ArcBest Corporation: Good Management Battles Poor Economics

ABF Freight has been ably managed for years despite an unfavorable economic position in the freight industry.

The biggest determinant of future success will be the evolution of the company's required contributions to multi-employer pension funds which are currently $150 million per year.

Assuming no pension relief, ArcBest is worth ~$25 per share, with significant upside from the resolution of funding issues at funds such as Central State not factored into the valuation.

One of Warren Buffett's oft repeated quotations is: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." The message being conveyed is simple: the underlying economics of a company are more determinative than management in how it performs financially.

In many ways, the situation that ArcBest Corporation finds itself in today is perfectly captured in Buffett's quotation. ArcBest Corporation is a transportation company with roots in the LTL industry that has expanded to include an expedited freight forwarder, a third party logistics provider, a mover, and a fleet maintenance and roadside assistance company. Seventy percent of revenues remain with its unionized LTL carrier, ABF Freight. In discussing the company, I would like to be specific in why I think the management team should be praised and why the economics of the business have been so bad. But I would also like to discuss the odds of the economics changing and whether or not ArcBest should be considered investable despite the historically poor economics.

Full story here.......

America’s Road Team Encourages Safety this Memorial Day Weekend

Truck Drivers Honor Fallen Soldiers by Promoting Highway Safety

Today, American Trucking Associations and America’s Road Team Captains are turning their attention to highway safety in anticipation of a busy Memorial Day weekend. According to AAA, this year’s Memorial Day weekend will see the second highest traffic volume in the holiday’s history, with more than 38 million Americans expected to take to the highways this weekend.

“During busy weekends, our job as professional truck drivers gets a little more challenging, but we have the skills and training to deal with the extra traffic,” said America’s Road Team Captain Kirk Weis, of ABF Freight. “We want everyone to have a safe summer of driving and, to me, that starts with having a safe Memorial Day weekend on the highway. Keep these tips in mind while you’re traveling this weekend.”

The trucking industry is remembering the fallen soldiers who made the ultimate sacrifice in defending the nation’s freedoms. Trucking companies take great pride in providing meaningful, rewarding work for veterans of the military who want to continue their service to the country by assisting in the transportation of its most essential goods.

“There is no greater responsibility than protecting the lives of others,” said America’s Road Team Captain Henry Bruster, of UPS Freight. “I learned how to protect others and drive a truck while in the military, and I think those responsibilities have carried over to my job as a professional truck driver. We are all called upon to make safety a priority when using the highways, especially during busy holidays when more vehicles are on the roads.”

America’s Road Team Captains offer these safety tips to remind motorists about some key elements of safe driving, especially relating to operating small passenger vehicles near large tractor-trailers.

·       Buckle Up: Memorial Day weekend takes place during National Click It or Ticket Week. Seat belts save lives. Day or night and even if you’re riding in the back seat – wear your seat belt.

·       Slow Down: Chances of a crash nearly triples when driving faster than surrounding traffic. The spring and summer are periods when work zones are busiest. It is important to reduce speeds when traveling through those areas.

·       Do not drive impaired: There is a lot to celebrate this time of year, with graduations, weddings and holidays seemingly every weekend. With that said, driving is a great responsibility and your fellow travelers are relying on safe, attentive drivers to respectfully share the road and make good decisions.

·       Be aware of truck blind spots: When sharing the road with large trucks, be aware of their blind spots. If you can't see the truck driver in his or her mirrors, then the truck driver can't see you.

·       Keep your eyes on the road: Distracted driving is a major cause of traffic accidents. Even just two seconds of distraction time doubles the chances of an accident. Use your cell phone when stopped and never text while driving.

·       Do not cut in front of large trucks: Remember trucks are heavier and take longer to make a complete stop, so avoid cutting quickly in front of them.

·       Prepare your vehicle for long distance travel: Check your wipers and fluids. Have your radiator and cooling system serviced. Simple maintenance before you leave your home can prevent many of the problems that strand motorists on the side of the road.

·       Leave early and avoid risks: Leave early so you won't be anxious about arriving late. Road conditions may change due to inclement weather or traffic congestion.

·       Be aware of the vehicle in front of you: Leave extra room between you and the vehicle ahead.

Holland Named 2015 LTL Partner of the Year by Ravago Americas

In its first year of bestowing transportation supplier awards, Ravago Americas LLC chose Holland as its 2015 Less-Than-Truckload Partner of the Year. The selection process was based on a number of key supply chain metrics as well as overall superior customer service. Being chosen as the top regional carrier among the more than 70 carriers that serve Ravago Americas demonstrates the success of Holland in consistently delivering outstanding customer service as well as exceptional transportation service.

"We are honored to be Ravago Americas 2015 LTL Partner of the Year at their first carrier awards ceremony," said Scott Ware, president of Holland. "We thank Ravago for relying on us as their most trusted LTL transportation partner. Holland appreciates Ravago's business and we strive to earn it on a daily basis. Additionally, I thank everyone at Holland and appreciate their hard work, follow-through and dedication in providing quality Holland service."

Jay Pickett, transportation services manager of Ravago Americas, stated the importance of Holland's ability to understand the customer's needs and provide solutions across all aspects of the supply chain. "Sometimes it's important to step back, look at the year, and truly take some time to recognize and appreciate the partners that made the year such a success," shared Pickett.

The award was presented to Jim Ferguson, Holland vice president of sales and marketing, and John Ashworth, corporate account executive, at the Ravago Carrier Awards Ceremony held at the company's headquarters in Orlando, Fla.  Ravago is a leading global manufacturer and distributor of plastics, rubber and chemicals.

ABF Freight Road Driver Loren Hatfield Named 2015 Arkansas Driver of the Year

ABF Freight is proud to recognize Loren Hatfield, a road driver based in Little Rock, Arkansas, for being chosen 2015 Driver of the Year by the Arkansas Trucking Association.


“We’ve grown accustomed to hearing Loren’s name mentioned as being among the top professional truck drivers in the industry,” said ABF Freight President Tim Thorne. “He is a consummate professional, and we are extremely pleased to have him driving for ABF Freight.”

Hatfield has been a professional driver for 25 years, the last 17 with ABF Freight. A six-time competitor in the National Truck Driving Championships, he earned second place in the straight truck class in 2015. He has earned recognition as an America’s Road Team Captain, Arkansas Road Team Captain and member of the ABF Freight Road Team. He has been an Arkansas Truck Driving Grand Champion. At the Arkansas competitions, he has also earned highest written score, best pre-trip and the sportsmanship award. He’s earned these and other honors while driving over 2 million accident-free miles.

“Loren’s leadership and contribution to the industry set a high bar and have earned him this recognition. He represents the best trucking has to offer, and his commitment to safety is personal and evident in his excellent driving record and extraordinary volunteer efforts,” noted Shannon Newton, president of the Arkansas Trucking Association.

Loren speaks to elementary and high schools promoting safety around big trucks. He helps the Arkansas Highway Police by driving in their “World’s Largest Convoy,” a fundraiser for Special Olympics. Loren also works with the Arkansas Children’s Hospital at its “Teen Driving Roadeo,” educating teen drivers about safety around trucks and volunteers at other events across the state.

“Loren is more than a safe and professional driver; he looks for opportunities to give back – to help others and make our industry better,” said David O’Neal, ATA’s director of safety services.

Hatfield was named the Arkansas Driver of the Year during the ATA’s 2016 Annual Business Conference in Little Rock. According to the ATA, more than 80,000 Arkansans are employed in the trucking industry, of which 38,000 are drivers.

“I am very proud to be part of an industry that is so vital to the success of our nation,” Hatfield said. “Being chosen Arkansas Driver of the Year is a great honor.”