Conway and CFI to merge.....

[Skywalker]

Just got a call from a driver there....will add details later.

Here's the base line:

Conway has entered into an agreement with the Owners of CFI to purchase CFI for $750 Million. CFI will apparently, since they had been the principal long haul carrier for Conway, continue to serve this purpose. More later.

Here's the link to the article on CNN.com:

http://money.cnn.com/news/newsfeeds/...16072007-1.htm

By the way folks, this is not a rumor. I got the email today from an "unimpeachable source". And a second email from a friend at CFI.... a driver who received the same email and forwarded it to me.

[Orangetxguy]

WOW. CFI won't even have to change their Logo! The CFI "logo" will work!!!

[Jackrabbit379]

That sounds interesting. Wonder if CFI will be doing some LTL work..

[VitoCorleone99]

That sounds interesting. Wonder if CFI will be doing some LTL work..

The LTL stuff is still under ConWay Freight. The merger specifically involves ConWay Truckload, at least in terms of operations. I know there are some ConWay guys on the forum, so maybe they can clarify, but I've always understood that the LTL and Truckload divisions were essentially like separate companies.

[Jackrabbit379]

Oh ok.

So, the Conway truckload are the guys who pull the 53' trailers, and that is who is buying CFI?..

[VitoCorleone99]

Oh ok.

So, the Conway truckload are the guys who pull the 53' trailers, and that is who is buying CFI?..

In terms of operations yes. ConWay has something like 250 trucks in its truckload division that pull 53' trailers. The rest of their big boxes are contracted out to other carriers (the largest share of which is already pulled by CFI). The guys pulling the doubles are ConWay Freight. Again, this is my understanding, so if I'm off I'm sure someone will correct me.

In a corporate finance sense, the company that owns all of the Conway operations is buying the company that owns all of CFI's operations.

[Jackrabbit379]

I see.

So, when yall talk about those Conway loads, that is Conway. Ok. I just figured it was an account or something...

The fog is clearing, now. :P

[Smokeeater]

Darn, there go the Sterlings lol

[BigDawg]

all i can say is i have talked to a few ConWay TruckLoad Teams all of them seemed very happy and content said they wasn't going any where.

[greg3564]

If I were at CFI, I would be really excited. CFI drivers are going to benefit in a huge way. Better benefits and retirement. I'm sure the cpm are probably better too. The one downfall is you will not have that small company feel.

[Snowman7]

If I were at CFI, I would be really excited. CFI drivers are going to benefit in a huge way. Better benefits and retirement. I'm sure the cpm are probably better too. The one downfall is you will not have that small company feel.

Dont bet on this. Alot of major LTL companies have a truckload division and they are paid less than LTL guys. They still compete in the truckload sector and have to be competitive with costs and wages. Conway truckload isnt paid as high as Conway Freight and UPS Freight truckload (sometimes called Special Services Division) isnt paid as high as UPS Freight (LTL). As a matter of fact Conway Freight doesnt even have a pension anymore, they eliminated it in October last year. I previously worked for Conway Freight and now work for UPS Freight. We have a driver that transferred from SSD and he makes way more money for much less work. They make 35-40 cpm and we make 46-54 cpm.

[greg3564]

If I were at CFI, I would be really excited. CFI drivers are going to benefit in a huge way. Better benefits and retirement. I'm sure the cpm are probably better too. The one downfall is you will not have that small company feel.

Dont bet on this. Alot of major LTL companies have a truckload division and they are paid less than LTL guys. They still compete in the truckload sector and have to be competitive with costs and wages. Conway truckload isnt paid as high as Conway Freight and UPS Freight truckload (sometimes called Special Services Division) isnt paid as high as UPS Freight (LTL). As a matter of fact Conway Freight doesnt even have a pension anymore, they eliminated it in October last year. I previously worked for Conway Freight and now work for UPS Freight. We have a driver that transferred from SSD and he makes way more money for much less work. They make 35-40 cpm and we make 46-54 cpm.

Don't get me wrong. I'm not at all saying the truckload guys coming from CFI will make LTL money. But the cpm will be better and the health benefits will be improved. Right now CFI makes their drivers wait a year before they can get dental insurance.

While LTL and Truckload are different divisions of Con-Way, the buying power they have when it comes to getting health benefits will allow them to get the best deal.

[Skywalker]

Don't get me wrong. I'm not at all saying the truckload guys coming from CFI will make LTL money. But the cpm will be better and the health benefits will be improved. Right now CFI makes their drivers wait a year before they can get dental insurance.

While LTL and Truckload are different divisions of Con-Way, the buying power they have when it comes to getting health benefits will allow them to get the best deal.

I tend to agree... Conway is a much bigger "entity", thus their buying power for equipment and health benefits is far greater. I can see where eventually CFI's drivers will benefit from greater and better health coverage, and quite possibly at a lower cost.

CFI has for a long time pulled much of Conway's LTL freight from terminal to terminal and cross country via relays and team operations. I can well imagine that they will continue to do so. It will be interesting to see how this all shakes out over time. Plus, Conway owns "Menlo Logistics" which ships about $800 million in freight per year....so it looks like this transaction has vetted a bit of "job security" for CFI drivers, and quite possibly provided a safety blanket that will insulate them from some of the vagarities of the OTR irregular route freight market.

Personally, I see the merger as a plus for CFI drivers.

[VitoCorleone99]

The way I see it, there are basically three possibilities. It will be a plus, a minus, or a 'what's the difference?' Personally, I anticipate number three.

What could be the pluses? Steadier freight, big company benefits, more terminals to use at our convenience, and a role as internal candidates for those who wish to transition into LTL work seem to be the most obvious ones.

To me, our freight is already steady, the benefits are not nearly as different from other companies' as people would have you believe, I don't use terminals unless I have to anyway, and I can take my chances on the open market if I want LTL work. A pay raise is a distinct possibility, but I am a bit cynical when it comes to the business world, so I'll go ahead and assume that any extra profits will go to the shareholders until I see otherwise.

What could be the minuses? No more small company atmosphere, more bureaucracy vis a vis operations, uniform purchases, different trucks, and job cuts (I guess would be a possibility) seem to be the ones that people mention.

CFI isn't exactly Mom & Pop's trucking as it is, bureaucracy is probably unavoidable, uniforms are tax-deductible and can't be terribly expensive, I'll get used to whatever truck they put me in, and a move that was made to grow ConWay's truckload capability would be monumentally stupid if it were followed by cutting driving jobs, so I won't lose any sleep there.

In reality, we have ten times as many trucks as they do, the operations are moving to our headquarters, our CEO is being put in charge, and at the end of the day we pick something up in Town #1 and we drop it off in Town #2, regardless of the logo on the trailer. I have a hard time seeing how life out here will be affected to any large degree, one way or the other.

[Snowman7]

The way I see it, there are basically three possibilities. It will be a plus, a minus, or a 'what's the difference?' Personally, I anticipate number three.

What could be the pluses? Steadier freight, big company benefits, more terminals to use at our convenience, and a role as internal candidates for those who wish to transition into LTL work seem to be the most obvious ones.

To me, our freight is already steady, the benefits are not nearly as different from other companies' as people would have you believe, I don't use terminals unless I have to anyway, and I can take my chances on the open market if I want LTL work. A pay raise is a distinct possibility, but I am a bit cynical when it comes to the business world, so I'll go ahead and assume that any extra profits will go to the shareholders until I see otherwise.

What could be the minuses? No more small company atmosphere, more bureaucracy vis a vis operations, uniform purchases, different trucks, and job cuts (I guess would be a possibility) seem to be the ones that people mention.

CFI isn't exactly Mom & Pop's trucking as it is, bureaucracy is probably unavoidable, uniforms are tax-deductible and can't be terribly expensive, I'll get used to whatever truck they put me in, and a move that was made to grow ConWay's truckload capability would be monumentally stupid if it were followed by cutting driving jobs, so I won't lose any sleep there.

In reality, we have ten times as many trucks as they do, the operations are moving to our headquarters, our CEO is being put in charge, and at the end of the day we pick something up in Town #1 and we drop it off in Town #2, regardless of the logo on the trailer. I have a hard time seeing how life out here will be affected to any large degree, one way or the other.

I agree with you. Truckload is truckload, it is what it is. Just a different owner. USF Holland (LTL) and USF Glen Moore (TL). One is union with top pay and benefits and one is non union with avg OTR pay and bennies. If you want LTL pay and bennies you have to do LTL work. If you want to do OTR work you're going to get OTR pay, regardless of who is signing your check.

[feederfred]

Just IMHO I think this will be great for all concerned. You all know that I'm kind of a union guy.....that said BUT. Con-Way is a good company that pays very close to "scale" wages. The Teamsters have never had any real gripe with Con-Way. We know they are not hauling cheap freight and under-cutting wages, even for the union side. If Con-Way takes over CFI for their TL freight then it can only be good for Con-Way and CFI. Con-Way will hopefully (and I'm pretty sure they will) raise CFI way up and that can only be good for the TL business. Con-Way is non-union, that's true, BUT they pay good wages and benefeits and that is all anyone can ask, union or non-union...

[VitoCorleone99]

...Con-Way will hopefully (and I'm pretty sure they will) raise CFI way up and that can only be good for the TL business.

According to yesterday's conference call with the financial analysts, CFI is substantially more profitable and roughly ten times the size of ConWay Truckload, so I suspect they might be hoping for the opposite, i.e. CFI will hopefully lift ConWay Truckload way up.

[feederfred]

Uh, somehow I doubt that as far as wages and benneys....ConWay is way ahead of the poverty wages CFI pays. Somehow the .32cpm CFI is always talking about pales in comparison to the .48cpm+ (and hourly) that the ConWay drivers I know get...ConWay is part of Redwood Industries, a company MUCH larger than CFI.....

[VitoCorleone99]

Uh, somehow I doubt that as far as wages and benneys....ConWay is way ahead of the poverty wages CFI pays. Somehow the .32cpm CFI is always talking about pales in comparison to the .48cpm+ (and hourly) that the ConWay drivers I know get...ConWay is part of Redwood Industries, a company MUCH larger than CFI.....

I think you're confusing the LTL folks with the truckload folks. There is no hourly pay. I don't know what their CPM is, but CFI teams start at .43 (not including safety bonus, and with no minimum experience). ConWay's website states that their teams average 5,500 miles per week. Most CFI teams that I've talked to are pushing 25,000 in a typical month (not a terribly busy month, mind you, a typical one).

ConWay Truckload operates at just better than break-even. CFI has an operating ratio of below 90%. According to the press release, the merger creates a truckload division with a combined $500 million in annual revenue. CFI's annual revenue, on its own, was ~$450 million (according to my memory of the conference call, but definitely somewhere in that ballpark).

The .32 at CFI is for a driver with 6 months of experience, not enough to get a handshake at the LTL's paying .48, so not quite a reasonable comparison there either. I earned over $47,000 in my first year, during which my wage progressed from the .26 while I was with my trainer to the current .35. I have no doubt that plenty of you folks make more than I do, but poverty is a pretty amusing term to use. Considering that this is without a doubt the easiest job I've ever had, my wages are fine with me.

Anyone who actually took the time to do an A-B comparison of benefits between companies would quickly find that this is a fun way to knock CFI, but in reality it's much ado about nothing. You get cheap, basic, no-frills insurance for one year. After that the benefits are just like anywhere else.

But yeah, you're probably right.

Conway will use CFI to consolidate multiple-skid orders via their Menlo Logistics subsidiary. In this way, they will get a TL driver to do LTL work at a significant savings in labor costs. They will also use truckload to pull more and more LTL linehaul.