A.M. Executive Briefing - Nov. 16
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NY/NJ Eyes Bridge Incentive for Trucks
Trucks could be rewarded for traveling at night on bridges in the heavily traveled New York City area, according to the New York Times.The Port Authority of New York and New Jersey is considering an option to give trucks large discounts on bridge and tunnel tolls for traveling late at night, in an effort to ease congestion. That is part of a broader plan that would raise tolls for many commuters to help pay for large capital spending plans by the port authority, the Times added.
Some could see the night-driving proposal at odds with the U.S. Department of Transportation's planned reform of trucker drivers' hours-of-service rules, which has been criticized on the grounds that the way it would limit drivers' operating hours could force trucks off the road at night. Transport Topics
Airborne Expanding Ground Deliveries
Air delivery company Airborne Freight (ABF) plans to put $30 million into expanding its business-to-business ground delivery, or trucking, operations in the coming year, Bloomberg reported. The company, which operates under the name Airborne Express, is already building on its separate home-delivery business through an alliance with the U.S. Postal Service.
Airborne President Carl Donaway said at a Salomon Smith Barney transportation conference that shopping by both consumers and businesses is changing because of the Internet, increasing demand for direct package delivery, Bloomberg noted. By 2004, trucks and vans are expected to deliver 5.6 billion packages, compared with 4.8 billion last year.
Airborne's investment and the hiring of more salespeople is intended to help it reclaim some business lost to larger rivals United Parcel Service (UPS) and FedEx (FDX), Donaway told the group. Bloomberg added that Airborne's earnings have been hurt for over a year by a decline in shipments and higher fuel costs. Transport Topics
Oil Consumers to Plead for Lower Prices
Oil-consuming nations plan to tell producers this weekend that prices need to be low enough to allow for steady global growth, Bloomberg News reported Thursday.Officials from more than 50 countries, producers as well as consumers, plan to meet in Saudi Arabia to try to settle differences - but without high hopes for real resolution, the story said.
Officials from the Organization of Petroleum Exporting Countries are expected to counter the request for lower prices by urging consumer nations to lower their own fuel taxes as a way of cutting the final cost of fuel to consumers.
Oil prices have around $33 a barrel in the London market. OPEC's official target for oil prices is a range of $22 to $28 a barrel. U.S. Energy Secretary Bill Richardson has called the "ideal" price range $20 to $25 a barrel.
This week, OPEC members agreed to keep production where it is rather than plan further increases, and decided to meet again Jan. 17, the news service said. Transport Topics
Dura Gets Large Vehicle Parts Order
Vehicle-parts manufacturer Dura Automotive Systems (DRRA) has received $260 million in orders to make seats, windows and pedals for cars and trucks through 2005, Bloomberg reported.Dura has signed contracts with Ford Motor Co. (F), General Motors (GM) and Volkswagen to make the parts, the wire service said. Dura said the order would offset their losses from the decreased sales of recreational vehicles.
Dura also makes some parts for the commercial vehicle market, which has been much weaker in 2000 than last year. Transport Topics
United Road Services Reports Net Loss
Albany, N.Y.-based United Road Services, Inc. (URSI), whose various operations include roadside assistance and transporting vehicles and construction equipment, reported a net loss of $7.4 million or $3.73 per diluted share in the third quarter while earnings before counting interest, depreciation, taxes and amortization (EBIDTA) were down slightly to $3.4 million.Those figures compare with a net loss a year earlier of $3.7 million or $2.16 per share and an EBIDTA of $3.5 million.
Gerald Riordan, its chief executive, said that with such recent steps as closing some units and bringing in more capital through new equity issuance and a credit refinancing, "we continue our efforts to return to profitability."
Albany, N.Y.-based United Road Services operates in 20 states and was formed in 1997. Transport Topics
Tenneco Predicts Decreased Revenue
Replacement vehicle-parts maker Tenneco Automotive Inc. (TEN) of Lake Forest, Ill. predicts its sales will drop 2% in the coming year, Bloomberg reported.Tenneco, the world's largest maker of exhaust systems, said newer models of trucks and cars are built stronger and don't need replacement parts as much as older models, which has contributed to the lower demand for its products.
After its third-quarter earnings fell 67%, the company recently said it will cut up to 700 jobs, Bloomberg added. Transport Topics
Marten Looks for 4Q Earnings Drop Without Y2K
Refrigerated-truck carrier Marten Transport (MRTN) said Thursday it expects fourth-quarter earnings to be 35 to 40 cents per share, well below the year-earlier 66 cents. Marten plans to report those quarter earnings in late January. The Mondovi, Wis.-based company said last year's earnings strength included higher-than-normal rates on special freight services, which occurred in the context of tighter hauling capacity then and customers' concerns to ship ahead of possible 1999 year-end problems associated with the Y2K computer glitch. Marten does not see that kind of freight demand repeated, so it looks for lower earnings. Transport Topics
Montreal Container Backlog Reported Shrinking
The container backlog at the Port of Montreal continues to shrink even though a strike by independent truckers drags on, the Journal of Commerce Online reported Thurs-day.On Tuesday - the strike's 25th day - 1,946 container-carrying truck moves in and out of the facility were tracked, compared with a normal daily average of 1,200 to 1,500, a port authority spokesman told JOC. Trucks are traveling under police protection.
About 5,000 containers remained piled up at dockside - and an equivalent number waited at terminals in the Montreal region, according to the port authority.
About 60% of the port's container business has remained unaffected, moving by rail directly between the port and shippers in the United States and Canada, the JOC said. Transport Topics
U.S. Compliance With Kyoto Accord Seen in Reach
In a development that could help ease some potential cost pressures on the U.S. trucking industry, a new government research report cited by the Wall Street Journal says the United States could come into compliance with an international air quality accord if a series of voluntary steps were taken.A report commissioned by the Energy Department found that investments in energy efficiency could be recouped within 20 years through lower costs for energy use. That could help bring the United States into compliance with the Kyoto climate protocol over the next decade without burdening the economy, the paper reported.
The study said that doubling the federal investment in clean-energy research, giving drivers cost incentives for fuel efficiencies and developing a domestic emissions-trading system could reduce carbon dioxide levels substantially, the Journal reported. Transport Topics
Small Business Optimism Dropping, Foundation Finds
Small trucking companies are not the only ones getting jittery about the economy - small business optimism generally dropped 1.7 points in October, according to the latest Small Business Economic Trends report from the NFIB Education Foundation.Although enterprises in general may not have as much trouble hiring help as small trucking companies are having finding drivers, it is still an issue. Of the firms responding, 22% reported that finding qualified labor (skilled or unskilled) was the most important problem faced by their firm. Hard-to-fill job openings were reported by 32% of respondents. Labor compensation was increased by 31% of the firms, but only 6% cited labor costs as their number-one business concern. That issue has fallen behind taxes, which 26% of small businesses call their top worry.
A net 15% of all firms reported raising average selling prices, up 2 points following a 3 point gain in September. Higher labor and energy costs spurred the increases.
Availability of credit has been somewhat of a bright spot, due to risk-based pricing, lenders have said "no" less often, the foundation found. Only 4% reported that credit was harder to get.
"No 'riots' over energy prices or higher interest rates appear in the data, but these annoyances nibble away around the edges," stated William Dunkelberg, chief economist at the foundation. Transport Topics
Postal Service Facing Money Woes, Downsizing
Even though the U.S. Postal Service raised its package rates recently, it is facing losses and job cuts, the Washington Post reported Wednesday.
The postal service - which receives no taxpayer funds to cover its operations and is expected to break even every year - is facing a loss of $480 million and cuts of as many as 13,200 jobs in fiscal 2001, the Post said.
However, it could get worse, because the independent Postal Rate Commission has approved a lower increase than USPS requested, the Post said. Higher fuel costs and competition from private carriers are among the woes, as well as Internet traffic slashing into first class and other document revenue.
Furthermore, law prevents USPS from applying a fuel surchage, a spokeswoman told Bloomberg News. USPS was hammered with $240 million in increased fuel costs during first six months of this year, Bloomberg said. However, package competitors FedEx (FDX) and United Parcel Service (UPS) did raise rates, partly due to the fuel jump, the news service said. Transport Topics
Headlines From Yesterday's P.M. Briefing
- GE Capital Links with Innovative Fleet Services to Sell Used Trucks
- Lund Reports Greater 3Q Loss
- TransCom Posts Sharply Lower 3Q Earnings
- TravelCenters Bought by Oak Hill
- Engine Maker Cummins Sees Growth for Generator Unit
- Traffic.com Goes Live in Houston, Philadelphia, LA
- Sen. Campbell to Haul Capitol Christmas Tree
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