Freight volume: Tough times may be receding

Though the slump in freight volume is expected to continue for the rest of the year, many transportation providers believe the toughest stretch may now be in the rearview mirror. And if the downturn removes weaker competitors from the playing field, some companies believe that may open up opportunities for growth and market share gains.

"I do not foresee a significant change in the current freight environment as we move through the third quarter. However, there has been a slight improvement in volume trends,” said Henry Gerkens, president & CEO of Landstar System in the carrier’s second quarter earnings report.

“In addition, some of the very difficult revenue comparisons experienced during the first half of 2009 begin to ease toward the end of the 2009 third quarter and into the 2009 fourth quarter,” he noted. “I believe the worst is over.”

That being said, however, Gerkens stressed that there continues to be some level of uncertainty in the marketplace. He noted Landstar’s revenue continued to be negatively impacted by the severe recession in the domestic and global economies during the second quarter, with earnings shrinking to $17.9 million on revenues of $491.2 million, compared to $29.8 million in earnings on revenues of $697.7 million in the same period last year.

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Arkansas Best slips to loss in Q1

Transportation holding company Arkansas Best Corp. reported a loss in its first quarter, reflecting significantly lower freight levels, hurt by poor economy, and a very competitive pricing environment.

For quarter, the company posted a net loss of $18.16 million or $0.73 per share, compared to a net income of $8.54 million or $0.34 per share last year. The company noted that the quarterly results included $0.15 per share costs from the ABF RPM initiative compared to $0.10 per share in the preceding year.

Quarterly operating revenues fell to $339.68 million, a per-day decrease of 22.9%, from $447.51 million in the same quarter a year ago. Operating loss was $28.60 million, versus operating income of $13.15 million in the prior year. Interest and dividend income plunged to $930 thousands from $1.82 million in the previous year.

ABF Freight System, Inc., the largest subsidiary of Arkansas Best, generated revenues of $323.11 million, lower than last year's $427.75 million. Total billed revenue per hundredweight was $23.85, a decrease of 9.4%, compared to $26.32 in the prior year. The decline was mainly due to the steep decline in fuel surcharge compared to the first quarter of 2008. Other revenues and eliminations were $16.56 million, in comparison with $19.76 million in the preceding year.