A.M. Executive Briefing - Sept. 22

• Headlines From Yesterday's P.M. Briefing

Oil Prices Dip Slightly on SPR Release Speculation

U.S. crude fell 1.4%, as much as 48 cents, to $33.52 per barrel on the New York Mercantile Exchange; Brent crude on London's International Petroleum Exchange dropped 1%, 33 cents, to $32.40 a barrel, the article said. Analysts believe Clinton may announce his decision on the SPR as early as Friday afternoon, according to Bloomberg.

However, another Bloomberg report noted that many analysts do not believe tapping the SPR will lower prices much. One called the proposal "a short-term fix," possibly meant to help Clinton's vice president Al Gore win the upcoming presidential election, the article said. Prices may only drop slightly on a release of the SPR, as it would not end bottlenecks at oil refineries, Bloomberg noted.

Weather may also affect oil production in the U.S. Gulf of Mexico near Florida, Reuters reports. In advance of Tropical Storm Helene, which came ashore Friday morning, ExxonMobil evacuated some non-essential oil and gas production platform workers as a precaution against the storm. But a company spokesman told Reuters that production had not yet been affected. Transport Topics

Canadian National Will Extend RoadRailer Service

To boost the new service, CN will acquire an additional 200 53-foot, tandem-axle RoadRailer trailers - which can ride on both steel on the rails and rubber on the highways - to bring their fleet to 400 of those units, the article said.

William Berry, CN vice president of intermodal services, said the new service will make the railroad competitive with over-the-road carriers in the Montreal-Toronto-Chicago trade corrider, JoC noted. Transport Topics

Rollins Expects Lower 4Q Earnings

The company expects to report earnings of 14-18 cents per diluted share for the quarter and 86-90 cents per diluted share for the year. Early estimates have put earnings in the 26-33 cents per share range for the quarter and 98 cents-$1.08 per share for the year.

Rollins said the decline in earnings is due to several factors, including higher-than-expected maintenance costs on some acquisitions, lower-than-expected contribution from the commercial rental fleet and start-up costs related to Rollins' entry into 12 new markets. Transport Topics

Major Industrial Nations Prop Euro Currency

That can affect North American truck-hauling operations in several ways. The weak euro was threatening to curb U.S. exports to Europe and undermine the broad European economy, which could hurt international trade in goods hauled by truck. And a number of U.S. freight companies have operations or alliances in Europe, so weakness there can hurt their earnings.

In addition, heavy truck builders DaimlerChrysler and Volvo had warned Thursday in a Bloomberg report that continued euro weakness and its threat to that region's economy could undermine heavy truck sales there, on top of a strong decline this year in North American truck demand.

Since truck making is more and more a global enterprise, the health of markets in one part of the world can affect the ability of those manufacturers to serve markets elsewhere. Transport Topics

Freightliner Goes Postal With New Contract

Freightliner will provide 2,380 trucks in the 2001 fiscal year, and USPS will have the option of extending the contract an additional two years for 4,400 vehicles. Without the option years, the contract is worth more than $79 million, the companies said.

Gaffney, S.C.-based Freightliner Chassis will build a single rear wheel walk-in van chassis, which will then be equipped with a Utilimaster body, for USPS. The new truck has a payload capacity of almost 4,800 lbs. with interior space of 535 cubic feet, 85 cubic feet more than USPS's currently used truck. Transport Topics

Memphis Airport Will Open New Runway

FedEx's main hub is in Memphis, and it handled 95% of that airport's cargo last year, the article said. From there, FedEx can fly non-stop to Asia - benefitting on the eastbound journey from eastward-blowing headwinds - and also offers service to Canada, Europe and Latin America from the airport, the JoC notes.

Airport officials also hope the new runway will boost international service through other carriers such as KLM and Northwest, the article said. Transport Topics

Teamsters Approve Purolator Deal

The previous contract expired Dec. 31, meaning the company's drivers and terminal personnel have been working without a contract for 8½ months.

Purolator representative Jeff Connell said the deal, which extends through Dec. 31, 2003, applies to 8,885 sorters, markers and drivers of vans and trucks throughout 323 Canadian shipping centers and facilities. The proposal was sent to workers after negotiations were completed Aug. 30.

The Mississauga, Ontario-based company provides both air and ground delivery services. Jonathan S. Reiskin, Transport Topics

Wisconsin Central Transportation Corp. Warns on 3Q Outlook

Earnings are under pressure due to the impact of the strong U.S. dollar on foreign currency, the company said, as well as rising fuel prices. Various other transporation companies, especially related to trucking, have said fuel costs are hurting their profits.

Wisconsin Central also said it will extend its stock buyback program and implement some internal restructuring. Transport Topics

Florida East Coast Expects Increased Profits

Florida East Coast's railroad unit should post 2000 operating profits at a 5-7% increase over 1999, the article said.

The planned restructuring in the trucking/container business is meant to better coordinate container traffic between the trucking and railroad units through centralized dispatching, according to Reuters. Florida East Coast said it expects an unspecified increase in both rail and trucking business from container services. Transport Topics

Headlines From Yesterday's P.M. Briefing

• As Fuel Prices Go Up, European Truck Sales May Go Down
• Summers: Gore's Plan to Tap SPR Could Be Appropriate
• Oklahoma Not OK as Fire Spreads
• Auto Makers, Truckstop Operators Square Off Over Clean Diesel Rules
• U.S. Rail Intermodal Up Sharply, AAR Says
• Averitt Express Opens New Texas Service Center
• German Chancellor Under Pressure From Fuel Prices
• LA Transit Strike Reaches Day 5
• NHTSA's Firestone Death Toll Now 101 Humans; 2 Pets Counted Earlier

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