Fort Smith-based logistics company ArcBest, the parent company of less-than-truckload carrier ABF Freight, has worked to overcome numerous challenges that have come about because of the COVID-19 pandemic.
Judy McReynolds, chairman, president and CEO of ArcBest, highlighted Wednesday (Oct. 7) the challenges in a segment for Supply Chain USA, which Reuters Events hosted virtually this year because of the pandemic.
“2020 has certainly been a different year than any of us expected,” said McReynolds, noting the difficulties the pandemic has had on the company, industry, customers and overall society. “That’s really where the challenges have come from.”
The customer continues to be a focus for the company, and the pandemic has challenged the company to do so. ArcBest has accounted for how quickly and dramatically the pandemic has affected its customers and has remained in touch with them and understands the impact it’s had on them, McReynolds said.
“As the pandemic started toward the end of March and we were going into the month of April, just felt like it was falling off of a cliff in terms of the economic activity and had to deal with some of the shutdowns for our customers,” she said. “What we learned from that was it was important to make sure our employees were safe, they had materials and the technology they needed to be able to adequately serve our customers and that they felt great about doing that. What was great about our front-line employees was that they did just that.”
The company also ensured it was serving customers that were essential businesses and providing capacity for those that were increasing operations as a result of the pandemic, she noted.
“I was really, really proud of our team, particularly in the beginning as we navigated through that,” she said. “We were able to position our employees well, particularly in those situations where they are interacting with the customer, picking up freight or delivering freight. We moved our office workforce, basically all of them, home. A large, large percentage are working remotely, and that’s still the case today.”
McReynolds cited the company’s development into a full-service logistics company has helped it maintain good relationships with customers during the pandemic. Some of this development has come about through acquisitions and technology initiatives and has allowed it to be flexible and to adapt to customers’ changing demands. The company has been visually connected to customers for more than 20 years, she said, and a lot of this can be attributed to its U-pack moving business.
A technology that’s helped during the pandemic is the dynamic LTL transactional offering.
“Customers are wanting to get onboarded more quickly,” she said. “They’re wanting to do business more seamlessly. They want it to be a quick response to a request that they have.”
The technology uses artificial intelligence to provide market-appropriate pricing and to place freight on a trailer in a specific shipping lane, said McReynolds, adding that it’s helped to meet customers’ needs at a time when they are changing shipping patterns.
The company’s case management system is a technology that was released a few years ago but the digital aspect of it was enhanced. Customers can interact with a virtual agent to respond to their needs. Another technology allows for the digital fulfillment of about 20% of truckload shipments. The carrier can match them to shipper needs without human intervention, she said.
McReynolds pointed to the company’s great culture in how it’s been able to quickly respond to customers’ needs.
“All of that comes about, not overnight but by a purposeful development of our people, and what we try to do is instill in our people our values,” she said. “It’s creativity, integrity, collaboration, growth, excellence and wellness.”
The employees with these values are going to respond well in a remote environment, she said. And this is what the company has experienced, and it’s not had any negative impact on productivity during the pandemic.
“Even as this pandemic has maybe to some extent leveled off, we’re still having the office workforce work from home because it’s safer,” she said. “We can watch as things unfold, and perhaps early next year, we’ll be in a position where we’re bringing people back. But the great thing is because of the character of our employees and the way they approach their roles we really haven’t had to do that.”
The pandemic has been one of the most difficult challenges people have faced, and McReynolds said the supply chain the company manages needs to be more reliable, more flexible, more adaptable but also to reduce the risk.
“When you think about that, you want to do business with companies that you can trust and you want to perhaps be a partner,” she explained. “We really feel like some of the changes that we’re going to see over the next
several years really play to our strengths and the approach that we have and the multi-solutions that we’ve developed.”
She expects supply chains will continue to be reviewed and to seek greater adaptability, flexibility and visibility, and this will be brought about through an innovative approach.
“We think freight is going to be delivered faster, more safely, more efficiently, and we really believe our company is going to be on the forefront of that,” McReynolds said. “We’re positioned well. Over the last few months, I think we have really vaulted forward in digital adoption, whether you are a consumer or you’re a business. If you’re positioned well, you are already playing in those arenas. You’re going to be a player that can move forward, serve customers and really have an impact.”
Revenue and income at Fort Smith-based ArcBest for the first half of 2020 were below that of the same period in 2019, but improving conditions allowed an end to salary cuts and other cost-cutting measures implemented April 6. The less-than-truckload carrier and logistics company reported July 29 second quarter net income of $15.88 million, down 34.9% from the $24.376 million in the same quarter of 2019. Earnings per share of 61 cents were significantly better than the 0 cents per share expected by a consensus of analyst estimates. The company is scheduled to report third quarter earnings on Nov. 3.
Company shares (NASDAQ: ARCB) closed Wednesday at $34.41, up 91 cents. During the past 52 weeks the share price has ranged between $35 and $13.54.