Executive Briefing - March 14
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CNF Issues 1Q Earnings Warning
Multi-modal freight hauler CNF Inc. (CNF) said Wednesday it expects first-quarter earnings to be below last year's results, because of the economic slowdown that began to affect company performance in the third quarter of 2000.
The Palo Alto, Calif.-based company now estimates first-quarter results to be in the range of 22-27 cents per share. CNF President Gregory Quesnel said each of CNF's core transportation businesses are currently experiencing substantial tonnage and revenue declines.
Among them is trucking company Con-Way Transportation Services, which is expected to have a decline in operating income compared to a year ago. Also, air cargo carrier Emery Worldwide will incur a loss due to a reduction in domestic freight volumes.
(Click here for the full press release.)
OPEC Expected to Cut Oil Output 2%
The Organization of Petroleum Exporting Countries, which pumps 40% of the world's oil supply, is expected to cut oil production by 2% or 500,000 barrels per day when the cartel meets Friday in Vienna, the Associated Press reported.OPEC is trying to keep oil prices above $25 per barrel. But Monday's crude oil prices fell below this mark at $24.38 per barrel, bolstering the case for an OPEC cut in output.
The demand for oil has been weak in recent weeks, which is normal for spring, AP noted. But the slowing U.S. economy and a relatively mild winter in major oil-consuming countries have also contributed to slumping demand. Transport Topics
Parts Dealer Noble Ends Plans to Buy CD&L
Auto-parts dealer Noble Internationalsaid Wednesday that it had ended negotiations to buy delivery and logistics company Consolidated Delivery & Logistics, Reuters reported.Detroit-based Noble said the two companies could not agree on purchasing terms, the wire service note. No further details were available.
Clifton, N.J.-based CD&L is ranked No. 77 in the
Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics(Click here for the related press release from CD&L.)
Oregon Wants Court Decision on PrePass
The Oregon Department of Transportation has asked a federal court to decide whether it's lawful for it to enroll transponders belonging to Heavy Vehicle Electronic License Plate's PrePass system into the state's "Green Light" weigh-in-motion program for commercial trucks.Oregon wants to use the transponders because they are compatible with its own system, and could save many trucks from having to stop at weigh stations.
Thousands of trucks operating in Oregon today have a PrePass transponder used for clearance in other states, but HELP considers its transponders proprietary. Transport Topics
U.S. January Business Inventories Rise 0.4%
U.S inventories of unsold goods piled higher in January, rising 0.4% to $1.225 trillion, the Commerce Department said.Rising inventories can translate into less trucking activity, since companies may be shipping less when stocks are rising and because they may order fewer goods for the future to prevent a further buildup of stocks.
Sales of goods in January were unchanged at $896 billion after a 0.1% gain in December. The inventory-to-sales ratio, which measures how long inventory stays on store shelves, was 1.37 months or the highest since March of 1999.
Stockpiles of unsold cars and trucks contributed to January's overall rise, as vehicle inventories rose 0.9%, Bloomberg noted. Transport Topics
Exel Buying FX Coughlin
U.K.-based logistics company Exel Plc said it will pay $201 million in cash and debt for U.S.-based FX Coughlin Group, which provides logistics and freight-forwarding services to the U.S. auto industry, Bloomberg News reported.Exel said it would pay $140 million for Coughlin and assume $21 million of debt. It will pay a further $40 million over the next three years.
Exel said the move would boost its share of business from the auto industry, which now accounts for 7% of sales. Transport Topics
States Taking Up Ergonomics Debate
For many states, Congress' repeal last week of new ergonomics regulations signaled the start of a new debate, the Wall Street Journal reported.The repeal was hailed by the trucking industry and other business groups for reversing federal rules that would have been enormously costly to implement. Labor saw them as worker protections.
Currently, almost two dozen states operate their own workplace-safety programs under authority of the U.S. Occupational Safety and Health Administration.
Congress' repeal relieves states of the need to meet a May deadline for adopting standards as strict as the federal regulations, but all states still have that option, the Journal noted.
Some states have already taken action. North Carolina decided to overturn ergonomics rules, while the Seattle Times reported that the Washington Senate voted to delay ergonomics rules for two years. Transport Topics
Swift Sees Earnings Far Below Estimates
Swift Transportation Co. (SWFT) said it expects to report first-quarter earnings to be well below expectations, citing a drop in shipments from the West Coast in January and February that has continued into March.
The Phoenix-based dry van and flatbed truckload carrier said it expects earnings of two cents a share, when it believed Wall Street analysts have been expecting 12 cents.
Swift said it plans to continue its merger with M.S. Carriers, finishing in the second quarter.
Swift is ranked number No. 19 in the Transport Topics 100 list of U.S. trucking companies, based on 1999 data. Transport Topics
(Click here for the full press release.)
M.S. Carriers to Miss Earnings Estimates
M.S. Carriers (MSCA), an irregular route truckload carrier, said it expects to fall significantly short of Wall Street's first-quarter earnings estimates.
Chairman and Chief Executive Officer Mike Starnes said the company is affected by the overall economic slowdown, and that "softness in the freight markets which we serve is limiting our revenue per unit."
The Memphis, Tenn.-based company is being acquired by Swift Transportation, and said that deal should be completed during the second quarter.
M.S. Carriers is No. 23 on the Transport Topics 100 list of largest U.S. trucking companies, based on 1999 data. Transport Topics
Click here for the full press release.)
Bush Drops Cut in Utilities' Carbon Dioxide
In a decision that could help the finances of the nation's utilities, which operate large specialized truck fleets, President Bush said he has decided not to seek mandatory reductions in carbon dioxide emissions by power plants.Bush cited a recent Energy Department study showing that an emission-reducing requirement would lead to higher energy costs, as more utilities shift from coal as a power plant fuel to greater use of more costly natural gas, news reports said.
This decision was a reversal of a Bush campaign pledge to cut carbon dioxide emissions. Bush aides explaining the shift said they had not realized during the campaign that carbon dioxide was not listed as a pollutant under the Clean Air Act, the Associated Press reported. Transport Topics
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Click here for the latest edition of Utility Fleet Management.)
FMCSA Looks to Tenn. for Truck Safety Program
The Federal Motor Carrier Safety Administration is looking at a Tennessee truck safety program as a national model, the Nashville Tennessean newspaper reported in its online edition.That program, called Alternative Commercial Enforcement Strategies, has reduced accidents in the state by 23% in a two-year period, the Tennessean said. ACES provides voluntary inspections to trucking companies by public safety officials.
At a Tuesday meeting in Nashville, FMCSA officials met with state officials to learn how the program works. Since most trucking-related accidents involve out-of-state carriers, ACES backers say a national program would dramatically reduce fatalities. Transport Topics
Truck Finance Council to Meet May 20-22
Trucking and equipment-finance officials will meet May 20-22 in Asheville, N.C., in a conference that takes aim at the tough financial issues that trucking executives face in the economic slowdown.The event is American Trucking Association's National Accounting and Finance Council meeting.
ATA said the group will debate how the combination of banking industry consolidation, economic slowdown and rising fuel costs affects credit availability.
Sessions are also planned on taxes, insurance, profitability analysis, technology and antitrust law. For more information, see http://www.nafc.truckline.com. Transport Topics
Colorado High-Tech Trucks to Speed Emissions Tests
A Colorado program that begins Wednesday will give drivers the chance to skip future emissions tests simply by routing past specially designed trucks on the highway.he Greeley, Co., Daily Tribune reported that through infrared and ultraviolet beams, those trucks will read exhaust plumes and take a photo of the license plate each time a vehicle drives past.
Though the system doesn't work well in poor weather, if a vehicle passes this automatic system two times, its driver will not have to get an emissions test during the year. Everyone else will still need to go for the normal emissions check.
One truck has been set up on U.S. 34 in Greeley, and a second one is located in Fort Collins. Transport Topics
