A.M. Executive Briefing - Jan. 19
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Economy: More Weakness Seen in Trade, Factory Reports
The latest U.S. government report on international trade flows from last fall contained more evidence that even then the slowing economy was eating into shipment patterns. And that comes on top of a Thursday report of more-recent weakness in the factory sector from the Philadelphia Federal Reserve Bank.The Commerce Department said Friday that it had calculated the November U.S. trade deficit at $32.99 billion, the second straight month in which the trade deficit with other countries narrowed. Normally, a shrinking trade gap is seen as a good thing, but the narrowing came from a drop in both imports and in exports, but with the value of exports down the most.
For trucking, the decline in the flow of goods coming from overseas and being sent abroad simply means that shipment activity declined in both directions. While U.S.-generated goods create more trucking business, a large number of trucks are involved in hauling freight from ports to customers across North America.
Home Depot Warns of Lower-Than-Expected Earnings
Home improvement retailer Home Depot (HD) warned Friday that it anticipates fourth-quarter earnings of 20 cents per share rather than 24 cents as estimated by Wall Street analysts. During the same period last year, the company earned 25 cents a share.Home Depot blamed weak sales in lumber and building materials – products that are often carried on trucks – for the lower-than-anticipated earnings, various wire reports said. The company said it believes the trend will continue through the first quarter.
The retailer's concerns were supported by a U.S. Department of Commerce report Thursday that said although groundbreaking of new homes was up .03% in December, requests for building permits – a gauge for determining future construction-was down 6.6%. Transport Topics
Mitsubishi Reaffirms Volvo Alliance
Mitsubishi Motors said late Thursday that its partnership with truck maker AB Volvo (VOLVY) will proceed as planned, Reuters reported. In April, Volvo is planning to increase its stake in Mitsubishi to 19.9%.Meanwhile German car and truck maker DaimlerChrysler (DCX), which owns a 34% stake in Mitsubishi, said it would announce a restructuring plan soon. DaimlerChrysler is reported to favor a breakup in the Volvo-Mitsubishi alliance. Additionally, the German company said Thursday that it is considering its option to take full control of Mitsubi-shi after three years. Transport Topics
Most Air-Cargo Carriers to Keep Fuel Surcharge
Even though Lufthansa Cargo cut its fuel surcharge by 5 cents per kilogram (2.2 pounds), most airlines do not plan to give a similar discount, a Journal of Commerce.com said late Thursday.The German airline recently lowered its fuel surcharge from 15 to 10 cents per kilo for air cargo in a market with decreasing freight volumes, the article said. When air-cargo volumes decrease, fewer trucks are used to haul the freight on land.
Most air cargo companies have said that the recent decision by OPEC to cut oil production justifies maintaining a 15-cent premium on fuel. Transport Topics
Trans-Pacific Cargo Traffic Softens
Cargo volume in the trans-Pacific sector is dropping in both directions after a year of rapid growth, the Journal of Commerce Online reported Thursday.This means less freight for trucks to haul on the West Coast – and these trends began before the electricity shortage intensified.
December containerized imports were down in Long Beach, Calif., by 2.7% from a year earlier, and exports were down 8.5%, the JOC said.
In Los Angeles, growth of 25% to 35% a month decreased to 2.9% for inbound containers and 11.7% for export containers, according to the JOC. Transport Topics
Northwest Cargo Calls 2000 Best Year Ever
Northwest Cargo said late Thursday that it posted the best performance in its history for the year ended Dec. 31 – setting records in revenue, tonnage, yield, number of flights and average load per flight.Cargo revenue for the full year increased 17.1% over 1999 results to $857 million, while cargo-ton-miles grew 7.1%.and cargo yields increased 9.4% over full-year 1999 results, the company said.
The airfreight carrier said closer cooperation with Dutch airline KLM helped manage trans-Atlantic loads and launch of a partnership with Japan Airlines Cargo has improved the company's Pacific market position, Northwest said.
Since 1999, Northwest Cargo is increased its freighter fleet by 50% with acquisition of four Boeing B747 aircraft, although two will not enter revenue service until later this year. Northwest said the new planes should help it increase cargo revenue to more than $1 billion for the first time in the company's history.
Northwest Cargo is a subsidiary of Minneapolis-based Northwest Airlines (NWAC). Transport Topics
Headlines From Yesterday's P.M. Briefing
- Union Pacific 4Q Earnings Drop
- Caterpillar Reports Increased 4Q Earnings
- Calif. Power Crisis Hits Commerce, Traffic
- GM to Idle Three Plants Next Week
- Norwegian Co. Building Quebec Plant to Serve GM
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