Executive Briefing - Jan. 23
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OTR Express Warns of 4Q, 1Q Earnings
Dry-van truckload carrier OTR Express said late Tuesday it plans to report net losses for both its fourth and first quarter.The company blamed high fuel costs, lower used-truck values and a slowing econ-omy among the reasons for the anticipated losses.
The company will release results of its fourth quarter in February. Transport Topics
Norfolk Southern Cuts Rail Workers, Dividend
Eastern-U.S. rail freight giant Norfolk Southern Corp. said it will lay off up to 2,000 employees, and slash its dividend from 20 cents a share to 6 cents, in response to an economic slowdown and "changes in transportation markets."NS is not only a competitor to trucking for some freight business, but like other major rail lines is a partner with some trucking operations for freight carried in intermodal containers.
By taking such cost-cutting actions as a sharp dividend reduction and eliminating so many jobs, NS is the latest of a series of railroads and truck lines to pare operations in the face of weakening shipment activity.
NS Chairman David R. Goode said in announcing the belt-tightening measures that they are part of a series of actions to "further align our company with changing economic realities, and they sharpen our focus on improving financial performance for our investors.”
Other actions planned by NS include abandoning up to 4,000 miles of underutilized or duplicate track over the next 24 months; consolidating up to 10 underutilized or redundant facilities; and disposing of about 12,000 surplus freight cars. The company also plans to redesign its service network with the help of a railroad consulting firm.
Although NS has experienced financial difficulties related to congestion problems associated with its 1999 takeover of a share of the former Conrail system, the company has also been buffeted by high fuel prices and a drop in traffic. Dan Lang, Transport Topics
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Fuel Prices, Less Freight Drive Down BNSF's Q4 Earnings
Burlington Northern Santa Fe (BNI) on Tuesday reported lower fourth quarter 2000 earnings but finished the year slightly ahead of 1999.Fourth-quarter earnings were $0.65 per diluted share, 6% lower than a year ago. The railroad blamed the slide on reduced traffic volume, bad weather in the Midwest and higher fuel prices.
Intermodal revenues were a bright spot for the quarter, increasing 3% to $692 million on higher international volumes and new truckload business.
For the year, BNSF's adjusted earnings per diluted share was $2.45, up 1% from 1999. The company said its operating ratio increased slightly to 76.4% for 2000 compared with 75.4% in 1999.
BNSF is based in Ft. Worth, Texas. Transport Topics
DHL to Raise Rates
Express delivery-company DHL said late Monday that it will raise rates 2.9% on domestic and international shipments beginning Feb. 4, the Journal of Commerce Online said. The action follows similar rate increases by FedEx (FDX) and United Parcel Service (UPS). Both companies announced rate hikes in December as a result of rising fuel costs and other factors relating to a slowing economy. DHL said it would continue charging a 4% premium on fuel.
The article noted that DHL will use the rate hike to upgrade its vehicle and aircraft fleet.
The hike does not apply to the company's same-day, WorldFreight (shipments of over 220 pounds) or Worldmail services (international mail processing), the article noted. Transport Topics
Werner 4Q, Year Earnings Slide
Truckload and refrigerated carrier Werner Enterprises (WERN) saw per-share earnings downturns for the year as well as the fourth quarter, the company reported late Monday.Fourth-quarter earnings went down a penny from a year ago to 26 cents a share. The company attributed 4% of the fourth-quarter earnings drop to transfer of its logistics business to Transplace.com, which occurred July 1. For the year, earnings fell to $1.02 per share from $1.26 in 1999.
Werner Chairman Clarence (C.L.) Werner said the company plans to continue at a slower growth rate for the near term, and increase it when margins improve.
Omaha, Neb.-based Werner also offers flatbed, intermodal and warehousing services, and was No. 20 on the Transport Topics 100. (Click here for the full press release.) Transport Topics
Heartland Has Stable 4Q
Truckload carrier Heartland Express announced 2000 fourth-quarter earnings equal to those of 1999 -- 31 cents a share. But it reported an 18.6% increase in yearly earnings.Earnings for the year ended Dec. 31 were $1.34, compared with $1.13 in 1999.
Heartland said that the sale of two properties and the repurchase of about 1.1 million of its outstanding common shares were credited with boosting the yearly per-share earnings.
Heartland's operating ratio for the fourth quarter was 85.1%, compared with 82.7% in 1999. The ratio for the whole year was 83.2%, compared with 82.9% in 1999, the company said.
The privately held Coralville, Iowa-based company was No. 58 on the Transport Topics 100 list. Transport Topics
STB Says Trucking Undercharge is Unreasonable
The U.S. Surface Transportation Board has said that undercharge claims against bankrupt trucking companies are unreasonable, the Journal of Commerce Online reported Monday.Undercharge claims arose in the 1990s when a trucking company would go out of business and the successor would claim that the trucking company did not pay enough for shipments.
Although the trucking company and shipper may have completed the transaction and settled their payments, the successor would say the transaction charges were lower than the published tariff rates. Thus, the successor company would say it deserved the published rate.
The U.S. Supreme Court supported the claims in 1990. However, in 1993, Congress passed the Negotiated Rates Act of 1993 said that claims to such undercharges were unreasonable.
Recently, the STB agreed with Congress and said the extra rate claims were unreasonable. Transport Topics
Palfinger Plans to Make Hydraulic Tailgates
The world's largest maker of truck-mounted cranes will enter the hydraulic tailgate market, Bloomberg News reported Tuesday.Bergheim, Austria-based Palfinger announced an alliance with Hamburg-based Eurolift and Fors Industries of Sweden to develop tailgates under the brand name Palgate, the news service said.
Palgate bought Ohio-based Tiffin Loader Crane Co. earlier in January. The Eurolift venture will give the company a presence in Germany, the world's largest market for truck hydraulic tailgates, Bloomberg said. Transport Topics
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