News Briefs - April 21
The Latest Headlines:
- Washington State Senate Passes Fuel Tax Increase
- Barron's: UPS, FedEx Face Growing Competition
- Gasoline Prices Decline in Latest Lundberg Survey
- U.S. Xpress 1Q Earnings Rise
- Arkansas Best Narrows Loss
- Smithway Reports Loss for 4Q, 2002
- Barron's: UPS, FedEx Face Growing Competition
Washington State Senate Passes Fuel Tax Increase
The Washington state Senate voted last week to boost the motor fuel tax by 5 cents per gallon, increase weight fees for trucks by 15% and the sales tax on vehicles by 0.3%, the Associated Press reported.However, $4.1 billion of highway improvements and other transportation projects still must be reconciled with the House's smaller, more mass transit-oriented proposal passed earlier in the month, AP said.
The Senate’s plan is larger and more focused on roads than the $3.1 billion plan passed by the House earlier this month, which envisioned a 4-cent fuel tax increase spread over four years and a higher trucking fee and sales tax increase.
It will be difficult reconciling the House and Senate versions of the bill, AP reported. Differences among majority Democrats in the House may prevent them from moving too far toward the Senate plan, Transportation Chairman Ed Murray told AP. Transport Topics
Barron's: UPS, FedEx Face Growing Competition
United Parcel Service and FedEx Corp. are facing growing competition, especially in the ground market, and are being forced to give large customers bigger discounts to keep them, Barron’s reported Monday.Shipping managers are playing the two companies off each other and turning to newer entrants like Airborne Inc. and International Courier Network to obtain lower prices, Barron’s said.
Meanwhile, Airborne said the proposed takeover of its ground operations by Deutsche Post AG will happen even if the German delivery company is found to be improperly in control of two U.S. airlines, a violation of federal law, the Wall Street Journal reported Monday.
Airborne said the takeover agreement is structured so that DHL Worldwide Express, which owns Deutsche Post, would be required to purchase Airborne, even if it is found in violation of airline-ownership laws.
Barron's reported the demand for parcel services already is flagging, and the intensifying competition will likely hurt UPS' and FedEx's profits in the months ahead.
The growing competition also may cause the shares of UPS and FedEx to fall, Barron’s said.
UPS is ranked No. 1 and FedEx No. 2 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
Gasoline Prices Decline in Latest Lundberg Survey
Gasoline prices have dropped six cents a gallon nationwide over the past two weeks, the biggest two-week drop since October 2001, according to the Lundberg survey of gas stations nationwide.About one-third of trucking uses gasoline instead of diesel, commercial trucking’s dominant fuel.
The average price for gas nationwide, including all grades and taxes, was about $1.70 a gallon last Friday, the survey said.
Motorists are seeing the first drop in gas prices in four months due in part to falling crude oil prices because of increased certainty about Middle East oil supplies, industry analyst Trilby Lundberg said.
Another factor was the completion of repairs and maintenance at refineries in advance of spring demand, Lundberg said.
The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.67 for regular, $1.76 for mid-grade and $1.85 for premium. Transport Topics
U.S. Xpress 1Q Earnings Rise
Truckload carrier U.S. Xpress Enterprises on Monday reported higher 2003 first-quarter earnings and operating revenues.Net income for the quarter was $121,000 or 1 cent per share, compared with a net loss of $1.4 million or 10 cents per share a year ago.
Total operating revenues increased 11.9% to $220.7 million, compared with $197.2 million in 2002.
The truckload segment saw an 8.8% increase in operating income to $3 million. That figure would have been doubled, the company said, "had we not experienced the dramatic rise in fuel costs during the quarter."
U.S. Xpress, Chattanooga, Tenn., is ranked No. 25 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
(Click here for the full press release.)
Arkansas Best Narrows Loss
Transportation holding company Arkansas Best Corp. said Monday its net loss for the first quarter of 2003 was $734,000 or 3 cents per share, compared with a net loss of $22.5 million or 89 cents per share a year ago.The company said in a release the 2003 quarter included a $9 million charge related to Arkansas Best's interest rate swap on some of its borrowings. The year-ago period included a goodwill charge of $23.9 million related to Clipper, its freight forwarding subsidiary.
Less-than-truckload carrier ABF Freight System's operating income more than doubled to $11.1 million, despite severe weather and higher workers' compensation costs, the company said.
ABF's revenue and tonnage increased during the first quarter, which the company said was due in part to the closure of Consolidated Freightways.
"Since last September, it has been difficult for ABF to differentiate the impact of additional CF business and the changes in the economy. However, it does appear that the economy has moderately declined during the last few months," said Robert A. Young III, Arkansas Best chief executive officer.
Arkansas Best, Fort Smith, Ark. is ranked No. 17 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
(Click here for the full press release.)
Smithway Reports Loss for 4Q, 2002
Truckload carrier Smithway Motor Xpress Corp. said Monday its net loss for the 2002 fourth quarter and fiscal year both increased.For the quarter, Smithway’s net loss was $4.7 million or 97 cents per share, compared with a loss of $2.3 million or 48 cents per share in the fourth quarter of 2001.
Smithway said decreased revenue production of its tractor fleet, decreased brokerage revenue and increased parts and maintenance expenses all contributed to the loss.
For the fiscal year, the net loss was $8.7 million or $1.79 per share, compared with $5.2 million or $1.07.
Smithway said it filed its annual report on Form 10-K for the year ended Dec. 31, 2002, with the Securities and Exchange Commission earlier this month. It previously had filed for an extension of the filing date.
During the past month, the company also said it negotiated amendments to its financing and equipment financing arrangements because it had been in violation of certain terms of the agreement.
Looking ahead, the company said it expected to report a net loss for the fiscal first quarter of $1.6 million to $1.7 million.
Based in Fort Dodge, Iowa, Smithway is ranked No. 75 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
(Click here for the full press release.)
