Arkansas Best CEO Davidson to retire
| Davidson |
Arkansas Best Corp. announced that Chief Executive Officer Robert A. Davidson will retire on Dec. 31 and be replaced by Chief Financial Officer Judy R. McReynolds, 47.
Arkansas Best is the parent of ABF Freight System, one of the largest U.S. less-than-truckload carriers.
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The surprise news coincided with Arkansas Best earnings results that showed a $14 million third quarter operating loss for ABF. The carrier's revenue declined 22.4 percent to $370 million from the same quarter in 2008, while tonnage fell 10.1 percent. Tonnage is down 14.9 percent year-to-date.
Third quarter shipment yields also shrank 13.6 percent to $23.98 from $27.75, which the company attributed to a sharp decline in fuel surcharge collections. The money-losing situation is reflected in the company's operating ratio, which worsened to 103.8 percent compared to 94.7 percent.
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'Our third quarter results reflect the ongoing impact of lower freight levels and competitive industry pricing that deteriorated further compared to the first half of the year,' Davidson said.
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| McReynolds |
'The smaller decline in ABF's third quarter tonnage implies an improving freight environment compared to the first half of the year. However, this year-over-year trend is primarily related to comparisons back to last year's third quarter when business levels fell sharply. Nevertheless, this quarter's tonnage also benefitted from modest market share gains from our LTL competitors,' Davidson said. 'On a sequential basis, ABF's third quarter tonnage trends were slightly better than normal, seasonal expectations. Though that trend has weakened somewhat since the last full week of September, we continue to add freight previously handled by other carriers. Regardless of business levels, we continue to manage the costs of the ABF network each day in line with the amount of available freight, while striving to maintain the high level of customized service that is important to ABF's customers.
'Industry LTL pricing further weakened during the third quarter. Declining yields, worsened by the recessionary economy, have made it more difficult to cover normal cost increases,' Davidson added. 'Despite a more price-sensitive environment, ABF has maintained its traditional emphasis on offering each customer a fair, competitive rate.'
Davidson, 61, will also resign from the Arkansas Best board of directors. After working his way up the ranks at ABF, Davidson took over the motor carrier and corporation in February 2006.
The company credits Davidson's work setting up a pricing department and implementing account-based customer relations following deregulation of the trucking industry in 1980 as well as its service levels developed while he was vice president of marketing.
Arkansas Best Chairman Robert Young said the company regretted his decision to take early retirement.