News Briefs - March 15
The Latest Headlines:
- Canary Urges Government-Private Partnership
- Referendum Set on Washington State Fuel Tax
- Ga. Interstate Reopened After Wreck
- Snowstorm Moves Across Plains States
- Fed's Next Meeting May be a Turning Point, Paper Says
- MTBE Ban Seen as Risk to Cause Fuel Shortage
- Yellow Announces Stock Offering, Regional Spinoff
- Report Criticizes USPS Customer Service
- Year-to-Date Rail Intermodal Down 0.3%
- OPEC to Maintain Output Cuts
- Navistar to Issue $200M in Notes
- Referendum Set on Washington State Fuel Tax
Canary Urges Government-Private Partnership
The goals of improving trucking productivity and improving highway safety are not mutually exclusive, William J. Canary, president and chief executive officer of the American Trucking Associations, said Thursday.In remarks prepared for the Transportation Resource Board’s National Freight Forum, Canary said one major problem in achieving these goals is a “disconnect” between the reality of the freight transportation system and the public policy decisions that impact it.
To rectify this problem, Canary said the freight transportation sector needs to engage in a national campaign to promote a partnership between the government and industry to improve the nation’s transportation system. Transport Topic
Referendum Set on Washington State Fuel Tax
Months of debate in Washington state came to an end Friday as legislators approved a plan to hold a referendum on increasing the state’s gasoline tax to fund $7.7 billion in transportation improvements, Bloomberg reported Friday.The state’s House and Senate approved the plan to let the voters decide on the increase of 9 cents per gallon late Thursday, just before the end of their 60-day legislative sessions, Bloomberg said.
The statewide plan would increase the gasoline tax from 23 cents to 32 cents per gallon, the Seattle Post-Intelligencer said.
It also would raise the weight fee for trucks by 30%, levy a 1% sales tax on new and used vehicles and transfer sales-tax revenues from new highway construction from the state's general fund to the transportation budget beginning in 2006.
The bill would also allow the state to sell as much as $4.5 billion in bonds for highway construction, the wire said.
Major manufacturers in the state like Boeing Co. and Microsoft Corp. say that the state needs to upgrade its transportation networks to maintain economic growth and reduce traffic, Bloomberg reported.
The vote will be on the ballot for Washington’s general election in November. Transport Topics
Ga. Interstate Reopened After Wreck
Nearly 12 hours after a horrific 125-vehicle pileup forced its closure, Interstate 75 in northern Georgia was reopened to traffic in both directions, authorities reported.The accident, which claimed four lives and caused at least 39 injuries, was blamed on dense fog that limited visibility. (Click here for the earlier story.)
A spokesperson for the Georgia Department of Transportation told Transport Topics that the southbound lanes of the highway were reopened at about 3 p.m. Thursday, but the northbound section remained closed until shortly after 1 a.m. Friday.
The crash also caused lengthy delays on alternate routes in the area. Transport Topics
Snowstorm Moves Across Plains States
At least two people died as freezing rain and more than a foot of snow swept through parts of Iowa, Minnesota, Wisconsin and South Dakota Thursday night and Friday, news services reported.The storm left in its wake power outages and hundreds of traffic accidents.
About 300 flights were canceled on Thursday evening at the Minneapolis-St. Paul International Airport and 350 school districts in southern Minnesota and western Wisconsin were closed, the Associated Press said.
The storm is expected to ease by Friday night. Transport Topics
Fed's Next Meeting May be a Turning Point, Paper Says
With evidence building that the U.S. economy is recovering, next week's meeting of Federal Reserve policy makers could lay the groundwork for a gradual shift to rate increases, the Wall Street Journal reported Friday.Higher interest rates can increase monthly interest expenses for some trucking operations, if they carry large floating-rate debt on their equipment.
The Fed cut interest rates 11 times last year to help spur the economy.
Although the Fed is not expected to change interest rates at Tuesday's meeting, a statement saying that the risks to the economy are now balanced between weakness and inflation could signal a coming shift.
Still, with a favorable inflation outlook, and questions about consumer demand, the Fed may decide to be cautious with rate increases, the article said. Transport Topics
MTBE Ban Seen as Risk to Cause Fuel Shortage
A research firm has recommended that California delay enacting a ban on the additive MTBE from gasoline until November 2005 or risk supply shortages and price spikes, the Wall Street Journal reported Friday.Although long-haul trucking mainly uses diesel fuel, a large segment is carried out in gasoline-burning vehicles.
The state is still planning on phasing out the MTBE by the end of the year, but the report by Stillwater Associates said that would cause a shortfall of 55,000 to 1000.000 barrels a day. Waiting until 2005 would give the state a chance to expand its refinery capacity, the article said.
Environmentalists took issue with this report, saying that a delay could mean that more groundwater becomes contaminated by the additive. Transport Topics
Yellow Announces Stock Offering, Regional Spinoff
Yellow Corp. said late Thursday that it is planning an offering of 3.4 million shares of common stock.In addition to the offering, Yellow will allow its underwriters to purchase up to 510,000 additional shares to cover over-allotments. The offering is being made through Credit Suisse First Boston and Deutsche Banc Alex Brown.
Also Thursday, the Overland Park, Kan.-based trucking company said it has received authorization from its board of directors to take steps toward spinning off SCS Transportation, the holding company for its regional operating companies, Saia Motor Freight Inc. and Jevic Transportation. The spin off will be accomplished by distributing all of SCS's stock to shareholders, the company said.
The action should be completed by the end of 2002.
"With the anticipated improvements in the economy, the timing is right to spin off the regional business from Yellow Corporation so that both entities can pursue independent growth strategies that will increase shareholder value," said Bill Zollars, chairman and chief executive officer.
Yellow Corp. is ranked No. 5 in the 2000-2001 Transport Topics list of 100 biggest trucking companies in the United States. Transport Topics
(Click here for the full press release on the stock offering.)
(Click here for the full press release on the spin off.)
Report Criticizes USPS Customer Service
As the United States Postal Service pushes for price increases for its services, a reported by the Office of the Consumer Advocate said its customer service is unacceptable, the Wall Street Journal reported Friday.Long lines at its branches and significant delays in the delivery of Priority Mail were among the group's main complaints, the article said.
The Postal Service declined to comment on the report, but has asked the Postal Rate Commission to remove the report from the record so it can not be considered when deciding on a possible postage-rate increase in June.
The report recommends that struggling service should increase the number of postal clerks and change its advertising of Priority Mail so consumers have more realistic expectations, the Journal said. Transport Topics
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Year-to-Date Rail Intermodal Down 0.3%
Loadings of trailers and containers on the nation's railroads totaled 1644,636 in the first 10 weeks of the year, which was 0.3% behind the 1,649,295 loaded in the same period last year, the Association of American Railroads reported Thursday.Intermodal is the segment of the railroad business most directly competitive with long-haul trucking.
During the 10-week period, trailer loadings were down 7.4% from the preceding year, while container loadings were up 2.8%
For the week ended March 9, trailer and container loadings totaled 163,960, a 2.1% drop from the 167,405 loaded in the corresponding week in 2001.
Trailer loadings were down 4.2%, while container loadings were down 1.1%. Transport Topics
OPEC to Maintain Output Cuts
The Organization of Petroleum Exporting Countries agreed Friday to maintain output curbs on the production of crude oil, seeking to force the price up into the cartel's preferred price range, Reuters reported.Prices for gasoline and diesel fuel, both used in large quantities by commercial trucks, tend to fluctuate with the pride of crude oil.
OPEC hopes to establish a firm price for its export basket in a $22-$28 a barrel range.
The cartel's ministers will meet again in mid-June, but are already sending mixed signals as to whether they will increase output at that time. Transport Topics
Navistar to Issue $200M in Notes
Truck maker Navistar International Corp. said Friday that its finance subsidiary Navistar Financial will issue $200 million in corporate notes due 2009.The Warrenville, Ill.-based company said in a release that the proceeds will be used for general corporate purposes.
On Wednesday, the corporate credit rating of Navistar was cut to junk status by Standard & Poor's. Transport Topics
(Click here for the press release.)
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