Interstate Highways: Big Numbers In Washington

WASHINGTON, D.C. – Long before there was an Interstate Highway System, there were highway lobbyists. In fact, the American Road and Transportation Builders Association, or ARTBA, was founded 104 years ago. As the Interstate turns 50 this week, ARTBA is using the occasion to pound the table on its policy priorities.

As part of that effort, ARTBA’s formidable economics staff has put out a barrage of statistics on the Interstate’s economic 50-year impact and outlook. The stats make good fodder for the ARTBA’s arguments on expanding highway capacity. They’re also startling for anyone presently bothered by traffic congestion.

Full story at Forbes.com

Port Brouhaha A Positive For These Stocks

WASHINGTON, D.C. – Whether or not Congress lets a Dubai, U.A.E., company take over management of several U.S. port terminals, the deal has stirred up interest in cargo security. That may mean good news for companies selling technology and services related to inspecting cargo.

Supporters and critics of the deal can debate its merits, but few dispute that cargo inspection systems need a good deal of improvement. A report from the U.S. Government Accountability Office last May bemoaned the lack of even minimum technical standards for nonintrusive inspection equipment. “The cargo and vehicle inspection systems market is still in its infancy,” read a line from the most recent annual report filed by OSI Systems, which sells inspection equipment.

In the accompanying table, we’ve pulled together a few stocks in this field. Several of them are small-caps, such as American Science & Engineering. The Billerica, Mass., company sells X-ray inspection systems, such as CargoSearch, which scans trucks and containers for drugs and weapons.

Full story at Forbes.com

Looking Down The Highway

WASHINGTON, D.C. – The U.S. interstate highway system will turn 50 this year, on June 29.

President Dwight Eisenhower signed the law creating the system and the Highway Trust Fund to finance it in 1956.

So when the Transportation Research Board held its 85th annual meeting in Washington, D.C., recently, a panel of academic and private sector experts took stock of the half-century gone by and gazed down the road ahead for our car-centric nation.

Like the Internet, the interstate has affected the American economy in ways its creators couldn’t and didn’t imagine. Bruce Seeley, professor of history and chair of the social sciences department at Michigan Technological University, reminded would-be seers that planners didn’t anticipate how the interstate would affect freight movement. “The idea of trucks replacing railroads in so many areas was not envisioned,” he said. Nor did planners foresee the economic importance of logistics hubs so prevalent outside such cities as Chattanooga, Tenn., and Indianapolis.

Full story at Forbes.com

Oshkosh Truck Powers Up In Hybrids

Among the more agreeable types of government programs are the ones that help your company win new business and cozy up to important customers. Consider the case of Oshkosh Truck, Waste Management and the Department of Energy’s Advanced Heavy Hybrid Propulsion Systems initiative.

The program, managed by the National Renewable Energy Laboratory, began in 2002. Its goal: Bring industry and government researchers together to get cleaner, more fuel efficient trucks and buses on the road by the end of the decade. Notable corporate participants are Eaton, Caterpillar, General Motors and Rockwell Automation.

In February 2003, Oshkosh Truck , which makes big, tough, trucks for military, municipal and other customers, received a $9 million grant from the Advanced Heavy Hybrid program to develop hybrid power-control systems and electronics for its severe-duty trucks. A key component of Oshkosh’s bid: its relationship with trash industry giant Waste Management .

Full story at Forbes.com

Don’t Tread On Us

Washington, D.C. – Since its enactment in August, the $287 billion U.S. transportation-spending law has been a target. Hurricanes Katrina and Rita prompted calls for partial repeal of some of the spending, namely the 6,000 projects, or earmarks, that lawmakers set aside for their constituents. High gas prices have led some to suggest suspending or eliminating the wellspring of transportation funding: the federal gas tax. And now House conservatives are sharpening their budget-cutting knives.

But none of that will stop the powerful highway lobby.

Instead, officials from the American Road & Transportation Builders Association are watching their rear as they move on to their next big project: reauthorization of the highway bill in 2009. “Those are two sides of the same coin,” says David Bauer, ARTBA’s senior vice president for government relations.

Full Story at Forbes.com

Airport Defense, Beltway Offense

Washington, D.C. – At a crowded congressional hearing on aviation security two weeks ago, the temperature in the room was uncomfortably high. So too, with the London Underground bombings still fresh in the headlines, was the frustration voiced by some of the members of the Subcommittee on Economic Security, Infrastructure Protection and Cybersecurity.

“The Transportation Security Administration spends approximately $4 billion a year to screen passengers and baggage,” said Rep. John Linder (R-Ga.), “I fear that this country is not getting nearly the return it would hope on such an investment.” Rep. Loretta Sanchez (D-Calif.) grumbled that “we’ve had plenty of meetings with many technology companies who tell us they have a solution to everything.”

One witness feeling the heat that day was Deepak Chopra, chief executive of OSI Systems. His company pulled in half its $247 million in 2004 revenues from its security division, Rapiscan Systems, which makes X-ray and gamma-ray inspection systems, as well as devices to detect dangerous materials (explosives, drugs and so on) using bursts of subatomic particles. After the Sept. 11, 2001, terrorist attacks, the U.S. Transportation Security Administration spent heavily on Rapiscan machines. TSA remains Rapiscan’s biggest customer.

Full story at Forbes.com

Run, Robot, Run

Gary Carr is a mechanical engineer working for Ensco, a professional-services firm and government contractor headquartered in Falls Church, Va. But get him started on the subject of the robot he’s building, and he sounds more like a beaming parent.

“It starts to go off and make decisions on its own,” he explains. “Decisions sometimes you can’t believe it made.”

Carr leads Ensco’s team which is competing in the second annual Grand Challenge, a robot derby taking place next October that is sponsored by the Defense Advanced Research Projects Agency (DARPA). The challenge in question is to build an unmanned vehicle capable of traveling on its own through 175 miles of desert terrain in less than ten hours. The team whose robot completes the mission the fastest takes home $2 million.

At last year’s Grand Challenge, Ensco fielded “David,” a modified all-terrain vehicle. Alas, it and the 12 other robots all crapped out within eight miles of the start. But the firm got plenty of mileage in publicity terms. On its Web site, Ensco, a relatively small outfit with $100 million in annual revenue, still proudly touts a 38-page booklet packed with media mentions from the 2004 event.

Full story at Forbes.com

GM’s Intelligent Advocates

WASHINGTON, D.C. – Yesterday, the Bush Administration showed its intention to put the screws on domestic discretionary spending with a budget cutting or shutting down 150 federal programs. With such a clampdown afoot, can federal funding for “Deer Avoidance Research” survive? Sure, if Neil Schuster has any say in the matter.

“We have a vision,” says Schuster, president of the Intelligent Transportation Society of America (ITSA). “Zero fatalities and zero delays.”

Maybe it’s all the time they and their staff spend stuck in Washington traffic, but members of Congress seem to like that message. Funding for intelligent transportation systems stands a decent chance of more than doubling to $3.7 billion when Congress gets around to passing a gigantic highway and transportation spending bill.

Full story at Forbes.com

Motorola’s Cargo Call

Washington continues to grapple with how best to protect the flow of commerce from terrorism. This week, U.S. Customs and Border Protection hosts a symposium on the matter, an event following up on the Department of Homeland Security’s “Cargo Security Summit” a month ago. There, outgoing Homeland Security Secretary Tom Ridge declared cargo security to be “a linchpin issue.”

That makes it a ripe business opportunity, too. In Ridge’s audience at the December meeting lurked reps from Boeing, Booz Allen Hamilton, IBM, Lockheed Martin, Northrop Grumman, Science Applications International and Unisys.

Also in that crowd was another company to keep an eye on: Motorola. A year ago, the Schaumberg, Ill.-based company launched Secure Asset Solutions, an outfit aiming to help businesses use satellite, cellular and short-range radio technologies to keep track of valuable goods, such as cars and cargo containers.

Full story at Forbes.com

Boat Gambling

For the past two years ocean shippers have had the wind behind them. Their vessels will carry 4.6 billion tons of oil and dry bulk cargo (iron, coal and so on) this year, up 10% since 2002, while container traffic will increase 23% over 2002 levels, says Clarkson Research Studies. All categories are expected to keep growing in 2005.

Given the inflexibility, at least in the short term, in the supply of ships, that uptick in demand translates into a huge gain in profitability for shipowners. This year’s net income at shipowner OMICorp. should be up better than tenfold from two years ago. Share prices are
up, too, although not as steeply. Standard & Poor’s index of maritime stocks has risen 83% since 2002 versus 29% for the S&P 500.

The party isn’t over, says Mark Coffelt, chief investment officer at First Austin Capital Management. He began buying tanker stocks a year ago for his $43 million Texas Capital Value Fund. He isn’t about to jettison his holdings.

Full story at Forbes.com