It’s a milestone few companies can say they’ve reached, but next year ArcBest will mark its 100-year anniversary. The Fort Smith-based shipping and logistics company has stayed in business through World War II, the Cold War, The Great Depression, The Great Recession, several natural disasters and a global pandemic.
Today, ArcBest is one of the top 15 truckload brokers in the country. It’s a remarkable feat – one that no one at ArcBest is taking it for granted. “I think we’re going to celebrate that 100-year anniversary all year long because it’s so unusual,” CEO Judy McReynolds said.
So, what’s the centennial secret? ArcBest has been good at evolving and adapting to external circumstances; the most recent one being the pandemic. During a crisis in which demand became volatile – spiking and plummeting from month to month – COVID could have devastated the company. ArcBest, however, made adjustments early on, anticipating its customers would experience shutdowns that would reduce business.
According to McReynolds, the ability to anticipate a problem and implement quick changes is what kept freight moving and supply chain going during the pandemic. This, she credits to good hiring. “I can’t say enough about our investment in our people,” she noted. “Our competency, experience, integrity and values are important for doing things the right way and doing them fast. When you trust people, you can work faster.”
The disruption COVID brought to ArcBest was difficult, but it was mostly short-lived. The company managed to come back to its normal status rapidly within the later part of 2020. That was another adjustment. But, according to the CEO, the labor employees, drivers and dock workers were “patriotic in their approach,” to keeping everything moving. A quick comeback hasn’t been the case for everyone. ArcBest continues to help some of its customers who are still struggling with supply chain issues, especially with establishing lead times for goods from overseas.
“We’re working with them to get all of that to a better place, but the challenges are still there,” McReynolds explained.
COVID is only one of the modern-day challenges ArcBest has faced. In 2009, in the middle of the great recession, when the company had lost $128 million and the industry was suddenly more competitive than ever, the CEO of ArcBest unexpectantly decided to retire. It was news that came as a surprise to both employees and investors. In the wake of the disruption, McReynolds was asked to rise from her CFO position to CEO.
Out of respect for the founding family and board of directors, whom she had worked with for the last 12 years, McReynolds quickly said yes. “When I got home and was having dinner that night with my husband,” she recalled, “it was both a celebration for being asked to do something significant, but at the same time a realization that I had taken on a huge challenge.”
Based on a recommendation from one of the board members, McReynolds brought in a strategy consultant who helped the leadership team find untapped areas for growth. They had hours upon hours of meetings to discuss options. One thing that came out of those meetings was to hyperfocus on long-term customers and research where they were spending dollars beyond ArcBest. Then, they made changes to begin to attack and win a larger share of the transportation logistics market.
This new strategy evolved into years of realignment. ArcBest combined its sales force, pricing people, training and development, talent acquisition and marketing department all into one single team — their best team — to become more accessible to customers. The company also made four acquisitions between 2012 and 2017 that were significant in terms of solutions that could be provided to customers. Most recently, in 2021, ArcBest bought MoLo, a truckload freight brokerage firm that placed ArcBest in the top 15 U.S. truckload brokerage market.
Today, rather than the 90 percent of the business coming from less-than-truckload (LTL) shipments, it’s much more balanced. Close to half of the revenue comes from logistics solutions. ArcBest currently has 14,000 employees and 250 campuses and services centers.
“We really have evolved into a very different company than we were when I first took on my role as CEO,” McReynolds said. “We’re able to leverage these solutions to meet our customers’ needs. We find our retention of these customers goes way up. It’s nine percentage points better under this approach than it was when we were a one-solution company.”
In its latest published report, ArcBest achieved the highest revenue and net income in company history on both a fourth quarter and annual basis. The company made $4 billion in revenue for 2021 (compared to $2.9 billion in 2020) and an operating profit $318 million. Since 2016, the company’s revenue has grown almost 50 percent and profit has grown nearly 500 percent.
McReynolds praised ArcBest employees for the positive results. “It’s a reflection of our team and the talented people we have at our company.”
As a manager, she describes herself as someone who is open to change. “I love the discussions of what we could do and what we should do,” she emphasized, noting that listening and understanding other perspectives leads to a better developed strategic path and makes the company stronger. Receiving input from the leadership team and trusting the individuals with whom she works shoulder to shoulder allows everyone to work faster and more efficiently.
The CEO also is a risk-taker, which has proven to be vital in the last decade. “I’m willing to take risks if that’s what’s needed to make some kind of transformational change with our company, and we’ve done a lot of that. I’m proud of that.”
For those coming up behind her in the industry, or in any industry for that matter, McReynolds recommends they do their homework and become knowledgeable so they can develop their own point of view.
“It’s important to have the facts and to have thought deeply about some of your most significant decisions. Be credible. Be someone who can be trusted.”