Con-way finalizes CFI acquisition

The acquisition of CFI by Con-way was made official on Aug. 23. Con-way first entered into an agreement to acquire CFI on July 16, and the merger joins CFI with Con-way’s existing truckload division in a move that creates a business unit with more than $500 million in annual revenues for truckload freight.

Roy Reed and Ursull Lewellan founded the Joplin-based CFI in 1951 with two trucks. The company generated revenues of $12,000 during its first year. Today, the company’s fleet includes 2,600 trucks helping produce more than $400 million in revenues.

Bill Compton is a CFI driver who has been with the company for 27 years and has logged more than 3 million miles. He was on hand Aug. 24 to welcome the Con-way drivers alongside CFI president Herb Schmidt and said it was encouraging to see the growth associated with the merger.

“When I started we only had about 100 trucks,” Compton said. “It seems like every year the freight load has increased and we’ve got more trucks. I think this (Con-way acquisition) is a good think, I just hope it doesn’t get so big that we lose that personal, family feeling. The nice thing about CFI is that whether you’re a president or a janitor, we all know each other.”

Schmidt was the first to welcome Con-way’s driving team of Howard and Laverne Thompson to CFI’s main headquarters Aug. 24. He said the Joplin location would continue to serve as the centralized dispatch for all truck-load operations, though he said the integration process of the two companies into one could take as long as 18 months.

“There are multiple steps involved,” Schmidt said. “The first step is getting the Con-way drivers on the team. There’s also the priority of getting Con-way’s Menlo Logistics business integrated and the Con-way truckload spin. There’s a big, big laundry list and we’ve started taking those steps immediately.”

Schmidt said one of the nice things about the integration process is that Con-way utilizes the same on-board communication devices as CFI — “It’s just a matter of flipping the switch,” he said. The only transition toward that end, he said, will be training, and some of Con-way’s employees have already started coming to Joplin for that training.

Another priority that will be party of the 18-month process, Schmidt said, will be the labeling and marketing strategy of the new synergized company. Schmidt said the members of upper management will “elicit a lot of opinions” about branding over the coming month before making a decision.

“We’re still not sure the best way to brand right now,” he said. “That’s something we’ll have to determine over the course of the integration process.”

Con-way is a publicly-traded company with headquarters in San Mateo, Calif. It has contracted with CFI for the past eight years and officials for the two companies say the merger was a natural transition in the growth of both companies.

CFI creates much of its revenue from business in-and-out of Mexico (about 40 percent of total revenues, Schmidt said), while Con-way has ventured into the worldwide market with its Menlo Worldwide Logistics division. It provides analysis to help streamline outdated or new supply chain systems. Con-way president and CEO Doug Stotlar has said adding CFI to the Menlo division will likely account for about 40 percent of the company’s total annual revenues.

That global business has created a company worth $4.2 billion, according to Tom Nightingale, vice president of marketing for Con-way. CFI recorded 2006 revenues of $427 million, according to Stotlar.

CFI currently has 2,600 trucks in service, while Con-way has 250. There are about 470 drivers from Con-way that will move operations to CFI’s base in Joplin.

In 2006, CFI acquired about 300 additional trucks for future replacements. CFI saved money by buying the trucks ahead of new standards. Schmidt said those trucks are sitting on the lot in Joplin and are replacing old trucks at a pace of about 11 trucks per week.

Nightingale said in a telephone interview that the 2,600 active trucks and the 300 on Joplin’s lot will be folded into CFI’s division, creating immediate driver and support positions in Joplin and some of the other hubs across the country.

CFI has four terminals outside of Joplin – Laredo and Lancaster, Texas; West Memphis, Ark.; and Taylor, Mich., – while Con-way has 470 operating locations across the country, 360 of which are “brick-and-mortar” buildings and the rest mere drop lots.[[In-content Ad]]