CNF Inc. announced last month that it had combined three of its major business units into a single company called Menlo Worldwide. The new company, which will offer customers a full range of logistics services through a single source, consists of four divisions, including:

• Emery Worldwide, which provides international air and ocean forwarding, customs brokerage and North American airfreight services;
• Menlo Worldwide Logistics, which provides third-party logistics services;
• Vector SCM, a "fourth-party" joint venture with General Motors that manages the automaker's worldwide distribution system; and
• Menlo Worldwide Technologies, which provides information technology, supply chain engineering and consulting services.

Menlo Worldwide will have combined annual revenues of $3 billion. It will be headed by John H. Williford, who was president and chief executive officer of Menlo Logistics.

At the same time, CNF announced that it would permanently close down Emery Worldwide Airlines, which had provided domestic air carriage for Emery Worldwide. That airline had been grounded since mid-August as a result of safety and maintenance violations. Instead, Emery, operating as a division of Menlo Worldwide, will offer North American overnight and deferred services through contract carriers.

CNF Inc. is a $6 billion company whose operations provide a variety of logistics and supply chain services. For the first nine months of last year, the company reported a net loss of $185.8 million, which included an earlier $207.7 million charge for restructuring at the now-defunct airline. After discounting special items and discontinued operations, the company had a net income of $9 million for the first nine months.

Executives said the company would take an after-tax charge of $200 million for the fourth quarter, reflecting the cost of closing the airline and disposing of its fleet. Emery has been the most troubled division in the CNF family, losing $47 million in the third quarter of last year. Those losses included the costs of providing a substitute fleet after the airline was shut down as well as costs resulting from the Sept. 11 terrorist attacks.

The changes substantially reduce CNF's capital requirements. Some analysts speculate that the reorganization will enable the company to spin off one or both of its operating companies, Con-Way Transportation Services, whose principal business is regional less-than-truckload transportation, and Menlo, although that's considered unlikely in the near future. The restructuring is in line with previous corporate statements in which management said it intended to move toward an "asset-light" business model.