P.M. Executive Briefing - Feb. 10
This Afternoon's Headlines:
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BNSF Lands Overnite Contract
Thanks to a contract signed late last year but not announced, Burlington Northern Santa Fe intermodal trains will haul truckload shipments for Overnite Transportation, a subsidiary of BNSF's western U.S. rival Union Pacific.Although sources at BNSF believe the railroad will now get a greater percentage of Overnite traffic, sources say UP will not be losing any Overnite shipments to its rival railroad.
Shippers Say No to Diesel Fuel Surcharge
Top shippers as well as national manufacturer, importer, exporter, and distributor associations are resisting Canadian trucking companies' attempts to levy fuel surcharges. In the past year, the rack price of diesel fuel in Canada rose 150%.When the Canadian Trucking Alliance asked for a conference call about the issue with 11 major industry associations of manufacturers and distributors, only three joined in the call.
Shippers are questioning why they should pay for rising fuel costs, especially after many have already agreed to pay some more. According to Canadian Industrial Transportation Association managing director Lisa MacGillivray, carriers and shippers will have to work out separate compromises on surcharges, since "the impact of fuel prices increases varies per trucker."
General Motors of Canada is one of the few companies that said it would even consider surcharges, but it will first examine carriers' operations to "help them identify opportunities for cost savings," said spokesman Stew Low. It will agree to a surcharge only if there are no such opportunities. Journal of Commerce (02/10/00) P. 12; Tower, Courtney
TransForce to Buy
The Canadian trucking company TransForce said it intends to land e-commerce business with a purchase of express parcel carriers Distribution de Colis les Appalaches and DCA Express 24. TransForce said its purchase of the companies, which mostly serve Quebec, Ontario, and the Maritime Provinces, will close next month. Montreal Gazette (02/10/00) P. F5Commerce Dept.: Transport and Warehousing a $300 Billion Business
The Census Bureau of the U.S. Department of Commerce released new Economic Census reports Thursday saying the transportation and warehousing sector in the United States totaled $318 billion in 1997 revenues.The year saw $141 billion in truck transportation revenues – $88 billion of which was in general freight trucking – and $24 billion in water transportation revenues. The transportation and warehousing sector totaled over 178,000 locations and 2.9 million employees, with California and Texas topping all other states in revenues. Journal of Commerce Online (02/10/00)
C.H. Robinson Income Up in Fourth Quarter
C.H. Robinson Worldwide said it saw fourth-quarter earnings of $14.6 million (35 cents a share), up 30.9% from the year-earlier quarter, on revenue of $77.9 million, up 22.8%, with income from operations of $22.7 million, up 29.3%.Full-year net income was $53.3 million ($1.29 a share), up 24%, on revenue of $293.3 million, up 19.45%, with income from operations of $83.8 million, up 22.5%. Journal of Commerce Online (02/10/00)
CNF Transportation Changes its Name
CNF Transportation has become CNF Inc. to reflect the fact that it now offers "global supply chain services rather than pure transportation." San Jose Mercury News (02/09/00) P. 2COutsourcing of Trucking, Warehouses Set by AWG
Associated Wholesale Grocers last week announced it is outsourcing its trucking operations in Kansas City, Kan., to Perryman Refrigerated Lines and its trucking operations in Springfield, Mo., to Refrigerated Transport Express. It will also be contracting for warehouse services in Kansas City with CS Integrated and in Springfield with Elite Logistics.Associated will have better operations at lower costs and be able to grow geographically thanks to the outsourcing, and it should make more than $10 million from selling trucks, trailers, and equipment, said President and CEO Doug Carolan.
The outsourcing will begin on April 2, one day after the expiration of Associated's contracts with 650 Springfield Teamsters and 436 Kansas City Teamsters; 1,800 Associated workers in all will be affected.
The union locals were in negotiations with Associated last week and are reportedly threatening strikes and boycotts. Associated said its truck drivers will be able to be owner-operators for the trucking companies and the warehouse workers can apply at the warehousing firms.
Some divisions of Kroger, Safeway, and Wal-Mart Stores also have such deals with Elite Logistics' parent company Tibbett & Britten Group North America. Supermarket News (02/07/00) Vol. 48, No. 6; P. 1; Springer, Jon
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