A.M. Executive Briefing - April 21

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This Morning's Headlines:

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  • KLLM CEO Receives Backing of MCI Chief to Buy Trucking Firm
  • Deal Expands Arizona Firm in South
  • J.B. Hunt Gets Wal-Mart Job
  • Votes Challenged in Close Union Election at Saia
  • Accord is Reached to Sell 81 Percent of Logistics Subsidiary
  • UPS Logistics Unit Wins Compaq Contract
  • Drug Traffickers Switch Transportation Modes

    KLLM CEO Receives Backing of MCI Chief to Buy Trucking Firm

    KLLM Transport Services CEO William J. Liles III and MCI WorldCom CEO Bernard J. Ebbers have offered $8.25 a share to acquire and privatize KLLM, which also faces a takeover offer of $7.75 per share – about $32 million – by New Prime owner Robert E. Low. Liles holds a 17% stake in KLLM and Low holds some 13%.

    The roughly $28 million Liles-Ebbers offer would be funded by Ebbers, who was brought together with Liles by mutual acquaintances; both men are Mississippi residents. An analyst at A.G. Edwards said KLLM's book value is $12.38 a share. Wall Street Journal (04/21/00) P. A6




    Deal Expands Arizona Firm in South

    Phoenix truckload carrier Knight Transportation has purchased Mississippi-based John Fayard Fast Freight's trucking business, operating in 48 states under the name Fastway Systems.

    According to A.G. Edwards analyst Donald Broughton, Fastway was a pioneer in using GPS tracking, while Knight offers good wages and boasts the highest operating margin among public TL firms.

    Knight Chairman and CEO Kevin Knight said Fastway is highly efficient and that the Fayard family now has stakes in both carriers. Fastway founder John Fayard Jr. will retain ownership of John Fayard Moving and Warehousing. Sun Herald (Biloxi, Miss.) Online (04/21/00); Moore, Matt; Porretto, John


    J.B. Hunt Gets Wal-Mart Job

    A number of Wal-Mart Stores distribution centers have reached a transportation operations agreement with J.B. Hunt Transport Services. Valued at about $100 million a year, the deal calls for J.B. Hunt to devote some 360 trucks and drivers and over 1,000 trailers for 31 Wal-Mart facilities.

    J.B. Hunt will also manage and operate rail and other transportation operations for the Bentonville, Ark.-based retailer. Wall Street Journal (04/21/00) P. B2


    Votes Challenged in Close Union Election at Saia

    National Labor Relations Board election supervisors have challenged three ballots and the Teamsters union has challenged 13 more in a SAIA Motor Freight representation vote that the Teamsters lost 171 to 170.

    The union spent 10 months attempting to organize the Yellow Corp. subsidiary's Grand Prairie, Texas, terminal prior to the vote there; the situation may not be resolved for at least a month.

    The Teamsters filed multiple charges of unfair labor practices during the unionization drive, and in November the NLRB filed a complaint against the LTL carrier alleging improper activities in Grand Prairie. Heavy Duty Trucking Online (04/21/00)


    Accord is Reached to Sell 81% of Logistics Subsidiary

    GATX Corp. is selling 57% of GATX Logistics to equity investment group Oak Hill Capital Partners, and another 23% to holding company Stephens Group, while keeping the other 19%. The logistics subsidiary is among the smaller units of GATX Corp., which does not believe the deal will impact its results for this year significantly. Wall Street Journal (04/21/00) P. B7


    UPS Logistics Unit Wins Compaq Contract

    UPS Logistics Group said Thursday that it will operate Compaq Computer's service parts network in North America, performing fulfillment, inventory management, warehousing and distribution, closed-loop returns, and other services in a multi-year deal.

    The deal will allow Compaq to have a more visible supply chain and enable its field technicians to make electronic parts orders while the company focuses on core operations. Journal of Commerce Online (04/20/00)


    Drug Traffickers Switch Transportation Modes

    Cocaine and heroin from South America now usually enter the United States by tractor-trailer, car, backpacks, and other means after being shipped to Mexico and Central America in noncommercial boats, said Office of National Drug Control Policy chief Gen. Barry McCaffrey.

    Shipping drugs to Mexico by air has mostly ceased due to crackdowns on smuggling, McCaffrey said while in Florida for an international meeting about security and hemispheric cooperation. Miami Daily Business Review (04/20/00) P. A3

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