Holiday sales gains bring hope to trucking industry

The announced increases in Black Friday and Cyber Monday holiday shopping are welcome news to a national trucking industry still struggling to emerge from a freight recession that some say began in late 2006.

comScore.com recently reported $12.7 billion in online retails sales during the first 25 days of November, up 15% compared to the 2010 period. Online sales during Black Friday were an estimated $816 million, up 26% compared to 2010. According to comScore, 50 million Americans visited online retail sites on Black Friday, up 35% compared to 2010. The top five retail sites achieved double-digit gains in visitors compared to 2010, led by Amazon. Walmart ranked second, followed by Best Buy, Target and Apple.

For the holiday season-to-date, $15 billion has been spent online, up 15% compared to 2010, said comScore. Cyber Monday reached $1.25 billion in online spending, up 22% against 2010 numbers. comScore said the Cyber Monday traffic was “the heaviest online spending day in history and the second day on record to surpass the billion-dollar threshold.”

IBM reported that Cyber Monday online shopping was up 33% compared to 2010. The IBM report also noted that the average Cyber Monday online order value was $198.26, up 2.6% compared to 2010.

Jack Waldo, a trucking industry analyst with Little Rock-based Stephens Inc., says such reports are a good sign.

“We view the relatively strong start to Holiday sales season as a incremental positive for all truckers, but probably a bit more constructive for truckload carriers,” Waldo said, adding that about 70% of truckload business is retail-driven, and about 40% for less-than-truckload (LTL) carriers.

Fort Smith-based ABF Freight System is one of those LTL carriers hoping for anything that will boost freight tonnage.

Third-quarter net income of $12.265 million for Arkansas Best Corp. — the parent company of ABF — marked the first time since the end of 2008 that the trucking company posted two consecutive quarters of income gains. The company, which employs about 9,500 nationwide, posted a 2010 net loss of $32.421 million, an improvement compared to a $127.522 million net loss in 2009. The 2009 income loss included a non-cash accounting charge of $64 million for the impairment of goodwill.

However, the company recently reported that systemwide tonnage between Oct. 1 – Nov. 13 fell 6%-7%. A more aggressive pricing policy by the company helped push revenue up 5%-6% during the same period despite the tonnage decline.

“Much of the tonnage decline has to do with the fact that last year’s tonnage was very strong (October 2010 versus October 2009 was up 16.3% and November 2010 versus November 2009 was up 15.5%),” David Humphrey, Arkansas Best vice president of investor relations and corporate communications, noted in an e-mail.

Humphrey also said the “sluggish economic recovery” continues to hurt prior year tonnage comparisons. The uptick in early holiday sales could improve tonnage for ABF.

“The weekend shopping numbers I’ve seen … were strong,” Humphrey noted. “That is encouraging to us and hopefully our freight levels for the rest of the year will be positively impacted by that. Early holiday shopping results are hopefully a sign of continued strength in the economy.”

Officials with Van Buren-based USA Truck will need a huge boost from holiday sales to help improve their financial picture.

The truckload carrier reported a loss of $4.305 million for the third quarter, compared to a $586,000 gain the 2010 period. For the first nine months of 2011, the company has lost $6.423 million, compared to a loss of $1.51 million in the 2010 period. If trends continue, 2011 will mark the third consecutive year of a losses for USA Truck. In 2010, the company reported a loss of $3.308 million, and a $7.177 million loss in 2009.