News Briefs - Sept. 10
The Latest Headlines:
- Defense: FedEx, World Airways Contracts Could Be Worth $2 Billion
- Visteon Warns on Profits After Ford Cuts Production
- Railroads Warn of Long-Term Infrastructure Problems
- Survey: Economists Lower Second Half GDP Forecasts
- Rail Intermodal Loadings Rise in Latest Week
- Trade Gap Narrows to $50 Billion in July
- Texas DOT Opens Its First Toll Road
- Visteon Warns on Profits After Ford Cuts Production
Defense: FedEx, World Airways Contracts Could Be Worth $2 Billion
The Department of Defense said that FedEx Corp. and charter provider World Airways Inc. were awarded military flight contracts that could be worth as much as $2 billion, Bloomberg reported.The contracts are awarded under the Civil Reserve Air Fleet program, which flies goods and people for all military services when the demand for flights exceeds the U.S. Air Force's capability.
FedEx officials declined to comment, Bloomberg said.
Some of the FedEx work would involve managing flights to be made by ATA Airlines and Polar Air Cargo, Defense said. Transport Topics
Visteon Warns on Profits After Ford Cut Production
Parts supplier Visteon Corp. late Thursday said its profits for the second half of 2004 would be below previous forecasts because of lower vehicle production at Ford Motor Co. and higher prices steel and fuel costs.The company did not offer new guidance, but analysts had expected full-year earnings of $75 million to $110 million, or 60 cents to 90 cents a share, the Associated Press reported.
Visteon also said it would take a charge of $825 million to $900 million in the third quarter to write down deferred tax assets, which it attributed in a statement to Ford's recent decision to cut production in the fourth quarter. (Click here for related coverage.)
Visteon is a former unit of Ford and was spun off four years ago. It said it would report third-quarter results on Oct. 21. Transport Topics
Railroads Warn of Long-Term Infrastructure Problems
The rail industry on Thursday warned the nation's transportation infrastructure was facing long-term difficulties coping with continued record freight volumes, the Financial Times reported.Ike Prillaman, chief marketing officer for Norfolk Southern, said the transportation industry would face a "crisis" becayse demand for freight services was at record highs, but there has been little construction of new rail facilities. He was speaking at a conference sponsored by the Association of American Railroads in Kansas City, Mo., the Times said.
Freight railroads have also been hurt by rail worker shortages, new security measures and and high fuel prices.
To combat these issues, Kansas City Southern said it would add 52 locomotives, boosting its fleet 10% since the start of the year and Burlington Northern Santa Fe Railroad said it added 3,700 flatcars and 1,800 employees in 2004. the Kansas City Star reported. Transport Topics
Survey: Economists Lower Second Half GDP Forecasts
Higher energy prices are prompting economists to reduce U.S. growth forecasts for the third and fourth quarters, according to a new Bloomberg News survey.The U.S. economy will grow at a 3.7% annual rate from July through September, slower than the 3.9% estimated last month, according to the median of 61 economists. They have slashed a half-point from third-quarter forecasts over the past two months, Bloomberg said.
Oil prices have increased by almost a third in 2004 and reached a record $49.40 a barrel in New York on Aug. 20. It closed just under $45 on Thursday.
The economy is also expected to grow at a 4% clip in the fourth quarter. Last month, the economists predicted 4.1% growth in the fourth quarter. Transport Topics
Rail Intermodal Loadings Rise in Latest Week
The Association of American Railroads said Thursday the number of intermodal loadings on U.S. railroads totaled 219,541 trailers or containers in the week ended Sept. 4, up 27.4% from the same week a year earlier.AAR said in a statement increases were magnified because the year-earlier week included the Labor Day holiday, while the 2004 week did not. Trailer traffic was up 28.6%, while container volume rose 27%, AAR said.
Railroad volume is considered an important economic indicator. Intermodal traffic, which tends to be higher-valued merchandise than bulk commodities, uses trains for the long haul and trucks for the shorter distance at either end of the trip.
Through the first 35 weeks of the year, intermodal volume totaled 7.3 million trailers or containers, up 10% from last year, AAR said. Transport Topics
Trade Gap Narrows to $50 Billion in July
The U.S. trade gap declined about 9% in July to $50.1 billion, the Commerce Department said Friday, but it still was the second highest on record.Imports dipped 1.4% to $146 billion in July, the first decline in 10 months. A drop in oil import prices to after eight consecutive increases helped lower the overall import bill, the Associated Press reported.
Commerce also said exports increased 3% to $95.9 billion, about $1 billion shy of the record set in May. Transport Topics
Texas DOT Opens Its First Toll Road
The Texas Department of Transportation on Wednesday opened its first toll road, the Camino Colombia, a 22-mile highway between the Mexican border and Interstate 35, the Associated Press reported.The road will be free for the first two months, but after Nov. 8, it would be $2 for a two-axle vehicle and $2 for every additional axle, AP said.
Private investors put $90 million into the new road in the late 1990s, but traffic was light during the first three years and it was put on auction block, AP said.
The state bought the road, which is only crossing for certified hazardous materials to and from Mexico in the Laredo region, in May for $20 million. Transport Topics
