William B. Cassidy | Apr 25, 2011 12:13PM EDT
ABF Freight Systems increased revenue and tonnage by double digits in the first quarter, but fuel prices and weak pricing contributed to a $22.6 million loss.
The less-than-truckload carrier's revenue jumped 20.8 percent from the first quarter last year to $402.4 million, while tons per day increased 17.4 percent.
The company's revenue per hundredweight or yield -- a measure of pricing -- increased 2.3 percent in the first quarter to $24.16, including fuel surcharges.
Total shipments rose 15.8 percent from a year ago and shipments per day 13.9 percent. Billed revenue per shipment increased 5.4 percent, ABF said.
Profitability improved as well as the company cut its losses from $35.7 million in the year ago quarter to $22.6 million, with an operating ratio of 105.6 percent.
The "lingering effects" of the LTL price war of 2009, which depressed prices during the recession, kept ABF running in the red last year, despite some price hikes.
"ABF continues to retain the general rate increase that was implemented in October," said Judy R. McReynolds, president and CEO of ABF parent Arkansas Best.
McReynolds reported "some progress" toward raising ABF rates, but said "more work is needed to align our pricing levels with the value we provide."
Tightening capacity in the LTL as well as truckload markets will benefit ABF, she said. "The opportunities for ABF to grow profitably this year are favorable."
The less-than-truckload carrier lost $7.4 million in the fourth quarter and $58.1 million in 2010 as it struggled to raise rates and get back to profitability.
ABF is also struggling to contain rapid increases in diesel fuel costs. Its fuel expenses were up 19.7 percent for the quarter from the first three months of 2010.
Rising fuel costs are becoming harder to recover because of fuel surcharge caps and non-standard surcharge programs negotiated during the recession, ABF said.
ABF is working to "increase pricing on underperforming accounts and correct inadequate fuel surcharge programs," the company said April 25.
-- Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter @Wbcassidy_joc.