Thursday, October 22, 2009

UPS Releases 3rd Quarter Results

Earnings at High End of Guidance Range; Volumes Improve Through Quarter

UPS today reported diluted earnings per share of $0.55 for the third quarter on $11.2 billion in revenue. A stabilizing economic environment led to improving volume trends during the quarter, while UPS`s International business continued to increase market share.

The $0.55 in diluted earnings per share was at the high end of the company`s guidance range of $0.45 to $0.55.

"I`m encouraged by the signs of economic recovery that are becoming apparent, although we still have a long way to go," said Scott Davis, chairman and CEO. "Ongoing strategic investment has positioned UPS to capitalize on growth opportunities around the world. We are managing operations well, while controlling costs and maintaining excellent service." Full Story........

Teamsters Applaud Attorneys General for Action on FedEx Ground's Illegal Driver Misclassification Scheme

Hoffa: Time for FedEx to Stop Dodging State Taxes, Worker Protections

The Teamsters Union on Tuesday praised attorneys general in New York, Montana and New Jersey for putting FedEx Ground on notice that the company faces legal action for violating labor laws, including shifting tax obligations onto residents through an illegal driver misclassification scheme.

"FedEx Ground can't get away with being a bully anymore, hiding behind its army of lobbyists to avoid responsibilities to workers and to American taxpayers," said Teamsters General President Jim Hoffa. "This is an issue of fairness. The laws of this country apply to everyone."

Attorneys General Andrew Cuomo of New York, Steve Bullock of Montana and Anne Milgram of New Jersey sent a letter Tuesday to FedEx Ground warning the company that it faces legal action, including restitution, damages, civil penalties and other relief over its illegal misclassification of drivers.

"FedEx's illegal misclassification of its drivers has resulted in a serious injustice to more than a thousand FedEx drivers in Montana, New Jersey and New York," the letter said, also adding that "...besides hurting FedEx drivers, FedEx's practices hurt the states of New Jersey, New York and Montana when proper taxes are not paid. FedEx's practices also hurt other employers, which face unfair competition as a result of FedEx's illegal cost-cutting measures."

The three states found that FedEx Ground drivers are illegally misclassified as independent contractors, therefore denying them employment rights such as workers' compensation benefits, anti-discrimination laws and wage and hour protections. FedEx Ground drivers are required to spend thousands of dollars for trucks, repairs, uniforms, fuel and other equipment. The company controls the hours they work, how they dress and when they drive their own trucks.

"FedEx Ground has been cheating its workers and fleecing the taxpayers for too long," said Ken Hall, Teamsters International Vice President and Director of the Package Division. "Andrew Cuomo, Steve Bullock and Anne Milgram deserve credit for standing up to a powerful multinational that pads its profits by skirting state laws. Thanks to them, FedEx and its CEO Fred Smith won't be allowed to profit from this scheme at the expense of its workforce and the American taxpayers."

FedEx Ground is currently the subject of investigations by 30 other states over its misclassification scheme. Also, more than 45 class-action lawsuits have been filed against the company in state and federal courts over the issue.

Misclassification of employees not only cheats workers, but leads to the loss of federal income and employment tax revenue. It is estimated that more than $4.7 billion in federal income is lost due to this practice. At the state level, misclassifying 1 percent of workers results in an average of $198 million lost annually to state unemployment insurance funds.

Stifel: LTL rates to remain low through first quarter

Fuel surcharges are less of a concern in negotiations with carriers this year

A note this week from Stifel, Nicolaus & Co. says rates for less-than-truckload services will remain low into the first quarter of next year, "unless YRC shuts down or other carriers exit" the market. That's good news for freight buyers but also means carriers "on the bubble" could struggle with another quarter of lower revenues, putting them at risk. Full Story.....

Arkansas Best Corporation CEO Robert A. Davidson to Retire — Judy R. McReynolds Named His Successor

Robert A. Davidson, current President and Chief Executive Officer of Arkansas Best Corporation has announced his retirement from the company effective on December 31, 2009. Mr. Davidson is also resigning from the Arkansas Best Corporation Board of Directors, effective on December 31, 2009. Judy R. McReynolds, current Senior Vice President, Chief Financial Officer and Treasurer will become Arkansas Best’s President and Chief Executive Officer on January 1, 2010. In addition, Ms. McReynolds was named to the Arkansas Best Corporation Board of Directors, effective January 1, 2010.

Mr. Davidson, who will turn 62 years old later this year, has served as the President and Chief Executive Officer of Arkansas Best Corporation since February 2006. He was named to the Arkansas Best Corporation Board of Directors in December 2004. During his career, Mr. Davidson served the company in various areas including as ABF’s Vice President of Pricing from 1982 until early 2003 and as ABF’s Vice President of Marketing from 1997 until early 2003, when he was named President of ABF Freight System, Inc.

“Throughout Bob Davidson’s nearly 38 years with our company, he has been instrumental in helping to successfully guide Arkansas Best and ABF through dramatic changes in our company and in the trucking industry,” said Robert A. Young III, Arkansas Best Chairman. “Following the 1980 deregulation of the trucking industry, Bob was the perfect person to establish ABF’s new Pricing Department and to develop and implement ABF’s account pricing philosophies that have been major contributors to the success and survival of ABF. During his time leading ABF’s Marketing initiative, Bob was instrumental in establishing ABF’s award-winning position as the most innovative, customer-centric carrier in the LTL industry. ABF’s reputation for providing a high level of service and significant value in the marketplace is built on the foundation that Bob Davidson has helped establish over the years. We will miss his leadership and guidance and regret his decision to take an early retirement. His service to our company is greatly appreciated,” said Mr. Young.

Judy R. McReynolds, who is 47 years old, has served in her current position since February 1, 2006. Prior to that she was Arkansas Best’s Vice President, Controller, beginning in January 2000. Ms. McReynolds joined Arkansas Best in 1997 after several years in public accounting and two years at another publicly-held transportation company.

“As a result of her nearly twenty years of service to the transportation industry, Judy McReynolds is highly qualified to guide Arkansas Best Corporation. I am pleased to know that our employees, customers and shareholders will be benefitting from her vision and judgment,” said Robert A. Davidson, Arkansas Best President and Chief Executive Officer. “During her time at our company, Judy has displayed a combination of intelligence, integrity and energy. She exhibits the steady leadership that was established by our founder, Robert A. Young Jr. and that continues today through our Chairman, Robert A. Young III. In her role as Chief Financial Officer, Judy has worked closely with me in developing the strategic initiatives that will allow Arkansas Best to grow and prosper for many years to come. We all can look forward to a bright future for our company under her leadership.”

Wednesday, October 21, 2009

Arkansas Best Corporation Announces Third Quarter 2009 Results

Arkansas Best Corporation today announced a third quarter 2009 net loss of $5.6 million, or $0.23 per diluted share, compared to net income of $15.4 million, or $0.60 per diluted share, in the third quarter of 2008.

"Our third quarter results reflect the on-going impact of lower freight levels and competitive industry pricing that deteriorated further compared to the first half of the year," said Robert A. Davidson, Arkansas Best President and Chief Executive Officer. "We are now entering the fourth year of a severe freight decline that is unprecedented in our company's history. It is unclear when business levels will benefit from a significant improvement in our nation's economy. In the meantime, our company's emphasis will remain on providing a high level of value-added service to our customers while managing our business, for the long-term, through diligent cost control and disciplined pricing."

Arkansas Best Corporation Third Quarter 2009
-- Revenue of $399.0 million, a per day decrease of 19.5% from prior year quarter of $495.8 million

-- Net loss of $0.23 per diluted share compared to net income of $0.60 per diluted share in the prior year period

ABF Freight System, Inc. Third Quarter 2009
-- Revenue of $369.8 million compared to $476.3 million in third quarter of 2008, a per-day decrease of 22.4%
-- Tonnage per day decrease of 10.1% versus third quarter of 2008
-- Total billed revenue per hundredweight of $23.98 compared to $27.75, decrease of 13.6%, that is mainly attributable to the steep decline in fuel surcharge compared to the third quarter of 2008
-- Operating loss of $14.0 million compared to operating income of $25.2 million in third quarter of 2008
-- Operating ratio of 103.8% compared to 94.7% in third quarter of 2008

"The smaller decline in ABF's third quarter tonnage implies an improving freight environment compared to the first half of the year. However, this year-over-year trend is primarily related to comparisons back to last year's third quarter when business levels fell sharply. Nevertheless, this quarter's tonnage also benefited from modest market share gains from our LTL competitors," said Mr. Davidson. "On a sequential basis, ABF's third quarter tonnage trends were slightly better than normal, seasonal expectations. Though that trend has weakened somewhat since the last full week of September, we continue to add freight previously handled by other carriers. Regardless of business levels, we continue to manage the costs of the ABF network each day in line with the amount of available freight, while striving to maintain the high level of customized service that is important to ABF's customers."

"Industry LTL pricing further weakened during the third quarter. Declining yields, worsened by the recessionary economy, have made it more difficult to cover normal cost increases," said Mr. Davidson. "Despite a more price-sensitive environment, ABF has maintained its traditional emphasis on offering each customer a fair, competitive rate. ABF's history of pricing discipline has contributed to our current financial strength, and Arkansas Best's financial stability allows us to maintain high service levels and manage the company for the long-term benefit of our shareholders, employees and customers."