News Briefs - June 5
The Latest Headlines:
- $54 Million in Grants Headed to U.S.-Mexico Border
- FedEx Sees Growth in Ground Unit
- ISM Services Index Rises Again
- Cargo Airport to Serve Twin Cities Eyed
- Fed Not in Hurry to Raise Rates, Analysts Say
- Oil Prices Slide; U.S. Recovery Questioned
- Velocity's Chairman Buys 61,000 Shares of Stock
- Government Commits $3 Million to Rebuild I-40 Bridge
- QDI to Operate Bulk Terminal for NS
- FedEx Sees Growth in Ground Unit
$54 Million in Grants Headed to U.S.-Mexico Border
U.S. Transportation Secretary Norman Mineta announced Wednesday the allotment of $54 million in grants to ensure the safe operation of Mexican trucks within the U.S. and to facilitate inspection and authorization at the border.This announcement comes as the expected date for Mexican trucks to gain access to U.S. roads under the North American Free Trade Agreement draws closer. The Department of Transportation said it hopes to have the border open by mid-summer.
The grants will go to Texas, California, New Mexico and Arizona to improve the flow of traffic across the border and to build and improve truck safety inspection stations. Texas will receive $40.8 million to construct eight new commercial motor vehicle safety inspection facilities and complete other safety projects, the DOT said.
FedEx Sees Growth in Ground Unit
FedEx Corp. said its ground shipping unit will continue to grow as businesses shift to the lower-cost delivery options, Bloomberg reported Wednesday.The Memphis, Tenn.-based company, which reported an 11% increase in net income in its fiscal third quarter ended Feb. 28, will expand its coverage to all U.S. addresses by the end of the year.
Chairman Fred Smith said the company is gaining some business from the U.S. Postal Service and United Parcel Service as FedEx offers new products and as more customers switch from premium services like air to less expensive truck shipments.
Fourth-quarter shipments at FedEx Ground are expected to rise about 16%, Bloomberg said.
FedEx is ranked No. 2 in the 2000-2001 Transport Topics 100 list of the largest U.S. trucking companies. Transport Topics
ISM Services Index Rises Again
The U.S. service industry grew for the fourth month in a row in May, according to the index compiled by the Institute for Supply Management.Service companies -- which include trucking -- account for about five-sixths of the U.S. economy.
The institute said Wednesday its non-manufacturing businesses rose to 60.1 from 55.3 in April. Economists had expected the services index to rise to 56. Bloomberg said.
Readings over 50 indicate expansion. Transport Topics
Cargo Airport to Serve Twin Cities Eyed
The cities of Minneapolis and St. Paul, Minn., are considering converting a regional airport in St. Cloud, Minn. into an international cargo airport and distribution center, the Associated Press reported Monday.Currently, cargo in and out of the Twin Cities is carried mostly via truck to Chicago. While the construction of a cargo hub would be intended to convert that ground traffic to air, trucks would still be involved in pickup and delivery services.
In addition, the AP said a consulting group had warned businesses might move elsewhere because of current delays in the movement of overseas freight from Minneapolis-St. Paul International Airport.
While passenger traffic into the airport has increased steadily, air cargo shipments have remained flat, AP reported.
However, the consulting group said putting the airport outside the Twin Cities would free up more space for passenger flights and alleviate delays in cargo shipments, AP reported. Transport Topics
Fed Not in Hurry to Raise Rates, Analysts Say
Fresh comments from Federal Reserve Chairman Alan Greenspan on Tuesday have most analysts believing the Fed won't raise interest rates before its August meeting, the Associated Press reported.After pushing interest rates to a 40-year low of 1.75% last year to fight the recession and the shocks from the Sept. 11 terrorist attacks, the Fed has left rates unchanged so far this year. Low interest rates can spark spending and increase the demand for trucking services.
Speaking as part of a panel discussion with other central bankers, Greenspan said that U.S. economic prospects continued to look brighter, but growth in coming months will slow from the January-March pace. Analysts told AP rates will go up once unemployment stops rising.
On Tuesday, the Bank of Canada boosted its key interest rate by a quarter-point and warned that further rate hikes are coming, AP said. Transport Topics
Oil Prices Slide; U.S. Recovery Questioned
World prices for crude oil plunged to a 2½ -month low Wednesday, Bloomberg reported, citing concerns that the U.S. economic recovery may not be as robust as forecast.Crude oil is distilled into diesel fuel and gasoline, so falling crude oil prices are good news for the trucking industry.
The American Petroleum Institute said U.S. oil supplies rose 2%, after seven of nine analysts in a Bloomberg survey had predicted a decline.
Crude oil prices dropped 61 cents or 2.4% to $24.72 per barrel in electronic trading on the New York Mercantile Exchange on Tuesday, Bloomberg reported.
On London's International Petroleum Exchange, the price of Brent crude oil fell 45 cents to $24 a barrel, the lowest since March 13.
The U.S. economy expanded at a 5.6% annual rate in the first quarter, Bloomberg said, which was 0.2% slower than expected.
The slower economic growth combined with plans of non-OPEC countries to boost output in the third quarter suggests prices will continue to fall, Bloomberg reported. Transport Topics
Velocity's Chairman Buys 61,000 Shares of Stock
Velocity Express Corp., a provider of same-day logistics services, said Tuesday that Chairman Vincent Wasik recently bought 61,000 shares of company stock on the open market.To date, Wasik has bought 67,260 shares of the company at market prices. With the purchase, Wasik, along with several top company executives, owns 21% of Velocity's capital stock.
In its most recent quarter ended March 30, the Minneapolis-based company reported a net loss of $180,000 on revenue of $81.5 million.
Velocity Express, previously known United Shipping & Technology, is ranked No. 43 on the Transport Topics 100 list of the largest U.S. trucking companies. Transport Topics
(Click here for the full press release.)
Government Commits $3 Million to Rebuild I-40 Bridge
U.S. Transportation Secretary Norman Mineta said Tuesday the Federal Highway Administration has committed $3 million in federal emergency relief funds to Oklahoma to rebuild the Interstate-40 Bridge."I-40 is one of this nation's busiest east-west routes, and we will continue working closely with the state of Oklahoma to ensure that the bridge is reconstructed quickly," Mineta said.
The bridge, which collapsed May 26 after a barge on the Arkansas River hit a bridge support, was 100 miles east of Oklahoma City and carried about 20,000 vehicles a day. Up to 39% of traffic was trucks, Transport Topics previously reported.
Mineta said new technology means the bridge could be reconstructed in about half the normal six-month time. Transport Topics
(Click here for the full press release.)
QDI to Operate Bulk Terminal for NS
With the opening of a new bulk transfer terminal in Augusta, Ga. Norfolk Southern Railway continues an association with Quality Distribution Inc., a company headed by a former top NS executive, Tom Finkbiner.inkbiner, who resigned as Vice President Intermodal at NS in late 1999, is now chairman and chief executive officer of Quality Distribution Inc.
Under the agreement announced by NS Monday, Quality Terminals, a subsidiary of QDI, will operate the terminal, which will handle the transfer of bulk products, such as plastic pellets and liquid sweeteners, from one mode of transportation to another.
Quality currently operates NS terminals at Columbus, Ohio and Spartanburg, S.C.
The Augusta terminal has 44 car spots with separate tracks for food products and can handle both dry and liquid bulk products. Transport Topics
