LTL carrier ABF Freight has posted a first quarter operating loss of $35.7 million, and parent company Arkansas Best Corp. has announced a first quarter 2010 net loss of $21.4 million, or $0.85 per share, compared to a net loss of $18.2 million, or $0.73 per share in the first quarter of 2009.
“Despite some signs of improvement in our nation’s economy resulting in the stabilization of our business, Arkansas Best’s first quarter results illustrate the ongoing effects of low freight levels combined with a weak pricing environment,” says Judy R. McReynolds, president and CEO of Arkansas Best. “We have continued our focus on long-term profitable growth and the customer-service-level commitments it takes to accomplish this objective. We are encouraged by the first quarter increases in ABF’s tonnage versus very low totals last year. However, in order for ABF’s operating results to improve in a meaningful way, we need further increases in freight demand, strong improvements in pricing and the positive financial impact of wage concessions.”
Arkansas Best Corp.
First Quarter 2010
Revenue of $359.9 million, a per-day increase of 5.1% from prior year quarter of $339.7 million
Net loss of $0.85 per share compared to net loss of $0.73 per share in the prior year quarter
ABF Freight System Inc.
First Quarter 2010
Revenue of $333.0 million compared to $323.1 million in first quarter 2009, a per-day increase of 2.2%
Tonnage per-day increase of 3.3% versus first quarter 2009
Total billed revenue per hundredweight of $23.61 compared to $23.85 in first quarter 2009, a decrease of 1.0% despite a year-over-year increase in fuel surcharge levels
Operating loss of $35.7 million compared to operating loss of $26.8 million in first quarter 2009
Operating ratio of 110.7% compared to 108.3% in first quarter 2009
McReynolds also notes that a tentative agreement has been reached between ABF and the leadership of the Teamsters union, that includes 15% wage concessions and an ‘Earnings Plus’ plan that pays our union and nonunion employees when ABF’s operating ratio reaches certain profitable levels. This agreement, she says, will offer ABF the opportunity to adjust its cost structure to be more comparable with the LTL marketplace.
“Also, in late March, legislation was introduced in the U.S. Senate that addresses the payment of multiemployer pension fund benefits to retirees whose companies have gone out of business and no longer make contributions to the multiemployer pension funds. This Senate bill is similar to a bill that was introduced in the U.S. House late last year,” says McReynolds. “We fully support a legislative solution that addresses the current, inequitable situation in which some of ABF’s pension contributions are, in effect, used by the multiemployer funds to pay the benefits of persons who never worked for our company. Enactment of this legislation would be an important step toward ensuring that all of our pension payments go toward our goal of fulfilling our obligations to ABF employees and retirees.”