News Briefs - March 25
The Latest Headlines:
- TCA Supports Senate Fuel Surcharge Bill
- British Postal Service Cutting Jobs
- NABE Panel Says Recovery Is Underway
- Existing Homes Sales Slip 2.8% in February
- Some California Refiners May Use Ethanol
- Canada Appeals U.S. Lumber Tariffs to WTO
- Truck Makers to Cooperate on Marketing, Research
- Federal Spending Seen Aiding Recovery
- Cannon Makes Cost-Cutting Moves
- British Postal Service Cutting Jobs
TCA Supports Senate Fuel Surcharge Bill
The Truckload Carriers Association's Board of Directors has recently voted to support mandatory fuel surcharge legislation introduced in the U.S. Senate by John Kerry (D-Ma.) and Kit Bond (R-Mo.).he measure was originally backed by the Owner-Operator Independent Drivers Association.
The legislation would mandate a fuel surcharge for those not already paying one when the price of diesel rises above $1.15 per gallon. However, TCA said on its Web site this bill would only require a carrier to pay its drivers if the carrier is able to collect the surcharge from its shipper.
British Postal Service Cutting Jobs
Consignia, the government-owned public company which handles Britain's mail deliveries, said Monday it will cut 15,000 jobs, or about 7.5% of its work force, and scale back its package delivery division that was competing with United Parcel Service and FedEx Corp., the Journal of Commerce reported.In all, the three-year restructuring plan will save the company $1.7 billion.
The company said about 6,700 employees of Parcelforce Worldwide would be fired as it readjusts its focus to express deliveries and basic parcel services. JoC said this illustrates an inability to compete with European rivals such as Deutsche Post World Net, which have become competitors UPS and FedEx.
The company also plans to close four mail distribution centers and to cut back on train and truck transport of mail. Transport Topics
NABE Panel Says Recovery Is Underway
A panel of U.S. economists expressed confidence that a sustainable economic recovery is underway, Reuters reported Monday.A general economic recovery would be a boost to the trucking industry, which relies on orders and commercial activity for much of its revenue.
A survey of a panel by the National Association for Business Economics show that 67% of economists said a double-dip recession was unlikely, Reuters reported. A double-dip recession is a condition where growth resumes briefly before falling again later.
Nine percent of those surveyed placed the odds of a double-dip recession at better than 50/50, Reuters reported.
The NABE did express concern, however, particularly about the level of consumer and corporate debt, excessive growth in government spending and taxes, overcapacity of corporate spending and the large federal deficit, Reuters said. Transport Topics
Existing Homes Sales Slip 2.8% in February
The number of previously owned home dipped 2.8% in February, the National Association of Realtors said Monday morning.The rate of existing home sales can have an impact on the demand for dry van freight trucking services as buyers contract to have furniture and appliances moved into their new homes.
Despite the dip, the adjusted annual pace of 5.88 million homes was still more than 500,000-home pace of the same month last year.
Analysts had expected existing home sales to fall to a rate of 5.54 million from January’s record pace of 6.05 million, Bloomberg reported. Transport Topics
Some California Refiners May Use Ethanol
Although the state of California has recently postponed a ban on the gasoline additive MTBE until 2004, some of the largest refiners will likely switch to ethanol as early as next year anyway, the Wall Street Journal reported Monday.While the biggest over-the-road trucks use diesel fuel, a significant number of smaller commercial trucks run on gasoline. California has the highest gasoline prices in the country due in part to environmental regulations.
The switch could create short-term price surges, the article said, because it would require more gasoline in the market. MTBE adds more volume to gasoline than ethanol.
ChevronTexaco Corp. said it plans to move forward with the switch to ethanol, while Exxon Mobil Corp., Shell Oil Co. and BP PLC said they are prepared to switch but are evaluating their options. Transport Topics
Canada Appeals U.S. Lumber Tariffs to WTO
Calling the United States’ decision to impose tariffs averaging 29% on much of its lumber “obscene,” Canada is joining a list of nations protesting protective trade actions taken by the United States this month, the Wall Street Journal reported Sunday.If the tariffs create a trade war, or if prices for products made from wood rise too high, it will hurt the trucking companies that ship lumber to factories or finished goods to stores.
Canada has already appealed the decision by the U.S. to the World Trade Organization and will ask that a panel within the North American Free Trade Agreement be formed to investigate the ruling.
The European Union, Japan and Australia also has appealed to WTO over the high tariffs on imported put in place by the United States earlier this month. Transport Topics
Truck Makers to Cooperate on Marketing, Research
Truck manufacturers Scania AB and Hino Motors Ltd. said Monday that they have aligned with each other to work on marketing and research projects, Bloomberg reported.Hino is the largest heavy truck maker in Japan and Scania is the No. 4 truck manufacturer in Europe. The two companies will team up to develop cleaner engines. Hino will also market Scania's tractors in Japan, Bloomberg said.
This is the second major alliance Hino has been involved in during the past week. On March 19, Hino said it was cooperating with the other three major truck manufacturers to create new emissions standards. (Click here for the related coverage.) Transport Topics
Federal Spending Seen Aiding Recovery
Despite the failure of Congress to immediately pass an economic stimulus package after the Sept. 11 terrorist attacks, government spending may have helped pull the U.S. economy out of its recession, the New York Times reported Saturday.Some feared failure to pass a stimulus bill would doom the economy to a lengthy recession, the Times said. However during the political battle, it went relatively unnoticed that the government spent more on highway and school construction, unemployment, Medicaid and public works projects than the original stimulus package would have spent.
Government spending increased as a result of several uncoordinated decision and serendipitous windfalls, the Times said. That spending in conjunction with billions in income tax cuts are expected to further stimulate the economy.
The Times cited an economist at Economy.com, a forecasting and data gathering firm, as saying that it could be reasonably argued that not only is the recession over, but that government spending played a big part in ending it. Transport Topics
Cannon Makes Cost-Cutting Moves
Truckload carrier Cannon Express said late Friday that it would cut 50 corporate, non-driver jobs.The company said the cuts were made based on the advice of management and consultants.
As part of the cost cutting, Dean Cannon, president and Rose Marie Cannon, secretary-treasurer of the company, have decided to forgo their salaries and allow offices of the Cannon family to be used by the Springdale, Ark.-based company indefinitely for no charge. Transport Topics
(Click here for the full press release.)
