Con-Way raises the bar on fuel savings and “green” operations

Patrick Burnson, Executive Editor -- Logistics Management, 3/13/2008

ANN ARBOR, Mich.—In a move designed to reduce fuel consumption and cut down on carbon emissions, Con-way Freight will be turning back the speed governors on its 8,400-tractor fleet from 65 miles per hour to 62 miles per hour.

“Freight transportation, by its nature, is a significant consumer of carbon-based energy resources. Yet it also is one where if we look creatively at how we operate the business, we can find and adopt practices that reduce our carbon footprint and help the bottom line,” said John G. Labrie, Con-way Freight president, in a statement. “Fuel conservation and cost savings aside, this speed reduction initiative will have the single largest impact on carbon footprint reduction of any operational or business practice change available to us.” 

One prominent industry analyst told LM, that while the move will make the carrier “more competitive in a very tight pricing market,” it will not be expressed in immediate benefits for shippers.“It will certainly be good for Con-Way,” added the analyst.

“We now think we are getting closer to the bottom not only for demand but also for over-capacity and that increased pressure from fuel will finally send out some less well-financed truckers of all sizes over the next several months,” stated Ed Wolfe, an analyst with Bear Stearns, in a research note.

Whether other trucking companies emulate the strategy remains to be seen.

The move is expected to reduce consumption of diesel fuel from its over-the-road tractor fleet by nearly 3.2 million gallons annually while eliminating approximately 72 million pounds of carbon emissions from the environment. The carbon gas reduction is equivalent to removing nearly 7,300 automobiles from America’s highways.

 And we think shippers will see rate benefits in the long-term,” Con-Way spokesman, Gary Frantz, told LM. “Given the fact that contracts factoring in surcharges are done on a yearly basis, this is going to have a positive impact for our customers.”