Executive Briefing - Oct. 3
- Crude Oil Price Continues to Fall
- O'Neill Pitches Stimulus to Congress
- L.A. Officials Look for Tighter Harbor Security
- Trucks to be Rerouted During LSU Football Game
- Mineta Backs Truck Parking Initiative
- Roadway Corp. Declares Dividend
- Nortel Networks, GE Lead New Round of Job Cuts
- Eagle Global Logistics Settles Discrimination Suit
- Swift Transportation Warns on 3Q
- Amtrak Seeks $515 Million to Improve Security
- EGL Expects to Report Slight 3Q Loss
- Minnesota State Employees Remain on Strike
- Race for Fuel Cells Brings Companies Together
- Morgan Group Wins Federal Injunction
- Railroads Launch Mexican Intermodal Service
- O'Neill Pitches Stimulus to Congress
Crude Oil Price Continues to Fall
The price of crude oil fell more than 3% on Wednesday after a report by the American Petroleum Institute showed the biggest weekly rise in U.S. inventories since July.The price of crude oil affects the price of diesel and gasoline, making it important to trucking industry.
The 3.4 million-barrel increase was seen as more evidence that the global economy is weakening, according to Bloomberg. Supplies of crude oil in the U.S. are currently about 7% higher than year-earlier levels.
Crude oil for November delivery fell as much as $1.07, or 4.7%, to $21.72 a barrel on the New York Mercantile Exchange. Prices have fallen 21% since Sept. 11.
O'Neill Pitches Stimulus to Congress
Treasury Secretary Paul O'Neill offered Congress a new economic stimulus package of between $60 billion and $75 billion to encourage consumer confidence and business investment and to help workers displaced by the terrorist attacks, Bloomberg reported.President Bush on Wednesday met with a group of national business leaders and assured them his administration would help shore up the economy in the wake of the Sept. 11 terrorist attacks, according to the news service.
Some Republican leaders in Congress are coming out against President Bush’s economic stimulus plan because it includes pubic works funds and aid for the unemployed instead of more tax cuts for businesses, the Wall Street Journal reported.
The Bush plan would include an extension of federal unemployment benefits to all workers and perhaps a tax cut for lower income workers who did not receive rebate checks the first time, the Journal reported.
A tax cut and stimulus plan could help the trucking industry if it spurs economic activity. Transport Topics
L.A. Officials Want Tighter Harbor Security
Fearing that terrorists could strike at some of the nation’s busiest ports, officials are calling for tougher security at Los Angeles and Long Beach harbors, the Los Angeles Times reported.The ports and adjacent facilities handle about 5,000 ships per year, with cargo at a combined value of $190 billion. Much of that cargo is taken inland by trucks.
Local residents are concerned about the damage that could be done in an assault on the numerous fuel and chemical storage facilities near the ports.
Spearheading the effort is Rep. Jane Harman (D – Calif.), who is urging the deployment of additional U.S. Customs and Coast Guard officers at the ports to inspect all ships and crews, the Times said.
Harman is a member of the House subcommittee on terrorism and homeland defense. Transport Topics
Trucks to be Rerouted During LSU Football Game
Truck traffic that normally would be allowed to travel unabated near Louisiana State University in Baton Rouge will be directed away on Oct. 6, as part of tougher security surrounding the LSU-University of Florida football game."In addition to the increased security in and around the stadium, truck traffic (more than two axles) will be prohibited on La. 30 (Nicholson Drive) and River Road from the hours of 11:30 a.m. to 7:30 p.m.," university officials said.
Police will direct all commercial traffic to the interstate. In addition, trucks will be prohibited from the area at least three hours before, and two hours after, all home games for the rest of the season.
The Louisiana Motor Truck Association recommends that trucks carrying placarded hazardous materials look for alternate routes for Highway 30 between Baton Rouge and Gonzales, La. Transport Topics
(Click here for the full press release.)
Mineta Backs Truck Parking Initiative
The U.S. Department of Transportation has agreed to allow states to use funds from their Surface Transportation Program to modify commuter parking areas and weigh stations to provide parking areas for trucks.Transportation Secretary Norman Mineta, responding to a letter from American Trucking Associations interim President and Chief Executive Officer William J. Canary, said the DOT will also allow states to use funds to build truck parking areas.
However, these states will have to prove that safety problems can be traced to a lack of truck parking areas. Transport Topics
(Click here for the full press release.)
Roadway Corp. Declares Dividend
Roadway Corp. (ROAD) on Wednesday announced a dividend of 5 cents per share, payable on Dec. 3 to all stockholders of record on Nov. 9.
Roadway Corp. is ranked No. 7 in the 2000-2001 Transport Topics 100, and is the parent of Roadway Express.
In August, the company said it was buying Arnold Industries for $475 million. Transport Topics
(Click here for the full press release.)
Nortel Networks, GE Lead New Round of Job Cuts
As the U.S. economy continues to worsen, more companies are laying off employees.Job cuts, particularly in the manufacturing and retail sectors, are important to the trucking industry because of its reliance on consumer spending.
- Nortel Networks, the Canadian fiber optic leader, said it was slashing 20,000 more jobs and expects to lose $3.6 billion in its third quarter.
li> General Electric announced Wednesday that it would cut 4,000 jobs at its aircraft engine division. The cut, of nearly 13% of the division's workforce, was necessary because of the weakening U.S. airline and aircraft manufacturing industries.
li>Raytehon Aircraft, a division of U.S. missile maker Raytheon Co., announced that it is trimming 750 jobs due to weak sales and disrupted air travel after the Sept. 11 attacks.
li> Retail giant Nordstrom Inc. said that it has let go 1,600 employees in the past month. The layoffs represent 3.6% of the company’s total workforce.
li> Shoemaker Stride Rite Corp., which produces footwear under the Keds and Sperry names, will lay off 120 people, or 6% of its workforce.
li> Computer chip maker Cirrus Logic Inc. announced it is cutting 300 jobs, or 30% of its payroll.
li> Computer giant Hewlett-Packard warned employees that there may be more job cuts before the company’s proposed merger with Compaq.
LI>Owings Mills, Md.-based technology company Aether Systems has also notified its workers of plans to cut 280 jobs, or roughly 25% of its staff.
I>Transport Topics
Eagle Global Logistics Settles Discrimination Suit
Freight forwarder Eagle Global Logistics said it has settled a lawsuit for $9 million alleging the company practiced widespread discrimination on the basis of race, gender and national origin.
EGL Inc. (EAGL) of Houston is the parent company of Eagle Global Logistics. It has reached this agreement with the U.S. Equal Employment Opportunity Commission.
The company agreed to pay $8.5 million in back pay and damages, and $500,000 to create a fund to train women and minorities for leadership jobs at the company.
Eight employees and job applicants sued the company, asserting that they were discriminated against. Transport Topics
(Click here for the full press release.)
Swift Transportation Warns on 3Q
Third-quarter earnings will be lower than expected at Phoenix-based Swift Transportation Co. (SWFT), the company said in a press release.
One of the nation's largest truckload carriers, Swift had been expected by Wall Street analysts to earn about 19 cents a share for the quarter ended Sept. 30. Now the company says 13-16 cents a share is more likely.
Chairman Jerry C. Moyes attributed the shortfall to a previously slow economy that has been sent reeling by the terror attacks of Sept. 11.
The company's formal financial position could look even worse depending upon how it evaluates its Mexican assets. Swift owns half of Transportes Easo, a Mexican truckload carrier.
Depending upon the results of that assessment, Swift might have to take charge against its third-quarter earnings. The Mexican investment of $10.5 million is small though, relative to Swift's total size. The company has annual revenue of about $2 billion.
In June, Swift acquired M.S. Carriers of Memphis, Tenn., another large, truckload carrier. Transport Topics
(Click here for the full press release.)
Amtrak Seeks $515 Million to Improve Security
Amtrak, the nation’s rail passenger service, has asked Congress for $515 million to bolster security in the wake of the Sept. 11 terrorist attacks, the Wall Street Journal said.
The company, which gets 43% of its revenue from non-passenger business, has until 2003 to wean itself from annual government subsidies. It has been looking to increase the amount of freight it hauls to increase revenues.
Amtrak said it would use the money to add police officers, install lighting and fencing around facilities and add alarm systems and closed circuit television around its terminals. It is also looking to improve escape routes and ventilation at critical stations like New York’s Penn Station, according to the Journal.
This money is part of a total package of $3.1 billion that Amtrak is requesting from the U.S. government.
Many airlines have already received funds from the government to improve security. The trucking industry has also been subjected to tighter security measures since the attacks. Transport Topics
GOP Leaders Oppose Part of Bush Stimulus Plan
Some Republican leaders in Congress are coming out against President Bush’s economic stimulus plan because it includes pubic works funds and aid for the unemployed instead of more tax cuts for businesses, the Wall Street Journal reported.The Bush plan would include an extension of federal unemployment benefits to all workers and perhaps a tax cut for lower income workers who did not receive rebate checks the first time, the Journal reported.
A tax cut and stimulus plan could help the trucking industry if it spurs economic activity.
ouse Majority Leader Dick Armey (R – Texas) is one of the most vocal Republicans in calling for greater tax cuts, saying that extended unemployment and public works projects won’t work. Transport Topics
EGL Expects to Report Slight 3Q Loss
EGL Inc. (EAGL), a provider of global freight, supply chain and information services, said that it will likely report a small loss for the third quarter, due in large part to the Sept. 11 terrorist attacks.
The Houston-based company said that prior to the attacks, it was on pace to at least break even for the quarter. However, now EGL says it will post a loss of 2-5 cents per share.
Much of the loss is due to its priority air services being disrupted by the closure of U.S. airspace in the days following the attacks. Transport Topics
(Click here for the full press release.)
Minnesota State Employees Remain on Strike
Minnesota Gov. Jesse Ventura said he's eager to see the state's largest-ever state employees' strike to end, but no new talks are currently scheduled, the Associated Press reported.About 20,000 workers are on strike, including highway maintenance workers. Also, Teamsters truck drivers said they will not cross the picket lines and deliver goods to state buildings.
The strike began on Monday, and could have a negative impact on the state's economy if it continues for an extended period. Transport Topics
Race for Fuel Cells Brings Companies Together
In an effort to quickly deliver fuel cell technology to the consumer market, Ford Motor Co. (F) and DaimlerChrysler AG (DCX) have traded pieces of their research and development teams to Ballard Power Systems (BLDP), the Wall Street Journal reported.In exchange, the vehicle makers are receiving a larger stake in the Vancouver, British Columbia-based company.
Some industry observers believe fuel cells will hold the answer to the trucking industry’s search to meet more stringent clean-air standards. They believe that fuel cells will begin powering a small number of vehicles in the next few years, but the costs will have to come down before it catches on with a larger audience.
Ballard will now be able to produce an entire fuel cell propulsion system. Previously, the company was only able to develop and make fuel cell “stacks,” relying on automakers to provide other engine hardware. Transport Topics
Morgan Group Wins Federal Injunction
Morgan Drive Away Inc., a division of the Morgan Group (MG), said it has won a temporary injunction against a former officer and a competitor.The company filed suit on Sept. 26, accusing former officer Ruby Davis and Bennett International Group of conspiring to misappropriate drivers, employees and customers, as well as trade secrets while Davis was still employed at Morgan.
In addition to the injunction, Morgan is also seeking monetary damages from both parties, and a permanent injunction against interference in Morgan’s business affairs. Transport Topics
(Click here for the full press release.)
Railroads Launch Mexican Intermodal Service
Canadian National Railway (CNI) and Union Pacific Railroad (UNP) announced the formation of a truck-competitive intermodal shipping service between central Canada, Michigan, Texas and Mexico City.
This is the beginning of a series of CN-UP joint ventures designed to improve service and expedite border crossing time. Since the Sept. 11 terrorist attacks, trucks have been subject to more stringent inspections and long delays entering the United States.
The new service will begin on Oct. 8, the companies said. Transport Topics
(Click here for the full press release.)
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