ABF WILL TAKE A MONTH TO PONDER RATES FOR CAROLINA FREIGHT CUSTOMERS

ABF WILL TAKE A MONTH TO PONDER RATES FOR CAROLINA FREIGHT CUSTOMERS

ABF Freight System Inc. will carry Carolina Freight Carriers Corp.'s freight for a month at existing prices after the companies merge this year before deciding what rates will be offered to Carolina customers, said David Stubblefield, president of ABF.

Mr. Stubblefield said that while ideally he'd like to hang onto all Carolina's customers, experience suggests about 30 percent will be lost after the merger.That would mean about $200 million in less-than-truckload freight back on the market. Analysts say it is low-price business that ABF is better off without. But Mr. Stubblefield and Carolina's customers say it's too early to know where they'll end up.

The tender offer from Fort Smith, Ark.-based Arkansas Best Corp., ABF's parent, for WorldWay Corp., Carolina's Charlotte, N.C., parent, expires at midnight tonight. Final approval of the merger of ABF, Carolina and Red Arrow Freight Lines Inc., a smaller WorldWay carrier, is needed from the Interstate Commerce Commission and the Teamsters, which represents hourly employees at all three carriers. That probably won't come until late September.

"We'll be over there Monday morning," said Mr. Stubblefield. "We'll leave their management, their employees, all in place, operating it with our oversight, until we consolidate."

Mr. Stubblefield said the merger will create new economies of scale.

"Under the new efficiency, is pricing right or wrong? We just don't know," he said.

Carolina customers said they'd like to stay with ABF and are anxious to know what will happen.

"We have a contract," said William Rue, transportation manager for Florida Power & Light Co. "As long as ABF will honor that, I would tend to stay with them. If they don't, then we're prepared to take alternative action."

FPL, a Juno Beach, Fla., electric utility, uses Carolina to handle about $1 million a year in inbound freight.

Douglas Rockel, analyst with Furman Selz in New York, said some of the freight is probably not worth keeping at current rates.

"ABF should be selective in what freight they retain and what they do not retain," he said. "Otherwise, they'll find themselves in the same situation that Carolina did."

Mr. Rue and other customers said they were surprised mostly by the timing of the July 10 merger announcement, but they think the move is the best possible one for troubled Carolina, and themselves as well.

"I do look at it as a positive thing for Carolina," said Jeff Nolte, chairman of the traffic council of White Consolidated Industries Inc. of Columbus, Ohio. He said his company's multimillion-dollar contract will probably stay with ABF.

"I think its too early to tell what will happen," said Mr. Nolte. "It has potential to be a good thing for us."