UPDATE 1-Arkansas Best, Teamsters agree tentative 5-yr deal

(Adds executive comment, details on company, Teamsters' statement, stock action)

CHICAGO, Jan 30 (Reuters) - Arkansas Best Corp (ABFS.O: Quote, Profile, Research, Stock Buzz) said on Wednesday that its largest unit has reached a tentative five-year labor agreement with the Teamsters Union.

The Fort Smith, Arkansas-based company said that the deal reached between ABF Freight System and the union will replace the existing agreement, which expires on March 31 this year.

"This new contract provides us with greater labor flexibility and will allow ABF to more effectively serve the competitive less-than-truckload market," Arkansas Best Chief Executive Robert Davidson said in a statement.

Less-than-truckload companies consolidate smaller loads into a single truck.

Under the agreement, ABF's unionized employees will be covered by the proposed Teamsters' National Freight Industry Standards Agreement.

The tentative agreement, also known as the National Master Freight Agreement, provides higher benefit contributions from employers that will help protect health, welfare and pension benefits, the Teamsters said.

"Improving and protecting our members' wages, benefits and working conditions are our top priority," Tyson Johnson, director of the Teamsters National Freight Division and lead negotiator on the proposed agreement, said in a statement. "I urge all Teamster freight members to approve the tentative agreement."

As part of the agreement, Arkansas Best said ABF will continue to participate in and contribute to all of its current multi-employer pension plans.