A.M. Executive Briefing - Sept. 20
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CNF Expects Lower 3Q Earnings; USPS Will Pay Higher Rates
Lower operating profits than expected for air freight subsidiary Emery Worldwide has parent company CNF Inc. warning of lower overall third-quarter earnings, the company said Tuesday. The slump was blamed on a slowdown in domestic heavyweight shipments.CNF is a major transportation provider, with operations in trucking, ocean freight and logistics as well as air cargo. Its earnings warning is the latest in a series from companies related to freight transport, although some providers such as FedEx have seen business continue to grow.
CNF expects earnings of approximately 61-66 cents per diluted share for the quarter; the consensus estimate from First Call/Thomson Financial was 80 cents a share.
White House Debate Seen Growing Over Oil Reserve Use
The Clinton administration is more intensely debating whether to tap the U.S. Strategic Petroleum Reserve to push down oil prices, the Wall Street Journal reports.U.S. officials who favor the move see it helping in the face of a looming winter fuel price bulge, as Wall Street firms see their profits cut from high fuel costs, and with the November presidential elections coming soon, the story said.
Those opposed say it could distort the free oil market and thereby increase risks of future shortages, that the government has only a limited ability to move market prices anyway, and tapping re-serve stocks could undermine Saudi Arabian support to boost OPEC output, the Journal added.
Separately, Bloomberg reported that OPEC says it could add another 500,000 daily barrels of increased output to the 800,000 already planned, if the Oct. 1 increase in supplies does not knock prices down enough.
Using the reserve is an option long favored by industries such as trucking. American Trucking Associations President Walter McCormick is slated to meet Wednesday with Energy Secretary Bill Richardson about fuel costs. Transport Topics
Volvo May Sell Scania Stake to Volkswagen
Swedish truck maker Volvo is in talks with Volkswagen about a possible acquisition by VW of Volvo's 45.5% stake in Scania, another Swedish truck maker, Bloomberg reported Wednesday.VW currently holds 34% of Scania's voting stock; Volvo's 34% stake is worth approximately 2.35 billion euros (US$1.99 billion), according to the article.
Volvo's sale of its Scania holdings will likely help it win approval from the European Commission for its purchase of Renault's Mack/RVI division, Bloomberg noted. Transport Topics
L.A., Long Beach Ports Were Hot Spots in August
The ports of Los Angeles and Long Beach, the top two container ports in the United States, both handled record numbers of containers in August and are primed for a record-breaking peak shipping season, the Journal of Commerce Online reports.Long Beach handled the highest number of containerized imports for the month at 236,969 twenty-foot equivalent units (TEUs), a 10.4% increase of the same period of 1999; Los Angeles' volume rose 30.4% to 235,529 loaded TEUs, the article said. In addition, the ports of Tacoma, Wash., and Oakland, Calif., also saw increased volume last month.
August is the midpoint of the holiday shipping season; similar volume increases are expected into the hot shipping months of September and October, the JOC said. Transport Topics
U.S. Agency Raises Death Toll Linked to Recalled Firestone Tires
The U.S. National Highway Traffic Safety Administration announced Tuesday it has received 800 more complaints on the recalled Firestone tires in the past month, raising the number of related deaths to 103 and injuries to more than 400, the Associated Press reports.Most of the reported accidents with the 6.5 million recalled Firestone ATX, ATX II and Wilderness AT tires involve rollovers of Ford's Explorer sport-utility vehicle, on which those tires are standard, AP said.
NHTSA continues to examine Bridgestone/Firestone regarding company knowledge of tire defects and other matters linked to the recall. Transport Topics
AMR's Air Cargo Unit Will Raise Fuel Surcharge
American Airlines Cargo, a division of AMR Corp., will boost its fuel surcharge on international shipments from the United States by 5 cents per kilogram effective Oct. 18, Bloomberg reported late Tuesday.The higher surcharge will apply to shipments to Canada, Europe, Latin America and Asia, the company said.
Competitor United Parcel Service had raised rates in July, also to cover fuel price increases, Bloomberg noted, and jet fuel has risen 30% in the past month in the New York market. Transport Topics
Earthgrains Makes Progress, But Job Actions Go On at 26 Bakeries
Although giant baker Earthgrains has reached a tentative five-year deal with one of its bargaining units, talks are on hold with another union, Reuters reports, so 26 of its U.S. bakeries still see job actions under way.A strike like this can hurt the hauling business for trucking companies that handle inbound commodities and outbound shipments of finished products for the bakeries.
Members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union struck Aug. 28, and the action continues with 3,000 workers at 26 bakeries across the country, the article said. Only two bakeries have halted production, though some regions are having trouble meeting customer demands, Reuters said.
Earthgrains, second-largest U.S. bread maker, covers much of the contiguous U.S. map except for the Northeast and the Pacific Northwest. Transport Topics
European Probe Wonders if Fuel Tax Concessions are Unfair
Although protests across Europe by truckers and other groups against fuel costs pushed some countries to curb their enormous fuel taxes or grant offsets, the European Commission is now probing whether this amounts to unfair subsidies, The Wall Street Journal reported Wednesday.Under its rules, the EC has to power to cancel those concessions by member countries and require repayment if it finds them to be state aid, the Journal said.
European transport ministers were meeting Wednesday in a special session on the protests. Reuters noted the lcation was switched to Luxembourg from Brussels on fears that last week's Belgian protests might be repeated.
Traffic tie-ups and blockages this week hit Spain, Germany, Sweden, Ireland and Israel, Reuters said. Transport Topics
DaimlerChrysler May Consider Bidding for Part of Daewoo
A DaimlerChrysler official said in a press conference Wednesday that the vehicle maker might consider bidding for part of Korea's Daewoo, if that automaker were to be broken up, Bloomberg reports.Ford Motor Co. last week withdrew an offer for Daewoo. General Motors and Fiat are currently the only companies expressing an interest in buying the company, the story said.
DaimlerChrysler has said it is not interested in bidding for all of Daewoo, either alone or in partnership with Hyundai Motors, Bloomberg noted. Transport Topics
Simon Transportation Transaction Complete
Refrigerated truckload carrier Simon Transportation Services announced Tuesday that Jerry Moyes has completed his purchase of all 913,751 shares of Simon Transportation Class B common stock formerly held by Richard Simon, at $9 per share.In addition, Simon resigned as chairman and chief executive officer of Simon Transportation. Moyes will take over as chairman, and former Swift Transportation Vice President Jon Isaacson will serve as CEO and chief operating officer, the company said.
Richard Simon and Kelle Simon, current Simon Transportation president, will remain on the board of directors. Lou Edwards, Gordon Holladay and Earl Scudder, along with Moyes and Isaacson, will replace the Simon Transportation directors who resigned from the board. Transport Topics
Headlines From Yesterday's P.M. Briefing
- Oil Prices Keep Rising, Near $37 Mark
- Los Angeles Transit Strike Goes On
- Yellow Customers Can Now Talk to Customer Service Over the 'Net
- Suburban Chicago Politicians Urge End to Illinois Gas Tax
- U.S. Senate Okays China Measure; Biggest Trade Bill Since Nafta
- ShipServ, Emery Team Up for E-shipping
- ATA's McCormick Will Meet With DOE Secretary on Fuel Cost
- McQuaid Steps Down as NPTC President, CEO
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