LTL carrier Con-way Freight plans to close terminals and reduce miles within its network to reduce operating costs while becoming more nimble, the company announced.
“In study after study, customers have told us the service attributes most important to their business are exception-free delivery, reliable on-time service and fast transit times,” said John Labrie, president of Con-way Freight. “The prime objective of this effort was to create improvement opportunities in all three service performance factors, and to identify areas where we could reduce costs and gain efficiencies through better process design and asset deployment.”
Calling the process a “re-engineering” effort, Con-way Freight – a subsidiary of San Mateo, CA-based Con-way Inc. – plans to close 40 terminals and reduce its nightly inter-city line-haul operation by more than 124,000 mi. per day while increasing the amount of freight that is direct-loaded from origin to destination. Reducing miles and eliminating re-handling through increased direct-loading are key factors in safety, on-time performance, faster transit times and exception-free delivery, Labrie said.
According to the company, the re-engineering plan should reduce the carrier’s cost base by $30 to $40 million annually and 75% of the employees at the 40 terminals to be closed will be offered jobs at another facility. Depending on the choices employees make, Con-way Freight expects a net workforce reduction nationwide of about 1%.
When these network changes are complete and fully operational by early December, Con-way Freight will operate 303 “brick and mortar” service centers in the United States and Canada, supported by 70 Freight Assembly Centers (FACs), or strategic re-ship points – facilities that operate at night using the same physical facility as daytime pick-up and delivery operations.
“These types of changes are never easy, but they are necessary for us to advance our mission to provide the best LTL service in the market,” Labrie said, adding that Con-way Freight is not exiting any markets.
“Every customer and every community that receives direct service today from Con-way Freight will continue to receive direct service when our network change is complete,” Labrie added. “We are simply balancing business volumes across a more strategic network footprint. It makes better use of available capacity and improves service with more efficient operations.”