New Services & Labor Deal Lift Outlook

Article Excerpt

ARKANSAS BEST CORP. $37 (Nasdaq symbol ABFS; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 25.2 million; Market cap: $932.4 million; WSSF Rating: Average) specializes in less-than-truckload (LTL) shipping, which combines freight from multiple customers into a single vehicle. LTL services supply 95% of Arkansas Best’s revenue. The remaining 5% comes from logistics and vehicle maintenance services. The company is expanding its same-day and overnight delivery services. Demand for regional shipping is growing faster than Arkansas Best’s traditional long-haul services, as many of its customers aim to carry less inventory as the economy slows. Short-haul now accounts for one-third of the company’s shipping revenues. Arkansas Best recently secured a new five-year contract with the Teamsters union, which represents 75% of its workers. Besides labor peace, the new deal gives the company more control over its costs than regular truckload carriers. This flexibility will make it easier for Arkansas Best to meet the needs of its time-sensitive regional customers. In the three months…