News Briefs - April 22
The Latest Headlines:
- Saddam Calls for Arab Oil Exporters to Stop U.S. Sales
- Illinois Marks $2.3 Billion for Highways
- CSX Reports Rise in 1Q Profits
- Scania's Earnings Drop 33% on Weak Demand
- Volvo Narrows Loss, but Truck Division Struggling
- Truckers Seeing Recovery Signs, Times Says
- Hino Cuts Earnings Forecast Again
- Gasoline Price Down Slightly, Lundberg Says
- USFreightways Reports Loss in 1Q
- Contrans Completes Tri-Line Purchase
- OPEC Secretary General Steps Down
- Illinois Marks $2.3 Billion for Highways
Saddam Calls for Arab Oil Exporters to Stop U.S. Sales
Iraqi President Saddam Hussein called for Arab oil exporters to stop sales to the United States and Israel, the Associated Press reported Monday.Crude oil is refined to produce gasoline and diesel fuel, making its price crucial to the trucking industry. An oil embargo would cause prices for these fuels to rise.
Hussein's remarks came less than a month after he announced Iraq was cutting off oil exports for 30 days or until Israel withdraws from Palestinian territories. He also recommended these nations cut their total exports in half.
Also Monday, Saudi oil minister Ali Naimi said that the Organization of Petroleum Exporting Countries may increase production in the coming months. Transport Topics
Illinois Marks $2.3 Billion for Highways
The state of Illinois has budgeted $2.3 billion for road construction and repairs during this coming year, the Associated Press reported Friday.Road construction can temporarily slow traffic, but well-built roads help reduce wear and tear on over-the-road trucks.
Among the projects to be funded are the completion of a 60-mile stretch of four-lane highway between Quincy, Ill.; and Macomb, Ill.; the modernization of Interstate 74 through Peoria, Ill. and continued improvements along the 226-mile U.S 67 corridor between Alton, Ill. and Rock Island, Ill.
Illinois officials said that the state's growing budget deficit would not affect the road construction program. Highway projects in Illinois are funded by liquor taxes, license plate fees and fuel tax and licensing fee supported bonds. Transport Topics
CSX Reports Rise in 1Q Profits
Freight railroad CSX Corp. said Monday its first-quarter net income was $25 million, or 12 cents per share, compared with $20 million, or 10 cents per share, in the year-earlier period.These results include a charge of $43 million, or 20 cents per share, for accounting changes.
The Richmond-based company's railroad and intermodal groups saw operating earnings rise to $194 million, compared with $182 million.
Total revenues were $1.96 billion, down from $2.03 billion a year ago. Transport Topics
(Click here for the full press release.)
Scania's Earnings Drop 33% on Weak Demand
Swedish truck manufacturer Scania AB said its net income fell off from $55.29 million, or 28 cents per share in the first quarter of 2001, to $36.9 million, or 19 cents per share in the most recent first quarter. The drop in net income was attributed to weaker demand for heavy trucks, especially in Latin America.As a result of the company's weak results, Scania said it will be forced to trim another 600 jobs from its workforce.
The company, the fourth largest truck maker in Europe, said that forecasts were improving in Western Europe, but that dangers to the market still remained. Demand for trucks in the region flattened out, the company said, but added that it was still too early to label this a trend.
The company saw its Latin American demand decline, officials said.
"Volume declined in Latin America. In practice, the Argentinean market disappeared as a consequence of economic and political chaos," said Leif Ostling, president and chief executive officer. "At the same time, our volume declined in Brazil mainly as a consequence of the price hikes we are implementing in order to bring truck prices to a world market level. The improvement in prices, along with the lowering of the cost level, has begun to have an effect." Transport Topics
(Click here for the full press release.)
Volvo Narrows Loss, but Truck Division Struggling
Volvo AB said Monday that it narrowed its first-quarter loss by reducing costs despite continued falling sales, Bloomberg reported.The company's truck division had a net loss of $45.7 million, before interest and taxes, compared with a profit of $14.5 million last year. Truck sales fell 21% to 33,322 vehicles worldwide.
"We still suffered from weak demand for new trucks, primarily in North America," chief executive officer Leif Johansson said in a release.
The company's overall net loss was $72 million, an improvement over the $77.2 million in the year-earlier period. The Swedish company said that sales fell 7.8%.
Volvo said it expects 2002 to be a difficult year, and that its truck business was "still under pressure."
(Click here for the full press release.)
Truckers Seeing Recovery Signs, Times Says
In a positive indication of the economy's direction, truck drivers are beginning to see an uptick in their business, the New York Times reported Sunday.Often times, commercial trucking sees an increase in business as factories begin boosting production and stores and consumers begin purchasing goods again.
Several drivers at a truck stop in Oklahoma City told the Times that they have seen the frequency of their loads begin inching up, suggesting the nation's economy is starting to climb out of its recession.
The majority of drivers interviewed said they felt good about business and the prospects for an economic recovery. One owner-operator who works with automobile carrier Allied Automotive Group told the Times that not only have all of that company's former employees been called back after layoffs, but that Allied was looking to hire more drivers. Transport Topics
Hino Cuts Earnings Forecast Again
Hino Motors Ltd., Japan's largest truck maker, said Monday that it was cutting its earnings estimate for the fiscal year ended March 31 due to weaker sales of heavy-duty trucks and buses, Bloomberg reported.The company said it reduced its net income estimate by 39% from its previous forecast made in November to $61 million. Still, this is expected to be the first profit in four years for the company.
In November, Hino nearly halved its forecast for the full fiscal year. Hino is 50% owned by Toyota. Transport Topics
Gasoline Price Down Slightly, Lundberg Says
Despite ongoing tensions in the Middle East, and recent political turmoil in Venezuela, gasoline prices in the United States have remained practically unchanged over the past two weeks, edging down less than a cent, according to the Lundberg survey of 8,000 stations nationwide.While most commercial trucking operations use diesel fuel, a large segment of the industry runs on gasoline.
Friday's weighted price per gallon for all grades and taxes was about $1.46, the same price as reported two weeks ago. Analyst Trilby Lundberg said the price actually dipped, but it was less than one cent. Still, this could be a sign that prices may have peaked, the Associated Press reported.
From Feb. 8 to April 7, gasoline prices had jumped 32 cents. Prices remain more than 21 cents a gallon lower than they were at this time last year, when gas cost $1.67 per gallon. Transport Topics
USFreightways Reports Loss in 1Q
USFreightways Corp. reported a net loss on Monday of $77.7 million, or $2.84 per share, because of charges related to ending an investment in Asia and to reflect a change in accounting rules.A charge of $12.8 million was taken to relinquish the company's interest in its Asia joint venture, and a $70.0 million charge was recorded related to goodwill impairment at USF Worldwide.
In the first quarter of 2001, the Chicago-based company had net income of $8.45 million, or 32 cents per share.
"The results of the first quarter, while somewhat encouraging, continue to be affected by the current sluggish economy," said Samuel Skinner, chairman, president and chief executive officer. He also noted there have been some signs recently that business is picking up.
Total sales during the first quarter fell 7% to $577.7 million, while USFreightways' regional trucking group saw revenue decline 6.3% to $430.2 million.
USFreightways is ranked No. 9 on the 2000-01 Transport Topics list of the 100 biggest trucking companies in the United States. Transport Topics
(Click here for the full press release.)
Contrans Completes Tri-Line Purchase
Canadian trucking company Contrans Corp. said Friday that it has completed the previously announced purchase of "substantially all" of the trucking assets of Tri-Line Expressways Ltd. from KPMG Inc.The Woodstock, Ontario-based company will acquire the tractors, trailers, property and other related material assets from Tri-Line for $8.5 million. The assets are located primarily in the provinces of Alberta and Saskatchewan, as well as in the state of Texas.
Contrans also expects to negotiate the continued use of leased property in other Canadian provinces.
Tri-Line's trucking unit is headquartered in Calgary, Alberta; the company provides flat bed and dry van transportation services throughout North America. Transport Topics
(Click here for the full press release.)
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OPEC Secretary General Steps Down
Ali Rodriguez is leaving his post as secretary general of the Organization of Petroleum Exporting Countries to assume the presidency of Venezuela's state-owned oil monopoly, the Associated Press reported Friday.The prices of diesel fuel and gasoline are dictated by the price of oil, and OPEC has been successful in supporting the price of oil.
The AP said Rodriguez had been pressured to take the job by Venezuelan President Hugo Chavez. Rodriguez's successor in the OPEC post was not immediately known.
Chavez has tried to assert control over Petroleos de Venezuela by appointing supporters to key positions - a move many managers perceived as political interference.
The dispute boiled over in April, when a when dissident executives and oil workers began a work slowdown that almost choked production and exports. Venezuela's largest business and labor groups called a general strike to support them, and a storm of opposition swept Chavez from office April 12.
However, the coup collapsed, and Chavez was back in office by Sunday. Transport Topics
