News Briefs - Oct. 10
The Latest Headlines:
- Plan to Revive CF Seen Doomed
- Import Prices Rose 0.7% in Sept.
- U.S. Initial Jobless Claims Fell 40,000 Last Week
- Crude Oil Price Falls as Iraq Makes Overture
- Old Dominion Plans Stock Offering
- ATA Reaffirms Call for Speeding Crackdown
- Import Prices Rose 0.7% in Sept.
Plan to Revive CF Seen Doomed
A plan by a group of Texas investors to buy Consolidated Freightways' assets is headed for failure, analysts said, mainly because a reconstituted CF would have difficulty winning back customers.Officials of Rollin' International presented a $500-million plan to buy and resurrect the 73-year-old less-than-truckload carrier at an Oct. 9 meeting with Consolidated creditors in Los Angeles, said Frank Snell, a company spokesman.
CF's creditors will make a recommendation to the court overseeing the company's bankruptcy.
Rollin', created specifically to buy CF, would take possession of Consolidated's equipment, terminals and airfreight division, Snell said. The company would hire Teamster drivers and take on CF's pension liability, Snell said.
Tom Albrecht, an analyst at BB & T in Richmond, Va., said working out details over financing and labor agreements was an immediate obstacle to the company's success and he questioned whether shippers would be willing to give business back to a reformed CF.
"Shippers are going to be leery of giving freight back to CF," Albrect said, adding that competing LTL carriers could cut prices in lanes where CF attempted to restart as a way of keeping a new competitor out of the market. Daniel L. Whitten
Import Prices Rose 0.7% in Sept.
The price of goods imported into the United States rose 0.7% in September -- their third straight increase, the Labor Department said Thursday.Higher prices for imports can hurt truckers who carry goods inland from ports to stores and warehouses.
Excluding the volatile market for oil products, import prices rose 0.2%. Concerns about a war in Iraq pushed oil prices higher during the ninth month of the year, Labor said.
Analysts told Bloomberg that rising oil prices can damage the economic recovery by diverting money from other areas to fuel. Transport Topics
U.S. Initial Jobless Claims Fell 40,000 Last Week
The number of people in the United States filing for jobless benefits for the first time fell by 40,000 for the week ended Sept. 28 to 384,000, the Department of Labor reported Thursday.Unemployment data is often a driver for consumer confidence and spending -- both of which have a strong impact on demand for trucking services.
The drop brought initial claims to their lowest level since Aug. 3 and it was the first time that the claims total was below 400,000 in seven weeks, Labor said.
The four-week moving average, a statistical device for removing volatility from the week-to-week figure, fell to 412,250 from a four-month high of 424,500. Transport Topics
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Crude Oil Price Falls as Iraq Makes Overture
The price of crude oil fell Thursday after Iraq invited United Nations weapons inspectors to visit several disputed sites inside the country, Bloomberg reported.Crude oil is distilled down to motor fuels like diesel and gasoline -- making it an important contributor to the cost of trucking.
The move was seen by traders as easing tensions, Bloomberg said, and that pushed the price of crude down to $29.09 a barrel in electronic trading on the New York Mercantile Exchange. Transport Topics
Old Dominion Plans Stock Offering
Old Dominion Freight Line announced Thursday that it would make a public offering of 3,045,000 shares of its common stock.The less-than-truckload carrier, based in Thomasville, N.C., said 1,095,876 shares were to be offered by a selling shareholder, while 1,949,124 were to be newly issued shares.
The Old Dominion press release said underwriters are to have an option to purchase up to an additional 455,000 shares of common stock to cover over-allotments, if any.
Credit Suisse First Boston is serving as lead manager and BB&T Capital Markets and Legg Mason Wood Walker Inc. are serving as co-managers.
Old Dominion is ranked No. 35 in the Transport Topics list of the 100 largest trucking companies in the United States and Canada. Transport Topics
(Click here for the press release.)
ATA Reaffirms Call for Speeding Crackdown
The American Trucking Associations renewed its call for a national crackdown on speeding cars and trucks as part of its observance of the second annual Put the Brakes on Fatalities Day."Speeding is, by everyone's account, one of the most prevalent contributing factors in traffic crashes on our nation's highways," ATA President William Canary said in a release. "Knowing this, why wouldn't we want to slow everyone down on our highways? It's simple: safe speeds save lives."
Canary also said that in nearly 30% of all fatal crashes in 2000 drivers were exceeding the posted speed limit or driving too fast for road conditions. These crashes accounted for more than 12,000 of the nearly 42,000 lives lost in fatal crashes, he said.
"More must be done to address the toll exacted by speeding drivers," said Canary. "Right here and right now, the American Trucking Associations, our member motor carriers and their professional truck drivers again go on the record -- and call for the strong, strict and visible enforcement of existing speeding laws as a measure to help reduce the human and financial costs associated with speed-related accidents." Transport Topics
(Click here for the full statement from ATA.)
