News Briefs - Sept. 30
The Latest Headlines:
- FedEx Announces Expansion of Ground Unit
- Stocks Suffer on Poor Spending News
- FMCSA Announces New Securement Rules
- Embattled Sen. Torricelli Drops Out of Race for N.J. Senate Seat
- Old Dominion Predicts 'Significant' Increase in 3Q Earnings
- VW May Up Its Stake in Scania, Paper Says
- OPEC Increased Oil Output in Sept., Watchdog Reports
- New York Fed's McDonough Says Fed Has Room to Cut Rates
- Stocks Suffer on Poor Spending News
FedEx Announces Expansion of Ground Unit
FedEx Corp. said Monday that it is rolling out a $1.8 billion, six-year expansion plan for its FedEx Ground unit, which will nearly double its daily package volume to 4.8 million from 2.5 million by the end of fiscal year 2009.The plan includes the expansion of 23 central distribution hubs and the expansion or relocation of more than 300 existing facilities. FedEx Ground will also construct 10 all new hubs by the end of 2009, the company said.
FedEx Ground will open new hubs in Memphis, Tenn.; Dallas; Cincinnati and Hagerstown, Md. By 2006 and will add six more new facilities by the end of fiscal 2009.
FedEx is ranked No. 2 on the 2002 Transport Topics 100 of the listing largest trucking companies in the United States and Canada. Transport Topics
(Click here for the full press release.)
Stocks Suffer on Poor Spending News
A weaker-than-expected consumer spending report, coupled with two major retailers reducing their September same-store sales estimates drove investors out of the stock market sharply lower Monday, the Associated Press reported (Click here for related coverage.).Consumer spending only rose 0.3% during August, the Commerce Department said. Observers had been projecting a rise of 0.5%, AP reported.
Along with the poor spending news, both Wal-Mart and Federated Department Stores warned that their September same-store sales would be lower than previously announced, AP said.
In early afternoon trading, the Dow Jones Industrial Average was down 156.13 points, or about 2%, to 7,545.32. At one point Monday, the blue chip average had dropped as much as 240 points. These declines followed a 295-point decline on Friday. Transport Topics
FMCSA Announces New Securement Rules
The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration released a new set of cargo securement standards Friday that it is requiring interstate commercial vehicles to meet in order to reduce accidents caused by cargo shifting or falling off trucks.The final rule sets new cargo securement standards based on the North American Cargo Securement Standard Model Regulations. It also clarifies how to determine the load limit for securement systems and the way carriers should use tiedown devices to secure cargo to prevent leaks, spills, blowovers or falls from commercial trucks.
In addition to rules for general cargo securement, the requirement also establish freight-specific rules for the transportation of logs, dressed lumber, metal coils, paper rolls, intermodal containers, vehicles, heavy equipment, machinery, flattened or crushed vehicles, roll-on and roll-off containers and large boulders, the FMCSA release said.
The performance standards go into effect on Dec. 26, and carriers have until Jan. 1, 2004 to comply. Details of the rule can be seen at http://dms.dot.gov/ by searching for docket number FMCSA-97-2289. Transport Topics
(Click here for the full press release.)
Embattled Sen. Torricelli Drops Out of Race for N.J. Senate Seat
Sen. Robert Torricelli (D-N.J.) announced in a Monday afternoon press conference that he has pulled out of the race for his Senate seat.Torricelli, who has been embroiled in a scandal over campaign fund raising during his 1996 campaign, made the announcement just after 5 p.m. EDT in Trenton, N.J.
Trying to maintain a Democratic majority in the Senate was the reason Torricelli gave for withdrawing from the race. In the last few months, Torricelli has gone from a double-digit lead to a double-digit deficit to Republican rival, Doug Forrester.
"I will not be responsible for the loss of the Democratically controlled Senate," Torricelli said.
New Jersey is seen as a key battleground state for control of a narrowly divided Senate.
Possible replacements for Torricelli could be former Senators Bill Bradley, the ex-basketball star and Frank Lautenberg, the Associated Press said.
Republicans in the state said that such a swap would circumvent the democratic process and should not be allowed, AP reported. Transport Topics
Old Dominion Predicts 'Significant' Increase in 3Q Earnings
Less-than-truckload carrier Old Dominion Freight Lines Inc. said that it expects to announce earnings of between 65 cents and 70 cents per share for the third quarter – 11 cents higher than its previous estimate.Chairman and Chief Executive Officer Earl E. Congdon also announced an increase in Old Dominion's full-year guidance to a range of $1.90 and $2 per share – up 30 cents from its previously announced estimate.
During 2001, Old Dominion reported earnings of 44 cents a share during the third quarter and $1.43 per share for the full year.
"The increase in our earnings guidance primarily reflects the ongoing improvement during the third quarter of positive trends for LTL tons and LTL shipments that contributed to our substantial profitable growth for the second quarter," Congdon said. "Old Dominion has continued to leverage its extensive service center network to gain increased market share. In addition, but to a lesser extent, the bankruptcy of Consolidated Freight, announced Sept. 3, has also contributed slightly to Old Dominion's revenue and earnings growth for the quarter."
Old Dominion is ranked No. 35 on the 2002 Transport Topics 100 list of the largest trucking companies in the United States and Canada. Transport Topics
(Click here for the full press release.)
VW May Up Its Stake in Scania, Paper Says
Volkswagen AG, the largest automaker in Europe, said it may increase its stake in Swedish truck manufacturer Scania AB, the Swedish newspaper Dagens Industri reported Monday.Bernd Pischetsrieder, chief executive officer of Volkswagen, told the paper that the company wants to strengthen its position in Scania. VW could buy shares as rival Volvo AB sells off shares as part of an antitrust settlement with the European Union.
Volkswagen bought a 34% voting stake of Scania in 2000 after the EU blocked Volvo's takeover bid, Bloomberg reported. Volvo currently owns about a one-third voting stake in Scania and must sell its remaining shares by 2004.
Pischetsrieder told Dagens Industri that VW plans to make Scania the second-largest truck maker behind DaimlerChrysler AG. Transport Topics
OPEC Increased Oil Output in Sept., Watchdog Reports
Oil industry consulting group PetroLogistics said the Organization of Petroleum Exporting Countries increased its oil production during September as some members tried to take advantage of rising prices, Bloomberg reported.Oil is a critical commodity to the trucking industry, which makes heavy use distilled fuels like diesel and gasoline.
PetroLogistics said that OPEC pumped 24.1 million barrels of oil per day during September, up from 23.7 million barrels a day during the previous month. The cartel has placed a limit on itself of 21.7 million barrels per day, Bloomberg said.
Algeria, which had a request to boost output rebuffed at OPEC’s most recent meeting, and Venezuela were the largest quota cheaters, PetroLogistics said. Transport Topics
New York Fed's McDonough Says Fed Has Room to Cut Rates
New York Federal Reserve Bank President William McDonough said Monday that the central bank still had room to cut rates, which currently stand at a four-decade of 1.75%, Reuters reported.Lower interest rates encourage business and personal spending, which contribute to demand for trucking services.
McDonough, a voting member of the Fed's policymaking Open Market Committee, tempered his comments by saying the U.S. economy should "do just fine," Reuters reported.
A survey released by the National Association for Business Economics said that the United States was on the road to a healthy recovery and because of it, the Federal Reserve had little need to cut interest rates any farther, Reuters reported.
In a poll of 32 forecasters with the NABE taken in early September, more than 80% responded that the U.S. economy does not need a further boost from a rate cut. NABE also forecast a 3.1% rate of growth in the third quarter and a 2.7% growth rate in the fourth. Transport Topics
