A.M. Executive Briefing - April 20
This Morning's Headlines:
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Crude Futures May Signal Warning
A steep jump in crude oil futures on the New York Mercantile Exchange Wednesday, caused in part by reports that fuel supplies have hit a seven-year low, indicated that a drop in fuel prices could be delayed beyond this summer.Strong trucking business is one reason for the low crude-oil inventories, analysts say, and the shortage is worrisome because inventories are usually gaining during this part of the year. Heavy Duty Trucking Online (04/20/00); Lockridge, Evan
Rail-Merger Worries Eased
Although the head of Burlington Northern Santa Fe said in March that a 15-month merger freeze may keep BNSF's planned combination with Canadian National from ever happening, CN President Paul Tellier told a shareholders' meeting Wednesday that he believes the merger will go forward next year.Tellier said he expects that the two companies' court challenge to the U.S. Surface Transportation Board moratorium will allow the merger to take place. While the court has not set a date for a decision, Tellier said he believes it will take place in May or June.
The Wednesday meeting in Montreal was to have been the occasion for a shareholder vote on the merger plans. In addition to the merger, CN plans to step up competition with trucking by adding more RoadRailers. Montreal Gazette (04/20/00) P. D3; Dougherty, Sarah
USA Truck's Earnings Spoiled by Diesel Prices
With fuel prices taking 50% of revenue, USA Truck'sirst-quarter earnings fell 117% to a $394,385 (4 cents a share) loss despite a 52.3% revenue gain. This fell short of the 6 cent per-share profit projection from Stephens Inc. and A.G. Edwards & Sons' estimate of a 2 cent per-share loss, a projection that only recently was changed from expected earnings of 22 cents.
Driver turnover and utilization issues also drove earnings downward for the Arkansas-based truckload carrier; CFO Jerry Orler said the utilization drop could have been due to insufficient freight and some lost business due to increased rates.
A.G. Edwards analyst Donald Broughton said the 1999 purchase of CCC Express may also have affected utilization, but once the acquired firm is completely absorbed, USA Truck's earnings should reflect the revenue boost it has experienced since the acquisition. Arkansas Democrat-Gazette Online (04/20/00); Corteau, Sarah L.
Canadian Teamsters Join Overnite Strike
Overnite Transportation employees belonging to the Teamsters union started striking at the carrier's eight Canadian terminals Wednesday, joining the union's six-month-old strike against the LTL firm in the United States. Heavy Duty Trucking Online (04/20/00)Graves Proposes Increasing Highway Patrol Staffing
Kansas Gov. Bill Graves has proposed increasing the state Highway Patrol's budget by $911,250 to cover 15 additional troopers for the truck-safety patrol as well as an added office employee.Because the troopers would be assigned to the truck unit, the state would qualify for $729,000 in federal money, while truck drivers' license fees would cover the remainder of the proposed increase.
The governor said having extra truck-safety troopers would enable the patrol to put more troopers in rural areas; sparse highway-patrol coverage in some areas has become an issue in the state. Associated Press (04/19/00); Hanna, John
Agencies Team Up for State Port Inspections
Two days of truck and container inspections at the state port in Wilmington, N.C., found no major violations, but officials said the program succeeded in ensuring that the trucks and containers were in proper order and in encouraging cooperation between state, local, and federal authorities.The joint operation, which included the city police department's canine unit, resulted in 85 citations for equipment violations and nine driver citations, as well as $2,000 in fines and 13 trucks taken off the road.
Coast Guard Petty Officer Grant Weldin said the containers have improved since last year's operation, in which several containers were found not fit for shipping. Morning Star (Wilmington, N.C.) (04/19/00) P. 1B; McGrath, Gareth
Ashcroft Critical of Plan to Truck Nuclear Waste Through State
Opposition to federal plans to route a truck carrying spent nuclear fuel through Missouri has been joined by Sen. John Ashcroft (R-Mo.), who wrote to Energy Secretary Bill Richardson that Interstate 70's poor condition and heavy traffic make the route too risky, so an Iowa route should be examined instead.Last year, the decade-long program shipping nuclear waste to an Idaho storage site commenced with five shipments trucked through Iowa; only one load is planned for this year, and the Missouri route is 68 miles shorter.
The plan has also been opposed by Gov. Mel Carnahan, who will likely run for Senate against Ashcroft this year, as well as the mayor of St. Louis, environmentalists, and the state Department of Natural Resources. But the state Transportation Department said I-70 could handle the loads.
Missouri will also be the chief conduit for bigger nuclear-waste shipments that will be sent to a Nevada facility starting a decade from now. Associated Press (04/19/00); Sloca, Paul
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