News Briefs - Dec. 27
- Snow Continues; New York Thruway Section Closed
- Oil Price Falls Amid Bets OPEC Will Miss Targets
- Roadway Plans to Go Next-Day
- Board Stalls Airline Aid Plea
- Mortgage Applications Hit Record High
- Job Cuts Set Record in 2001
- U.S. Xpress Raises $107 Million in Financing
- Vaughn Named President at Daylight Transport
- U.S. Army Renews Contract for Trucks, Trailers
- Oil Price Falls Amid Bets OPEC Will Miss Targets
Snow Continues; New York Thruway Section Closed
Continued heavy snowfalls in Western New York have forced the closing of about 50 miles of the New York Thruway and of other roads including a section of Interstate 190 near Buffalo.The New York State Thruway Authority issued a press release Thursday announcing the closing of the stretch from Hamburg to Batavia.
The area was buffeted with some 25 inches of snow Monday and Tuesday and weather forecasts predict anywhere between 24 and 48 more inches of snow over Thursday and Friday.
The National Weather Service said the snow Thursday afternoon would be intense, accumulating at a rate greater than three inches per hour. Later in the evening, the Weather Service said, the snow would be intermittent and light. Transport Topics
Oil Price Falls Amid Bets OPEC Will Miss Targets
The price of crude oil, which rose Wednesday on speculation that oil cartel members will vote to cut production Friday, fell Thursday on speculation that the cartel members will fail to adhere to the planned reductions, Bloomberg News said.Members of the Organization of the Petroleum Exporting Countries will probably agree to reduce output by 1.5 million barrels a day, Bloomberg said, but have overshot their targets for much of the year.
Bloomberg estimated that OPEC members exceeded quotas by 459,000 barrels a day in November.
The price of oil for February delivery, which had risen on the New York Mercantile Exchange Wednesday to above $21 a barrel, dropped back to $20.32 at mid-day. Transport Topics
Roadway Plans to Go Next-Day
Roadway Corp. will use its recently acquired Arnold Industries Inc. to jump into the next-day delivery market, the Wall Street Journal said Thursday.The company plans to make additional acquisitions as it expands regional service, as it views next-day delivery to be more profitable than long-haul trucking.
Chairman and Chief Executive Officer Michael Wickham plans to allow New Penn Motor Express, the less-than-truckload unit of Arnold which will provide next-day service, to operate autonomously instead of incorporating it into Roadway Express. Roadway Express is Roadway Corp.'s principal operating unit, which is structured for long-haul business, the Journal said.
Roadway Corp. has not yet released an official earnings report, but a Thomson Financial/First Call consensus estimated earnings of only 69 cents per share, compared to $1.34 per share the previous year, according to the Journal. Transport Topics
Board Stalls Airline Aid Plea
The first company to seek help under a program designed to aid strugging airlines may be forced into bankruptcy if the board created by Congress three months ago to distribute $10 billion in loan guarantees does not act soon, the New York Times reported.America West Airlines submitted the necessary paperwork on Nov. 13, but the board has requested two revisions after adding more demanding conditions, sources told the Times.
The guidelines for the board, which were devised by the White House, are aimed at ensuring loans are repaid by the borrowing airlines.
The success and reliability of the airlines is important to the trucking industry as commercial airlines carry cargo in the bellies of planes, and trucks are responsible for carrying the goods to and from airports.
The Times said other airlines, struggling since the Sept. 11 attacks, are watching the process closely and say they may be forced to file under the guarantee in the next year if they do not see an increase in passenger traffic. Transport Topics
Mortgage Applications Hit Record High
Mortgage applications hit record numbers in the week ending Dec. 21, Reuters reported Thursday.Reuters cited the Mortgage Bankers Association of America, which said its purchase index for the week climbed to 373.5, the highest level since the weekly application survey was begun in 1990.
Mortgage applications are a harbinger of home purchases which provide business for trucking companies engaged in moving furniture and other household goods.
Refinancing declined 20.5% last week, compared to the previous week, reaching the lowest level in the year since the week ending July 13. Reuters laid the decline to the level of the 30-year fixed rate, which, at 7.13% is well above the 6.4% level seen in the week ended Nov. 2.
The weekly MBA survey covers about 40% of all applications processed by mortgage lenders and monitors purchasing, refinancing and overall market activity. Transport Topics
Job Cuts Set Record in 2001
The U.S. is currently facing the greatest number of announced job cuts in a 12-month period, according to an industry report.The job placement firm Challenger, Gray & Christmas said that U.S. corporations have announced nearly 1.8 million job cuts through November, three times last year's total for the same time frame, the Associated Press reported. The total is the largest since the group began tracking job cut announcements in 1993.
More than 624,000 job cuts have been announced since the Sept. 11 attacks, which in itself is almost as many as the 677,000 in 1998, the worst year prior to 2001, the AP said.
The economic sectors most hard hit by the reductions have been manufacturing/industrial, high technology and travel, the AP said.
Job cuts, especially in the manufacturing sector, are a bad sign for the trucking industry because they can lead to reduced consumer spending and lower levels of production. Trucking relies on both for business. Transport Topics
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U.S. Xpress Raises $107 Million in Financing
U.S. Xpress Enterprises Inc. announced Wednesday that it has raised about $107 million in equipment financing to reduce the maximum borrowing under its revolving credit facility to $87 million.With the move, U.S. Xpress said that it now has $24 million available to borrow under its credit facility.
The Chattanooga, Tenn.-based truckload carrier said in a press release that the financing, combined with anticipated cash flow in 2002, is intended to provide "adequate liquidity to meet the company's operational and anticipated capital expenditure needs well into 2003".
The revolving credit facility's maximum borrowing will reduce to $80 million in June 2002, the press release said, and the facility matures on July 1, 2003.
U.S. Xpress was ranked No. 22 in the 2000-2001 Transport Topics 100 list. Transport Topics
(Click here for the press release.)
Vaughn Named President at Daylight Transport
Steve Vaughn has been named president of Daylight Transport, it was announced Wednesday by Richard Breen, chief executive officer.Vaughn, formerly executive vice president, will oversee day-to-day operations of the Long Beach, Calif.-based company, which provides both truckload and less-than-truckload services.
"Steve Vaughn has been a key executive of my team for more than 15 years," said Breen, "and I know that Daylight will thrive under his direction and leadership." Transport Topics
(Click here for the press release.)
U.S. Army Renews Contract for Trucks, Trailers
Stewart & Stevenson Inc. announced Thursday that its subsidiary, Stewart & Stevenson Tactical Vehicle Systems LP, has won renewal of a $374 million contract from the U.S. Army's Tank-automotive and Armament Command for trucks and trailers.The contract, under which Stewart & Stevenson will provide 2,400 trucks and more than 500 trailers for the Family of Medium Tactical Vehicles, is part of a pre-existing multi-year arrangement. The U.S. Army has exercised its option to extend the deal through Sept. 2003, the company said. At that time, TACOM may extend the contract for another year.
"We are pleased that the Government has exercised the option to extend the base contract an additional year," said Michael L. Grimes, President and Chief Executive Officer.
Houston-based Stewart & Stevenson Inc. manufactures and distributes industrial and energy-related equipment, oilfield and airline ground support equipment and medium tactical vehicles, as well as parts and service for over-the-road trucking and intercity commercial applications. Transport Topics
(Click here for the press release.)
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