Regional Airport Nears Completion; Mergers Popular With Truckers

Preparations continue for the opening of the new Northwest Arkansas Regional Airport later this year.

The airport has signed a contract with Wackenhut Services Inc. of Palm Beach Gardens, Fla., to provide fire fighting services. Wackenhut won the contract with a bid of $238,744. The contract is for one year with an option to renew it each of the four following years.

Wackenhut is hiring 11 people locally to work at the facility. The firemen are scheduled to start work at the airport in October. The three-bay facility is 95 percent complete, says Scott Van Laningham, spokesman for the airport authority.

Late last month, the Federal Aviation Authority conducted a flight check of the airport’s navigational system. Although the final report hasn’t been issued, the preliminary results were good, Van Laningham says.

The water and sewer lines that connect the airport to the municipal utilities of Bentonville were finished the first week of July. Water samples from the lines have been sent to the state Department of Health in Little Rock for analysis.

American Eagle, the first commercial airline to commit to the new airport, is scheduled to begin service Nov. 1. Airport officials are negotiating with other commercial airlines and charter airlines to use the airport.

Trucking industry joins acquisition, merger trend

The trucking industry is experiencing the same cycle of consolidation and mergers that has been emerging in other types of businesses during the last few years.

Currently, the $55 billion annual business of carrying the nation’s goods from manufacturer to market is split among about 50,000 trucking companies. Industry experts predict that the acquisition of smaller companies by the larger, publicly held carriers will drastically reduce the number of trucking companies during the next 20 years.

The industry will become divided into two categories: the large companies created by the consolidations and the small companies who find a niche not being served by the larger companies.

The consolidation already has begun to accelerate over the past few years. Companies with annual revenue between $15 million and $100 million have been a favorite target.

P.A.M. Transportation Inc. of Tontitown is the only Arkansas trucking company with an aggressive acquisition strategy. P.A.M. has acquired two companies since 1995 and company officials say they are looking for other opportunities.

Tim Quillon, an analyst with Stephens Inc. of Little Rock who issues monthly reports on the industry, says he expects P.A.M. to acquire another company during the next 12 months, probably in the $15 million to $50 million range.

J.B. Hunt Transport Services Inc. of Lowell has achieved its growth without the help of acquisitions. Instead, the company, which is the largest publicly traded truckload shipper in the nation, has generated new companies by selling some of its subsidiaries.

Hunt has focused its efforts on expanding its intermodal, logistic and dedicated contract business. Quillon says he expects Hunt to continue the strategy and he doesn’t expect the company to make an acquisition in the near future.

USA Truck Inc. of Van Buren could afford to acquire a company but Quillon says he doesn’t believe it will happen. The company has been able to maintain healthy growth by expanding its dedicated contract service. However, the company has one of the most experienced management teams in the industry who would consider an acquisition if presented with the right opportunity, he says.

Arkansas Best Corp. of Fort Smith, the parent company of ABF Freight System Inc., has only recently recovered from its latest acquisition and isn’t expected to consider another one soon.

What does all this mean to investors? Plenty, if you put your money on the right companies.

Quillon says the best bet for the consolidation and acquisition game is Swift Transportation. However, other good bets include Covenant Transport Inc., Knight Transportation Inc., M.S. Carriers Inc. and Werner Enterprises Inc.