Swift Transportation Co. announced that a special committee formed by its board of directors rejected an offer from Swift’s largest shareholder, Jerry Moyes, to buy the company for $29 per share in cash. The Phoenix-based trucking company said the committee determined the offer was inadequate and that it would begin talks with Moyes to determine if the price could be increased. The committee said it also had begun discussions with other potential buyers.
NATSO, the trade association for truck stop and travel plaza operators, said it is “strongly opposed” to new tolls on highways and bridges, whether added to new or existing lanes, even if the new fees are designated for new roads and bridges. Tolls essentially are double taxation for truckers that already pay 40 percent of highway users’ fees, said NATSO, which supports the continued use of federal fuel taxes to provide highway funding.
Wells Fargo & Co. acquired Dallas-based EFC Partners, which does business as Evergreen Funding Corp. and provides accounts receivable purchasing for small and midsize companies, focusing on trucking, staffing and manufacturing. Terms were not disclosed.
Pitt Ohio Express and The CEI Group formed a partnership under the brand TruckGuardian Group to jointly provide risk and safety management services, and collision and claim management services. Visit www.truckguardian.com.
Everyone knows that new tractor purchases in 2007 will be a bit more painful financially because of the new engine emissions requirements. All the more reason to have a good plan and a good relationship with your truck dealer. With those in place, you need not necessarily fear the higher prices.
“Unfortunately, a lot of the people who come to us needing trucks need a lot of help getting their ducks in a row before we can even think about proceeding with any transaction,” says Robert Raiford, senior vice president of Southland International Trucks, a high-volume truck dealer headquartered in Birmingham, Ala. “Ideally, you should have started working on a plan for expansion long before ever contacting us,” Raiford says. Even so, your dealer can and should be an ongoing resource, he says. “We look at it like pulling a chair up and becoming a partner in your business with you.”
Raiford says that first you should work to avoid the red flags that can kill the best financing deals – obvious things such as association with a past bankruptcy, unresolved tax liens and slow payment history. A record of non-sufficient funds checks also can kill a deal.
On the positive side, consider surprising your dealer and lenders by providing forward-looking profit-and-loss and cash-flow forecasts, and a narrative detailing how you will fill the new trucks profitably and handle the growth. “Almost no one except the largest fleets do that,” Raiford says. On the non-financial side, the relationship between buyer and seller is quite important after the sale. The buyer needs a plan, and the seller must respond to it.
If you already are in the process of buying trucks for your business, and your dealer doesn’t seem to care what your plans are once he’s gotten your John Hancock, re-evaluate the relationship. No discount is worth costly after-purchase operational drawbacks. Are you even confident that the dealer is selling you the right truck for your operation?
“One mistake I see a lot of people making is evaluating a transaction without having all the facts,” Raiford says. “Someone might see something initially perceived as cost-prohibitive and immediately say ‘no,’ but there’s a chance that this item might save you money in the long run. You must be able to think in terms of lowest overall cost of ownership.” A simple example might be a truck that’s a little more expensive but more fuel-efficient due to its aerodynamic design.
Raiford cites the new Environmental Protection Agency requirements – costing about $6,000 to $8,000 per truck – as a prime example of a cost that some owners won’t feel comfortable absorbing, but that others will figure out how to mitigate. For example, some dealers are helping with slightly longer financing, so long as your trade cycle is not interrupted and you maintain comparable monthly cash flow.
“Price is the easiest part of the transaction,” Raiford says. “What happens after the sale? Trucks do break. Does your dealer have guaranteed parts pricing? More importantly, is there a relationship in place to help you get problems resolved, or did your dealer take the money and run? If you do your homework before approaching a dealer, you will have addressed these issues long before they become a problem.”
If you can find the right dealer to help you get exactly what you need, then everything else will fall into place much easier.
See “Positioning Your Company for Debt Financing,” by Gary Honig, as published on ZeroMillion.com
OOIDA opposes Pennsylvania Turnpike sale
The Owner-Operator Independent Drivers Association is voicing vehement opposition to any efforts to sell Pennsylvania highways to private investors. “Proposals to sell the turnpike to private companies are un-American, and to consider selling this national asset to foreign companies is downright anti-American,” OOIDA Executive Vice President Todd Spencer said in response to recent Pennsylvania politicians’ comments supporting the possible sale of the Pennsylvania Turnpike.
“The idea of selling the turnpike may sound good to some opportunistic politicians thinking in the here and now,” Spencer said, “but it certainly would not be a yellow brick road for the highway’s users who will be paying exorbitant tolls for years to come – or for Pennsylvanians who will see those tolls translate into higher prices at the checkout counter and more congestion on the commonwealth’s other highways.”