Forward-Looking Statements
The following is a “safe harbor” statement under the Private
Securities Litigation Reform Act of 1995:
Statements contained in this presentation that are not based on historical
facts are “forward-looking statements.” Terms such as “estimate,”
“expect,” “forecast,” “predict,” “plan,” “anticipate,” “believe,” “intend,”
“should,” “would,” “scheduled” and similar expressions and the negatives
of such terms are intended to identify forward-looking statements. Such
statements are by their nature subject to uncertainties and risk, including
but not limited to union relations; availability and cost of capital; shifts in
market demand; weather conditions; the performance and needs of
industries served by Arkansas Best’s subsidiaries; actual future costs of
operating expenses such as fuel and related taxes; self-insurance
claims; union and non-union employee wages and benefits; actual costs
of continuing investments in technology; the timing and amount of capital
expenditures; competitive initiatives and pricing pressures; general
economic conditions; and other financial, operational and legal risks and
uncertainties detailed from time to time in the Company’s SEC public
filings.
2
Headquarters:
Largest subsidiary:
Expansion:.
Coverage:
Experience:
Arkansas Best Corporation, a transportation holding
company is located in Fort Smith, Arkansas.
ABF Freight System, Inc. (ABF) began operations as
a local less-than-truckload (LTL) carrier in 1923.
ABF became a national LTL carrier in the early 1980’s
as a result of several acquisitions.
Today ABF is one of North America’s largest LTL motor
carriers, providing direct service to all 50 states, Canada
and Puerto Rico, with extensive service to Mexico.
President & CEO Robert Davidson has over 35 years
with the company; the average tenure of corporate
officers is 28 years.
3
2007 Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . .$1.84 billion
ABF concentrates on national and regional transportation of general
commodities freight throughout North America
2007 Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.77 billion
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,430
Service Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289
2007 Pounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 billion
4
ABC Revenue and Net Income
ABF Operating Ratios
$2,000
$120
$1,836.9
$1,800
$100
$1,400
$80
$1,200
$57.8
$1,000
$60
$800
$600
$400
$40
93.9%
O.R.
92.0%
O.R.
94.5%
O.R.
94.5%
O.R.
91.0%
O.R.
95.1%
O.R.
92.6%
O.R.
Net Income (millions)
Revenue (millions)
$1,600
$20
$200
$0
2001
2002
(5)
(4)
2003
Revenue
2004
2005
(3)
2006
(2)
2007
(1)
$0
Net Income
Operating Ratios (O.R.) = ABF Freight System, Inc. Operating expense/Revenue
All amounts are from continuing operations
(1)
(2)
(3)
(4)
(5)
2007 excludes the settlement accounting expense of $1.0 million, and includes $11 million of expense related to ABF’s regional initiative, both numbers after-tax.
2006 excludes the settlement accounting expense of $6.2 million, after-tax.
2005 excludes the gain on sale of properties to G.I. of $9.8 million, after-tax.
2003 excludes the gain on sale of Wingfoot of $8.4 million, after-tax.
2002 excludes write off of Clipper goodwill of $23.9 million, after-tax, due to change in accounting principle.
Note: The years 2003-2007 include the effect of the
revenue reclassification made in 4Q ’07.
5
Net Capital Expenditures vs. Operating
Cash
180.0
160.0
$168
140.0
$148
$137
120.0
Millions
$143
$136
100.0
$89
80.0
60.0
$85
$74
$65
$65
40.0
$60
$64
$64
$46
20.0
0.0
2001
(1)
2002
2003
Net Capex
2004
2005
2006
2007
Cash Provided by Operations
(1) 2001 operating cash includes reductions for $57.0 million of payments of IRS interest and taxes, 2000 incentive payouts and the
payoff of old life insurance loans.
6
Equity, Cash & Outstanding Debt
Position
$700
$600
Millions
$500
$400
$300
$200
$100
$0
Dec. '01
Dec. '02
Dec. '03
Stockholders' Equity
Dec. '04
Dec. '05
Dec. '06
Cash & Short-term Investments
Dec. '07
Mar. '08
Total Debt
7
Planned Uses of Financial Position
Arkansas Best’s strong financial position will provide the following
opportunities:
¾
Net capital expenditures in 2008 will be in the range of $60 - $70 million.
¾
Current quarterly cash dividend of $0.15 per share provides a dividend yield of
1.5%, the second highest in the industry.
¾
Authorization to repurchase up to $75 million of its common stock; approximately
$18 million remains as of March 31, 2008.
¾
Strategic alternatives to best utilize our financial position.
8
After-Tax Return on Capital Employed (ROCE)
25%
19.22%
20%
18.38%
17.29%
15.37%
15.02%
15%
10.79%
10.62%
10%
9.53%
10.95%
9.50%
5%
0%
1998
1999
2000
2001
2002
(4)
2003
(3)
2004
2005 (2)
2006 (1)
2007
Median after-tax ROCE from a 2007 study of S&P 500 companies
ROCE = (Net Income + After-tax interest)/(Avg Total Debt + Avg Equity)
All amounts are from continuing operations
(1)
(2)
(3)
(4)
2006 excludes the settlement accounting expense of $6.2 million, after-tax.
2005 excludes the gain on sale of properties to G.I. of $9.8 million, after-tax.
2003 excludes the gain on sale of Wingfoot of $8.4 million, after-tax.
2002 excludes write off of Clipper goodwill of $23.9 million, after-tax, due to change in accounting principal.
9
Dec-98
Feb-99
Apr-99
Jun-99
Aug-99
Oct-99
Dec-99
Feb-00
Apr-00
Jun-00
Aug-00
Oct-00
Dec-00
Feb-01
Apr-01
Jun-01
Aug-01
Oct-01
Dec-01
Feb-02
Apr-02
Jun-02
Aug-02
Oct-02
Dec-02
Feb-03
Apr-03
Jun-03
Aug-03
Oct-03
Dec-03
Feb-04
Apr-04
Jun-04
Aug-04
Oct-04
Dec-04
Feb-05
Apr-05
Jun-05
Aug-05
Oct-05
Dec-05
Feb-06
Apr-06
Jun-06
Aug-06
Oct-06
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Stock Price Percentage Change vs.
Base Period Price from December 1998
1100%
1050%
1000%
950%
900%
850%
800%
750%
700%
650%
600%
550%
500%
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
-50%
-100%
ABFS
ODFL
YRCW
ABFS:
ABFS:
$39.11
$39.11
6/20/2008
6/20/2008
CNW
10
Industry Trends
11
Industry Trends
Shippers demand customized solutions to the unique needs of fulfilling their
supply chain.
The transportation market demands a trusted logistics partner who offers a
high level of dependable services and financial stability.
Regional transportation services are important in order to reduce product
inventories and reaction times by providing consistent, timely deliveries.
12
Industry Trends
Shippers demand customized solutions to the unique needs of fulfilling their
supply chain.
ABF is attentive to responding to specific customer requirements.
ABF does the “difficult things” well.
ABF’s systems are flexible enough to support most customer requests with
minimal investment.
The full service value ABF provides in the long-haul and regional markets
strengthens customer relationships and improves pricing yields and account
margins.
13
Customized Services Through Technology
ABF SERVICES
CUSTOMER BENEFITS
Supply chain visibility
• Real-time shipment information and control
• Customized services across the ABF network
Adaptable and portable IT applications
• Integrates carrier information internally, thus
creating marketing and operational efficiencies
• Provides superior customer service to their
customers with minimal IT investment
Automation of manual tasks
• Reduces administrative costs for the customer
and ABF
• Allows ABF’s sales personnel to concentrate on
solving more complex logistical challenges
• Results in a richer customer service experience
Internal systems development
•
•
•
•
Cost effective solutions
Applications built by ABF, for ABF
Broad distribution of IT knowledge throughout ABF
Timely and flexible ABF response to unique
requests
14
Industry Trends
The transportation market demands a trusted logistics partner who offers a high
level of dependable services and financial stability.
In 2007, ABF handled 99% of its shipments claim-free and had its lowest
cargo claim ratio in over twenty-five years.
Percent
In late April 2008, ABF won the ATA’s Excellence in Claims/Loss
Prevention Award for an unprecedented fourth time.
ABF has won the prestigious ATA President’s Trophy for safety an
unprecedented five times.
ABF’s driver turnover is approximately 3% - 4% when excluding normal
retirements.
ABF’s award winning web site, abf.com, provides shipment visibility
throughout the entire supply chain.
15
ABF Full-Year Operating Ratios
Since Deregulation
East Texas acquisition
WorldWay acquisition
Average 1980-1994: 96.5%
Average 1997-2007: 93.1%
1,100 LTL Carriers
200 LTL Carriers
Note: ABF’s operating ratio for 2006 and 2007 excludes settlement accounting charges.
16
Industry Trends
Regional transportation services are important in order to reduce product
inventories and reaction times by providing consistent, timely deliveries.
Distribution patterns are being regionalized as emphasis is placed on the
speed of market response times.
Percent
ABF effectively competes in this large, growing market.
Regional business, as defined by shipments moving 800 miles or less,
accounted for 46% of ABF’s total tonnage in the 1Q’08 versus 44% in
1Q’07.
A successful RPM initiative could provide an additional $800 million to
$1 billion in regional revenue to ABF at margins comparable to that of ABF’s
existing business.
17
Regional Performance Model (RPM)
Offering next-day and second-day services being branded as the
Regional Performance Model (RPM)
West RPM
Expansion
by the end of
2008
Currently RPM –
capable in 228 ABF
facilities
18
Arkansas Best Corporation is:
A stable, strong, financially sound, well-managed company
with a superior labor force.
Managing capital efficiently while maximizing shareholder returns.
Providing value-added services, shipment visibility and supply chain
solutions in response to customer needs.
Pursuing growth opportunities in response to marketplace demands.
19
Additional Information
(not discussed in formal presentation)
20
Arkansas Best Corporation
1st
1st
Twelve Months
Ended
12/31/07
Revenue
Operating Income
$ 447.5
13.2
$ 427.8
6.8
$ 1,836.9
84.8
$ 1,881.5
124.7
GAAP Net Income
Plus Pension Settlement Expense (1)
Net Income – excluding above items
$
$
$
$
Qtr
2008
Millions ($000,000) (except EPS data)
GAAP EPS – Diluted
Plus Pension Settlement Expense (1)
EPS – excluding above items
$
$
$
8.5
8.5
0.34
0.34
Qtr
2007
$
$
$
4.8
4.8
0.19
0.19
$
$
$
56.8
1.0
57.8
2.26
0.04
2.30
Twelve Months
Ended
12/31/06
$
$
$
80.5
6.2
86.7
3.16
0.24
3.40
Note: Excludes discontinued operations
(1) Under FAS 88, the Company is required to record a pension accounting settlement when cash payouts exceed annual service and
interest costs of the related plan.
21
Recent Results
ABF’s 1Q’08 operating ratio was 97.0% compared to 98.6% in the 1Q’07.
In the 1Q’08, ABF’s average daily total tonnage decreased 0.5% compared to
the same period last year.
In the 1Q’08, ABF continued to gain traction in the regional market. ABF’s
investment in RPM stabilized and the impact on year-over-year operating
results was minimal.
Quarter-to-date through the weekend of June 15th, average daily total tonnage
was flat compared to the same period last year.
22
Condensed Cash Flows
Millions ($000,000)
Condensed Cash Flows
Three Months Ended
March 31, 2008
(Unaudited)
Source (Use) of Cash
Net Income
Depreciation and Amortization
Working Capital and Other Changes
Net Cash Provided by Operating Activities
$
8.5
19.3
(2.6)
25.2
Net Sales (Purchases) of Property and Equipment,
net of capital leases and asset sales
Capitalization of Software and Other
Purchase of Short-term Investments
Sale of Short-term Investments
Net Cash Used by Investing Activities
8.1
(1.2)
78.6
85.5
Net Change in Bank Overdraft
Payments on long-term debt
Dividends Paid on Common Stock
Purchase of Treasury Stock
Proceeds from exercise of stock options and other
Net Cash Used by Financing Activities
(3.6)
(0.1)
(3.8)
(7.5)
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Period
Cash and Cash Equivalents at the End of the Period
103.2
93.8
$ 197.0
23
2008 Net Capital
Expenditures Forecast
$150.0
$135.0
$120.0
Millions
$105.0
$90.0
$75.0
$75
$60.0
$60
$45.0
$30.0
$40
$15.0
$20
$0.0
Revenue Equipment
Replacements
Real Estate & Other
Total Net Capital
Expenditures (1)
Depreciation and
Amortization
Expected Expenditures
(1)
This figure represents the low-end of the projected Net Capital Expenditure range of $60 - $70 million. Potential additional capital expenditures amounting to as
much as $10 million above the low-end figure, could include real estate opportunities throughout ABF’s network, if necessary.
24
Rating Agencies
Standard & Poors
Moody’s
BBB+
Baa2
RATINGS TABLE
5/28/03 – Last Upgrade
1/30/06 – Last Upgrade
S&P
Moody’s
Superior
Excellent
Strong
ABC, Stable
Outlook (12/19/07)
Good
Adequate
Poor
AAA
AA+
AA
AAA+
A
ABBB+
BBB
BBBBB+
BB
BBB+
B
B-
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
B2
B3
Exceptional
Excellent
Good
Adequate
ABC, Stable Outlook
(7/5/07)
Questionable
Poor
25
Corporate Governance
The Board of Directors consists of 6 independent (outside) members,
CEO Bob Davidson and Chairman Robert Young (former CEO).
Arkansas Best complies with all Nasdaq and SEC-specified
governance regulations.
Arkansas Best has no history of accounting, tax, regulatory, disclosure
or other compliance issues.
Since it went public in 1992, Arkansas Best has not backdated any
stock option grants nor engaged in timing grant options to enhance
their value prior to public release of information.
Chairman Robert Young owns 7.2% of the company’s stock. The
entire board and management team own 8.5% of the company’s stock.
26
ABF Freight System, Inc. System Map
289 Terminals
98.9% Penetration
Terminals
Distribution Centers
NOTE: Points in Mexico represent sales offices only.
27
ABF Freight System, Inc.
Millions ($000,000)
1st Qtr
2008
1st Qtr
2007
Per Day
% Change
Year Ended December 31
2007
2006
Revenue
Operating Income
Operating Ratio
$ 427.7
12.9
97.0%
$ 412.6
5.8
98.6%
4.5%
$ 1,770.7
86.2
95.1%
$ 1,831.4
$ 135.3
92.6%
Thousands (000’s)
Total Lbs./Day
25,768
25,886
- 0.5%
27,225
28,678
Note: Excludes the settlement accounting charges for years ended December 31, 2007 and 2006.
28
102.0%
100.0%
98.0%
96.0%
94.0%
92.0%
4 Quarter Moving Revenue Total
1Q '08
4Q '07
3Q '07
2Q '07
1Q '07
4Q '06
3Q '06
2Q '06
1Q '06
4Q '05
3Q '05
2Q '05
1Q '05
4Q '04
3Q '04
2Q '04
1Q '04
4Q '03
3Q '03
2Q '03
1Q '03
4Q '02
3Q '02
2Q '02
1Q '02
4Q '01
3Q '01
2Q '01
1Q '01
4Q '00
3Q '00
2Q '00
90.0%
1Q '00
$1,850
$1,800
$1,750
$1,700
$1,650
$1,600
$1,550
$1,500
$1,450
$1,400
$1,350
$1,300
$1,250
$1,200
$1,150
$1,100
$1,050
Operating Ratio
Revenue – (millions)
4 Quarter Moving Revenue Total
and Moving Operating Ratio
88.0%
4 Quarter Moving Operating Ratio
NOTE: Since 1997, ABF experienced compounded annual revenue growth of 4.4% including periods of significant business
decline.
NOTE: Revenue and operating ratios from 4Q 2000 forward are revised for the ABF revenue reclassification as noted in the
1Q 2004 press release. Revenues and operating ratios from 1Q 2003 forward are revised for the ABF reclassification noted
in the 4Q 2007 press release.
NOTE: Operating ratios in 2006 & 2007 exclude the effect of settlement accounting charges.
29
Total Billed Revenue per
Hundredweight
$27.00
$26.50
$26.00
$25.50
$25.00
$24.50
$24.00
$23.50
$23.00
$22.50
$22.00
$21.50
$21.00
$20.50
$20.00
$19.50
$19.00
$18.50
$18.00
$17.50
$17.00
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
'00 '00 '00 '00 '01 '01 '01 '01 '02 '02 '02 '02 '03 '03 '03 '03 '04 '04 '04 '04 '05 '05 '05 '05 '06 '06 '06 '06 '07 '07 '07 '07 '08
Billed Revenue per Hundredweight
Note: Billed Revenue per Hundredweight since 1Q’03 includes the revenue reclassification adjustment made 4Q ’07.
30
Labor Contract Agreement
On February 11, 2008, ABF announced that the International Brotherhood
of Teamsters has ratified its new collective bargaining agreement.
A five year agreement from April 2008 through March 2013
Compounded average yearly increases included in this contract:
¾ Wages – 1.9%
¾ HW&P Benefits – 7.0%
¾ Combined Wages and HW&P Benefits – 3.8%
ƒ
The contract provides for:
¾ Flexible “utility” employee
• Enhances existing RPM delivery times
• Allows for expansion of RPM to the Western U.S.
¾ 4-Hour casual employee
31
Rev/Cwt Changes:
What Do They Mean?
Freight profile characteristics impacting Rev/Cwt include:
• Weight/Shipment
• Length of Haul
• Freight Class
• Fuel Surcharge
• Freight Density
• Customer Account Mix
• Growth Rate of Value-Added Services
For many years, consistent profile characteristics made Rev/Cwt changes a
reasonable measure of yield, but not profitability.
In the last few years, it has been difficult to remove the impact of changing profile
characteristics in order to determine true Rev/Cwt changes.
ABF focuses on individual account profitability and rarely considers overall
Rev/Cwt in account or market evaluation.
At the system level, profitability must be considered together with, or
instead of, Rev/Cwt.
Profile Neutral Rev/Cwt is very difficult to calculate and not very accurate.
32
ABF Operating Ratio Comparisons
Full Year
2007
Full Year
2006
Full Year
2005
Full Year
2004
Full Year
2003
Full Year
2002
ABF
95.1%*
92.6%
91.0%
92.0%
94.5%
94.5%
YRC National
Con-way Freight & Transportation
Old Dominion
FedEx Freight
96.5%
91.9%
90.7%
89.9%
93.9%
88.9%
89.8%
86.7%
93.1%
88.2%
90.8%
89.0%
94.5%
90.2%
91.4%
90.9%
98.0%
91.3%
92.3%
92.1%
97.4%
93.3%
93.6%
91.8%
Notes:
ABF’s 2007 & 2006 operating ratio excludes settlement accounting charges.
YRC National is on an “as reported” basis. 2007 excludes impairment charges. Operating ratios prior to 2007 are a weighted average of
Yellow Transportation and Roadway.
FedEx Freight’s year end is May 31.
Con-way’s 2006 OR excludes a $6.2 million 3Q’06 gain from the sale of assets related to Con-way Expedite.
* ABF’s 2007 operating ratio increased by approximately 1.0% due to the RPM initiative.
33
ABF — A Record of Excellence
2008
ABF was recognized by the American Trucking Associations as best in
claims/loss prevention for a record fourth time.
2007
ABF was cited as an innovator in information technology by
InformationWeek magazine, which lists ABF on the 2007 InformationWeek
500.
ABF’s Tony Spero is selected as an America’s Road Team Captain by the
American Trucking Associations (ATA).
ABF wins the ATA Excellence in Security Award for a record fourth time.
ABF drivers John Hazlett and Kevin Scott Harris were named National
Champions during the 2007 National Truck Driving Championships.
34
ABF — A Record of Excellence
2006
ABF TimeKeeper.com was cited as an innovator in information technology
by InformationWeek magazine, which lists ABF on the 2006
InformationWeek 500.
For fifth consecutive year, ABF is ranked among the top 10 of Selling
Power’s magazine’s listing of the 25 best U.S. companies to work for in the
service sector.
2005
ABF received the 2005 Fleet Contest Division Leader Award from the
National Safety Council for outstanding performance in transportation
safety.
ABF is among the winners of CIO magazine’s annual CIO 100 awards
competition for the second consecutive year.
ABF U-Pack Moving was awarded a 2005 WebAward for its Web site at
upack.com. U-Pack was named the Best Institutional Web site for 2005.
ABF again recognized by American Trucking Associations as the top
motor carrier in both claims/loss prevention and security.
ABF is named one of the top six U.S. companies to sell for in the service
sector by Selling Power magazine.
35
ABF — A Record of Excellence
2004
ABF named the exclusive recipient for the entire transportation
industry of CIO magazine’s Enterprise Value Award. The award
recognizes exemplary application of information technology.
ABF named one of the top 100 agile companies by CIO
magazine. The international competition recognizes
organizations that exemplify the highest level of operational and
strategic excellence in information technology (IT).
ABF receives ATA Excellence in Security Award. ABF Safety
and Security Program has been recognized 28 times since 1971
by the ATA Safety & Loss Prevention Management Council.
ABF recognized by Logistics Management magazine as a 2004
Quest for Quality Award winner. The award recognizes the best
of the best in transportation and logistics.
Selling Power names ABF one of the top two service companies
to sell for.
The ATA named two ABF road drivers, Richard Alford and
Ralph Garcia, to its prestigious 2005-2006 America’s Road
Team.
36
ABF — A Record of Excellence
2003
ABF receives ATA President’s Trophy for safety, the highest safety
award in the motor carrier industry – 2003, 1998, 1993, 1989 and
1984 (an unprecedented five times).
ATA Safety Director of the Year: ABF’s Jim McFarlin
ATA Security Professional of the Year: ABF’s Brian Shutt
InfoWorld magazine honors ABF with two “leading technology
innovators” awards involving ABF’s Web site and our NetLink
system. These awards recognize the company’s innovation and
strategic use of technology.
Selling Power magazine again names ABF one of the top seven
service companies to sell for.
Two ABF Road Team Drivers named Captains of the America’s
Road Team sponsored by the American Trucking Associations.
The drivers selected were Garland Woods and Ruben Armendariz.
Otto Schmeckenbecher was selected as an alternate.
37
What Makes ABF Different?
Training
Pricing Discipline and Account Profitability
Operational Efficiency

Safety & Cargo Claims
Prevention
Quality Process
Technology
38
What Makes ABF Different:
Training
Investment in Training
¾ Centralized training department made up of former ABF branch
managers.
¾ New management and sales employees receive 4-5 weeks of training
during the first year of employment.
¾ All operational and sales personnel attend new training courses every
two years.
¾ On-site training classes are provided to ABF’s dock and driver
employees.
39
What Makes ABF Different:
Pricing Discipline and Account Profitability
Account Pricing Structure
Centralized control of pricing decisions
¾ Avoids the typical political nature of these decisions
¾ Pricing discipline
¾
Costing Model for Measuring Account Profitability
Developed over a 30-year period
¾ Continual “fine tuning” of individual elements
¾ Management has confidence in the costing model and the
discipline to make sound business decisions.
¾
40
What Makes ABF Different:
Operational Efficiency
The Newest Road Tractor Fleet in the Industry
¾
¾
¾
¾
¾
Three year trade cycle for road tractors
Current average age of 21 months
Results in reduced maintenance facilities and staff
Requires a smaller fleet
Advantages include improved equipment utilization, leading edge tractor
technology and increased fuel economy
Reduced Use of Rail
¾
¾
Percentage of rail miles run is lower than that of ABF’s major competitors
Rail used mostly in peak periods and for lane equipment balancing
41
What Makes ABF Different:
Operational Efficiency
Real Time Labor Management
¾
¾
Daily matching of labor with available freight
Manpower adjustments can be made quickly
Shipment Handling
¾
With fewer distribution centers, ABF handles each shipment less, thus
reducing costs.
42
105,000
2/1/08
12/1/07
10/1/07
8/1/07
6/1/07
4/1/07
2/1/07
12/1/06
10/1/06
8/1/06
6/1/06
4/1/06
2/1/06
12/1/05
10/1/05
8/1/05
6/1/05
4/1/05
2/1/05
12/1/04
10/1/04
8/1/04
6/1/04
4/1/04
2/1/04
12/1/03
10/1/03
8/1/03
6/1/03
4/1/03
2/1/03
12/1/02
2/1/08
12/1/07
10/1/07
8/1/07
6/1/07
4/1/07
2/1/07
12/1/06
10/1/06
8/1/06
6/1/06
4/1/06
2/1/06
12/1/05
10/1/05
8/1/05
6/1/05
4/1/05
2/1/05
12/1/04
10/1/04
8/1/04
6/1/04
4/1/04
2/1/04
12/1/03
10/1/03
8/1/03
6/1/03
4/1/03
2/1/03
12/1/02
10/1/02
8/1/02
6/1/02
50,000
10/1/02
8/1/02
6/1/02
ABF Freight System, Inc.
Total Shipments
140,000
130,000
120,000
110,000
100,000
90,000
80,000
70,000
60,000
Total Dock, Street & Yard (DSY) Hours
Week Ending Date
265,000
245,000
225,000
205,000
185,000
165,000
145,000
125,000
Week Ending Date
43
What Makes ABF Different:
Quality Process
Philosophy
“Do It Right The First Time”
Reasons for a Mistake
¾
¾
¾
Lack of the correct tools
Lack of training
Lack of attention
ABF’s Specific Quality Focus
¾
¾
¾
¾
Shipment shortages
Shipment damages
Delay in delivering shipments on time
Correct freight bill
44
What Makes ABF Different:
Quality Process
Impact
An integral part of the ABF culture
Taught to all employees on an ongoing basis
¾
¾
Classroom training is available to management once a month.
All employees are trained every 18 months using a new ABF-produced
Quality video.
Has changed the mindset of ABF’s workforce
Has improved ABF’s work processes and saved ABF money
45
Equipment Count
Road & City Tractors
City-Straight Trucks
Total Trucks and Tractors
Total Road and City Trailers
4,249
86
4,335
20,745
Note: All equipment listed above is owned.
Equipment count is taken from U.S. Department of Transportation 2007 Form M Annual Report.
Current amounts could differ.
46
Investment Policies
All of Arkansas Best’s investments are predicated upon the expectation of
a 10% ROCE
Tractors
¾ Road – 3-year trade cycle
¾ City – Typically 7-9 years; not a fixed cycle
Trailers
¾ Generally replace those with the highest repair cost/mile
Freight Terminals
¾ Based on expected ROCE compared to 10% standard
Information Systems
¾ Information technology group assesses and prioritizes needs
¾ Software capitalized over 2-3 years
¾ Hardware capitalized over 3 years
47
Tonnage Breakdown by
SIC Industry Description
Only 15% of ABF’s 2007 tonnage can be identified with a valid SIC code.
Of that 15%, the ten largest SIC industry descriptions are:
¾
¾
¾
¾
¾
¾
¾
¾
¾
¾
Industrial Machinery and Equipment
Fabricated Metals Industries
Chemicals and Allied Products
Food and Kindred Products
Primary Metals Industries
Wholesale Trade – Durable Goods
Rubber and Plastic Products
Electrical and Electronics
Furniture and Fixtures
Printing and Publishing Industries
48
ABF’s Technology
Internal Applications
¾
Freight Handling & Productivity Solutions
¾ WiFi Enabled Personal Data Assistants (PDAs)
¾ Java Enabled Handset
¾ GPS Enabled Devices
¾ Earlier shipment visibility
¾ Load and route optimization
¾ Transit time improvements
¾ Operating and financial controls
¾ Yield management
¾ Cost control
External Applications
¾
ABF’s Internet Site
¾ Shipment Visibility and Control
¾ E-Mail Notification and Reporting
49