Trucking news: Con-way rolls out new brokerage service, Con-way Multimodal

Jeff Berman, Group News Editor -- Logistics Management, 8/7/2008

SAN MATEO, Calif. and PORTLAND, Ore.—Con-way announced this week it has re-launched and expanded its truckload brokerage services with the introduction of Con-way Multimodal.

This entity will replace Con-way Truckload Services, its former truckload brokerage, and it will provide shippers with various third-party truckload freight shipments throughout the U.S. and Mexico, according to a Con-way statement.

Con-way Multimodal will be led by Tyler S. Ellison, whom will serve as president. Ellison joins Con-way from Schneider National Inc., where he most recently served as senior vice president of its Global Client Group. Con-way Multimodal will operate as a division of Menlo Worldwide Logistics, Con-way’s third-party logistics subsidiary.

In an interview with LM, Ellison explained that that the underlying drivers for the launch of Con-way Multimodal are two-fold. One reason he cited was confusion in the marketplace and internally due to Con-way’s June 2007 acquisition of Contract Freighters Inc., a large truckload carrier based in Joplin, Missouri, for $750 million. CFI was re-named to Con-way Truckload in January. The confusion stemmed from its Con-way Truckload Services brokerage and its Con-way Truckload carrier division.

The other reason, said Ellison, was more market strategy-driven.

“The name Con-way Truckload services obviously implies a single mode, and we definitely want to have a one-stop shop for the marketplace in a multi-modal [services]-based environment,” explained Ellison.

In terms of the lineup of third-party brokerage services shippers can expect, Ellison said that Con-way Multimodal will offer flatbed, truckload, specialized, intermodal, reefer, heavy-haul, and specialized transportation services. He added that as the company strategically grows the business, it will be sensitive to marketplace trends and demands and continue to enhance its services to the marketplace over time.  

Con-way Multimodal has more than 5,000 carrier partners domestically, which are evenly distributed throughout the U.S and Mexico, said Ellison. It currently has more than 50 employees, and Ellison said the company plans to add more staff over the next few years.

Industry trends: With capacity leaving the trucking market in recent months and premium being put on service for larger entities like Con-way and others, Ellison said various factors need to be considered when approaching day-to-day strategies and operations.

“It is a very transient market,” said Ellison. “And as conditions change, carriers can very easily re-renter the marketplace [after leaving] and will in time. What we are really focusing on is how do we create a compelling value proposition for each segment of the carrier group? We want to be very appealing to the small- and mid-size carriers, and that is a fundamentally different value proposition than it is to a larger carrier. At the end of the day, you have to have a strong base of carriers.”

Market conditions: As tonnage is up gradually over the last two months—as noted in the American Trucking Associations monthly Tonnage Index—and fuel prices have seen some relief in recent weeks, Ellison noted that any optimism that this may represent an industry recovery needs to be carefully guarded.

While conditions may not get materially worse, he said the industry is in the “sixth or seventh inning” with more innings to go.

But larger companies like Con-way with strong balance sheets provide a level of comfort to the shipping community, because they are in it for the long-term, said Ellison. And he added that until the capital markets, housing, and automotive industries, among others, make a full recovery, the demand side will continue to be impacted.