Executive Briefing - July 3
Today's Headlines:
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Freight Handlers EGL to Absorb Circle Intl.
Heavy-weight freight forwarder EGL, a domestic-focused company, will absorb Circle International as a wholly owned subsidiary, the companies said Monday. This merger, they said, "will create a global leader in domestic and international transportation, logistics and customs brokerage businesses."
Armey Says House Could Consider Dropping Gas Tax
U.S. House Majority Leader Dick Armey, R-Texas, told the Fox News Sunday television show that the House would probably go along if the Senate votes to suspend the federal gasoline tax of 18 cents a gallon, but said a new way would have to be found to fund highway construction projects, according to an Associated Press report of his remarks.The federal fuel tax, as well as a similar tax imposed by states, has become a target for removal or suspension several times this year, first as truckers saw diesel fuel costs soar last winter and then as huge spikes in gasoline prices at the start of summer caused more widespread concern among drivers of non-diesel. But much of the federal money raised by that fee goes into a so-called trust fund for highway projects and both federal lawmakers and states that depend on that money have raised concerns about altering the formula for a short-term price problem. Transport Topics staff
Air Canada's Freight More Likely to Keep Flying
Talks between Canada's dominant airline, Air Canada, and its pilots union appeared Sunday to be making more headway, so much that the Reuters news agency said the strike threat had dwindled. Since June 26, the pilots have been poised to issue a 72-hour strike notice over wage and pension issues, which could disrupt large volumes of air freight carried in the bellies of passenger jets and throw more volume onto already congested truck lanes along the busy U.S.-Canada border.Reuters noted the company said Sunday the two sides had made considerable progress, and the Associated Press quoted a pilots' union official saying there was enough happening in the talks to keep them going.
Strikes at major airlines cause delays and disruptions at various stages for air freight, usually a high-end, time-sensitive type of cargo. Shutting down a major carrier sends shippers scrambling for space on others, but they are often soon filled to the brim and that pushes more freight onto trucks for the full haul. Reuters noted that a 1998 strike at Air Canada lasted 13 days and cost the company $166 million in U.S. dollars. Transport Topics staff
American Air Cargo Boosts Intl. Freight Fuel Surcharge
Citing "the continuing increase in fuel prices," American Airlines Cargo on Monday gave a 30-day advance notice that it will raise its fuel surcharge as of Aug. 3 by $.05/kg from U.S. origin points to all international destinations where it is permitted. And it noted that it would continue to "make adjustments to this surcharge as needed."American is one of the largest scheduled air freight carriers in the world, with more than 14 million pounds of daily lift capacity to major cities in Europe, Canada, Mexico, the Caribbean, Central and South America, Asia and across the United States. Transport Topics staff
Truckers' License Probe Spreads Beyond State Where Scandal Found
Truckers probably already knew it was happening, but the bribery scandal over issuing truck licenses in Illinois and Florida has spilled over to spur safety officials to crack down in the rest of the country.The Associated Press reports that federal and state investigators spotted nearly 3,000 suspicious commercial drivers licenses from those two states, and many of those drivers have exchanged those licenses for new ones elsewhere. AP said its own survey of state agencies found at least 175 truckers outside of Illinois and Florida have had licenses revoked or suspended through this probe.
This issue bears some resemblance to scandals in which high school teachers guide students to the right answers to meet standardized test requirements, but many truckers are being retested as well as licenses held amid concerns that improperly certified truckers are contributing to highway accidents and deaths. Transport Topics staff
Six-Week Lane Closure for Chicago Expressway Project Starts July 10
For Chicago-area highway trafic, the northbound entrance ramp to the inbound Stevenson Expressway, on Interstate 55 at 1st Avenue (Illinois 171) will close at 5 a.m. central time July 10 for six weeks of bridge repair as part of a long Stevenson reconstruction project, the Illinois Department of Transportation said. IDOT recommends that 1st Avenue drivers enter the inbound Stevenson at Harlem Avenue.These and other lane shifts are available on a web site for Mission I-55, a big project involving a busy truck route for one of the nation's prime commercial centers. The project is slated for completion by Oct. 31. For the latest information about it, call 312-DOT-INFO or visit the Mission I-55 website at at www.missioni55.com. Transport Topics staff
Moyes' Tender Offer for Simon Transportation Expires
Investor and trucking executive Jerry Moyes said late Friday that his tender offer for all outstanding shares of Class A and Class B Common Stock of Simon Transportation Services, at $7 per share in cash, had expired without all conditions being satisfied. It will not be extended, he added, and he will not buy any of the shares tendered to his offer.Simon, based in Salt Lake City, specializes in refrigerated trucking for the food industry, and Moyes is chief executive of Phoenix-based truckload carrier Swift Transportation.
In his announcement, Moyes said he had also withdrawn his consent solicitation, which attempted to elect his own majority of Simon's board. About 1.4 million shares had been tendered through 5:00 p.m. eastern time on June 30, Moyes said, his latest offer deadline.
Moyes said he still hopes to increases his stake in Simon, and that he has discussed consulting with that company or perhaps serving on its board. And he noted that "although I presently do not intend to attempt to acquire a controlling interest in the company or seek to obtain majority representation on its board, I do not rule out that possibility in the future." Transport Topics staff
