A.M. Executive Briefing - July 27
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June Durable Goods Orders Strong; Cost Figure Slows
The U.S. government reported Thursday that new orders for durable goods built at U.S. factories rose 10% in June, the strongest monthly gain in nine years and well above economists expectations.It was driven mostly by transportation equipment orders, especially Boeing aircraft, Bloomberg reported, so the increase was not robust across all types of manufacturing. Still, the gain implies some strength will remain in factory-related shipments.
Another closely watched indicator, the quarterly employment cost index, slowed in the June quarter to a 1% gain from 1.4% in March, but the Associated Press said its 12-month rise of 4.4% was also a nine-year high. The Federal Reserve eyes this report as a sign of whether the economy is overheating or needs interest rate increases to cool it down. Transport Topics
Replacement Work on Wilson Bridge in D.C. Area to Start Despite $600 Million Shortfall
Maryland Gov. Parris N. Glendening has issued the go ahead for work on replacing the Woodrow Wilson Bridge, a major link on Interstate 495 outside Washington, D.C. The action should help avoid a yearlong delay that has loomed ever since Maryland, Virginia and the federal government reached an impasse on funding issues, the Washington Post reported Thursday.The primary debate has focused on who picks up the $600 million shortfall in the project budget. Glendening had refused to allow the dredging contract out for bid until the funding issues were resolved. However, since environmental regulations only allow dredging in the Potomac River five months a year, Glendening said he did not want to risk a further delay of the project.
The bridge crosses the Potomac River at the Maryland-Virginia state line and is a common bottleneck along the Capital Beltway, which has a heavy amount of commercial truck traffic. Transport Topics
Truckers Worried About Planned Reduction in Free Container Storage Time at L.A. and Long Beach Ports
News of Los Angeles and Long Beach ports looking to reduce the amount of free time containers can be stored at the docks before penalty fees are charged has trucking officials concerned about possible complications it will mean to their business.The Journal of Commerce reported this week that the top two container ports will be reducing the free storage time from 10 days to five in an effort to get containers moved through quickly, especially as the peak shipping season starts. The individual harbor commissions will vote on the policy change in August, with plans to implement it staring Sept. 1.
Trucking officials said one problem comes from the driver shortage the entire industry is experiencing. Meeting the driver demand by the ports' Sept. 1 deadline for the new policy will be difficult. The other issue is over the burden the truckers will have in being reimbursed from importers and exporters for those penalty fees. Transport Topics
Dana Corp. Will Sell Ohio Plant
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Sypris is based in Louisville, Ky., and makes drivetrain and electronics products for commercial trucks.
Dana Corp. put the plant up for sale last year in an attempt to shift its focus more on the car and light truck markets, the article said. Transport Topics
Michelin Stock Falls After Tiremaker Issues Profit Warning
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In reply, shares fell nearly 10% to 33.6 euros. Market analysts have also downgraded their ratings and estimates on the company, the article said.
Michelin is a tire supplier to the the commercial truck market. That market is experiencing its one dropoff, attributed mostly to high diesel fuel costs. Transport Topics
Mullen Transportation Inc. Reports Second Quarter Results
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Consolidated revenues rose 24.2% to $68.8 million, while net income grew more than 70% to $4.4 million, or 33 cents per share.
While Mullen attributed the overall rise to an increase in activity in its oilfield services division, the company also said the related increase in fuel prices has hurt its trucking division.
In addition, Mullen Transportation also operates a logistics division. The company is based in Aldersyde, Alberta, and serves Canada, the United States and Mexico. Transport Topics
P.A.M. Transportation Says Costs Continuing to Climb
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Company President Robert Weaver said in a statement that second-quarter results, though solid, had been "negatively impacted by higher fuel costs" outside of what could be recovered through fuel surcharges.
So Weaver said that looking ahead "our goal is to post strong earnings and increase revenues to offset the continuing rise in various operating expenses, including fuel, insurance and wages." Transport Topics
