Arkansas Best Corp. Q4 2007 Earnings Call Transcript

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2008-01-25 12:51:55.0

Tags: Arkansas Best Corp.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Tom Wadewitz.

Analyst for Thomas Wadewitz - J.P. Morgan

Good morning, it’s Alex Johnson for Tom. I think you mentioned that fuel surcharge contributed to pricing and yields but I’m not sure that you specified by exactly how much. Could you do that?

Robert A. Davidson

We no longer break out fuel surcharge. Again we’re at the point where that’s becoming an indistinguishable part of the yield. There’s a substitution effect with other portions of the yield and we mentioned it because fuel prices were up but I think more and more you ought to start thinking about it as part of the price.

Analyst for Thomas Wadewitz - J.P. Morgan

Okay, and then in terms of LTL tonnage ex the spot truckload business that you had, can you tell me what the LTL tonnage growth rate was?

Robert A. Davidson

We also don’t break out LTL and tonnage because we actually measure it in a different way than you would based on how it’s rated rather than on shipment size. We gave you the fact that directionally the tonnage was up and the LTL contributed more than the volume as you move forward in the quarter and that’s all we were trying to make.

Analyst for Thomas Wadewitz - J.P. Morgan

Okay, thanks.

Operator

Thank you. Your next question comes from Justin Yagerman.

Justin Yagerman - Wachovia Capital Markets, LLC

Hey, good morning, everyone. I was pleased to see that RPM didn’t have a drag on the OR this quarter or only had a minimal drag but as you go through and you expand on the west coast and the western third of the country, do you expect that OR drag to reaccelerate a little bit, and if so, you didn’t quantify it, but how much of an impact do you think that’s going to have on this year’s operations?

Robert A. Davidson

We’re still designing the network but I think you can expect the impact to be significantly less than what we saw in the eastern two-thirds of the United States. Because of the distances out there, we’ll actually be using different operating techniques more over-the-road and less real estate investment.

Justin Yagerman - Wachovia Capital Markets, LLC

That make a lot of sense actually. Can you give us a sense of how fast it’s growing relative to the overall business or the core business? I know you guys don’t want to break it out and consider it part of it, but just generally, two times as fast, three times as fast? Is it comparable? How can we get a feel for how this is transitioning what your core business actually is or the length of haul in your core business?

 

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