Although the trucking market may not be quite as attractive as rail, it's not terrible. Tonnage is increasing at a slower rate, but is still positive and likely to continue growing so long as the economy grows. Unfortunately, Arkansas Best (Nasdaq:ABFS) seems to be making a tough decision on price versus volume, and needs to show better margins to validate the choice.
A Disappointing Close to the Year
Of the three metrics that most transport investors place great importance on, Arkansas disappointed meaningfully on two. Revenue was up 5% in the quarter, but strong pricing (up almost 13% per hundredweight) was offset by very weak volume. Tonnage was down about 8% in the fourth quarter, and weakened as the quarter went on. Given the overall tonnage trends, it looks as though Arkansas Best may have priced itself out of some business.
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