A.M. Executive Briefing - Dec. 29
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Steelmaker LTV May File for Bankruptcy
Truck freight operations may suffer every time a manufacturer or retailer goes bankrupt and closes some facilities, so Friday's Wall Street Journal report that LTV (LTV) is considering a bankruptcy protection filing and is in danger of closing adds to a growing list of woes for the trucking industry.The LTV news comes on the heels of layoffs by enginemaker Cummins Inc. (CUM), announcements that retailers Montgomery Ward and Bradlees expect to shut down completely and a warning from railroad leader Union Pacific (UNP) that overall freight shipping has turned downward in recent weeks.
The Journal report said that unless LTV can soon get fresh lending from its bank, Chase Manhattan (CMB), it could run out of cash and halt operations. If it goes into a Chapter 11 bankruptcy reorganization again, as it did during the 1980s, LTV would be the ninth U.S. steelmaker to take that course in the last two years, the Journal added.
Bush Names Thompson to HHS; Transportation Still Vacant
President-elect Bush on Friday named Wisconsin Gov. Tommy Thompson to be his secretary for health and human services, ending a process in which Thompson publicly said he would have preferred to head the Transportation Department. To head the Interior Department, Bush chose former Colorado Attorney General Gale Norton.After the Friday morning announcements, the Cabinet posts of transportation, energy and labor remain unfilled.
Both the Thompson and Norton appointments can affect the trucking industry, since the Health and Human Services Department is involved with numerous health policy issues that can affect workers' families. Norton would be involved in Bush administration planning on such energy issues as tapping the Arctic National Wildlife Refuge for oil production.
Bush also on Friday named Rod Paige as education secretary; Paige has overseen a reform of the Houston school system. Bush tapped Anthony Principi, a former deputy secretary of the Department of Veterans Affairs, to be that department's secretary. Transport Topics
PNV Suspends Services
PNV Inc. (PNVN), a provider of Internet-access pods to about 300 truck stops in 41 states, has posted a notice on its Web site that it has "temporarily suspended services." But it said its PNV.com site remains operational.Calls to the Coral Gables, Fla., headquarters receive a message that the company will be suspending all its services, and to call back after Friday for further instructions. The company on Dec. 20 had filed a petition for voluntary bankruptcy reorganization, which it said was done to facilitate a sale of its assets.
PNV pods allowed truck drivers to tap into telephone and television services along with Internet hookups.
The company had been unable to unable to pay $4.9 million in interest due bondholders in November, and owed another $1 million due this month to America Online, Transport Topics previously reported. When it filed for bankruptcy, it has said operations would continue as it tried to find a buyer. Transport Topics
Timing Fluke Boosts One-Week Rail Intermodal Stats
Rail-truck intermodal freight volume during the week of Dec. 23 at major U.S. rail-roads showed a 25.1% gain from the 51st week in 1999, the Association of American Railroads reported. However, the year-on-year comparison was skewed because the year-ago week was shorter due to the Christmas holiday.Christmas this year will land in the 52nd week, and with the New Year's comparisons coming up as well it could be several weeks before the year-on-year comparisons sort through holiday timing quirks. So far this year, intermodal shipments by rail are still ahead of 1999 by 3% but weakened significantly as the year went on.
Last week, intermodal freight volume totaled 168,055 units, compared with 134,328 units during the same week last year.
When reported separately, trailers made a 19.7% gain with 53,712 units and contain-ers gained 27% with 114,343 units. Earlier in December, rail intermodal volume had gained just 2.1% the week of Dec. 2, showed no gain in Dec. 9 week and fell 4.1% the week of Dec. 16. Transport Topics
Crude Oil Prices Drop as Heating Oil Shortage Eases
Crude oil prices dropped Friday in London and New York as heating oil output rose due to Iraq resuming its oil exports, Bloomberg reported.Crude oil for February settlement traded at $23.02 per barrel in London Friday, down 69 cents. In New York, crude oil traded at $25.85, a drop of 62 cents.
Although Iraq had resumed its oil exports on Dec. 13, only the Mina-al-Bakr terminal was loading oil tanks. However, officials monitoring Iraq's exports said that the nation began loading oil at its other terminal at Ceyhan, Turkey, this week. This raised the level of crude oil supply and brought prices down, the report said. Transport Topics
Winter Storms Continue to Hamper Freight Moves
From the northern reaches of the Great Plains to the Southeast, heavy winter storms continued Friday to batter freight activity for trucks, air cargo and rail operations. And besides the cold, snow, ice and heavy rain, power outages were disrupting commerce in some areas.Heavy snow had already hit Minnesota, and then early Friday spread across the Great Lakes region, snarling ground and air traffic alike. In the South, the Associated Press said winter storms since Christmas Eve have knocked out power to more than 600,000 homes and businesses in Arkansas, Louisiana, Oklahoma and Texas. Arkansas electricity may not be restored until Jan. 6.
The eastward-moving ice storm that socked Arkansas turned into heavy rain on Thursday across the Southeast, causing traffic disruptions. Now, a massive winter storm is predicted to hit the East Coast Friday night and Saturday.
The cumulative effects have already hurt commerce in numerous ways. Retailers have seen store traffic reduced in many cities, some manufacturers have had to cut production as weather prevented workers from getting in, and freight haulers have seen both falling demand and operational difficulties amid the storms. And trucks used by utilities have been getting an extra workout as storms knocked out power and telephone lines. Transport Topics
Navistar to Buy Remaining 50% of Brazilian Engine Maker
Truck and engine maker Navistar International Corp. (NAV) said Thursday that it will buy the remaining 50% of Brazilian company Iochpe-Maxion's engine-making unit, Bloomberg reported. Navistar already owns the other half of the unit.The transaction, which will close in January, will give Chicago-based Navistar more access to the South American market, the wire story noted. Navistar plans to pay $83.5 million for the acquisition. Transport Topics
XATA Reports 4Q Losses
XATA Corp. (XATA), which provides onboard technology for trucks, reported its fourth-quarter earnings Friday. It reported a net loss of $310,692 or 7 cents per share, compared with earnings of $56,045 or 1 cent per share during the same period in 1999. The company blamed the fourth-quarter loss on tax liability adjustments and sales discounts given to large customers. XATA is based in Minneapolis. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Census Figures to Alter U.S. House
- Clinton Hikes Projected Budget Surplus
- Dealer Files $30M Lawsuit Against Volvo
- Winter Weather Hinders Truck Traffic Across the U.S.
- Retailer Montgomery Ward to Close Down
- Transport Corp. Buys Back Common Stock
- RailAmerica Sells Canadian Truck-Trailer Subsidiary
- Bush Selects Donald Rumsfeld as Defense Secretary
- New Idaho Law Quadruples Small Truckers' Costs
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