News Briefs - July 3
The Latest Headlines:
- Swift Completes Acquisition of Merit
- ISM Services Index Rises in June
- Pacer Files for Secondary Stock Offering
- Survey: Economy Will Rebound in Second Half of Year
- OPEC Oil Output Fell in June, Bloomberg Says
- Washington State's Motor Fuel Tax Increases
- Giant Announces Completion of Deal With Pilot
- ISM Services Index Rises in June
Swift Completes Acquisition of Merit
Truckload carrier Swift Transportation Co. said late Wednesday it had completed the previously announced acquisition of Merit Distribution Services Inc. for $76 million, which includes $26 million for additional equipment and other assets not originally anticipated.Swift said in a release that the acquisition would add an estimated $140 million to annual revenue.
Merit's fleet consists of 825 tractors and 1,400 trailers. Its primary business consists of dedicated trucking fleets that serve Wal-Mart's grocery distribution centers and retail outlets.
(Click here for the full press release.)
(Click here for previous coverage of the deal.)
ISM Services Index Rises in June
The Institute for Supply Management said Thursday that its index of non-manufacturing activity jumped to 60.6 in June from 54.5 in May.The trucking industry is part of the service sector, which accounts for 85% of U.S. economic activity.
This was the highest reading since September 2000. Readings above 50 shows growth in the service sector.
Economists had forecast a rise to 55, Reuters reported.
The employment index edged up to 50.3 from 48.7, the first positive reading on employment in six months. Transport Topics
Pacer Files for Secondary Stock Offering
Freight transportation and logistics provider Pacer International Inc. said Thursday that it filed for a secondary offering of nearly 7 million shares of common stock with the Securities and Exchange Commission.Pacer said in a release it has about 37 million shares outstanding. Its initial public offering took place on June 13, 2002.
"Facilitating the sale of these shares through an underwritten offering enables Pacer to achieve three important objectives: increased public float, broader ownership of the company's common stock and the orderly entry of shares into the market," said Don Orris, Pacer's chairman and chief executive officer.
Pacer is ranked No. 16 on the 2002 Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
(Click here for the full press release.)
Survey: Economy Will Rebound in Second Half of Year
New tax cuts and improved business profits should lead to an economic rebound in the second half of the year started July 1, according to 54 economists surveyed by The Wall Street Journal.However, the Journal noted Thursday the same group has been predicting a rebound for nearly three years. But many of the economists point to a rising stock market as strong evidence the rebound will be for real this time, the Journal said Thursday.
Trucking is sensitive to economic conditions and growth would be good news for the industry.
The nation's gross domestic product is projected to grow at a 3.5% annualized rate in the third quarter and at a 3.8% rate in the fourth quarter, according to the survey. Transport Topics
OPEC Oil Output Fell in June, Bloomberg Says
Crude-oil production from OPEC members fell 1.8% in June, according to a Bloomberg survey released late Wednesday.Production from all 11 OPEC nations fell 495,000 barrels to 26.3 million barrels a day, Bloomberg said. The biggest decline was from Saudi Arabia, the world's top producer and exporter, where output fell 570,000 barrels to 8.63 million barrels a day.
Iraqi output in June more than doubled to 640,000 barrels a day, from a revised estimate of 305,000 in May, as the country recovered from disruptions caused by the U.S.-led invasion in March. The nation's output rose as high as 847,000 barrels a day in mid-June.
raq had produced 2.48 million barrels a day in February. Transport Topics
Washington State's Motor Fuel Tax Increases
The state of Washington's motor fuel tax increased a nickel a gallon on Tuesday to 28 cents from 23 cents, the Associated Press reported.This is part of a 10-year package that includes $3.4 billion for highways and $605 million for public transportation. The extra nickel is projected to bring in more than $1.7 billion over 10 years.
On Aug. 1, a 15% increase in trucking fees for commercial rigs is scheduled to become law. It would pay for freight mobility projects. Transport Topics
Giant Announces Completion of Deal With Pilot
Oil product refiner and marketer Giant Industries Inc. said June 24 that it has completed the sale of its Travel Center on Interstate 40 east of Gallup, N.M., to Pilot Travel Centers LLC.Giant said that in line with its previously announced debt reduction plans, it would use proceeds from the Travel Center sale to reduce the balance of a revolving credit facility and help satisfy terms of a credit facility covenant.
Giant, Scottsdale, Ariz., owns crude oil refineries, product distribution terminals, a fleet of crude oil and product trucks and retail service-station and convenience stores.
