News Briefs - May 29
The Latest Headlines:
- Crude Oil Price Rises as Gasoline Supplies Fall
- R.I. Senate Votes to Allow Seat Belt Tickets
- Hino Expects Profit to Grow in Coming Years
- Jobless Claims Fall by 9,000 in Latest Week
- Shippers’ Surcharge Money Often Bypasses Drivers, OOIDA Says
- R.I. Senate Votes to Allow Seat Belt Tickets
Crude Oil Price Rises as Gasoline Supplies Fall
Crude oil price had their biggest increase in two weeks on Thursday afternoon after an Energy Department report showed that U.S. gasoline supplies fell 3.4 million barrels last week while oil inventories rose 1.1 million barrels.Oil for July delivery was up 52 cents to $29.10 a barrel on the New York Mercantile Exchange, Bloomberg said, the biggest one-day increase since May 14.
Gasoline inventories declined as wholesalers and retail filling stations stocked up before the Memorial Day holiday weekend. Bloomberg said, leaving supplies at a five-week low of 205 million barrels.
Meanwhile, U.S. stockpiles of crude oil were at 286.2 million barrels in the week ended May 23, 10% smaller than a year earlier. DOE said. Transport Topics
R.I. Senate Votes to Allow Seat Belt Tickets
The Rhode Island Senate voted Wednesday to allow the police to pull over and ticket drivers simply if they or their passengers are not buckled up, the Providence Journal reported.Currently, a driver must be stopped for another violation first before the police can issue a seat-belt ticket.
The bill would provide for a warning-only period from July 1 through the end of this year, and allow for the tickets after that. The fines for unbelted adults would be reduced to $30 from $75, the article said.
Although similar proposals have stalled in the House this year, officials said Rhode Island could be in line about $4 million annually over the next six years in additional federal money if it passes the measure. Transport Topics
Hino Expects Profit to Grow in Coming Years
Hino Motors Ltd., Japan's largest truck maker, said it expected operating profit to more than double in the fiscal year ending March 2006 from the year just ended as it raises sales in markets such as the United States and China, Bloomberg reported Thursday.Total overseas unit sales are expected to surge 62% to 41,700, Hino said. Sales in Japan will probably rise 25% to 43,500 units.
Hino, like other truck makers, are investing with foreign alliance partners to develop reduced emission technology for diesel engines to win new customers as governments across the globe strengthen environmental regulations, Bloomberg said. Transport Topics
Jobless Claims Fall by 9,000 in Latest Week
The Labor Department said Thursday initial claims for state unemployment insurance benefits fell to 424,000 in the week ended May 24, compared with a revised 433,000 for the prior week. This was the 15th straight week claims exceeded 400,000, a number some economists consider a sign of a weak labor market, Reuters said.Claims have now fallen four of the last five weeks. Economists expected the number of initial claims to decline to 420,000 from the previous week's initially reported 428,000, Bloomberg said.
Continued positive reports on the employment market often bolster consumer confidence and can increase the demand for trucking services.
The fall in state claims nudged the four-week moving average down to 427,000 from 434,250 in the prior week. This average has remained above the key 400,000 mark for 13 weeks. Transport Topics
Shippers’ Surcharge Money Often Bypasses Drivers, OOIDA Says
While fuel surcharges do help carriers in times of rising fuel costs, sometimes that added revenue does not make it down to the independent driver, an official at the Owner-Operator Independent Drivers Association said.Todd Spencer, OOIDA’s executive vice president, said that not all companies pass along fuel surcharge revenue to the owner-operators with which they work. “I would bet in the area of 60% [of owner-operators] will see some [surcharge revenue] when prices are rising,” Spencer said.
He said that one of the biggest problems owner-operators have is that there is no legal requirement for carriers and brokers to pass surcharge revenue on to the driver. Particularly when a driver is leased to a carrier, Spencer said, that carrier can withhold some or all of the surcharge it collects from shippers.
Kane Freight Lines tries to get the fuel surcharge revenue “to those that need the benefit,” Business Development Manager David Jadick said. The company calculates what surcharges it has collected and distributes revenue to owner-operators, Jadick said. He added that sometimes it is tricky because not all of its contractors are paid the same way. Some are paid on a per-mile basis and others receive a flat rate.
Vitran Express uses owner-operators as backups in case the company has an overflow, according to Tom Nagel, a company vice president.
When the Indianapolis-based carrier does contract with an owner-operator, that driver will quote Vitran a price for the trip that includes fuel costs. Sean McNally
This story appeared in the May 26 print edition of Transport Topics.
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