Con-Way Announces Truckload Operation

Con-Way Transportation Services, parent of regional less-than-truckload (LTL) carriers Con-Way Central Express, Con-Way Southern Express, and Con-Way Western Express as well as Con-Way Canada Express, Con-Way Mexico Express, and expedited carrier Con-Way NOW said it would begin truckload operations under a new operating company, Con-Way Truckload during the first quarter of 2005. The new company will serve Con-Way's three domestic regional LTL carriers by providing linehaul service on full truckloads of LTL shipments moving in transcontinental traffic lanes.

Logistics Today: How much do you spend on truckload services, and how much do you expect to save as a result of forming Con-Way Truckload?

Con-Way: We spent $170 million to purchase truckload services in 2003 to move LTL shipments. With the "healthy" growth in LTL shipments thus far, we estimated similar truckload services could reach $200 million in 2004. Con-Way Truckload would provide modest savings at first, but given the improving economy and the limited availability of quality truckload carriers, higher fuel costs, etc., those savings could grow. More importantly, we'll start providing our own capacity to protect the transit time standards that Con-Way LTL operations are known for. We'll have greater control over our own destiny.

Logistics Today: How do you handle these truckload moves today?

Con-Way: Currently Con-Way uses six or seven primary truckload carriers. We expect to continue working with these carriers.

Logistics Today: Will intermodal be part of the mix?

Con-Way: We currently use intermodal only for deferred traffic. This freight moves at a lower price and moves in restricted transcontinental lanes with longer transit times. It is not mixed with our standard LTL service.

Logistics Today: Given the current talk of driver and capacity shortages, do you see any problem in staffing a truckload operation?

Con-Way: We have no illusions. Recruiting drivers will be a challenge. But the drivers will be Con-Way employees. We have an excellent reputation for treating employees fairly. We're relying on that reputation to create interest in the driver community. The equipment will be new. It will be continuously maintained to Con-Way specifications. The routes and driving patterns will be regular. We'll offer competitive wages. We think these conditions will prove attractive.

Logistics Today: How do the new Hours of Service Rules play into this decision?

Con-Way: The new Hours of Service (HOS) regulations have played little or no role in our decision to start the truckload operations. The Con-Way LTL operations are configured in a matter so the new HOS had virtually no impact on any of the driving hours in our LTL schedules. The Con-Way Truckload operations will face the same HOS as any other truckload carrier. Since we'll start with total dedication of moves between Con-Way facilities, where the trailers will be loaded and unloaded by the LTL employees, there will be no strain of waiting time on our truckload drivers.

Logistics Today: What are your long-term plans for Con-Way Truckload?

Con-Way: We're going to start with a modest truckload operation. Its capacity is guaranteed to be used 100% of the time during the first several years. We have the luxury of being able to grow the truckload fleet for a number of years without hanging any heavy overhead costs on it. We also have a fixed facility network throughout the country that can provide fuel, communications, and maintenance support.

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