News Briefs - Dec. 21
- Freightliner to Consolidate Operations
- Bush Says Economy May Not Need Stimulus
- Congress Adjourns Without Terrorism Insurance Bill
- Consumer Sentiment Index Rises in December
- Volvo, Navistar End Engine Negotiations
- Caterpillar to Cut 900 Jobs, Close Plant
- California to Target Unsafe Truckers
- USFreightways Sees Lower 4Q Profits
- Volvo Applies to Delist Shares in Tokyo
- American Airlines Cargo Cuts Fuel Surcharge
- Rail Intermodal Up 5.9% in 50th Week
- Bush Says Economy May Not Need Stimulus
Freightliner to Consolidate Operations
/h4>Truck maker Freightliner LLC said Friday in a release that its sales and marketing operations will be consolidated with its Western Star and Sterling truck units.
In addition, the Portland, Ore.-based company named Juergen Kritschgau as chief financial officer, effective Feb. 1, 2002.
Freightliner, the North American truck unit of DaimlerChrysler AG (DCX), also announced the retirement of managers at three plants in North Carolina and one plant in Mexico. Transport Topics
Bush Says Economy May Not Need Stimulus
President Bush said Friday that he was disappointed that Congress did not pass a stimulus plan before recessing, but the U.S. economy may rebound without it, news services reported.Bush does not intend on calling Congress back into session before the month-long holiday break is scheduled to end, Reuters reported. At that time, Bush said, they will have a chance to evaluate the state of the economy and decided whether a stimulus bill is needed.
The House did pass a stimulus bill early Thursday morning, but it died in the Senate because Democrats said it contained too many tax breaks for business and not enough aid for the unemployed, the Associated Press said. Transport Topics
Congress Adjourns Without Terrorism Insurance Bill
Congress adjourned for the year on Thursday without passing a terrorism insurance bill, leaving many industries facing much higher premiums in 2002, news services reported.Industries likely to be hardest hit by higher rates include the airlines, shipping companies and the energy industry. Previous experience also suggests the trucking industry would be one of the groups targeted for higher premiums.
Without a government backstop for insurers in the event of another terrorist attack, U.S. insurers will likely refuse to cover terrorist acts in new policies due to be signed Jan. 1. An estimated 70% of commercial policies are set to expire at the end of the year, the Wall Street Journal reported.
Insurers are facing $40 billion to $70 billion in claims from Sept. 11 and have already been curtailing coverage, Reuters said.
Lawmakers are expected to take up this issue again next year. Transport Topics
Consumer Sentiment Index Rises in December
The University of Michigan said Friday that its final index of consumer sentiment rose to 88.8 in December, a sign that U.S. consumers were more upbeat about their finances, Bloomberg reported.This is up from a final reading of 83.9 in November and a preliminary December reading of 85.8.
Consumer spending accounts for two-thirds of all economic activity and when consumers are feeling more confident, they will likely spend more. This will mean more business for trucking companies as stores restock shelves.
In a separate report, the Commerce Department said that consumer spending fell 0.7% in November. However, that was less than the 1% drop economists had predicted, Reuters reported.
Meanwhile, the University of Michigan's index of final current economic conditions was 99 in December, compared with last month's final reading of 95.3 and a preliminary December reading of 95.9. The index of final December expectations was 82.3, compared with a final reading of 76.6 in November, and a preliminary reading of 79.3. Transport Topics
Volvo, Navistar End Engine Negotiations
Truck manufacturer Navistar International Corp. (NAV) has lost a second potential engine provider for its International brand trucks after Volvo AB (VOLVY) ended negotiations because terms of the agreement weren't met, Bloomberg reported.Volvo was to provide 12- to 13- liter engines to Navistar, which will still offer engines from suppliers Cummins Inc., Caterpillar Inc. and Detroit Diesel.
In May, Navistar lost a deal to provide engines for the truck line with Cummins.
The manufacturer faced a loss of $23 million for its fiscal year ending in October and has been looking to reduce costs while demand for trucks remains low. Analyst Eli Lustgarten told Bloomberg this will not help the Warrenville, Ill.-based company because they are now faced with the engine-development burden. Transport Topics
Caterpillar to Cut 900 Jobs, Close Plant
Caterpillar Inc., diesel and natural gas engines and construction equipment, said Friday that it will lay off more than 900 people worldwide, 420 of which will be in the United States. In addition, it will close its Perkins Engine manufacturing facility in Shrewsbury, England.The company plans to offer most workers a voluntary early retirement plan, cutting 1.3% of its work force by June 30, 2002. The company will face a $55 million charge for the reduction, while its earnings will otherwise be comparable to its October predictions.
Engine production from the Perkins facility will be distributed among other locations, the company said in a release.
In other news, Boeing Co. said Friday it was handing out 1,737 layoff notices as part of its previously announced plan to eliminate as many as 30,000 jobs, mostly by the middle of next year, Reuters reported. Transport Topics
(Click here for full press release.)
California to Target Unsafe Truckers
The California Highway Patrol said Thursday that on Jan. 1 it will launch an 18-month campaign targeting commercial truck drivers who speed, drive under the influence or commit other violations.The goal of the $1.2 million program is a 5% reduction in the number of truck collisions resulting in deaths and injuries, the highway patrol said in a release.
Nearly 23,000 hours of overtime have been granted to officers for this project. Transport Topics
(Click here for the full press release.)
USFreightways Sees Lower 4Q Profits
Less-that-truckload carrier USFreightways (USFC) said late Thursday that it expects earnings for the fourth quarter to be in the range of 32 cents to 42 cents per share, well below the 91 cents it earned last year.Analysts had been expecting the Chicago-based company to earn 42 cents per share, Bloomberg reported.
In its release, USFreightways said that its projections were based on actual figures through Dec. 19, but the results could vary based on weather conditions through the end of the year. It did say LTL shipments are down 5.6% compared with the same period last year.
SFreightways is ranked No. 9 on the 2000-2001 Transport Topics 100 list. Transport Topics
(Click here for the full press release.)
Volvo Applies to Delist Shares in Tokyo
Swedish truck Volvo AB (VOLVY) on Friday applied to delist its shares from the Tokyo Stock Exchange, saying trading volume was too low.Volvo listed its shares in Japan in 1986 as a way to increase foreign ownership in the company, but on average, less than 3,000 shares change hands monthly on the exchange.
Shares also are listed on the Nasdaq stock market as well as the stock exchanges in London, Frankfurt and Brussels.
In other news, Roar Isaksen has been appointed head of Volvo Truck Corp's Europe Division, while Claes Svedberg, president of Volvo Truck Australia, has been appointed as new head of Volvo's International Division. Transport Topics
(Click here for the press release on the delisting.)
(Click here for the press release on the Isaksen.)
American Airlines Cargo Cuts Fuel Surcharge
American Airlines Cargo on Thursday said it will eliminate its fuel surcharge of 33 cents per pound effective Jan. 7, the Journal of Commerce reported.
The airline said it will increase its handling fee, to 33 cents a pound from 22 cents, in order to make up for the loss and to account for the increased cost of security.
Air freight is important to the trucking industry, as many commercial airlines transport cargo in the bellies of their planes and trucks carry the cargo to and from airports.
Earlier this month the United Parcel Service and FedEx Corp. lowered their fuel surcharges to 0.75% and 2%, respectively. Both companies attributed decreased charges to the low national fuel prices. Transport Topics
Rail Intermodal Up 5.9% in 50th Week
Trailers and containers loaded for intermodal service on the nation’s railroads totaled 175,906 in the 50th week of 2001, up 5.9% from the same week in 2000, the Association of American Railroads said.For the year to date, loadings of trailers and containers totaled 8,661,312, down 2.5% from the same time frame in 2000. Six months ago, intermodal loadings trailed last year’s levels by 3%.
Container loadings were up 10.8% for the week ended Dec. 15 and trailer loadings were down again, this time by 3%.
Intermodal is the segment of the railroad business most directly competitive with trucking, especially long-haul trucking. However, railroad and trucking companies often work together in intermodal service, with the railroad carrying the load for the long haul and trucks providing pick up and delivery service. Transport Topics
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