News Briefs - July 29
The Latest Headlines:
- FHA Loans More Than $900 Million to Texas
- Amtrak Train Derails Near Washington
- Budget Group Files for Chapter 11
- Cannon Retains Financial Advisers
- Oklahoma Bridge Reopening to Traffic
- WTO Rules U.S. Erred in Lumber Tariff
- MAN Expects to Meet 2002 Forecast
- Potential Ohio Turnpike Strike Would Affect Many Truckers
- Airborne Cites Ground Business in Gains
- Maine Trucking Company Shuts Down
- Gasoline Price Rises, Lundberg Survey Finds
- Bush Officials Optimistic on Economy
- Amtrak Train Derails Near Washington
FHA Loans More Than $900 Million to Texas
Transportation Secretary Norman Y. Mineta said Monday the Federal Highway Administration has reached a deal with the Texas Transportation Commission on a $916.76 million loan.This will provide funding for the $3.6 billion first phase of the Central Texas Turnpike Project, which is a toll highway facility in Austin, Texas, and around the central part of the state.
"The investments we are making in Texas and across the country will provide an economic boost while improving the transportation infrastructure, all at a cost savings to the taxpayer," Mineta said in a Department of Transportation release. Transport Topics
Amtrak Train Derails Near Washington
An Amtrak train traveling from Chicago to Washington derailed on Monday about 10 miles from its destination, the Associated Press reported.The accident happened in the Kensington, Md. area, near Connecticut Avenue, a major through street that connects Washington with the Capital Beltway.
An Amtrak spokeswoman said the train derailed around 2:15 p.m. local time, AP said. Transport Topics
Budget Group Files for Chapter 11
Car and truck rental company Budget Group Inc. filed for Chapter 11 bankruptcy protection Monday as part of its previously announced recapitalization plan.The voluntary filing will allow Budget, the world’s third-largest car and truck rental system to speed up its plan to reduce non-vehicle debt and receive new capital investment while it maintains normal operations, the company said.
Budget secured a $750 million commitment for vehicle financing to maintain and expand its vehicle fleet. Additionally, the Lisle, Ill.-based firm got a commitment for up to $100 million of debtor-in-possession financing for fleet financing and domestic day-to-day operations.
Budget operates a car rental company under the name Budget Rent A Car Corp. and truck rental division under the name of Ryder TRS Inc. – which is the No. 2 consumer truck rental company in the country.
There is no connection to Ryder System Inc., a commercial truck leasing and logistics services company, which sold its consumer truck rental operation to Budget in 1996 Transport Topics
(Click here for the full press release.)
(Click here for Ryder System's press release.)
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Cannon Retains Financial Advisers
Truckload carrier Cannon Express Inc. said Monday that it has engaged the services of financial services firm CFOex Inc. to assist in improving its financial and operational positions.Based in Knoxville, Tenn., CFOex was founded and is headed by Bruce Jones, the former chief financial officer of J.B. Hunt Transport Services, and serves on the boards of - or assists in the direction of - several trucking firms.
Cannon Chairman, Dean Cannon, said that CFOex has a “unique understanding of the issues facing trucking companies in the current environment and have provided successful financial direction for a number of carriers.” Transport Topics
(Click here for the full press release.)
Oklahoma Bridge Reopening to Traffic
The Interstate 40 bridge in Oklahoma, which collapsed on May 26 after a towboat slammed into it, was to reopen to traffic Monday, the Associated Press reported.The bridge is located 100 miles east of Oklahoma City, and prior to the accident, carried about 20,000 vehicles a day. Up to 39% of traffic was trucks.
Crews finished repairs more than a week ahead of schedule, the story said. Since the accident, cars and trucks have been rerouted each day through small towns.
The cost of the construction project is estimated at $30 million, twice the original estimate, AP said. Transport Topics
WTO Rules U.S. Erred in Lumber Tariff
The World Trade Organization said Friday that the United States made a mistake in instituting a tariff on Canadian softwood lumber this spring, the Associated Press reported.Trucks carry a significant amount of lumber.
The ruling was hailed by Canada and the United States as a victory, AP said. Canada hopes the decision will be a stepping stone to reversing the tariff the U.S. approved last year. At the same time, the U.S. said the ruling was a victory for it because it called Canada's system of letting lumber mills cut from public lands a subsidy - one the U.S. has the right to counter act, AP reported.
Nearly 90% of Canadian timber land is owned by the government, which allows logging firms to cut trees for a fee. The U.S claimed the fee was artificially low and amounted to subsidization of the Canadian timber industry, AP said.
Crossborder lumber haulers will likely see some impact one way or the other, depending on how the U.S. and Canada sort out their dispute. Transport Topics
MAN Expects to Meet 2002 Forecast
Germany truck maker MAN AG again said Monday that full-year pretax profit will improve over last year, Bloomberg reported Monday.The company said it has no plans to issue a profit warning and disputed a published report it would fail to meet its 2002 forecast.
Despite sluggish growth, MAN said it has scaled back production and reduced its workforce to cut costs, Bloomberg reported. Transport Topics
Potential Ohio Turnpike Strike Would Affect Many Truckers
A potential strike by Ohio Turnpike toll collectors and maintenance workers could mean longer trips for truckers who haul goods across the Midwest, the Akron Beacon Journal reported Friday.The Ohio Turnpike is a major corridor between Chicago and the East Coast.
About 900 workers, represented by the Teamsters union, are seeking a new contract and have threatened to strike by Labor Day without it. Since truck drivers represented by the Teamsters have the right to refuse to cross picket lines, they would probably choose other routes, cutting toll revenue and increasing traffic on other highways, the story said.
The turnpike commission said the turnpike would remain open if there is a strike.
The Akron, Ohio area is home to many Teamster truck terminals and freight docks, including Roadway Express, Yellow Transportation, Consolidated Freightways, USF Holland and United Parcel Service, the story said. Transport Topics
Airborne Cites Ground Business in Gains
Airborne Inc. Monday cited cost controls and expanded ground delivery business for producing second-quarter profits of $457, 000, or 1 cent per share, compared with a net loss of 12 cents per share last year.The result for the second quarter, which ended June 30, included a nonrecurring restructuring charge of $2.3 million, or 3 cents a share after tax.
The Seattle based parent company to Airborne Express reported first-half income of $5.7 million or 12 cents per share, compared with a net loss of $23.4 million or 48 cents per share for the corresponding period of 2001.
"The ground delivery service is driving shipment volume growth, thereby changing our total shipment mix," said Carl Donaway, chairman and chief executive officer of Airborne. "Although these deferred shipments generate lower yields than air shipments, ground delivery allows us to enhance productivity and leverage our infrastructure. The growth in GDS has been particularly important during this time when air volumes have continued to decline throughout the industry." Transport Topics
(Click here for the press release.)
Maine Trucking Company Shuts Down
John Michaud, the president of Maine-based L & M Trucking Corp., agreed to permanently shut down operations after pleading guilty to falsifying records, the Associated Press reported Thursday.Michaud was sentenced in federal court to three years probation and a $2,000 fine. The charges stemmed from alleged attempts to evade federal and state regulations on the maximum length of shifts truck drivers can work, AP said.
Contacted by phone, Michaud confirmed to Transport Topics that L&M is closing but declined to discuss the matter further.
L & M employed four drivers and operated three trucks and five trailers, AP said. Transport Topics
Gasoline Price Rises, Lundberg Survey Finds
The average price of gasoline, including all grades and taxes, was about $1.46 per gallon on Friday, an increase of 1.68 cents over the past two weeks, according to the Lundberg survey of 8,000 stations nationwide.Though the majority of commercial trucking runs on diesel fuel, gasoline is still an important fuel to the industry.
The average pump price is now nearly identical to year-ago levels, the Associated Press said.
Analyst Trilby Lundberg said the higher price reflects a closer balance between supply and demand and continued crude oil price strengths, AP reported.
The national weighted average price of gasoline at self-serve pumps was about $1.43 per gallon for regular, $1.53 for mid-grade and $1.61 for premium, the survey found. Transport Topics
Bush Officials Optimistic on Economy
Two Bush administration officials said Saturday and Sunday that the U.S. economy is fundamentally sound, the Associated Press reported.Trucking companies will see an increase in business as the economy grows.
Treasury Secretary Paul O'Neill Sunday pointed to the positive reports of strong second-quarter earnings reports and productivity growth as among the reasons for his optimism and said real growth is taking place.
This came a day after Commerce Secretary Donald Evans said in a television interview the economy is doing "surprisingly well," considering the events of the past 18 months, including the Sept. 11 terrorist attacks and the decline in business investment spending, AP said.
Evans also noted the economy is expanding, although the pace of the expansion may be slower then some expected. The overhaul of corporate regulations passed by Congress - which Bush has promised to sign - should restore confidence in the markets and U.S. financial system, he said. Transport Topics
