Logistics operations were not as healthy as other divisions, including the less-than-truckload (LTL) unit for this $4.7 billion freight transportation and logistics services company. Overall net income for the second quarter of 2008 of $47.1 million was off slightly from last year’s $47.7 million.
The company’s LTL unit, Con-way Freight, enjoyed a 10.6% boost in revenues, to $824.0 million, compared to last year’s $744.9 million. Per day tonnage grew 1.9%. In commenting on the growth, Con-way president and CEO, Douglas W. Stotlar, attributed the gains to,” Targeted growth initiatives, implemented late last year at our LTL unit which continued to produce market share gains. We also began to see indications of a more stable pricing environment in the quarter."
The carrier has a Truckload segment that had revenues of $137.4 million after elimination of $44.2 million in inter-company revenues. Con-way Truckload—renamed as such in January of this year—is a combination of the company’s former truckload division and Contract Freighters, Inc. (CFI) that was acquired in August 2007.
According to Stotlar, a weaker economy has seen other carriers leaving the market, resulting in an overall reduction in capacity that worked to the benefit of Con-way Truckload. "Our Truckload unit did an excellent job in managing costs, and taking advantage of synergy opportunities with its sister companies to reduce empty miles and improve asset utilization,” he said.
While revenues for Menlo Worldwide Logistics, were up at $377.1 million, a climb of 16.4% year over year, its operating income of $5.0 million was down 28.6% from last year’s $6.9 million. The company noted that it had encountered higher than expected costs related to its activities in China as well as what it calls, “two customer-specific issues” that were resolved during the quarter.
"Integration of our acquisition in China is proceeding at a slower pace than planned, so our expectations for profit from this operation will take a longer time horizon to realize," claimed Stotlar noted. "Our expansion strategy in Asia is playing out from a growth perspective; we expect to see operating results improve through the remainder of the year.”