News Briefs - June 3
The Latest Headlines:
- ISM Services Index Falls From Record in May
- Other LTLs Benefiting From Closing of Red Star
- First-Quarter Productivity Rises 3.8%
- Jobless Claims Rise by 6,000 in Latest Week
- Fuso Executives Get Pay Cut for Defect Cover-up
- CSX Announces Intermodal Changes
- Other LTLs Benefiting From Closing of Red Star
ISM Services Index Falls From Record in May
The Institute for Supply Management said Thursday its non-manufacturing index dipped to 65.2 in May, from a record 68.4 the month before.Despite the decline, May's reading was the fourth-highest ever. Readings greater than 50 indicate expansion, and the index has surpassed 60 every month this year.
This index measures the services sector, which is the largest segment of the economy and includes trucking.
The index of new orders for non-manufacturing companies slipped to 61.3 from 65.6. Transport Topics
Other LTLs Benefiting From Closing of Red Star
Yellow Roadway Corp., Overnite Corp. and the Con-Way unit of CNF Inc. are among the less-than-truckload carriers adding loads following the closing of USF Red Star last month, Reuters reported.Chicago-based USF Corp. unexpectedly closed its Red Star unit, a regional LTL carrier that employed about 2,000 people, following a dispute with the Teamsters. (Click here for previous coverage.)
Analysts said other LTLs including Old Dominion Freight Lines would benefit from Red Star's closing as well, Reuters said. Transport Topics
First-Quarter Productivity Rises 3.8%
Business productivity increased at a revised 3.8% annual rate in the first quarter, the Labor Department said Thursday, which was slightly faster than the 3.5% gain initially reported.Efficiency gains are important to the economy's long-term vitality because they allow the economy to grow faster without igniting inflation. Companies can pay workers more without raising prices, and it can bolster a company's profitability.
Labor also said companies boosted output at a 5.4% rate for the quarter, stronger than previously estimated and up from a 4.2% growth rate in the fourth quarter.
Unit labor costs -- a key gauge of wage pressure that measures the cost of labor per unit of production -- rose at a revised 0.8% rate in the first quarter, compared to an initially reported 0.5% advance. Transport Topics
Jobless Claims Rise by 6,000 in Latest Week
The number of Americans filing initial claims for unemployment declined by 6,000 to 339,000 last week, the Labor Department said Thursday.The four-week moving average of claims, a less volatile measure, rose to 341,000 from 335,750.
The number of people continuing to collect state jobless benefits rose by 65,000 to 3.003 million in the week that ended May 22 from a revised 2.938 million a week earlier. This showed that jobless workers were still facing some difficulties finding new jobs, Reuters reported.
The four-week moving average for continuing claims rose to 2.958 million from 2.936 million. Transport Topics
Fuso Executives Get Pay Cut for Defect Cover-up
Mitsubishi Fuso Truck & Bus Corp. on Wednesday cut the pay of six executives and managers and penalized 23 other employees as a result of a cover-up of wheel and clutch defects to avoid recalls, the Associated Press reported.The truck maker, which is 65% owned by DaimlerChrysler AG, said the pay cuts involved a 30% reduction for three months for the senior executives and a 50% pay cut for one day for senior managers.
Five former executives and workers of Mitsubishi Fuso have been charged in a cover-up of a design flaw that caused a wheel to fly off a truck and kill a pedestrian, AP said. Fuso has also acknowledged a clutch defect cover-up in a death of a driver whose truck crashed. Transport Topics
CSX Announces Intermodal Changes
CSX Intermodal, a unit of the nation’s third-largest railroad CSX Corp., said May 25 it was introducing a program to improve service networks, simplify operations and improve on-time train performance.The company said the changes, set to take effect June 28, would designate some intermodal terminals and trains for containers only and emphasize more use of doublestack trains.
"Our goal is to have the new plan in place before the fall traffic peak," said Mike Parrotta, a CSX assistant vice president. Transport Topics
I>This story appeared in the May 31 print edition of Transport Topics.
