10q10k10q10k.net

What changed in ARCBEST CORP /DE/'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of ARCBEST CORP /DE/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+507 added−548 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-23)

Top changes in ARCBEST CORP /DE/'s 2024 10-K

507 paragraphs added · 548 removed · 413 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

104 edited+38 added−48 removed50 unchanged
Biggest changeThis initiative connects first-term regular Army and Army Reserve soldiers to the civilian workforce by providing two guaranteed job interviews and possible employment after their service in the Army. ​ Asset-Light Segment Asset-Light received the following recognitions since 2022: ● “2023 leading third-party logistics provider” by Global Trade Magazine in their Leading 3PLs List for the second consecutive year; ● “Top Freight Brokerage Firms” in Transport Topics for 2023, marking its ninth consecutive year to be listed; ● MoLo was honored in January 2024, for the fourth consecutive year, as part of Built In’s “2024 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 was named a “2023 Top Food Chain Provider” by Food Shippers of America; ● MoLo was named by Financial Times to the “America’s Fastest Growing Companies” list for 2022; ● 2023 and 2022 EPA SmartWay Transport Partners recognition for Panther and recognition for MoLo in 2022; and ● Three “Quest for Quality” awards by Logistics Magazine in the categories of 3PL Transportation Management, Household Goods and High Value Goods, and Intermodal Marketing Companies in 2023, marking the eighth time Panther has been recognized and the fourth time U-Pack has been honored with “Quest for Quality” awards. ​ 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.
Biggest changeOur 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;” ● 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; 17 Table of Contents ● 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.
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. 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).
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.
A material increase in the frequency or severity of accidents, cargo claims, or workers’ compensation claims or the material 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.
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.
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 from the United States for international transportation, pursuant to federal operating authority granted by the U.S. Department of Transportation (the “DOT”) and the U.S.
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.
As previously described in the “Asset-Based Segment” within this Business section, as of December 2023, 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.
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.
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 the best price on each shipment by leveraging available capacity within the ABF Freight network at the time of the quote.
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.
In our dock operations, we utilize forklifts with engines powered by liquefied petroleum gas (LPG), which the EPA recognizes as a clean, alternative fuel, and have invested in a small number of electric forklifts, electric yard tractors, and electric Class 6 straight trucks to replace diesel-burning 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.
As of December 2023, 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.
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.
The Annual Report on Form 10-K and other information may also be obtained without charge in writing to ArcBest Corporation, Attention: Investor Relations, 8401 McClure Drive, Fort Smith, AR 72916; or by telephone at 479-785-6000.
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 Asset-Light segment includes the ground expedite services of Panther; our truckload and dedicated 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.
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.
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 and unique shipping requirements customers encounter.
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.
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. ​ 16 Table of Contents Other Intellectual Property Additionally, our business and operations utilize and depend upon both internally developed and purchased technology.
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.
ABF Freight offers interstate and intrastate services to approximately 51,000 communities in all 50 states, Canada, and Puerto Rico through 240 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.
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.
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 29,000 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 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.
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 2024 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.
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.
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 12 Table of Contents (“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.
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.
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 ELD 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.
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.
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 and Investor Relations pages). ​ ​
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). ​ ​
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. ​ 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.
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. ​ 8 Table of Contents 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.
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 with established accounts and without negotiated published rates to obtain competitive LTL rates for their shipping needs with ABF Freight’s reliable service and capacity options through a dynamic pricing option.
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.
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 Social and Environmental Responsibility We are focused on understanding the potential impact and related risks of environmental and social issues on our business and the impact of our operations on the environment.
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.
Note O 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, 2023, 2022, and 2021. ​ 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.
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.
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. ​ 9 Table of Contents Industry Factors According to management’s estimates, and market studies by Armstrong & Associates, Inc. and the U.S.
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.
In the Asset-Light segment, the 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.
In the Asset‑Light segment, the 10 Table of Contents 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.
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 19 Table of Contents is electronically filed with, or furnished to, 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.
See Note K to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more specific disclosures regarding 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.
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 6 Table of Contents 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.
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. ​ 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 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. 13 Table of Contents ​ 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.
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 8 Table of Contents Freight Line, Inc.; Saia, Inc.; the U.S. LTL operating segment of TFI International Inc.; and the North American LTL segment of XPO, Inc.
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.
The 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.
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 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.
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.
Department of Commerce during 2023, the total market potential in the industry segments we serve is approximately $494 billion. The LTL industry has significant barriers to entry and is highly competitive, as previously discussed in “Asset-Based Segment” within this Business section.
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.
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. ​ ​ 14 Table of Contents Human Capital Resources ​ Our people are at the heart of our success, and we provide a workplace that respects all cultures, perspectives, and experiences, so that we can provide the best atmosphere for our employees and the best service to our customers.
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.
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 48.1% of Asset-Based revenues for 2023, are the largest component of the segment’s operating expenses.
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.
Similarly, the EPA proposed more ambitious emissions reduction standards for light- and medium-duty vehicles starting with model year 2027 in April 2023. ​ 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.
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.
ABF Freight is a nine-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.
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.
Our Neurodivergent Project Team has helped develop our neuroinclusive strategy by raising awareness, 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.
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.
Through partnerships with 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. ​ Brands The value of our brands is critical to our success.
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.
As a result, our customers can provide shipping information and support directly to their own customers. ​ 11 Table of Contents ArcBest has an Innovation Ambassador Program to encourage new, transformative ideas.
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.
Inclement weather conditions can adversely affect freight shipments and operating costs of our Asset-Based and Asset-Light segments.
Inclement weather conditions can adversely 9 Table of Contents affect freight shipments and operating costs of our Asset-Based and Asset-Light segments.
Additionally, in 2022, our Asset-Light segment began leasing 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.
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.
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 and Dedicated Our truckload and dedicated services provide third-party transportation brokerage services by sourcing various capacity solutions, including dry van over-the-road, temperature-controlled and refrigerated, flatbed, intermodal or container 7 Table of Contents shipping, and specialized equipment, coupled with an owned fleet of trailers, strong technology, and carrier- and customer-based Web tools.
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.
For the year ended December 31, 2023, no single customer accounted for more than 4% of revenues in the Asset-Based segment, and the segment’s ten largest customers, on a combined basis, accounted for approximately 14% of its revenues.
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.
In August 2021, the EPA announced the “Clean Truck Plan,” a series of rulemakings over the next three years, the first of which was proposed in March 2022, to set new emissions standards to reduce nitrogen oxide emissions from heavy-duty vehicles beginning with model year 2027.
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.
For the year ended December 31, 2023, no single customer accounted for more than 2% of the Asset-Light segment’s revenues, and the segment’s ten largest customers, on a combined basis, accounted for approximately 13% of its revenues.
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.
In addition, disruptions from unexpected events such as natural disasters, geopolitical conflicts and, in prior years, the COVID-19 pandemic have resulted in further utilization of expedited shipping and premium logistics services and have caused 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.
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.
Other carriers would be similarly affected by changes in industry regulations; therefore, the impact of such changes on our competitive position cannot be determined. ​ 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.
Other carriers would be similarly affected by changes in industry regulations. 11 Table of Contents ​ 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.
In April 2023, the EPA announced a proposal 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.
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.
Hunt Transport Services, Inc.; the Logistics segment of Knight-Swift Transportation Holdings Inc.; Landstar System, Inc.; the Truckload Brokerage service offering of RXO, Inc.; and the Freight segment of Uber Technologies, Inc. ArcBest’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.
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.
In celebration of our 100th anniversary, we committed to $1 million in centennial giving during 2023 to organizations that align with our philanthropic pillars. In our corporate headquarters’ local community, we have long supported the United Way of Fort Smith Area and its partner organizations.
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 2023, we announced the launch of ArcBest’s Employee Dependent Scholarship Program with initial scholarships to be awarded in 2024. ​ We utilize a customized performance management system that incorporates goals and development planning to better position employees in their career paths. Employees participate in annual career conversations with their direct supervisor.
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.
The passage of the Inflation Reduction Act of 2022 in August 2022 also seeks to update GHG standards. ​ 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 passage of these additional rulemakings 12 Table of Contents 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.
Our Asset-Light market share represents a small portion of the total market, which evidences the significant growth opportunity for us in this segment, a growth position already strengthened with the addition of MoLo in November 2021.
Our Asset-Light market share represents a small portion of the total market, which evidences the significant growth opportunity for us in this segment.
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.
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.
As of December 2023, we had 15,000 employees, of which approximately 56% were members of labor unions.
As of December 2024, we had 14,000 employees, of which approximately 57% were members of labor unions.
We strive to help customers solve their logistics challenges by efficiently providing a best-in-class experience with easy access to our integrated solutions. ​ 5 Table of Contents For the year ended December 31, 2023, no single customer accounted for more than 2% of our consolidated revenues, and the ten largest customers, on a combined basis, accounted for approximately 11% of our consolidated revenues.
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. ​ 4 Table of Contents 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.
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 the 3% maximum bonus amount provided in the prior 2018 ABF NMFA as a result of the operating ratio achieved in 2022, representing payment of the bonus in all four eligible years under the prior labor contract. ​ 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. 6 Table of Contents 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.
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.
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.
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.
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 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 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.
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. ​ 7 Table of Contents 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.
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 through numerous means of communication (e.g., mobile apps, satellite tracking, electronic logging device (“ELD”), and other communication units on the vehicles) to continually update the position of equipment to meet customers’ requirements to track the status of the shipment from origin to delivery.
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.
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.
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.
In 2023, with employee support, we again earned the United Way’s Pacesetter award by setting the standard for leadership and community support, along with the Chairman’s Award and the Outstanding Achievement award for 2022-2023 campaign efforts.
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.
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.
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.
We then have 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. We also offer a tuition reimbursement program, and we partner with a private university to provide onsite and virtual classes for employees to further their education.
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 January 2024, three ABF Freight drivers 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. ​ During 2023, ABF Freight partnered with the IBT and the U.S.
In January 2024, three ABF Freight drivers 15 Table of Contents 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 have voluntarily published an annual report over the last four years that details our responsible business focal points, including DEI efforts, sustainability approaches, investments in operational efficiencies and innovation, safety standards, and community-based partnerships.
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.
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. Additionally, during 2023, ArcBest Technologies sponsored its fourth annual Imagine competition, allowing teams to collaborate and work on innovative ideas related to technology and business systems innovation.
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.
ArcBest, ABF Freight, Panther, and MoLo participate 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. ABF Freight has also participated in opportunities to address environmental issues in association with the Sustainability Task Force of the American Trucking Associations.
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.
Note O 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, 2023, 2022, and 2021. ​ Our Asset-Based carrier, ABF Freight, has been in continuous service since 1923.
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. ​ 5 Table of Contents 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.
Our technology and innovations team, ArcBest Technologies, 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 in the Business Description section 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. ​ On February 28, 2023, we sold FleetNet America, Inc.
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.
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.
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.
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, 2023, 2022, and 2021. ​ Technology ​ As a multibillion-dollar integrated logistics company focused on making it easier for our customers to do business, ArcBest is building the future of logistics.
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.
We support our employees by providing an exceptional 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. ​ In 2023, we launched our ArcBest Values in Practice (“VIP”) awards, which aim to recognize teams that embody ArcBest’s core values in ways that positively impact our customers and each other.
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.
In pursuit of our mission to connect and positively impact the world through solving logistics challenges, and aligned with our values-driven culture, we are also focused on conducting business in a way that helps create a safer, more sustainable, and inclusive company and world. ​ United as ArcBest, we offer 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 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”).
ABF Freight has internally developed an environmental stormwater management strategy, including the delineation of roles and responsibilities for stormwater maintenance and compliance; developing procedures for tracking the permit process, including comprehensive employee training; implementing standard operating procedures; ensuring contractor awareness of stormwater laws; and tracking facility-specific corrective actions throughout the term of the Consent Decree. ​ 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.
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.
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. ​ 15 Table of Contents In October 2022, we announced our partnership with Integrate Autism Employment Advisors (“Integrate”), a non-profit organization that collaborates with companies to identify, recruit, and retain professionals on the autism spectrum, to foster a neuro-inclusive workforce and continue attracting the best talent with unique skill sets.
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.
At the present time, management believes that these regulations could result in significant net additional overall costs should the technologies developed for tractors, as required in the EPA/NHTSA Phase 2 rulemaking, prove not to be as cost-effective as forecasted by the EPA and the NHTSA. ​ 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 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.
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.
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 research and pursue more sustainable equipment, including replacing aging equipment models with clean, fuel-efficient equipment.
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.
For many years, our Asset-Based segment has voluntarily limited the maximum speed of its trucks, thereby reducing fuel consumption and emissions and contributing to ABF Freight’s excellent safety record.
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.
Through our truckload and dedicated services, we offer a growing network of more than 105,000 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. ​ Expedite Leveraging our best-in-class Panther fleet, we offer expedite freight transportation services to commercial and government customers.
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.

… 110 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

100 edited+11 added−10 removed75 unchanged
Biggest changeThe success of our approach to technology innovation depends on market acceptance of our solutions and a number of 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. ​ 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, or if any enhanced or new technology does not yield the results we expect, or is developed by others, we may be placed at a competitive disadvantage; lose customers; 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. ​ Although we do not have a significant customer concentration, the growth of our business could be materially impacted and our results of operations and cash flows would be adversely affected if we were to lose all or a portion of the business of some of our large customers.
Biggest changeIf 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.
ITEM 1A. RISK FACTOR S ​ Our business is subject to a variety of material risks about which we are aware. We could also be affected by additional risks and uncertainties not currently known to us or that we currently deem to be immaterial.
ITEM 1A. RISK FACTOR S ​ 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.
A reduction in our customer base or difficulty in collecting, or the inability to collect, payments from our customers due to changes in pricing, 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.
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.
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 the results of operations of our Asset-Light segment. ​ 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.
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.
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.
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.
In addition, third-party providers can be expected to increase their prices based on market conditions or to cover increases in operating expenses.
In addition, third-party providers can be expected to increase their prices based on market conditions or to cover increases in their operating expenses.
We are subject to market risk due to variable interest rates on our borrowings on the 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”).
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”).
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 K to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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.
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, our borrowings under such facilities could be immediately declared due and payable.
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.
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 K 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.
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.
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; 23 Table of Contents ● 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.
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.
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. ​ 28 Table of Contents 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.
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.
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. ​ 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.
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. ​ 26 Table of Contents 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.
This Risk Factors section discusses the material risks relating to our business activities, including business risks affecting the transportation industry and our Company that are largely out of our control.
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.
Our annual impairment evaluations for goodwill and indefinite-lived intangible assets in 2023, 2022, and 2021 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.
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.
However, we cannot ensure that controls identified 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. ​ 21 Table of Contents 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.
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.
See Note I 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 covenants and other customary restrictive covenants that may limit our future operations.
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.
See Note C and 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 lease-related impairment charges. ​ Our goodwill and intangible assets are primarily associated with acquisitions in the Asset-Light segment.
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.
Supply chain disruptions have and may continue to have a significant impact on consumer prices, demand, and 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.
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.
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, results of operations, financial condition, and cash flows. ​ 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.
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.
As market capacity tightens, customer demand may exceed available carrier capacity in the industry as experienced through the second half of 2022. ● 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.
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 customers select 25 Table of Contents 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.
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.
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, and there can be no assurance that any given network change will result in a material 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.
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.
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. ​ 30 Table of Contents Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties.
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.
We expect our customers will continue to demand more sophisticated technology-driven solutions from their suppliers, including advancements in processes, equipment, and facilities to address concerns over business efficiency, supply chain effectiveness, and climate change.
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.
Although third-party service providers 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.
Although third-party service providers 27 Table of Contents 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.
Interest rates are highly sensitive to many factors, including inflation, governmental monetary 31 Table of Contents 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.
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.
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 earnings. ​ 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.
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.
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. ​ Risks Related to Financial Considerations ​ We are subject to interest rate risk and certain covenants under our financing arrangements.
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. ​ 28 Table of Contents Risks Related to Financial Considerations ​ We are subject to interest rate risk and certain covenants under our financing arrangements.
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 and testing provisions.
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.
Although we have business continuity plans in place, there is no guarantee that our plans have adequately addressed each known risk or every possible risk and can be successfully or timely implemented.
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.
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, for loss or damage to our customers’ goods or other damages for which we are alleged or may be determined to be responsible.
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 29 Table of Contents damage to our customers’ goods or other damages for which we are alleged or may be determined to be responsible.
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 32 Table of Contents insurance coverage.
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.
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. ​ ​ 34 Table of Contents
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. ​ ​
Some or all of our expenditures to defend, settle, or litigate these matters may not be covered by 29 Table of Contents insurance or could impact our cost of, and ability to obtain, insurance in the future. Also, litigation can be disruptive to normal business operations and could require a substantial amount of time and effort from our management team.
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.
However, despite such legislative actions, we may still trigger withdrawal liability through, among other things, mergers and other fundamental corporate transactions and, as a result of operational changes, site closures and job losses.
However, despite such legislative actions, we may still trigger withdrawal liability through, 25 Table of Contents 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 increased costs or disruption of these services, and claims arising from these services, could adversely affect our business, results of operations, financial condition, cash flows, and customer relationships. ​ A reduction in the availability of rail services or services provided by third-party capacity providers to meet customer requirements, 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.
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.
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 33 Table of Contents American economy, and capacity in the trucking industry as well as our customers’ inventory levels and freight profile characteristics.
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.
Customers encountering adverse economic 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.
Customers encountering adverse economic 31 Table of Contents 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 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. ​ The driver fleet for portions of our Asset-Light segment is made up of independent owner-operators and individuals.
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 compete with LTL carriers of varying sizes, including both union and nonunion LTL carriers and, to a lesser extent, with truckload carriers and railroads.
We compete with union and nonunion LTL carriers of varying sizes and, to a lesser extent, with truckload carriers and railroads.
It is more difficult to match our staffing levels and purchased transportation resources to our business needs in periods of rapid or unexpected change, which we have experienced in recent years. 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.
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.
New entrants to the market, including start-ups and emerging business models which are often technology-centric or technology-enabled, have also expanded the field of competition and driven an 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.
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.
In connection with these operations, we are subject to federal, state and local environmental laws and regulations relating to, among other areas: emission controls, transportation of hazardous materials, underground and aboveground storage tanks, stormwater pollution prevention, contingency planning for spills of petroleum products, and disposal of waste oil.
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.
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 operational efficiency and that of our third-party capacity providers, as well as our customers’ demand for our services.
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.
If we are unable to successfully adapt and implement appropriate measures in response to these changes, our operating results could be adversely affected. ​ 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, 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 and significant weather events, in addition to increased costs of materials and labor, above normal inflation levels, and high interest rates, which impact equipment financing.
If we are unable to successfully adapt and implement appropriate measures in response to these changes, our operating results could be adversely affected. ​ 23 Table of Contents 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.
To our knowledge, the various protections we have employed have been effective to date in identifying these types of events at points when the impact on our business could be minimized.
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.
Our customer relationships are generally not subject to 22 Table of Contents 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.
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 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 revolving credit facility or our accounts receivable securitization program, and notes payable.
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.
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. ​ Unsolicited takeover proposals, proxy contests and other proposals/actions by activist investors may distract management and adversely affect our business and the market price and lead to pronounced volatility in the price of our common stock. ​ We could become subject to unfavorable advances by investor activists or receive unsolicited takeover proposals at an undervalued stock price.
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. ​ 21 Table of Contents 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.
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, which may negatively impact our results of operations.
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.
As we focus on growing our Asset-Light segment, 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.
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.
Our IT 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 20 Table of Contents computer viruses; and other events beyond our control, including cybersecurity incidents such as denial of service, system failure, security breach, intentional or inadvertent acts by employees or vendors with access to our systems or data, phishing, disruption by malware, or attacks enabled by AI.
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.
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 could have an adverse impact on our results of operations. ​ Additionally, we pay independent contractor drivers a fuel surcharge that increases with the increase in fuel prices.
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.
Government regulations or the adverse impact of certain legislative actions that result in shortages of qualified drivers could also impact our ability to grow. The expansion of flexible work options triggered by the COVID-19 pandemic has also provided more employment opportunities for those in professional roles, including our IT roles, making attraction and retention more complex.
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.
Despite our efforts to adapt to and address these concerns and concerns over AI impacting brand reputations, our efforts may be insufficient. Additionally, the implementation of initiatives, including our sustainability initiatives, may increase our costs.
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.
Although there have been recent signs of normalizing in the manufacturing capacity of original equipment manufacturers (“OEMs”), 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.
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.
Fuel prices fluctuate greatly due to factors beyond our control, such as global supply and demand for crude oil and diesel, political events, military conflicts, price and supply decisions by oil producing countries and cartels, terrorist activities, and hurricanes and other natural or man-made disasters.
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.
The costs of compliance with current and future environmental laws and regulations may be significant and could adversely impact our results of operations. ​ We routinely transport or arrange for the transportation of hazardous materials and explosives. At certain facilities of our Asset-Based operations, we store fuel and oil in underground and aboveground tanks and other containers.
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.
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, which could have an adverse effect on our business.
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.
International security concerns, including the Russia-Ukraine and Israel-Hamas wars, Red Sea crisis, and other 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.
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.
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. ​ Risks Related to Employees and Benefits ​ Difficulty attracting, retaining and upskilling employees throughout the Company, or if ABF Freight is unable to reach agreement on future collective bargaining agreements, could result in labor inefficiencies, disruptions, stoppages, or delayed growth. ​ During recent years, we experienced, and continue to experience in certain markets, challenges with hiring an adequate number of qualified drivers, freight-handlers, and professional personnel to meet increases in demand due to numerous factors.
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. ​ 24 Table of Contents 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.
Determination that certain long-lived assets are no longer needed for the strategic growth of our business may result in significant impairment charges, such as those incurred during the third quarter of 2023 as certain long-lived operating right-of-use assets were made available for sublease.
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.
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, which may increase our operating costs, a work stoppage, the loss of customers, or other events that could have a material adverse effect on our business, results of operations, financial condition, and cash 27 Table of Contents flows.
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.
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 and the services we provide.
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 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, which could have a material adverse effect on our business, results of operations, financial condition, and cash flows.
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.
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. ​ 24 Table of Contents 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, 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.
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.
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 signed into law in October 2023 under California Senate Bill 253 Climate Corporate Data Accountability Act and California Senate Bill 261 Climate-Related Financial Risk Act , as described in “Environmental and Other Government Regulations” within Part I, Item 1 (Business) of this Annual Report on Form 10-K.
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.
Furthermore, we may invest significant resources to enter or expand our services in markets with established competitors and in which we will encounter new competitive challenges, and we may not be able to successfully gain market share, which could have an adverse effect on our operating results and financial condition. ​ 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 the adjustments that would otherwise be necessary to align the labor cost structure to corresponding business levels are limited as we strive to maintain customer service.
Furthermore, we may invest significant resources 20 Table of Contents 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.
We could become subject to new or more restrictive regulations, and the costs to comply with such regulations could increase our operating expenses or otherwise have a material adverse effect on the results of our operations. Such regulations could also influence the demand for transportation services.
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.
As AI capabilities improve and are increasingly adopted, we may see cybersecurity attacks perpetrated through AI. 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.
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.
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 or invalidated, or misappropriated or infringed upon, by third parties.
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.
Any significant failure or other disruption in our 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 personal information of customers, employees and others, being compromised could have a significant impact on our business, 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, any of which could have a material adverse effect on our business, results of operations, and financial condition. ​ New or enhanced technology that we develop and implement may also be subject to cybersecurity attacks and may be more prone to related incidents.
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.
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 as well as other factors beyond our control, such as extreme weather events, natural disasters, cybersecurity breaches, geopolitical conflicts, or government shutdowns.
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.
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. ​ As of December 2023, approximately 82% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA, the collective bargaining agreement with the IBT that will remain in effect through June 30, 2028.
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.
With the exception of the market disruption experienced in 2023 due to the shutdown of a large LTL competitor, the available pool of drivers has been declining in recent years, which has caused and may in the future cause difficulty in retaining and hiring qualified drivers.
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.
If the operations of these providers are impacted to the extent that a shortage of quality third-party service providers occurs, there could be a material adverse effect on the business and results of operations of our Asset-Light segment. Also, activities by these providers that violate applicable laws or regulations could result in governmental or third-party actions against us.
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.
If such additional costs are disproportionate to our business levels, they may adversely impact our operating results. A prolonged labor shortage or significant labor inefficiencies could have a material adverse effect on our results of operations, financial condition, and cash flows as a result of lower levels of service, including timeliness, productivity and/or quality of service.
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.
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 because they are subject to less-stringent labor work rules.
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.
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, as well as costs associated with the cleanup of accidents involving our vehicles. ​ The transportation of hazardous materials or explosives also involves the risks of, among others, fuel spillage or leakage, environmental damage, a spill or accident involving hazardous substances, and hazardous waste disposal.
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.

… 41 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeThe 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 240 revenue producing facilities, 10 of which also serve as distribution centers.
Biggest changeThe 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 114 of these Asset-Based segment facilities and leases the remainder from nonaffiliates.
The Company owns 119 of these Asset-Based segment facilities and leases the remainder from nonaffiliates.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−3 removed1 unchanged
Biggest changeThe Company will pursue recovery for its losses, if any, against all available sources, including, but not limited to, insurance and any potentially responsible third parties. ​ For additional information related to our environmental and legal matters and other events, see Note P to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. ​ ​ 37 Table of Contents ITEM 4.
Biggest changeFor 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 DISCLOSURE S ​ Not applicable. ​ ​ 34 Table of Contents PART I I ​
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. ​ In January 2023, ArcBest Corporation and MoLo Solutions, LLC were added as defendants in five separate lawsuits all arising from a single multi-fatality auto accident involving one of MoLo’s contract carriers.
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.
Removed
The accident occurred in June 2021 in Baxter County, Alabama, and the cases are pending in the state and federal courts therein situated. The accident occurred prior to the Company’s acquisition of MoLo. The lawsuits allege that MoLo was negligent in the selection of the motor carrier involved in the accident. The claimants are seeking compensatory and punitive damages.
Removed
The Company intends to vigorously defend against these lawsuits. Although a range of reasonably possible losses for this matter cannot be estimated at this time, it is reasonably possible that such amounts could be material to the Company’s financial condition, results of operations, or cash flows.
Removed
MINE SAFETY DISCLOSURE S ​ Not applicable. ​ ​ PART I I ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed1 unchanged
Biggest changeIn 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 share repurchase program to $125.0 million. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ ​ ​ Purchased Per Share (1) Program Under the Program ​ ​ ​ (in thousands, except share and per share data) ​ 10/1/2023-10/31/2023 ​ 128,766 $ 97.68 128,766 $ 46,536 ​ 11/1/2023-11/30/2023 ​ 55,297 ​ 117.54 55,297 $ 40,036 ​ 12/1/2023-12/31/2023 ​ 58,189 ​ 112.87 58,189 $ 33,468 ​ Total ​ 242,252 $ 105.86 242,252 ​ ​ ​ ​ (1) Represents the weighted average price paid per common share including commission. ​ ​ ITE M 6.
Biggest changeDuring 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. ​ ​ ITE M 6. [ RESERVED] ​ ​ 35 Table of Contents
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 February 2, 2024, 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 16, 2024.
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.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIE S ​ 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 19, 2024, there were 23,520,701 shares of the Company’s common stock outstanding, which were held by 177 stockholders of record.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIE S ​ 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.
In February 2023, 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 2023, the Company purchased 930,754 shares of its common stock for an aggregate cost of $91.5 million, including 501,146 shares for an aggregate cost of $47.6 million under Rule 10b5-1 plans, which allowed for stock repurchases during closed trading windows.
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.
The program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. In January 2003, the Board of Directors authorized a $25.0 million common stock repurchase program and authorized extensions of the share repurchase program in 2005, 2015, and 2021.
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.
Removed
During the three months ended December 31, 2023, the Company purchased 242,252 shares, leaving $33.5 million remaining under the Company’s share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

191 edited+45 added−71 removed79 unchanged
Biggest changeAs of December 31, 2023, we have no other derivative or hedging arrangements outstanding. ​ Balance Sheet Changes ​ Accounts Receivable Accounts receivable decreased $87.4 million from December 31, 2022 to December 31, 2023, reflecting improved collections and lower revenue levels in late 2023 compared to late 2022. ​ Other Accounts Receivable Other accounts receivable increased $41.1 million from December 31, 2022 to December 31, 2023, reflecting the receivable for insured liability settlement for third-party casualty claims during 2023, with the related liability in accrued expenses. ​ Operating Right of Use Assets and Operating Lease Liabilities The increase in operating lease liabilities, including current portion, of $34.7 million from December 31, 2022 to December 31, 2023, was primarily due to new leases and lease renewals during 2023.
Biggest changeAs 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. 56 Table of Contents ​ 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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION S ​ ArcBest Corporation ™ (together with its subsidiaries, the “Company,” “ArcBest ® ,” “we,” “us,” and “our”) is a multibillion-dollar integrated logistics company that leverages our technology and a full suite of solutions to meet our customers’ supply chain needs.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION S ​ 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.
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: ​ Pounds or Tonnage – total weight of shipments processed during the period in U.S. pounds or U.S. tons. ​ Tonnage per day (average daily shipment weight) – tonnage 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. ​ Pounds per shipment (weight per shipment) – total 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.
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.
These measures are defined below and further discussed in the Asset-Based Operating Expenses section within Asset-Based Segment Results: ​ ● Shipments per DSY hour – total shipments (including shipments handled by purchased transportation agents) divided by dock, street, and yard (“DSY”) hours. This metric is used to measure labor efficiency in the segment’s local operations.
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.
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 following Asset-Based Segment Results section. ​ ABF Freight operates in a highly competitive industry comprised primarily of nonunion motor carriers.
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.
Consequently, 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.
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 must 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 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.
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.
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.
To mitigate the potential for such occurrences at our primary data center, we have implemented various systems, including redundant telecommunication facilities; 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.
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.
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 O 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.
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.
In addition to general effects of inflation, the motor carrier freight transportation industry faces rising costs related to 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.
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.
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 E 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.
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.
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, lease impairment charges, and estimated legal settlement expenses, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations.
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.
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 and provides meaningful comparisons between current and prior period results, as well as important information regarding performance trends.
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.
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. ​ 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.
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. ​ 41 Table of Contents 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.
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 revolving credit facility; and other factors. ​ In February 2023, 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 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.
MD&A is comprised of the following: ​ ● Results of Operations includes: ● an overview of consolidated results with 2023 compared to 2022, 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 2023 compared to 2022, including a discussion of key actions and events that impacted the results; ● a financial summary and analysis of the results of our Asset-Light segment for 2023 compared to 2022, 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 are expected to have a material effect on our future results of operations or financial condition. ​ 39 Table of Contents RESULTS OF OPERATIONS ​ This Results of Operations section of MD&A generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
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. ​ 36 Table of Contents 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.
Notes payable, 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.
Notes payable, 55 Table of Contents 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.
Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our Fourth Amended and Restated Credit Agreement (see Note I to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
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).
We believe 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 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.
We believe that actual amounts will not vary significantly from estimates of variable consideration. ​ 58 Table of Contents 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.
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, 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.
While we cannot determine with any certainty the contributions that will be required under future 46 Table of Contents 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 K to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
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).
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 24.4% and 24.1% for 2023 and 2022, 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.
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.
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 equity investment, lease impairment charges, estimated legal settlement expenses of the Asset-Light segment, gain on sale of subsidiary, and transaction costs, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations.
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.
Asset-Based revenues for 2023, compared to 2022, were negatively impacted by lower fuel surcharge revenue due to a decrease in the nominal fuel surcharge rate, while total fuel costs also decreased.
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 scheduled maturities of our operating lease liabilities as of December 31, 2023 are disclosed in Note H 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.
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.
Indefinite-lived intangible assets are not amortized but rather are evaluated for impairment annually 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.
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.
Billed revenue used for calculating revenue per hundredweight 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 43 Table of Contents manage the segment’s cost structure from period to period.
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.
See Note O 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, 2023, 2022, and 2021. ​ The key indicators necessary to understand the operating results of our Asset-Based segment are outlined below.
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.
The amortization of intangible assets is estimated to be approximately $13.0 million in 2024, 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, high interest rates as a result of monetary policy, and volatile energy prices, among other factors.
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.
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 49 Table of Contents chain.
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.
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. ​ Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been offset through price increases.
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. 50 Table of Contents ​ Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been offset through price increases.
The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9%, 5.9% and 6.9% effective on October 2, 2023, November 7, 2022, and November 15, 2021, respectively, 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 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.
Amortization of acquired intangibles totaled $12.8 million, $12.9 million, and $5.3 million for 2023, 2022, and 2021, respectively, and is expected to total approximately $13.0 million for 2024. (3) Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition.
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.
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 63 Table of Contents adjustments based on historical information, and revenue is recognized accordingly at the time of shipment.
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.
Throughout 2023, 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.
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 liability for contingent 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 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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.
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. ​ ​
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. ​ 61 Table of Contents ​
Effective November 1, 2023, our self-insured limits for each loss are generally $2.0 million for third-party casualty or general liability claims and $3.0 million for auto liability claims, up from self-insured limits of $1.0 million for third-party casualty or general liability claims and $2.0 million for auto liability claims 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.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 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, 2022. ​ Our effective tax rate on continuing operations was 23.9% and 24.1% of pre-tax income for 2023 and 2022, respectively.
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.
See Note O 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 for the years ended December 31, 2023, 2022, and 2021. ​ The key indicators necessary to understand our Asset-Light segment operating results are outlined below.
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 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 60 Table of Contents short-term investments on hand.
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.
CMC is an additional pricing mechanism to better capture the value we provide in transporting these shipments. ​ 45 Table of Contents 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.
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.
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 expedite and dedicated operations).
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).
These settlement expenses are discussed further in Note P to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. ​ 52 Table of Contents Asset-Light Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Asset-Light Adjusted EBITDA”) We report our financial results in accordance with GAAP.
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.
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. 56 Table of Contents ​ 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 phishing, an increased risk of unauthorized access to proprietary information or sensitive or confidential data, and increased risks of other cybersecurity incidents.
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.
Global supply chain volatility and labor and energy shortages, in addition to the impact of federal programs and monetary policy, have elevated costs higher across a broad array of consumer goods. The consumer price index (CPI) increased 3.1%, before seasonal adjustment, year-over-year in January 2024 and 0.3% from December 2023.
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.
A portion of our variable life insurance policies 41 Table of Contents have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility.
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.
Workers’ compensation and third-party casualty claims liabilities, which are reported in accrued expenses, totaled $181.8 million and $122.8 million at December 31, 2023 and 2022, respectively. The reserve at December 31, 2023 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, 2023.
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 evaluated the need for a valuation allowance for deferred tax assets at December 31, 2023 by considering the future reversal of existing taxable temporary differences, future taxable income, and available tax planning strategies. Valuation allowances for deferred tax assets totaled $1.8 million and $1.7 million at December 31, 2023 and 2022, respectively.
We evaluated the need for a valuation allowance for deferred tax assets at December 31, 2024 by 57 Table of Contents 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.
Adjusted EBITDA should not be construed as a better measurement than operating income, operating cash flow, net income, or earnings per share, as determined under GAAP.
Adjusted EBITDA should not be construed as a better measurement than operating income, net income (loss), or earnings per share, as determined under GAAP.
As of December 31, 2023, estimated projected payments, net of retiree premiums, related to postretirement health benefits total $0.7 million for the next year and $7.5 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.
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 EBITDA valuation input drove the decrease in fair value of the contingent earnout consideration as of December 31, 2023, compared to the valuation at December 31, 2022, reflecting lower earnings than anticipated for 2023, resulting in no earnout payment for the year, and revised assumptions for the impact of business growth in 2024 and 2025. 64 Table of Contents ​ Impairment of Goodwill and Intangible Assets Our consolidated goodwill balance of $304.8 million at December 31, 2023 is primarily related to acquisitions of MoLo and Panther in the Asset-Light segment.
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.
The vesting of restricted stock units resulted in a tax benefit of $5.3 million and $0.21 per diluted share for 2023, compared to a tax benefit of $8.1 million and $0.32 per diluted share in 2022. ​ 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”).
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”).
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 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 13.3% and 14.0% as of December 31, 2023 and 2022, respectively.
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.
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 normal levels.
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%.
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 or more frequently if indicators of impairment exist. The annual impairment testing on the goodwill balances was performed as of October 1, 2023.
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.
Adjustments made are not material. (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.
(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.
The year ended December 31, 2022 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. ​ 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 ​ ​ 2023 ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue per shipment ​ ​ (25.3%) ​ ​ 18.1% ​ ​ ​ ​ ​ ​ ​ ​ ​ Shipments per day ​ ​ 5.3% ​ ​ 39.3% ​ ​ Asset-Light Revenues Asset-Light segment revenues totaled $1.7 billion and $2.1 billion in 2023 and 2022, respectively.
(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. ​ 47 Table of Contents 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.
To our knowledge, the various protections we have employed have been effective to date in identifying these types of events at a point when the impact on our business could be minimized.
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.
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 lease impairment charges during the third quarter of 2023 related to 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 H to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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.
For the years ended December 31, 2023 and 2022 financial reporting income exceeded taxable income. ​ We made $115.7 million of federal, state, and foreign tax payments during the year ended December 31, 2023, and received refunds of $36.4 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 2024 due primarily to the effect of 60% bonus depreciation on qualified depreciable assets in 2024 as allowed under the Tax Reform Act of 1986 (the “Tax Reform Act”), as amended.
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.
In addition to our focus on sustainability of our equipment and facilities, we continue our commitment to advance environmental and social 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 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.
Remeasurement of the 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. ​ Estimated legal expenses to settle a claim related to the classification of certain Asset-Light employees under the Fair Labor Standards Act reduced operating results in 2023 by $9.5 million (pre-tax), or $7.1 million (after-tax) and $0.29 per diluted share.
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.
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. ​ 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 ​ ​ ​ 2023 2022 2021 ​ Asset-Based Operating Expenses (Operating Ratio) ​ ​ ​ ​ ​ ​ ​ Salaries, wages, and benefits ​ 48.1 % 43.0 % 46.6 % Fuel, supplies, and expenses ​ 12.6 ​ 12.6 ​ 10.3 ​ Operating taxes and licenses ​ 1.9 ​ 1.7 ​ 1.9 ​ Insurance ​ 1.8 ​ 1.6 ​ 1.5 ​ Communications and utilities ​ 0.7 ​ 0.6 ​ 0.7 ​ Depreciation and amortization ​ 3.6 ​ 3.2 ​ 3.6 ​ Rents and purchased transportation ​ 11.8 ​ 14.6 ​ 14.2 ​ Shared services ​ 9.7 ​ 9.4 ​ 10.2 ​ (Gain) loss on sale of property and equipment and lease impairment charges ​ — ​ (0.4) ​ (0.3) ​ Innovative technology costs (1) ​ 0.8 ​ 0.9 ​ 1.1 ​ Other ​ 0.2 ​ 0.1 ​ 0.1 ​ ​ ​ 91.2 % 87.3 % 89.9 % ​ ​ ​ ​ ​ ​ ​ ​ Asset-Based Operating Income ​ 8.8 % 12.7 % 10.1 % (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 ​ ​ ​ 2023 2022 % Change Workdays (1) ​ ​ 251.5 ​ 252.0 ​ ​ ​ Billed revenue per hundredweight, including fuel surcharges ​ $ 44.46 ​ $ 45.45 (2.2) % Tonnage (tons) ​ 3,220,013 ​ 3,304,352 (2.6) % Tonnage per day ​ 12,803 ​ 13,113 (2.4) % Shipments per day ​ 20,529 ​ 19,895 3.2 % Shipments per DSY hour ​ 0.425 ​ 0.428 (0.7) % Pounds per shipment ​ 1,247 ​ 1,318 (5.4) % Pounds per mile ​ 18.87 ​ 18.71 0.9 % Average length of haul (miles) ​ ​ 1,092 ​ ​ 1,090 ​ 0.2 % (1) Workdays represent the number of operating days during the period after adjusting for holidays and weekends. ​ 47 Table of Contents Asset-Based Revenues Asset-Based segment revenues totaled $2.9 billion and $3.0 billion for the year ended December 31, 2023 and 2022, respectively.
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. ​ 43 Table of Contents 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.
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 $4.4 billion for 2023, decreased 12.0% compared to 2022.
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.
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 or our accounts receivable securitization program. ​ This Liquidity and Capital Resources section of MD&A generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
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.
During the next 12 months and for the foreseeable future, we believe existing cash, cash equivalents, short-term investments, cash generated by operating activities, and amounts available under our revolving credit facility 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 as it is earned.
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.
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 K 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 ​ 2023 2022 2021 ​ ​ (in thousands) Capital expenditures, gross including notes payable (1) ​ $ 252,516 ​ $ 230,648 ​ $ 118,112 ​ Less financing from notes payable ​ 33,495 ​ 82,425 ​ 59,700 ​ Capital expenditures, net of notes payable ​ 219,021 ​ 148,223 ​ 58,412 ​ Less proceeds from asset sales ​ 7,763 ​ 19,691 ​ 13,815 ​ Total capital expenditures, net ​ $ 211,258 ​ $ 128,532 ​ $ 44,597 ​ (2) Actual capital expenditures in 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, delays in some real estate facility projects. ​ For 2024, our total capital expenditures, including amounts financed, are estimated to range from $325.0 million to $375.0 million, net of asset sales.
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.
Inputs that could impact the measurement of contingent earnout consideration include revised projections of 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.
Inputs that could impact the measurement of contingent earnout consideration include revised 59 Table of Contents 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.
See Note P 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. ​ As disclosed in Note P to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, the Company tentatively settled a claim relating to the classification of certain Asset-Light employees under the Fair Labor Standards Act .
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 .
These combined costs impacted consolidated results by $52.4 million (pre-tax), or $39.7 million (after-tax) and $1.61 per diluted share, for 2023, compared to $40.8 million (pre-tax), or $30.8 million (after-tax) and $1.21 per diluted share, for 2022. ​ 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 (loss).
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 $1.61 per diluted share, for 2023. ​ The liability for contingent earnout consideration recorded for the MoLo ® acquisition is remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring assessments is recognized in operating income.
Asset-Light Adjusted EBITDA should not be construed as a better measurement than operating income (loss), operating cash flow, net income, or earnings per share, as determined under GAAP. ​ Asset-Light Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31 ​ ​ ​ 2023 2022 2021 ​ ​ ​ ($ thousands) ​ Operating Income (Loss) (1) ​ $ (12,271) ​ $ 52,725 ​ $ 46,397 ​ Depreciation and amortization (2) ​ ​ 20,370 ​ ​ 20,730 ​ ​ 11,387 ​ Change in fair value of contingent consideration (3) ​ ​ (19,100) ​ ​ 18,300 ​ ​ — ​ Lease impairment charges (4) ​ ​ 14,407 ​ ​ — ​ ​ — ​ Legal settlement (5) ​ ​ 9,500 ​ ​ — ​ ​ — ​ Gain on sale of subsidiary (6) ​ ​ — ​ ​ (402) ​ ​ (6,923) ​ Asset-Light Adjusted EBITDA ​ $ 12,906 ​ $ 91,353 ​ $ 50,861 ​ (1) The calculation of Asset-Light Adjusted EBITDA as presented in this table begins with operating income as the most directly comparable GAAP measure.
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.
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 $4.6 million and $0.19 per diluted share in 2023, and reduced consolidated net income by $2.7 million and $0.11 per diluted share in 2022.
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.
We recognized a gain of $19.1 million related to the net decrease in the fair value changes in the liability of contingent earnout consideration for the year ended December 31, 2023.
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.
We are strategically investing in our Asset-Based operations to utilize technology to drive efficiency and productivity and to enrich our deep 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.
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.
As of December 31, 2023, payments due within one year under the withdrawal liability settlement total $1.6 million and total payments, which are due over the next 18 years, total $28.2 million. As of December 31, 2023, the outstanding withdrawal liability recognized in the consolidated balance sheet for this obligation totaled $19.4 million.
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.
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 and Asset-Based segment results during 2023 and 2022.
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.
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 from continuing operations of $47.6 million and $54.2 million at December 31, 2023 and 2022, respectively.
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.
A 10% increase in the estimate of IBNR would increase the total 2023 expense for workers’ compensation and third-party casualty claims by approximately $6.8 million.
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.

… 227 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−2 removed6 unchanged
Biggest changeOur short-term investments at December 31, 2023 were principally composed of certificates of deposit, and at December 31, 2022, short-term investments also included U.S. government securities. 66 Table of Contents 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 .
Biggest changeAlthough 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 .
A 10% change in market value of these investments would have a $2.6 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.
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.
We have not historically engaged in a program for fuel price hedging and did not have any fuel hedging agreements outstanding at December 31, 2023 and 2022. ​ 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.
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.
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. ​ ​ ​ 67 Table of Contents
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. 62 Table of Contents
Revenues from non-U.S. operations amounted to less than 2% and 4% of total consolidated revenues for 2023 and 2022, respectively. 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.
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.
Our Credit Facility, accounts receivable securitization program, interest rate swap agreement, and notes payable are further described in Note I 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.
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 portion of cash surrender value of life insurance policies subject to market volatility was $25.7 million and $23.0 million at December 31, 2023 and 2022, respectively.
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.
At December 31, 2023 and 2022, cash, cash equivalents, and short-term investments totaled $330.1 million and $325.9 million, respectively. Substantially all cash equivalents were in demand accounts with financial institutions.
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.
Borrowings, if any, under our Credit Facility and accounts receivable securitization program are at a variable interest rate and expose us to the risk of increasing interest rates. We currently have an interest rate swap agreement, which mitigates the risk of interest changes on our outstanding Credit Facility borrowings.
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.
Removed
The interest rate swap effectively converts $50.0 million of borrowings under our Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of our Credit Facility as of December 31, 2023.
Removed
Amounts borrowed under our Credit Facility in excess of the $50.0 million notional amount, if any, are exposed to changes in market interest rates as defined by the Credit Agreement.

Other ARCB 10-K year-over-year comparisons