News Briefs - March 21
The Latest Headlines:
- Ford Halts Shipments After Defective Part Found
- BNSF President, CEO Rose Becomes New Chairman
- Tonnage Levels Down, Roadway Predicts 1Q Loss
- USFreightways to Take $70M Charge
- Federal-Mogul Increases Diesel Engine Part Line
- Conn. Bill Would Add Truck Parking
- Postal Rate Commission Likely to Approve Rate Hikes
- Recession Survivors' Stocks Seen Gaining
- Budget Group's Stock To Be Delisted
- Velocity's Shareholders OK Reverse Split
- EU Rules Against UPS
- BNSF President, CEO Rose Becomes New Chairman
Ford Halts Shipments After Defective Part Found
Ford Motor Co. said Thursday that eight of its North American assembly plants had stopped shipping vehicles to dealers because some were found to have a defective part in their four-wheel-drive systems, Reuters reported.If there is a long delay in the delivery of vehicles, it could hurt the profits of the trucking companies that do business with Ford.
Spokesman Ed Lewis said the problem was found on at least three sport utility vehicles and two pickup trucks.
BNSF President, CEO Rose Becomes New Chairman
Burlington Northern Santa Fe Corp., parent company of Burlington Northern and Santa Fe Railway Co., said Thursday that President and Chief Executive Officer Matthew Rose has been elected to replace the retiring Robert Krebs as chairman.Rose took over as president of the company in June 1999, and added the CEO title in December 2000.
Krebs joined the company in 1995 when it was created by the merger of Burlington Northern Inc. and the Santa Fe Pacific Corp., parent of the Atchison, Topeka & Santa Fe Railway Co. He will officially leave the board on April 17.
Burlington Northern agreed to merge with Canadian National Railway Co. in December 1999, but the companies called it off in July 2000 after U.S. regulators imposed a 15-month merger ban, Bloomberg said. Transport Topics
(Click here for the full press release.)
Tonnage Levels Down, Roadway Predicts 1Q Loss
Roadway Corp., the parent of less-than-truckload carrier Roadway Express, said Thursday it expects to post a first-quarter loss after tonnage levels in January hit the lowest point since 1987.While analysts had been predicting a profit of 30 cents per share, Reuters said, the Akron, Ohio-based company now expects to report a loss of 8 cents to 12 cents per share for the fiscal quarter ending March 23.
Although Roadway said it recently has seen signs of improved tonnage levels, and its truckload unit Arnold Transportation Services has seen similar levels compared with last year, it was not able to cut costs fast enough to avoid a loss for the quarter.
Roadway is ranked No. 7 in the 2000-2001 Transport Topics 100 list. Transport Topics
(Click here for the full press release.)
USFreightways to Take $70M Charge
USFreightways Corp. said Thursday that it is taking a non-cash impairment loss of $70 million in the first quarter of 2002.The impairment charge is the result of a required change in the way companies may assess goodwill and will be reported as a cumulative effect of change in accounting principle in keeping with the standards of the Financial Accounting Standards Board. USFreightways adopted the new rule on Jan. 1.
Based in Chicago, USFreightways Corp. is ranked No. 9 on the 2000-2001 Transport Topics list of the 100 largest trucking companies in the United States. Transport Topics
(Click here for the full press release.)
Federal-Mogul Increases Diesel Engine Part Line
Federal-Mogul Corp., and its subsidiary FP Diesel, plan on expanding their line of replacement parts for diesel engines through the integration of the Sealed Power parts line, the company said Wednesday.FP Diesel and Sealed Power are both manufactured and marketed by Federal-Mogul, which made the announcement about the product line expansion at the 2002 Mid-America Trucking Show in Louisville, Ky.
FP Diesel already makes and sells replacement pistons, piston rings, bearings, cylinder liners, camshafts, crankshafts, valvetrain components, gaskets, seals, fuel system products, cooling and lubrication system components, specialty chemicals and tools and complete engine overhaul kits for diesel engines. The integration of the Sealed Power line and its components is scheduled to be completed by the end of 2002. Transport Topics
(Click here for the full press release.)
Conn. Bill Would Add Truck Parking
A bill currently in the Connecticut state legislature would give trucks the go-ahead to park in commuter parking lots and roadside weigh stations, the Hartford Courant reported this week.The extra parking, trucking groups said, is needed because of a parking shortage along Interstate 95. The highway has very few rest stops, especially southbound, between Connecticut and northern New Jersey, the paper said.
The paper cited a study by the state that said an estimated 1,200 truckers cannot find any parking each night.
Passage of the bill is not a certainty, the paper said. It barely got out of the body's transportation committee, the Courant reported. Transport Topics
Postal Rate Commission Likely to Approve Rate Hikes
The Postal Rate Commission meets Friday in Washington and is expected to approve a rate increase for most classes of mail, USA Today reported.The U.S. Postal Service, expected to lose about $1.7 billion this fiscal year, estimated the increases would bring an extra $500 million a month.
The cost of a first-class stamp would rise to 37 cents from 34 cents, effective June 30. Sending a postcard would cost 23 cents -- an increase of 2 cents -- and the rates for periodicals would also go up.
The cost of Priority Mail would increase if the package was traveling a long distance, but the price may decrease if it is a short trip. The USPS would also offer discounts to commercial customers who pre-sort and bar code their mail.
The Postal Board of Governors proposed these increases on Sept. 11, just prior to the terrorist attacks. Transport Topics
Recession Survivors' Stocks Seen Gaining
Expectations of an economic recovery have led to an increase in insider stock sales of trucking companies, Bloomberg reported late Wednesday.Although thousands of smaller trucking companies folded over the past few years due to the slow economy, high fuel prices and driver shortages, the ones that survived are expected to gain market share as the recession ends. That is causing a rise in their stock prices.
Bloomberg said executives at J.B. Hunt Transport Services Inc., Heartland Express Inc. and Landstar System Inc. have all sold shares as the individual stocks have increased in the past six months. Transport Topics
Budget Group's Stock To Be Delisted
Truck and car rental company Budget Group Inc. said late Wednesday that it has received notification from the New York Stock Exchange that trading of its stock will be suspended before the opening of the market on March 28.The NYSE ordered the delisting after the company's stock failed to meet several requirements of the exchange. Among those requirements were holding a price per share of at least $1 over a 30-day period and having a total market capitalization and shareholders' equity of more than $50 million each.
The company pointed to the weak economy in the last part of 2001 as one of the reasons for its struggles.
"The weak economy and the events of Sept.11 have adversely affected the company's ability to meet the share price and market capitalization criteria," the company said. "Budget Group anticipates that its stock will continue to trade on the over-the-counter bulletin board on or before March 28."
Budget Group owns Budget Rent a Car Corporation and Ryder TRS Inc. Budget is the world's third largest car and truck rental system and Ryder TRS is the nation's second largest consumer truck rental company, the company claimed. Transport Topics
(Click here for the full press release.)
Velocity's Shareholders OK Reverse Split
Velocity Express Corp. said Thursday that its shareholders have approved proposals to increase its equity by $22 million and to move ahead with a reverse stock split at the discretion of the board.The Minneapolis-based company said the previously announced proposals are designed to strengthen its balance sheet and attract institutional investors.
Velocity Express, formerly known as United Shipping & Technology, is ranked No. 43 on the 2000-2001 Transport Topics 100 list. Transport Topics
(Click here for the full press release.)
EU Rules Against UPS
The European Court of Justice rejected claims by United Parcel Service on Wednesday that purchase of DHL International by Deutsche Post was illegal, the Journal of Commerce reported.PS has first filed complaints with European regulators in 1998, saying the deal would give Deutsche Post a dominant position in the express mail delivery market. The EU head office rejected UPS' complaint in June 1998, but the Atlanta-based company later began legal action in the EU high court.
The court said in its decision that UPS has not proved there had been any abusive practices and noted that Deutsche Post did not use profits from its national postal monopoly to fund the DHL purchase.
UPS is ranked No. 1 on the 2000-2001 Transport Topics 100 list. Transport Topics
