Greetings, and welcome to the ArcBest Second Quarter 2020 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded on Wednesday, July 29, 2020. I would now like to turn the conference over to David Humphrey, Vice President of Investor Relations. Please go ahead, sir.

Welcome to the ArcBest second quarter 2020 earnings conference call. Our presentation this morning will be done by Judy McReynolds, Chairman, President and Chief Executive Officer of ArcBest; and David Cobb, Chief Financial Officer of ArcBest. We thank you for joining us today. In order to help you better understand ArcBest and its results, some forward-looking statements could be made during this call. As we all know, forward-looking statements by their very nature are subject to uncertainties and risks. For a more complete discussion of factors that could affect the company's future results, please refer to the forward-looking statements section of the company's earnings press release and the company's most recent SEC public filings. In order to provide meaningful comparisons, certain information discussed in this conference call includes non-GAAP financial measures as outlined and described in the tables in our earnings press release. Before I turn it over to Judy, I'm going to take a moment to congratulate her on being named one of the top 10 women in logistics by Global Trade Magazine. This is a tremendous honor, and I want to let her know how proud we are of her on this well-deserved recognition. With that, I'll turn it over to Judy.

Good morning, everyone. Thank you for joining us today. As you know, the second quarter of this year began under the challenging circumstances of the coronavirus pandemic, which impacted everyone and nearly every sector of the economy. During our first quarter call in May, I mentioned that in tough times like these, I believe ArcBest demonstrates its strengths. That sentiment remains true. Along with our solid balance sheet and the long-term relationships we have built with our customers, much of our success over the past three months is due to the dedication of our employees and the culture we have fostered that encourages innovative problem-solving in response to the challenges we face. I am extremely proud of how our employees have performed under these difficulties, especially our frontline teams who consistently focus on maintaining product movement and delivering the exceptional customer service that clients expect from ArcBest. We have made significant strides over the last quarter during one of the steepest economic downturns since the Great Depression, and David and I are eager to discuss the results with you today. In our Asset-Based business, we observed that the shipping patterns of many customers were greatly affected by the pandemic. The effects varied by customer; for instance, those shipping essential items experienced increased demand, whereas many others saw business levels drop compared to last year. We noted a significant rise in residential delivery shipments tied to the growth in e-commerce. Customers with an online presence saw higher shipment volumes, particularly those selling products like exercise equipment and outdoor storage sheds. Despite the increase in e-commerce, we faced considerable reductions in overall shipments and tonnage within our asset-based network, necessitating that we align our labor and other network resources with this period's business levels. At the peak of the pandemic, we temporarily laid off around 1,000 employees and reduced various equipment and supplemental resources typically used in our network. Our operations team responded effectively to this heightened challenge, resulting in improvements in most operational metrics we monitor, many of which increased by at least 5% compared to last year's second quarter. Furthermore, despite a weak market, our yield management strategy allowed us to achieve necessary pricing levels for accounts. The decrease in core account LTL-rated shipments within our ABF freight network was the primary reason for the overall decline in shipment and tonnage. As seen earlier this year, our strategy of using lane-specific data to identify capacity opportunities and fill them with truckload rated spot loads and heavier transactional LTL-rated shipments helped offset the business declines while allowing for a more efficient use of available network resources. I am incredibly proud of how our operations, sales, and yield teams have responded during this unforeseen period. They have executed exceptionally well and demonstrated our ability to maintain trusted customer relationships remotely while proactively adjusting our cost structure and account pricing in response to an evolving environment. Changes in freight mix associated with lower business levels, in conjunction with the supplemental spot and transactional shipments that we strategically added, contributed to a decrease in total revenue per hundredweight for the second quarter. Additionally, reductions in fuel surcharge revenue compared to last year's second quarter also impacted lower revenue per hundredweight comparisons. However, we are pleased to see that pricing rationality persists despite the sharp business reductions faced by our industry. Later in the call, David Cobb will share more specific insights regarding our contract renewals, which were favorable and comparable to last year. Excluding the effects of transactional shipments and fuel surcharge changes, we achieved high single-digit percent price increases on our core LTL business. Turning to the Asset-Light segment, the overall decrease in shipments due to business closures and reduced customer shipping levels linked to the pandemic, along with a slight dip in total revenue per shipment, were the key drivers behind the year-over-year revenue decline in ArcBest's Asset-Light segment for the second quarter. Automotive plant closures throughout April and May, along with ongoing challenges in industrial manufacturing, led to reduced demand for expedite services, affecting daily shipment counts in that area of the business. The availability of lower-cost capacity resources in the market also contributed to the decrease in expedite business levels. Similarly, the contribution from truckload brokerage in the Asset-Light segment was lower than the previous year due to declines in shipment counts and average shipment revenue. The pandemic's effects, along with downturns in the petroleum sector, impacted shipments from our traditional asset-light truckload customer base. The most significant year-over-year revenue decline in that segment came from customers in the oil and gas, wholesale durable goods, and manufacturing sectors, particularly metal products and industrial machinery. Margin compression in the Asset-Light segment, driven by these market trends, resulted in a decrease in operating income compared to last year. Like in the Asset-Based business, reduced consumer activity in household goods during this uncertain pandemic period positively influenced Asset-Light financial outcomes. In these trying times, we recognize that supply chain optimization and the demand for tailored logistics solutions is more crucial than ever for our clients. Consequently, our managed transportation services are thriving and contributed positively to the Asset-Light results. Managed daily revenue increased by 82% compared to last year's second quarter, while the first half of the year saw a 69% rise in managed revenue. Developing managed solutions enables us to leverage our expertise, knowledge, and the full potential of our assets and capacity resources to assist our customers in navigating the current uncertainties. At FleetNet, we saw declines in both roadside repair and preventative maintenance events, reflecting the pandemic's impact on the business activities of FleetNet's customers. Consequently, second quarter revenue fell short of last year. The drop in operating income for this quarter was mainly due to the reduced event count. Now, I would like to invite David Cobb to present our earnings results and operational statistics.

Thank you, Judy, and good morning, everyone. Let me start with some consolidated information. In the second quarter of 2020, our consolidated revenues were $627 million, down from $771 million in the same quarter last year, marking a 19% decline per day. On a GAAP basis, our net income for the second quarter of 2020 was $0.61 per diluted share compared to $0.92 per share last year. Our adjusted net income for the second quarter of 2020 was $0.67 per diluted share, down from $1.4 per share during the same period last year. ArcBest's effective GAAP tax rate for the second quarter of 2020 was 23.4%, which is comparable to our non-GAAP effective tax rate. We expect our full-year 2020 non-GAAP tax rate to be between 23% and 24%, although the effective rate for the quarter may be affected by specific items related to that period. This range has decreased from our earlier expectations, primarily due to changes in pretax income levels and certain tax credits. We saw non-deductible expenses due to decreased travel-related costs from the pandemic. Full details of our GAAP cash flow for the second quarter can be found in our earnings press release, but at the end of June, our cash and short-term investments totaled $574 million. Our total liquidity, which includes cash and borrowing availability under existing facilities, was $602 million. Our financial covenants remained strong by the end of June, as our adjusted leverage ratio was at 0.4:1, well below the maximum allowed of 3.5:1. Our interest coverage ratio stood at 7.38:1, above the minimum required of 3.5:1. Our total debt at the end of the second quarter was $533 million, which included $250 million from our credit revolver, $85 million borrowed in our receivable securitization, and $198 million in notes payable primarily for equipment for our asset-based operations. With these cash balances, we entered the second quarter with net cash of $41 million, compared to net debt of $3 million at the end of the first quarter, marking an improvement of $44 million. We continue to monitor our customer base regarding accounts receivable and the pandemic's impact on their payment timelines. We concluded the pandemic period in a strong position with our receivables, which has benefited us in recent months. Beginning in April, we saw improvements in payment timelines, which affected when customers made their payments. Since May, payment trends among our customers have generally stabilized and are improving. Due to these factors and our strengthened net cash position, we are considering options to repay the $225 million of incremental borrowings we took in March during the third quarter. Although we did not buy back treasury stock during the second quarter, we have maintained this program alongside our quarterly dividend payments to enhance shareholder value. The capital allocated to these initiatives has been reasonable, and we will continue to assess these programs against our operational cash needs in light of potential uncertainties. At the beginning of April, we committed to cost reductions, which included a 15% salary decrease for all non-union employees and suspension of the employer match for the non-union 401(k) plan; a 15% fee decrease for ArcBest's board members, among other cost-saving measures. These salary-related reductions led to savings of about $15 million in the second quarter of 2020 compared to the same period in 2019. We are seeing some positive financial trends, including sequential business improvement, increased cash levels, stabilized customer account payment trends, and improved EBITDA. However, we continue to face uncertainties in our outlook. Some cost reductions will be reinstated starting in the third quarter of 2020, including the restoration of non-union salary rates, the 401(k) company match, and board fees. We believe these actions are justified, especially given the sacrifices made by our employees. Since the pandemic started, we have continued to serve our customers across the country. Comparatively, we expect that the increase in expenses related to these cost restorations in the third quarter of 2020 will be around $10 million to $15 million. Asset-based revenue for the second quarter was $460 million, down from $560 million last year, indicating an 18% decline per day. In terms of asset-based tonnage, total tonnage per day fell by 13.8% compared to last year's second quarter. Monthly asset-based daily tonnage for the second quarter indicated a decrease of about 14.3% in April, 14.2% in May, and 13.6% in June. As mentioned earlier, these declines were primarily driven by the pandemic's impact on customer shipping levels but were somewhat offset by additional spot truckload-rated shipments and LTL-rated transactional shipments added to utilize available capacity in our ABF asset-based network. Total daily shipments in the second quarter decreased by 13.3% compared to the same quarter last year. The reduction in total shipments was less pronounced in each control month of the quarter. The total billed revenue per hundredweight on asset-based shipments fell by 4% relative to the previous year. Excluding fuel surcharges, billed revenue per hundredweight on asset-based LTL-rated freight showed slight positive movement during the quarter. The average increase on asset-based customer contract renewals and deferred price agreements negotiated during the quarter was 3.2%, similar to last year's second quarter. Pricing on traditional published LTL-rated business, excluding fuel surcharges, increased by a percentage in the high single digits. Our adjusted operating ratio for the second quarter on an asset-based basis was 94.4% compared to 93% in the second quarter of 2019. In July, performance compared to last year shows asset-based billed revenue per day decreased by 7%; total tonnage per day shrank by 5%; and total shipments per day fell by 6%. Total billed revenue per hundredweight decreased by about 2%, influenced by lower fuel surcharges and changes in freight mix. Billed revenue per hundredweight, including the fuel surcharge on LTL-rated shipments, remained stable. This was driven by profile changes related to the inclusion of transactional shipments. Excluding fuel surcharges, pricing on LTL business in July 2020 rose by a percentage in the high single digits compared to July of 2019. Additionally, the average increases from contract renewals and deferred pricing agreements negotiated in July 2020 are outpacing those from the recent second quarter and better than last year's third quarter. Historically, the average sequential change in ArcBest's asset-based operating ratio from the second to the third quarter has been roughly flat. However, due to the effects of the COVID-19 pandemic, the 2020 comparison for this period may differ from historical trends, depending on business levels through September. We are beginning to execute the previously committed salary rate reductions and other cost savings mentioned earlier, which will affect asset-based operating results in the third quarter compared to the second quarter. The impact of these additional costs on third-quarter profitability was considered when deciding to restore them. Some operational resources are being reinstated as business improves, and those costs will be managed carefully in relation to business levels. The sequential change in the operating ratio will be influenced by the level of revenue increase that surpasses the costs of restoration previously mentioned and the annual contractual rate increases in union wages effective July 1, as well as necessary health and welfare rates effective August 1. For the Asset-Light segment, daily revenue across our combined asset-light businesses fell by 15% compared to the same quarter last year, reflecting declines in both the ArcBest segment and FleetNet. The total asset-light business operating income was $2.1 million in the second quarter, down from $3.1 million last year, with this decrease largely attributed to lower overall business levels, especially in our expedite operations. Asset-light revenue for the ArcBest segment, excluding FleetNet, remained flat in July compared to the previous year. Up to now in the month, purchase transportation expenses constitute a larger percentage of total revenue, which is expected to lower overall margins this month compared to July a year ago. This morning, we filed an 8-K that included our second quarter 2020 earnings report along with additional information about our quarterly financial results, recent business trends, and future expectations regarding certain financial metrics. This information, including more details on our July business trends, should assist in modeling expectations for our 2020 financial results. Now, I'll hand it over to Judy for some closing remarks.

Thanks, David. Our outlook going forward remains positive, while none of us here are in a position to predict what the economy is going to do in the coming months. The indicators that we follow are showing signs of improvement. There are some predictions of a second wave of the virus in the fall. If that occurs, it could impact fourth quarter business levels and our financial results for that period. However, we remain positive about the company's trajectory and are in a strong position to respond to whatever the rest of this very unpredictable year may have in store. For those of you who have been following ArcBest for a while, I hope that you can see how much the company has transformed over the last decade. We have worked hard to diversify our business model to not only allow us to provide a wider range of solutions and services for our customers but to also synergize these services to make each individual component stronger. We have increased our utilization of data and technology led by our in-house ArcBest Technologies Group to integrate innovative solutions into our processes and the services we provide. These efforts combined with our customer obsession and nearly a hundred years of shipping experience have paid off, and we continue to receive high marks from our customers. I know I touched on this in my opening remarks earlier, but I credit this to the strength of the culture that we have cultivated here at ArcBest. Our team fully embraces our core values, and it's been this commitment that drives our team to excel regardless of the circumstances or the environment. 2020 has indeed proven to be a difficult year. And so far, we have successfully navigated the unexpected challenges it has presented. I continue to admire how our employees have responded to the difficulties presented to them over the last four months and how hard they have worked despite these setbacks to keep the essential goods moving throughout our nation. With business trends improving and in acknowledgment of this hard work, we are very pleased to be able to reverse some of the cost-saving measures we took earlier this spring. As always, we will continue to monitor business levels and make adjustments where necessary. However, I truly believe that we have some of our best work ahead of us, and I look forward to sharing all of it with you in the coming months. And I'll turn it over to David Humphrey to conduct our question-and-answer session.

Okay, Frank, I think we're ready to take questions. I know we've got some folks in the queue, so go ahead with that.

Thank you. Our first question comes from Chris Wetherbee with Citi. Please proceed.

Hi, this is Liam on for Chris. Thanks for taking my question.

Good morning.

So, first question I want to start with the Asset-Based segment. I know that if this trend improves year-over-year especially in July, I'm just wondering if you could provide a little more color on the puts and takes when it comes to the sequential or lot progression in the third quarter. I know you said it may not be comparable to historical trends, roughly flat, but I was just hoping you could provide some context on the potential magnitude of deviation from that historical trend.

Let me share some insights on the transition from the second to the third quarter in our asset-based segment. In July, our revenues were approximately 7% lower compared to July 2019, which is a notable improvement from April when our revenue was down 21%. This suggests a significant increase in revenues from April to July, surpassing our usual comparisons for the initial months of each quarter. As Judy mentioned, our productivity measures showed substantial improvements in the second quarter, with many metrics rising by 5%. This improvement is reflected in our shipment levels and reduced empty miles. A key factor contributing to this progress is the flexibility in our labor contracts, allowing us to adapt our resources effectively. Moreover, this environment enables our customers to extend their appointment windows, as there is less congestion due to street closures and similar issues. At the same time, we successfully managed our schedules to meet customer needs. We also enhanced our pricing programs with technology to utilize remaining empty capacity and create efficient line haul loads. Moving forward with the economic reopening, we do anticipate a decline in productivity as we navigate our customers' disrupted supply chains, though we believe it will still be favorable compared to the previous year. Our technology, including dynamically priced rates and route optimization software, plays a significant role in this. So far in July, our shipment count has outpaced our operational hours, and pricing remains stable, which we expect will help offset inflation, including union wage increases. In a down economy, this could positively impact our revenue through August and September. I wanted to provide this broader context to illustrate how the second quarter compares to these trends. Does that clarify things?

No. That's very helpful. Thank you. And also separately, I know I just want to talk when you'd mentioned about yields. I know you were saying that revenue per hundredweight ex-fuel and LTL-rated shipments was flat in July versus like a low single-digit increase in the second quarter. And I'm just wondering if you could provide some additional context on where you expect growth to trend going forward and how transactional shipments might be impacting that ticket.

Yeah, I would just say that, that a lot of what you're seeing in that revenue per hundredweight metric is mixed related to our business mix. And so, we would describe the pricing environment as good, as positive, rational will be at end of term. But so we see that remaining in a good place.

Got it. And finally, I'm just wondering if you could provide any additional color on the sequential expected change in the asset-light in the third quarter and you provide some comments from the asset-based above asset-light segment.

As Judy mentioned, several industries and sectors influenced the asset-light business. The automotive industry faced challenges due to plant shutdowns, and our moving business saw a significant decline, especially in April, as customers were hesitant to move. Manufacturing plants also experienced shutdowns. However, as auto and manufacturing plants reopen, this will especially benefit our expedited services, and customer comfort regarding moving is expected to improve as well. This is anticipated to lead to positive trends from the second to the third quarter. Additionally, while it remains to be seen if this trend will continue, we are noticing a tightening in capacity, with reports of increased spot rates and higher levels in the MBI. Overall, these factors are likely to bode well for the asset-light business as we progress.

All right. Thank you for taking my questions.

Okay. Thanks a lot, Liam.

Thank you.

Our next question comes from Todd Fowler with KeyBanc Capital Markets. Please proceed.

Good morning, Todd.

Hey, Judy. Great. Good morning. How are you?

Good. How are you?

Good. So, I wanted to follow up on the yield comments or the yield question there. Can you help square the 3.2% increase in contract during the quarter with a comment around the high single-digit price increases you're seeing with core accounts? And then the comment that pricing has improved sequentially now into the third quarter, it seems like a pretty quick response to some of the improvement in the tonnage of the volume environment. Is that just normal contract renewals? Or do you have the opportunity to maybe replace some freight in the market as tonnage is coming back?

Todd, regarding the additional aspect of our tariff-based business, it's important to consider this when assessing our core account LTL pricing. Typically, contract and deferred pricing arrangements involve larger, more price-sensitive accounts. I'm pleased to see solid price increases during this period, which is encouraging. It's essential to evaluate all these factors collectively to understand the overall outcome. The high single-digit increase mentioned excludes transactional and spot-related shipments we have attracted. We make decisions based on our available capacity, assessing these on an incremental profitability basis to ensure they enhance our situation as we commit to pricing. I hope that clarifies things.

It does. No. And I understand all of that. And then just to follow up on kind of the pricing opportunity in the third quarter. Is that just normal contract renewals? The timing of those renewals coming through, or is that some additional pricing opportunity as tonnage is coming back?

It’s essentially business as usual with one exception: we have experienced some delays in finalizing certain deferred pricing renewals due to how the customer contacts are progressing. There isn’t anything concerning, but there are some delays. We do have contract renewals every month and are following the usual process. The activity in the third quarter is similar to what we've seen in the first half of the year. We are taking specific pricing actions as the tonnage returns, addressing each account as we normally would. This involves evaluating the profitability of each account and making necessary adjustments while engaging with customers as needed.

Got it. Okay. That's super helpful. And then just to follow up, could you comment on the monthly or trend during the quarter? It’s clear that the quarter average showed significant volatility, with different trends in April compared to June. I'm curious about your figures in June and would appreciate a rough directional number, if you can provide one, to give us an idea of where you ended the quarter compared to where you started.

Well I'm not going to give you the specific numbers or anything. But I will say, I mean, you could observe this by the different 8-K disclosures that we did throughout the quarter. April was a rough month. It really did not contribute much in terms of operating profit to the quarter. And certainly, June was a much greater contributor to the quarter's profits. And we were encouraged by that. And so, I think you see or hear some commentary from us about momentum, we feel like the momentum as we ended the quarter with certainly improved from where we were when we released our first quarter results. And so, I hope that helps you.

Yeah. No. That makes sense. And that's kind of what I figured and I was hoping to maybe get a little bit more granular, but I understand maybe not wanting to get to that level of detail, so.

Good try. Good try. Yeah.

I'll turn it over.

Hi, Todd. I appreciate it.

Thank you.

Our next question comes from Jack Atkins with Stephens Inc. Please proceed.

Good morning, David.

Good morning, Jack.

Good morning.

Thanks for taking my questions here. So, I guess, we're hearing quite a bit about e-commerce and there's obviously been a shift in sort of consumer purchasing behavior in the freight market, I think, reflecting that. Is there any way to kind of think about the opportunity that you see in front of you guys from e-commerce, whether it's in the shorter term or longer term as just more B2C activity? It looks like it's here to stay. Is there any way to kind of think about the opportunity that can provide an LTL network like yours as we look out over the next couple of years?

It's definitely a good opportunity, Jack, and recent trends highlight that. We experienced significant growth in the first quarter, even prior to the pandemic, indicating something noteworthy. Our residential delivery shipments related to e-commerce increased by 12% in the first quarter and surged by 35% in the second quarter. That acceleration is important, but looking back at the first quarter growth is key as it reflects strong performance before the pandemic. The stay-at-home changes have led people to feel more comfortable making these kinds of transactions, especially for larger items like exercise equipment, storage sheds, outdoor furniture, and televisions. The necessity has led to greater participation in these purchases. Our long history in this business has been advantageous. Our U-Pack service launched in 1997, so we've gained experience delivering to homes, understanding city routes, and the requirements for drivers. This experience has enhanced our customer service and helped us manage costs and timing effectively, especially with the increased volume we've seen. As David pointed out earlier, we hope to maintain some advantages moving forward, such as extended appointment windows from shippers. Due to the pandemic, there's been less demand for in-home delivery, leading us to facilitate more curbside or threshold deliveries, which improves our productivity. Reduced traffic has also played a role. While some of these trends might not last, we hope that our shipper customers also see benefits and choose to continue with these practices, allowing us to enhance our operations and efficiency.

Okay. That’s great. Yeah. I'm sorry. David, go ahead.

I want to add a few thoughts on this. The pandemic has definitely accelerated the growth of e-commerce and sales. As we look at the wider range of products being handled through e-commerce, less-than-truckload (LTL) shipping really offers the flexibility needed for vendor shipments to retail performance centers or distribution centers. While you asked about continuation, we believe LTL is playing a significant role here. The ABF brand, particularly its service aspect, has become increasingly valuable as customer expectations rise. Meeting service requirements is essential, and the retail rest program is a part of that, contributing to the benefits of LTL and the ABF brand. Additionally, our asset-light operations are benefiting from this e-commerce trend. Consider the changes in product sourcing, whether it's nearshoring or shifting within the U.S., which reflects how supply chains are evolving. We're positioned to assist in this area, especially through our managed solutions, which have seen growth in the quarter as we help customers develop, design, and optimize their supply chains. Our range of services, including international operations, full load brokerage, and expedited services, are all aimed at supporting the ongoing e-commerce trend.

Okay. That’s great. Thanks so much for the color, guys.

Thanks a lot.

Thank you.

Our next question comes from Scott Group with Wolfe Research. Please proceed.

Good morning, Scott.

Good morning.

Hey, good morning, guys. It's Rob on for Scott this morning.

Hi, Rob.

Judy, to follow up on the asset-based area, we exited June with significantly stronger profitability than we typically have. For the Asset-Based segment, you've indicated we're facing about 190 to 260 basis points of sequential incremental challenges. Can you provide more insight on what we should anticipate in terms of sequential margin improvement if normal seasonality occurs in the coming months? Will margins remain flat, or do we need to prepare for potential decline due to the additional costs that are on the way?

We believe that our experience in the second quarter demonstrates our ability to manage costs effectively in relation to our business levels, and that will be our focus moving forward. We are seeing growth in July compared to what we experienced in the second quarter, as well as in June. David and I have outlined some details regarding yield, and we aren't noticing any concerning changes. The technology enhancements mentioned by David will continue, and we have clear visibility over our costs and ways to improve them, such as through transactional LTL shipments and improving utilization. Looking ahead, we have the capability to serve our core LTL customers better as their businesses reopen. However, I want to highlight that in the second quarter, particularly at the beginning, we had an opportunity to adjust costs due to a clear understanding of business shutdowns. As we progress through the year, we have a map indicating the uneven restart of our customers, which presents management challenges. It's crucial that we serve our customers effectively, despite these inconsistencies, as we approach the next month. As we close out 2020, it’s clear that this business is challenging, and adding these factors complicates things further. Our analysis going back ten years, including periods like the Great Recession, shows our insight into cost management levers has improved. We have implemented strategies such as line haul optimization, light lane notifications, and a mobile app to better manage our city routes and be aware of any issues, while holding our team accountable to necessary standards. These changes have yielded encouraging results, contributing to our performance in the second quarter. Some cost actions we took were intended to be temporary, addressing uncertainties about the situation we faced, including concerns about business declines and customer collections. We have moved past those concerns and appreciate the current momentum in our business, which justifies restoring those actions. We are pleased to be able to do this.

Okay. And I guess a quick follow up. In terms of the July update for the tonnage per day or the shipments per day up 4% and 3% sequentially. How does that compare to normal seasonality versus June levels for ABF freight?

It's much better than normal, much better. It's on the high end of the kind of the best ever.

Good try. Good try. Yeah.

Hey, good morning. This is Matt on for Dave. Thanks for taking the questions.

Hi, Matt. How are you?

Good. Wanted to get a bit more color on what you're hearing directly from customers regarding their plans heading into August, the rest of the summer. And then, I guess, specifically, you proved a little bit more detail around how much auto shutdown their impact result in order on the asset-light side and sort of how we should think about that going forward. Thanks.

Overall, we remain cautiously optimistic about the momentum we're seeing with our customers. Many customers and states are reopening, which is positively impacting our business volumes. Our sales team has continued to engage with customers despite remote work, which is encouraging. We are effectively utilizing our technology and resources for this purpose. Many of our large clients are seeking assistance in stabilizing their supply chains in this uncertain environment, providing a great opportunity for us to offer our integrated solutions. Our sales pipeline is strong, and an increasing number of customers are turning to us for the diverse, integrated solutions we provide. Our expedite business levels have increased, which is significant within the Asset-Light segment, particularly regarding the utilization of our straight trucks and cargo vans. Although the expedite business is not as robust as it once was due to partnerships with other manufacturers in the life sciences sector, combining the automotive and manufacturing sectors represents a considerable portion of our operations, likely around 30% to 50%, potentially more when factoring in our work with 3PLs. We are encouraged by the reopening of auto plants, which has been beneficial according to the information in our recent filings. Normalization in this area will help improve our asset-light results. The disruptions in supply chains highlight the value we provide in that division, and our customers rely on us for support as we move forward until the situation stabilizes.

Excellent. Thank you.

Thanks.

Thanks a lot, Matt.

Our next question comes from Jeff Kauffman with Loop Capital Markets. Please proceed.

Thank you very much. Congratulations.

Thanks.

Thank you. Good morning, Jeff.

I noticed that you've only reported about $10 million in capital expenditures year-to-date on the cash flow statement. Can you share your insights on capital spending for the rest of this year and possibly into next year? How should we approach our expectations regarding CapEx spending?

When reviewing our cash flow statement, it's important to note that we finance some of our capital expenditures with equipment notes. If you check the bottom of the cash flow statement, you'll notice the equipment financed with notes. This total should be included, and we can discuss the specific numbers later. It's approximately an additional $14 billion.

Okay. Thank you, David.

But as we mentioned in our supplemental or exhibit down there too, that our CapEx range is expected to be $95 million to $100 million for the year for 2020.

Okay. That's unchanged from where you were before then basically.

Yeah, we've narrowed the range on the pad.

Can you discuss the current state of the real estate market? Are there any attractive properties that stand out to you considering the many distressed carriers? Also, could you share your insights on how shipper supply chains have shifted during the COVID crisis and whether this is influencing your thoughts on potential geographical locations?

We are continuously assessing where our business stands as part of our process. This ongoing evaluation by our real estate department is beneficial for us, as they are regularly assessing properties. This includes the possibility of exchanging properties or selling others, which occurs from time to time. You may have observed that we realized a gain from a property sale this quarter. We adjust our business locations to better suit our customers' centers. I believe that the e-commerce trend is driving a need for warehouses, as inventory levels may be higher than historical averages to meet growing customer expectations for timely deliveries. There seems to be some pressure on warehouse space, but my interpretation might differ slightly from common news reports, though it is likely similar.

Okay.

Hey, Jeff. We can move along, we got a couple more. We want to try to get it before the top of the hour, but I appreciate you jumping in with us.

Thank you.

Our next question comes from Stephanie Benjamin with SunTrust. Please proceed.

Good morning, Stephanie.

Hi, good morning. I wanted to touch on your strategy to bring in transactional truckload or LTL business. Obviously, it's been very helpful with improving some efficiencies during the quarter, particularly with some of the volumes. Do you have any kind of plan change of that strategy as we look forward, maybe as the traditional LTL business, some of those volumes start to improve? Any color there would be helpful. Thanks.

Yeah. Well, Stephanie, the interesting thing about that strategy is that it is nimble and flexible with whatever's going on at the time. And certainly, we favor our core LTL accounts in terms of being sure that we're servicing them or making our services available to them. But this strategy that we have been using is really designed to meet the customer where they are. What it allows us to do, these were opportunities that we were getting before, and we're just better equipped to take advantage of those in the right instances. I mentioned the visibility of a cost opportunity to make more efficient in the asset-based operation. So, what I would say is that that is going to be adjustable depending on the circumstance for that day or that week. I think our team has really come together. I think our yield strategy team's working well with the operations team and making sure that we make more efficient the resources that we're deploying. Again, it’s a good customer experience because it's meeting the customer where they are. It's a quote that they were already involved with, and we're just able to meet their expectations and then also a target that where we need it to make more efficient in the network.

Got it. I appreciate the time. I'll leave it at that. Thank you.

Thanks, Stephanie.

Thanks, Stephanie.

Our next question comes from Sanjay Ramaswamy with BofA. Please proceed.

Good morning, Sanjay.

Hey, thanks for taking my question. In your prepared remarks, you mentioned using lane-specific data for truckload rated shipments, especially with the significant changes in truckload spot rates. Could you provide more details on how you expect this to evolve, particularly in light of the more stable LTL pricing environment?

Well, actually, I think that was similar to what the question that I just answered for Stephanie. But again, we're very focused on utilizing that to meet the needs of both our network and the customers. I think that what you've seen from the core account LTL customers that we have, we have good increases. So, the combination of that I think worked very well in the second quarter. We're seeing that work well in the month of July where we've seen some strengthening. I think just keeping those activities synchronized, so to speak, is really the best advantage that we can have. We intend to continue to do that based on the needs that we have in the network, and then again, meeting the customer need as we go forward.

Okay. Great. That's it for me. Thanks.

Thank you.

Okay. I think we've got time for one more. I think it's a follow up question. Can you queue that one up?

We have a follow-up from the line of Todd Group, Wolfe Research. Please proceed.

Hey, guys. Thanks again for the follow-up. With regard to Panther and kind of the Asset-Light segments, as we think about kind of overall truckload rate inflation, should we think in aggregate about the Asset-Light segment benefiting or hurting from kind of higher truckload rates and obviously an offset in terms of purchase transportation on a go-forward basis for earnings?

That's an interesting question. I think it depends on what I've mentioned because we have seen, just this week, regions of the country that are very tight. We need to navigate carefully in those areas to ensure they do not deteriorate and that we can grow our desired net revenue. I believe that in a tight capacity environment as we move through the rest of the year, customers will recognize this, which will enhance our ability in many situations where expedited services are already designed to work that way with the customer, their contracts, or their relationships. Therefore, we expect that as capacity remains tight over time, it will be beneficial to our net revenue growth. David, do you have anything to add?

No. I would agree with that. Just to your point, I think that's probably where you're doing, Rob, just periods of time you may have a tightening or a tightening of the net revenue margins, and then expanding. So, as the cycle moves and as Judy pointed out, I think it's about the customer recognition of the market environment that you're playing in, in order to get the spread.

That should have been more difficult, I think, is the customer side of that. Yeah.

Okay. We'll, I think that concludes our call. We thank you for joining us this morning. We appreciate your interest in ArcBest. So that concludes our call. Thanks a lot.

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day everyone.