A.M. Executive Briefing - April 13
This Morning's Headlines:
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Shippers Steer to Trucks as Railroad Service Lags
Sunkist Growers director of distribution Lawrence Stern says the company uses trucks to haul nine-tenths of its shipments, despite lower rates for intermodal and rail, because rail service delays are unacceptable for the perishable products Sunkist ships.He says many shippers want to go back to railroads as fuel prices and labor shortages drive up trucking costs. But railroads must improve service if they want to seize the chance to reclaim some of trucking's share of freight movement.
Railroads can attract shippers by presenting solutions that live up to shippers' requirements, says Stern, such as a new Amtrak time-sensitive freight service that will begin in May with Sunkist as the initial shipper.
However, the rail industry needs to allow all shippers access to such premium services in order to get a bigger piece of long-haul traffic. They are working to do so by speeding up average train velocity, improving networks and interlining, and providing better intermodal service.
Charles L. Schultz of BNSF says they should also be more customer-friendly by letting customers know when there is a service problem, rather than hearing about problems from customers themselves. Journal of Commerce (04/13/00) P. 23; Mongelluzzo, Bill
Acquisition Concerns Drive KLLM Stock to New High
KLLM Transport Services stock closed up 68.75 cents Wednesday at a record $7.6875 following a $7.75 per share tender offer from Prime Inc. President Robert Low for the Mississippi-based refrigerated carrier's outstanding stock.A.G. Edwards & Sons analyst Donald Broughton said the tender offer, 75 cents above the stock's Tuesday closing price, demonstrates the seriousness of Low's takeover bid and the reason for Low's request of a list of KLLM shareholders. Low wants to be able to write to the shareholders and "plead his case as to why they should tender to him," said Broughton.
The KLLM board has established a subcommittee to consider Low's offer, which carries a deadline of May 9, and competing bids from Jack Liles, KLLM's president and CEO. Associated Press (04/13/00) ; Moore, Matt
Safety Agency Calls Technology Key to Reducing Road Fatalities
Clinton Magby, who heads the Federal Motor Carrier Safety Agency Office of Research and Technology, told a recent National Association of Independent Insurers meeting that insurers need to help cut truck-crash deaths in half in the next decade by tying premiums to individual trucking companies' crash rates.Magby said truck-crash deaths can be cut with better technology and improved amount, accuracy, and timeliness of crash data, which will help the insurers lower rates for companies with better records.
FMCSA data is already online at , and the agency is also cooperating with the industry and law enforcement, among others, on cutting deadly truck wrecks, and twelve states have joined a project imposing penalties, including stripping the registrations of whole fleets, for carriers who do not upgrade safety records.
American Trucking Associations President and CEO Walter B. McCormick Jr. pointed to various initiatives demonstrating the industry's commitment to lower crash rates. But David Golden of the NAII said it is highly important for FMCSA to find a powerful administrator to give the agency a vision on which to concentrate for years. Journal of Commerce (04/13/00) P. 10; Linn, Gene
TxDOT Weights 'No-Truck Lane' for Parts of I-10
Texas may get its first "no-truck lane" under a proposal being considered by the state Department of Transportation that would keep trucks out of the leftmost lane of Interstate 10 in Houston between Waco Street and the Uvalde interchange. If adopted, the restriction would be in force weekdays between 6 a.m. and 8 p.m. and would still allow trucks to go into the leftmost lane when passing.Sally Wegmann of TxDOT's Houston office said research results on no-truck lanes have been mixed, but the department would be "willing to try a pilot program."
The proposal was drafted by City Councilman Carroll Robinson, who suggests a maximum $200 fine per violation. If the proposal is passed by TxDOT and the city council, Robinson will seek a study to find whether the no-truck lane reduces accidents; if it does, he will try to extend the restriction to the other freeways in the city. Houston Chronicle Online (04/12/00); Asher, Ed
Caterpillar Chairman Tells Stockholders Profits and Sales Should Rise
Caterpillar Chairman Glen Barton told the annual shareholder meeting in Chicago Wednesday that first-quarter results, to be announced next week, foreshadow moderately increased earnings and revenue this year.After the company showed diversification allowed it to maintain a profit last year despite reduced sales, low commodity prices, and economic problems in two-fifths of Caterpillar's markets, the company plans to build on that success, he said. He also said the company anticipates being helped in 2000 by such recent initiatives as a new compact-machinery line, the Perkins Engines takeover, and rental-business growth.
Meanwhile, shareholders turned down a proposal to allow all shareholders, not just the board of directors, to vote on the shareholders rights plan, as well as another proposal that would have effectively forced Caterpillar to abandon trading in countries with poor records on civil rights. Copley News Service (04/12/00) ; Gordon, Paul
Port to Seek Loan from TxDOT
The Port of Corpus Christi will request that the Texas Department of Transportation secure a low-interest loan from the State Infrastructure Bank to help pay for the Joe Fulton International Trade Corridor, a planned $40 million industrial-truck route.The port wants the 11.5-mile trade corridor, slated to begin construction in 2003, to keep the trucks off public roads and open more land to industrial development, and it intends to pay $16.3 million itself for the project. If the state does not approve a $23.7 million loan to cover the rest, the port may consider such options as economic-development agency money, revenue bonds, or port cash reserves. Corpus Christi Caller-Times (04/12/00) P. C7; Jares, Andrea
FedEx Given OK to Build Terminal
The Warren (R.I.) Town Council approved FedEx Ground's bid to establish a sorting facility that developers say will add $100,000 to the town's tax revenue and bring 100 part-time jobs.Shipments will arrive by tractor-trailer at the facility, which will be located at an industrial park near Route 195, mostly at off-peak times; sorters will arrive for work around 1 a.m. and delivery vans will begin showing up around 6 a.m.
Construction of the 59,000-square-foot center is expected to start around the beginning of next month. Providence (R.I.) Journal-Bulletin (04/12/00) P. 1C; Mello, Bob
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