News Briefs - Aug. 7
The Latest Headlines:
- Can't Declare Recession Over, NBER Group Says
- TransForce Acquires Mirald Transport
- Oil Price Pushes U.S. Import Prices Up 0.3% in July
- Weakening Recovery May Push Fed to Cut Rates
- Unexpected Supply Rise Pushes Crude Oil Price Down
- Bush Signs Trade Bill Into Law
- Smithway Loses 24 Cents Per Share in 2Q
- TransForce Acquires Mirald Transport
Can't Declare Recession Over, NBER Group Says
A panel of economists said Tuesday it has not yet ruled out a "hypothetical" second leg of the U.S. economic downturn, so it cannot formally say the recession has ended.The end of the recession would likely mean an increase in demand for trucking services.
National Bureau of Economic Research's business cycle dating committee said on its Web site that there have been small monthly increases in activity, but that it still needs to see more data before making a firm decision on the status of the recession.
TransForce Acquires Mirald Transport
TransForce Inc. said Wednesday that it has acquired all the outstanding shares of Mirald Transport.Based in Boucherville, Quebec, Mirald is a family owned truckload company that specializes in transborder hauling.
No financial terms of the deal were disclosed in TransForce's press release, but the company expects to close the transaction by Aug. 16.
TransForce is a transportation and logistics provider based in Montreal. It is ranked No. 58 on the 2002 Transport Topics 100 listing of the largest trucking companies in the United States and Canada. Transport Topics
Oil Price Pushes U.S. Import Prices Up 0.3% in July
U.S. import prices posted a 0.3% rise in July, mostly as a result of a 4.9% rise in the cost of imported oil, the Labor Department said Wednesday.Without that increase, Labor said, import prices were unchanged.
A substantial portion of imported and exported goods are transferred from ships and planes to trucks for delivery.
The increase was the largest since April and was more than economists had expected, Reuters said. Labor said petroleum import prices have risen 47.4% since December.
Labor also said export prices rose 0.3% percent in July, after an unchanged reading a month earlier. Transport Topics
Weakening Recovery May Push Fed to Cut Rates
Several economists feel that the Federal Reserve may move toward a resumption of interest rate-cutting when the group's policy-making board meets Aug. 13, Bloomberg reported.Investment and spending triggered by a cut in interest rates could increase the demand for trucking services.
The Fed's Open Market Committee, which sets the rate at which banks can borrow money from the U.S. central bank, has left interest rates steady at 1.75% -- a 41-year low -- for several months. However, a string of indications that the economy's recovery is losing steam could force it to begin cutting rates once more, Bloomberg said.
The stock market reacted positively Tuesday to the news that the Fed may cut rates again before the end of 2002, Bloomberg said. Corporate accounting scandals, poor earnings reports and several government and private reports that show manufacturing and job creation stalled recently had been hammering the market. Transport Topics
Unexpected Supply Rise Pushes Crude Oil Price Down
Oil traders reported an unexpected rise in supply levels of gasoline, Bloomberg reported Wednesday, which led to a decrease in the price of crude oil.Crude oil is distilled into diesel fuel and gasoline, the two fuels of the trucking industry.
The price of Brent crude oil for September settlement fell 31 cents or 1.2% to $25.22 per barrel in trading on the International Petroleum Exchange in London, the story said.
Traders told Bloomberg the threat of conflict between the U.S. and Iraq is keeping the price of oil from falling too much, but until the U.S. economy recovers, supply levels will hold their high levels and possibly force prices down further.
Meanwhile, Bloomberg reported Tuesday that the Organization of Petroleum Exporting Countries will begin its fall meeting on Sept. 19, one day later than it had previously announced.
Members of the cartel are expected to use the meeting to discuss the possibility of increasing their collective output of oil, Bloomberg said, although it had been reported on Monday that Russia, the largest non-OPEC oil exporter in the world, had agreed to work with the cartel to keep prices from falling. The nature of the cooperation was not revealed, but previously Russia had limited its output to support OPEC.
Recently, OPEC members Algeria and Nigeria have asked the group to raise their quotas in order to take advantage of higher oil prices. Transport Topics
Bush Signs Trade Bill Into Law
President Bush signed a bill Tuesday returning wide-reaching powers to negotiate trade agreements to U.S. presidents after an eight-year lapse, the Associated Press reported.Increased trade with foreign countries would mean more trucks would needed to haul goods to and from U.S. entry ports.
Upon signing the bill, Bush told reporters that "America is back in the business of promoting open trade," AP said.
The bill gives Congress 90 days to approve or reject trade pacts negotiated by the White House, AP said. The president said he hopes this will give other countries confidence to talk with the United States about trade. Transport Topics
Smithway Loses 24 Cents Per Share in 2Q
Truckload carrier Smithway Motor Xpress Corp. said late Tuesday that it lost 24 cents per share or $1.2 million during the second quarter of 2002 -- nearly three times what it lost in the same quarter last year.During last year's second quarter, Smithway posted a net loss of $384,000 or 8 cents per share. The Fort Dodge, Iowa-based company said its revenues, excluding fuel surcharges, declined from $49.9 million in 2001 to $44.6 million.
"We are encouraged by the substantial progress Smithway made on several fronts during the quarter," said William Smith, chairman, president and chief executive officer. "We had previously announced our core goals of improving revenue per seated tractor per week, improving our van operation's performance, decreasing our number of tractors without drivers, and continuing our commitment to safe operations."
Smithway is ranked No. 75 on the 2002 Transport Topics 100 listing of the largest trucking companies in the United States and Canada. Transport Topics
(Click here for the full press release.)
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