Arkansas Best sees big drop in 2008 net income; cuts jobs and equipment
by January 29, 2009 8:09 am 179 views
Fort Smith-based Arkansas Best Corp. reported this morning (Jan. 29) that the reduction in freight demand has forced the national trucking company to cut about 2,000 jobs in 2008, with 1,100 of those cuts coming the the fourth quarter of 2008.
The less-than-truckload carrier said its 2008 net income was $29.16 million, a drop from its 2007 net income of $56.82 million. Its revenue in 2008 was $1.833 billion, slightly below the $1.836 billion in 2007.
“We are now over twenty-seven months into a freight recession that is the worst I have seen during my 37 years in this industry,” Arkansas Best President and CEO Robert Davidson noted in the earnings statement. “Fourth quarter freight declines of this magnitude, in addition to those ABF has experienced during the previous two years, have made it more and more difficult to adequately reduce network costs in step with business declines without impacting the service to our customers.”
The company recorded a fourth-quarter net income loss of $10.97 million, compared to a net income of $13.48 million in the same quarter of 2007. Tonnage per day declined 11.5% in the fourth quarter and 4.2% for the year.
A majority of the jobs cuts were outside the company’s Fort Smith headquarters operation, according to a company spokesman.
Other reactions to the declining freight environment include:
• Additional employee reductions of approximately 350 in January 2009.
• Fleet reductions that include a 14% decrease in road tractors and a 9% decrease in road trailers, with additional tractor and trailer reductions planned in 2009.
• Realignment of the structure of ABF’s field management organization, to 10 nationwide regions from 12 regions, thus eliminating four field officer positions, other employee jobs and the associated overhead costs.
• Reductions of employee positions in the corporate office.
• Elimination of pay increases and annual incentive payments to company executives.
Company-wide travel limitations.