...Greetings, and welcome to the ArcBest acquisition of MoLo Solutions. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. Should you require operator assistance at any time, please press star zero. As a reminder, this conference is being recorded today, Wednesday, September 29th, 2021. I would now like to turn the call over to David Humphrey, Vice President of Investor Relations. Please go ahead. Thank you for joining us today. Today's call, we walk you through the details of our acquisition and how this transaction that we have been working on for several months will unlock significant growth and value creation potential for our business. Our presentation this afternoon will be done by Judy McReynolds, Chairman, President, and CEO of ArcBest, and David Cobb, Chief Financial Officer of ArcBest. Also joining us for the Q&A session will be Danny Lowe, ArcBest President of Asset-Light Logistics and Chief Yield Officer, and Dennis Anderson, ArcBest Chief Customer Officer. To help you better understand ArcBest and the transaction we announced today, 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 risk. For a more complete discussion of factors that could affect the company's future results, please refer to the Forward-Looking Statement section of the company's press release and the company's most recent SEC public filings. As a reminder, the slides that Judy and David will be reviewing here can be found on the ArcBest website, arcb.com. We will now begin with Judy McReynolds. Thank you, David, and good afternoon, everyone. Earlier today, we announced a definitive agreement to acquire MoLo Solutions, a Chicago-based company that is one of the fastest-growing truckload brokerages in America. We're very excited about this transaction, which positions us to make key advancements toward our strategic objectives. Bringing these two companies together will significantly accelerate our growth by increasing the scale of truckload brokerage services offered within our Asset-Light business segment and advancing our position in the large and growing domestic transportation management market. I'd like to begin by walking you through highlights of ArcBest's strong performance and business momentum. I will then provide a summary of the transaction and additional color about the strategic rationale. David Cobb will take you through the specifics to discuss the terms and financials in greater detail. Finally, I'll offer a few additional comments before we open it up for some questions. On slide three of the presentation, we've summarized the strong business momentum ArcBest has achieved so far this year. As evidenced by today's 8-K update, we are excited that this momentum is continuing into the second half of the year. Compared back to 2020, which was impacted by the effects of the pandemic, we have rebounded nicely with preliminary expected consolidated revenue growth through the third quarter of 2021 of 32%, and that includes asset-based revenue growth of 24% and revenue growth of 55% in the Asset Light ArcBest segment. On a non-GAAP basis, through the third quarter of 2021, our year-to-date asset-based operating ratio is expected to be 89.6%. Our annual non-GAAP asset-based operating ratio has improved nearly 600 basis points since 2016. Along with the revenue increase, our asset-light profits have grown substantially this year. So our business is performing well. We have strong tailwinds, and we are pursuing this accretive growth opportunity from a position of strength. As we enter this strategic transaction, we are in a very solid financial position. Midway through the year, our cash balance was nearly $425 million, putting us in a $185 million net cash position. Considering all our available financial resources, our total liquidity was over $660 million. Throughout this year, we've made significant investments in our people to cultivate and retain talent, which positions us to capitalize on accretive growth opportunities. Within ABF, we have added over 1,000 new employees so far this year and netted over 500 when considering normal employee departures, primarily retirements. We have previously mentioned our plans to invest $100-$135 million in 2022, above our historic CapEx levels in equipment purchases and real estate investments to enable further growth. The addition of approximately 350 new employees has contributed to the growth across our Asset-Light business this year. Our focus remains on developing strong customer relationships to increase cross-selling opportunities, driving higher revenue, greater profitability, and higher retention. The addition of MoLo strengthens our long-term position in the marketplace by nearly doubling our available capacity and enhancing our ability to serve larger customers across the suite of logistics solutions we offer. On slide 4, we've identified 6 highlights of the MoLo acquisition that summarize why we are confident this transaction best positions us for the future.... An especially important element of being an effective truckload broker is the ability to access the needed capacity to move loads. ArcBest has a large number of carrier partnerships, and the number of MoLo's carrier relationships slightly exceeds ours. As we combine our relationships, there is minimal overlap, and the resulting capacity network is nearly double, providing more resources for serving our customers. In recent years, ArcBest has been on a journey to improve the balance of revenue between our asset-based and asset-light service offerings. This acquisition accelerates the revenue growth of truckload brokerage within our asset-light segment. Our balanced revenue mix will more closely mirror customer transportation spend. We also know that in most cases, when we grow our asset-light services and associated revenues, it results in growth in our asset-based business. Over 60% of our customers who use asset-light services also utilize our asset-based services. We have been encouraged by our recent growth outlook, but look forward to driving an extended positive impact on our asset-based business through a more rapid approach to scale our broader suite of logistics services. In that sense, we see this acquisition as a springboard for our existing business. By increasing the strength of our truckload brokerage solution, we can better deliver comprehensive supply chain solutions for our customers. The addition of MoLo fortifies our ability to win truckload, which is the biggest area of logistics spend for our customers. We operate in markets with $330 billion of available spend, and we've identified specific opportunities of over $3 billion with current customers who are loyal and not price sensitive. A significant portion of this opportunity is truckload, and our impressive growth this year in asset-light business is further validation that shippers look to us for these services. MoLo brings especially attractive expertise in this space, with a strong track record of rapidly growing, that can meaningfully increase the number of daily truckload-sized loads we handle. Further, there is very little customer overlap, which will offer significant opportunity for current ArcBest customers to benefit from MoLo expertise and current MoLo customers to benefit from ArcBest's broader set of logistics services. ArcBest truckload provides our customers and carrier network with digital channels that make it easier to do business. Our digital business capabilities are a key strength and continue to advance rapidly. The combination of ArcBest and MoLo enables our combined carriers to access more customer shipments and gives our customers access to nearly twice the capacity, all available through our established digital channels. MoLo's expertise with larger customers that have significant needs, many of whom are digitally connected, will provide a unique opportunity for us. The increased scale of the business provides more data and enhanced intelligence to better serve our customers and carriers while operating more efficiently. Since our first significant asset-light acquisition, the purchase of Panther in June of 2012, we've advanced our stated strategy of ArcBest being an integrated logistics company that offers innovative solutions to our customers' supply chain needs. Since that time, we've focused on developing ArcBest asset-light services, our team of trusted logistics experts, carrier capacity resources, and the internal systems necessary to offer our customers delivery choices and shipment visibility. We've been very transparent about our strategy and our intent. The purchase of MoLo is the next step in solidifying and advancing our logistics strategy. It is an investment in our long-term future that enhances how we serve customers and accelerates our revenue growth, both asset-light and asset-based, and our financial returns for the benefit of all ArcBest stakeholders. Like ArcBest, MoLo prides itself in taking care of customers, carrier partners, and employees. One of MoLo's keys to success, especially with larger customers, is their commitment to providing an exceptional level of service. ArcBest and MoLo are fully aligned on serving our customers with excellence. We expect MoLo will generate earnings accretion by the fourth quarter of 2022 and be on track toward our 2023 target of $25 million of annual adjusted EBITDA. We are very pleased with these compelling financial benefits and fully expect that the acquisition will be accretive to our long-term return on capital. On slide five, I want to share a few details about MoLo that illustrate why it is such an appealing addition to ArcBest. MoLo is based in Chicago, the innovation hub of the truckload brokerage industry. MoLo's primary location positions us well and strengthens our ability to add the qualified talent we need to continue to grow this important part of our business. Since its creation in 2017, MoLo has been able to scale to be one of the fastest-growing truckload brokerage companies. Their services are an ideal complement to our current offering, and the combination of the companies will make all ArcBest service elements much stronger. In addition, they provide strength in growth markets such as food and beverage and enhance our ability to serve these customers. As you can see from this slide, MoLo has been recognized numerous times just this year for excellence in workplace and revenue growth. MoLo's CEO, Andrew Silver, and President, Matt Vogrich, have strong backgrounds in the truckload brokerage industry. Andrew gained valuable experience during his career at Coyote, which was founded by his father, Jeff Silver. Andrew and Matt lead MoLo with a true entrepreneurial spirit that focuses on serving customers while ensuring that customers, capacity providers, and their team members have the best experience possible. In recognition of their approach to the business, earlier this year, both Andrew and Matt were recognized as 2021 Midwest Entrepreneurs of the Year by Ernst & Young. I'm very happy that Andrew and Matt will remain with ArcBest in leadership of truckload brokerage. Andrew will report to Danny Loe, who leads ArcBest Asset-Light Logistics, and all of MOLO's executive team will remain with ArcBest. With that, I'll turn it over to David Cobb, who will discuss specifics of this transaction. Thank you, Judy, and good afternoon, everyone. Slide 6 presents some key profile items of MoLo and ArcBest and the impressive view of those metrics on a combined basis. Combining our second quarter 2021 trailing twelve-month revenue with MoLo's expected revenue for the full year equates to total ArcBest pro forma 2021 revenue of over $4 billion. This slide also demonstrates MoLo's ability to rapidly grow with a small number of large customers, as Judy referenced earlier. We're excited about the truckload carrier relationships that MoLo brings. MoLo's carrier base is slightly larger than ours, and we estimate that upon completion of the transaction, we will have access to 70,000 truckload carrier partners, improving our service to asset-light and asset-based customers. Slide 7 highlights a few key points about the acquisition. At closing, ArcBest will make an initial cash payment of $235 million from available cash on hand. Following that, the remainder of 2021 and 2022 will be focused on integrating our operations and applying best practices. Based on an annual earn-out agreement in years 2023 through 2025, there is the potential for additional cash payments based on annual Adjusted EBITDA targets. We have structured the agreement to foster continued rapid growth of MoLo within ArcBest. As highlighted on the previous slide, MoLo is expected to generate $600 million of revenue in 2021. Continuing the significant growth, we expect our combined truckload brokerage operation to generate revenue of over $1.2 billion in 2022. MoLo has been operating at a break-even level in recent months as net revenue margins have progressively improved. We do expect the business will continue to be break-even for the first half of 2022 during a transition period. The earn-out agreements align with our mutual interest of generating positive earnings. And to achieve the target earn-out that begins in 2023, we expect for the business to generate earnings accretion by the fourth quarter of 2022 and be on an annual adjusted EBITDA run rate toward the 2023, $25 million target. We also expect that the purchase of MoLo will be accretive to our long-term return on capital. We're encouraged by the potential synergy of the combined operations that will drive additional benefits, particularly in the areas of carrier procurement, increased cross-selling revenue, and leveraging other best practices. While execution is important for realization of those, the identified synergies are meaningful, and along with combined scale, have the potential to double the earn-out target EBITDA amounts. The financial results of the combined MoLo and ArcBest truckload brokerage business will be reported as a part of the asset-light ArcBest reporting segment, which is consistent with how we have previously reported our truckload brokerage results. The acquisition is expected to close in the fourth quarter and is subject to the customary requirements and expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Act. Slide 8 contains details on the earn-out agreement, which will be measured based on financial results in years 2023 through 2025. We believe that the structure of the earn-out agreement ensures that ArcBest and MoLo's mutual interests are consistently aligned for future revenue growth and increases in Adjusted EBITDA. At the 100% target level in 2025, the MoLo acquisition would add $44 million in incremental Adjusted EBITDA to the asset-light ArcBest segment. If the earn-out amounts for the three-year period were paid at the target level of $215 million, the cumulative consideration would be $450 million. The table on this slide illustrates the minimum and maximum potential earn-out payments. Earlier, Judy talked about how the addition of MoLo expedites our stated goal of having balance in our asset-light and asset-based revenue mix. Slide 9 illustrates how quickly we will be moving toward this goal. Combining our second quarter 2021 trailing twelve-month revenue with the 2021 revenue projection for MoLo shows that our pro forma 2021 asset-light revenue mix increases 10 percentage points to 44%. We enter this transaction with a strong balance sheet and total cash as of the end of the second quarter of $423 million and total available liquidity of $662 million. Considering our debt, our second quarter net cash level was $185 million. After the initial $235 million payment from MoLo, we remain in a strong financial position. With a solid business momentum, we are continuing with our investment plans to expand our asset-based capacity, supporting our growth objectives, as well as our programs to return capital to shareholders through dividends and share buybacks. With accelerated free cash flow, we also intend to review our capital allocation going forward, including the levels of capital return to shareholders. Now I'd like to turn it back over to Judy for some additional comments on the acquisition. Thanks, David. As noted on slide 10, for the last few years, we've identified a three-point strategy to drive revenue growth and improve profitability. We believe the acquisition of MoLo checks all of the boxes in advancing this strategy and achieving the goals we previously identified. The addition of MoLo certainly expands ArcBest revenue opportunities. Its track record of rapid revenue growth and customer obsession is the perfect catalyst to accelerate our pursuit of the $91 billion domestic transportation management market, while building long-lasting customer partnerships. MoLo has been very successful in going deeper with large customers. This approach will be synergistic in strengthening relationships with ArcBest current customer group. Our asset-based business provides many advantages and resources that allow ArcBest to craft customized solutions using the assets we own and manage. ABF Freight flourishes and is most effectively utilized when working alongside solid asset-light services because of the options we're able to provide our customers. We have especially seen the benefit of these capabilities over the last few years. For this reason, the addition of MoLo and the progress it will facilitate toward a balanced revenue mix will benefit all of our logistics services. As I stated earlier on the call, our digital capabilities provide us with a significant advantage in streamlining processes, reducing costs, and augmenting human expertise. I will cover this more on the next slide. Ultimately, the acquisition of MoLo ensures that we are best positioned to advance our strategy in each of these three areas, with the end result of significantly enhanced shareholder value. Combining with MoLo further advances our digital capabilities. Indicated in green on this slide are several advantages from combining our truckload brokerage operations into one formidable market leader. ArcBest has a number of digital, automated, and data-enhanced tools for the intake of truckload shipments and fulfillment of that demand. These tools link us to our shippers and capacity providers over an array of channels and provide for fully automated real-time transactions, including digital freight matching, price negotiation, and shipment acceptance, as well as real-time quotes, API connectivity, load board automation, and enhanced shipment visibility. Many of these proprietary tools are built on cognitive capabilities and machine learning functions that rely on data. The addition of MoLo more than doubles the amount of data flowing through these digital tools. The ability to leverage technology and data is an absolute necessity for success and longevity in the truckload brokerage marketplace. ArcBest has solid digital business capabilities with a broad scope that is expanding every day. Combined with MoLo, our digital strength will be even more of a differentiator in serving the logistics marketplace. As we close out this portion of today's call, turning to slide 12, I want to reiterate some of the items I mentioned in my earlier remarks regarding this strategic opportunity. It is essential that we have a strong and growing partner network of capacity providers in our business. Nearly doubling our carrier relationships gives us a generous resource to find a way to say yes to our customers. As an integrated logistics company, our goal is to position ourselves with the tools to facilitate profitable growth by creating innovative solutions to meet the critical supply chain needs of our customers. The markets in which we operate are large, and our opportunities with customers are significant. The addition of MoLo's expertise in truckload brokerage increases our ability to better serve customers and to win a larger portion of their logistics spend. At ArcBest, we work hard to see our business through the lens of customers. As trusted logistics partners, we work directly with them to understand their challenges and to put together customized solutions that reflect innovation and creativity. MoLo shares these same values and goals. Like ArcBest, they are truly customer-obsessed, and at both of our companies, our people are at the heart of our success, a perfect match to do great things for our customers. The truckload brokerage business MoLo brings to ArcBest will allow us to more quickly diversify our revenue mix and increase the portion coming from asset-light services that have a higher capital return potential. This acquisition is an important opportunity to fuel the revenue growth of our company, deliver improved financial returns, and drive our strategy forward. With this acquisition, we expect to better serve customers and create new opportunities for many employees, while profitably growing our business and creating value for shareholders. We are excited about our future and eager to welcome the MoLo team to ArcBest. And David, that concludes our prepared remarks. I think we're ready for some questions. Okay, Dave, I think we're ready to take some questions. I think we've got some folks in the queue. We do indeed. Certainly, and thank you. Our first question comes from Jack Atkins with Stephens. Your line is open. Okay, great. Good afternoon, and congratulations on this transaction. ... Thank you, Jack. Thanks, Jack. So, Judy, I guess maybe if we could start, I would love to get you to maybe expand a bit on the technology and digital capabilities that MoLo is gonna bring to your existing truckload brokerage and asset-light capabilities. I'm just curious to what degree, you know, you're buying—clearly, you're buying a rapidly growing business, but to what degree are you also buying a technology platform that you can scale across the rest of your asset-light operations? Can you just talk to that for a moment? Yeah, I mean, it's interesting because, you know, MoLo has heavily invested in their relationships, you know, with customers, carriers, and employees. And as these relationships continue to mature, we see opportunities to continue growing, you know, this truckload business while capitalizing on economies of scale. And really, our digital capabilities will allow MoLo to further, you know, improve their operating efficiencies and provide an even better experience for their customers. And some of the capabilities that we built for customers are, you know, API connectivity, real-time web quoting and booking, account-specific pricing, that's via an agent or the web, automation of low-value tasks for agents. And then on the fulfillment side, digital freight matching, negotiation and acceptance, web and mobile apps that allow carriers to manage their business as well as communicate their specific preferences so they see loads that they wanna carry. And so all of this kind of comes together, and we will be leveraging best practices between the two to improve efficiency and those customer connections. And, you know, MoLo has good practices with respect to connecting with larger customers that we value, and, you know, we have a lot of capabilities on the transactional side of the business. And, really, at times, the only limitation that we see is just based on what customers or carriers want to do. And in those instances, we just bring, you know, our human and digital channels together in a way that really helps us facilitate, you know, that experience, whether it's a customer or a carrier partner. But we're excited about this. I mean, I don't underestimate the value of that data. And you know, I mean, that's gonna be helpful to us in understanding, you know, market capability and efficiencies. Okay. Okay, that's helpful, Judy. Thank you. And then I guess for my follow-up question, could you kind of walk us through the next steps here over the next 18-24 months as you integrate MoLo into your existing truckload brokerage operations? I mean, yeah, can you kind of walk us through some of the goals there? Are you gonna try to put everyone on the same platform? You know, what sort of heavy lifting will be required to sort of get that integration of the different acquisitions that you've made over the last 9 years onto that one platform? You know, I know in the past, with other companies, they've sort of struggled with that. I'm just sort of curious the lessons that you maybe have learned from other folks' mistakes as you sort of embark on this journey. Yeah, Jack, I'm gonna let Danny Lowe, who's the President of Asset-Light Logistics, who will be leading, you know, all of our efforts to do that integration, to help answer that question. Yeah. Okay. Hey, thanks, Jack. I think the key is, you know, is our focus, ultimate goal of this is one seamless truckload offering to our customers and our carrier partners. And so you hit on the key points there. That needs to be one platform, and so our focus is to build towards that one platform. You know, currently, right now, Andrew Silver's dad, Jeff Silver, has a company named Mastery that has a TMS offering called MasterMind, and that is what MoLo has built their platform around. And so we see significant opportunity to use that platform and then leverage that with all the digital tools that Judy's talked about to provide a unique and, to me, a very complementary solution to both our current ArcBest customers and carriers and the MoLo customers and carriers. But as far as the integration plans, really, I have three, three main focus areas. It's not to disrupt our employees, it's not to disrupt our customers, and it's not to disrupt our carrier partners. And so we're gonna find the synergies, but we're gonna be deliberate as we walk through and make sure we get the right answer for those three categories. Okay, that's great. I'll turn it over. Thanks so much for the time, and congrats. Thank you. Thanks, Jack. Our next question comes from Jason Seidl with Cowen. Your line is open. Thank you, operator. Hey, Judy and team, first, congratulations on the transaction. Thank you. Wanna look a little bit sort of down the line. You know, this obviously is a pretty big one for you guys. Really reshapes the company in terms of, you know, percentage of revenue and between asset-light and asset-heavy. A while back, you sort of put out longer-term targets. Are you thinking about revising them given this transaction and where you want the company to shake out between asset-light and asset-heavy? Well, you know, I think that is good to think about. I mean, you know, one of the things that we did was include in the slide deck just how much, you know, this transaction means to us in terms of, you know, the balance between asset-light and the asset-based business, and also just where it puts us just almost day one, you know, with their $600 million of revenue on a run rate and then what we've done so far this year. And, you know, we're excited about the update we put out as well because I think it just, you know, brings all that together in an exciting growth story. And so, you know, I think it does make sense as we absorb this. You know, to think about those targets and, you know, what we could share, because, you know, this does check a lot of our boxes. It accomplishes, you know, some of our objectives. But also, I think, you know, for the team that's on this call, it, we're really feeling like we're in the early innings, is what I'd say, of our, of our story. And we've really, since we did the enhanced market approach in 2017, and, you know, we've taken several actions to try to better, face the customer with the right resources. You know, having these additional carrier partners, adding capacity, and the success that we've had, bringing all of that together, whether we're in a pandemic or coming out of a pandemic or, you know, perhaps in a normal growth year, all of that is pretty exciting, and, and there's a lot of work to do. But, it feels good to make progress on our strategic path, which we know and we believe in. That was helpful. I guess, on your update that you gave, it looks like the sort of implied OR that you're giving for 3Q is gonna be considerably better than what you talked about on your earnings call. Am I doing the math right on that? Yeah. David, you want to talk about that? Yes, yes, that's right. And Jason, I hope you saw the business update, 8-K, that we filed today. If not, it's out there. It gives us, you know, it enables us to talk about things a little more deeply than we typically do, but given this transaction. So, but we did say in there that the third quarter sequential change in ArcBest, the asset-based operating ratio versus the second quarter is expected to improve about 200 basis points. You know, we obviously haven't closed the quarter yet, but wanted to give you that insight as we're seeing this great business momentum, and we gave some updates also on the revenue and stats in the business. Perfect. Those are my two. Thank you, guys. Congrats again. Yep. Great. Thank you, Jason. Our next question comes from Chris Wetherbee with Citigroup. Your line is open. Yeah, hey, thanks. Good afternoon, guys, and congrats again. Hey, thanks, Chris. Thanks. Appreciate that. Okay, yeah, absolutely. And maybe I can just pick up on sort of the synergies comment. Can you maybe get a little bit more specific? Obviously, there's a lot of revenue growth embedded in this business that you're buying, given the pace that you're sort of outlining here. But what are the sort of synergy opportunities? Maybe if you could be a bit more specific, whether they be in terms of the size of the revenue potential, or maybe there's different verticals or areas, geographies that you might be, you know, helpful. If there's cross-sell between the truckload business and the LTL business that you guys are thinking about, that would be helpful. Yeah. Hey, Chris, this is Dennis. I'll take that. And first of all, you know, we see this as a great opportunity for cross-sell, as you mentioned. And to be a holistic logistics provider, really having a strong truckload offering is essential. I mean, we feel it's imperative to have a truckload service offering of scale that leverages data technology and relationships to provide a competitive and valued truckload service, offering both to our shipper and carrier partners. And so we have that capability today, but we're strengthening that tremendously, for our customers, going forward, and so we see that possibility there. For the MoLo customer base, which is also a larger... It skews larger, so Fortune 500 type customers. They have many, many needs beyond just truckload that we're able to bring to the table for them, and so we're excited about the cross-sell opportunities there, from a customer base perspective. And you can see in the presentation, maybe the number of customers are 30,000, they're 500. That really starts to give you a little bit of an idea of, you know, being able to go deeper and wider with that customer base. And so, from a customer perspective, we really like the revenue synergies. And then on the carrier side of things, we have the capability to buy better, with our combined carrier base and then bring that carrier base to those customers. Just excited really about, about synergies from that perspective, as well as the revenue synergies we talked about earlier. Okay. Yeah, no, that, that's super helpful. And then, you know, maybe if I could ask one on, on the update, because obviously that also was extraordinarily helpful. You know, clearly, some significant improvement, at least relative to, you know, where you were before last quarter in the operating ratio. Can you just talk a little bit about sort of the environment behind sort of that that drove that OR improvement sequentially, as opposed to what you normally see from a seasonal perspective? Yeah. Hey, Chris, this is David. You know, as we've been talking about, we've continued to see solid demand from our core customers, you know, in our business. And that's asset-based, that's asset-light, that's across the board. And so, hopefully, you had a chance to see our business update, Form 8-K, and that you're referring to that. But, you know, some good metrics, we, you know, we're able to manage our network really to a good revenue level and, you know, revenue per shipment level for the quarter. And that's really, you know, helping us on that asset-based OR improvement. You know, pricing is still in a great place, continues to be. You know, the demand for our LTL service is solid, I would just say. ... I don't, anything else to add? Yeah, I mean, what I would say, too, is just the overall strategy that we deploy. It is amazingly effective in this time. I mean, we started down this path, as I mentioned before, you know, in 2017. I just think our team does a great job of, you know, seeing the business opportunity through the customer's lens. There's so many different conversations that customers want to have about whatever challenge they have or what they're trying to solve. And, you know, oftentimes, that conversation involves more than one of our solutions. The asset-based solution is very valuable right now because of the certainty surrounding that. And, you know, the success we've had with hiring people recently has really helped us there. But, you know, we, we retain business better because we can have a more fulsome conversation, and that's back to, you know, the truckload point that Dennis was making earlier. It's just so valuable to be able to come together, you know, from a solution standpoint ourselves, you know, to give the customer a seamless solution. And so we're, we're really seeing all that play out. And I think it was mentioned earlier that, you know, when we do asset-light business with a customer, 60% of the time, the asset-based business is involved in that in one form or fashion. And that's just a, that's just a positive, you know, overall outcome, I think, for the customer, and it works well for us as well. Okay, that's very helpful. Thanks very much for the time this afternoon. Appreciate it. Thanks, Chris. Thank you. Our next question comes from Todd Fowler with KeyBanc. Your line's open. Hey, great. Good afternoon, everyone. So I wanted to ask a little bit- Hey, Todd. Hey, Judy. Hey, David. So we've talked a little bit about the top-line trends. I want to make sure I understand, the profitability of the business, then also how you're thinking about it into, into next year. So it sounds like basically the business is breakeven currently, but some of that's the function of where, gross margins are from a cyclical standpoint. So I guess maybe if you can talk about where the gross margins have been and where you expect them to go. And then for, for 2022, what sort of level of EBITDA are you expecting? And then, if I've got it right, you're not expecting earnings accretion until the fourth quarter. I just want to make sure I've got those pieces right. That's right, Todd. Yeah, the way we've described that is, you know, 2022 would be a transition period, and, you know, the net revenue margins, as you talked about, you know, have been improving, and so that's operating at a breakeven level. But by the end of 2022, we're expecting the business to be profitable and on that 2023 target EBITDA run rate. So that's where we expect it to exit the end of the year. But in terms of margins, I would describe them as being probably less than where our existing truckload brokerage margins have been, but certainly improving over time. Yeah, and Danny, you might add what your thoughts are about how all that comes together. I mean, when I, you know, you look back and MoLo, in their first year of operation in 2017, their revenue was $5 million. In 2021, it's expected to be, you know, this year, expected to be $600 million. And so, you know, there's been a lot going on in the rapid growth side for them, and, and, you know, you might- Sure ... speak to how that, that is going to be handled or thought about going forward. Sure, Judy. I think the other exciting part is to look at the customer base, like you described. That was with 500 customers, and now we have deep relationships with over 30,000 customers that we're going to introduce our MoLo to. So, but as I think through it, Todd, as we go through this, a lot of people think it's an either/or as far as growth and improved margins, and that's really not the case. We have a lot of experience that shows we can do both, and so we plan to grow, and we plan to expand the margins of the business. And what we've seen in our history is when we do that, that's where you produce the best operating income for the company as well, too. So, we see it going forward. They have a lot more contract primary business as compared to the spot market, compared to the current ArcBest. As we think the mixture of that business, the mixture of the carriers, it's going to produce not only from maybe a price point, but also a buying standpoint. So margin can increase in two to two ways, and so we think the complement, we think, would be more productive as well by implementing best practices across both brokerages. So we're excited to see that. And again, it can be both. We expect to see growth and margin improvement. Well, and the expertise and experience that comes, you know, with Andrew Silver and Matt Vogrich, and the rest of the team, is going to really benefit the entire, you know, truckload brokerage business, and we're excited about that. Yes, very excited. Yeah. Yeah, got it. No, that makes sense and kind of the view, particularly in the marketplace, about growth versus margins. But David Cobb, I guess I'm still not clear, what sort of EBITDA are you expecting for 2022 then from the business? Yeah, I think one way to think about it is, like I said, you can keep in mind that 2023 EBITDA target that's in our materials, and just think of the fourth quarter, you know, on that sort of run rate. Got it. So by the time we get to the fourth quarter, we're annualizing close to that $25 million for 2023? ... That's one way to think about it, yeah. I think there's, you know, there's synergies, as we talked about, to help that as well. And, so there's a lot to work through this transition period, but, you know, that's a way to model this, I guess, you know, as you try to work that through. Okay. Yeah, no, and I don't want to belabor the point. I just want to make sure we kind of get the numbers right. So I appreciate the color there. Just for my follow-up, Danny, you just touched on this for a moment, but can you share what% of MoLo's book is contract versus transactional or spot? Yeah, I'll give you a rough range. I would say that- Sure. Their contract primary is more kind of in the 50%-60% range. It varies a little bit, but that'd be a good range of what we see at this point. Where have you guys been historically? you know, our primary business is probably lower in the teens, so in the 10%-20% range- Yeah is what we see. Got it. Okay. Hey, thank you all for the help tonight. Congratulations. Yeah, thanks a lot. Thanks, Todd. The next question comes from Scott Group with Wolfe Research. Your line. Hey, guys. Thanks, and congratulations. Hi, Scott. Thank you, Scott. I want to just a couple of quick things first. When you say that the business today is break even, is that on an EBITDA or operating income basis? And then how do you think this impacts the long-term margin guidance for the Asset-Light segment? Yeah, Scott, EBITDA and operating income are almost the same. I mean, again, I'm excluding any purchase accounting amortization in talking about this. But, yeah, there's, you know, essentially, it's asset-light, so think of it that way. In terms of OR, I think the margins, you know, when you bring this business together with ours and best practices and the synergy and just really all the strategic reasons why we're putting this together, you know, we could see the OR improving over time. And I think that's a reasonable expectation out of this. So. Okay. And then—Judy, I get obviously the focus here where we're a lot of Asset-Light growth. You know, I don't want to lose sight of that the Asset-Based business has just been so good. Can you maybe just talk about your thoughts over the next couple of years about, you know, further opportunities to keep improving the Asset-Based margins? And if maybe there's anything about this deal and bringing on MoLo that helps drive further LTL margin improvement? Oh, yes. It definitely, you know, we do see opportunity. I mean, you know, we've articulated some investments that we want to make. I think it's $100-$135 million of investments in real estate and equipment because of how bullish we are about the asset-based business. And, you know, I don't know if you saw our update that we put out, but, you know, to have a year-to-date operating ratio in that business of 89.6 is, you know, really, really good and solid. And, you know, I think we've put out there a measurement against 2016, just, you know, over the last five years, about a 600 basis point improvement, and yet we still have more to go. You know, we really want to get that business to a better position of growth because we really feel like this acquisition is going to accelerate the growth of our asset-based business as well. You know, many times when we're talking to a customer, especially one where we enter in a truckload brokerage or a truckload, the full load, let's just call it full load, conversation, it often finds itself into, "Well, what can you do for me, you know, in the LTL piece or the LTL network?" And, you know, Danny, you might talk about the way that you see the LTL business interacting with this business and, you know, how often that's coming up in the conversations you see operationally, but then also on the yield side, you know, as we are doing managed business or other types of combinations. Absolutely, Judy. Judy mentioned, as she said, as we have conversations, whether it's about LTL or whether about truckload, that leads to conversations about the overall supply chain. In our managed transportation area has been one of our fastest-growing areas is because our customers are asking us to help solve or help make their supply chain more efficient. In this timeframe now, they're asking us, "Help us find capacity." So I think when we think of this MoLo acquisition, that goes right down the fairway of finding more capacity for them. As we build solutions for customers who manage transportation, we leverage our truckload brokerage, all of our carrier partners. We also leverage our asset network, whether that be just straight LTL or whether that be optimized solutions that use truckload and LTL to provide the correct answer for our customers. So as Judy mentioned, it does... This acquisition is not just about Asset-Light, it also strengthens our asset business. Yeah, and Danny, since you have so much interaction with this, I mean, you know, one of the things that we've talked about this year is just, you know, growth opportunities with our core customers. Yes. You know, you might also, you know, talk about what you see in terms of, you know, the positive impact of transactional. You know, since you're here, and you can talk with us about that, you know? In the asset business. Yeah. Right. In the asset business. You know, I think we've talked about just the transactional business, the ability for us to, as we find solutions, we're able to find capacity inside our asset network, even though we're moving—there's still opportunities and to fill that with this transactional business. And the beauty that we've been able to—that we've done in the past is, or in the, in the most recent past, is we're able to fill the right shipments into our network. We're able to find the right freight that fits, fits into our network, which what you're able to do then is put revenue on costs that were already going to happen. And so the ability to do that, to, to have that transactional business, to fit it into our network, is it, it provides great results for us. Yeah. And so, you know, I think our overall view, Scott, is just one that is growth oriented, perhaps... you know, at a higher level than what we've been doing, and, and, you know, this year has been a challenge, but it's not a demand challenge. I mean, it really is one of, there's plenty of demand out there. It is, that's definitely not the issue, it's just finding your way through that to serve your best customers and the right customers and to do it well. And, and that's been, you know, a winning formula for us this year, and we continue to think about it that way going forward. Hey, Scott, I'm going to move us along. I got a few more in queue that want to get a question. Thanks, Scott. Thank you for the time. Appreciate it. Thanks. Our next question comes from Ken Hoexter with Bank of America. Your line is open. Hey, good afternoon. Just to- Hi, Ken. Judy, Dave, and team. So just to, I guess, understand the business here, is this a digital brokerage company, or is this a normal calling base? Maybe just tell us a little bit about MoLo. What percent- Yeah, eighty-one ... what% is LTL, what% is TL? Yeah. So, first, they are truckload brokers. There's really no LTL services they provide to their customers, which we talk about, that's a great synergy for us to be able to offer not just LTL, but managed transportation, international, and other services to those customers. But, you know, MoLo is a, they have a digital presence, but you know, they're a Chicago-style brokerage, is what they are. But, you know, all digital brokerages have digital tools, and so we're excited about the combination of the tools that MoLo has, the tools that ArcBest, that Judy articulated earlier when she was talking. The combination of those, whether you call it a digital brokerage or whether you call it a traditional brokerage, what we're focused on is matching our customers with our carriers in the most efficient manner in the channels they provide. If that's digital, that's great. Some of our customers may not prefer that, and so, you know, Judy talked about augmenting our people, and that's really what our digital tools, they can be completely digital or can be augmented, where our people are leveraging our relationships with both our customers and our carriers. So maybe we can just revisit the point of, you know, if this is the best-ever trucking market, and we can see that in the asset-based margins improving so nicely, and Judy, that's a great move to the mid to upper eighties. Congrats on that. Thank you. But what gives you confidence then, that you move from breakeven to if we then go into a softer market, then to improving profits out of that? Is that decreasing the growth rate, or what changes that gives you the confidence that you flip into a more profitable phase? Well, you know, one thing that you look through, they've committed to prices. They've made some decisions to honor prices regardless of what the market on the buy side went up, and so they've experienced pressure in that way. So in some ways, the hot market hurts them on margins because of the prices they've committed to, and so they're honoring those prices to the customer. So, as the market changes, we believe that data will help us. It'll help us set prices better. It'll help us, whether it be in the spot market or even in the primary market. But also, we've seen a steady margin progression from them when we look back into 2020 through 2021, and so that's what gives us a lot of confidence that that can continue. Okay. Great. Appreciate the time. Thanks, guys. Thanks, Ken. The next question comes from Jeff Kauffman with Vertical Research. Your line is open. Hey, everybody. Congratulations. Hi, Jeff. Thank you. Hey, getting into Modern L ogistics. That's awesome. So, just a couple questions. I think a lot have been asked, but is your expectation? I think a lot of asset-light brokerages, particularly truckload, we're looking if I kind of measure operating margins as a percent of gross revenue, they kind of gravitate toward that 3% range. Your own business is getting there now. Do you believe the long-term profitability of MoLo would be different than that? The reason I ask is, if I take the revenue growth and take your EBITDA targets, they come in a little light of that. So is there something about the structure where the margin would be different? And I'm looking pre-synergy, pre-amortization. Yeah. Yeah. I mean, Jeff, I think that where we're focused beyond what you just said is really in the synergies. You know, we see, you know, with their expertise and the data and information that we'll gain and the capacity options that we'll gain, we believe there's a great opportunity for us to buy, you know, better, but at the same time, be satisfying to the carrier partner. And, you know, and then also, you've heard us talk for a long time about the cross-selling opportunity we have. We have $3 billion of opportunity within ArcBest's most loyal customers for buying logistics solutions, and a lot of that is truckload. And so, you know, these are relationships that we've already invested in, and we know these customers, and we feel like that with the advancement of our digital tools, the data and information and knowledge that we gain, and again, the ability to better serve customers that we already know something about that are more value-based, we feel like that we're going to be in a good place. And, you know, we wouldn't do this transaction if it wasn't going to be, you know, accretive to us and to improve our returns. And, you know, we see that happening, and the synergies really sit on top of that. And so, you know, we're glad for that. We can see real clearly, and we feel like this team is going to be one that we can really work with, you know, to bring about the best in our current business, and you know, Danny's discussion earlier of the ways that we can interact with them, you know, to potentially provide resources to help improve what they're already doing. I think it's going to be a win-win, and we're excited about it. ... Just a quick one for David Cobb, and thank you, Judy, for that. Yeah. David, given that we have an earn-out structure here, for the acquired company, are we gonna be reporting MoLo as a standalone business unit, or is it gonna be consolidated within the asset-light operations line? Yeah, yeah. Thank you, Jeff. It will be within our ArcBest asset-light business like our truckload brokerage is today. Okay, great. Combined together. Yeah. Last clarification. Judy, when you were in your opening comments, you mentioned an 89.6%, and you were just talking so fast I couldn't keep up with the writing. What were you referring to with the 89.6%? Uh, yes. Yeah, yeah. Well, it's on slide three, and what we did... Well, I don't know if you saw this, Jeff, but we did an 8-K that gave an update on the third quarter. So using that information and combining it with our, you know, first 6 months results, takes you to slide three, which gives you a year-to-date asset-based OR of 89.6. Okay, year to date. And again, we're not- Thanks. Yeah. Yeah, we're not final on all those numbers- I was just gonna say congratulations. But we're close. Yeah. Yep. All right. Thanks for doing the call. Thank you, everyone. Yeah. Thanks, Jeff. Thanks, Jeff. Hey, Dave, I think we've got one more in the queue, so we'll take that and then wrap up the call. Indeed, and thank you. The last question will come from Ravi Shanker at Morgan Stanley. Your line is open. Hey, guys. Congratulations, and thanks for fitting me in here. Maybe you can talk a little- Yeah, no problem. Thanks, guys. You guys have also spoken in the past about the opportunity in managed transportation. Maybe you can talk a little bit about how this acquisition, you know, potentially fits in with that and that opportunity. Hey, Ravi, this is Dennis, and thanks for that question. We definitely see the opportunity to serve our customers and manage transportation. One of the things that MoLo brings to the table, other than we talked about the customer base, which is Fortune 500-type customers, and they have a great need for managed transportation services, supply chain services that we bring to the table there. But also, MoLo's capacity base actually helps us serve any managed customer, and we're able to connect that truckload capacity with whatever other supply chain services they need. So definitely some opportunities all around from capacity and customer on the managed side. Got it. Great. And maybe if I can squeeze in one more just to follow up on the tech commentary from earlier. With asset-light now being a, you know, significantly larger percentage of the business, any shift in priority in terms of technology spend going forward, you know, particularly around sort of digitization of kind of the brokerage model? Any thoughts on that front would be great. Yeah, Ravi, this is Dennis again. I mean, I think when you look at our spend on technology, we think of our business as a unified logistics company, and so we're serving our customers and our capacity sources, and one of those capacity sources happens to be that asset-based LTL network with ABF. And so, being able... We have a very robust process that really looks at the return on investment for each of those projects that we work through in our technology space. But when we think about the entire portfolio, we think about it as really all working toward this one strategy, so not a shift in priority there for sure. Awesome. Really appreciate the thoughts. Thank you, guys. Thanks, Christine. Okay. Well, I think that concludes our call. We appreciate everybody joining us today, and that ends the call. Thank you very much. All that does conclude the conference call for today. We thank you very much for your participation. You may now disconnect.