A.M. Executive Briefing - Feb. 10

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This Morning's Headlines:

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  • Demonstrators Protest High-Cost of Diesel Oil
  • Truck Stop Business Drops as Many Sideline Their Rigs
  • That Trucker May Be Watching Your Driving
  • AAA Begins Campaign to Reject Gas Tax
  • Volvo May Have to Sell Assets to Win Scania Deal
  • Interview: DaimlerChrysler Prepared to Develop Asia Trucks Op Alone
  • KLLM Transport Posts Strong Earnings Growth for Fourth Quarter
  • Truck Drivers Want Ontario to Provide Roadside Rest Areas
  • Boyd Bros. Revenues Rise 13 Percent in 1999

    Demonstrators Protest High-Cost of Diesel Oil

    Independent truckers demanded that Massachusetts and Rhode Island leaders help them fight high diesel costs, as they parked their rigs around the state houses in a demonstration set up by some 60 independents.

    The problem was attributed by Rhode Island Senate Majority Leader Paul Kelly to increasing OPEC prices and trouble navigating oil ships through Providence channel. Because the problem centers on New England, it is getting less attention than the 1970s energy crisis, said Kevin Rabbitt of Massachusetts' Rabbitt Trucking. Round-trip costs between New Jersey and Rhode Island have gone up 100%, said a New Jersey driver.



    Rhode Island Gov. Lincoln Almond met in the Statehouse with some of the drivers; the governor's spokeswoman said all options are being examined but "we are not aware of any federal program" to help the truckers. Associated Press (02/09/00); Flynn, Gillian


    Truck Stop Business Drops as Many Sideline Their Rigs

    New Hampshire truck stops are getting much less business than usual as higher diesel costs keep many independent truckers off the road.

    At Hanscom's on Route 1 in Portsmouth, where only one truck fueled up one recent morning as opposed to the line of rigs the stop usually sees, general manager Dana Joy said trucks' operating costs have not been this high during his 26 years in the industry. He and general manager Kevin Dailey of the Travelport in Greenland both agreed that consumer prices will rise, although Dailey said right now most people outside the trucking world are mostly concerned with the price of heating oil.

    Jolly Gardener Products, in Portland, has been getting only two trucks hauling bark mulch from Canada each day, as opposed to the 36 a day that is usual. Sales at Dailey's truck stop have gone down 30%, and truckers are putting less gas in their rigs as well. The Travelport has lately been issuing only half its usual amount of permits for hauling freight to Maine, and sales of all its other products are dropping as well.

    Many truckers expect independents to strike if the prices stay so high. Foster's Daily Democrat (Dover, N.H.) Online (02/09/00); Dekoning, Brian


    That Trucker May Be Watching Your Driving

    Between 15 and 25 truckers, recruited by the Minnesota Trucking Association, will be reporting accidents, unlawful driving, road conditions, debris, and stranded drivers to the Minnesota State Patrol beginning Monday.

    The program, in which the trucker's report will be sufficient to allow officers to pull over violators, will be tested in coming months on Interstate 35 from Fairbault to the Iowa line and could go statewide if successful.

    Although drivers have long made road reports by calling 911, these truckers will be taught to make proper reports, given identification numbers to flag their calls as important, and be witnesses in court when needed. Minneapolis Star Tribune Online (02/10/00) ; Blake, Laurie


    AAA Begins Campaign to Reject Gas Tax

    The American Automobile Association this week will begin advertising on the radio in its fight against the Oregon referendum to raise the gas tax, institute a diesel tax, and raise registration fees while scrapping the weight-mile tax.

    The auto club's Oregon/Idaho chapter says the tax changes, passed by the legislature but put on the May ballot by an AAA petition, will give truckers from outside Oregon substantial tax breaks while moving trucks' share of road costs to motorists. But the trucking, business, union, and local government coalition Fair Funding for Better Roads disagrees.

    According to a Legislative Revenue Office report, an extra $458 million in car taxes and fees – and $245 million from trucks – would be collected through 2005 if the measure passes. In the first two years, 80,000 pound trucks would be paying in excess of its share of road costs while trucks over 100,000 pounds would pay less, with trucks overall paying some $72 million more. Oregon Live Online (02/10/00)


    Volvo May Have to Sell Assets to Win Scania Deal

    Volvo could be forced to sell some assets in order to get European Commission approval for an acquisition of Swedish truck and bus maker Scania. Competition authorities are concerned about the market share the combined entity would have, including 30% of the European Union heavy-truck market, 90% of the truck market in Sweden, and half of the Nordic commercial-vehicles market.

    Volvo is also in acquisition or collaboration discussions with Czech truck manufacturer and engineering group Tatra, it was learned Wednesday.

    Volvo's offer to divest some Scandinavian dealerships might be inadequate; analysts predict Volvo will need to get rid of its 37% share of car and truck distributor Bilia, and perhaps some

    xclusivity deals Volvo and Scania have with Nordic dealers will have to terminate. Financial Times (02/10/00) P. 32; Brown-Humes, Christopher; Hargreaves, Deborah


    Interview: DaimlerChrysler Prepared to Develop Asia Trucks Op Alone

    If DaimlerChrysler is unable to form a proper partnership to enter Asian commercial-vehicle markets, it will develop its own commercial-vehicle operations there, said Klaus Maier, chief of the Mercedes-Benz truck business unit.

    The company remains interested in discussions with Nissan Diesel Motor but wants to sit down with other Japanese firms as well, although the debt troubles at Nissan Diesel and existing partnerships between Japanese automotive firms create hurdles. The Chinese market is also important and could be bigger, but "truck prices and infrastructure" there pose a problem," he said.

    With "few potential partners" and many companies seeking Asian partners, DaimlerChrysler will have to investigate organic growth, partnerships, and all other options, Maier said. AFX-Asia (02/09/00)


    KLLM Transport Posts Strong Earnings Growth for Fourth Quarter

    KLLM Transport Services said higher demand drove net earnings for the fourth quarter to $30,000 (1 cent a share), up from the $605,000 (14 cents a share) net loss in the year-earlier quarter, with $59.1 million in operating revenue, compared to $54.6 million a year earlier.

    FY99 net loss was $792,000 (19 cents a share), including a $247,000 non-recurring charge, down from $1.8 million (42 cents a share) the previous year, with operating revenue rising to $234.6 million.

    With continued strong demand as well as tight capacity for temperature-controlled transportation, the company is "aggressively pursuing rate increases while continuing to focus on cost control," said Chairman and CEO Jack Liles. Associated Press (02/09/00); Moore, Matt


    Truck Drivers Want Ontario to Provide Roadside Rest Areas

    The Ontario Trucking Associations Professional Driver & Operator Forum has started a petition drive to request that the province construct more rest areas. Forum executive director Leo Van Tuyl said truck drivers need places to stop both because of hours-of-service regulations and the need to take breaks or naps when experiencing fatigue.

    Parking on highway shoulders is dangerous, truck stops discourage lengthy parking, and shopping mall lots can also not be used, he said. Ontario should look at the accommodations at U.S. rest areas, which can be found at two- to four-hour intervals on major highways, the Forum says.

    Nine-tenths of foodstuffs and consumer products in Canada and four-fifths of trade between the United States and Ontario is carried by truck, and truck volume is predicted to rise. The petition is being circulated at truck stops and is available from the OTA or at . M2 Presswire (02/09/00)


    Boyd Bros. Revenues Rise 13% in 1999

    Boyd Bros. Transportation said it set records in earnings and revenues last year, with full-year operating revenues of $133.1 million, up 13% from 1998, and net income per share of 99 cents, up 14% largely because of stock buybacks during the year. Fourth-quarter operating revenues were $34.5 million, up 16% from the year-earlier quarter, with net income per share of 12 cents, down 8 cents.

    President and CEO W. Miller Welborn said second-half operations were disappointing, with fuel costs making an impact and the owner-operator program failing to make "the kind of progress in 1999 as we had intended." The company expects the continuing rise in fuel costs and the normally slow first quarter to put first-quarter revenues and profits "under pressure." TruckingInfo.com (02/09/00)

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