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FedEx Earnings Take a Hit as International Shipping Slows

FedEx Corp. reported higher revenue but lower profits in the third quarter of fiscal 2019 and cut its earnings forecast for the remainder of the year.

The company tempered its outlook due to a slowdown in international shipping and costs associated with business realignment activity in the U.S., and ongoing integration expenses in Europe related to the company’s acquisition of TNT Express in 2016.

The Memphis, Tenn.-based parcel, freight and logistics service provider posted adjusted net income of $797 million, or $3.03 a share, in the three months ended Feb. 28, compared with $1.02 billion, or $3.72 a share, in the same period a year ago. Revenue increased 3% to $17 billion from $16.5 billion.

“Our financial results were below our expectations and we are focused on initiatives to improve our performance,” said Fred Smith, chairman and CEO, in a statement that was released after the market closed on March 19.

FedEx said it was taking a number of actions to counter the weakness in global trade, including offering buyouts to certain employees and cutting back on hiring.

US Cuts Oil Production Forecast for First Time in Six Months

The U.S. government cut its oil production forecast for the first time in six months as drillers scale back in smaller shale plays and the U.S. Gulf of Mexico.

While crude output is still expected to reach record levels, the Energy Information Administration trimmed its 2019 forecast to 12.3 million barrels a day — 110,000 barrels-a-day lower than it had forecast previously. In 2020, production is expected to reach 13.03 million barrels a day — 170,000 barrels a day lower than last month’s estimate.

“This is just the beginning,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. “The reality of the situation is that a lot of these guys are not making money and are having a hard time keeping these production levels up. Any pullback is going to make it harder to keep that upward trajectory of oil production moving higher.”

The U.S. rig count tumbled to a 10-month low last week, suggesting the rate of production growth could slow, the EIA said in its monthly Short-Term Energy Outlook. Most of the growth expected through 2020 will come from the Permian basin of West Texas and New Mexico, rather than smaller shale plays, the report said.

Average Diesel Price Inches Up 0.3¢ to $3.079 a Gallon

The U.S. average retail price of diesel rose 0.3 cent to $3.079 a gallon, according to the Department of Energy, as crude oil prices advanced slightly.

The national average price of diesel is 10.3 cents more than it was a year ago, when the price was $2.976, DOE said after its March 11 survey of fueling stations.

The increase was the fourth consecutive rise in the average weekly diesel price, totaling 11.3 cents.

But average prices for diesel did not rise in every region.

Diesel prices went up the most in the Central Atlantic region, 1.4 cents to $3.315 per gallon. Prices declined in three regions, dropping the most in the Lower Atlantic, 0.4 cent to $2.981.

Fighting Fakes Was a Big Reason Behind Amazon’s Big Vendor Purge

Amazon.com on March 9 hinted that fighting counterfeits was a reason for its sudden and unexplained purge of thousands of vendors that sowed panic among longtime suppliers.

The company selectively reinstated some accounts, apologizing for “any inconvenience” caused by the “temporary pause” in orders, according to communications reviewed by Bloomberg. It encouraged those reinstated to enroll in “brand registry,” a tool to help brands knock counterfeit products off the platform.

The communication sheds further light on why Amazon abruptly canceled routine merchandise orders from thousands of its longtime suppliers over the past two weeks.

Volvo Self-Driving Buses Set for Singapore

Volvo AB is ready to start trialing full-size driverless buses in Singapore, helping the city state take a step forward in the race to deploy autonomous public transport.

The electric buses, with a capacity close to 80 passengers, soon will begin driving at the campus of Nanyang Technological University before trials are extended to public roads, the Swedish company and its partners said March 5.

Singapore has said it aims to operate scheduled services using autonomous buses during the off-peak periods in three residential areas away from the city center by 2022. The country has built a mini town for the testing of driverless vehicles, complete with intersections, traffic lights, bus stops and pedestrian crossings.

Volvo’s first full-size electric autonomous bus, unveiled in Singapore on March 5, “represents a key milestone for the industry,” Volvo Buses President Hakan Agnevall said in a statement. “The journey towards full autonomy is undoubtedly a complex one.”

Alabama Gov. Kay Ivey Proposes Fuel Tax Hike for Infrastructure Plan

Alabama Gov. Kay Ivey has proposed a 10-cent increase to the state’s fuel tax as part of her Rebuild Alabama Infrastructure Plan to generate money for transportation projects.

Ivey announced the infrastructure plan at a news conference Feb. 27 alongside a group of legislators and local government officials. The proposed 10-cent tax hike would be indexed to keep up with the rising cost of rebuilding roads.

The current excise tax rate is 19 cents per gallon for diesel and 18 cents per gallon for gasoline. The revenue created from these taxes creates 80% of Alabama’s transportation funding.

The revenue created through the proposed fuel tax increase will be split among state, county and municipal government agencies for infrastructure improvement and maintenance projects.

Diesel Rises 2.8¢ for Third Consecutive Weekly Gain

The U.S. average retail price of diesel rose 2.8 cents to $3.076 a gallon, according to the Department of Energy, as crude prices inched up.

The national average price of diesel is 8.4 cents more than it was a year ago, when the cost was $2.992, DOE said after its March 4 survey of fueling stations.

It was the third consecutive rise for trucking’s main fuel.

The average prices for diesel rose in every region.

Additionally, the U.S. regular gasoline average price rose 3.2 cents to $2.422 a gallon, 13.8 cents lower than a year ago, DOE’s Energy Information Administration said.

Crude futures on the New York Mercantile Exchange closed March 4 at $56.45 per barrel compared with $55.16 on Feb. 25.

Meanwhile, one large 3PL company finds itself wearing many hats when it come to managing fuel for its customers and itself, an executive said.

Improving Infrastructure Can Cut Fuel Costs, Aid Environment, ATRI Study Finds

The nation can conserve fuel and reduce emissions by improving the nation’s highway infrastructure, according to a report by the American Transportation Research Institute.

The study, released March 5, quantifies how infrastructure improvements to the nation’s highways cause congestion. Nationally, congestion is estimated to have increased the trucking industry’s fuel consumption by 6.87 billion gallons in 2016, adding $15.74 billion to its fuel bill.

ATRI estimated the fuel consumption and emissions impact of congestion at one of the worst traffic bottlenecks in the country: the interchange of Interstate 285 and I-85 in Atlanta, a hot spot known locally as Spaghetti Junction. The research combined ATRI’s unique truck GPS database to determine vehicle speeds by time of day, emissions factors derived from the U.S. Environmental Protection Agency’s state-of-the-science emissions model and daily trip counts collected by the Georgia Department of Transportation.

DOE giving $50 million research jolt to heavy-duty trucking

The U.S. Department of Energy (DOE) announced $51.5 million in grant money for heavy-duty and off-road truck technology research that could help boost prospects for electric trucks.

Funded through DOE’s Office of Energy Efficiency and Renewable Energy, money will be allocated among five topic areas, including up to $18 million for projects aimed at technical barriers to battery-electric vehicles and up to $6 million for hydrogen fueling technologies.

“As the fastest growing fuel users, trucks offer an important opportunity to use innovation to improve energy productivity,” DOE’s Undersecretary of Energy Mark Menezes said in a statement on March 1.

“Through research and new developments in both energy efficiency and domestically sourced fuel technologies, we can not only strengthen our energy security but also improve transportation affordability for our nation’s trucking industry – helping those who deliver American goods and those who use them.”

Autonomous Advancements Present Opportunities for Drivers, Experts Say

SAN DIEGO — Autonomous mobility experts said that the technology can open up new opportunities for drivers, noting that as progress on greater levels of automation expands over time, drivers will have chances to capitalize on that change.

“There are going to be a lot of situations where we can enhance the capabilities of the driver by providing the information technology,” Jenny Elfsberg, Volvo’s director of the innovation lab for connected vehicles, said during a Feb. 25 panel on autonomous technology here at the Lytx User Group Conference. “I think we should do our best in this industry to make the truck drivers, or the excavator operators, or the bus drivers, become the heroes of the transport society. They can actually move up a little bit.”

“Our view is the driver of the future looks like the driver of today — they’re doing a lot of the same things but in different domains,” added Alden Woodrow, co-founder and CEO of autonomous truck technology developer Ike, which is focused on creating fully autonomous trucks that can operate safely on interstate highways and bring value to fleets. “We are really focused on making the trucking industry better.”

Woodrow outlined a model in which drivers would take loads to drop-off points near interstates, where autonomous trucks would then take over for long stretches of highway. “The approach we want to take is to bring new technology to the industry in a complementary way,” he said. “The highway is very structured. You have access control, there are no stop signs and stoplights, and most of the things are driving in a straight line in the same direction most of the time.”