A.M. Executive Briefing - July 14
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Senate Sets Friday Vote on Estate Tax Repeal
After a lengthy U.S. Senate session Thursday on a Republican effort to repeal the estate tax, lawmakers scheduled a vote on the final plan for Friday. Repealing or reducing the tax could especially help family controlled businesses such as small trucking firms, where the death of a family member who is a key shareholder could mean selling off chunks of the business to pay inheritance taxes. So the trucking industry has a vested interest in the outcome.The GOP-controlled Senate rejected a Democratic substitute that would curb the tax but not repeal it altogether, and risked a threatened veto of the GOP plan by President Clinton. However, by adding amendments to a House-passed repeal the Senate would set up a conference on the two versions in which further changes could be made before a final bill is sent to Clinton. Transport Topics
Senate Votes Against Suspending Motor Fuel Taxes
As part of the estate-tax debate, the Senate also voted against a proposal to suspend the federal taxes on motor vehicle fuel. The idea from GOP Sen. Spencer Abraham (Mich.) was to drop the tax for 150 days to help drivers of freight trucks and automobiles who have been buffeted by soaring fuel costs this year.
Yellow Freight Plans Rate Increase in August
Giant general-freight truck line Yellow Freight System plans to implement a 5.9% rate increase, effective Aug. 1, for customers not on contract rates, the company announced Friday. Yellow has a major presence in the freight consolidation or less-than-truckload industry segment.About half of Yellow Freight's 300,000 customers will be affected, the company noted, with the remaining customers subject to possible increases during contract renewals.
Yellow Freight System is a Yellow Corp. subsidiary based in Overland Park, Kan. Transport Topics
Con-Way NOW Will Expand Into 176 New Cities
Con-Way NOW, an express emergency freight service with an air component that is part of Con-Way Transportation Services, will expand its air coverage into 176 more cities effective July 18, the company said Friday.Con-Way NOW began air operations to 24 cities in March. This service is meant to move emergency deliveries between locations in the United States and Canada.
The parent company has several less-than-truckload and full truckload subsidiaries. Transport Topics
California Looking At Soot-Trap Requirement For All Diesel Engines
California trucking companies may soon be forced to install soot-catching equipment on their rigs as part of an effort by the state's air quality regulators to reduce diesel particulate pollution, the Los Angeles Times reported Friday.The plan was unveiled Thursday by state regulators and calls not only for big rigs, but also bulldozers, school buses and farm equipment to be fitted with soot traps. If the state's Air Resources Board approves the plan, it's estimated that 1.25 million engines would have to be retrofitted. The board will review the plan at its September meeting.
While the American Trucking Associations lobbies against proposed federal regulations from the Environmental Protection Agency to reduce sulfur in diesel fuel, the California Truck-ing Association supports the state's plan geared at reducing pollution. An association spokeswoman told the Los Angeles Times that CTA will push for legislation requiring a $25 to $50 fee on truck owners to create a fund designed to help small trucking companies with the retrofitting costs. Transport Topics
Rail-Truck Intermodal Hauls Fall in July 4 Week
Hauls of loaded intermodal truck containers fell so much in the week ending July 8, com-pared with the same week in 1999, that it offset growth in container hauls on major U.S. railroads to produce a net 1.5% decline in rail intermodal traffic, the Association of American Railroads reported Thursday. But an AAR statement with the figures noted that where the July 4 holiday fell during each year's reporting periods would have depressed the figures somewhat.So far this year, the rail-hauled intermodal volume is up 3.2% over 1999. Inside that overall gain, though, the trend continues to show ever-higher container numbers along with steady declines in trailers loaded aboard flatcars. Rail-hauled trailers have declined 9.0% this year to 1.530 million units for the first 27 weeks, while container loads have grown 10.3% to 3.188 million.
The trend reflects the higher efficiencies of container moves, which can be stacked two high and several lengthwise aboard special railcars. Trailers must be tied down onto flat-cars, with more spacing in between, and cannot be stacked. So a train can load more containerized freight than it can haul cargo packed in trailers. Transport Topics
@Road Re-files IPO, Later Raises $20 Million in Private Placement Financing
@Road Inc. has completed a private placement of $20 million with current investors ABS Capital Partners, Galleon Management and Sirios Capital Management, the company said Friday. The Fremont, Calif.-based company provides location-related services using the Internet, Global Positioning System and wireless communications.This announcement comes one day after @Road refiled to go public in an initial stock offering. The company said in a Reuters story Thursday that it hopes to raise $88.6 million, less than the amount it sought in an earlier IPO filing. The private placement announced Friday will bring @Road's total raised to $83.2 million. Transport Topics
Economy: Output Slows While PPI, Retail Sales Show Growth Without Broad Inflation
The government reported Friday that industrial production slowed to just a 0.2% gain in June from a 0.5% rise in May. June's reading was the slowest in nine months, and would affect how much shipping volume factories generate for truck carriers.On prices, the government reported a big jump in the overall June wholesale inflation reading but a mild drop in the core producer price index when energy prices were removed. Meanwhile, June retail sales grew more than expected at 0.5%.
Those reports indicated that U.S. inflation pressures remain subdued outside the volatile cost of fuel, and that consumers are still interested in buying enough to keep the economy growing at a solid pace, even though industrial output from U.S. producers is slowing. The Commerce Dept. also revised its earlier reading of May retail sales to a 0.3% rise from an earlier-reported 0.3% decline. Transport Topics
