A.M. Executive Briefing - Jan. 20
This Morning's Headlines:
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FedEx Courting Net Shoppers
FedEx Home Delivery, a new service aimed at online shoppers, with scheduled deliveries and later hours, is set to debut in March with two- to five-day delivery times. There are also name changes in the works for FDX and its subsidiaries, hoping to make the most out of the FedEx brand; the parent company FDX will now be FedEx, Federal Express will be FedEx Express, and RPS will be FedEx Ground.The company hopes to extend home delivery to 98% of the United States within four years so it can get in on e-commerce and be competitive with United Parcel Service and the postal service. It will add 240 distribution centers and hire 500 more drivers in order to achieve its goals. Bergen (N.J.) Record Online (01/20/00); Bair, Jeffrey
J.B. Hunt Unit Creates Bid System for Truckers
The first annual Carrier Conference was held Wednesday by J.B. Hunt Logistics, where the logistics firm described its planned bidding system enabling competition between carriers for oft-used routes. This would let shippers use one carrier for all its loads while giving carriers the opportunity to use the routes to create regular schedules. The system will also allow J.B. Hunt Logistics to pay carriers based on factors like shipment frequency and dock waiting time in addition to distance traveled.The company looked over data for routes used 50 or more times yearly, including information about dock wait time and shippers' hours, then gave the information to the carriers so they could decide on their bids. For the most part, carriers seem to like the idea; the president of the small North Carolina carrier GWL Transport said it could help his company find loads to haul on return trips from distant delivery points. Arkansas Democrat-Gazette Online (01/20/00); Wieland, Barbara
Volvo Order Backlog Rises
Volvo Trucks North America resumed production at its plant in Dublin, Va., Monday, setting production levels 13.2% lower on its VN model and 21.9% lower on specialty Class 8-type trucks than the levels prior to the holiday shutdown. Despite an increasing backlog of Class 8 truck orders, it remains expected that the company will furlough up to 434 employees this week for an undetermined duration. Although the heavy truck market has weakened, Volvo wants to claim a 20% share of the U.S. Class 8 truck market this year. Stark's News Service (01/20/00)Trucking Company Wants Records Back
Metro Transportation Services, of Bushkill Township, Pa., asked Northampton County Court Wednesday for an order forcing the state to return the carrier's payroll records, allowing it to comply with reporting laws by filing W-2 forms. The company has been charged with failure to provide employees with workers' comp insurance, and the records were seized in a 1999 investigation by a two-county insurance-fraud task force. Morning Call (Allentown, Pa.) Online (01/20/00)Renault's Board of Directors Gives Green Light to Buy Samsung Motors
According to industry and banking sources, the board of directors of Renault decided in late December to purchase Samsung Motors and to consider a $714.2 million takeover of the bus and truck operations at Daewoo Motor. Although Renault's $357 million offer for Samsung was lower than what the South Korean company and creditors wanted, the price may change in negotiations.According to an executive at a Samsung creditor, negotiations are expected to end by late February or perhaps as late as the end of March. The French company told creditors at Daewoo that it is looking for an indirect purchase of the commercial vehicle sector of Daewoo. Korea Herald (01/20/00)
Few Surprises Expected in Caterpillar Earnings Report
Wall Street analysts do not expect to be surprised by Caterpillar's fourth-quarter and full-year results, to be released Friday, but they wonder whether the company still has the optimism about this year that it had at the end of the last quarter. The company was seeking "improved sales in every region" then, said Midwest Research's Mark Koznarek, but he thinks continuing weak sales and growing use of rentals will make the company give up on North America.But while Salomon Smith Barney's Tobias Levkovich thinks the heavy-duty engine market will plummet due to such factors as higher fuel prices dropping profits in the trucking industry, he expects Caterpillar to express optimism. Morgan Stanley Dean Witter's Steve Volkman agrees, particularly because "we're starting to see some of the end markets look better for Caterpillar."
Analysts all put the fourth-quarter earnings around 64 cents per share, down from 83 cents in the year-earlier quarter, and full-year earnings around $2.90 a share – not much different from the company's prediction when the third quarter closed. Copley News Service (01/19/00); Gordon, Paul
Widow of Man Killed in Accident Sues Trucker
An accident victim's widow has sued the trucking company Leo J. Umerley, of White Marsh, Md., and driver Norris L. Dishon Sr. for negligence, claiming that reflective tape on a truck could have kept a deadly 1998 crash from occurring.Elizabeth G. Ashley, whose husband died in the U.S. 40 wreck, is suing for $10 million. Her lawyer said that while federal rules do not mandate reflective tape on trucks built before 1993, such as the 10-year-old semi Dishon was driving in the accident, it is "strongly" recommended. Baltimore Sun (01/19/00) P. 6B
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