Executive Briefing - June 22
- Swift Offers 1.2 Million Shares
- Labor Finalizes Ergonomics Hearings
- House Committee Approves $298 Million for FMSCA
- UP Sued Over Operation of Overnite
- Mail-Pickup Service Growing at UPS
- Gasoline Price Decline Expected to Continue
- Mack Plans to Unveil Two New Trucks
- N.Y. Close to Approving Cell Phone Ban
- UPS Cleared of $1.8 Billion Charge
- Maine Will Upgrade Inspection Equipment
- Intermodal Traffic Continues to Trail 2000 Levels
- Labor Finalizes Ergonomics Hearings
Swift Offers 1.2 Million Shares
As part of its purchase of M.S. Carriers (MSCA), Swift Transportation Co. (SWFT) of Phoenix has offered 1.2 million of its common shares for sale at $16 each.
The two truckload carriers have previously said they are hoping to finish the merger on Tuesday, June 26. The stock was offered for sale on Thursday, with Credit Suisse First Boston acting as lead manager of the transaction.
The sale of additional shares was necessary to comply with accounting rules for the merger.
Swift is ranked No. 19 and M.S. Carriers No. 23 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
Labor Finalizes Ergonomics Hearings
The Department of Labor has announced the dates, times and locations for its three ergonomics hearings in July.Earlier this year, House and Senate lawmakers repealed ergonomics regulations issued by the Clinton administration, but organized labor and some lawmakers are advocating that workers need additional protection while on the job. The repeal was signed by President Bush in March.
Secretary Elaine Chao said she would make a decision by September on whether to proceed with a new rulemaking based partly on what comments are received at these public hearings.
Labor said it plans to hold a two-day hearing in the Washington, D.C., area, July 16 and 17. That hearing is scheduled to occur at the Campus Professional Center of George Mason University, Arlington, Va. It begins at 9 a.m. ET. On the 17th, the hearing will start at 8:30 a.m. ET.
On July 20, DOL is scheduled to gather comments at the University of Chicago, Noyes Hall, beginning at 9 a.m. CT.
The third hearing is scheduled for July 24 at Stanford Law School, Palo Alto, Calif. It is scheduled to start 9 a.m. PT. John Wislocki
House Committee Approves $298 Million for FMSCA
The House Appropriations Committee approved $298 million for the Federal Motor Carrier Safety Administration in fiscal year 2002, including $206 million for the motor carrier safety program, an increase of $29 million above the current level. The new fiscal year begins Oct. 1.
Lawmakers approved the entire transportation appropriations on June 20, essentially carrying out the recommendations made by the subcommittee June 12.
The 2002 appropriations also includes $14 million set aside for border safety programs, including salaries for 80 new border inspectors, five bilingual attorneys, 23 trailers to house the inspectors and funds for safety audits in preparation for the Mexican border opening.
House members deleted funding for motor carrier safety research, but asked that any administrative savings be applied to this area.
Money was provided for a 4.6% pay raise for employees. John Wislocki
UP Sued Over Operation of Overnite
Union Pacific Corp. (UNP) management is being sued by 10 shareholders who claim that anti-union efforts at Overnite Transportation Co. caused the trucking unit’s value to fall about $900 million, news services reported.
The lawsuit, whose plaintiffs include Overnite workers, names Union Pacific Chief Executive Dick Davidson, board members, current managers and former executives such as retired Chairman Drew Lewis. At least three of those suing are Teamsters, whose union began a strike against Overnite in October 1999, said company spokesman Robert Turner.
The suit, filed Memphis, Tenn., in chancery court, claims pervasive anti-union animus by Davidson, Lewis and others resulted in high employee turnover and worker unrest.
UP bought the regional less-than-truckload carrier in 1987 for $1.2 billion and refused a $300 million offer from an unidentified buyer for the unit last year, the suit said. The union began an organizing campaign at Richmond, Va.-based Overnite in the mid-1990s. The two sides have not reached an initial contract, though talks have continued since the strike began.
However, Turner said that the suit is without merit and it is part of the Teamsters’ corporate campaign against Union Pacific.
The suit seeks an injunction to stop alleged violations of the National Labor Relations Act, as well as unspecified monetary damages. Transport Topics
Mail-Pickup Service Growing at UPS
United Parcel Service’s mail-pickup service, which recently launched in Atlanta and Dallas, will spread to about 30 major U.S. markets by the middle of next year, the Wall Street Journal reported. UPS (UPS) is trying to gain more business by leveraging U.S. postal rules that grant discounts on first-class rates to anyone mailing at least 500 pieces at once.
By combining mail from small companies, UPS can save these companies two cents on every 34-cent stamp.
Businesses told the Journal that although it is not a huge savings, it is more convenient to work with UPS than the U.S. Postal Service. And it has UPS in a good position to get more involved in the mail revenue stream in the near future.
UPS is ranked number No. 1 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
Gasoline Price Decline Expected to Continue
Gasoline prices in California and throughout the United States are expected to continue to decline as inventories reach two-year highs while demand remains low, according to the Automobile Club of Southern California.Since May 25, when the record of $2.036 was set in the Los Angeles-Long Beach area, the average price of self-serve regular has dropped 6.8 cents per gallon. In the past week alone, the price fell 2.5 cents per gallon to $1.968.
However, prices are falling at a much slower rate than they rose earlier this year. According to the California Energy Commission, retailers might be trying to make back the profits lost during the highest-priced months, when refiners added as much as 76 cents per gallon to cover their own costs. Transport Topics
(Click here for the full press release.)
Mack Plans to Unveil Two New Trucks
Mack Trucks plans to unveil two new trucks at the World Sales Conference in Las Vegas on Friday, the Morning Call of Allentown, Pa., reported. The two new vehicles are a 50-ton Granite dump truck and an 18-ton Mack Freedom, a compact delivery truck. Mack said these trucks offer drivers a wider, bigger cab with more leg and head room.
Additional improvements include a new air ride cab mounting system, padded steering wheels and ergonomic repositioning of pedals and controls.
The article said Mack sold 28,210 heavy-duty trucks in the United States last year, but sales have dropped about 33% so far this year. Transport Topics
(Click here to see the latest issue of Light & Medium Truck.)
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N.Y. Close to Approving Cell Phone Ban
New York is likely to become the first state in the nation to ban drivers from using hand-held cell phones, the Associated Press reported.The New York Senate approved the measure on Thursday and it will be taken up by the state Assembly next week.
If signed by Gov. George Pataki, the proposal would take effect Nov. 1, but violators would get only a verbal warning for a month. Those nabbed after Dec. 1 would be ticketed, but they could get that dismissed through February by showing a receipt for a hands-free system.
Several counties in the state already have enacted such bans, and 39 other states are considering similar laws, the article said. Transport Topics
UPS Cleared of $1.8 Billion Charge
United Parcel Service Inc. (UPS) said that a federal appeals court has overturned a 1999 U.S. Tax Court ruling that UPS had created an independent, Bermuda-based company solely to avoid paying federal income taxes, Bloomberg reported.
The Internal Revenue Service argued that UPS created Overseas Partners Ltd. in 1984 to evade taxes, rather than to provide extra package insurance to customers as the company said.
However, the 11th U.S. Circuit Court of Appeals ruled that OPL is independently taxable and not under UPS’ control.
After the 1999 ruling, UPS paid $1.8 billion dollars worth of back taxes into an account with the IRS, pending the appeals court decision.
UPS is ranked number No. 1 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
(Click here for the press release.)
Maine Will Upgrade Inspection Equipment
Authorities inspecting commercial truckers and their rigs in Maine will soon be equipped with laptops that can instantly access an online national database of safety ratings for motor carriers, the Associated Press reported.State officials said the equipment will help catch habitual offenders and recently suspended drivers.
lthough Maine does currently have a similar system in place, this new one will be much faster because the police can bypass dispatchers, and will make it much easier to get updated information on truckers with licenses from any state. Transport Topics
Intermodal Traffic Continues to Trail 2000 Levels
Intermodal traffic on the nation's railroads continues to trail last year's performance, according to the Association of American Railroads.Railroading, like commercial trucking, is considered an important economic indicator. Intermodal traffic, which tends to be merchandise rather than bulk commodities, is more directly competitive with trucking and more reflective of the state of the economy.
The AAR said 173,220 trailers and containers were loaded in the week ended June 16, which was down 3% from the same week in 2000.
Trailer loadings were down 9.7% for the week, while containers were down only 3.3%. Part of this disparity can be attributed to weakness in the domestic economy, although intermodal use of trailers has been dropping, compared to containers, for years.
So far this year, trailer and container loadings totaled 4,023,823, down 3.0% from last year’s pace. Transport Topics
