March 21, 2000 3:05 PM, EST

P.M. Executive Briefing - Mar. 21

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This Afternoon's Headlines:

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Nissan Diesel Completes Main Plant Land Sale

Gas Prices Study Criticized

Campbell's Recipe for Savings

Nissan Diesel Completes Main Plant Land Sale

Nissan Diesel Motor announced Tuesday that it sold the land at its chief plant to a special purpose company and expects to see a profit of 21 billion yen for the fiscal year, which ends this month, due in part to the sale.

The sale is part of the plans to bail out the Japanese truck manufacturer, which also include a 20 billion yen credit line as well as cooperation between Nissan Diesel and RVI, the commercial-vehicles division of Renault.

Louis Schweitzer, chairman of Renault, said this month that Nissan Diesel's future is looking brighter, although it still may be sold; however, analysts say restructuring measures are merely perfunctory unless creditors forgive a sizable amount of debt. Reuters (03/21/00)

Gas Prices Study Criticized

Critics are unimpressed with the Canadian government's decision to hire a think tank to study the fuel industry and how pump prices are associated with supply, demand, and crude oil prices, saying the government is avoiding responsibility. The Canadian Trucking Alliance's David Bradley questioned "how credible and sincere the desire to help is here."

One of the issues to be studied by the Conference Board of Canada is the reason why price changes seem to be simultaneous at all oil companies; the companies say OPEC is at fault, while critics have claimed price-gouging. The study is necessary to determine the truth, since there has been a great deal of change in the market, said the country's ministers of Industry and Natural Resources.

Canadian Automobile Association President Brian Hunt, while saying the study is a good idea, said the Dec. 31 due date for the think tank's report is too far off, speculating that the economy could stall by then, and that he is uncertain the study will "have any effect." London (Ontario) Free Press (03/21/00) P. D1; Ayed, Nahlah

Campbell's Recipe for Savings

Campbell Soup has achieved seven-figure cuts in distribution costs via its strategic pricing program, which gives customers incentives to increase ordering efficiency, order electronically, purchase products in full truckloads and palletloads, and unload trucks more efficiently.

A cost-cutting study that started two years ago found that it was less expensive to serve customers who ordered pallets rather than cases, who shipped truckload rather than LTL, and who used automated ordering. It also requires that customers use the CHEP USA pallet pooling program, but it covers the majority of rental and issuance fees for the customers.

Since the strategic pricing initiative began, the amount of domestic volume sent in truckload quantities has increased to more than 90%, from 70-75%, the amount sent by palletload has risen from 70% to 85-90%, and the percentage of customers using electronic ordering and inventory information exchange has increased to roughly 90% from 60-65%.

Other cost-cutting measures Campbell is eyeing is Continuous Planning, Forecasting, and Replenishment, which eliminates redundant inventory, and a program under which receiver employees rather than truck drivers unload the trailers, which will be easier now that so many customers get full truckloads. Logistics Management & Distribution Report (03/31/00) P. 42; Cooke, James Aaron