Con-way subsidiaries introduce new U.S.-Mexico intermodal service

Two subsidiaries of freight and global logistics and transportation service provider Con-way Inc.—Con-way Truckload and Con-way Multimodal—have rolled out a new intermodal service geared towards North American shippers that, Con-way said, will leverage the capabilities of both groups to provide a “high-value, high-reliability offering for intermodal shipping.”

Con-way officials said that this new joint service provides a new service for shipper customers of both Con-way Truckload and Con-way Multimodal for U.S.-Mexico shipping, which it explained is timely with more companies locating manufacturing and distribution operations in Mexico, which has resulted in a need for capacity and reliable cross-border shipping services.

The company added that this service will partner with all seven Major Class I railroads to offer national service for intermodal movements, as well as placing a focus on what it called a unique capacity and differentiated capability for U.S.-Mexico trade. What’s more, it added that the service takes advantage of Con-way Truckload’s expertise in Mexico through its CFI Logistica subsidiary, which has ten offices, 40 years of experience in Mexico and an extensive drayage network, coupled with Con-way Multimodal’s resources, systems, and freight procurement expertise.

Saul Gonzalez, president of Con-way Truckload, and Tommy Barnes, president of Con-way Multimodal, told LM that there are myriad shipper benefits for this new service.

“By using Con-way’s intermodal service, customers receive a number of benefits, including: integrated door-to-door service through the combined industry-leading networks of Con-way Truckload and Con-way Multimodal; state-of-the-art security, simple tariff procedures and inclusive customs services; real-time updates with Track and Trace through all stages of shipments; and all paperwork and trans-border regulations handled by Con-way Truckload,” they said. “This adds another capacity option in the NAFTA corridor for many shippers/manufacturers. Additionally, it combines that strong asset and non-asset units of Con-way to create a flexible, nimble product to support increasingly complex supply chains.”

Con-way officials provided an example of how this service works:
1-A customer in Indiana with a shipment for Monterrey, Mexico contacts either Con-way Truckload or Con-way Multimodal to arrange service;
2- Con-way Multimodal surveys its system, locates capacity and books the load with the
railroad, also arranging for a container if the customer needs it;
3- a Con-way Truckload truck and driver (or another partner of Con-way Multimodal) then is dispatched to the customer to pick up the load (or deliver an empty container);
4-a driver then delivers the shipment to the rail partner’s intermodal rail ramp in Chicago, where it is loaded on a stack train. The stack train departs and transits into Mexico; and
5- at the intermodal ramp outside of Monterrey, a drayage driver arranged by and under the direction of CFI Logística picks up the container (which has been pre-cleared through the customer’s customs broker working with CFI Logística’s office), proceeds to
the customer and delivers the shipment.

Gonzalez and Barnes said that Con-way Truckload and Con-way Multimodal have a robust pipeline with many new shippers that are interested in the use of intermodal (to augment their existing truckload capacity) as a result of the increased demand for inbound and outbound Mexico traffic. Additionally, they said the subsidiaries are able to combine mode options and offer truckload and intermodal to meet increased volume demands (and lead time requirements) of many organizations.

In terms of how this service came to be, they explained that Con-way and its third-party logistics subsidiary Menlo Worldwide Logistics LLC already move quite a bit of intermodal in the purchased transportation environment.

“This is an extension of the base product,” they said. “It combines that strong infrastructure (in Mexico) and customer relationships from the Con-way Truckload team with the operational and procurement expertise of the Con-way Multimodal team. The companies have been developing the service together over the last half of 2012.”

And with a renewed focus on shippers setting up operations in Mexico for various reasons, including shorter length of haul, increasing fuel costs and competitive labor prices, Gonzalez and Barnes noted that current near-sourcing trends are increasing the volumes available for both rail and trucking providers, supporting expansion in the market.

Con-way Truckload today derives 35 percent of its revenue from shipments destined for or originating in Mexico, they said, adding that the company has a fleet of 2,700 tractors and 8,800 trailers, with more than 2,300 trailers operating in Mexico.

“With more than three decades of cross-border expertise and experience working with Mexican carriers and forwarders in-country and at the border, Con-way’s product offers the industry’s most secure and efficient intermodal transportation solution in the NAFTA corridor,” they said. “The joint service provides a new solution for customers of both companies for U.S.-Mexico shipping and the companies see a real opportunity to grow significantly within the region.”