Executive Briefing - Mar.12
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Matlack Reported in Serious Financial Trouble
Matlack Systems (MLK), the second-largest U.S. bulk transport trucking company, has told federal regulators it is losing money and may have to consider bankruptcy or closing, Traffic World reported.
The Wilmington, Del.-based carrier said its survival depends on its ability to refinance an existing bank credit facility or obtain an alternative source of lending, the magazine added.
Matlack's stock was delisted from the New York Stock Exchange in October, and the company replaced its auditors last year July.
Matlack is ranked No. 68 on Transport Topics 100 list of largest U.S. trucking companies, based on 1999 data. Transport Topics
Covenant Warns on 1Q Earnings
Chattanooga, Tenn.-based truckload carrier Covenant Transport (CVTI) on Monday warned that its first-quarter earnings may fall at least 4 cents below industry forecasts of 9 cents per share.
Company Chairman, President and Chief Executive Officer David R. Parker blamed the weak freight market for the anticipated low earnings.
"Although freight demand at the end of February and early in March seems to be increasing slightly, it's not improving enough to overcome a very soft January and February market," he said in a statement with the earnings warning.
The company expects business to improve beginning in late March, as long as the current levels of freight do not deteriorate.
Covenant is ranked number No. 33 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
(Click here for the full press release.)
Dutch Govt. to Whittle Stake in TNT
The Dutch government is planning to sell a 7.3% stake in TNT Post Group (TP), easing the company's path to alliance with American firms, the Journal of Commerce Online reported Monday.
After the sale, the Dutch government will own only 36%, and aims to shed more over time to eventually own just 10% of the Amsterdam-based global mail, express and logistics company.
The JOC said that news of the plan to reduce government ownership to just 10% was likely to revive speculation of a potential link between TNT and United Parcel Service (UPS), which seeks to counter the expansion of Germany's Deutsche Post World Net (DPW-FRK).
Deutsche Post has spent more than $5 billion on acquisitions, including U.S. air freight forwarder Danzas AEI and DHL Worldwide Express. Transport Topics
Delphi Buying Eaton's Switches for $300M
Delphi Automotive Systems (DPH) said Monday that it would buy the Vehicle Switch/Electronics Division of Eaton Corp. (ETN) for $300 million.
Eaton makes parts for various types of vehicles, including commercial trucks. Delphi said the purchase would broaden its electrical systems capability.
Delphi added that this acquisition also diversifies its customer base, and further shifts its manufacturing and engineering footprint toward high-tech electrical products. Transport Topics
(Click here for the Delphi press release.)
(Click here for the Eaton press release.)
U.S. Retail Gasoline Price Drops
The average price for gas at U.S. stations fell almost two cents to 148.0 cents per gallon in the past two weeks, the Associated Press reported from the latest survey by market analyst Trilby Lundberg.The new average is a drop of 1.95 cents from Feb. 23, the survey of 8,000 fueling stations noted. The drop is consistent with a 4-week slide due to lower crude oil prices, AP added.
lthough no immediate hikes are anticipated, the Organization for Petroleum Exporting Countries is expected to decrease production after its Friday meeting in Vienna. Transport Topics
Covenant Joins NTE E-marketplace
Truckload carrier Covenant Transport (CVTI) announced Monday that it has joined NTE's e-commerce trading community to buy dry-van truckload freight.
NTE helps shippers and carriers match loads through the company's online services. The Downers Grove, Ill.-based company originally focused on less-than-truckload shipments, but expanded to both LTL and TL shipments last year.
Covenant, which is based in Chattanooga, Tenn., operates a fleet of 3,800 tractors and 6,900 trailers. It is ranked number No. 33 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
(Click here for the full press release.)
Hoffa Urges U.S. to Keep Out Mexican Trucks
Teamsters President James P. Hoffa met Friday with Transportation Secretary Norman Mineta, and urged Mineta to keep the U.S. border closed to Mexican trucks, the union announced.A Nafta panel ruled recently that the border beyond the 20-mile zone should be opened to Mexican trucks. The Bush administration has not yet done so, and the union said the administration should continue that cautious stance.
The Teamsters union argues that allowing Mexican trucks would threaten U.S. highway safety. Last year, almost four million trucks crossed from Mexico into a 20-mile U.S. border zone, yet less than 1% of them were inspected for safety violations, the union said.
However, Mexico's president, Vicente Fox, recently told the Washington Post that Mexican trucking companies are ready to operate in the United States, meet U.S. standards and compete with the U.S. fleet.Transport Topics
OPEC Studying Production Cuts
Chakib Khelil, the Algerian energy minister and current president of the Organization of Petroleum Exporting Countries, said Saturday that OPEC is studying production cuts ahead of Friday's meeting in Vienna, the Associated Press reported.One of the main topics of that meeting will be to coordinate an OPEC strategy for an expected drop in oil demand, as winter heating needs ebb in many consumer countries.
Cuts in world oil output could soon cause prices to quit falling or move higher. That, in turn, could end the recent decline in pump prices for diesel fuel and gasoline used by the trucking industry, and cause them to rise again.
Although new output cuts have been expected, Khelil did not specify an exact figure. He reiterated that OPEC's objective is to hold market prices for crude oil steady at about $25 a barrel.
The Wall Street Journal reported that non-OPEC oil production has risen by almost a million barrels per day, which has nearly made up for what OPEC took off the market when it trimmed output in January. Transport Topics
Railcar, Intermodal Traffic Slows
U.S. and Canadian railcar freight traffic fell by 3.3% in the four weeks ending March 3 from the comparable period of 2000, as slower manufacturing activity in February cut into shipments of economically sensitive commodities, the Journal of Commerce Online reported.Rail intermodal shipments of truck containers and trailers also declined in February, JOC said.
Although containers eked out a 1.2% gain, trailer hauls fell 9.9%, producing a 2.1% decline in overall intermodal shipments by rail.
February was the second straight month of declines for carload and intermodal freight movements. The decline was sharper than in January, when carload volume was down 3.1%, and intermodal dipped 0.7%, according to JOC.Transport Topics
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BNSF Holding First Online Fuel Auction
he largest U.S. freight railroad, Burlington Northern and Santa Fe Railway Co., said Monday it will be the first U.S. rail system to use the Internet for some of its fuel purchases.
BNSF said that on March 27 it will buy 9 million gallons of fuel over the American Petroleum Exchange's online system.
APE describes itself as a neutral e-marketplace that has already performed over 1,700 diesel fuel and gasoline transactions.
Headquartered in Fort Worth, BNSF operates a rail network that sprawls across 28 states and two Canadian provinces. BNSF buys about 1.2 billion gallons of fuel annually.Transport Topics
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Click here for the full press release.)
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b>Northwest Airlines said Monday that all its flights would continue as scheduled. An ongoing conflict between the airline and its mechanics union Aircraft Mechanics Fraternal Association had raised concerns about potential flight disruptions.
Interruption of service by a major airline can also burden trucking companies, since air cargo from passenger planes or dedicated cargo flights may be diverted to other airlines or over-the-road trucks.
On Friday, President Bush issued an order prohibiting any strike actions for 60 days. AMFA had planned to strike beginning 12:01 a.m. Monday if the airline and union were unable to reach agreement on wages and pensions, CNN.com reported.
Talks between the union and airline continued over the weekend, but ended late Sunday before any settlement could be made, news services reported. Transport Topics
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b>Emery Worldwide has charged in a lawsuit that a $6.3 billion contract awarded by the U.S. Postal Service on a no-bid basis to FedEx will increase the cost of transporting mail by a range of $443 million to $1.17 billion, the Washington Post reported Sunday.
Emery, a subsidiary of trucking company CNF Inc., is challenging the USPS/FedEx deal in the U.S. Court of Federal Claims on Tuesday, stating that the no-bid contract violated a 1970 law, the Post said.
Emery used to haul priority mail for USPS, but ended its agreement in January.
CNF is No. 3 on Northwest Air Continues Full Service
Emery Charges Postal Deal with FedEx Will Boost Mail Cost
ServiceCraft Names Miller CEO/President
Transportation and distribution company ServiceCraft on Friday named Jeffrey M. Miller as its president and chief executive officer.Miller has been in the logistics and distribution business for 30 years. The company said that Miller will be responsible for expanding the company's services beyond its less-than-truckload shipments and warehousing operations.
ServiceCraft is a wholly owned subsidiary of Chicago-based May Logistics Services. Transport Topics
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Click here for the full press release.)