Arkansas Best Corporation Q1 2008 Earnings Call Transcript

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2008-04-23 14:17:08.0

Tags: Arkansas Best Corp.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from the line of Justin Yagerman, Wachovia Securities.

Justin Yagerman -- Wachovia Securities

Hey, good morning guys, how are you doing?

Judy McReynolds

Good, how are you?

David Humphrey

Good morning, Justin.

Justin Yagerman -- Wachovia Securities

I wanted to get a sense, because it doesn't feel like your quarter was as impacted by fuel as many of your competitors, on the percentage of your business that's subject to fuel surcharge caps and I guess, if you could comment a little on how you were able to overcome the rapid rise in fuel and is this more of the favorable benefit of your workers' comp canceling out the negative impact of fuel, or how should we be figuring out how you're operating within this high-energy cost environment?

Bob Davidson

We do have some fuel surcharge caps, but as you might expect from our traditional pattern of pricing discipline, we probably have fewer of those than other carriers. I will say that we don't look at that on the aggregate. Since we focus on individual account profitability, we're going to those customers one at a time and just simply explaining that the world has changed. It's not too different from a factor that we've had for a long time, which is single commodity-class exceptions. You might put in a class 70 for a customer and if they start shipping ping-pong balls, all bets are off and it's time to take a look at the deal. We've got a few instances of where we've got fuel surcharge caps, but at the end of the day, fuel surcharges are in the revenue and fuel is in the cost and ABF, along with every other carrier in the marketplace, is going back to customers and saying, we're running a loss and we can't do that.

Justin Yagerman -- Wachovia Securities

Got it. So it's just -- it's looking at it on an account-by-account basis.

Bob Davidson

If you roll it up on a account-by-account basis, the aggregate company results end up pretty good.

Justin Yagerman -- Wachovia Securities

Got it. On that workers' comp benefit that you saw in the quarter -- and you may have commented on this and I missed it -- I guess what part of that more favorable experience is going to be on going and a benefit for the rest of this year, and what part of that is more one time in nature?

 

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