ABF, CAROLINA FREIGHT TO BOOST RATES IN JANUARY

ABF, CAROLINA FREIGHT TO BOOST RATES IN JANUARY

Two more major less-than-truckload carriers announced freight rate increases Thursday, joining the nation's four largest LTLs in announcing some kind of rate adjustment for 1994.

ABF Freight System Inc., the nation's fifth-largest LTL in 1992 revenue, said it would raise freight rates by 4.5 percent on Jan. 1. Carolina Freight Carriers Corp., the seventh-largest LTL, said it would raise rates by 4.7 percent on Jan. 3.Thursday's announcements follow similar actions this week by Yellow Freight System Inc. (a 4.7 percent increase effective Feb. 1); Roadway Express Inc. (4.5 percent increase on Jan. 1); CF Motor Freight (a 3 percent discount rollback commencing Jan. 1) and Overnite Transportation Co. (individual shipper rate adjustments).

Like its competitors, ABF said increased costs were the reason for seeking rate hikes from shippers. It said the general rate increase would exclude international shippers.

The Fort Smith, Ark., company cited fuel price increases as a major reason for the rate hikes. A new federal tax of 4.3 cents a gallon, some new state taxes and the federally mandated switch to more-costly low-sulfur diesel will boost net costs by $6 million in 1994, ABF estimated.

It also noted that the corporate tax rate had increased in the new federal deficit reduction act, and included a clause making a 35 percent tax rate retroactive to the beginning of 1993. In addition, deductions for meals and other on-the-road expenses have been curbed from 80 percent to 50 percent.

"As we expand the scope of our transportation services, it is important for ABF to be able to make the investments necessary to provide reliable, comprehensive services to the shipping community," said Robert A. Young III, ABF president and chief executive, in explaining the annual increase.

"An increase in prices is also needed to restore company profits to a level sufficient to encourage additional capital investment," ABF said in a statement. Although ABF's operating profit margin is somewhat better than most of its competitors', it is below that typical of other industries, the statement added.

ABF reported $843 million in total 1992 revenues, with an operating ratio (expenses as a share of revenues) of 94.9 percent.

Carolina officials could not be reached for comment to elaborate on why the company announced the 4.7 percent rate increase for Jan. 3.