A.M. Executive Briefing - Dec. 20
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Swift Transportation to Acquire Cardinal Freight
National truckload carrier Swift Transportation Co. (SWFT), which announced a merger with M.S. Carriers Inc. (MSCA) last week, said late Tuesday that it will buy certain assets of Cardinal Freight Carriers Inc. The dry-van carrier, owned by Concord, N.C.-based Cardinal Logistics Management Inc., operates 600 tractors and 1,400 trailers.
Phoenix-based Swift has reported a very profitable year so far, with a net income of $42.5 million for the nine months ending Sept. 30, 2000. Transport Topics
FedEx 2Q Earnings Up; Outlook Shaved
FedEx Corp.'s (FDX) per-share earnings for its fiscal second quarter are up 18% over last year to 67 cents, the company announced Wednesday. However, the Memphis, Tenn.-based airfreight and trucking giant said third-quarter earnings will range between 35 cents and 40 cents per share. CBS MarketWatch reported that is lower than current Wall Street forecasts of 41 cents. Even attaining that lower estimate will depend on the economy achieving a soft landing rather than a harder slowdown, and on FedEx meeting its cost-control plans, the company indicated.
But FedEx expects per-share earnings of $2.65 for the full year, topping Wall Street's expectations of $2.54, the news service said.
FedEx also said it had a 7% rise in revenues to $4.9 billion, with net income rising 13% to $194 million.
Chief Financial Officer Alan Graf credited good volume growth at FedEx Ground and exceptional cost control throughout the company for the strong results.
Fuel expenditures rose about $78 million over last year's second quarter due to higher prices, but surcharges helped offset the impact, the company said.
The fastest-growing portion of the business remains FedEx's international priority shipments. IP revenue increased more than 16% compared with last year's second quarter, as the company generally experienced an 11% growth in volume and a yield increase of 5%. FedEx Ground's average daily volume grew by 7%, the best in more than two years, the company said. Transport Topics
Still More Snow, Wind to Hit Midwest
Snow and wind were expected to cut a swath across the Upper Midwest and into the Great Lakes on Wednesday, the Associated Press reported.Major truck routes in the area could take a beating. Snow was expected to head for the Dakotas, Minnesota, Iowa, Nebraska and Missouri and then shift to the western Great Lakes, the news service said.
Two to six inches could fall in the Plains states, and one to four in western Michigan, AP said.
As if that were not enough, the snow in the northern Plains states was expected to blow and drift, reducing visibility to less than a quarter mile, according to AP. Transport Topics
Housing Starts Leveling Off
Housing starts are flattening out, meaning slow growth in loads of building material for trucks to haul.In November, housing starts rose 2.2% to 1.56 million units, exceeding analysts' expectations of 1.54 million units, BridgeNews said Wednesday.
A sharp decline is not expected, however, the news service reported. Most of the rise came from the volatile multifamily component.
The closely watched single-family start figure was down 0.4%, compared with a 0.1% drop in October. But multifamily starts leapt 12.9%, compared with a 2.6% decline in October. Transport Topics
Fed Shift Leaves Markets Worried, Down
With the Federal Reserve now warning that the U.S. economic slowdown is getting risky -- but not yet ready to cut interest rates -- financial markets in Asia and Europe followed the lead set by U.S. markets late Tuesday and sold off overnight. Then the U.S. markets, which were hoping for an immediate rate cut on Tuesday, moved lower again on Wednesday.An interest-rate cut could stimulate freight shipment activity that has weakened for many trucking operations, and would help pare operating expenses by shaving the amount of interest truckers have to pay on debt they hold for rigs.
Various news services cited comments from market traders that the Fed's Tuesday statement showed the U.S. economy may be weakening too much, at the same moment that the struggling Japanese economy is weakening anew.
Keeping the U.S. economy from sliding into a recession, or even into such weak growth that it could become a "growth recession," is a priority of the trucking industry. Trucks hauls nearly all U.S. freight at some stage, and need general commercial activity to remain strong.
And truckers have already been reeling this year from a slowdown that hit the manufacturing sector before it became clear in the broader economy. In addition, freight comparisons with late 1999 are even worse than normal because last year many trucking companies enjoyed extra business as shippers moved cargoes ahead of possible disruptions from the Y2K computer glitch.
Tuesday's Fed decision leaves the U.S. central bank poised to cut rates at its late-January huddle, but also means Fed Chairman Alan Greenspan could initiate a rate cut earlier if he thought it was warranted. Transport Topics
Slow North American Market Brings Volvo Sales Down
The North American market remains the weak spot for Volvo Trucks (VOLVY), bringing the overall sales figures through November down 3%, the company said Wednesday.Volvo sold only 21,807 trucks in North America through November, down 31% from last year, the company said.
By contrast, sales to Eastern Europe shot up 47% to 3,775 units, while sales in Asia rose 11% to 4,973. Transport Topics
Guide Corp. CEO Resigns, Blames GM for Profit Woes
The head of Guide Corp., which makes headlights and turn signals for cars and trucks, resigned Tuesday and blamed General Motors Corp. (GM) for Guide's unprofitability, Reuters reported.Guide Chief Executive Officer Dennis Pawley said GM was not willing to pay Guide's requested price for auto lighting parts, according to the story. However, GM officials denied causing any problems for Guide and said it had complied with the contract.
Guide is a spin-off of GM's former parts unit Dura Automotive Systems (DRRA), Reuters noted. The Anderson, Ind.-based supplier provides 75% of GM's lighting parts. Its other customers include Toyota Motor Corp. and Isuzu Motors.
Headlines From Yesterday's P.M. Briefing
- FMCSA Proposes Tighter Load-Securement Rules
- Intrenet Names New Chairman
- Firestone Tells of Tire Design, Manufacturing Problems
- Bush Seen Naming Evans to Top Commerce Post
- Dow Chemical to Raise Freight Fuel Charge
- Ballot-Carrying Ryder Truck Sells for $67K
- Minn. Ramp-Meter Study Expected Soon
- Indian Mail Carriers End Strike
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