News Briefs - May 22
The Latest Headlines:
- EU Looks for Guidance on U.S. Steel Tariffs
- Trucking Executive Says Easing Congestion Crucial
- Senate GOP Rallying for Repeal of Estate Tax
- Air Association to Offer Insurance to Members
- Bandag, Michelin Reach Settlement
- Nissan Diesel Reports Another Full-Year Profit
- U.S. Oil Inventories Rise; Crude Price Falls
- Banks’ Ability to Recognize Bad Loans Cited
- FedEx Pilots to Rejoin ALPA in June
- Trucking Executive Says Easing Congestion Crucial
EU Looks for Guidance on U.S. Steel Tariffs
The European Union on Wednesday formally asked the World Trade Organization to declare a tariff on its steel shipments to the United States illegal, the Associated Press reported.The tariff could hurt trucking if it decreases the number of shipments of steel to and from seaports.
Although Wednesday’s request was blocked by the United States, AP said, it will be reconsidered on June 3, along with complaints from several other nations including Japan and South Korea.
On Tuesday, the EU released plans to place $341 million in tariffs on products ranging from cigarettes to paper and frozen vegetables if its steel industries do not get compensated for the U.S. tariff. Transport Topics
Trucking Executive Says Easing Congestion Crucial
Michael S. Card, president of Combined Transport Inc. and chairman of American Trucking Associations' Highway Policy Committee, said Tuesday a multifront assault is needed to correct the growing problem of highway traffic congestion.Speaking to the House subcommittee on Highways and Transit, Transportation and Infrastructure Committee, Card said a 1999 study estimated the cost of traffic congestion nationwide was $78 billion, representing 4.5 billion hours of wasted travel time and 6.8 billion gallons of wasted fuel.
or every minute that a truck delivery to an automobile manufacturing plant is delayed, the plant loses around $5,000, he said.
Card also noted that for every $20 spent on freight transportation, an estimated $17 will accrue to trucks. And with the number of trucks expected to increase by 31% over the 12 years, highway capacity will need to grow along with it.
A plan to reduce congestion, he said, should include efforts ranging from boosting trucking productivity, eliminating bottlenecks, promoting Intelligent Transportation Systems and encouraging telecommuting and carpooling. Transport Topics
(Click here for Card's full statement.)
Senate GOP Rallying for Repeal of Estate Tax
Senate Republicans and their allies are preparing for an all-out push to gain support for a permanent repeal of the estate tax, the Wall Street Journal reported Wednesday.A repeal of the estate tax would benefit many small, family-owned trucking outfits that are often passed from one generation to the next.
Democrats in the Senate feel right now they have a chance to beat the measure, the Journal reported.
Supporters of the bill plan to have small businessmen and farmers meet with undecided Senators to try and swing their vote, the Journal said. Transport Topics
Air Association to Offer Insurance to Members
The Air Transport Association of America said Tuesday it has joined Marsh Inc. to create a risk retention group that can offer war-risk insurance to airlines to protect them against acts of terrorism.Companies like FedEx and UPS, which are major players in trucking, also operate large fleets of cargo aircraft.
A risk retention group is a liability insurance company that is owned by its members. Typically, an RRG is created when insurance is unavailable on affordable terms.
Known as Equitime, the RRG created by ATA is designed to offer insurance to both passenger and cargo airlines at premiums roughly half that currently paid by airlines, the association said. Transport Topics
Bandag, Michelin Reach Settlement
Tire retreader Bandag Inc. said Tuesday that it has reached a settlement in its ongoing litigation with Michelin North America Inc. and Michelin Retread Technologies Inc.In its release, Bandag said all parties have been dismissed from the litigation and agreed to dismiss all financial claims.
In 1999, Bandag had filed suit against the Michelin, claiming that the tire manufacturer was trying to eliminate Bandag as a competitor in the retread business by raiding Bandag’s dealer network, misappropriating proprietary information and making false statements. (Click here for the full story.)
Michelin later countersued, contending Bandag had engaged in exclusionary conduct to keep its monopoly position. Transport Topics
(Click here for the full press release.)
Nissan Diesel Reports Another Full-Year Profit
Japanese truck maker Nissan Diesel Motor Co. reported its second consecutive full-year profit Thursday as cost cuts helped offset falling truck demand, Bloomberg reported.The company, which is 45% owned by Nissan Motor Co. and Renault SA, appears to be on its way to a third straight yearly profit due in part to the sale of shares.
Net income for fiscal year 2002 ended March 31 was $4.8 million, topping analysts’ estimates in Japan, Bloomberg said.
The company said it expects sales to remain flat in the year ahead, even after re-porting an 8.1% decline in fiscal 2002. Transport Topics
U.S. Oil Inventories Rise; Crude Price Falls
U.S. stocks of crude oil rose Wednesday for the first time in three weeks, forcing a drop in the price of oil, Bloomberg reported.The prices of diesel fuel and gasoline, used in great quantities by the trucking industry, rise and fall with the price of crude oil.
Supplies of crude rose 5.6 million barrels, or 1.8%, the American Petroleum Institute said.
Brent crude oil for July settlement fell 25 cents to $25.35 a barrel on the International Petroleum Exchange in London, and to $26.15 a barrel on the New York Mercantile Exchange. Transport Topics
Banks’ Ability to Recognize Bad Loans Cited
A 10-year economic expansion, followed by a mild recession may have caused some financial institutions to lose their ability to recognize bad loans, Federal Reserve Governor Mark Olson told the Maryland Bankers Association Tuesday.If the recession is over, the trucking industry could benefit from increased demand as businesses and consumers begin spending again. However, a tightening of loan requirements could threaten some companies in the short term.
Bloomberg News said Olson, speaking at the MBA convention in Palm Beach, Fla. said some banks have misreported financial transactions used to offset risk.
Olson said the Fed has not noticed widespread abuse, it has uncovered instances in which the financial reporting has not reflected the substance of the transaction, Bloomberg reported. Transport Topics
FedEx Pilots to Rejoin ALPA in June
Pilots for FedEx Corp. will disband their independent union and rejoin the Air Line Pilots Association, effective June 1.The ALPA executive board unanimously approved the move in a Tuesday vote. The Members of the FedEx Pilots Association voted to switch to the larger union April 1.
"Our pilots plan to use ALPA's vast resources and its highly specialized staff to advocate much-needed changes in the cargo industry," said Capt. David Webb, president of the FPA. "Beginning with enhanced security that meets the same stringent standards applied to passenger carriers and more realistic flight-time/duty-time rules that take into account the rigors of night flying."
The union is expected to begin negotiations on a new contract with FedEx by 2004.
FedEx is ranked No. 2 on the 2000-01 Transport Topics 100 list of the largest trucking companies in the United States. Transport Topics
(Click here for the full press release.)
