AMERICAN FREIGHT SYSTEM POSTS $10 MILLION LOSS

AMERICAN FREIGHT SYSTEM POSTS $10 MILLION LOSS

American Freight System Inc.'s acquisition of Smith's Transfer Corp. doubled the company's truck tonnage in the fourth quarter but produced a $10 million loss, according to financial reports filed with the Interstate Commerce

Commission.

American Freight, a unit of American Carriers Inc., an Overland Park, Kan., holding company, said it incurred substantial costs in merging the operations of the two giant trucking companies.The combined operations of American and Smith's will produce one of the nation's five largest motor carriers.

American's financial results for the fourth quarter and full year, along with those of six other truck lines, are included in the accompanying tables. The Journal of Commerce publishes financial and operating statistics for the country's 50 largest motor carriers each quarter.

This week's statistical installment includes two other general freight motor carriers, Watkins Motor Lines Inc., Lakeland, Fla., and Bowman Transportation Inc., Atlanta, Ga; three major household goods carriers, Mayflower Transit Co., Carmel, Ind.; United Van Lines Inc., Fenton, Mo., and Atlas Van Lines Inc., Evansville, Ind., and an automobile hauler, M&G Convoy Inc. of Buffalo, N.Y.

Aside from the merger related costs, American suffered from the sharp freight rate discounting that hammered most less-than-truckload motor carriers in 1987. The carrier's revenue per ton fell 5 percent from a year earlier.

Bowman, another fleet with a heavy concentration of small shipment traffic, experienced a 4.99 percent. drop in its revenue per ton.

American, which acquired Smith's on Oct. 4, began to integrate the Staunton, Va., carrier's operations the first week of December. By the end of the year, 94 overlapping freight terminals had been eliminated as the company transferred operations to one building at each site.

Additionally, American eliminated 1,200 employees, reassigned 400 road drivers to new locations and consolidated or eliminated eight break-bulk sorting centers.

The truck line also added several new direct loading schedules and converted to a single computer system.

John Bigger, American's senior vice president and corporate secretary, said the company experienced some rough spots in merging the two operations. But he said the assimilation generally was proceeding according to plan.

Company officials said the after-effects of the merger likely would impact adversely this year's first quarter results as well.

Mr. Bigger also said American would do some selective paring of unprofitable business. We'll decide what best fits the new system and what can be handled profitably.

Full year results for the three major moving companies were mixed.

Mayflower increased its operating income 66 percent and improved its operating ratio, which measures expenses as a share of revenue, from 97.3 percent to 95.5 percent.

United Van Lines, however, lost $3.7 million after posting a profit of $1.4 million the year before. Operating profits at Atlas Van Lines slipped 10 percent from 1986 levels.