P.M. Executive Briefing - Feb. 9
This Afternoon's Headlines:
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Truckers Planning New York Fuel Protest
Claiming that steamship lines including Evergreen, Maersk Sealand, Zim, and Yang Ming are not reimbursing them for extra fuel costs, Port of New York and New Jersey owner-operators plan to demonstrate at Maher Terminal in Elizabeth, N.J., at 8 a.m. Thursday. Officials in the trucking industry and at the port authority do not know who is in charge of the protest or how it will affect operations. A flier from the truckers also complains of "wasted time at the ports and rail yards" and other port conditions. Journal of Commerce Online (02/09/00)DOT Budget Seeks Big Increase for Safety
The Federal Motor Carrier Safety Administration has requested a 54% funding hike to $279 million for the next fiscal year; $87 million of the funding increase would go to the states as safety grants.
The National Highway Traffic and Safety Administration wants a 36% funding hike, part of which would fund a joint study of truck-crash causes with the FMCSA. The Federal Highway Administration wants a 6% funding increase, some of which would go toward CDLs and safety research as well as detecting evasion of highway use taxes. Finally, the hazmat-regulating Research and Special Programs Adminsitration wants a 25% funding hike. Heavy Duty Trucking Online (02/09/00); Patton, Oliver B.
Transport Corp. Stock Off 40 Pct As Merger Fails
After Transport Corp. of America reported fourth-quarter net income per diluted share of 15 cents and announced that USFreightways' acquisition deal was terminated, the company's stock fell more than 40% in Wednesday morning trading on the Nasdaq.ABN AMRO cut Transport to a hold rating from outperform and Deutsche Banc Alex. Brown dropped it to a buy rating from market perform. AMRO said its EPS forecast had been 37 cents and the consensus 40 cents; it lowered its full-year earnings estimate for Transport by 40 cents to $1.20. Before special charges, Transport saw $1.2 million in net income, down $2 million from the year-earlier quarter. Reuters (02/09/00)
Clarke Reports Fiscal 2000 Third Quarter Results
The Canada-based transportation and logistics provider Clarke said it saw C$2.9 million (C$0.43 a share) in the fiscal third quarter ended Dec. 31, up 5% from the year-earlier quarter, with revenue up 2% to C$69 million and operating income up 9% to C$4.9 million. Net income rose even though Clarke's income tax rate rose 4 percentage points to 36%, and consolidated operating ratio fell 0.4 percentage points to 92.9%.The company saw C$14.6 million in EBIT in the first nine months, up 23% from the comparable year-earlier period, with net income up 5% to C$8.4 million and revenue up 14 percent to C$207.5 million. The year-to-date gains consolidated revenues and EBIT were largely due to the August 1998 acquisition of Concord Transportation. Canada NewsWire (02/09/00)
Hub Group Results Improve in Fourth Quarter
The logistics provider Hub Group announced fourth-quarter earnings per share of 40 cents, up 17.6% in the year-earlier quarter, with net income of $3.1 million, up 18%, and revenue of $336.3 million, up 7.8%. The company saw a 33.1% rise in logistics revenue, a 15.1% rise in truckload brokerage revenue, and a 3.8% rise in intermodal revenue.The company reported full-year earnings per share of $1.40, up 21.7% from 1998, with net income of $10.8 million, up 21.8%, and revenue of $1.3 billion, up 13.2%. The full year saw a 88.3% rise in logistics revenue, a 19.3% rise in truckload brokerage revenue, and a 6.2% rise in intermodal revenue. Journal of Commerce Online (02/09/00)
Mack Trucks Is Taking its History on the Road
Mack Trucks is celebrating its 100th anniversary by sending its Mack Centennial Trailer Exhibit across North America. The exhibit traces the company's history and is housed in a 53-foot Featherlite trailer decorated with a Mack bulldog and a birthday cake. A Mack Vision tractor will pull the trailer to various stops beginning with the World of Concrete Truck Show later this month in Orlando, Fla. Morning Call (Allentown, Pa.) Online (02/09/00); Shope, DanNova Scotia Truckers to Shut Down Over Fuel Surcharge
Citing fuel costs rising 19.3 cents a liter from October through Jan. 29, truck drivers carrying road salt for the province of Nova Scotia said they will shut down if the government does not pay a 21.6 cent per kilometer fuel surcharge. The Transportation Department is attempting to set up a meeting with the Truckers Association of Nova Scotia this week, but the province's depots have adequate salt for now, said a department spokesman. TruckingInfo.com (02/09/00)Railroads Put New Hauling Fees on Track
Due to higher fuel and labor costs, Norfolk Southern, Union Pacific, and CSX are all planning to raise rates on selected customers, commodities, and routes this year.NS lately raised rates 2% to 4% for intermodal shippers and shippers of lumber, scrap metal, and paper, while Union Pacific is looking for "aggressive price increases," it said. Now running short on freight cars and freight yards, CSX is taking advantage of the situation to raise rates and move toward spot rates rather than the lengthy contracts it used to overcome overcapacity.
Track and equipment shortages, the bull economy, and rising trucking rates are giving railroads some temporary pricing power, said Standard & Poor's chief economist David Wyss. Although rail rates have fallen behind the pace of inflation since 1980, things are changing now as railroads are squeezed for capacity and are taking a more careful approach to adding capacity. The higher rates will probably not add much to inflation but could have a large effect on rail profits, said Wyss.
Shippers are particularly upset about the news of higher rates coming now because of service problems and reduced competition resulting from mergers in the industry. Some analysts are unconvinced that railroads will be able to raise rates given their inability to do so in previous situations. Wall Street Journal (02/09/00) P. A3; Machalaba, Daniel
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