ABF NMFA Tentative Agreement

Transcription

1 ABF NMFA Tentative Agreement Two- Person Meeting Chicago, IL May 20, 2013 IBT Economics & Contracts Department, IBT Washington, DC

2 Overview Economy is a Mixed Bag The Freight Recession Continues for Some Carriers The ABC s s of ABF Consequences of Inaction

3 General Economy: Still Recovering This Economy is Not Showing Signs of A Traditional Rebound Unemployment Still High: Annual Avg: : 9% since 2009 Payroll Emp. Gain in not enough to overcome losses Housing Improved but not New Construction Consumer Debt Still Near All-Time Highs

4 What s s Going on at ABF? Heightened Pricing Competition from FDX, C-W, UPS Freight, Estes, R & L, YRC Revenue Setbacks in 2012 Tonnage off -4.6% last year Yields off in 2013 so far - discounting Major Cash Burn from ABF Losses & Panther deal The turnaround that never happened

5 Major L-T-L Carriers Revenue Changes : 2011 and REVENUE ($ million) $4,710 1 Top 15 less-than-truckload carriers 2009 revenues 2 (including Con-way fuel surcharges) Freight 3 Note: RANK CARRIER NAME FedEx Freight YRC Freight UPS Freight Old Dominion ABF Freight Estes Express Lines YRC Regional R+L Carriers* Saia Southeastern * Vitran Express Averitt Express Roadrunner Trans* AAA Cooper $3,197 $3,183 $2,299 $1,732 $1,681 $1,636 $1,554 $1,207 $1,030 $820 $686 $557 $467 $ REVENUE ($ million) $5,011 $3,340 $3,187 $2,378 $1,942 $1,669 $1,661 $1,641 $1,250 $1,099 $875 $703 $579 $511 $465 PERCENT CHANGE 6.4% 4.5% 0.1% 3.4% 12.1% -0.7% 1.5% 5.6% 3.6% 6.7% 6.7% 2.5% 3.9% 9.4% 6.9% Revenues for LTL operations only, unless otherwise indicated *Revenues may include truckload and other services Source: Company reports and SJ Consulting Group estimates, as published in the Journal of Commerce, 3/18/13 Margin leader Flat Y-O-Y #8 in 2009 Top line loser New on list

6 ABC Operating Revenues & ABF: Last 5 Years (in millions) 2,500.0 ABC now less reliant on ABF for Rev & Income 2, , , , , , ,833.1 $1,759 ABF 96% of Revenue 2, , , ,472.9 $1,731 $1,725 $1,533 $1, ABF 82% ABC Rev (Consol) ABF Op Rev (total) Source: SEC documents

7 ABF & ABC Income: (in millions) $150 $100 $50 $0 ($50) ($100) ($150) $86 $57 Freight Recession $48 $ $58 -$100 -$128 -$55 ABF trending against industry $4 $10 First Quarter $19 -$23 -$15 -$13? ABF Operating Income ABC Net Income Source: SEC documents and analysts reports

8 ABF Operating Ratio: Last 5 Years + Q BREAK EVEN LINE ? Q1 '13 Source: SEC documents Break even OR leaves room for certain non-operating expenses to be paid and equipment purchases

9 Changes in Total Compensation for Local Cartage Driver Under NMFA CSLCSA S-T Hourly Wages + Benefit Rate $45.00 $40.00 $35.00 $35.10 $35.10 $37.50 $36.10 $36.10 $36.50$36.50 $36.10 $33.83 $34.19 $37.95 $38.95 $38.95 $39.35 $39.55 $40.00 $40.35 $ month comp gap of up to $12.14/hr $30.00 $25.00 $27.19 $26.23 $26.62 $26.87 $26.87 $27.21 $29.44 $29.82 $30.17 YRC ABF $30.51 $ /1/2008 8/1/ /1/2008 4/1/2009 8/1/ /1/2009 4/1/2010 8/1/ /1/2010 4/1/2011 8/1/ /1/2011 4/1/2012 8/1/ /1/2012 4/1/2013

10 With ABF, We Are Facing Hard Economic Realties 64% of NMFA workers are age 50 or older which is 10% higher than 2008 Some Benefit Plans are Combined over $18/hr currently Company Has Highest Avg Yield but Fewest Shipments in Class Once Unique Services Now Targeted by Non-Unions

11 ABF Projections for 2014 and Beyond Don t Change >> Broadly assume that market conditions will not improve much >> Pricing: continued rate war with peers >> Tonnage: comparable levels to 2012 >> Operating ratios: over w/o help >> Cannot Recap Business w/o help Stagnant Results and Market Diversion

12 % Density L-T-L Marketshare: Percent of Rev Union vs. Non-Union: 1998 to 2013 Recession cut our share further $32 B % 28% Union-LTL Non-Union-LTL

13 The Freight Future: Uncertainty 2012 Saw a Top Line Pullback for Some YRC Freight & ABF Most Notably Survival of Union Market Share is Now Predicated on Success of Just 3 Corps ABF Has Limited Resources and BoD Lacks Stomach for Any More Debt Has $145 MM in L-T L incl current portion Time to Act is Now mixed signals from the Economy (and the company)