A.M. Executive Briefing - Feb. 7
This Morning's Headlines:
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Lawsuit Claims UPS Inflates Insurance Fees
A federal class-action lawsuit against United Parcel Service claims that UPS broke federal antitrust laws and used unfair trade practices to overcharge customers for insurance on packages worth over $100.The plaintiffs, Devon, Pa., residents Francis Farina and Steven Mersky, said UPS charged them close to "three times the competitive rate." The lawsuit alleges that UPS' 35-cent extra value charge for each extra $100 in shipment value is part of a deal between the parcel carrier and National Union Fire Insurance to take customers from competing policies with extra value charges as low as 13 cents.
OPEC Holds Key to Lower Fuel Prices
The World Bank believes the Organization of Petroleum Exporting Countries' March meeting will see an agreement to increase output, which will drive crude oil below $20 a barrel before year's end.A heating-fuel shortage in the Northeast quickly drove up the price of retail fuel in recent weeks, and the Oil Price Information Service said terminals along the Atlantic coast have seen product outages.
Some independent truckers, especially those who own their trucks outright, have stopped driving as they wait for prices to drop, said the Owner Operator Independent Drivers Association's Todd Spencer. He added that truckers should request higher rates or surcharges if they have to haul loads or go to their carriers or brokers and say "let's work on your percentage so we split the loss."
There could still be higher prices in the future for fuel buyers, however, as retail prices are still lagging behind the increased replacement costs, OPIS says. Heavy Duty Trucking Online (02/07/00); Lockridge, Deborah
Truckers Threaten Port Shutdown Over Wage Dispute
Vancouver independent port truckers, claiming Aheer Transportation violated an August wage agreement guaranteeing truckers C$46 an hour, say they will shut down the port unless Aheer's operating license is suspended for one week. But they will not shut down before they meet with the Port Authority; a meeting has not yet been scheduled.The Container Haulers Association's 350 members do not want to strike again but think drivers who agree to be paid by the trip are wrecking the agreement, says CHA Chairman Gary Leclaire. Another owner-operators' organization is against a job action and promises to try for a Supreme Court injunction to halt pickets and keep the port moving.
The cost to the trucking industry of the four-week July-August 1999 strike that precipitated the wage agreement was C$33 million. Vancouver Sun (02/07/00) P. A1; Griffin, Kevin
Truckers Vow Action
Although Quebec truckers gave the provincial government a Feb. 20 deadline to act on the "transportation crisis," which is largely regarding fuel costs, they may engage in pressure tactics before then. Confederation of National Trade Unions truckers in Abitibi, Montreal, Mauricie, and the Saguenay backed the union mandate in a Sunday vote. Montreal Gazette (02/07/00)170 Truck Drivers Cited During Wake Crackdown
Thirty officers from the North Carolina Highway Patrol and Division of Motor Vehicles and the Raleigh police cited 170 truckers during a Friday crackdown on Interstates 40 and 440 and other highways in Wake County.During the 18-month-old DMV program for safer highways in the state's top 21 counties for commercial-vehicle accidents, accidents have fallen 5% in the 1998-99 fiscal year. In that time, deadly semi crashes have fallen to 65 from 79.
In the latest crackdown, Raleigh and DMV officers chased down one semi and found its driver was wanted on four rape charges. Charges of DWI and driving with a revoked license were laid on another driver. Raleigh News and Observer (02/05/00) P. B4
Shipping Firms Fail to Deliver High Profits
Parcel carriers United Parcel Service, FedEx, and Airborne Freight have seen their stocks fall well below the highs they hit in January as the expected benefit from higher online purchasing failed to materialize and higher fuel costs reduced profits.In the United States, the FedEx-UPS rivalry is growing, as UPS gains in the FedEx territory of air shipment and FedEx competes with UPS by increasing home-delivery service. And the typical Dow Jones transportation average stock sees investors paying only one-quarter the amount per dollar of earnings per share that they pay for the parcel carriers' stock.
Among the 16 analyst firms that Bloomberg Financial Markets tracks, 50% have given UPS a hold rating and two out of three have given hold ratings to FedEx and Airborne. ING Barings analyst Douglas Rockel, who rates UPS and FedEx neutral, says if anything increases earnings for the industry it is international business, where FedEx and UPS are both growing. Akron Beacon Journal (02/05/00) P. AA1; Wilson, David
Fatal Accident Rate Rose After Speed Limits Went Up, Study Says
In the three years after Missouri increased the maximum speed limit to 70 mph, the average fatal crash rate on rural interstates went up, says a study by the state Transportation Department. But the department says this is mostly caused by alcohol use, neglecting to use seat belts, and reckless driving speed.Fatal truck crashes on 70-mph rural interstates went up to 32 in the 12 months prior to March 14, 1999, from 15 in the year before the speed limit was raised. Overall, the crash rate on interstates went up slightly in the first of the three years and went down for the following two.
The prevailing speed on rural interstates went up to 74.6 mph in 1998 from close to 72 mph in 1995, and average interstate speed went up to 68.3 mph from 66 mph. The state highway patrol will try to get more overtime funding so patrols on rural portions of Interstates 70, 55, and 44 can be increased.
Insurance Institute for Highway Safety senior transportation engineer Richard Retting questioned the study's emphasis on drunken driving, seat belts, and reckless driving because those factors were in place prior to the speed-limit increase. St. Louis Post-Dispatch (02/05/00) P. 8; Leiser, Ken
His Boss, Robert Schippers, Pleaded Guilty Thursday. But Ronald Padula Said He Was Just Doing What Was Ordered.
Ronald Padula, who was head mechanic at the defunct Easton, Pa., trucking company Schippers Services, will avoid trial on charges of environmental violations thanks to a plea deal.On Friday, the 57-year-old Padula pleaded guilty on 21 counts of making false statements, one count of conspiracy, and one count of violating the Clean Water Act. U.S. Assistant Attorney Alicia Strohl Resnicoff said that according to the evidence Padula acted under his boss's orders and that Padula agreed to cooperate with prosecutors.
Former Schippers Services owner and operator Robert J. Schippers earlier admitted to using trucks leaking hazardous liquids and putting hazardous liquids in the sewer system. 02/05/00 (Morning Call (Allentown, Pa.) Online); Ford, William J.
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