FedEx profit hit by economy, fuel

FedEx Corp. on Thursday reported a higher-than-expected third-quarter net profit, but gave a low outlook for the current quarter citing soaring fuel prices and slowing U.S. economic growth, sending the package delivery company's shares down more than 2 percent.

"Our fourth-quarter earnings outlook has been impacted by higher-than-anticipated fuel prices and a weak U.S. economy," Chief Financial Officer Alan Graf said in a statement. "Looking ahead to our fiscal 2009, we are expecting a continuation of fourth-quarter trends, which would result in limited earnings growth next year.

"We are scrutinizing all expenses and investments to realign them with the current environment," he added.

Al Meyers, portfolio manager for the AHA Diversified Equity Fund, said the results showed "the downward economic spiral continues."

"The question is whether in three months time whether we'll see any improvement," he said.

The Memphis-based company reported net income for its quarter ending February 29, of $393 million, or $1.26 a share, down almost 7 percent from $420 million, or $1.35, a share a year earlier.

Wall Street analysts had on average expected earnings per share for the quarter of $1.23, according to Reuters Estimates.

In a conference call with analysts, high oil prices were mentioned repeatedly as weighing on the company's business.

Chief Executive Fred Smith said he saw "little justification" for current price levels and said the high costs had led to some customers shifting "to lower-cost services." Complete Story...

Arkansas trucking group wants congressional study of diesel prices

Arkansas trucking companies are asking Congress to look into record high diesel fuel prices. The Arkansas Trucking Association says the high prices are threatening the general economy and the flow of goods throughout the country.

The trade group, based in Little Rock, wants Congress to hold hearings on the problem. Association President Lane Kidd says Congress should examine why diesel supplies are plentiful but prices keep rising and consumption is flat.

The group includes representatives from ABF Freight Systems at Fort Smith, FedEX Freight at Harrison, P.A.M. Transportation Services in Tontitown, and USA Truck Inc. at Van Buren.

UPS Freight Workers in Alabama, Michigan, Pennsylvania Sign Cards to Become Teamsters

In Latest Victories, About 280 Drivers, Dockworkers Will Join Teamsters

An overwhelming majority of about 280 workers at the UPS Freight terminals in Alabama, Michigan and Pennsylvania have signed authorization cards to become Teamsters, bringing the total number of drivers and dockworkers seeking to join the union to more than 9,000 since January 16, Teamsters General President Jim Hoffa announced.

The workers are seeking to join Locals 991 and 612 in the Alabama cities of Birmingham, Dothan and Mobile; Locals 7, 406 and 486 in the Michigan cities of Battle Creek, Cadillac, Grand Rapids and Saginaw, and; Local 397 in Erie, Pennsylvania.

“Every day brings more good news for UPS Freight workers, who have remained strong and committed in their long effort to join the Teamsters,” said Ken Hall, Director of the Teamsters Package Division. “It is exciting to have more than 9,000 UPS Freight workers join the Teamsters from across the nation.”

“This victory means a lot and I want to thank Jim Hoffa and Ken Hall for their efforts to make this happen,” said Tom Harty, President of Local 7.

“A lot of workers who started at Overnite were prior Teamsters who tried for years to rejoin the union. But they kept at it and now the former Overnite workers and UPS Freight workers are pretty tickled,” said David Robinson, Secretary-Treasurer of Local 486.

“We are ecstatic that these workers will be part of our union,” said Ron Holzgen, Secretary-Treasurer of Local 406. “We believe we can greatly improve the lives of these workers.”

“I want to thank several UPS Freight employees who were particularly instrumental in acting as organizers to get this done,” said Donnie West, President of Local 612.

“These workers will now have a voice on the job and this will move them toward a more secure future with the Teamsters,” said Jim Gookins, Secretary-Treasurer of Local 991. “Our thanks go out to the Teamsters’ Organizing Department for helping us with this victory.”

“We look forward to negotiating a strong contract for our new members,” said Ron Gibbs, President of Local 397. “Our greatest asset is our members.”

DHL National Contract Supported by Members in Delaware, Missouri, Connecticut

Additional Meetings Planned for Members Across the Country


DHL Express members in Missouri, Delaware and Connecticut reviewed the new DHL National Master Agreement in meetings held this past weekend. The meetings informed members of the highlights of this strong, historic agreement.

“Once everybody got the facts and could see everything in print, they were ready to go with the contract,” said Joe Smith, Secretary-Treasurer and business agent of Local 326 in New Castle, Delaware. “Members could see it’s a damn good contract. It protects the benefits, seniority and working conditions that have been in place under the NMFA.”

“I think it’s a good contract,” said John Mastella, a 29-year driver based at DHL’s New Castle, Delaware facility and 15-year shop steward. “I tell coworkers it’s a strong contract, and I would say 80 to 85 percent of our barn endorses it. This contract has real strong language and it hits on all points—job protection, wages and benefits. We didn’t take a step backward on anything.”

Approximately 75 members of Local 326 and 95 members of Local 600 in St. Louis attended meetings to review the tentative agreement. Eleven members of Local 493 Uncasville, Connecticut attended a meeting with some 350 members of Local 25 in Boston. Approximately 250 members of Local 107 in Philadelphia also met this past weekend and strongly supported the new tentative agreement.

“Prior to the meeting we were getting feedback that there was going to be a lot of concerns about the use of part-timers,” said Scott Gilchrist, business agent at Local 600. “But after the workers had the rules explained, they were a lot more comfortable with the language that was used to protect them. I told our membership that we support the contract and I think the majority of our members are going to vote for this contract.”

“Receiving support from these first five DHL locals shows that this is a strong contract for members,” said Brad Slawson Sr., chair of the Teamsters national negotiating committee. “As more and more members learn the details of this tentative agreement, they see its great benefits.”

Unanimously endorsed 52-0 by local leaders who represent workers at DHL throughout the country on March 12, the tentative agreement is the first new national master agreement to be negotiated in more than 30 years. Members will be mailed voting ballots in the next few weeks.

Additional informational meetings are planned for DHL locals across the country. As more locals hold meetings, members will be updated regularly.

FedEx Files Brief Defending Illegal Contractor Model in U.S. Appeals Court

FedEx Asks For Review of NLRB Employee Determination

FedEx Corporation subsidiary FedEx Home Delivery is defending its illegal
contractor model in the U.S. Court of Appeals for the District of Columbia
Circuit.

In a brief filed Tuesday, FedEx Home Delivery is requesting a review of
a National Labor Relations Board determination that drivers at two
Massachusetts terminals are employees and not "contractors" as contended by
FedEx.

The drivers at the two facilities overwhelmingly voted in October 2006
to join Teamsters Local 25. The NLRB ordered FedEx to bargain with Local
25, but FedEx refused to do so and filed the request for review in the
Court of Appeals instead.

The D.C. Circuit is the highest court yet to hear a case on FedEx's
illegal contractor model.

FedEx's filing restates the many losing arguments that the company has
tried in previous trials and hearings before the NLRB, civil courts and
state and federal agencies. FedEx's brief focuses on the false claims of
"entrepreneurship" offered by the company and ignores the many control
factors that directs the drivers as employees in practice.

"The National Labor Relations Board has repeatedly and rightly
determined that FedEx Ground and Home Delivery drivers are employees, yet
FedEx is trotting out the same failed arguments and false promises before
the Court of Appeals," said Teamsters General President Jim Hoffa.

"Instead of sitting down, negotiating a contract with these drivers
that literally deliver profits to FedEx everyday and getting back to
business, FedEx is repeating its mistakes," said Local 25 President Sean
O'Brien. "These drivers and Local 25 are ready to talk and get a contract,
but FedEx insists on delaying the process and raising the stakes with an
appeal that will only result in another legal setback to its scam
contractor model."

Massachusetts authorities repeatedly ruled that these same drivers are
employees under state law. The state's Department of Workforce Development
ruled one driver was eligible as an employee for unemployment benefits. The
Massachusetts Commission Against Discrimination ruled four drivers were
employees and could pursue a claim. The Massachusetts Attorney General
issued 13 citations against FedEx Ground for misclassification and fined
the company $190,000 in an ongoing investigation.

The California Supreme Court and California Court of Appeal upheld a
trial court's 2005 decision that drivers in California were improperly
classified as contractors. In December 2007, FedEx announced that an
Internal Revenue Service audit also preliminarily determined that the
drivers were employees and issued a $320 million back tax bill to the
company.

FedEx's brief and other documents are available at FedExWatch.com.

Latest Victories Include Nearly 350 Drivers, Dockworkers

An overwhelming majority of nearly 350 workers at the UPS Freight terminals in California, Colorado, Kentucky and Tennessee have signed authorization cards to become Teamsters, bringing the total number of drivers and dockworkers seeking to join the union to about 8,750 since January 16, Teamsters General President Jim Hoffa announced.

The workers are seeking to join Local 287 in San Jose, California,
Local 17 and Local 961 in the Denver, Grand Junction and Colorado Springs
area, Local 519 in the Knoxville and Chattanooga, Tennessee area, and Local
505 which includes Prestonburg, Kentucky.

"The number of workers that have signed cards in recent weeks has been
overwhelming," said Ken Hall, Director of the Teamsters Package Division.
"Their determination to become Teamsters will be rewarded with the union's
dedication to them to get them as strong a contract as we can."

"Now these workers have union protection that they never had before,"
said Midget Morgan, President of Local 505. "The workers are so excited to
join the Teamsters."

"These victories have been tremendously uplifting to all the workers
across the country," said Bob Blanchet, President of Local 287. "They see
hope for a better future around the corner."

"Workers here have been concerned about their benefits slowly going
away and were eager to join the Teamsters in order to get a contract," said
Chris Rodriguez, Vice-President and Business Agent of Local 17.

"This has been a long time coming and we look forward to a great
relationship with the workers and with the company," said Matt Fazakas,
President of Local 961. "I also thank Mr. Hoffa and Ken Hall for leading
our efforts."

"The workers here were very united and committed and we got this done,"
said Wes Trotterchaud, President of Local 519. "We're sending the message
that we are unified."

Zollars Sees Some Improvement

The head of transportation and logistics company YRC Worldwide Inc. said Wednesday that he has started seeing some bright spots in the economy but that the overall environment is "still a bit like crawling over broken glass."

Meanwhile, YRC's shares followed other trucking stocks in a downward spiral after several analysts said first-quarter earnings reports likely will be worse than expected, as harsh winter weather compounds weak demand and record fuel prices.

YRC shares on Wednesday fell 85 cents, or 6.9 percent, to $11.40, below the previous 52-week low of $11.77.

Bill Zollars, chief executive of the Overland Park, Kan.-based company, told analysts at a conference sponsored by JP Morgan and broadcast over the Internet that YRC's attempts to restructure its troubled regional trucking business are starting to gain traction, although he also cautioned it was early in the process.

YRC, the nation's largest less-than-truckload carrier, last month said it was closing 27 service centers for its USF Reddaway and USF Holland brands and eliminating 1,100 jobs as it tried to give the struggling carriers smaller regions to work in.

"We've seen some pretty significant impacts," Zollars said. "Reddaway has snapped back almost immediately from the return to their normal market. Holland has also shown signs of improvement although that's going to take a little bit longer."

Less-than-truckload carriers combine shipments from multiple customers into a single load.

Zollars said he has noticed increased weakness from retail customers and that the overall economy hasn't changed in recent months, although he added that severe winter weather has made it difficult to gauge the exact health of the economy. He said the company has had better luck getting price increases as it renews shipping contracts with customers and has seen an uptick in the weights per shipment, which he said has typically pointed to economy recovery in the past.

"It's too early to call that as we haven't seen that across all companies, but that increase in weight per shipment is an encouraging sign and one we didn't have several months ago," he said.

Zollars' comments came after Baird analyst Jon A. Langenfeld cut his per-share annual earnings estimate for YRC from $1.25 to $1, noting that severe weather and fuel costs are driving up expenses across the industry. He didn't change his expectation that YRC will lose 20 cents per share in the first quarter.

Analysts surveyed by Thomson Financial expect annual earnings of $1.49 per share and a first-quarter loss of 17 cents.

Panel discusses hindrances, helpers of innovation

A forum on “drivers and impediments” to innovation, held Monday at the Kauffman Foundation, put permission to fail high among the “drivers.”

“We celebrate innovation, even when it doesn’t work,” said William Zollars, chief executive of YRC Worldwide. “Our only rule is ‘fail fast.’ ”

Zollars said YRC has worked to break down its former hierarchical chain of command and push decision-making closer to the customer, making it easier to introduce innovations.

Tops on the “impediments” list: a U.S. education system that’s not turning out appropriately qualified graduates for the workplace, the panel said.

“Education and work worlds too often are spinning in separate orbits,” said Emily DeRocco, president of the Manufacturing Institute. “As the boomers line up at the exit doors in our manufacturing plants, we find almost no young workers ready to replace them.”

She said government incentives, educators and parents need to redirect attention to the value of technology-based education, keyed to the needs of today’s workplace.

Zollars and fellow Kansas City area chief executive Len Rodman of Black & Veatch contributed their business leaders’ perspective to a discussion led by U.S. Secretary of Commerce Carlos Gutierrez and Kauffman chief executive Carl Schramm.

Rodman said his engineering company sees three impediments to innovation — the declining trend in U.S. science and engineering graduates, U.S. immigration policies that limit access to foreign-born talent, and “legislation driven by concern of terror” that limits foreigners’ access to proprietary computerized information (which is a must for any company doing international business).

Gutierrez said that the U.S. has the ability to maintain its historical role as an innovation leader, but that businesses could benefit from “greater predictability on taxes” to help make investment decisions.

Also, Gutierrez said, U.S. isolationism is not the solution.

“We should put out the welcome sign for foreign investment,” he said.

“We shouldn’t be having debates about staying in NAFTA. … This is the most open economy in the world and we should stay that way.”

Schramm said the young U.S. generation entering the work force is demanding that businesses provide climates where innovation can foster.

“If they don’t get it, they will take their careers and go elsewhere,” Schramm said.

ABF Selects 2008-2009 Load Team

ABF Freight System, Inc. has selected its 2008-2009 Load Team, an elite group of freight-handling professionals from across ABF’s North American network. The Load Team members and their customer service centers are:

Erik Van Amen, Salt Lake City, Utah
Joseph B. Baety, Atlanta, Ga.
Jeremiah Shane Bergman, Dayton, Ohio
David Shane Crockett, Little Rock, Ark.
Lowell Mark Moore, Kansas City, Mo.
Ronald E. Patrick, Carlisle, Penn.
Ricky C. Self, Winston-Salem, N.C.
Mark Reed Shaffer, Dallas, Texas
Leonard Taylor, Chicago, Ill.
Warren E. White, Albuquerque, N.M.

“Load Team members exemplify an attitude of teamwork and commitment to meeting the needs of our customers through safe and efficient freight handling,” says ABF Senior Vice President of Operations Wes Kemp. “We acknowledge the contributions and the talents of these dedicated employees who make it possible for customers to trust ABF — knowing that more than 99 percent of all ABF shipments are moved claim free.”

The Load Team program was established both to honor outstanding performance and to draw upon dock employees’ insights regarding dock procedures and equipment. Members are selected on the basis of their safety records, involvement in ABF’s Quality Process, integrity and their ability to load trailers in an optimal fashion – a skill that facilitates the safe, timely, claims-free and efficient movement of shipments.

View From the Road

Thank a Trucker
By Dale Morrow
Mar 13, 2008 - 4:53:13 PM

This week my travels brought me to Tampa. Imagine, actually working in a city where I knew the location of most everything is. It was a pleasant change.

I had to pick up freight on east Broadway early Thursday morning, and then two freight pick ups in Lakeland later in the day. It does not seem very exciting, but the familiar streets and local sites were refreshing. The three partial loads were going to be delivered in Gainesville the following morning.

After all the pick ups were made, I decided to stop at a truck stop for the night just north of Tampa. I had a nice meal, and had my hair cut. Then I sat in the truckers lounge and enjoyed some television on a big screen. The next morning I woke up and proceeded north to Gainesville.

The scenery at the truck stop can be very interesting. I was parked close to the entrance to the fuel pumps. As I prepared to sleep, I completed some paperwork and listened to some music on the radio. As the evening progressed a parade of trucks passed before me while I looked through the windshield into the dark skies.

My imagination had visions of all the different places that these trucks had come from. Every imaginable type of freight was soon to be resting here along with me and my load. Car transporters, flat beds, van bodies, tankers and refrigerated trailers filled the lot.

Many men and women, far from their families and homes had stopped for some well deserved rest, many heading for Tampa with their loads.

Many truck stops offer conveniences and supplies that make our journeys down the highways more comfortable.

A safe place to sleep, to get a refreshing shower, and a good meal. This type of place is as close to a temporary home as some men and women get. Often drivers spend several weeks at a time away from there families. This can be an oasis of sorts to them.

Most people don’t think about the hardships that truck drivers sometime incur, while making sure products arrive for the pubic to enjoy.

Everything you buy has probably been brought to the store near you by a trucker. Night and day the wheels of America’s trucks turn so that commerce can continue.

When you shop this week, consider all the effort it took to get the products to you. You can probably thank a trucker.

My “View From The Road” this week recognizes the efforts of truckers that keep the economy moving.

Truckers Expect Record High Fuel Costs

Truckers see no exit from a fuel price "crisis" and expect diesel bills to break records in 2008, the industry's main trade group said Monday.

The American Trucking Associations said current price forecasts show the industry will spend $135 billion on fuel this year, up from $112.6 billion in 2007.

Diesel fuel rose more than a penny overnight to a new record Monday, surpassing a national average of $4 a gallon, up from $2.75 a year ago, according to AAA and the Oil Price Information Service. Meanwhile, light, sweet crude for April delivery fell $3.79 to $106.42 a barrel on the New York Mercantile Exchange in afternoon trading.

The ATA is asking Congress and the Bush administration to address the "crisis situation and move immediately to take steps to increase diesel fuel supply," including increased refining capacity and exploration of Alaska's Arctic National Wildlife Refuge and Outer Continental Shelf.

In the air, rising fuel prices have led to rising ticket prices. Some of the nation's largest airlines, including United and Continental, last week increased their fares by as much as $50 round-trip to help offset surging fuel prices.

Fuel is gaining on labor as the largest expense for motor carriers, said ATA President and Chief Executive Bill Graves. At close to 25 percent of total operating expenses, fuel typically represents the second highest expense.

The cost to fill fuel tanks on a typical tractor trailer has increased 116 percent, or $615, in five years, according to the ATA, whose members include United Parcel Service Inc. and Knight Transportation Inc. Trucks haul 70 percent of all freight and rising fuel costs could raise the cost of their cargo, including food, retail and manufactured goods.

Members Overwhelmingly Endorse DHL National Contract in Massachusetts, Pennsylvania

Additional Meetings Planned for DHL Members Across the U.S.

In meetings held this past weekend, more than 600 DHL workers in Massachusetts and Pennsylvania voted overwhelmingly to support the new DHL National Master Agreement. During these first meetings scheduled to inform members of the highlights of the historic agreement, not one member in attendance voted to oppose the tentative agreement.

"Our principal officer told our membership how we felt," said John Murphy, chairman of the New England DHL negotiating committee, and Local 25 Vice-President and business agent. "This is the best contract we could have negotiated with DHL. I think it's a damn good contract for our members. When we got a motion to accept and adopt the contract there was no one against it."

Approximately 352 members of Local 25 and 250 members of Local 107 in Philadelphia attended meetings to learn about the tentative agreement.

"Coming into the meeting members had questions and some concerns. But when everything was explained and they got the real story, there was 100 percent support for the contract," said Bill Hamilton, President of Local 107 and Joint Council 53. "I think this is the best contract I've been associated with. Considering the wages, benefits and no-layoff guarantees, we've given the company the opportunity to grow and protected and strengthened our members" position."

"Without a doubt the overwhelming support from two of the largest DHL locals is strong sign," said Brad Slawson Sr., chair of the Teamsters national negotiating committee. "This shows that when members learn the details of this contract, they see its benefits. As additional meetings are held, we are confident that other members will also support this tentative agreement."

Unanimously endorsed 52-0 by local leaders who represent workers at DHL throughout the country on March 12, the tentative agreement is the first new national master agreement to be negotiated in more than 30 years. Members will be mailed voting ballots in the next few weeks.

Additional informational meetings are planned for DHL locals across the country. As more locals hold meetings, members will be updated regularly.

See more information about the tentative DHL National Master Agreement.

Two-Thirds of UPS Freight Workers Have Signed Cards to Become Teamsters

Latest Victories In Ohio, Pennsylvania Include 230 Drivers, Dockworkers

With victories in Ohio and Pennsylvania, two-thirds of UPS Freight workers have signed authorization cards to become Teamsters, announced Teamsters General President Jim Hoffa. The number of UPS Freight workers who are seeking to join the Teamsters is about 8,400 since January 16.

"This milestone is especially gratifying given the years of struggle many of these workers have endured to be able to join the Teamsters," Hoffa said. "We look forward to many more victories in the coming weeks."

"We are proud to have these workers join the Teamsters," said Ken Hall, Director of the Teamsters Package Division. "They have worked tirelessly and for so long to gain a strong voice in their workplaces. The Teamsters will in turn make certain they get the strong contract they deserve."

The latest victories came in Ohio and Pennsylvania when an overwhelming majority of 230 workers at those UPS Freight terminals signed cards. The workers are seeking to join Local 585 in Pittsburgh and Local 24 in Richfield, Ohio.

"I would like to thank my in-house Organizing Committee led by UPS Freight city driver Keith Van Nostran," said Travis Bornstein, President of Local 24. "These guys worked extremely hard. Their commitment to building the union and standing together for change is what makes this exciting."

"Becoming Teamsters is going to be tremendous for these workers," said Roy Marshall, Secretary-Treasurer of Local 585 and also President of Joint Council 40. "It's been a long effort for them to join the Teamsters and now they will finally benefit from that."