A.M. Executive Briefing - July 13
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Cummins' Net Tops Wall Street Ideas, But Engine Maker Cautions About Truck Market Weakness
When Columbus, Ind.-based Cummins Engine Co., maker of big-rig truck engines, said Thursday that its second-quarter net earnings reached $1.62 per share, the good news was that it topped the First Call consensus of Wall Street analysts, who had looked for $1.59, according to the Reuters news wire.Inside the earnings announcement, however, Cummins included a tough reminder about the market for new trucks in North America for the second half of this year.
"Looking ahead to the third quarter, we see continued strength in most of our markets with the notable exception of the North American heavy-duty truck market," said Chairman and Chief Executive Officer Tim Solso. "While we still estimate a 30% decline in that market for the year, we expect the second half of the year to be particularly difficult as truck OEM's (original equipment manufacturers) make major adjustments in their build rates."
United Arab Emirates Says If OPEC Reaches Consensus Oil Production Will Rise
The United Arab Emirates will raise its oil production, but only if a consensus can be reached with the other members of OPEC, the Associated Press reported Thursday.UAE Oil Minister Obaid bin Saif al-Nasseri said after a meeting with OPEC President Ali Rodriguez of Venezuela that his country would raise its oil output to 500,000 barrels a day should the rest of OPEC agree to such an increase.
Rodriguez has been meeting with members of OPEC over the possibilities of increasing oil output. The cartel produces one-third of the world's oil and is under pressure from the United States to attempt to bring prices down. Transport Topics
Economy: Oil Pushes Import Prices Up; Jobless Claims Jump
The government reported Thursday on two areas of the economy that have broad implications for nearly all types of commerce. It said import prices in June rose 0.8%, driven mainly by surging costs of oil, and that claims for unemployment insurance in the latest week jumped to their highest level in more than a year amid layoffs in the auto-building industry.The import price measure is the first of three major inflation measures reported for last month, but Bloomberg reported the gauge showed no change when petroleum was excluded. So the broad non-energy mix of imported goods was not generating inflation pressure last month, although Bloomberg notes various types of U.S. businesses have to raise product prices to cover energy costs.
On the labor front, some will see good signs about a cooling economy in news that jobless claims jumped by 27,000 in the week ended July 8. The Associated Press reports a lot of that came from temporary layoffs by automakers retooling their factories. However, since the numbers are seasonally adjusted to try to account for such predictable events, it may take several more weeks to be clear about what is happening in the job figures. And the cooling of employment at car plants is consistent with a slowdown being reported by various companies serving the heavy-truck manufacturing industry. Transport Topics
Trucker Values Life Too Much Not To Risk His For Another
His varied life experiences, including being a nurses' aid and an ordained minister, all contributed to Pat Smith having the determination to brave flames engulfing a big rig and save the life of a fellow truck driver this week."I wasn't going to let the fire stop me from saving a life," said Smith, a driver for Grand Island Express. "I wouldn't stop from doing it again. I just think life is too precious to let it be taken like that."
On Tuesday at the Pilot Truck Stop in Gary, Ind. drivers rushed with fire extinguishers to the Keaton Truck Lines rig that had caught fire. Inside Keaton driver Robert Lumpkin was trapped in the sleeper berth. Smith got into the cab and pulled Lumpkin to safety as other drivers emptied their extinguishers on the burning tractor.
Firefighters arrived at the scene and revived Lumpkin, who was not breathing. He was taken to a Gary hospital and later flown to Chicago, where he remains in critical but stable condition.
According to his company, Smith was "singed" by the flames and inhaled some extinguisher powder, but continued on his trip and delivered Wednesday morning.
"We're just happy that our driver was there and of a mindset to help, and had the safety equipment available to help" said Bob Caldwell, Grand Island Express safety director. "Pat's an ordinary fellow, and he has a very kind nature."
"Pat Smith is Keaton Truck Lines' hero," said Bill Person, safety director. "(We're) glad (Smith) is on the road; he did a great job." Jennifer Botchie, Transport Topics
Landstar System's Second Quarter Earnings Reach $11.3 Million
With fewer trucks than a year ago, Landstar System, Inc., reported second quarter earnings of $11.3 million, or $1.24 per diluted share, up from $10.8 million and $1.05 per diluted share in 1999.In the company's report, Landstar CEO Jeff Crowe said, "The 2000 second quarter was a historic quarter for Landstar. Despite reduced truck count, Landstar generated $358.6 million in revenue, improved its operating margin excluding the Ligon restructuring charge, to 5.8%."
The second quarter earnings exclude a one-time $3 million restructuring charge due to the relocation of Landstar Ligon, Inc. from Madisonville, Ky., to Jacksonville, Fla., where Landstar System, Inc., is based.
The report said as of June 24, Landstar had 8,563 trucks, as opposed to 8,692 a year ago. However, the company plans to add at least 100 trucks in the second half of 2000.
Landstar System, Inc., also includes over-the-road carriers Landstar Gemini, Landstar Inway and Landstar Ranger, and the multimodal group Landstar Express America and Landstar Logistics. Transport Topics
Cargo Record Set At Port Of Los Angeles For First Half Of 2000
The Port of Los Angeles set a new cargo record in the first half of 2000, handling more than 30% more units than the same period last year, the port reported this week.In June, the Port of Los Angeles handled 402,557 units for a first-half total of 2,270,051 TEUs. Of the June total, 211,118 TEUs were inbound loaded units and outbound loaded traffic was 79,135 TEUs. Also, the loaded inbound traffic for the year is a record 1,160,998 and the outbound loaded TEUs totaled 479,294. All figures were significantly higher than at the same point in 1999.
"You look at these numbers and the thing that catches my eye is the astounding strength of imports," said Jack Kyser, chief economist with the Los Angeles Development Economic Corp. "The Port of Los Angeles is just rolling along. June is the start of the peak season, and this could really be quite a peak season." Jennifer Botchie, Transport Topics
Bridgeport, Conn. Shipping Project Seen As Way To Get Trucks Off I-95
Mark Sopin of Atlantic Leasing Corp. is among supporters of a proposed container shipping port in Bridgeport, Conn., which could result in fewer trucks on Interstate 95."I think it's a good idea. It would alleviate traffic jams (on I-95) – and any improvement we can make would help," Sopin said. Both car and truck traffic on the interstate is "tremendous," as it is the only corridor from New York to Rhode Island, he added.
The Associated Press reported this week that shipping containers would be brought into the port from New York and New Jersey by barges rather than trucks. Interstate 95 is heavily traveled in these areas, and supporters of the proposal say the port could result in up to 400 fewer trucks per month.
The Bridgeport Port Authority would provide approximately three acres of land for the project, and new infrastructure would have to be built to create the shipping port. The projected cost is $5 million. Officials are surveying trucking companies and other related businesses about the proposal. Transport Topics
Kinetic Sells Vehicle Computer Line to Focus on eTRUCK
Kinetic Computer Corp. said it had reached an agreement to sell its PC/Rover product line of vehicle- or fixed-mount computers to Telxon Corp.This allows Kinetic to focus its efforts on eTRUCK, its internet-based, e-logistics fleet-management service, company officials said. It offers transportation and logistics companies of all sizes access to a broad range of services including freight and vehicle tracking, electronic messaging, driver and vehicle performance monitoring, federal regulatory log tracking and automated fuel information. Transport Topics
ICCONA Premieres Motion Video for Transport Communications
ICCONA, LLC – a Thousand Oaks, Calif. startup company whose name stands for International Communications Center of North America – said it has joint ventured with The Bradford Group of Raleigh, N.C., in developing products that will allow "real time" motion video on wireless communications through the Internet.ICCONA plans to build a $30 million international communications center to receive raw digital and video data from air, ground and sea transportation modes. Under contract with Santa Barbara, Calif.-based Diversified Auto Technology, the "on-board" Vehicle Data Recorder manufacturers for ground transport, ICCONA will monitor all DAT's "on-board" recording equipment worldwide from its Southern California location.
It said it is also working with other companies that will manufacture the hardware necessary to operate "on-board" wireless cameras for all forms of transport. Such technology can also be applied to DAT's commercial trailer "on-board" Vehicle Data Recorder System, with cameras mounted on commercial trailers helping defend against cargo theft or hijackings. Transport Topics
Accused Truck Center Shooter Described As A 'Quiet Reserved Person'
A Texas police chief who for 25 years has known the truck mechanic accused of fatally shooting his supervisor and a co-worker at the RDO Truck Center in Dallas this week, told the Dallas Morning News that Larry Noble never displayed "violent or aggressive tendencies."James Whittiker, chief of police in Winnsboro, Texas, described the man now being held on two capital murder charges as being a "quiet reserved person" and never having more than a traffic ticket when it came to trouble with the law, the Dallas Morning News reported Thursday.
Police investigators spent Wednesday searching Noble's Winnsboro apartment. On Tuesday Sam Porter and Ron Penix, both 47, were shot to death at the truck dealership. Investigators said an RDO employee described Noble as being upset recently when he was told he would be paid on a commission basis. Transport Topics
