Today’s Pickup: Uber secures Middle Eastern dominance with Careem acquisition

Good day,

Uber Technologies Inc. has confirmed reports that surfaced over the weekend about its acquisition of Middle East on-demand cab hailing rival Careem for $3.1 billion, signaling its market domination in the region.

In a development late Monday night, Uber said it will be paying $1.4 billion in cash and $1.7 billion in convertible notes with the deal, giving the U.S. rideshare giant full control over Careem. The notes can be converted to cash at a price of $55 per note, which is 13 percent more than what Uber’s shares went for in its last investment round led by SoftBank Group.

Did you know?

Two of Asia’s largest ocean carriers reported full-year results, which highlighted the ongoing  challenges facing the industry.

Orient Overseas (International) Limited (OOIL) (HKEX: 316) , a subsidiary of one of China’s largest shipping companies, reported better revenue and operating profit thanks to the late 2018 container import surge. But rising financial costs sent 2018 net income lower.

OOIL, which officially became a unit of China’s Cosco Shipping last year following a 2017 acquisition, reported revenue of $6.57 billion, a 10 percent increase from last year with operating profit of $262 million rising by a similar percentage.

Quotable:

“When a shipper is concerned about its relationship with a carrier, the shipper will not keep the carrier’s truck on the dock as long. Shippers know detaining a truck for long periods of time hurts carrier efficiency and drives up carriers’ costs, and therefore makes them less desirable as a customer.”

–FreightWaves Director of Freight Market Intelligence Zach Strickland

In other news:

FedEx says bonus plan ditched because of changing economic reality:

FedEx said it cut out annual bonuses because of changing economic circumstances, but some employees complained the company was taking away a benefit they’d previously been led to expect. (The Daily Memphian)

Rees-Mogg Offers May Hope in Showdown Over Deal

British Prime Minister Theresa May gained the reluctant support of Brexit hardliner Jacob Rees-Mogg after Parliament took control of the decision Monday. (Bloomberg)

In Test of Boeing Jet, Pilots Had 40 Seconds to Fix Error

During flight simulations recreating the problems with the doomed Lion Air plane, pilots discovered that they had less than 40 seconds to override an automated system on Boeing’s new jets and avert disaster. (NYT)

Apple Pay to roll out in transit agencies around the U.S.

Marking a leap forward for mobile transit payments, Apple announced today that Apple Pay will be coming to bus, light rail and subway systems in select U.S. cities later this year. (FW)

Final thoughts:

One of transportation’s biggest challenges right now is how to gauge current operational performance and that of the economy as we round out the first quarter. Year-over-year comparisons can be misleading with 2018 being such an extraordinary year, often negatively amplifying any change in key performance indicators.

Most industry experts suggest skipping 2018 and looking further back to 2017 and even 2016 for comparisons, with both indices in our chart of the week being good examples of why this may be prudent advice. The widely-watched macroeconomic ISM Manufacturing New Orders Index – a measure of production set to come on tap and demand for industrial products, and the DAT Freight Barometer Flatbed – a measure of activity in the flatbed spot and contract markets based on rate and load availability, both reached 10-year record levels in mid-2018 after both grew close to 33 percent over a 12-month period from July 2016. Both indices are indexed to 50 with greater than 50 representing an expansion from the previous month with less than 50 representing a contraction.

Hammer down everyone!