Friday, April 27, 2012

Arkansas Best Corporation Announces First Quarter 2012 Results

Arkansas Best Corporation announced a first quarter 2012 net loss of $18.2 million, or $0.71 per share, compared to a net loss of $12.8 million, or $0.51 per share in the first quarter of 2011.

Arkansas Best's first quarter 2012 results were impacted by a number of unusual items which are listed below with the corresponding diluted per share effect:

Low corporate tax benefit rate - ($0.18/share)

High ABF workers' compensation costs - ($0.13/share)

Investments in sales, customer service and IT for all subsidiaries - ($0.12/share)

The unusually low corporate tax benefit rate is below historical levels because of limitations on the amount of deferred tax assets that could be recorded during the quarter. Depending on the financial results during the remainder of the year, Arkansas Best's quarterly tax rates will vary and the 2012 full year tax rate could be substantially lower than past, full year tax rates. ABF's workers' compensation claims costs were significantly above ten-year historical averages due to unfavorable severity on new and existing claims and increases in loss development, driven by claims experience.

This cost increase is very unusual for ABF. On a positive note, organic investments are being made for ABF and the non-asset based subsidiaries in sales, customer service and information technology ("IT") to improve operating efficiencies and support specific growth opportunities. The investments being made are expected to improve the operating results of these companies during 2012.

Full report............

UPS 1Q Earnings Per Share Grow 10 Percent

U.S. Domestic and Supply Chain & Freight Segments Post Double-Digit Gains in Operating Profit

UPS announced first quarter 2012 diluted earnings per share of $1.00, a 10% improvement over the prior-year period. Consolidated revenue increased 4.4% to $13.1 billion. Operating profit for the U.S. Domestic and Supply Chain and Freight segments increased 13% and 19%, respectively.

"These results demonstrate that UPS is providing its customers with the solutions needed for today's ever-changing market conditions," said Scott Davis, UPS chairman and CEO. "We will continue to invest and develop innovative services that facilitate global commerce, ensuring UPS's long-term success."

Consolidated Results
1Q 2012
1Q 2011
$13.14 B
$12.58 B
Operating profit
$1.57 B
$1.47 B
Operating margin
11.9 %
11.7 %
Average volume per day
15.6 M
15.0 M
Diluted earnings per share

During the period, UPS delivered approximately 1 billion packages, a 4.3% increase. Rapid e-commerce growth combined with growing demand for lightweight shipping solutions contributed to these results.
In March, UPS announced its intention to acquire TNT Express. This addition will further expand UPS's portfolio of solutions and geographic footprint. The complementary strengths of both organizations will create a customer-focused global platform and a leader in the logistics industry.  Full report...........

Thursday, April 26, 2012

YRC Creeps Quietly Out of China

The tide has certainly changed in a few short years. The Fortune-500 company is now staving off bankruptcy, its stock floundering about in the single digits on the NASDAQ from a 52-week high of $618.06 in April 2011. A net loss of $409 million was posted last year, on revenues of $4.9 billion. YRC is not going down without a fight though, as it turned to its creditors in mid-April to renegotiate the terms of a 2011 loan agreement. According to the Kansas City Business Journal, YRC’s lenders may require the once US$9.9 billion firm to repay its loan faster, likely necessitating asset seizures.

Though with a new CEO in place since July last year – trucking industry vet James Welch – the ailing firm does not have much left in the way of assets to be seized, should its lenders call in its debts. YRC let go of a number of assets in a purported “streamlining” strategy, initiated by Welch. YRC Worldwide has sold off its 65 percent stake in Jiayu Logistics, its JV in China, as well its entire logistics division, contract carriage business, and its truckload unit (Glen Moore). Not much else remains, aside from its North American longhaul less-than-truckload business, YRC Freight.  Full Story.......

Wednesday, April 25, 2012

BNSF Logistics Recognizes YRC Freight As “Carrier Excellence Award” Winner

BNSF Logistics, LLC, an industry leading global third party logistics and supply chain solutions provider, has announced that YRC Freight, an Overland Park, Kan.-based “less than truckload (LTL)” services provider, has been recognized for exceptional service and selected as the 2011 “Carrier Excellence Award” winner in the LTL services category. YRC Freight was selected after evaluation of multiple performance metrics, including on-time service, capacity and overall customer service performance.

"BNSF Logistics wishes to thank YRC Freight for serving as an integral and essential part of our continued success. Their nationwide capacity coverage, dedication to overall quality and customer service, as well as their excellence in partnership is greatly appreciated by our operations teams and the customers we serve," said Ray Greer, President of BNSF Logistics.

“We’ve had a very good relationship with BNSF Logistics over the last two years and we are honored to be selected for their first ‘Carrier Excellence Award’ in the LTL category,” said Jeff Rogers, President of YRC Freight. “We appreciate the confidence they’ve shown in our company and in our comprehensive long-haul network. I’m confident we’ll continue to meet their need for consistent, reliable service going forward.”

BNSF Logistics works with thousands of service providers across all modes of transportation and distribution, serving diverse industry segments that require transportation capabilities ranging from over-dimension, heavy haul transportation to specialized small package delivery. BNSF Logistics conducts an annual customer satisfaction survey that reports some of the highest overall satisfaction ratings in the industry, and actively solicits guidance for additional enhancements to drive continuous improvement.

Tuesday, April 24, 2012

Arkansas Best Corporation Declares A $0.03/Share Quarterly Dividend

The Board of Directors of Arkansas Best Corporation ABFS has declared a quarterly cash dividend of three cents ($0.03) per share to holders of record of its Common Stock, $0.01 par value, on May 8, 2012, payable on May 22, 2012.

Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a freight transportation services and solutions provider. Through its various subsidiaries, Arkansas Best offers a wide variety of logistics solutions including: domestic and global transportation of less-than-truckload and full load shipments, expedited and time-definite delivery solutions, freight brokerage, oversight of roadside assistance and equipment services for commercial vehicles, and household goods moving market services for consumers, corporations and the military.

U.S. freight tonnage gains shift into low gear, American Trucking Associations says

U.S. freight levels inched forward in March, increasing 0.2 percent compared with February and hinting at a slower growth pace this year, according to new data from the American Trucking Associations.

That compares with a 0.5 percent increase in February, seasonally adjusted.

The ATA’s index of for-hire truck tonnage now stands at 119.5, up from 119.3 in February. The year 2000 equals 100 on the index.

“March tonnage, and the first quarter overall, was reflective of an economy that is growing, but growing moderately,” ATA Chief Economist Bob Costello said in a release. “The pace of freight definitely slowed from the torrid pace in late 2011.”

Costello said economic indicators show tonnage increasing in the future, but not at the growth pace of the past two years (5.8 percent each). He estimates an average growth rate of 3 percent.  Full Story.........

Back on the road

Thanks to an improving U.S. economy, decent volume growth, and an avoidance of past errors, LTL is no longer the wreck on the highway.

There's a proverb that "there are no mistakes, just lessons." If that's true, the less-than-truckload (LTL) sector has acquired a world-class education over the past five to six years.

After a terrible cycle that saw annual revenues shrink from more than $33 billion at the last peak, in 2006, to $25.2 billion at the recession's trough in 2009, LTL carriers appear to have gotten their act together. Gone, at least for now, are the price wars that were largely designed to drive ailing YRC Worldwide Inc. out of business but ended up backfiring on the carriers that launched them. Volumes have returned as the economy has gradually improved, giving carriers the chance to exercise rate discipline and start to restore sanity to their bottom lines.

Through network redesigns and tough operational pruning, carriers have sopped up a large portion of the overcapacity that plagued them through the downturn and in the early part of the halting recovery.  Full Story........

2012 Virginia Truck Driving Champions Crowned

Nine professional Virginia truck drivers were crowned 2012 "Champions of the Highway" at the 61st annual Virginia Truck Driving Championships held April 20 and 21 at the Lee Hi Travel Plaza in Lexington, Virginia.

The annual Virginia Truck Driving Championships showcases the safe driving skills and professionalism of Virginia's best truck drivers in a safety-oriented competition.

The first place champions, their hometown, their company, and home terminal location are:

Step Van Class: Mark Brundage of Leesburg – FedEx Express, Herndon

Straight Truck Class: John Davis, II of Wytheville – ABF Freight System, Inc, Wytheville

3-Axle Class: Stephen Manning, Jr. of Elliston – UPS Freight, Roanoke

4-Axle Class: Randy Ebinger of Haymarket – YRC, Inc, Manassas

5-Axle Van Class: Timothy Copeland of Suffolk – Wal-mart Transportation, LLC, Sutherland

5-Axle Flatbed Class: James Hines of Richmond – Wal-mart Transportation, LLC, Sutherland 

5-Axle Tank Class: Joseph Clements of Chesterfield – UPS Freight, Richmond 

Sleeper Berth Class: Douglas Padgett of Alexandria – Robinson Terminal Warehouse Corp., Springfield 

Twin-Trailer Class: Hector Novoa of Aldie – FedEx Ground, Chantilly

A total of 83 professional truck drivers from across the state entered the contest - representing 11 different companies. First time contestants totaled 31. The event is sponsored by the Virginia Trucking Association and its Safety Management Council and is patterned after the American Trucking Associations’ National Truck Driving Championships. The first-place champions listed above will represent Virginia in the National Championships to be held August 7-11 in Minneapolis, MN.

The winner of the Neill Darmstadter Memorial Grand Champion Award and accompanying $200 Savings Bond was Joseph Clements of Chesterfield, driver for UPS Freight out of their Richmond, VA terminal. The Grand Champion Award is presented each year to the driver with the highest score of all the competitors. Clements scored 375 points out of a possible 480 points. Clements has been a professional truck driver for 30 years and 26 of those years with UPS Freight.

The Captain Roy M. Terry Memorial Pre-Trip Inspection Award, which is given to the driver with the highest score in the equipment defects portion of the competition, was won by Ron Regan of Richmond, driver for YRC, Inc., Richmond.

The Rookie of the Year Award and accompanying $100 Savings Bond was presented to Stephen Manning, Jr. of Elliston, driver for UPS Freight in Roanoke. This award is presented each year to the highest scoring, first-time competitor and can only be won once by a driver. Manning scored 343 points.

The Team Trophy was won by ABF Freight System, Inc. of Fort Smith, AR. This award is presented to the company with the highest average score of all its drivers.

Other winners in the competition by class, with their hometown, company and home terminal are:

Step Van - 2nd Daniel Woods – FedEx Express, Christiansburg; 3rd Matthew Bartnett – FedEx Ground, Fredericksburg

Straight Truck - 2nd: Nevin Brill –Con-way Freight, Winchester; 3rd: Ashby Lane – Wal-mart Transportation, LLC, Sutherland

3-Axle - 2nd: Tommy Staubs – FedEx Express, Dulles; 3rd: Michael Stickley – Con-way Freight, Winchester

4-Axle -2nd Jonathan Bryant – YRC, Inc., Fishersville; 3rd: David Gleaves – Con-way Freight, Winchester

5-Axle Van - 2nd: Mark Salzone – Frito-Lay, Inc., Lynchburg; 3rd: Stacy Warren – Con-way Freight, Wytheville

Tank - 2nd: Mike Barnes – Wal-mart Transportation, LLC, Mt Crawford; 3rd: Tony Wright – Con-way Freight, Wytheville 

Flatbed - 2nd: Justin Lipps – Con-way Freight, Winchester; 3rd: Mike West – YRC, Inc., Roanoke 

Sleeper Berth - 2nd: Mark Stephens – Wal-mart Transporation, LLC, Mt. Crawford; 3rd: David Boyer – ABF Freight Systems, Wytheville 

Twin Trailers - 2nd: Marty Hogan – UPS Freight, Roanoke; 3rd: Robbie Cottrell – Con-way Freight, Roanoke

Trucking Firm’s Troubles Reflected in IT

The 2003 merger which combined two major trucking firms, Yellow and Roadway, should have created a monster of the highway. Instead, as is often the case with large deals, the $1.05 billion merger turned into a monster headache that took years to finalize, partly because of a difficult combination of IT systems and staff. That headache continued on Friday as the company asked its creditors to help it stave off bankruptcy by amending the terms of a 2011 loan agreement. The company also skirted a bankruptcy filing in 2009.

In fact, YRC didn’t seriously get down to merging the IT systems of the two companies until 2009, allowing the two company IT staffs to work in parallel. Yellow was the leading trucking company in the niche that combines shipments of less than a full load; Roadway was No.2. George Kather, the CIO of YRC Worldwide, says new leadership in place since July 2011 forced the IT teams to merge, and worked to sweep away the remaining vestiges of cultural clashes, including conflicts over which applications, such as billing or freight management, were best. The company replaced its board of directors and CEO in July, with 30-year trucking industry veteran James Welch replacing William Zollars as CEO. Now, “there’s no more tolerance for any parochialism about the past,” says Kather, who has been CIO since 2007. Defensiveness among members of formerly separate IT staffs “is completely squelched now.”  Full Story.............