A.M. Executive Briefing - Jan. 24
This Morning's Headlines:
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Law Expected to Halt Rate Drop
Since Nafta passed in 1992, more and more U.S. companies have been leasing drivers and equipment from Mexican carriers, which has caused a lengthy drop in rates at the border. This rate drop will probably end because of a provision in the Motor Carrier Safety Improvement Act of 1999 prohibiting the practice if the Mexican equipment or drivers will be used outside the border trucking zones.But the law might also worsen the critical driver and equipment shortage between the maquiladoras in Mexico and the Los Angeles-Long Beach port. Although the provision became effective Jan. 1, California authorities will not enforce it until Feb. 19, or possibly later, so companies will have time to get out of complex leases.
The California Trucking Association urged passage of the ban to create fairer competition for carriers operating outside the zones, said CTA International Border Policy Subcommittee Chairman Armando Freire. He said leasing Mexican equipment and drivers is cheaper because no worker's comp payments are necessary; the trucks use Mexican diesel, which is cheaper and more polluting; and because the drivers do not have the same HOS limits as U.S. truckers.
The CTA supports an open border, said Freire, but he said lower-priced companies leasing from Mexican carriers have forced 30 San Diego companies to shut down in the past three years. Journal of Commerce (01/24/00) P. 1; Mongelluzzo, Bill
Truckers Test the Limits of Weight Rules on West Virginia Highways
The Charleston Gazette found that West Virginia greatly reduced enforcement of weight limits on coal trucks beginning in 1997, after Cecil Underwood took over as governor.The monthly average was 361 overweight citations in 1996, during the previous governor's term, then fell to 271 in 1997, 171 in 1998, and 115 last year. Inspections on the interstate highways have surged since September 1998, when enforcement crews were taken from the coalfields in the southern part of the state and moved to interstate weigh stations.
But very few trucks on interstates violate weight limits, while overweight trucks tend to use such roads as U.S. 52 and state routes 61 and 3. Last week, the Transportation Department used portable scales to inspect three trucks coming from West Virginia and Kentucky coal mines on U.S. 52, which typically sees enforcement crews weekly, and found them all at more than twice the 80,000-pound limit.
Cameron Lewis, state Division of Highways director of weight enforcement, said the problem will not be stopped by cracking down on truckers, who he said are "at the mercy of the coal companies," but by going after shippers or receivers. Associated Press (01/23/00)
Study Finds Lower Truck Speed Limit Poses No Safety Threat
The Idaho Transportation Department has found no statistically significant change in accident rates in the year and a half since the speed limit for trucks on interstates has been 10 mph lower than cars' limit. The lower maximum truck speed limit was passed as a trade-off for raising the weight limit to 129,000 pounds on certain eastern and southern Idaho routes to make up for poor Union Pacific Railroad service. Associated Press (01/22/00)Airborne Says Fuel Prices Will Drastically Cut Profit
Airborne Freight said rising jet fuel costs might cause its fourth-quarter profit to come in between 24 cents and 29 cents per share, as low as 50% of the First Call/Thomson Financial poll average of 48 cents. The company took an 11-cent earnings hit in the quarter as average fuel prices rose 32%. The company's net income was $38.3 million (78 cents per share) in the fourth quarter 1998. Airborne, United Parcel Service, Federal Express, and top airlines have all announced surcharges on fuel. Atlanta Journal-Constitution (1/22/00) P. 6FVolvo Lays Off 400, More Could Follow
Volvo Trucks North America is laying off 420 employees at its truck plant in Dublin, Va., this week, following up on its December announcement of 400 planned layoffs due to lower truck orders. According to labor officials, upcoming months could see between 400 and 500 more, which was unexpected. Volvo hired 725 employees in the summer, when it started expanding the plant, and the 420 workers being laid off were among them. The company said the expansion will go on and the employees will be rehired when the truck market gets better. Associated Press (01/22/00)© copyright 2000 INFORMATION, INC. Terms of Service
