Con-way Reports $111 Million Loss for 2009

Trucking and logistics giant Con-way reported losses both for the fourth quarter and the full year, as overcapacity and aggressive pricing cut into its trucking income.

Con-way reported a net loss of $110.9 million for 2009, compared with a $67 million net income in 2008. Its revenue declined 15.3 percent last year to $4.27 billion.

There are signs the worst may be behind for Con-way and other carriers, as freight shipping picks up and demand for capacity increases. But Con-way and its competitors enter 2010 weakened by fierce discounting that bit deep into earnings.

The fourth quarter trends followed patterns set in the third quarter, when Con-way said it had turned to “aggressive pricing” to gain LTL market share.
The LTL division reported $2.8 million in operating income for the quarter, compared with a $9.4 million operating loss a year ago.

Its fourth-quarter LTL revenue was $683.9 million, a 6.8 percent increase over last year’s fourth quarter revenue of $640.3 million.

Less-than-truckload pricing stabilized somewhat in the fourth quarter, albeit at a lower level, said Con-way President and CEO Douglas W. Stotlar. Rate discounts bit into Con-way’s yield, which fell 14.4 percent from the previous year.

“While yields were down compared to last year,” at Con-way Freight, “our increased tonnage levels have enabled better utilization of rolling stock capacity,” he said. Con-way’s LTL tonnage per day increased 20.6 percent from a year ago.

In 2010, Con-way Freight will continue to refine its network to drive cost savings and service improvements, Stotlar said. Last month the company re-engineered its line-haul network to speed transit times for shipping between 460 U.S. cities.

Con-way Truckload’s operating income fell 43.3 percent to $8.2 million in the quarter, reflecting weak truckload pricing and lower fuel surcharge revenue. The truckload division’s revenue dropped 15.6 percent to $93.6 million, excluding $46.1 million in inter-company revenue.

Stotlar said capacity is tightening in the truckload market, and early bid activity in January showed prices firming and stronger demand. “Those are encouraging signals that a recovery is beginning to take hold in this market segment.”

The division’s expansion last year into regional truckload is showing “good early returns,” he said.

Declines in income at Con-way Freight and Con-way Truckload in the fourth quarter were partially offset by improved operating income at Menlo Worldwide Logistics.