Executive Briefing - Sept. 19
- Bush to Nominate Shane to DOT Post
- Markets End Down, but Rally Late in Day
- Midwest Gasoline Prices Remain Stable
- Airlines Go to Hill for Bailout Package
- Bush Signs $40 Billion Package
- U.S. Trade Deficit Shrinks in July
- CNF Expects a Loss in 3Q
- Consumer Spending Getting Back to Normal
- TransFinancial to Liquidate Remaining Assets
- CRST International to Add a Texas Flatbed Firm
- J.B. Hunt Warns on 3Q
- Montreal Fire Trucks Show U.S. Flag
- Markets End Down, but Rally Late in Day
Bush to Nominate Shane to DOT Post
President Bush has announced his intention to nominate Jeffery Shane to the post of associate deputy secretary of transportation.The move was applauded by Transportation Secretary Norman Mineta, who said ask Congress to change the name of the position to under secretary for policy.
Shane is currently a partner in the law firm of Hogan & Hartsen.
Previously, he has held a series of senior transportation-related positions in the federal government. He is a graduate of Princeton University and the Columbia University School of Law. Transport Topics
Markets End Down, but Rally Late in Day
The Dow Jones Industrial Average, Nasdaq and the Standard and Poor's indexes all finished down Wednesday, but were helped by a late rally.The Dow finished down 144.27 to just over 8759.13, while the Nasdaq was off 27.38 points finishing at 1527.70. The S&P lost 16.66 points.
The Dow was off more than 400 points during the session, while the Nasdaq dipped nearly 80 by 3:15 p.m EDT. The index was threatening to close well below 1,500 – something it has not done since 1998.
Arthur Cashin of UBS Paine Webber told CNBC that the late rally was a "Jimmy Doolittle" bounce -- equating a move by the U.S. military to deploy some troops to the Middle East on Wednesday afternoon to the raid on Tokyo by Gen. James Doolittle during World War II.
The Doolittle raid inspired some confidence that the United States was "flexing her muscles," and Cashin said he believed this first deployment of troops was doing the same thing. Transport Topics
Midwest Gasoline Prices Remain Stable
Gasoline prices in Illinois and northern Indiana have not changed since the start of last week despite several cases of extremely high prices sparked by fears of shortages after last week's terrorist attacks, according to the AAA-Chicago Motor Club.While the biggest trucks run on diesel fuel, a significant portion of the commercial trucking business is carried out in trucks that use gasoline. Both fuels impact the cost of truck service.
In Chicago, self-serve regular gasoline now stands at $1.887 per gallon, which is up 33 cents from last month and 54 cents from last year. Motorists in northern Indiana pay an average of $1.667, which is 31 cents higher than last month and 50 cents higher than last year.
Looking ahead, the group said that although an economic slowdown could reduce demand for gasoline and hold prices down, potential U.S. military action could create panic buying, which would reduce inventories and force prices higher. Transport Topics
(Click here for the full press release.)
Airlines Go to Hill for Bailout Package
Airline industry executives have lowered their funding request, but appealed for quick action on a bailout package for the industry hardest hit by last week’s terrorist attacks, news services reported.The success of this industry is important to trucking because a significant portion of air cargo is moved on passenger planes that are later transferred to trucks.
Leo Mullin, chairman and chief executive officer of Delta Air Lines, led a group of executives who testified before the House Transportation and Infrastructure Committee on Wednesday in their effort to secure a $17.5 billion aid package for the airline industry.
The airlines had originally sought aid totaling $24 billion, but reduced the request when some members of Congress questioned a $7.8 billion tax relief package.
“Under current circumstances and without immediate financial support from the government, a number of carriers could be driven to bankruptcy within 60 days and the future of aviation could be severely threatened,” Mullin said in a press release.
The airline executives suggested $5 billion in immediate cash aid and up to $12.5 billion in loan guarantees. Transport Topics
(Click here for full press release.)
Bush Signs $40 Billion Package
President Bush has signed into law a $40 billion rebuilding package following last week's terrorist attacks, news services reported.Bush also signed legislation expediting benefit payments to injured firefighters and police, or to the survivors of public safety officers who were killed as a result of the attacks.
If the relief money is used for rebuilding damaged property, there will be a need for trucks to haul supplies into place. Transport Topics
U.S. Trade Deficit Shrinks in July
The U.S trade deficit declined slightly in July to an estimated $28.8 billion, according to a Commerce Department report released Wednesday.The term trade deficit refers to the amount by which exports trail imports.
The report pointed to weaker demand for a broad range of U.S. goods for the largest decline in exports, $2.2 billion, since January 1992. U.S. imports also declined for the fourth straight month to $112.6 billion in July.
Import and export figures are important to the trucking industry because trucks carry goods to and from seaports where much international shipping takes place. Transport Topics
CNF Expects a Loss in 3Q
CNF Inc. (CNF) said investors should expect a loss of 15 to 20 cents per share when the company announces its third-quarter earnings on Oct. 17.
The company blamed the loss on low freight volumes and issues involving Emery Worldwide. The airfreight company was grounded by the Federal Aviation Administration earlier this year over safety concerns. The company spent an estimated $16 million to provide a substitute fleet for its customers.
The airline also must now meet the FAA’s new security measures and absorb the cost of the ban on air travel last week in the wake of the terrorist attacks.
The company said that its other transportation subsidiaries, Con-Way Transportation Services and Menlo Logistics, are also looking at a loss for the third quarter. Transport Topics
(Click here for the press release.)
Consumer Spending Getting Back to Normal
Just as Wall Street is trying to get back to work, so to are consumers, according to a report in the New York Times.The paper said that consumer spending is returning to normal after last week’s tragic attacks on the World Trade Center and the Pentagon. Citing reports from Wal-Mart, Kmart and Sears, Roebuck & Co., which all say they are seeing comparable levels of visitors from last year.
Consumer spending is an important economic indicator for the trucking industry. When spending is up, companies must place orders to replenish their supplies and trucks do much of the product delivery.
On Sept. 11, the day of the attacks, the number of visitors to U.S. shopping malls plunged to 60% fewer than last year. Since then, visitation levels have only been down about 10%, which was the situation before the attacks, the story said. Transport Topics
TransFinancial to Liquidate Remaining Assets
TransFinancial Holdings, a Kansas-based corporation that owned two trucking companies through last year, said that it will liquidate its remaining assets.The company owned two Midwest regional motor carriers: Crouse Cartage Co. in the less-than-truckload business, which closed in September 2000, and truckload carrier Specialized Transport, which closed in December.
Chairman and Chief Executive Officer Bill Cox said the company has signed a definitive agreement to sell its financial services business and other assets for $14 million. He anticipates that it will be able to issue a liquidation dividend of $1.50-2.00 a share. Transport Topics
(Click here for the full press release.)
CRST International to Add a Texas Flatbed Firm
CRST International's flatbed unit announced it has purchased the assets of Kennedale, Texas-based E.A. Holder Inc."This purchase strengthens the Flatbed Division in both freight diversification and density," said Larry Fry, president of the division, said in a press release. "It also keeps is on target with our five-year growth plan for flatbed division, which includes expanding out business into Texas."
E.A. Holder is a flatbed company with its customers being primarily in steel, building products and lumber industries. The company moves about 420 regional and national shipments for a total of $13 million. Transport Topics
J.B. Hunt Warns on 3Q
Truckload carrier J.B. Hunt Transport Services Inc. (JBHT) said its third-quarter results will be lower than previously forecast because of less freight demand and higher costs.
The Lowell, Ark.-based company said it expects earnings of 5 cents per share, compared with Thomson Financial/First Call's consensus estimate of 28 cents per share, Reuters reported.
Costs associated with greater-than-normal activity in replacing tractors, trailers and containers, as well as for new projects are also taking a toll on the company.
Bloomberg noted that the company's 3.1% increase in rates this year failed to cover the rising costs of doing business. It is now planning a 10% increase next year. Transport Topics
(Click here for the full press release.)
Montreal Fire Trucks Show U.S. Flag
U.S. flags are flying from all 85 fire trucks in the Montreal area in tribute to the New York City firefighters lost in last week's terrorist attacks, the Associated Press reported.Division Chief Robert Seguin said that some of his men knew some of the firefighters who are missing or are confirmed dead.
Montreal, which has about 1,500 firefighters, also has been flying U.S. flags from many buildings this week. Transport Topics
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