William B. Cassidy, Senior Editor | Sep 06, 2012 11:10AM EDT
A weak economy is slowing financial recovery at ABF Freight System, the nation’s sixth-largest less-than-truckload motor carrier.
The Fort Smith, Ark.-based company expects its operating ratio, a measure of operating profitability, to be flat from the second to the third quarter.
ABF said Thursday it expects tonnage per day to decline 2 percent year-over-year, while billed revenue per hundredweight or yield should increase 2 percent.
The ABF forecast, released in an 8-K filing with the U.S. Securities and Exchange Commission, follows a gloomier mid-quarter outlook from Landstar System.
Landstar CEO, President and Chairman Henry Gerkens said the quarter, typically a strong period for trucking, had been “very choppy” for the truckload group.
The $2.7 billion truckload operator last week lowered 7 to 10 percent revenue growth expectations for the third quarter to a mid-single-digit range.
Historically, ABF has seen its operating ratio improve 1.6 points on average from the second to third quarter of the year. ABF had a 98.3 percent operating ratio in the second quarter.
“ABF’s sequential percentage change in total tonnage per day from July 2012 to August 2012 was weaker than historical averages,” the company said in its filing.
The nationwide LTL carrier reported a $7.7 million operating profit in the second quarter, compared with a $22 million first quarter operating loss.
The $1.7 billion trucker looks to higher pricing, cost-cutting and negotiations for a new Teamsters contract in 2013 to help secure more sustainable profits.
ABF also is embroiled in a lawsuit against the Teamsters union and the operating companies of YRC Worldwide over union wage and benefit concessions.
In its lawsuit, ABF contends three rounds of concessions from the Teamsters to YRC Worldwide were illegal under the 2008 National Master Freight Agreement.
The lawsuit was struck down last month for the second time by a U.S. District Court in Arkansas, but ABF plans to take its case to the U.S. Court of Appeals.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc.
