Ladies and gentlemen, thank you for standing by, and welcome to the ArcBest First Quarter 2016 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded on Friday, April 29, 2016. I would now like to turn the conference over to David Humphrey, Vice President of Investor Relations. Please go ahead, sir.

Welcome to the ArcBest Corporation first quarter 2016 earnings conference call. We'll have a short discussion of the first quarter results and then we'll open up for a question-and-answer period. Our presentation this morning will be done by Ms. Judy R. McReynolds, Chairman, President and Chief Executive Officer of ArcBest Corporation, and Mr. David R. Cobb, Vice President, Chief Financial Officer of ArcBest Corporation. We thank you for joining us today. In order to help you better understand ArcBest Corporation and its results, some forward-looking statements could be made during this call. As we all know, forward-looking statements by their very nature are subject to uncertainties and risk. For a more complete discussion of factors that could affect the Company's future results, please refer to the Forward-Looking Statements section of the Company's earnings press release and the Company's most recent SEC public filings. In order to provide meaningful comparisons, certain information discussed in this conference call includes non-GAAP financial measures as outlined in the tables in our earnings press release. We will now begin with Ms. McReynolds.

Thank you, David, and good morning everyone. We were pleased to report higher revenue and positive cash flow from operations at ArcBest for the first quarter, a typically slow period for the industry that this year was also marked by the soft industrial and manufacturing economic environment that emerged in the fall of 2015. As these market conditions persist, we are working to manage our cost while continuing to provide the service levels our customers expect from the ArcBest companies. At the same time, we continue to make investments in sales, customer service, equipment and information technology. We know that these are necessary to compete in the future and best serve our customers who seek ever faster transit times and reliability, and particularly for us the 'can do' attitude that continues to earn us their business. While ABF Freight saw diminished business levels because of the soft freight environment, pricing stability remained intact and revenue growth in the asset-light businesses reflected the positive effects of the recent Bear Transportation acquisition. In addition, continued success in the strategy of collaboration across the ArcBest enterprise contributed to increased load count at both Panther and ABF Logistics, which was also encouraging. Now for some details on each of the businesses. During the first quarter, ABF Freight was impacted by uncertain economic environment associated with slower trends in industrial production and manufacturing. Total revenue and tonnage were below the prior year period while the number of shipments handled throughout the ABF Freight network increased. The revenue decline was impacted by reduced fuel surcharge revenues associated with the ongoing decrease in diesel fuel prices along with lower tonnage levels. In the midst of seasonally slower months of the first quarter, we continued our emphasis on offering a high level of service to our customers. In…

Thank you, Judy, and good morning, everyone. ArcBest's first quarter 2016 revenues were $621 million compared to $613 million in last year's first quarter, with increases reported by ABF Logistics and FleetNet. ABF Logistics revenue increase was related to its acquisition of Bear Transportation Services that was completed in December of last year. Lower business levels and the impact of lower fuel surcharges affected first quarter revenue at most of our businesses. The first quarter 2016 net loss was $0.24 per share, compared to net income of $0.03 per share last year. As detailed in the non-GAAP reconciliation table in this morning's earnings press release, first quarter 2016 net loss adjusted for the non-union pension settlement charges and an increase in cash surrendered value of life insurance, was $5.9 million or $0.23 per share. Our reported first quarter results were impacted by ABF Freight's $1.6 million increase in workers' compensation and $1.3 million increase in third-party casualty claims cost, which together were $2.9 million or $0.07 per share above the prior year quarter. This was the result of an increase in the number of claims and the severity of claims versus the historical periods. As a part of our stock repurchase program, in the first quarter we bought 134,000 shares for a total amount of $2.6 million. We ended the first quarter with unrestricted cash and short-term investments of $204 million. Combined with the available resources under our credit revolver and our receivable securitization agreement, our total liquidity equals $330 million. The accordion features of those two agreements allow for an additional total amount of $100 million. Our total debt of $203 million includes the $70 million balance on our credit revolver, the $35 million borrowed on our AR securitization and $98 million of notes payable and capital leases primarily…

Thank you, David. I wanted to highlight a recent recognition we received. Last week, ABF Freight and Panther earned 2016 National Carrier of the Year awards from the National Shippers Strategic Transportation Council. ABF Freight was named the best LTL carrier and Panther was honored as the best expedited carrier. For ABF Freight, this is the fourth year in a row and the sixth time in the last seven years that NASSTRAC has recognized it as a top LTL carrier. This is the second time Panther has received NASSTRAC's Top Expedited Carrier Award. These awards are based on the input from shippers around the country and validate our efforts to customize solutions in order to meet the goals and objectives of each of our customers. As you may know, I often travel with our sales leadership to meet customers and hear first-hand what they appreciate from the ArcBest companies and what we can improve to keep winning more of their business. I'm always very encouraged by how much they recognize our employees' 'can do' spirit and that we solve problems for them that other companies often say they can't or do not wish to handle. That is something that characterizes the ABF and Panther brands, but increasingly what I also hear on these visits is how much people are beginning to recognize the scope of what we offer at ArcBest and how that helps them better manage their own businesses much more effectively. By providing needed services across the supply chain spectrum, we're now capturing more of their business than just the traditional LTL spend we used to get from ABF Freight and the expedited shipments at Panther. Without the full array of solutions we now offer, we simply would not be in a position to compete the way we must. As our investments in across collaboration and enabling systems evolve, our ability to serve customers through single points of contact they desire are positioning the ArcBest companies better than ever to keep and win more customers' business. And now, David, I think we are ready for some questions.

Okay, Terra, I think we are ready to do the questions.

[Operator Instructions] The first question comes from the line of Chris Wetherbee. Please proceed.

I wanted to ask about the sequential OR improvement. When you think about sort of the puts and takes that are going on in this spring for your freight market, we have some timing and holiday shifts that you guys I think highlighted as well, how do we think about some of the puts and takes at natural sort of 600 basis points or so improvement that we would normally see? Just trying to get a sense of maybe what could be changing off cycle with that.

Chris, a couple of things that we talked about, one of those being just the uncertainty of the economic environment, I think that kind of overhangs this whole discussion, and with what we are seeing in March and April, we aren't getting much of a read that things are improving yet, although we hope that they will. And so that's something that will have an impact. You mentioned Easter. I mean that was in March and is a comparison issue again, and the information that David gave you, it kind of underlies that. Another thing that I mentioned to you is this issue that we've had with our workers' comp third-party casualty claims here in the first quarter. I think I'll let David speak to some of the comparisons that we deal with there, but that's certainly a cost area that we're going to see we think some inflated cost or some higher cost even in probably the second and third quarter's release.

I would just add to that Chris that it's hard to tell exactly, but I think if you compare these areas, workers' comp and [indiscernible] to last year, last year actually benefited in that it was lower than historical averages by about 40 basis points combined. It wasn't really – actually that's a couple of years of favorable experience in those areas back-to-back but then I'm talking about second quarter, both second quarter 2014 and second quarter 2050. But if we could see – it's hard to tell again – if we see these trends continue, then we would be above the historical averages of those areas. So that could be a cost headwind I guess when you think about first quarter to second quarter OR sequential changes.

Okay, that's very helpful. One quick follow-up here, just want to touch on the Central States [indiscernible] plan, just want to get a sense of maybe how that has, if it has any impact on your contributions going forward, if there's any potential opportunity for reductions going forward for you?

For certain, through the contract period that we have that ends in March of 2018, we'll continue with the same contribution levels that we currently have on a per hour basis. Something to note about that though is that perhaps around 80% of those contributions have been flat for the last few years and that's something that we feel is appropriate. It was negotiated and is something again to note. So we feel good about the Central States. It's a fact that the trustees recognized the issues that they have to deal with. No one likes that they have to work through this in the way that they are having to, but our understanding is that they're going to receive a recommendation from U.S. Treasury on May 9 and that will have an impact on how the fund handles the participant benefit levels and we're watching to see what happens there as the events in Washington unfold.

Okay, so no changes in the short term or in the near term under the contract terms [indiscernible] right now?

That's right.

Our next question comes from the line of Jason Seidl with Cowen and Company. Please proceed.

Just looking at sort of the business trends, you had obviously one of your competitors out there claiming that things got a little more aggressive in April. I guess another competitor said they weren't even looking at the April pricing trends. Now, Judy, I know you said I guess things are decent in pricing, but have you noticed an increased competition in April at all even though it might be still rational in your opinion?

What I would suggest to you is that this year we've experienced an increased bid level of activity, customers perhaps coming out of cycle with their business for bid. But outside of that, we are working through our most price-sensitive accounts as we typically do and we're working on new business as we typically do. And I think I mentioned that our sequential pricing from when you look back to March into April was actually up a little bit less than 1% on our LTL business. And so that's a decent sign for us that things are kind of tracking along here.

And so I guess given where we've seen the trends in tonnage, are you pretty comfortable where pricing has [indiscernible]?

I would say, of course we always feel like that the value that we provide is more than we are able to gain at times, but outside of that, it seems rational. It seems like it's a constructive environment as we are working through things. And there are some comparison issues I think that were noted in David Cobb's discussion of April when you look back to last year. So when you're thinking about what's happening with tonnage in particular, you have to take note of those. In other words, we had some strong comparisons last year to deal with, and perhaps unfortunately, those get easier as we go throughout the year.

Our next question comes from the line of Ravi Shanker with Morgan Stanley. Please proceed.

Judy, another competition question, this time on the asset-light side. Are you running into any of these new start-ups that we're hearing about that seem to be trying to make inroads in this space?

We're not seeing much effect from them, but certainly hearing about them and reading about them, perhaps more so than seeing them in the business.

Got it. And with those guys, do you think it takes them time just to kind of ramp up? Do you think it's just a matter of time or do you think at some point they'll run into a natural wall that kind of stops them or kind of doesn't allow them to become the sizing and the positioning [indiscernible]?

I think, I mean, again this is a speculation or a guess on my part, but they're going to perhaps serve a place in the market, but when you get to larger volumes of freight or customers that perhaps have regular business, more certainty that they need attached to their business, those customers are going to be better served with a company, a logistics company that has multiple options, has capacity sources that can be counted on, has perhaps a greater level of certainty attached to it in terms of the volume of business that could be handled. And so I do think that that's perhaps a differentiating factor. Although when you think about these start-ups, I mean they are interesting, they have had an impact certainly in other industries in other ways, and we don't deny that that will have a place perhaps in our marketplace, but I do think that at this point it's not an effect that we are seeing in our business, and really is one, as I said before, that we're only hearing about and reading about perhaps.

Got it. And just one last one, it's a bigger picture question of the asset-light business, especially Panther. What's the solution here, I mean is it just a case of waiting for macro to come back in some of those expedited businesses or are there more levers you can pull on the cost side to kind of improve the OR here?

We certainly are looking for leverage on the cost side. We are having this scenario where we are doing more with our cargo vans and straight trucks and less on the tractor-trailer side, although we are really pleased with our owner-operators that we have on the tractor-trailer side in terms of the capacity source there. So we are ready for action if things do turn up. But I do think your point is well taken in that you do have to reflect on what is the business model that works here and what cost do you serve it with, and we're very self-reflective over those things, looking at the right resources to serve that business. Some things that I mentioned in my opening comments about the technologies that we're deploying in all of our businesses are really going to help us with those cost efficiencies because we see some opportunities for technology to help us with a more efficient use of our sales people's time and talent, perhaps automating some manual processes, and that helps us reduce the transactional cost that we have. But Panther's base business is ground expedite and that ground expedite business in this kind of environment is not going to be easy to grow. But one thing that I really like about Panther's approach to things is that they serve a place inherent in some supply chains, particularly in the auto industry, that really helps the customer reduce their total cost by utilizing Panther resources in moving their inventory rather than having to house it. And so, we're focused on growing that type of business and it's something that customers desire and customers really gain an advantage from. So, it's not just all about the spot market, it is about some of that regular business. We are just kneading to have greater success with growing that.

Our next question comes from the line of Brad Delco with Stephens, Inc. Please proceed.

Judy, I know you guys gave a little bit of detail about the impact Bear had on the quarter, but looking at a lot of other brokerage results, and you saw a lot of great margins both on operating income and the net revenue, is there any way you can sort of quantify what kind of drag that had on the profitability and then maybe give us more what organic volumes were for ABF Logistics?

Sure. I'm going to let David answer that question.

On Bear, Brad, as we said, it was slightly accretive on the EBITDA line, but with purchase accounting, and which some of that is still preliminary, the operating results were impacted probably about less than or around $100,000, less than $200,000 on the operating profit line.

And Brad, that was a loss is what David is talking about. So we knew going into this transaction that we were going to be working through an integration that was really putting in a seasoned leader to this campus and aligning the roles under sales and that carrier binders and working through sales and operational processes, their IT systems. We're working on a platform that actually puts together the ABF Logistics platform with some of the best features of the Bear platform into a system that all of our employees in that business will be working from, and we're excited about that. But all those things take time. And so, we know that that business has been challenged for us here in the first quarter. We expect that to kind of stabilize in the second quarter, and that once we get these integration issues worked through, that we'll be able to see the benefits of that in the second half of this year. But to your point about the margins that others have in this business, couple of things. One is, we want to have more of our relationships in our logistics business be ones that have certain levels of volume that are greater and that are more relationship oriented and less transactional, but we don't have that balance today. So the business that you see there is helped by Bear in these relationships but is still largely a transactional business and it's affected by the environment perhaps more than some of those companies that you are comparing to. Now the gross margins in our business are still good and we're pleased with that. The other thing is, as we see some of our sales and ops people gain more experience, there's a big productivity list. And so we can see our way to the margins that both you and I want to have in this business, but it's going to take us some time to work through things that I mentioned to get there.

And Brad, I'd just add, I think you were asking about the organic business and shipment levels, certainly increased. I mean they were up probably around 13% on just the ABF Logistics excluding the Bear acquisition. And if you think about that relative to like the market demand index for instance which was down 22% in the first quarter. So obviously what we're doing there in our strategy is paying off in that we're providing customer solutions across our enterprise. And so you see it there but you just don't see it on the top line because of the impacts in the marketplace with fuel and capacity impact on the revenue side.

That's great color and that's kind of why I wanted to know the volumes because I knew the fuel was [indiscernible].

Yes, it definitely has [indiscernible] factor.

Before David cuts me off, I'll say thank you very much.

The next question comes from the line of David Ross with Stifel. Please proceed.

Judy, you talked about the 2% increase in average daily volume like it was an issue in the quarter with having more resources on hand to handle the business and maintain service. It was still a 4% sequential decline from the average freight run to the system in the fourth quarter. I didn't think if you guys were running at capacity. So I guess I don't know why it was a headwind and you couldn't handle kind of a little bit more volume with fewer resources?

I think we certainly have to balance given that customer service with the efficiencies that we could gain in the business and we're still seeing some issues with our street productivity. But I'll offer this just I think to more directly address your question. If we look at our city, dock and linehaul employees on a sequential basis, the city employees were off nearly 3% in terms of headcount, dock was off almost 7%, linehaul was off close to 3%, and our shipments declined less than 1%. So, sequential sometimes helps you whenever you are thinking through these things. I mean obviously what we were talking about is looking year over year. But I think the point of that, and I think you've heard this from some of the companies that we compete with, is when you have this wait-for-shipment issue and your shipments are either up when you're tonnage is down or they're down less than you're tonnage, there's a top line effect but yet you do have to have the people to work that business. And so I think that was the point that we were trying to make.

That makes sense and you alluded in your other comment that you go out and meet with customers and they are happy with the service and that ABF does things that others don't want or can't do, but you're unhappy with the price they are willing to pay for it. So I didn't know how much there still is to go on telling people, listen, if you actually want us to provide this service, we can't lose money, an expensive operation.

Agreed. And we always have the opportunity for better results on those pricing discussions and we actively pursue those. And I think if you look at our Company over longer period of years, we've done a good job in that area, and I feel like when you look at our most price-sensitive accounts, we are doing a decent job. But you do have to consider the level of work that goes into some of the more difficult freight and we're looking at that and making sure that we are addressing that properly with customers.

Our next question comes from the line of Todd Fowler with KeyBanc Capital Markets. Please proceed.

Can you help us think about, as we move into the second quarter and it feels like that April is off to a little bit of a slower start, how do you think about making adjustments to the network? And I understand your comments about employees on layoff and probably seeing a little bit of attrition and maybe not replacing some of that work or some of those workers, but it feels like moving into the second quarter becomes that tricky balance of expecting a seasonal improvement, and if that doesn't materialize, I guess how do you adjust the network to respond to that?

We have the flexibility to address headcount as appropriate. I think the more difficult issue is the service issue that we've been highlighting. Obviously we need a certain level of service to provide the reliability to our customers that we should provide. So it's really more of the balance of that than an inability on our part to really adjust our headcount. So, as we see things progress, we are very, very focused on making sure that we have the efficient workforce that we need to reduce cost. And over time, Todd, we highlighted some of the technology that will help us with that as well. And so, we're planning to have a greater visibility of the activities that are involved in delivering freight to customers, so that we can provide that visibility to customers, but it also allows us a more efficient cost structure. And so some of those investments are interesting and create some opportunities in this business that we haven't seen for a long time in terms of allowing us an opportunity to better manage cost.

Yes, and that makes sense, Judy, and I appreciate that. I guess I'm just trying to think about at what point do you make the decision, if you're expecting kind of a big ramp into June, how quickly can you adjust if those things don't start to materialize and what are some of the things that you're watching to make sure that you've got the staffing at the right levels?

We are constantly watching our dock bills per hour and the bills per street hour is another area that we watch. We are looking at our equipment to make sure that when we send equipment out that those are efficient runs. So we've got some 53-foot trailers that we're utilizing more so than the lesser-length trailers that we've used in the past. We're studying and reassessing our inbound route planning tool to improve its effectiveness and looking at optimizations of our delivery routes. We're also doing some audit work on compliance with our inbound planners and our city planners to make sure that the staffing decisions that are being made are the right ones. And so there's a great deal of focus in these areas. We're not happy with the results. We know we can do much better. But at the same time, we're trying to balance that with a reliable answer for the customers, which is it's a more difficult thing to do in this kind of an environment.

All of that makes sense and it definitely sounds like that you're on top of all those things. I was just trying to get a sense of how you can respond and react to what seems like kind of an inconsistent environment right now. So thanks a lot for the time this morning. Okay, thank you.

Our next question comes from the line of Matt Brooklier with Longbow Research. Please proceed.

A question for you on tonnage, the step-down that you saw in March, which it looks like it's continued into April, can you talk to how much of that you think is just due to a softer overall freight macro and how much of that was potentially due to lost business just given the fact the markets maybe have gotten a little bit more price competitive here?

The best thing to do when you've got some of the questions you have is to look sequentially I think. And so when we look at April relative to March, the sequential comparison there is fairly normal. It's actually pretty average. Now, David mentioned in his comments that March was weaker than normal. Perhaps nine out of the last 10 years is where March was. And so, on the one hand you'd hope that there was a rebound in April, but what we're saying is that it's kind of a normal relationship, April back to March. And so I don't think it's really getting worse. We're not hearing that we're losing accounts. It's really just more some of the weakness in the industrial and manufacturing side, it's the inventory levels that still are high and haven't been worked through on the retail side. And over time, those things will change and get better, but in terms of new business opportunities, we're seeing pricing proposals be at a higher level. Some of the opportunities that we're getting a look at are good. Some of the customers that we're doing business with that really work across our organization and really take advantage of LTL, truckload, perhaps ocean shipping and some of the service offerings that Panther has, those conversations are good and they are growing business, and we're seeing some good relationship business opportunities in the logistics business as well. So we're not discouraged by what we're seeing in terms of those opportunities, but just the macro overhang continues to be there, and obviously we have to address that whenever we're trying to manage our cost to an efficient level.

Okay, that's helpful. And then my follow-up, you mentioned that you've seen kind of an earlier bid season start this year just given current market conditions. Can you talk to how much of your freight book of business at this point in time has re-priced and what needs to re-price this year, how much is left?

We really don't look at it like that. I mean it's pretty – when we look at our contract and deferred pricing, which is the accounts that we typically renew on a pattern annually, we're not seeing really any spikes in that. And the ones that we're talking about coming out of cycle, I mean it's a corporate account here or there, it's not an answer that's happening kind of across the board. And so, I think our comment there is just to give you some additional information about what we're experiencing, what we're seeing kind of in the overall pricing environment, and it's really not speaking to something that's broad-based or pervasive in terms of an area of concern.

Our next question comes from the line of Ken Hoexter with Bank of America Merrill Lynch. Please proceed.

Can you talk about, I just want to understand following on that last question the market a bit more, how much is from brokers now and how has that trended over time?

I mean I don't know if I understand your question, Ken? It's how much of our business is from brokers?

How much of your freight is tendered from brokers?

It's a very small percentage, it's like 5% or less. We're I think unique among the LTL competitors in that regard.

And when you're talking about on that last question the insight into the market and if we step back, I just want to understand the trends that we're seeing now on a more macro basis if you go back to kind of 2008 or 2009, is this worse than historical average March and what you're seeing in April to start, does it feel like we're kind of just chewing up excess inventories, does it seem like demand is really falling apart, maybe just a little more insight on that last question on the demand side?

I think we're in a different place than when you look back to 2008, 2009. I mean I don't think we're approaching anything like that. And I do think probably the bigger issue, I'd say two, one is chewing up these inventories. I think that's a good way to characterize that. And then the other is just the impact I think that the oil and gas business, the energy business has had, both first-order effects and second-order effects on capacity. I think it's those two things stand out to me. That oil and gas issue I think has created some industrial and manufacturing weakness that in the short term has been hard to overcome. But I really think it's those two things. I don't think that it's comparable though to 2008 or 2009.

And just a quick one to wrap up. The higher casualty cost, unless I missed it, I don't think Dave mentioned on that. Is there some trend building or was that a specific event?

No, that's more of a trend. It's more of just the frequency and severity of claims. So no specific item in the quarter.

Okay. I mean that's a big number. Is that something you have to launch new programs or new training, or how do you counter that $7 million increase?

You're right. I mean we are focused on these areas and technologies will help in this area as well. But, yes, we're not passive about that, we're certainly trying to do what we can to impact that. But again, some of those are event driven, and so when you see trends like that, you want to get the accounting right, but we're taking steps to be proactive about it.

We're focused on training and making sure that people understand what it means to do their job safely and that's on the workers' comp side. And then on the third-party casually side, I think it was not just one incident here, it was a few. And so, you really just have to make sure that everybody understands kind of the safety elements whenever you're driving and on the road as well. So it's really a focus there. Our Company has typically been good in terms of the quality of the results in these areas, but you do have times where there's an uptick in claims activity and this is one of those quarters for us. And we don't want to suggest to you that it immediately goes away because we do think as we go through particularly second and third quarter, we're going to carry a little bit of extra cost just because of the experience that we've had here.

Wonderful. Appreciate the time and insight. Thanks guys.

The next question comes from the line of Scott Group with Wolfe Research. Please proceed.

So just wanted to follow up on just some of the April commentary for a quick second, April similar to normal versus May, are you making any adjustments for Easter, just curious on that? And then the breakout you're giving us now of kind of pure LTL versus spot that you haven't given us so much before, how should we think about margin differentials on those two businesses?

Certainly LTL margins are going to be better than truckload spot margins. I mean we don't give the specifics of those markets and what they do, particularly because the truckload changes depending on the market dynamic. But generally speaking, the LTL margins, that's our preferred business, we use spot truckload business whenever we need to fill capacity.

And just on the sequential tonnage side, it's a per day basis. So that's reflecting the holiday effects.

Yes, we consider the holiday in the days worked that we're using to calculate the tonnage. So it's factored in.

Including Good Friday?

Yes.

Right.

There's a half a day adjustment there for Good Friday, Scott. It's not perfect but there's adjustment in the workdays on things like that.

Okay, perfect. And then just maybe just bigger picture, so Judy, when do you think we can start to see margin improvement in LTL again or what do you think it's going to take to see margin improvement in LTL again?

I think that we're working toward that. We have a number of ways that we could improve that. One of those, we're seeing work already which is on our equipment. We really haven't talked about that on this call, but the investment that we've made in our equipment is we are starting to see the good results of that. We've had – if you look at kind of the sum total of total cost to ownership which includes fuel and rented equipment, repairs and maintenance and depreciation, those costs were down in the first quarter relative to last year. So that's encouraging and we're just on the front end of our 2016 purchases. So as we go through this year, we expect for the results to improve there. Our focus on some of these productivity areas I believe will yield results later in the year. I outlined several technology areas that we're going to be spending resources in that we feel like will give us ability to better give customers visibility which will help us grow revenue, but it will also give us more visibility in our cost management, and we're encouraged by that. We have several opportunities I think, but it certainly helps you when the environment is a little bit better because that helps you in so many areas. One, it's certainly much more helpful to grow tonnage than have tonnage declines. And so we're looking forward to some improved results there with some of the customer negotiations and relationships we have, but also making sure that we've got a focus on the headcount, the right amount of equipment, the right facilities in the right locations. All those kind of typical blocking and tackling items, we are very focused on those. And all of that will result in improvement in the LTL business. But we are as impatient with it and perhaps more impatient with it than you are.

Scott, we're going to move along. I've got a couple of more in queue. I want to let everybody get a shot.

Our next question comes from the line of Rob Salmon with Deutsche Bank. Please proceed.

It's Seldon Clarke on for Rob. I apologize if I missed it, but did you give shipment trends on a monthly basis and quarter to date?

No, we didn't.

On quarter to date or just for April, we said they were down between 2% and 3%, but we didn't break it out for the first quarter.

Okay, that's fine. So maybe there's a little bit, the headwinds might ease a little bit I guess just from the fixed cost perspective if shipments are down a little bit. Does that make sense?

They are down less than the tonnage is. So we still have the same weight per shipment issue. We still have that – in April, we still have that same issue.

Is there anything you can do that quickly to kind of address that?

That's just a reflection of what's going on in the market. I mean that's…

From a fixed cost perspective.

I mean I think that all the things that we've been talking about in terms of better labor management, looking at our routings, making sure we're complying with the planned approach to those routings and that sort of thing, as well as just the continued focus on dock productivity, those are all initiatives that are pointed directly at improving labor costs. And the same is true in April and as we go through this quarter and the rest of this year.

And then I think earlier this month, there was a surcharge implemented for just freight going in and out of California. Are there any puts and takes there or has there been any pushback or anything like that?

Really I mean it's a fee that was set at [592] [ph] per shipment and nothing I think unusual about it other than it's in the state of California. But we are implementing it and working through it with customers and I'm not going to say much about the details because I really don't know them, I mean it's just a specific action that was taken in that market.

Our next question comes from the line of Willard Milby with BB&T Capital Markets. Please proceed.

Just wanted to touch on ABF Moving, I believe it was, did you say the revenues were down similar to Panther in the 15% to 20% range here in April?

That's right.

Do we think there's a trend brewing here where that levels could possibly continue throughout the year or is it just maybe some near-term government work that's just not coming through?

I appreciate your clarifying question. That's right, we're expecting that trend to continue for the balance of this year at least. So it is related to government shipments.

Okay, great. Have you all disclosed the D&A target for the full year for I guess all the operating companies?

We did. On a consolidated basis, we talked about just total depreciation and amortization being between $100 million and $110 million for the year. That includes our fixed assets and software. And then on top of that there's probably another $4 million or $5 million of intangible amortizations.

We've got a couple of more folks in the queue, so we're going to try to get to them.

Our next question comes from the line of Jeff Kauffman with Buckingham Research. Please proceed.

Just two quick ones here. We were just talking about household goods. Is there an election year impact on that business that we should be thinking about?

If there is – I mean it certainly is possible, but we're not specifically focused on that, but it is the Department of Defense that is kind of the initiator of that business. So there are a couple of reasons for the weakness there, but I guess a presidential election could be one of those, I'm just not specifically aware of that.

Okay. Just I didn't know whether that was having an influence. Then lastly, you did talk a little bit about the Central States proposal in front of Department of Treasury right now. We're going to get that answer in early May. If the proposal as it is requested is approved, do you have any rough idea of how that will or will not impact your business?

It really won't have a direct impact on our business except it will have a direct impact on our people because they've been notified of reductions that they should anticipate as a result of this plan going through, and it's my understanding that those would be implemented upon the completion of the process. But the process is, Treasury has to address this and I think make a recommendation, and then it goes back to the participants for a vote. And then there's a process after that a bit if it doesn't go through. And so there are a few steps there, but I think the main objective that Central States has is trying to address their under-funding and they've submitted the plan to do that, and we'll just be watching as you are on the events in Washington as they unfold.

All right, that's all my questions. The rest have been answered. Thanks so much.

Our next question comes from the line of John Barnes with RBC Capital Markets. Please proceed.

As a follow-up to what Jeff just asked, so my question would be, if there is a reduction in benefits as proposed, UPS made some announcement yesterday about the cash outflow to cover the shortfall on their end, I mean what is the cash outflow for ABF?

It is none. It's none on that. It's a different thing that they are impacted by it, and I don't want to pretend that I know all of the details, but I think you probably remember, when they exited the Central States plan, they had an arrangement when they did that in the event that the benefits ended up being reduced with their employees. We are still in the fund. And so, there is no impact on us as a result of that at all.

Okay, all right. So it's a matter of whether you exited or if you're still involved?

Yes, and the deal that you made with both Central States and your employees.

That makes sense. My last question, can you remind us when your current contract with the Teamsters comes up for renewal and is there any concern that depending on how this plays out that that becomes a bigger source of contention in the next negotiations that's making up this funding shortfall?

I really feel like this is the plan to do that, to address the funding shortfall. So I mean there are lots of different ways I suppose that this could be done, but Central States has worked through this in a very purposeful manner over more than 10 years I think trying to develop the solution, and the one that they've proposed addresses the underfunded nature of the fund. And so as we carry forward, we don't see that there is an impact on us that changes in terms of the current contract that we're in and it remains to be seen what will happen next, but if they are able to address the funding issues, I mean to me that's a net better for us as a company. It certainly is very hurtful to our employees in the haircuts that they have to take in their benefits, but that's really more…

And when does the contract expire?

Ours is March 31, 2018.

Okay, all right. Thanks for the color. I really appreciate it.

Listen, I think this concludes our call. We appreciate everybody joining us today and we'll see you next time. Thank you.

Thank you, ladies and gentlemen. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.