A.M. Executive Briefing - June 26
This Morning's Headlines:
ul>
Independent Truckers See Profits Vanish as Fuel Prices Rise
Truck drivers who own their own rigs say rising fuel prices are costing them as much as $500 a month in lost profits, making an already difficult financial situation even worse. Owner-operators have to plan their gas stops for wherever economical diesel fuel is available.The issue has not been as serious for company drivers – individuals who work for large transportation companies or manufacturers – because they do not have to pay their own overhead. But the owner-operators, who want or need more job flexibility, may be driven into other industries if things do not improve.
High Road Extends Tender Offer for KLLM; Says It Will Take Trucking Firm Private
High Road Acquisition Subsidiary is getting close to purchasing KLLM Transport Services, a trucking company that uses 2,000 refrigerated trailers and 2,000 employees to haul food, medicine, and cosmetics throughout North America.High Road's $8.05 per share offer – $33 million – beat out KLLM stockholder Robert Low's offer of $7.75 per share – $31.8 million. The deal is all but completed now that the Federal Trade Commission has issued regulatory approval.
Filings with the U.S. Securities and Exchange Commission state that the tender offer runs through July 6 but may be extended again. Associated Press (06/25/00); Moore, Matt
Roadway Express Reorganization to Create 100 Jobs in Akron, Ohio
Attempting to improve connections between key cities, Roadway Express is reorganizing some of its routes and is adding 500 sleeper teams throughout the United States.The company believes transit times will be reduced on such major routes as Northeast Ohio and Buffalo, N.Y., to the West Coast; New York-Florida; and New York-Chicago. According to industry analysts, the changes are intended to get back some of the regional-freight market from USFreightways, American Freightways, and other smaller carriers.
Part of the reorganization will move business to the Copley, Ohio, terminal from Buffalo, N.Y., which Travis Bornstein, president of the Teamsters local covering the Copley terminal, says is positive for his area despite drivers' dislike of the difficult sleeper-team jobs. Akron Beacon Journal (06/24/00); Kukuk, Christina Hange
Yellow Corp. sets $25 million share buyback
Yellow Corp., the Overland Park, Kan.-based giant in general freight trucking, said Friday that its board had okayed a plan to buy back up to $25 million of its common stock shares in the open market. The company plans to finance the buyback through cuts in capital spending, which was earlier projected to total $177 million.CBS Marketwatch reported that the buyback would represent about 6.8% of the company's market capitalization, and that the stock price moved up 5/8 Friday to 14 9/16, after hitting a new 52-week low of 13 7/8 earlier in the day. Transport Topics staff
Gas Prices Fuel Inflation Fears in Canada
The Canadian Trucking Alliance says diesel's rack prices have risen C$6 since last month, coming close to the February high. This could soon be raising consumer prices for goods other than gasoline, says the CTA. The rise in diesel prices is driving up freight costs, which could be passed along to the end buyer. Toronto Sun (06/24/00) P. 52; Lewyckyj, MaryannaIllinois Will Retest 15 Truck Drivers Licensed at Jerseyville and Waterloo
Following the indictments of two employees at a pair of Illinois driver licensing sites in the St. Louis area, Illinois plans to reexamine drivers who got CDLs there. The state will perform new tests on at least 15 truckers who were licensed at the Jerseyville and Waterloo sites, where two employees have been charged in connection with the bribes-for-licenses scandal. St. Louis Post-Dispatch (06/24/00) P. 11; McDermott, KevinCompiled by Transport Topics staff and INFORMATION, INC. © 2000
