Subscribe to our free, weekly email newsletter!


Labrie steps down as head of Con-way Freight

Con-way President and CEO Doug Stotlar to serve as interim president for next six-to-12 months
By Jeff Berman, Group News Editor
August 24, 2010

Transportation and logistics services provider Con-way Inc. said today that John G. Labrie, president of Con-way Freight, the company’s less-than-truckload (LTL) subsidiary, has left the company to pursue other interests.

Con-way officials said that Con-way President and CEO Douglas W. Stotlar has assumed the role of interim President of Con-way Freight and will fill the position for the next six-to-12 months. The company said that during this time Con-way Freight will focus exclusively on increasing profitability through yield management, cost reduction, and operating discipline.

“Con-way Freight has built a 27-year reputation as a premium carrier in all respects,” Stotlar said in a statement. “The management changes announced today are intended to ensure that we retain this position, and that we deliver to our shareholders, customers and employees the trust, consistent market-leading performance and sustainable value that have been the foundation of our success for nearly three decades.”

Company officials decline to provide further comment on this announcement.
Second quarter revenue at Con-way Freight—at $817 million—was up 25.8 percent, with yield down 2.1 percent year-over-year—6.4 percent excluding fuel surcharge. Tonnage per day increased 29.2 percent, and operating income of $17.2 million was down compared to $49 million last year.
“Demand significantly exceeded our forecast [for Con-way Freight] as the result of an unexpectedly strong economy,” said Stotlar during the company’s earnings call earlier this month. “Our volumes reached record levels starting in March and continuing through the second quarter. This presented several challenges, most notably the pace at which volumes came on created a significant hiring need.”
In the second quarter, Con-way Freight hired 3,200 new employees, whom were on-boarded, coupled with labor costs associated with higher volumes increasing, as well as higher costs due to overtime, rental expenses, and purchased transportation.
“One of our goals during the quarter was to relieve some of the pressure on our system while working to moderate our record volumes,” said Stotlar. “As we progressed through the quarter on a year-over-year basis, April tonnage per day was up 37 percent, May was up 28 percent, and June was up 23 percent. We expect to see sequential volumes moderate through the rest of this year, as we continue to focus on increasing price.”
Stotlar also said on that call that Con-way is seeing modest improvement, due to stronger demand, industry actions, and Con-way’s own specific initiatives. He added that benefits, strong demand, and improving pricing were offset by increased operating costs related to record volumes in the Con-way Freight network. And the task of moderating record volume while increasing price will take time to resolve and will curtail expectations for operating margin expansion in the near-term.

While Con-way said it is focused on increasing profitability through yield management, cost reduction, and operating discipline at Con-way Freight, Robert W. Baird analyst Jon Langenfeld wrote in a recent research note that this process is likely to take a while.

Langenfeld wrote that Con-way Freight’s second quarter, year-over-year volume growth was driven by the residual effects of an imbalanced pricing strategy in 2009 and lack of decisive action to cull unprofitable freight late last year and early in 2010.

“As a result, [Con-way’s] yield contraction continued given slow progress in improving pricing and purging unprofitable freight,” wrote Langenfeld. “However, this process takes time and while absolute yields weigh on near-term profitability, some signs of improvement are evident. [Con-way’s] actions to improve pricing are consistent with industry sentiment that has materialized as volumes improved.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

At $2.832 per gallon, the average price per gallon was down 1.1 cents, following drops of 1.6 and 1.1 cents the previous two weeks and a cumulative 8.2 cent cumulative drop over the last six weeks.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.0 in June, which edged out May by 0.3 percent.

Regardless of the date or year, one thing is beyond consistent when it comes to key themes in freight transportation logistics: the state of United States highways and related transportation infrastructure is in an eternal state of chaos and disrepair.

The high-volume warehouse or distribution center that supports B2B, Omni-channel activities, direct-to-consumer shipments, and the Internet of Things all require a flexible and scalable supply chain in order to function at optimal capacity. The problem is that most of today's supply chains are made up of fragmented silos of information that compromise their ability to compete, be responsive to customer demands or seize new business opportunities.

As customers' demands constantly evolve, transportation and logistics (T&L) operations are being put under growing pressure to offer more efficient delivery services, while not compromising on customer service. Using findings from a research survey conducted among transport and logistics managers around the world, this report explores how a combination of mobile technology implementations for mobile workers, and process re-engineering efforts can elevate operations to the next level.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA