Executive Briefing - Sept. 10
- More Companies Cutting Jobs
- Consumer Borrowing Weak in July
- NABE Cuts GDP Projection; Predicts Recovery
- Trism Sells Logistics Company
- Lundberg: Gasoline Price Rises 5.47 Cents
- Poll Finds Public Wants Mexican Trucks Inspected
- Postal Service Announces Cuts, Restructuring
- Washington City Bans Use of 'Jake Brakes'
- Jobless Rate Could Drive U.S. Economy Down
- Hino to Make Trucks in Thailand
- U.S Officials Train Former Soviet Guards
- Consumer Borrowing Weak in July
More Companies Cutting Jobs
Several more major companies announced job cuts on Monday as the U.S. economy continues to struggle.Job cuts -- especially in the manufacturing sector -- are important for the trucking industry because it usually means a decline in the volume of truck shipments in the next few months.
Among the companies:
- Tire manufacturer Michelin North American Inc. cited a downturn in the tire market as the reason it is cutting 7% of its work force – or 2,000 jobs.
- Qwest Communications International said it would slash 4,000, or 6% of its work force due to poor earnings.
li>Anadigics Inc. said it would cut an unspecified number of jobs. The maker of computer chips cited harsh business conditions as the impetus for the move.
li>Avici Systems Inc., maker of equipment to direct Internet traffic, said it would cut 55 workers, or 14% of its work force. The firings were attributed to cutbacks at some of Avici’s main customers, including Qwest. Transport Topics
Consumer Borrowing Weak in July
The Federal Reserve said Monday that consumer borrowing was essentially unchanged in July, after falling 1.3% in June.Because consumer spending drives the economy, any increase in borrowing and spending will create additional demand for raw and finished goods and the trucking shipments that get them to stores.
For July, consumer credit dipped by a tiny $4.7 million, leaving borrowing essentially unchanged at an annual rate of $1.59 trillion. The July figures showed that demand for nonrevolving credit, including loans for new cars and vacations, was steady at $888.9 billion.
The Associated Press reported that consumers remain cautious about job prospects in a weakening economy and have been careful about taking on extra debt. The June decline marked the first time consumer borrowing had fallen in nearly four years. Transport Topics
NABE Cuts GDP Projection; Predicts Recovery
The National Association of Business Economics has cut its projection for 2001 U.S. gross domestic product growth, but says that a recovery is likely to begin by the end of year, CNN reported.The NABE cut its projection from a 2.0% rate of annual growth to 1.6%. Two-thirds of the panel also said they expect the economy to recover from its slump before the end of the year, CNN said.
An economic recovery would likely lower the unemployment rate and increase consumer spending. This would help increase the demand for trucking services.
The economists also said in their report that the Federal Reserve raised interest rates too high during the last few years, which has contributed to the current slowdown, according to CNN. Transport Topics
Trism Sells Logistics Company
Glenn Kavanagh said Monday that he and Lisa McConnell have bought back the logistics company they sold to Trism Inc. in 1995.
Trism, which has recently restructured and closed its Specialized Division, is now left mainly with its Secured Division -- which handles radioactive materials, government munitions and commercial explosives.
The new logistics company will be named Kavanagh Logistics Inc. and will remain a third party logistics provider specializing in extra-large and heavy freight transportation management. Transport Topics
(Click here for full press release.)
Lundberg: Gasoline Price Rises 5.47 Cents
The average U.S. price of gasoline, including all grades and taxes, rose 5.47 cents to $1.56 a gallon in the last two weeks, according to the Lundberg Survey of 8,000 stations nationwide.Roughly a third of trucking-related freight hauls require gasoline for local pickup and delivery operations, so a gas-price jump has a significant effect on trucking.
Gas prices had been declining for most of the summer from their mid-May peak of $1.76 per gallon, but bottomed out in August at $1.45 a gallon.
Prices rose because a mini-glut of gasoline dried up, as some refineries shut down for repairs and to prepare for the fall and winter heating oil season, analyst Trilby Lundberg said. Transport Topics
Poll Finds Public Wants Mexican Trucks Inspected
A new poll conducted for the Advocates for Highway and Auto Safety found that 94% of the people living in the United States oppose giving Mexican trucks unrestricted access to U.S. roads without the proper safety inspections.The poll also found that 76% of those surveyed favored legislation that would restrict the use of cell phones while driving and 83% favor an increase in federal spending on highway and auto safety programs.
People also voiced their support for cameras at red lights as a law enforcement supplement, and that the government should set vehicle safety regulations. Transport Topics
(Click here for the full press release.)
Washington City Bans Use of 'Jake Brakes'
The city council of Vancouver, Wash., voted last week to prohibit the use of so-called "jake brakes," the Vancouver Columbian reported.These brakes –- also called engine brakes -- use engine compression to help slow large trucks more quickly and efficiently. They save wear and tear on brake linings, but can be very noisy.
Richard Bolin, regional manager of Jacobs Vehicle Systems, said the real problem is that many trucks do not have mufflers, so they make more noise. The story said that the state of Colorado determined that 37% of trucks do not have mufflers.
The law approved Tuesday exempts emergency vehicles and will allow accused drivers to defend themselves in court, by arguing the brakes were used to protect people or property. Transport Topics
Postal Service Announces Cuts, Restructuring
The U.S. Postal Service will be reorganizing its management, Postmaster General Jack Potter said late Friday, resulting in 800 layoffs.
Earlier this year, the USPS faced a potential $3 billion loss. Rate increases and cost-cutting measures -- including moving more mail to trucks -- have now cut that figure to $1.65 billion, the Associated Press reported.
The service is eliminating two regional management offices, a mid-Atlantic office in Arlington, Va., and a Midwest office in St. Louis. Potter said that the service also plans to re-evaluate some of its activities throughout the year. Transport Topics
Jobless Rate Could Drive U.S. Economy Down
Last week’s dismal unemployment news may spark an even greater U.S. economic downturn, the Wall Street Journal reported.The paper said that in previous slowdowns, a drop in consumer confidence and spending drove the decline. Consumer spending is a key to the success of trucking because it relies on orders from the manufacturing and retail sectors for a large portion of its business.
In this current slowdown, consumers have remained upbeat. However, a jump of 0.4% in the jobless rate could be the final straw, the story said. The more nervous people are about losing their jobs, the less likely they are to spend money to keep the economy afloat.
In response to the slowdown, the Journal also reported that the Bush administration is looking at a fresh round of tax cuts. Congressional Republicans have discussed a cut in the capital gains tax, while Democrats have floated the idea of broadening Bush’s rebate program. Transport Topics
Hino to Make Trucks in Thailand
Hino Motors Ltd., which is 51% owned by Toyota Motor Corp., plans to begin making small trucks in Thailand by 2003, the Nikkei English News reported.The company will try to sell 5,000 of its Dutro trucks a year in Thailand as it tries to make a dent in a fast growing market.
Vehicle sales in Thailand rose 12% to 39,264 in July, the story said. Transport Topics
U.S Officials Train Former Soviet Guards
U.S. Customs officers are using truck inspections along the U.S-Mexico border to train guards from Uzbekistan, a former Soviet republic, how to find smuggled weapons, the Dallas Morning News reported.The Uzbek guards are observing the U.S. officials at work, because the techniques used to find drug shipments in trucks and other vehicles are the same that are used to find dangerous cargo like chemical and biological weapons.
Since 1997, the U.S. Customs service, in cooperation with the State Department, has offered similar training to more than 2,600 border agents from 16 countries, the newspaper said. Transport Topics
