions presented above were influenced by changes in Asset-Based shipment levels.
For 2024, 2023, and 2022, approximately one-half of ABF Freight’s multiemployer pension contributions were made to
the Central States Pension Plan. The funded percentages of the Central States Pension Plan, as set forth in information
provided by the Central States Pension Plan, were 98.5%, and 14.5% as of January 1, 2023 and 2022, respectively. Despite
the funded percentage exceeding 80% as of January 1, 2023, the plan is deemed to be in critical status through 2051 due
to the receipt of funding from the SFA Program in January 2023. The plan announced that the SFA Program funding will
allow the Central States Pension Plan to avoid insolvency in 2025 and to reach full funding over time.
As of September 30, 2024 and 2023, the funded percentages of the New England Teamsters Pension Fund were less than
65%. In early 2023, the fund applied for the SFA program, which the PBGC approved during 2024; however, the plan is
deemed to be in critical status through 2051 due to the receipt of funding from the SFA Program in August 2024. The fund
announced that the SFA Program substantially improved the financial health and long-term viability of the fund.
The funding notices for the 2022 plan year for the Western Pennsylvania Teamsters and Employers Pension Fund, the
New York State Teamsters Conference Pension and Retirement Fund, and the Trucking Employees of North Jersey
Welfare Fund, Inc. – Pension Fund reflected the reinstatement of benefits previously suspended due to the significantly
improved status of each fund due to the funding provided by the SFA Program; however, these funds will be deemed to
be in critical status through the end of 2051. The Company also previously received notice that the PBGC will provide
financial assistance (by paying retiree benefits not to exceed the PBGC guarantee limits) to the Road Carriers Local 707
Pension Fund, which was declared insolvent; however, this fund received SFA Program funding during 2022.
Approximately 1% to 2% of ABF Freight’s total multiemployer pension contributions for the year ended
December 31, 2024 were made to each of these funds.
ABF Freight has not received any other notification of plan reorganization or plan insolvency with respect to any
multiemployer pension plan to which it contributes.
Health and Welfare Plans
ABF Freight contributes to 38 multiemployer health and welfare plans which provide health care benefits for active
employees and retirees covered under labor agreements. Contributions to multiemployer health and welfare plans totaled
$218.5 million, $215.6 million, and $194.4 million, for the year ended December 31, 2024, 2023, and 2022, respectively.
The benefit contribution rate for health and welfare benefits increased by an average of approximately 3.7% and 5.4% on
August 1, 2024 and 2023, respectively, under ABF Freight’s current collective bargaining agreement with IBT ratified in
2023 and 4.3% on August 1, 2022 under ABF Freight’s prior collective bargaining agreement with the IBT ratified in
2018.
Higher benefit contribution rates following the 2023 ABF NMFA ratification resulted in an increase in contributions to
health and welfare plans in 2024 and 2023, compared to their respective prior years. 2023 was also impacted by more
hours worked to maintain capacity in the first half of 2023 and to service higher business levels in the second half of 2023.
Other than changes to benefit contribution rates and variances in rates and time worked, there have been no other significant
items that affect the comparability of the Company’s 2024, 2023, and 2022 multiemployer health and welfare plan
contributions.
95
NOTE K – STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income
Components of accumulated other comprehensive income were as follows at December 31:
2024
2023
2022
(in thousands)
Pre-tax amounts:
Unrecognized net periodic benefit credit
$
5,660
$
6,816
$
9,287
Interest rate swap
—
1,710
3,526
Foreign currency translation
(5,323)
(2,709)
(3,247)
Total
$
337
$
5,817
$
9,566
After-tax amounts:
Unrecognized net periodic benefit credit
$
4,203
$
5,061
$
6,896
Interest rate swap
—
1,263
2,604
Foreign currency translation
(3,931)
(2,000)
(2,397)
Total
$
272
$
4,324
$
7,103
The following is a summary of the changes in accumulated other comprehensive income, net of tax, by component:
Unrecognized Interest
Foreign
Net Periodic
Rate
Currency
Total Benefit Credit Swap Translation
(in thousands)
Balances at December 31, 2022
$ 7,103
$
6,896
$ 2,604
$ (2,397)
Other comprehensive income (loss) before reclassifications
(1,791)
(847) (1,341)
397
Amounts reclassified from accumulated other comprehensive income
(988)
(988)
—
—
Net current-period other comprehensive income (loss)
(2,779)
(1,835) (1,341)
397
Balances at December 31, 2023
$ 4,324
$
5,061
$ 1,263
$ (2,000)
Other comprehensive loss before reclassifications
(3,310)
(116)
(1,263)
(1,931)
Amounts reclassified from accumulated other comprehensive income
(742)
(742)
—
—
Net current-period other comprehensive loss
(4,052)
(858)
(1,263)
(1,931)
Balances at December 31, 2024
$
272 $
4,203 $
— $ (3,931)
The following is a summary of the significant reclassifications out of accumulated other comprehensive income by
component for the years ended December 31:
Unrecognized Net Periodic
Benefit Credit
Year Ended December 31
2024
2023
(in thousands)
Amortization of net actuarial gain, pre-tax(1)
$
999 $
1,330
Tax expense
(257)
(342)
Total, net of tax
$
742 $
988
(1)
Included in the computation of net periodic benefit credit of the Company’s supplemental benefit plan (“SBP”) and postretirement
health benefit plan (see Note J).
96
Dividends on Common Stock
The following table is a summary of dividends declared during the applicable quarter:
2024
2023
Per Share Amount Per Share
Amount
(in thousands, except per share data)
First quarter
$
0.12 $
2,828 $
0.12
$
2,915
Second quarter
$
0.12 $
2,819 $
0.12
$
2,894
Third quarter
$
0.12 $
2,838 $
0.12
$
2,887
Fourth quarter
$
0.12 $
2,810 $
0.12
$
2,846
On January 28, 2025, the Company announced its Board of Directors declared a dividend of $0.12 per share to stockholders
of record as of February 11, 2025.
Treasury Stock
The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions
(the “share repurchase program”). The share repurchase program has no expiration date but may be terminated at any time
at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available
sources.
As of December 31, 2023, the Company had $33.5 million available for repurchases of its common stock under the share
repurchase program. In February 2024, the Board of Directors reauthorized the share repurchase program and increased
the total amount available for purchases of the Company’s common stock under the program to $125.0 million.
During 2024, the Company purchased 654,707 shares for an aggregate cost of $75.2 million, including 331,887 shares for
an aggregate cost of $37.7 million under Rule 10b5-1 plans, which allowed for stock repurchases during closed trading
windows. The Company had $56.6 million remaining under its share repurchase program as of December 31, 2024.
Treasury shares totaled 7,114,844 and 6,460,137 as of December 31, 2024 and 2023, respectively. Subsequent to
December 31, 2024, the Company settled repurchases of 136,936 shares for an aggregate cost of $12.9 million.
NOTE L – SHARE-BASED COMPENSATION
Stock Awards
The Company had outstanding RSUs granted under the ArcBest Corporation Ownership Incentive Plan (the “Ownership
Incentive Plan”) as of December 31, 2024 and 2023. The Ownership Incentive Plan provides for the granting of 4.9 million
shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock,
RSUs, or performance award units.
Restricted Stock Units
A summary of the Company’s RSU award program is presented below:
Weighted-Average
Grant Date
Units
Fair Value
Outstanding – January 1, 2024
725,433 $
48.94
Granted
101,238 $
115.85
Vested
(571,050) $
41.61
Forfeited(1)
(13,159) $
92.70
Outstanding – December 31, 2024
242,462 $
91.75
(1)
Forfeitures are recognized as they occur.
97
The Compensation Committee of the Company’s Board of Directors granted RSUs during the years ended December 31
as follows:
k
Weighted-Average
Grant Date
Units
Fair Value
2024
101,238 $
115.85
2023
149,350 $
86.53
2022
164,739 $
78.57
The fair value of restricted stock awards that vested in 2024, 2023, and 2022 was $67.5 million, $34.2 million, and
$48.1 million, respectively. Unrecognized compensation cost related to restricted stock awards outstanding as of
December 31, 2024 was $13.0 million, which is expected to be recognized over a weighted-average period of
approximately 1.6 years.
NOTE M – EARNINGS PER SHARE
The following table reflects the computation of basic and diluted earnings per common share for the years ended
December 31:
2024
2023
2022
(in thousands, except share and per share data)
Basic
Numerator:
Net income from continuing operations
$
173,361
$
142,164
$
294,648
Net income from discontinued operations
600
53,269
3,561
Net income
$
173,961
$
195,433
$
298,209
Denominator:
Weighted-average shares
23,553,410
24,018,801
24,585,205
Basic earnings per common share
Continuing operations
$
7.36
$
5.92
$
11.98
Discontinued operations
0.03
2.22
0.14
Total basic earnings per common share(1)
$
7.39
$
8.14
$
12.13
Diluted
Numerator:
Net income from continuing operations
$
173,361
$
142,164
$
294,648
Net income from discontinued operations
600
53,269
3,561
Net income
$
173,961
$
195,433
$
298,209
Denominator:
Weighted-average shares
23,553,410
24,018,801
24,585,205
Effect of dilutive securities
266,765
615,816
919,303
Adjusted weighted-average shares and assumed conversions
23,820,175
24,634,617
25,504,508
Diluted earnings per common share
Continuing operations
$
7.28
$
5.77
$
11.55
Discontinued operations
0.03
2.16
0.14
Total diluted earnings per common share(1)
$
7.30
$
7.93
$
11.69
(1)
Earnings per common share is calculated in total and may not equal the sum of earnings per common share from continuing
operations and discontinued operations due to rounding.
98
NOTE N – OPERATING SEGMENT DATA
The Company uses the “management approach” to determine its reportable operating segments, as well as to determine
the basis of reporting the operating segment information. Operating segments are defined as components of an entity for
which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate
resources to an individual segment and in assessing performance. The Company's Chief Executive Officer and Chairman
of the Board is the CODM who makes decisions about resources to be acquired, allocated and utilized in each operating
segment. The CODM uses revenues, operating expense categories, operating ratios, operating income (loss), and key
operating statistics to evaluate performance and allocate resources to the Company’s operations.
On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary and reportable operating segment of the
Company. Following the sale, FleetNet is reported as discontinued operations. As such, historical results of FleetNet have
been excluded from both continuing operations and segment results for all periods presented.
The Company’s reportable operating segments are as follows:
•
The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other
subsidiaries. The segment operations include national, inter-regional, and regional transportation of general
commodities through standard, expedited, and guaranteed LTL services. The Asset-Based segment provides
services to the Asset-Light segment, including freight transportation related to managed transportation solutions
and other services.
•
The Asset-Light segment includes the results of operations of the Company’s service offerings in truckload,
ground expedite, intermodal, household goods moving, managed transportation, warehousing and distribution,
and international freight transportation for air, ocean, and ground. The Asset-Light segment provides services to
the Asset-Based segment.
The Company’s other business activities and operations that are not reportable segments include ArcBest Corporation (the
parent holding company) and certain subsidiaries. Certain costs incurred by the parent holding company and the
Company’s shared services subsidiary are allocated to the reporting segments. The Company eliminates intercompany
transactions in consolidation. However, the information used by the CODM with respect to its reportable operating
segments is before intersegment eliminations of revenues and expenses.
Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing,
capacity sourcing functions, human resources, financial services, information technology, and other company-wide
services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.”
Included in unallocated costs are expenses related to investor relations, legal, the Company’s Board of Directors, and
certain technology investments. Shared services costs attributable to the reportable operating segments are predominantly
allocated based upon estimated and planned resource utilization‑related metrics such as estimated shipment levels or
number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or
appropriate to reflect fairly and equitably the actual incidence of cost incurred by the reportable operating segments.
Management believes the methods used to allocate expenses are reasonable.
Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided.
The Company’s foreign operations are not significant.
99
The following tables reflect reportable operating segment information from continuing operations for the years ended
December 31:
2024
2023
2022
(in thousands)
REVENUES
Asset-Based
$ 2,750,134
$ 2,871,004
$ 3,010,900
Asset-Light
1,552,936
1,680,645
2,139,272
Other and eliminations
(124,051)
(124,206)
(121,164)
Total consolidated revenues
$ 4,179,019
$ 4,427,443
$ 5,029,008
OPERATING EXPENSES
Asset-Based
Salaries, wages, and benefits
$ 1,387,491
$ 1,379,756
$ 1,293,487
Fuel, supplies, and expenses
316,526
361,355
378,558
Operating taxes and licenses
54,056
55,918
52,290
Insurance
72,610
52,025
47,382
Communications and utilities
19,336
19,288
18,949
Depreciation and amortization
110,021
104,165
97,322
Rents and purchased transportation
274,312
338,575
441,167
Shared services
270,182
279,248
281,698
(Gain) loss on sale of property and equipment and asset impairment charges(1)
(803)
982
(12,468)
Innovative technology costs(2)
—
21,711
27,207
Other
3,800
4,829
4,175
Total Asset-Based
2,507,531
2,617,852
2,629,767
Asset-Light
Purchased transportation
1,339,783
1,435,604
1,784,668
Salaries, wages, and benefits(3)
118,983
129,083
150,694
Supplies and expenses
10,232
12,094
13,955
Depreciation and amortization(4)
20,062
20,370
20,730
Shared services(3)
68,346
65,308
67,439
Contingent consideration(5)
(90,250)
(19,100)
18,300
Asset impairment charges(6)
1,700
14,407
—
Legal settlement(7)
274
9,500
—
Gain on sale of subsidiary(8)
—
—
(402)
Other(3)
25,362
25,650
31,163
Total Asset-Light
1,494,492
1,692,916
2,086,547
Other and eliminations
(67,438)
(55,944)
(81,832)
Total consolidated operating expenses
$ 3,934,585
$ 4,254,824
$ 4,634,482
(1)
For 2023, includes a $0.7 million noncash lease-related impairment charge for an Asset-Based service center. For 2022, includes
a $4.3 million noncash gain on a like-kind property exchange of a service center, with the remaining gains related primarily to sales
of replaced equipment.
(2)
Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause
the pilot during third quarter 2023.
(3)
For 2023, certain expenses have been reclassified to conform to the current year presentation, including amounts previously
reported in “Shared services” that were reclassified to present “Salaries, wages, and benefits” expenses in a separate line item.
Adjustments made are not material.
(4)
Includes amortization of intangibles associated with acquired businesses.
(5)
Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition (see Note C).
(6)
For 2024, represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth
quarter 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. For 2023, represents noncash lease-
related impairment charges for certain office spaces that were made available for sublease.
(7)
Represents settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act,
which were paid during first quarter 2025.
(8)
Represents the contingent amount recognized in second quarter 2022 when the funds from the gain on the sale of the labor services
portion of the Asset-Light segment’s moving business were released from escrow.
100
2024
2023
2022
(in thousands)
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS
Asset-Based
$ 242,603 $ 253,152 $ 381,133
Asset-Light(1)
58,444
(12,271)
52,725
Other and eliminations(2)
(56,613)
(68,262)
(39,332)
Total consolidated operating income
$ 244,434 $ 172,619 $ 394,526
OTHER INCOME (COSTS) FROM CONTINUING OPERATIONS
Interest and dividend income
$ 11,618
$ 14,728
$
3,873
Interest and other related financing costs
(8,980)
(9,094)
(7,726)
Other, net(3)
(28,358)
8,662
(2,370)
Total other income (costs)
(25,720)
14,296
(6,223)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
$ 218,714 $ 186,915 $ 388,303
(1)
Includes the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note C).
(2)
For 2023, “Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a freight handling pilot
facility.
(3)
Includes the components of net periodic benefit cost (credit) other than service cost related to the Company’s SBP and
postretirement plans (see Note J) and proceeds and changes in cash surrender value of life insurance policies. For 2024, includes a
$28.7 million noncash impairment charge to write off the Company’s equity investment in Phantom Auto, as previously discussed.
For 2023, includes a $3.7 million fair value increase related to the Company’s equity investment in Phantom Auto, based on an
observable price change during second quarter 2023 (see Note C).
The following table reflects information about revenues from customers and intersegment revenues for the years ended
December 31:
2024
2023
2022
(in thousands)
Revenues from customers
Asset-Based
$ 2,626,408
$ 2,749,803
$ 2,896,284
Asset-Light
1,547,627
1,673,399
2,128,394
Other
4,984
4,241
4,330
Total consolidated revenues
$ 4,179,019
$ 4,427,443
$ 5,029,008
Intersegment revenues
Asset-Based
$ 123,726
$ 121,201
$ 114,616
Asset-Light
5,309
7,246
10,878
Other and eliminations
(129,035)
(128,447)
(125,494)
Total intersegment revenues
$
—
$
—
$
—
Total segment revenues
Asset-Based
$ 2,750,134
$ 2,871,004
$ 3,010,900
Asset-Light
1,552,936
1,680,645
2,139,272
Other and eliminations
(124,051)
(124,206)
(121,164)
Total consolidated revenues
$ 4,179,019
$ 4,427,443
$ 5,029,008
101
The following table provides capital expenditure and depreciation and amortization information by reportable operating
segment from continuing operations for the years ended December 31:
2024
2023
2022
(in thousands)
CAPITAL EXPENDITURES, GROSS
Asset-Based(1)
$ 239,842
$ 207,072
$ 137,117
Asset-Light
3,062
7,587
14,372
Other and eliminations(2)(3)
60,913
37,752
77,720
$ 303,817
$ 252,411
$ 229,209
2024
2023
2022
(in thousands)
DEPRECIATION AND AMORTIZATION EXPENSE(2)
Asset-Based
$ 110,021
$ 104,165
$ 97,322
Asset-Light(4)
20,062
20,370
20,730
Other and eliminations(2)
19,004
20,814
20,107
$ 149,087
$ 145,349
$ 138,159
(1)
Includes assets acquired through notes payable of $80.7 million, $33.5 million, and $79.0 million in 2024, 2023, and 2022,
respectively.
(2)
Other and eliminations includes certain assets held for the benefit of multiple segments, including information systems equipment.
For 2022, also includes the purchase of a property for $37.5 million. Depreciation and amortization associated with these assets is
allocated to the reporting segments. Depreciation and amortization expense includes amortization of internally developed
capitalized software which has not been included in gross capital expenditures presented in the table.
(3)
Includes assets acquired through notes payable of $3.4 million in 2022.
(4)
Includes amortization of intangibles of $12.8 million, $12.8 million, and $12.9 million in 2024, 2023, and 2022, respectively.
A table of assets by reportable operating segment has not been presented as segment assets are not included in reports
regularly provided to the CODM nor does the CODM consider segment assets for assessing segment operating
performance or allocating resources.
The Company incurred research and development costs of $34.1 million, $52.4 million, and $40.8 million for the years
ended December 31, 2024, 2023, and 2022, respectively, related to innovative technology initiatives.
The following table presents operating expenses by category on a consolidated basis for the years ended December 31:
2024
2023
2022
(in thousands)
OPERATING EXPENSES
Salaries, wages, and benefits
$ 1,768,581 $ 1,781,304 $ 1,728,653
Rents, purchased transportation, and other costs of services
1,478,114 1,642,669 2,100,663
Fuel, supplies, and expenses
433,237
479,688
488,009
Depreciation and amortization(1)
149,087
145,349
138,159
Contingent consideration(2)
(90,250)
(19,100)
18,300
Asset impairment charges(3)
1,700
30,162
—
Other(4)
194,116
194,752
160,698
$ 3,934,585 $ 4,254,824 $ 4,634,482
(1)
Includes amortization of intangibles assets.
(2)
Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Notes C).
(3)
For 2024, represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth
quarter 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. For 2023, represents noncash lease-
related impairment charges for a freight handling pilot facility, a service center, and office spaces that were made available for
sublease.
(4)
For 2023, includes $9.5 million settlement expenses related to the classification of certain Asset-Light employees under the Fair
Labor Standards Act, which were paid during first quarter 2025. For 2022, includes a $12.5 million gain related to the sale of
property and equipment within the Asset-Based segment and the sale of replaced equipment and a like-kind exchange of a service
center property in the prior year. Includes innovative technology costs of $34.1 million, $52.4 million, and $40.8 million, for 2024,
2023, and 2022, respectively, associated with costs related to the Company’s customer pilot offering of VauxTM and initiatives to
102
optimize performance through technological innovation. For 2023 and 2022, innovative technology costs were also incurred
associated with the freight handling pilot program at ABF Freight, for which the decision was made to pause the pilot during third
quarter 2023.
NOTE O – LEGAL PROCEEDINGS AND OTHER EVENTS
The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains
liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured
retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal,
environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated
financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts
recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition,
results of operations, or cash flows.
Legal Proceedings
In January 2023, the Company and MoLo were named as defendants in lawsuits related to an auto accident which involved
a MoLo contract carrier. The accident occurred prior to the Company’s acquisition of MoLo on November 1, 2021. During
the second quarter 2024, the Company was released from this lawsuit, leaving MoLo as a named defendant. During the
fourth quarter of 2024, a settlement and release agreement was executed by MoLo and three respective insurers with
insurance policies responsible for settling the claim.
Other Events
The Company has received two Notices of Assessment from a state regarding ongoing sales and use tax audits alleging
uncollected sales and use tax, including interest and penalties, for the periods December 1, 2018 to March 31, 2021 and
September 1, 2016 to November 30, 2018. The Company does not agree with the basis of these assessments and filed
appeals for the assessments in October 2023 and May 2021 on the same legal basis. The Company has estimated the range
of loss to be from $0.2 million to $14.2 million. The Company has previously accrued $0.2 million related to these
assessments consistent with applicable accounting guidance, but if the state prevails in its position, the Company may owe
additional tax. Management does not believe the resolution of this matter will have a material adverse effect on the
Company’s financial condition, results of operations, or cash flows.
During fourth quarter 2024, the Company settled a claim for $9.8 million related to the classification of certain Asset-
Light employees under the Fair Labor Standards Act. The claim, which was paid in January 2025, had been tentatively
settled for approximately $9.5 million in 2023 with an additional $0.3 million recognized in 2024 upon final settlement.
The reserve for this claim was maintained within accrued expenses in the consolidated balance sheet as of
December 31, 2024 and 2023.
103
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
An evaluation was performed by the Company’s management, under the supervision and with the participation of the
Company’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation
of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2024. The Company’s disclosure
controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by the
Company in reports that the Company files under the Exchange Act is accumulated and communicated to the Company’s
management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange Commission. Based on such evaluation, the
Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure
controls and procedures were effective as of December 31, 2024 at the reasonable assurance level.
There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s assessment of internal control over financial reporting and the report of the independent registered public
accounting firm appear on the following pages.
104
MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL
OVER FINANCIAL REPORTING
Management of the Company is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal
control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. The Company’s internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and the Board of Directors of the
Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted its evaluation of the effectiveness of internal control over financial reporting based on the
framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework). This evaluation included review of the documentation of controls, evaluation
of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.
Although there are inherent limitations in the effectiveness of any system of internal control over financial reporting, based
on our evaluation, we have concluded that the Company’s internal control over financial reporting was effective as of
December 31, 2024.
The Company’s independent registered public accounting firm Ernst & Young LLP, who has also audited the Company’s
consolidated financial statements, has issued a report on the Company’s internal control over financial reporting. This
report appears on the following page.
105
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of ArcBest Corporation
Opinion on Internal Control Over Financial Reporting
We have audited ArcBest Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ArcBest Corporation (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on
the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related
consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in Part IV,
Index at Item 15(a)(2) and our report dated March 3, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Rogers, Arkansas
March 3, 2025
106
ITEM 9B.
OTHER INFORMATION
(a) None.
(b) During the three months ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule
16a-1(f) under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule
10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is contained in the Company’s Definitive Proxy Statement to be filed within 120 days
after December 31, 2024, pursuant to Regulation 14A of the Exchange Act in connection with the Company’s Annual
Stockholders’ Meeting to be held April 25, 2025, and is incorporated herein by reference.
ITEM 11.
EXECUTIVE COMPENSATION
The information required by this item is contained in the Company’s Definitive Proxy Statement to be filed within 120 days
after December 31, 2024, pursuant to Regulation 14A of the Exchange Act in connection with the Company’s Annual
Stockholders’ Meeting to be held April 25, 2025, and is incorporated herein by reference.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is contained in the Company’s Definitive Proxy Statement to be filed within 120 days
after December 31, 2024, pursuant to Regulation 14A of the Exchange Act in connection with the Company’s Annual
Stockholders’ Meeting to be held April 25, 2025, and is incorporated herein by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this item is contained in the Company’s Definitive Proxy Statement to be filed within 120 days
after December 31, 2024, pursuant to Regulation 14A of the Exchange Act in connection with the Company’s Annual
Stockholders’ Meeting to be held April 25, 2025, and is incorporated herein by reference.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is contained in the Company’s Definitive Proxy Statement to be filed within 120 days
after December 31, 2024, pursuant to Regulation 14A of the Exchange Act in connection with the Company’s Annual
Stockholders’ Meeting to be held April 25, 2025, and is incorporated herein by reference.
107
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1)
Financial Statements
A list of the financial statements filed as a part of this Annual Report on Form 10-K is set forth in Part II, Item 8 of this
Annual Report on Form 10-K and is incorporated by reference.
(a)(2)
Financial Statement Schedules
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
ARCBEST CORPORATION
Balances at
Additions
Balances at
Beginning of Charged to Costs
Charged to
End of
Description
Period
and Expenses Other Accounts Deductions Period
(in thousands)
Year Ended December 31, 2024
Deducted from asset accounts:
Allowance for credit losses and revenue adjustments $ 10,346 $
4,834
$
1,693 (b) $ 8,616 (c) $ 8,257
Allowance for other accounts receivable
$
731
$
(83)(d) $
— $
— $
648
Allowance for deferred tax assets
$
1,751
$
—
$
— $
20 (e) $ 1,731
Year Ended December 31, 2023(a)
Deducted from asset accounts:
Allowance for credit losses and revenue adjustments $ 13,892
$
3,633
$
3,512 (b) $ 10,691 (c) $ 10,346
Allowance for other accounts receivable
$
713
$
18 (d) $
— $
— $
731
Allowance for deferred tax assets
$
1,707
$
—
$
— $
(44)(e) $ 1,751
Year Ended December 31, 2022(a)
Deducted from asset accounts:
Allowance for credit losses and revenue adjustments $ 13,016
$
6,852
$
2,761 (b) $ 8,737 (c) $ 13,892
Allowance for other accounts receivable
$
690
$
23 (d) $
— $
— $
713
Allowance for deferred tax assets
$
2,196
$
—
$
— $
489 (e) $ 1,707
(a) Excludes the impact of FleetNet, which was sold on February 28, 2023 (see Note D to our consolidated financial statements
included in Part II, Item 8 of this Annual Report on Form 10-K).
(b) Change in allowance due to recoveries of amounts previously written off and revenue adjustments.
(c) Includes uncollectible accounts written off and revenue adjustments.
(d) Charged to workers’ compensation expense.
(e) Change in allowance due to changes in expectations of realization of certain federal and state net operating losses and federal and
state deferred tax assets.
108
(a)(3)
Exhibits
Exhibit
No.
2.1
Agreement and Plan of Merger, dated September 29, 2021, by and among the Company, Simba Sub, LLC,
MoLo Solutions, LLC and Andrew Silver and Matt Vogrich, in their capacity as Sellers’ Representatives
(previously filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Securities
and Exchange Commission (the “SEC”) on September 29, 2021, File No. 000-19969, and incorporated
herein by reference).
2.2
Consent and Amendment to the Agreement and Plan of Merger, dated October 25, 2021, by and among the
Company, Simba Sub, LLC, MoLo Solutions, LLC and Andrew Silver and Matt Vogrich, in their capacity
as Sellers’ Representatives. (previously filed as Exhibit 2.2 to the Company’s Annual Report on Form
10‑K, filed with the SEC on February 25, 2022, File No. 000-19969, and incorporated herein by reference).
2.3
Second Amendment to Agreement and Plan of Merger, dated March 31, 2022, by and among the Company
on behalf of itself and MoLo Solutions, LLC, and Andrew Silver and Matt Vogrich, in their capacity as
Sellers’ Representatives (previously filed as Exhibit 2.3 to the Company’s Quarterly Report on Form 10‑Q,
filed with the SEC on May 6, 2022, File No. 000-19969, and incorporated herein by reference).
2.4
Third Amendment to Agreement and Plan of Merger, dated May 6, 2022, by and among the Company on
behalf of itself and MoLo Solutions, LLC, and Andrew Silver and Matt Vogrich, in their capacity as Sellers’
Representatives (previously filed as Exhibit 2.4 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on August 5, 2022, File No. 000-19969, and incorporated herein by reference).
3.1
Third Amended and Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1
to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 3, 2024, File No. 000-19969,
and incorporated herein by reference).
3.2
Ninth Amended and Restated Bylaws of the Company, dated as of February 20, 2025 (previously filed as
Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 26, 2025, File
No. 000-19969, and incorporated herein by reference).
4.1*
Description of Common Stock.
10.1*
ABF National Master Freight Agreement, implemented on July 16, 2023 and effective through
June 30, 2028, among the International Brotherhood of Teamsters and ABF Freight System, Inc.
10.2
Withdrawal Agreement, executed on or about July 31, 2018, among ABF Freight System, Inc., Teamsters
Locals 170, 191, 251, 340, 404, 443, 493, 597, 633, 653, 671 and 677 affiliated with the International
Brotherhood of Teamsters, and the Trustees of the New England Teamsters and Trucking Industry Pension
Fund (previously filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K, filed with the SEC
on February 28, 2019, File No. 000-19969, and incorporated herein by reference).
10.3
Reentry Agreement, effective as of August 1, 2018, among ABF Freight System, Inc., Teamsters Locals
170, 191, 251, 340, 404, 443, 493, 597, 633, 653, 671 and 677 affiliated with the International Brotherhood
of Teamsters, and the Trustees of the New England Teamsters and Trucking Industry Pension Fund
(previously filed as Exhibit 10.4 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 28, 2019, File No 000-19969, and incorporated herein by reference).
10.4#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
awards after 2015) (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q,
filed with the SEC on May 9, 2016, File No. 000-19969, and incorporated herein by reference).
10.5#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature (for
2019 awards) (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on May 9, 2019, File No. 000-19969, and incorporated herein by reference).
10.6#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
2020 awards) (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on May 11, 2020, File No. 000-19969, and incorporated herein by reference).
10.7#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
2021 awards) (previously filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on May 7, 2021, File No. 000-19969, and incorporated herein by reference).
10.8#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
2022 awards) (previously filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on August 5, 2022, File No. 000-19969, and incorporated herein by reference).
109
10.9#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
2023 awards) (previously filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed
with the SEC on May 5, 2023, File No. 000-19969, and incorporated herein by reference).
10.10#
Form of Restricted Stock Unit Award Agreement (Non-Employee Directors – with deferral feature) (for
awards after 2023) (previously filed as Exhibit 10.11 to the Company’s Annual Report on Form 10-K, filed
with the SEC on February 23, 2024, File No. 000-19969, and incorporated herein by reference).
10.11#
Form of Restricted Stock Unit Award Agreement (Employees) (for 2022 awards) (previously filed as
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 5, 2022, File
No. 000-19969, and incorporated herein by reference).
10.12#
Form of Restricted Stock Unit Award Agreement (Employees) (for 2023 awards) (previously filed as
Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2023, File
No. 000-19969, and incorporated herein by reference).
10.13#
Form of Restricted Stock Unit Award Agreement (Employees) (for 2024 awards) (previously filed as
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 3, 2024, File
No. 000-19969, and incorporated herein by reference).
10.14#
Form of Indemnification Agreement by and between Arkansas Best Corporation and each of the members
of the Company’s Board of Directors (previously filed as Exhibit 10.3 to the Company’s Annual Report on
Form 10-K, filed with the SEC on February 24, 2010, File No. 000-19969, and incorporated herein by
reference).
10.15#
ArcBest Corporation Amended and Restated 2012 Change in Control Plan. (previously filed as Exhibit
10.15 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 25, 2022, File No.
000-19969, and incorporated herein by reference).
10.16#
First Amendment to the ArcBest Corporation Amended and Restated 2012 Change in Control Plan.
(previously filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed with the SEC on
February 24, 2023, File No. 000-19969, and incorporated herein by reference).
10.17#
Arkansas Best Corporation Supplemental Benefit Plan, Amended and Restated, effective August 1, 2009
(previously filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 24, 2010, File No. 000-19969, and incorporated herein by reference).
10.18#
Amendment One to the Arkansas Best Corporation Supplemental Benefit Plan, effective
December 31, 2009 (previously filed as Exhibit 10.18 to the Company’s Annual Report on Form 10-K,
filed with the SEC on February 24, 2010, File No. 000-19969, and incorporated herein by reference).
10.19#
Form of Amended and Restated Deferred Salary Agreement (previously filed as Exhibit 10.19 to the
Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2010, File No. 000-19969,
and incorporated herein by reference).
10.20#
ArcBest Corporation Voluntary Savings Plan, Amended and Restated Effective as of January 1, 2017
(previously filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 28, 2017, File No. 000-19969, and incorporated herein by reference).
10.21#
First Amendment to the ArcBest Corporation Voluntary Savings Plan, Amended and Restated effective as
of January 1, 2017 (previously filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed
with the SEC on February 28, 2019, File No. 000-19969, and incorporated herein by reference).
10.22#
Arkansas Best Corporation 2005 Ownership Incentive Plan (previously filed as Exhibit 10.4 to the
Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2011, File No. 000-19969,
and incorporated herein by reference).
10.23#
First Amendment to the Arkansas Best Corporation 2005 Ownership Incentive Plan (previously filed as
Exhibit 10.5 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2011,
File No. 000-19969, and incorporated herein by reference).
10.24#
Second Amendment to the Arkansas Best Corporation 2005 Ownership Incentive Plan (previously filed as
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 9, 2014, File
No. 000-19969, and incorporated herein by reference).
10.25#
Third Amendment to the Arkansas Best Corporation 2005 Ownership Incentive Plan (previously filed as
Exhibit 10.19 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2017,
File No. 000-19969, and incorporated herein by reference).
10.26#
Fourth Amendment to the ArcBest Corporation 2005 Ownership Incentive Plan (previously filed as
Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 28, 2019,
File No. 000-19969, and incorporated herein by reference).
110
10.27#
ArcBest Corporation Ownership Incentive Plan (previously filed as Exhibit 10.1 to the Company’s Current
Report on Form 8-K, filed with the SEC on May 6, 2019, File No. 000-19969, and incorporated herein by
reference).
10.28#
First Amendment to the ArcBest Corporation Ownership Incentive Plan (previously filed as Exhibit 10.1
to the Company’s Current Report on Form 8-K, filed with the SEC on May 7, 2020, File No. 000-19969,
and incorporated herein by reference).
10.29#
Second Amendment to the ArcBest Corporation Ownership Incentive Plan (previously filed as Exhibit 10.1
to the Company’s Current Report on Form 8-K, filed with the SEC on May 5, 2021, File No. 000-19969,
and incorporated herein by reference).
10.30#
Arkansas Best Corporation Executive Officer Annual Incentive Compensation Plan (previously filed as
Exhibit 10.6 to the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2011,
File No. 000-19969, and incorporated herein by reference).
10.31#
First Amendment to the ArcBest Corporation Executive Officer Annual Incentive Compensation Plan
(previously filed as Exhibit 10.7 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 23, 2011, File No. 000-19969, and incorporated herein by reference).
10.32#
Second Amendment to the ArcBest Corporation Executive Officer Annual Incentive Compensation Plan
(previously filed as Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 26, 2016, File No. 000-19969, and incorporated herein by reference).
10.33#
Third Amendment to the ArcBest Corporation Executive Officer Incentive Compensation Plan (previously
filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 9, 2016,
File No. 000-19969, and incorporated herein by reference).
10.34#
The ArcBest Long-Term (3-Year) Incentive Compensation Plan and form of award (previously filed as
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 6, 2022, File
No. 000-19969, and incorporated herein by reference).
10.35#
The ArcBest 16b Annual Incentive Compensation Plan and form of award (previously filed as Exhibit 10.1
to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2023, File No. 000-19969,
and incorporated herein by reference).
10.36#
The ArcBest Long-Term (3-Year) Incentive Compensation Plan and form of award (previously filed as
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 5, 2023, File
No. 000-19969, and incorporated herein by reference).
10.37#
The ArcBest Section 16 Officer Annual Incentive Compensation Plan and form of award (previously filed
as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 3, 2024, File
No. 000-19969, and incorporated herein by reference).
10.38#
The ArcBest Long-Term (3-Year) Incentive Compensation Plan and form of award (previously filed as
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 3, 2024, File
No. 000-19969, and incorporated herein by reference).
10.39#
Form of Consulting Agreement by and between ArcBest Corporation and Michael E. Newcity (previously
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 4,
2024, File No. 000-19969, and incorporated herein by reference).
10.40
Third Amended and Restated Receivables Loan Agreement, dated as of June 9, 2021, by and among
ArcBest Funding LLC, as Borrower, ArcBest II, Inc., as Servicer, the financial institutions party thereto
from time to time, as Lenders, the financial institutions party thereto from time to time, as Facility Agents,
and The Toronto-Dominion Bank, as LC Issuer and Administrative Agent (previously filed as Exhibit 10.1
to the Company’s Current Report on Form 8-K, filed with the SEC on June 15, 2021, File No. 000-19969,
and incorporated herein by reference).
10.41
First Amendment to Third Amended and Restated Receivables Loan Agreement, dated as of December 2,
2021, by and among ArcBest Funding LLC, as Borrower, ArcBest II, Inc., as Servicer, the financial
institutions party thereto from time to time, as Lenders, the financial institutions party thereto from time to
time, as Facility Agents, and The Toronto-Dominion Bank, as LC Issuer and Administrative Agent
(previously filed as Exhibit 10.39 to the Company’s Annual Report on Form 10-K, filed with the SEC on
February 25, 2022, File No. 000-19969, and incorporated herein by reference).
111
10.42
Second Amendment to Third Amended and Restated Receivables Loan Agreement, dated as of
May 13, 2022, by and among ArcBest Funding LLC, as Borrower, ArcBest II, Inc., as Servicer, the
financial institutions party thereto from time to time, as Lenders, the financial institutions party thereto
from time to time, as Facility Agents, and The Toronto-Dominion Bank, as LC Issuer and Administrative
Agent (previously filed as Exhibit 10.1 to the Company’s current Report on Form 8-K, filed with the SEC
on May 17, 2022, File No. 000-19969, and incorporated herein by reference).
10.43
Third Amendment to Third Amended and Restated Receivables Loan Agreement dated as of June 12, 2024,
by and among ArcBest Funding LLC, as Borrower, ArcBest II, Inc., as Servicer, the financial institutions
party thereto from time to time, as Lenders, the financial institutions party thereto from time to time, as
Facility Agents, and The Toronto-Dominion Bank, as LC Issuer and Administrative Agent (previously filed
as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 14, 2024, File
No. 000-19969, and incorporated herein by reference).
10.44
Fourth Amended and Restated Credit Agreement, dated as of October 7, 2022, among ArcBest Corporation
and certain of its subsidiaries party thereto from time to time, as borrowers, U.S. Bank National
Association, as a LC issuer, swing line lender and Administrative Agent, and the lenders and issuing banks
party thereto (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with
the SEC on October 11, 2022, File No. 000-19969, and incorporated herein by reference).
19*
Insider Trading Policy.
21*
List of Subsidiary Corporations.
23*
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
31.1*
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities
Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**
Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97#
ArcBest Recoupment of Incentive Compensation Policy (previously filed as Exhibit 97 to the Company’s
Annual Report on Form 10-K, filed with the SEC on February 23, 2024, File No. 000-19969, and
incorporated herein by reference).
101.INS*
XBRL Instance Document – the instance document does not appear in the Interactive Data Files because
its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
The Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL
document.
#
Designates a compensation plan or arrangement for directors or executive officers.
*
Filed herewith.
**
Furnished herewith.
(b)
Exhibits
See Item 15(a)(3) above.
ITEM 16.
FORM 10-K SUMMARY
None.
112
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARCBEST CORPORATION
Date: March 3, 2025
By: /s/ Judy R. McReynolds
Judy R. McReynolds
Chairman and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Judy R. McReynolds
Chairman and Chief Executive Officer
March 3, 2025
Judy R. McReynolds
(Principal Executive Officer)
/s/ J. Matthew Beasley
Chief Financial Officer (Principal Financial Officer)
March 3, 2025
J. Matthew Beasley
/s/ Jason T. Parks
Vice President – Controller and Chief Accounting
March 3, 2025
Jason T. Parks
Officer (Principal Accounting Officer)
/s/ Salvatore A. Abbate
Director
March 3, 2025
Salvatore A. Abbate
/s/ Eduardo F. Conrado
Director
March 3, 2025
Eduardo F. Conrado
/s/ Fredrik J. Eliasson
Director
March 3, 2025
Fredrik J. Eliasson
/s/ Michael P. Hogan
Director
March 3, 2025
Michael P. Hogan
/s/ Kathleen D. McElligott
Director
March 3, 2025
Kathleen D. McElligott
/s/ Craig E. Philip
Director
March 3, 2025
Craig E. Philip
/s/ Steven L. Spinner
Director
March 3, 2025
Steven L. Spinner
/s/ Janice E. Stipp
Director
March 3, 2025
Janice E. Stipp
ArcBest Executive Officers
Judy R. McReynolds
Chairman & Chief Executive Officer
Seth K. Runser
President
Christopher A. Adkins
Chief Strategy Officer
Dennis L. Anderson II
Chief Innovation Officer
J. Matthew Beasley
Chief Financial Officer
Erin K. Gattis
Chief Human Resources Officer
Matthew R. Godfrey
ABF Freight President
Michael R. Johns
Chief Legal Officer &
Corporate Secretary
Steven C. Leonard
Chief Operating Officer,
Asset-Light Logistics
R. Edward Sorg
Chief Commercial Officer
ArcBest Corporation - Consolidated
Reconciliation of GAAP to Non-GAAP Financial Measures
Operating Income from Continuing Operations
Amounts on GAAP basis
$ 244,434
$ 172,619
Innovative technology costs, pre-tax(1)
34,081
52,363
Purchase accounting amortization, pre-tax(2)
12,768
12,768
Change in fair value of contingent consideration, pre-tax(3)
(90,250) (19,100)
Asset impairment charges, pre-tax(4)
1,700 30,162
Legal settlement, pre-tax(5)
274
9,500
Non-GAAP amounts
$ 203,007
$ 258,312
Diluted Earnings Per Share from Continuing Operations
Amounts on GAAP basis
$ 7.28
$ 5.77
Innovative technology costs, after-tax (includes related financing costs)(1)
1.10
1.61
Purchase accounting amortization, after-tax(2)
0. 40
0.39
Change in fair value of contingent consideration, after-tax(3)
( 2.85)
(0.58)
Asset impairment charges, after-tax(4)
0.05
0.92
Legal settlement, after-tax(5)
0.01 0.29
Change in fair value of equity investment, after-tax(6)
0.91 (0.11)
Life insurance proceeds and changes in cash surrender value
(0.14) (0.19)
Tax benefit from vested RSUs(7) (0.47) (0.21)
Non-GAAP amounts(8)
$
6.28
$
7.88
ArcBest Board of Directors
Judy R. McReynolds
Chairman & Chief Executive Officer
Salvatore A. Abbate 2,3
Eduardo F. Conrado 2,3-Chair
Fredrik J. Eliasson
Michael P. Hogan 2,3
Kathleen D. McElligott 2-Chair,3
Dr. Craig E. Philip 1
Steven L. Spinner 1
Lead Independent Director - ArcBest
Janice E. Stipp 1-Chair
ArcBest Board Committees
1 Audit Committee
2 Compensation Committee
3 Nominating/Corporate Governance
Committee
For biographies of ArcBest’s executive officers
and directors, which include information
regarding their principal occupation, see the
“Executive Officers of the Company” and
“Election of Directors” sections of the 2025 Proxy
Statement & Notice of Annual Meeting.
Shareholder Information
Corporate Headquarters
ArcBest
8401 McClure Drive
Fort Smith, AR 72916
(479) 785-6000
arcb.com
invrel@arcb.com
Annual Meeting
The Annual Meeting of Stockholders will be held at
7:30 a.m. CDT on Friday, April 25, 2025. The Annual
Meeting will be held in-person at ArcBest’s Corporate
Headquarters.
Stock Listing
The Nasdaq Global Select Market
Symbol: ARCB
Transfer Agent and Registrar
Equiniti Trust Company
Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100
(800) 468-9716
shareowneronline.com
2024 2023
($ thousands, except per share data)
1) Represents costs related to our customer pilot offering of Vaux and initiatives to optimize our performance through technological innovation. The 2023 period also includes costs associated with the freight handling pilot test
program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.
2) Represents the amortization of acquired intangible assets in the Asset-Light segment.
3) Represents change in fair value of the contingent earnout consideration recorded for the MoLo acquisition.
4) The 2024 period represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth quarter 2024 as part of a strategic decision to adjust capacity within Asset-Light’s
operations. The 2023 period represents noncash lease-related impairment charges for a freight handling pilot facility, an Asset-Based service center, and Asset-Light office spaces that were made available for sublease.
5) Represents settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act, which were paid during first quarter 2025.
6) The 2024 period represents a noncash impairment charge to write off an equity investment in Phantom Auto, a provider of human-centered remote operation software, which ceased operations during first quarter 2024.
The 2023 period represents the increase in fair value of an investment in Phantom Auto based on observable price changes during second quarter 2023.
7) Represents recognition of the tax impact for the vesting of share-based compensation.
8) Non-GAAP amounts are calculated in total and may not equal the sum of the GAAP amounts and the non-GAAP adjustments due to rounding.
arcb.com
8401 McClure Drive
Fort Smith, AR 72916