Executive Briefing - April 9
- Benchmarking to Start This Year
- TCA, OOIDA Join to Support Fuel Surcharge Bill
- Union Pacific Struggling to Meet Earnings
- AMR Completes Purchase of TWA
- Bush Sees Economy Turning Around; Others Not So Sure
- U.S. 93 Under Construction in Ariz.
- Con-Way Using New Collision Avoidance System
- Northwest, Mechanics Reach Tentative Deal
- U.S. Gas Prices Jump Seven Cents
- Three Countries Announce Oil Accord
- Large Drop in Shipments Hurts Cooper
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Benchmarking to Start This Year
SAN ANTONIO, Texas -- The nation's truckload carriers should be able to measure themselves against industry-wide standards by the end of the year, according to a committee report issued Sunday at the annual meeting of the Truckload Carriers Association.A formal assessment of the industry's best practices, benchmarking has been a goal of TCA for more than four years, said committee chairman Daniel England, the chief executive officer of C.R. England Inc.
Until recently the effort had been stalled because of Justice Department concerns that the sharing of information necessary to establish the bench-marks would be considered collusion and a violation of antitrust law.
TCA, OOIDA Join to Support Fuel Surcharge Bill
SAN ANTONIO, Texas -- A group of trucking executives on Sunday endorsed a bill drawn up by the Truckload Carriers Association and the Owner-Operators Independent Drivers Association that would enact a law mandating fuel surcharges.The joint effort was a reaction to the U.S. House of Representatives passing a bill requested by OOIDA last year.
One provision in that bill would have required trucking companies to pay fuel surcharges to independents, irrespective of whether the companies could collect them, so vexed TCA's leadership that the two sides convened negotiations to try and solve the dispute.
Negotiating committee chairman Robert Molinaro of Warren Transport in Waterloo, Iowa, presented his work to TCA members at the group's annual meeting here. The roomful of trucking executives unanimously endorsed the proposal to the association's board of directors, which will have the final say on the matter.
Molinaro said the legislation would probably rouse the ire of shippers' groups, but that TCA and OOIDA would stand together in favor of the bill as a way to make sure the transportation industry receives some extra compensation during times of high fuel prices. Jonathan S. Reiskin
Union Pacific Struggling to Meet Earnings
Ronald Davidson, chief executive officer of railroad company Union Pacific, said in an interview with Bloomberg, the company is going to have a hard time matching last year’s fiscal second-quarter earnings of 96 cents per share.Analysts have been expecting $1.05 per share for the second quarter ending June 30.
He also said that 400 managers took early retirement on March 31 as part of the company’s existing plan to eliminate 2,000 jobs. It expects to fire an additional 100-200 managers during this quarter.
Union Pacific, the largest U.S. railroad company, is being hurt by a decline in chemical and auto shipments. This is a bad sign for trucking companies, since they are used to transport these items from rail yards. Transport Topics
AMR Completes Purchase of TWA
AMR Corp. (AMR), the parent company of American Airlines, completed the $742 million purchase of Trans World Airlines on Monday, news services reported. American is now the world's largest airline.Earlier in the day, an appeals court withdrew a stay order that had temporarily held up the purchase.
The stay had been granted in response to a petition from the Jewish Labor Federation, which said the deal would leave its retirees without pension benefits.
Any airline merger can have a big impact on trucking companies because nearly 60% of air cargo is shipped on passenger planes. A merger of this size could reduce the number of flights available in some areas, and limit the amount of cargo space available. Transport Topics
Bush Sees Economy Turning Around; Others Not So Sure
In his fiscal 2002 budget request, President Bush said that the U.S. economy was set for a recovery later this year as the effects of Federal Reserve interest rate cuts kick in and an overhang of business inventories clears up, Reuters reported.However, the Wall Street Journal said recent jobs and profit data indicates that the prospects for a quick economic rebound are fading. And as earnings season kicks into full gear, there likely will be more bad news on the way.
Treasury Secretary Paul O'Neill remained upbeat Monday, saying the U.S. economy was working through a correction but was still growing.
In the $1.96 trillion budget request, which includes a $1.6 trillion, 10-year tax cut, Bush says the nation should see faster growth in the coming months because forward-looking indicators have begun to strengthen.
The administration projects real GDP growth of 2.4% in 2001 and 3.3% growth next year. The average growth over the next decade is estimated at 3.2%. Transport Topics
U.S. 93 Under Construction in Ariz.
Truckers driving on Arizona's U.S. Highway 93 from Wickenburg to Interstate 40 will encounter delays for construction and blasting beginning Monday, the Arizona Department of Transportation said.Highway 93 runs north-south through the state. Wickenburg is about 60 miles northwest of Phoenix.
The construction will occur April 9-12 at 4 p.m. local time, for about 30 minutes. On April 13, the blasts in the work zones will begin at noon and continue for 30 minutes. The ADOT will post signs redirecting traffic on these dates. Transport Topics
Con-Way Using New Collision Avoidance System
Con-Way Transportation Services said its new Sterling tractors have a collision avoidance system installed that will help its drivers monitor the speed and location of other vehicles as they travel the highways.The system has a set of radar antennas on the front and the side of the tractor, which are connected to an on-board computer that monitors speed and engine activity. It also monitors the activity of vehicles in front and beside the tractor, and will alert the driver of potentially dangerous situations.
Con-Way, which is a subsidiary of CNF Inc. (CNF) said the cost of this safety improvement is more than $1 million.
CNF is ranked No. 3 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
(Click here for the full press release.)
Northwest, Mechanics Reach Tentative Deal
Northwest Airlines (NWAC) and its mechanics reached a tentative agreement early Monday, ending a 4½–year stalemate days before a board of arbitrators was to recommend settlement terms, news services reported.Northwest has an air cargo division, and also carries freight in the bellies of its passenger planes, so a strike could have greatly affected significant amounts of air freight normally carried to and from airports by truck.
When any airline strike occurs, it can throw more air parcels onto expedited truck services.
Neither side released details of the agreement, which will be voted on by the Aircraft Mechanics Fraternal Association in the coming weeks. The union had set a strike date of May 11. Transport Topics
(Click here for a press release from Northwest.)
U.S. Gas Prices Jump Seven Cents
Gasoline prices at U.S. stations rose an average of seven cents per gallon in the past two weeks to $1.54 as seasonal demand increased, according to the Lundberg Survey of about 8,000 stations.
This was the first rise since early January. The average price had fallen more than five cents since the start of the year, the Associated Press reported.
Other factors that caused the price jump included slowdowns at U.S. refineries for scheduled maintenance, and a shift to special environmentally friendly formulas required in some states.
Also Monday, the Wall Street Journal reported U.S. gasoline prices are expected to continue rising for the second straight the summer.
he U.S. Department of Energy has warned that low gasoline inventories may push prices up. Inventories are 5% lower than in 2000, and have not recovered from last year’s cold weather which created a ten-year low. Transport Topics
Three Countries Announce Oil Accord
Mexico, Venezuela and Columbia on Sunday announced an accord to help stabilize oil prices, news sources reported.The Group of Three, as the pact is called, seeks to streamline oil production and delivery between North and South America, Reuters noted.
Venezuela is a member of the Organization of Petroleum Exporting Countries, and is participating in the cartel's current agreement to cut oil production by 1 million barrels per day.
Mexico will join in cutting production, although it is not an OPEC member, the Associated Press said.
However, Columbia said last month that it would increase its oil production from 620,000 to 1 million barrels per day. Transport Topics
Large Drop in Shipments Hurts Cooper
Cooper Tire and Rubber (CTB) said that its first-quarter earnings will be much lower than expected because replacement tire shipments have been very weak, and vehicle production continues to decline.The Findlay, Ohio-based company said the industry experienced a decline of nearly 8% from shipments in last year's first quarter, the greatest rate of decline since 1980.
The company now expects earnings for the quarter ended March 31 to be in the range of 1-5 cents per share, compared to its estimate of 21 cents in February.
However, it does anticipate an improvement in its own business during the next quarter, even if overall economic conditions do not improve.
(Click here for the full press release.)
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