A.M. Executive Briefing - Mar. 10
This Morning's Headlines:
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Truckers to Rally in Washington
The Teamsters and port truckers will rally in Washington, D.C., March 22, with truck convoys coming from four East Coast ports, busloads of truckers from three other East Coast cities, and participants from farther away coming in by airplane, as the drivers continue efforts to call attention to harbor drayage.In recent months, the truckers have held rallies and given port and political officials copies of the Harbor Truckers Bill of Rights, which says drayage drivers are exploited and want to be able to unionize. High diesel costs are the immediate issue sparking the activity.
With many companies running short of drivers and worried that drivers will be gone by the holiday peak season, some are raising rates in general to make up for fuel and insurance costs as well as driver wait time. A group of Pacific steamship lines this week estimated imports from Asia will rise 10% this year, higher than the 7% to 8% they earlier predicted. Journal of Commerce (03/10/00) P. 15; Mongelluzzo, Bill
State Reports Highways Safer, Despite 65 mph Speed Limit
The New York Department of Transportation said Thursday the number of fatal crashes, the crash injury rate, and the amount of crashes in general fell since the speed limit was raised to 65 mph in 1995.Compared to the final three years in which the speed limit was 55, deadly crashes fell 29%, the rate of injuries fell 5%, and the number of accidents fell 4% on 1,181 miles of roads where the speed limit was affected by the change. On roads where the limit did not change, the crash rate remained steady and the rate of deadly crashes went up a bit.
The safety gains have been attributed to improved speeding and aggressive-driving enforcement, as well as improved compliance with the law requiring seat belts. The safety study was required by the statute that increased the speed limit; that statute is due to expire Dec. 1, but the governor and legislature can extend it, and legislators must also decide whether to hike the limit elsewhere.
The department also found an increase in the percentage of commercial vehicles on highways where the limit was raised, to 30.5% from 22.4%, as well as a 0.4% decrease in the number of speeding tickets given out by state police. Associated Press (03/10/00); Stashenko, Joel
Japan's Toyota to Take Effective Control of Truck Maker Hino
Toyota Motor will effectively take control of management in the money-losing Japanese truckmaker Hino Motors by increasing its equity stake in the truckmaker from 20.1% to 33.8%. Earlier this week, Toyota said it would purchase 5% of Yamaha Motor to gain stronger engine ties, with plans to move into Formula One racing.Although Toyota managing director Ryuji Araki said the timing of the two announcements was coincidental, Daiwa Research Institute analyst Masato Ogasawara said they form a strategy for survival among stronger worldwide competition. Ogasawara said Toyota needs stronger partnerships and that it is looking into more cooperation with Japanese companies and, if needed, with foreign companies.
Araki said Toyota does not intend to gain a larger share of Hino, despite a Nihon Keizai Shimbun report that Toyota may acquire more than half of Hino if the truckmaker's efforts to become profitable show progress. Agence France Presse (03/10/00); Ito, Shingo
USF Processors Contracts to Handle Grocery Returns
USFreightways subsidiary USF Processors has landed a reverse-logistics deal with Jitney-Jungle Stores of America, which is in Chapter 11 reorganization. USF will take care of unsaleable and returned goods for the company, which operates grocery stores, filling stations, and liquor stores in six southeastern states. Journal of Commerce (03/10/00) P. 4Rules for Large Truck Loads Face Review
The Nebraska Department of Roads will hold three public meetings this month regarding potential changes to regulations for overweight and oversized loads, including length limits, restrictions on hours, escort vehicles, and permits. Mobile-home haulers want an increase from the current length limit of 100 feet so they can use larger trucks when hauling 80-foot mobile homes without going over the total length limit.The meetings will take place March 21 at the Gering Civic Center in Gering, March 22 at the Ramada Inn in Kearney, and March 23 at the department's auditorium in Lincoln, all starting at 7 p.m. Omaha World-Herald (03/09/00) P. 16; Gertzen, Jason
Sales Slump Fuels Layoffs at Paccar
The North American Class 8 truck sales slump has sparked plans at Paccar to layoff some 300 Kenworth factory workers in Renton and Tukwila, Wash., at the end of March. Currently, the two plants are shut down one day a week, with unemployment benefits paid to employees for the idle days, but the company said build rate still exceeds order intake; it will reduce the Renton site's daily output to 36 units from 50.The Machinists' Union hopes the layoffs will not last long, especially if orders come in for Kenworth trucks at this month's Louisville, Ky., trade show.
Dain Rauscher Wessels analyst Roibert Toomey said the industry's recent boom years may have been fueled in part by artificial demand caused by manufacturers' aggressive financing. A used-truck glut and rises in interest rates and fuel costs are also blamed for the weaker new-truck market. But if economic growth continues to be strong, the sales slump will be short-term, he said.
McAdams Wright Ragen analyst Paul Latta said the slump will last at least six more months, citing indications that raw-material costs will rise as well as signs of at least one additional Federal Reserve rate increase in the future. Seattle Post-Intelligencer (03/09/00) P. D1; Virgin, Bill
Owner Pushed Truckers to Drive Excessive Hours
Neal B. Cohen, owner and president of Oxford, Maine-based Neal B. Cohen Trucking, pleaded guilty Tuesday on federal charges of falsifying documents and tax evasion.Cohen and his company acknowledged making false medical certifications and drug- and alcohol-test records, pushing drivers to make false logbook entries, and making $667,000 in payments that were not included in tax records to over 100 individuals. Cohen could get a maximum 10 years' imprisonment and $500,000 worth of fines, and the company could also be fined as much as $500,000.
According to Assistant U.S. Attorney George Dilworth, close to 50% of company logbooks were falsified, and Cohen Trucking put pressure on truckers to violate hours-of-service rules.
Parents Against Tired Truckers founder Daphne Izer encouraged stiff penalties for hours-of-service violations in order to make carriers who break the rules change their ways.
A routine 1997 federal audit of medical certificates discovered that some of the cards were completed and signed by Cohen and that he had made 65 or more false drug-test reports; these discoveries sparked the investigation. Cohen Trucking employee Warren Morrell also pleaded guilty three months ago on charges of tax evasion and conspiracy to falsify logbooks; he will be sentenced this month. Portland (Maine) Press Herald (03/09/00) P. 1A; Hench, David
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