Trucking sector slowdown weighs on YRC shares

YRC Worldwide Inc. fell more than 12 percent Friday after shipper FedEx Corp. cut quarterly and full-year profit estimates and an analyst cut earnings estimates for the trucking sector.

YRC Worldwide shares, already trading at prices not seen since August 2002, slipped from Thursday’s 52-week low of $20.01 to $17.39, the lowest price since June 2001. Shares closed Friday at $17.59, down $2.52 or 12.53 percent.

Shares of YRC Worldwide fell along with those of FedEx, which cut its second-quarter profit estimate and its estimate for the full year on rising fuel costs and lower shipping volume.

FedEx shares closed down $4.57, or 4.51 percent, at $96.80. Larger rival United Parcel Service Inc. fell $1.09, or 1.49 percent, to $72.01.

Robert W. Baird analyst Jon Langenfeld cut his earnings estimates for the trucking sector, saying current freight trends indicate the fourth quarter will be worse than expected.

Langenfeld cut his price target for YRC Worldwide shares to $22 from $28, citing an expected impact related to a Teamsters pension plan.

In an interview Friday with Dow Jones Newswires, YRC Worldwide chairman and chief executive officer Bill Zollars said his company is facing the same conditions as FedEx. He said YRC stopped giving earnings guidance around the middle of this year because of the difficulty in forecasting conditions in the market.

“We basically threw up our hands,” Zollars said

House Passes Ban on Cross-Border Truck Program

Funding Prohibition Part of Transportation Spending Bill

The House of Representatives today passed the transportation spending bill that includes a ban on funding the Bush administration's cross-border truck program.

Teamsters General President Jim Hoffa said he fully expected the funding ban to win final passage because of its overwhelming support from Congress and the public.

"Letting trucks from Mexico drive everywhere in America is unpopular for a good reason: it's dangerous and illegal," Hoffa said.

The Senate is expected this week to pass the same bill, known as Transportation-HUD or THUD. The spending bill reconciles separate versions passed by both chambers. President Bush has said he will veto the bill.

"The Teamsters won't quit the fight to stop the Bush administration's reckless program," Hoffa said. "Our members will urge their representatives to override the veto, and we will continue our lawsuit to prevent the program from starting up again."

The Teamsters union is suing to block the program in the 9th Circuit Court of Appeals in San Francisco. The union submitted its arguments to the court in October and the government has until Monday to reply. The case is expected to be heard in February.

Earlier this year, the Teamsters sought unsuccessfully to obtain an emergency injunction blocking the program before it began. Since then, a handful of trucks from Mexico have been allowed to travel beyond the narrow border zone.

ABX Air issues default notice to DHL

ABX Air declared Friday that DHL is "in default" of its contracts with the Ohio-based airline that transports cargo throughout the US for the express giant. ABX has both an ACMI and a hub and line-haul service agreement with DHL under which the latter reimburses the former for many of the expenses incurred while conducting DHL business. But the contracts stipulate that the reimbursements are reduced substantially if ABX's total revenue from non-DHL operations exceeds 10%, and DHL claims that threshold has been topped.

ABX said in a statement that DHL's calculation is flawed, insisting revenue generated from non-DHL operations is below 10%. President and CEO Joe Hete added that the decision to file documents formally with the US Securities and Exchange Commission alleging contract default "was taken only after intensive efforts on our part to resolve this issue directly with DHL." Despite the dispute, he said ABX "is today and intends to remain DHL's principal US business partner."

ABF Among Best Companies To Sell For

For the sixth consecutive year, ABF Freight System, Inc.(R), is ranked among the top 10 of Selling Power magazine's listing of the 25 best U.S. companies to sell for in the service sector. ABF(R), which ranks seventh overall, was again the highest-ranking transportation company on the magazine's 2007 listing.

"ABF always strives to be a leader in recruiting, training and equipping sales professionals who are empowered to serve the specific needs of our customers. So it is gratifying to have our efforts recognized by this prestigious publication," says ABF Senior Vice President of Sales and Marketing Roy Slagle.

The corporate research team at Selling Power annually identifies and ranks the best companies to sell for in the U.S., focusing on companies with sales forces of 500 or more. Assessments are based on compensation, training and career mobility. Selling Power ranks the top 25 manufacturing companies and the top 25 service companies to complete its annual list of the 50 best companies to sell for.

"Because our employees are trained to think critically and proactively respond to each customer's unique requirements, ABF customers benefit from a representative who helps them anticipate supply-chain challenges and meet them head on with customized solutions," says Slagle.

Two KC-area leaders have differing views on Fed's rate cut, state of economy

The Federal Reserve botched its recent interest rate cut, contend two high-profile Kansas City area leaders fretting the fate of the economy.

On that much, at least, they agree. Here’s where they differ: One wanted more, and the other wanted none at all.

Worldwide financial markets wobbled all week with indecision about who is right and whether we should worry more about recession or inflation. The focus of debate is the Fed’s quarter-point cut in short-term interest rates on Halloween. It was the central bank’s second cut in six weeks.

That’s not good enough, says Bill Zollars, chief executive officer of YRC Worldwide Inc. in Overland Park. Zollars has built YRC, formerly Yellow Freight, into a 20 percent share of the nation’s over-the-road hauling capacity. His read of transport volumes, considered a reliable indicator of future economic activity, suggests the economy is hitting the brakes.

“People are still underestimating the softness out there,” Zollars said. “In the shipment economy — people who make stuff and retailers — I think we are in a recession.”

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