A.M. Executive Briefing - July 5
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Fuel Prices Falling in Wake of Saudi Supply Move
In case you missed it amid the July 4 holiday festivities, Saudi Arabia announced late Monday that it would soon boost oil output by another 500,000 barrels per day to help bring down world fuel prices, and that news has already led traders to bid crude prices down. That could soon have U.S. transport companies and freight shippers celebrating as analysts say the Saudi move could pave the way for oil prices to fall to $25 a barrel from a recent $32 rate. And that would soon push pump prices lower for the full range of motor fuels.Already, prices have fallen in recent weeks, after the Federal Trade Commission launched a formal investigation of possible price-fixing in the Midwest, where gasoline prices had soared since Memorial Day. And there have been moves by several states as well as in Congress to remove or suspend state and federal taxes on motor fuels. Transport Topics staff
Intrenet Inc. Links Two of Its Three Flatbed Companies
Milford, Ohio-based Intrenet Inc. said Wednesday it has already linked two of its three flatbed truck operating companies in a "Common Freight Board" project, allowing each to see all loads available to it and the sister firms.
It also said its second phase of the Common Freight Board should be finished by Aug. 15, bringing both those subsidiaries' agents and owner-operators into the fold through internet access. Then the third phase by Sep. 11 should link the third company, Roadrunner Trucking, plus its agents and owner-operators. Transport Topics staff
Financial Markets Eye Earnings, Economic Stats
Reports coming this week about the quarterly earnings of a wide range of big companies will guide financial markets and give further clues to how the broad economy has fared in recent months. Among those slated to report this week are trucker Roadway Express, but other company reports will give clues about such basic industries as home-repair supplies and tires.On Friday, markets will also be ready to react to news about the U.S. jobs situation in June, a key report that lays the basis for many others. The thinking among many analysts is that if the labor situation shows more signs that the economy is slowing, that will convince more people that the Federal Reserve will remain on hold and not be inclined to raise interest rates further.
The Fed last week passed on a rate hike after raising short-term rates by 1.75 percentage points in the past year. That rate spike has in turn cut into sales of trucking equipment, and pressed some operators as a higher cost they could not pass on to customers.
Figures from the National Association of Purchasing Management show a 2.6% drop in manufacturing activity in June. Transport Topics staff
Air Canada, Pilots Put Off Strike Risk Further
The risk of a strike against Air Canada by its pilots was put farther into the future Tuesday as the two sides recessed their direct negotiations over wage and pension until Friday. Since the union must give a 72-hour notice if it were to call a strike, that means none could occur this week. Already, progress in the talks had reportedly made the strike option less likely.Since this is Canada's largest airline and passenger planes often carry freight in their bellies, a strike could impact the trucking industry. A strike, such as 13-day work stoppage in 1998, would push Air Canada's normal load of freight onto other already fairly loaded airlines. That would then push more freight onto trucks for cross-border treks into the United States at already busy border crossings. Transport Topics staff
Penske Buying Trimac's Rentway Truck Lease Unit
Penske Truck Leasing Co. of Reading, Pa. said Tuesday it has agreed to acquire Rentway, Ltd., a truck rental and leasing company based in Mississauga, Ontario. Rentway is now a wholly owned subsidiary of the Trimac Corp. trucking company of Calgary, Alberta, and Penske said the acquisition of Rentway "will expand our North American service network and will position Penske as a leader in the Canadian truck leasing and rental business." The deal should be complete by Aug. 31, Penske added, pending regulatory approvals.Rentway operates more than 10,000 commercial tractors, trucks and trailers through a network of 40 service facilities. It also offers fleet management services including full-service leasing, rentals, plus maintenance and repair in a network of heavy-duty truck shops across Canada. Trimac said it is selling Rentway for C$105 million, and that Trimac will focus on bulk trucking and third-party logistics. Trimac also plans further sales and divestitures of non-strategic assets over the next six months worth another C$105 million.
Penske Truck Leasing is a joint venture between Penske Corp. and GE Capital. With annual revenues of about US $2.7 billion, it is one of the largest providers of transportation services in North America, with 142,000 heavy, medium, and light-duty trucks to serve customers from more than 460 locations in the United States, Canada and Mexico. Transport Topics staff
Diesel Takes A 2-Cent Jump
The steady rise in diesel prices continued last week with the most recent surge being 2.1 cents.That increase lifted the national average price per gallon of diesel fuel to $1.453, according to figures from the U.S. Department of Energy. It is the highest the national average has been since late March. A year ago the national average diesel price as $1.08 according to figures from Fuel Line, the American Trucking Association's weekly fuel publication. Transport Topics staff
