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Home » ABF hikes non-contract rates by 6.9 percent
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ABF hikes non-contract rates by 6.9 percent

July 7, 2011
Mark B. Solomon
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Less-than-truckload (LTL) carrier ABF Freight System, Inc. said today it will hike rates by 6.9 percent on its non-contractual shipments effective July 25. ABF's move comes just days after rival UPS Freight, the LTL unit of UPS Inc., a similar rate increase on its non-contract freight.

In a statement, Fort Smith, Ark.-based ABF said the impact of the increase will vary depending on specific lanes and shipments.

The rate increase comes amid an improving climate for pricing and yields for the LTL industry as carriers benefit from generally firmer traffic trends and actions to cull unprofitable freight from their systems. Through mid-June, ABF's second-quarter yields were up between 9 percent and 10 percent from year-earlier levels, compared with 2 percent to 3 percent gains in the first quarter versus the same period in 2010.

ABF's volumes grew by 10.8 percent in the second quarter over 2010 levels, though they moderated significantly through mid-June in line with a general economic slowdown.

Few expect UPS Freight and ABF to be the last LTL carriers to implement these general rate increases. Though the hikes are scheduled to take effect during the traditionally slow summer shipping cycle, they stand a better chance of sticking as auto production resumes in Japan following last March's tsunami and earthquake that disrupted trans-Pacific automotive supply chains, analysts at Robert W. Baird & Co. said in a research note published today.

In another, perhaps unconventional, metric of a brightening LTL outlook, Con-way Inc., which runs LTL, truckload, and logistics businesses, announced yesterday it would restore two 401(k) contributions to employees that are largely based on an employee's time of service with the company. Con-way said in a filing with the Securities and Exchange Commission that an improvement in "general economic conditions" prompted the move, which takes effect Oct. 1 and will cost the company about $5 million per quarter.

Transportation Trucking Less-than-Truckload
KEYWORDS ABF Freight System Inc. Con-way UPS Freight
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    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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