Con-Way to Launch Truckload Company

New operating unit to serve parent's regional LTL carriers with linehaul service in transcontinental lanes


New operating unit to serve parent's regional LTL carriers with linehaul service in transcontinental lanes

Ann Arbor, MI — June 3, 2004 — Con-Way Transportation Services is forming a new operating company to serve Con-Way's three regional less-than-truckload carriers by providing linehaul service on full loads of LTL shipments moving in transcontinental traffic lanes.

Con-Way, a subsidiary of CNF, said the new operating company, Con-Way Truckload (CTL), is scheduled to begin operations during the first quarter of 2005. Con-Way has trucking operations throughout the United States, Canada and Mexico and has revenues of $2.2 billion.

Gerald L. Detter, president and CEO of Con-Way, said the new company will serve Con-Way Central Express, Con-Way Southern Express and Con-Way Western Express, the company's three regional LTL carriers.

"Formation of Con-Way Truckload will allow our organization to save money on linehaul costs, protect our service with inter-company operations that operate in tandem with our current truckload vendors and allow us to build a potential truckload revenue base," Detter said.

Douglas Stotlar, executive vice president and chief operating officer of Con-Way, said that Con-Way Truckload would be free-standing with its own employees and equipment. "In its first two years of business our plan is to add approximately 450 new, quality jobs to Con-Way's existing workforce of more than 18,500 employees," Stotlar said. "All drivers will be company employees with contract drivers utilized as needed."

Recruitment of management and operations staff is currently underway, Stotlar said, and a headquarters city will be announced during the summer. Additionally, specifications for sleeper tractors and trailers are currently being detailed and bids to equipment manufacturers will be let within the next 30 days.

Since 1998 the Con-Way regional LTL carriers have employed truckload carriers to provide transcontinental linehaul service for full loads of LTL freight. Detter said that these "no touch" loads are highly efficient and contribute to Con-Way's cross-country transit times of only three to four days.

"We are a major customer to a select number of very good truckload carriers who we will continue to work with," Detter said. "The new operation will focus on absorbing the growth in our long-haul portion of LTL operations, which currently is above 10 per cent annually."

Con-Way said it will spend approximately $200 million this year on purchased truckload services. Con-Way Truckload will service transcontinental routes in addition to the company's existing truckload providers.

"A growing number of shippers want multiple supply chain services from one company, and adding a truckload operation to our service portfolio provides Con-Way with a strategic way to manage costs and service while later providing truckload services for our customers," said Detter.

Con-Way Truckload will utilize existing Con-Way service centers, maintenance shops, professional mechanics and security personnel, and also leverage such existing administrative support services as claims, accounts receivable, payroll, information technology, legal and customer service that will support the new company with minimal or no investment needed, Stotlar said.

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