A.M. Executive Briefing - June 7
This Morning's Headlines:
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Covenant Warns on Earnings, Sets Stock Buyback Plan
Chattanooga, Tenn.-based truck line Covenant Transport said Tuesday afternoon it expects to earn 25 cents to 30 cents per share in the second quarter, which is less than analysts had been looking for. Covenant said revenue should be up by more than 20%, but it blamed the softer earnings outlook on "lower-than-expected utilization (miles per truck) due to a soft freight environment."This follows an earnings warning earlier this week by Memphis-based M.S. Carriers, and comes amid various economic reports suggesting that economic growth has slowed in recent months.
ContractorHub.com, Schneider Logistics Join E-hands
An Internet procurement service for the construction industry, ContractorHub.com, today announced a strategic alliance with Schneider Logistics – part of truckload giant carrier Schneider National--to bring online shipping and logistics management to ContractorHub.com's business-to-business (B2B) e-marketplace. The company said this would allow its users to automate shipping, fulfillment and order tracking, while broadening the user base for Schneider's various logistics products. Karim Khoury, president and CEO of ContractorHub.com, called Schneider "a best-of-breed partner with expertise on multiple fronts – providing both critical shipping services and real-time logistics management technology."The announcement also noted that by "leveraging the expertise and experience of the largest truckload transportation and logistics company in North America lends credibility to both buyers and sellers conducting business at ContractorHub.com." Transport Topics Staff
Illinois Gov. Ryan Says U.S., Other States Share Role in CDL Scandal
In a public hearing held by the Federal Motor Carrier Safety Administration, Gov. George Ryan blamed other states and the federal government for the large-scale truck licensing fraud that has been uncovered in Illinois.According to Ryan, excessively strict federal testing regulations drove corrupt individuals into searching for ways to illegally obtain commercial driver's licenses.
According to an anonymous source, federal trucking officials, who will be using the June 6 hearing along with visits to testing facilities to form recommendations for improving the commercial licensing program, were not taken in by Ryan's testimony.
Wisconsin Atty. Gen. Jim Doyle criticized the state of Illinois for allowing elected officials to become involved in the Transportation Department and has been looking into the prospect of ending a reciprocal licensing agreement with the state. Prosecutors have identified 550 people who received commercial licenses through fraud and more may still be at large. Chicago Tribune (06/07/00) P. 1N; Hilkevitch, Jon; Higgins, Michael
Illinois Police Launch Roadcheck 2000 Inspection Blitz
Illinois police on June 6 kicked off Roadcheck 2000, a 72-hour truck-safety inspection blitz taking place at weigh stations on Interstate Highway 57, U.S. Highway 41 at Rosecrans and Wadsworth Roads, Interstate Highway 55, and Interstate Highway 64. The program was designed to underscore the importance of big trucks meeting federal and state standards with regard to equipment, loads, and accompanying documentation. Chicago Tribune (06/07/00); Ziemba, StanleyPoor Accounting, Medicare Changes, Conspiracy Indictment Hit Laidlaw Hard
Burlington, Vt.-based Laidlaw has dug a hole for itself through poorly timed attempts at diversification. The company, which began solely as a trucking interest, first expanded into solid-waste management and then added school buses, public transit, and more.However, difficulties arose when Laidlaw purchased a 44% stake in waste-management company Safety-Kleen. Safety-Kleen has been the victim of a series of accounting difficulties as well as ineptness among its top officials and the company's stock price has plummeted.
Laidlaw also built up a very large ambulance service and has been hit hard by the U.S. government's attempts to cap reimbursement costs under the American Medicare system. If these failings were not bad luck enough, the company has also been victimized by an indictment in South Carolina regarding an alleged conspiracy to evade $52,000 in taxes on 39 school buses.
Still, Laidlaw is not out of the game yet; it still has school bus, inter-city, tour, and public transit operations that are turning profits. Ottawa Citizen (06/07/00) P. C1; Guly, Christopher
Compiled by Transport Topics staff and INFORMATION, INC. © 2000
