Contract Freighters Inc. in December will begin paying drivers based on Rand McNally practical route miles rather than the industry-standard short route miles. The change is equivalent to a 3.5 percent pay increase for company drivers and owners-operators. Crete Carrier Corp. earlier announced a switch to practical route miles.
J.B. Hunt Transport Services agreed to pay Burlington Northern Santa Fe Corp.’s railway unit $16.5 million to resolve its dispute with the firm. The companies announced last year that they would arbitrate the dispute over an undisclosed amount of revenue generated from their financial and operating agreement. BNSF Railway provides rail transportation services to J.B. Hunt under a joint-service agreement, and the relationship is expected to continue.
Jerry Moyes, chairman and chief executive officer of Swift Transportation, agreed to pay more than $1.2 million to settle charges of insider trading lodged by the Securities and Exchange Commission. Without admitting SEC’s allegations, Moyes will place the paper profits of $622,123.80 from his May 2004 stock purchases in a trust controlled by Swift’s independent directors, pay a civil penalty in the same amount and agree to a decree permanently enjoining him from violating securities laws. SEC is taking no action against Swift.
Yellow Roadway Corp. said its stock is “significantly undervalued” and has authorized a $50 million share repurchase. The LTL carrier said it may buy back shares in the open market based on market price and availability, and that the program has no expiration date.
Insurance costs represent a huge burden for transportation companies. So when the subject of how to reduce this cost arises, a bevy of strategies comes to mind. But there is no silver bullet or quick fix. Effective, long-term savings require a deliberate strategy, consistently applied, according to one industry veteran.
Controllers, CFOs and financial executives of transportation companies often are charged with leading the review of insurance matters and comparing policies and companies. The natural temptation is to judge solely on cost – but if you review the variables that determine overall cost, these financial officers often will find themselves explaining nonfinancial reasons to justify slightly higher costs.
“It’s not always the sexy strategies that really work,” says Stephen Johnson, owner of Marvin Johnson & Associates in Columbus, Ind. “Things like captives only really work if you’re of a large enough size, you are the worst risk in a group, and you read the fine details of the contracts to be sure you limit your liability,” he says.
