A.M. Executive Briefing - Dec. 27
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Mitsubishi/Volvo Medium Truck Debut Planned for 2004
A Volvo AB (VOLVY) collaboration with Mitsubishi Motors Corp. will result in a jointly developed medium truck for sale in 2004, Reuters reported Wednesday.Mitsubishi Motors told Reuters that company will sell the new trucks primarily in the Japanese market, while Volvo will sell them in Europe under its own nameplate.
The engine developed for the truck, however, is unlikely to be used in other Volvo trucks because their vehicles are bigger, according to Reuters.
Southern Ice Storm Spreading
An ice storm in the South is so fierce it has forced the shutdown of the state government in Arkansas, the Associated Press reported.Amarillo, Texas had more than a half-inch of ice and 15 inches of snow on Tuesday, the news service said. Texas Department of Transportation reported Interstate 40 through the panhandle was snow-packed early Wednesday, while sections of Interstate 27 were snarled by heavy and blowing snow.
The storm was expected to spread as far as northern Georgia Wednesday, leaving light freezing rain and drizzle in the southern Plains, USA Today said.
Texas was expected to get more snow, and thunderstorms were predicted for Louisiana, Mississippi and Alabama. A near-blizzard was expected in the northern and western High Plains. Transport Topics
Trailer Bridge Wins Daimler Vehicle Hauling Bid
Trucking and marine freight hauler Trailer Bridge (TRBR) said it has won a multiyear deal to be exclusive hauler of DaimlerChrysler (DCX) heavy trucks as well as passenger cars from the U.S. mainland to Puerto Rico.
The agreement is for three years, with an option for two more. Trailer Bridge noted that the DaimlerChrysler vehicles sold in Puerto Rico include the Chrysler and Mercedes-Benz car lines and Freightliner heavy trucks.
Trailer Bridge said it has had a growing relationship with Chrysler since 1993 and with Mercedez Benz since 1994. The carrier provides integrated trucking and marine freight service to and from the contiguous 48 states and Puerto Rico, using its own trucks, drivers, trailers, containers, U.S.-flag vessels and marine facilities in Jacksonville, New York and San Juan.
Trailer Bridge's founder and majority stockholder is Malcom P. McLean, the transportation pioneer who invented containerization 40 years ago. Transport Topics
Oil Price Rises on U.S. Cold, OPEC Grumbling
Continued wintry blasts across the United States, and blasts of production-cutting rhetoric from OPEC members, pushed up the price of crude oil overnight, wire services reported.That news from the oil market comes even as the U.S. Energy Department reported Tuesday that the average pump price of diesel and gasoline continued to fall in the latest week. If the price of crude keeps bouncing on weather or output worries, the recent relief in pump prices could soon reverse course again and hurt the freight-hauling industry further.
Reuters noted that the market price of U.S. light crude oil rose 35 cents early Wednesday to $26.99 a barrel, after Brent crude on the London market posted an 84-cent gain to $24.50. Bloomberg reported that the price of natural gas fell early Wednesday in a volatile and expiring contract, but it had risen more than 2% just on Tuesday from higher demand for home heating oil.
The United States has been in the midst of severe and repeated winter storms throughout December, which have hit numerous cities with snow and ice, and spread cold temperatures across much of the country.
However, leaders of some oil-exporting countries have been fretting that the world now has too much oil on hand, and that this will soon cause the price to plunge much like it did amid the global economic crisis of 1997-98. So several OPEC member countries have sounded a call to cut production at the cartel's Jan. 17 meeting. Transport Topics
U.S. Economic Indicators Fall Again
In another of a recent series of worrisome reports about the U.S. economic outlook, the private-sector group Conference Board said Wednesday that its index of leading economic indicators for November fell 0.2%. That is yet another signal that the trucking industry will face more shipping weakness in coming months.The LEI decline was in line with what market economists expected, the Associated Press reported, but it was the second consecutive monthly drop after a scant 0.1% gain in September.
The gauge is designed to predict how the economy might fare three to six months into the future, and so far its recent behavior points to more economic slowdown ahead rather than any pickup taking hold.
In November, five of the index's 10 component indicators pointed to future weakness. They were: average weekly initial unemployment insurance claims, average factory workweek, manufacturers' new orders, the pace of vendor deliveries and stock prices.
So far in December, earnings warnings and company layoffs as well as more up-to-date indicators continued to show weakness. Even the Federal Reserve has warned that it is concerned that the economy may be softening too much, but the Fed has yet to add to the money supply enough to bring all interest rates down. Transport Topics
Ford Settles Six Explorer Rollover Lawsuits
Ford Motor Co. (F) has agreed to settle six cases involving deaths or injuries when tires on Ford Explorers failed and the SUVs rolled over, Bloomberg News reported.Ford refused to reveal the amount. The settlements are among the first in more than 100 suits brought in the United States against Ford and tire maker Bridgestone/Firestone.
A plaintiff's lawyer praised the company for making significant offers early. Transport Topics
Retailer Bradlees to Liquidate
In a development that can hurt some trucking operations mainly in the Northeastern United States, the sizable discount retailer Bradlees Inc. said it will go out of business.With 105 stores and three distribution centers, Bradlees generates considerable volumes of consumer goods moving from warehouse or supplier to its stores, and Reuters reported the company expects to liquidate its assets rather than restructure. How many of its stores will survive in some form is not yet clear. The chain had sales of $1.5 billion last year.
Braintree, Mass.-based Bradlees filed for protection under Chapter 11 of bankruptcy law for its second filing in five years. This time, though, it said it would wind down its operations and that its options include a possible sale of the company. The Associated Press said the company would begin this week to phase out its distribution and headquarters functions, and that it had arranged to sell off its remaining inventory to another company.
Reasons cited for the bankruptcy include many factors that are bedeviling trucking firms directly as well as hurting other trucking customers - the general economic slowdown, the rise in interest rates starting in 1999 and the jump in energy costs that left consumers with less money to spend on merchandise. Transport Topics
Portugese Trucking Assn. Calls for Rate Hike
Freight price increases are planned by Portugal's transportation associations to compensate for fuel price hikes and inflation, Bloomberg News reported.A truck company association told its 4,500 members that freight prices should go up by 9% for domestic service and 10% for services abroad, Bloomberg reported.
The government expects to raise bus and taxi prices, the news service said.
The freight price increase would not be subject to government approval, unlike the proposed bus and taxi hikes. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Chicago Snow Cleanup Trucks Menaced by Cars
- FedEx Fled Memphis Weather Early
- 3Q Shows Trucking Co. Shakeout
- Ice Wallops South
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