A.M. Executive Briefing - Nov. 29
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Saudi Arabia Confirms It Will Fill Oil Gap
Saudi Arabia, the world's largest oil producer, confirmed Wednesday that it will make up for any drop in oil supplies if Iraq decides to stop exporting oil, Bloomberg reported.
Iraq recently threatened to stop exporting oil if companies refuse to pay an extra premium of 50 cents per barrel to an Iraqi bank outside of United Nations' control. Currently, the United Nations is monitoring Iraq's oil exports due to penalties imposed on Iraq after it invaded neighboring Kuwait in 1990. However, late Tuesday, Iraq indicated that it would not stop exporting oil.
Meanwhile, crude oil fell to a two-week low early Wednesday, Bloomberg noted, narrowing a gap with year-ago levels. Crude oil is just 24% lower than this time last year.
The price drops came from expectations of warmer weather in the Northeast next week, release of oil from emergency reserves in the United States and Europe and Saudi Arabia's announcement of providing extra oil, Bloomberg noted. Transport Topics
3Q GDP Expansion Rate Falls to 2.4%
Trucking companies seeing slack shipment activity could probably have predicted it, but the U.S. Commerce Department confirmed Wednesday that the U.S. economy grew more slowly in the third quarter than previously reported - at a 2.4% annualized pace instead of the 2.7% Commerce earlier estimated. The downward revision left the growth rate still higher than market analysts had expected.The 2.4% is the slowest U.S. growth pace in four years. The sluggishness has occurred in the midst of the highest interest rates in nine years, the highest oil prices since the Gulf War, waning stock markets and a strong dollar, Bridge News pointed out.
Although the slowdown mean less freight for trucks to carry than would have other-wise been the case, it might also help lead the Federal Reserve to eventually push interest rates back down. The Fed's policy committee meets next on Dec. 19. Transport Topics
Supreme Court: Arbitration Can Save Drug-Using Driver's Job
The ability of a trucking company to fire an unsafe driver was restricted by the U.S. Supreme Court, which ruled Tuesday to uphold arbitration decisions.The unanimous decision stated that the losing side must abide by arbitration decisions, except in rare cases, Bloomberg News reported. Such cases would include a decision requiring breakage of the law.
The driver worked for a coal company and had tested positive for marijuana on two occasions. For the second incident, the arbitrator ruled that the drug use was a lapse spurred by a family problem. The United Mine Workers had argued that Department of Transportation rules do not require companies to fire workers who test positive for drugs, Bloomberg said. Transport Topics
UFCW Aims to Organize Amazon.com Distirbution Workers
Distribution workers are the target of a labor organizing drive at Amazon.com (AMZN), but not by the Teamsters - the United Food and Commercial Workers and the Prewitt Organizing Fund are taking aim, the New York Times reported Wednesday.Layoffs last January and sharp drops in the value of their stock options spurred the effort. The Communications Workers of America is trying to organize 400 customer-service representatives in Seattle, the newspaper reported.
The company acknowledged placement of antiunion statements on its internal Web site, after the content was leaked to the Times. Transport Topics
RDO Reports 3Q Losses
Truck supplier RDO Equipment Co. (RDO) reported a net loss of $4.2 million or 32 cents per share for the third quarter, compared to a net income of $2.3 million or 18 cents per share for the same period last year, the company said.RDO's Chief Executive Officer Gary Weihs said the loss was due to decreased market demand for trucks as well as lower market values for trucks.
The Fargo, N.D.-based company supplies trucks to several industries including the transportation and warehousing industries. It operates 55 locations in nine Midwestern and Southwestern states.Transport Topics
Shortage of Pipeline, Shipping Capacity Keeps Oil in Texas
Barrels of oil are piling up in Texas due to tight shipping capacities and pipelines, Reuters reported this week.The U.S. Northeast needs a higher supply of oil this year due to the possibility of a colder-than-normal winter. Although the oil is available, there are not enough pipelines to transport the oil, the article said.
Additionally, there is a shortage of domestic oil-carrying ships, the only vessels authorized to transport oil between American ports. Transport Topics
Truck Sales Rise in Western Europe
New truck sales rose 2.9% in Western Europe for the third quarter, Bloomberg reported. Registrations for light and heavy trucks increased to 524,020 units compared to 509,082 units during the same period in 1999.Industry analysts said the truck sales grew due to the establishment of the Euro currency in 1999 and increase in cross-border trading. This gave trucking companies additional capital to expand their fleets, the wire service noted. Transport Topics
Mazda Closes Truck Assembly Plant in Japan
Mazda Motor Co. closed a Hiroshima assembly plant which makes Proceed pickup trucks, Bloomberg reported.Mazda, an affiliate of Ford Motor Co. (F), said the closings would reduce excess production. However, the assembly of Proceeds will be transferred to a plant in Thailand. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Volvo Seeks More Than Market Value for Scania Stake
- Dana Corp. to Sell Replacement Parts Business
- Crude Oil Falls After Iraq Denies Export Cut Rumors
- Economy: Durable Orders, Confidence Weaken
- NHSTA Begins Rulemaking on Van Rear Mirrors
- Dorsey Trailers Suspends Operations
- DaimlerChrysler to Buy UK Fleet Manager
- UPS Adds Global Flights to Bombay, Singapore
- ARS to Introduce New Rail Warning System
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