A.M. Executive Briefing - Sept. 25
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Fuel Prices Fall After U.S. Oil Reserve Release Announced
Crude oil prices fell 4% in London Friday to their lowest level in a month, Bloomberg reported, after U.S. President Bill Clinton ordered a release of oil from the U.S. Strategic Petroleum Reserve.Brent crude traded on London's International Petroleum Exchange dropped to $30 a barrel, which the wire service said was the lowest since Aug. 22. It added that prices have fallen 14% in the past week. Some news reports noted that the announced 30-million-barrel SPR release was more than oil markets had expected.
Various oil product prices were also reported falling across Asia Monday. Transport Topics
Ontario Truckers Reach Fuel Surcharge Agreement
A weekend breakthrough deal meant that Ontario's National Truckers Association, which represents about 1,700 independent owner-operators, called off its threatened strike that had been planned to start at 5 p.m. on Friday.After negotiations among the Ontario Trucking Association representing truck company own-ers, federal and provincial governments and the NTA, the truckers agreed not to strike as several major industries agreed to start paying fuel surcharges immediately, according to the Toronto Star.
Bill Wellman, NTA president, told a news conference Sunday that the agreement is not a final deal, but a "significance step forward." Further details were expected to be announced Monday. Transport Topics
USFreightways Warns on 3Q Earnings
General commodities truck hauler and supply chain management provider USFreightways said Friday it expects third-quarter earnings to be lower than in the year-earlier period, and below what Wall Street analysts had been expecting.Like many other trucking or related companies that have warned about their earnings outlook, the company cited increased fuel costs as well as a slowed overall pace of economic activity as factors hurting its performance.
USF said it expects to report earnings of 90-95 cents per share. A year ago it earned $1.07, and it noted that the consensus estimate by analysts had been for it to report net income this time of $1.11 a share. Transport Topics
Clinton Includes Trucks in SPR Remarks
President Bill Clinton on Saturday specifically mentioned administration policies involving fuel for commercial freight trucks, as he explained his Friday order released 30 million barrels of oil from the U.S. Strategic Petroleum Reserve to boost domestic fuel supplies and knock down soaring fuel prices.Clinton said that in addition to the SPR release and related efforts to deal with the short-term crisis, his administration's efforts had included expanded research into alternative fuels and ways to enhance vehicle fuel efficiency. "We're on track to tripling the mileage of passenger vehicles, and more than doubling the mileage of medium and heavy-duty trucks," he said.
The president also noted that research had been expanded on bio-fuels and fuel-cell technology, and that the administration was involved in a 21st Century Truck Initiative with industry, which is aimed at producing safer and more fuel-efficient trucks.
Clinton's statement followed Energy Secretary Bill Richardson's mention of trucking on Friday as part of the reason for releasing SPR oil. Richardson said the release would help U.S. "diesel truck drivers, who deliver the sole source of supplies for 70% of America's communities. If those rigs aren't rolling, a lot of us aren't going to eat."
Those comments come after a strong effort by the trucking industry to press upon the administration how much harm the high fuel prices are inflicting and how that damage can ripple through the economy. American Trucking Associations President Walter McCormick had led a delegation of trucking executives to meet with Richardson last Wednesday afternoon, when the energy chief had told them to expect a presidential decision on the SPR within three days. Transport Topics
Trucker Protests Continue Abroad Over Fuel Costs
Truckers continued Monday to protest high fuel prices around the world. Pakistani drivers launched a two-day strike after that country hiked fuel oil prices last week, Bloomberg reported, and Australian truckers blockaded three oil depots in Melbourne.Some Pakistani trucks were back on the road by noon local time, Bloomberg reported from Karachi, and haulers were expected to raise their rates soon. In Australia, Prime Minister John Howard's government was refusing to hold talks with truckers who want a cut in the fuel tax.
In London, leading transportation companies are boosting their diesel fuel stocks and setting up emergency fuel storage facilities to be ready in case truck protesters again try to block British fuel depots, the Journal of Commerce Online reports. Transport Topics
CSX Rail Sets Fuel Surcharge, Completes CTI Sale
Eastern-U.S. rail giant CSX Transportation said it would set a fuel surcharge effective Oct 25 and based on the market price of crude oil, the Journal of Commerce Online reported. The story quoted CSX Chairman John Snow saying that recent spikes in fuel prices would cost CSXT another $30 million for the rest of this year, pushing the year's total to $265 million more than the railroad paid for fuel in 1999.
However, the statement came before President Clinton late Friday authorized a sale of oil from the U.S. strategic stockpile. Anticipation of that had already pushed prices down from their peaks last week, and the price has come down more in the days since.
Separately, CSX said it had completed the $650 million sale of its CTI Logistx unit5 to the Dutch company TNT Post Group, Bloomberg reported, and would mainly use that money to pay off long-term debt. Transport Topics
Merger Talks Called Off in Separate Transport Deals
Freight-hauling companies in both the United States and Canada on Friday said they were ending negotiations on proposed mergers.From Marietta, Ga., Professional Transportation Group and U.S. Trucking said they were no longer going to try to merge the two operations, both of which report to Chairman W. Anthony Huff. He said in a statement that the anticipated synergies of a merger turned out "not as attractive as we once believed."
Meanwhile, Toronto-based Clarke Inc., a transport and logistics firms that serves shippers with both truckload and less-than-truckload volumes, said it had ended negotiations to acquire the Consolidated Fastfrate rail-freight-forwarding company. Transport Topics
Trimac Execs Offer Buyout to Take Company Private
Calgary, Alberta-based Trimac Corp. - reportedly the second-largest truck hauler of bulk materials in North America - said it had received a buyout offer of C$9.50 a share from Chairman John McCaig and his son Jeff McCaig, the chief executive, to take the company private. Reuters said the McCaig family had founded Trimac 55 years ago, and that the C$260 million bid (US$174 million) follows a recent restructuring at the company.
The McCaigs already own 22% of its stock, and have gotten enough support from other family members, company managers and institutional investors to push their total backing to 85% of Trimac shares, Reuters added. Transport Topics
Headlines From Friday's P.M. Briefing
- Helene Causes Temporary Interruption in Gulf Oil Production
- CSX Completes CTI Logistics Sale
- Germany Agrees to Provide Fuel-Tax Relief, But Not for Trucking
- GM, Renault Team Up on Commercial Van, Hope to Boost European Sales
- Summers: Oil Prices Put U.S. Economy at Risk
- House-Senate Panel to Huddle Next Week on Transport Bill
- Earthgrains Reaches Tentative Agreement With Union
- Professional Transportation Group, U.S. Trucking Call Off Merger Talks
- Emery Pilots Ratify Collective Bargaining Agreement
- U.S. Agency Targets Truck Firms Over Fine Nonpayment
- Kmart Reaches Agreement With Warehouse Workers' Union
- Ga. Officials Seeking Truckers Who May Be Holding Fraudulent CDLs
- Several Fla. Groups Opposed to Heavier Trucks
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