GLG News by Mr. John Schulz, Independent Analyst - Contributing Editor
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Addition by Subtraction: Where Have All the Trucks Gone?
October 21, 2008
Truck Capacity in Reverse | www.trafficworld.com
Truck capacity is being pulled out of the truckload sector at an alarming rate. J.B. Hunt has cut more than 1,400 trucks from its fleet, a 30 percent reduction, in about 18 months. Werner Enterprises and Swift Transportation have also reduced over-the-road capacity by about 10 percent. When the economy does recover, this will have major ramifications for trucking rates, and profitability.
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Shippers Going Green Means Less Green For Carriers
October 8, 2008
Slimmer Packages Mean Slimmer Profits for Truckers | www.businessweek.com
The Green movement toward smaller and lighter packaging and products is hurting trucking companies as they try to recover from the economic downturn. The industry's chief economist is predicting that trucking company failures could exceed those from the last recession in 2000-2001.
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If Con-way is Hurting, Everybody Must be Suffering
October 3, 2008
Con-way Slashes '08 Outlook as Economy "Battered." | www.reuters.com
Con-way announced a significant falloff in earnings expectations for the third quarter and the rest of 2009 because of what it called "a challenging business environment." Con-way perennially is one of the market leaders in per-share profitability. But it says the "battered" U.S. economy is causing significant operational headwinds. This cannot be spun as a positive. Other, more leveraged carriers must be feeling the pinch even more, leading to the likelihood of a major carrier or two closing or declaring bankruptcy, if conditions don't improve soon.
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Oct. 1 Ushers in a New Era for West Coast Port Truckers
October 1, 2008
Ports ready to enforce clean-trucks plan | www.joc.com
The ports of Los Angeles and Long Beach are implementing the nation's stiffest commitment to clean the air in the port area by banning all pre-1989 trucks from the ports' grounds, effective Oct. 1. It is estimated the nation's first clean truck plan will cut truck pollution by 80 percent over the next five years. The move was fought by the American Trucking Associations, the nation's largest trade group representing trucking companies, every step of the way. ATA is still appealing a lower court decision to the 9th Circuit Court of Appeals. The appeal process is continuing even as two of ATA's largest members, Swift Transportation and Knight Transportation, have signed onto the new clean-air plan.
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Teamsters Strike Oak Harbor Freight ; Who's Next?
September 24, 2008
Oak Harbor Freight on Strike | tdu.org
About 600 Teamsters are on strike against Oak Harbor Freight, a major LTL carrier in the Pacific Northwest. Drivers, dock workers and back-office union members have been without a contract for 11 months. The increasingly militant clout of the Teamsters union is expected to increase in the coming months, especially if Democrats win the White House and expand their majorities on Congress.
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Trucking Has Been Very, Very Good to These Guys
September 22, 2008
Salaries for Top Teamster Officials Hit New High | www.tdu.org
There are nearly 100 Teamsters union officials making $150,000 or more at a time when more than 2,000 trucking entities went out of business since the first of this year. Teamsters for a Democratic Union, the dissident wing of the 1.4 million-member Teamsters, tracks and publicizes the salaries for TDU's "$150,000 Club Report" every year. To show how rampant salaries are increasing among top officials of the union, in the past these fat cats were part of what TDU called the "$100,000 Club." Inflation has made its mark. Now, one has to earn $150,000 to be in this somewhat exclusive club.
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What Took So Long? YRC Plans to Merge Yellow and Roadway Units
September 10, 2008
As Buyout Bust Turns Bitter, A Major Deal Lands in Court | www.logisticsmgmt.com
YRC Worldwide's plan to integrate most of the operations of its Yellow and Roadway long-haul LTL units is mostly a positive. But it likely will result in a smaller overall company than the two operating companies currently are, but that's mostly because demand for long-haul LTL services is flat or declining. This move is long in coming, and probably should have been done five years ago when then-Yellow Corp. bought out Roadway Express for $1.1 billion.
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Watch out UPS and FedEx, Here Comes the Postal Service
September 8, 2008
USPS Wants Your Parcel Business | multichannelmerchant.com
The U.S. Postal Service appears to be getting serious about improving its technology and marketing efforts to better compete with the two publicly held parcel delivery giants, UPS and FedEx. Postmaster General Jack Potter recently disclosed plans that would revamp the centuries-old Postal Service to create a new shipping and mailing services division that would target large-volume shippers. This unit will allow USPS to offer volume discounts and be better able to compete in the small parcel shipping market.
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Non-Union Job Cuts at YRC Worldwide Show Freight Slump is Continuing
September 8, 2008
YRC Plans To Cut Several Hundred Non-Union Jobs | www.ttnews.com
YRC Worldwide, which collectively has about a 30 percent market share in the $35 billion less-than-truckload sector, is laying off at least 200 back-office workers, mostly at its Overland Park, Kan., and Akron, Ohio, offices. These cutbacks can be taken two ways. The half-full view is that YRC is gaining long-anticipated synergies from its $1.1 billion purchase of Roadway Express in 2003. The half-empty view is these cutbacks are economically driven in an attempt to cut costs and boost YRC's bottom line.
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Up in June, Down in July: Welcome to the Trucking Recovery of 2008
August 29, 2008
Truck Tonnage Index jumps 5.4 Percent in June | www.truckinginfo.com
The closely watched American Trucking Associations' Truck Tonnage Index jumped by 5.4 percent in June, the eighth straight month of an increase. It's the largest monthly gain since January of 2005. But that streak suddenly ended with a 0.3 percent drop in the index in July
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C.W. Johnson Xpress Closes Doors. Were Chairman's Complaints Valid?
August 29, 2008
Trucking Chief Says Government Failed Him | www.courier-journal.com
When C.W. Johnson Xpress, a Louisville, Ky.-based truckload carrier closed in mid-August, its chairman Charlie Johnson lashed out at Louisville and federal officials for failing to aid him. Johnson's company was the beneficiary of millions of dollars in federal grants to aid underprivileged persons to obtain jobs, which many did at this trucking company. But when the grants dried up, Johnson Xpress faltered under the weight of $8.3 million in debt. The majority of Johnson Xpress's customer list has been obtained by Indianapolis-based Celadon Express.
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Car-Haul Agreement Gets Voted Down. Is a Teamsters Strike Next?
August 20, 2008
Deal Covering 9,500 Carhaul Members Rejected | tdu.org
A proposed three-year agreement between the Teamsters union and the major unionized car-haulers has been voted down. No new talks have been scheduled. The Teamsters director of car-haul negotiations, Fred Zuckerman, said he hopes "to resolve this contract without going on strike." But Zuckerman himself is under fire from the Teamsters for a Democratic Union, the dissident wing of the Teamsters, which wants him replaced as lead negotiator.
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How Did Con-Way Lure CFO Away From Trucking Rival YRC Worldwide? Here's How
August 18, 2008
Con-way Replaces CFO as Financial Complexity Grows | www.bizjournals.com
The hiring of ex-YRC Worldwide Chief Financial Officer Stephen Bruffett by Con-way Inc. has more intrigue than would first meet the eye. It's more than just filling a corner office in the executive suite. The inside story is quite telling of the conditions in the trucking industry in 2008.
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Yellow Goes Rah-Rah Route to Rally Employees
August 11, 2008
YRC North American says Velocity Network reducing transit times | www.etrucker.com
How well is YRC Worldwide's new "Velocity Network" performing after this summer's rollout? Here's an internal memorandum to employees that explains it.
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Schneider National is Adding Truckload Capacity -- Here's How
August 8, 2008
Schneider National Owner-Operators Now Paying Just $1.085 for Diesel | www.wisbusiness.com
Schneider National is betting on an innovative way to attract and retain owner-operators at a time when other large truckload carriers are reducing their over-the-road capacity. One way is this fuel subsidiary program that is popular with owner-operators used by Schneider, one of the largest privately held TL carrier in the country.
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Drivers Starting "Mutiny" Over Ethanol as Engine Woes Mount
July 29, 2008
In Gas-Powered World, Ethanol Stirs Complaints | www.nytimes.com
The popularity of ethanol as a fuel is rapidly declining. Once seen as a panacea to this nation's dependence on foreign sources of fuel, ethanol now is being blamed for worldwide food inflation, diversion of crops from food to fuel and, now, operational problems in engines. A number of service stations are now marketing "100 percent gas," or gasoline uncontaminated by ethanol. Even the most popular blend, E10, which is 10 percent ethanol, is being rejected in some quarters because of technical difficulties associated with the fuel. The long-range ramifications of this are huge, especially with Congress recently passing a law requiring that up to 36 billion gallons of biofuel be incorporated into the nation's fuel supply by 2022.
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"Exciting" Time at Yellow Transportation. Does That Mean Profits, Too?
July 15, 2008
Yellow's Two Change of Operations | roaddrivers.org
Yellow Transportation is enacting what officials are calling the most important change of operations in the company's history. More than 500 Yellow Teamsters have accepted new dock, driving and new "utility" positions to give the venerable long-haul LTL carrier a bigger footprint into the next-day regional freight market. "We are changing the unionized freight industry," is the why Teamsters National Freight Director Tyson Johnson phrased it. The buzzword for the change is "velocity." While that may be hyperbole, what Yellow is doing is significant as it tries to create a turnaround after two quarters of huge losses.
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One Auto Hauler Closes, Another in Chapter 11, Where is the Bottom?
July 9, 2008
Troha's Old Truck Firm Files for Bankruptcy | www.jsonline.com
JHT Holdings, Kenosha, Wis., is filing a "pre-packaged" Chapter 11 bankruptcy proceeding. Officials of the company are optimistic the company has support of lenders in a plan that would provide $25 million in financing while reducing its debt by 40 percent. JHT's move follows the June 13 closing of Performance Transportation Services Inc., the second-largest car-hauler and a Teamsters-covered carrier. PTS closed during negotiations with the union over a new contract.
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The Bright Side of $145 Crude Oil and $4.50 Gasoline? No Congestion Pricing
July 4, 2008
Politics Failed, but Fuel Prices Cut Congestion | www.nytimes.com
New York City Mayor Michael Bloomberg's scheme to charge drivers $8 per vehicle to drive in lower Manhattan during business hours was attacked by drivers, the trucking industry and eventually was shot down by the New York State legislature in Albany. But the combination of $4.50 per-gallon gasoline and the slowing American economy has produced the same effect: fewer vehicles clogging Manhattan streets during business hours. Is this the death knell of that awful scheme favored by academics and grant-seekers everywhere, "congestion pricing?" Could be.
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The Regulatory Score is Now Railroads 1,234, Shippers 1
July 3, 2008
STB Forces CSX to Drop "Unreasonably High" Rail Rates | www.purchasing.com
The Surface Transportation Board's decision to declare rate relief for chemical maker DuPont in a captive shipper rate case is not unprecedented, but it is stunning. DuPont is eligible for rate relief up to $3 million over a five-year period. Not a deal-breaker for the Class 1's, but not chump change, either. Railroads may not be sweating the STB just yet. Still, this decision leaves open the possibility that a new day is dawning--and that is not good news for the rails.
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