The Con-way Freight Story

Con-way Freight was founded as a spinoff company by Consolidated Freightways (CF) in 1983. Previously, Consolidated Freightways’ key business focus was long-haul transportation, with many of its routes averaging 1,300 miles. CF had sold its truck manufacturer, Freightliner, and needed direction about where to invest that money. The company’s management looked to Boston Consulting Group (BCG) to assemble a report and advise on its next investment. The report showed that the most profitable segment of over-the-road transportation at the time was freight that traveled less than 500 miles, and that, in fact, the average length of a haul in the United States was closer to 500 miles than CF’s 1,300.

A decision was made among CF executives to pursue the idea of regional LTL companies, focusing on three regions: Con-way Eastern Express (CEX), Con-way Western Express (CWX) and Con-way Central Express (CCX). Though the deregulation of the 1980 Motor Carrier Act had left several carriers floundering and desperate for a buyout, CF elected to build its companies from the ground up in the West and Midwest. The three new LTL carriers began as independent companies that could only sell freight within 500 miles of a terminal. Their freight could not be shipped to another destination outside of the terminal, even if it fell within the company’s area of service.

CF faced unique challenges when operating Con-way Freight due to its relationship with the Teamsters union. CF was union-affiliated, and the Con-way companies were not. Therefore, there could be absolutely no overlap in their business practices, customers, employees or affiliations, or Consolidated Freightways could be accused of “double-breasting.” Technically, the money used to create Con-way Freight came from Consolidated Freightways’ holding company, and the new companies were safe. However, that did not stop the Teamsters from pursuing them, and each of the Con-way Freight units had to be on guard constantly, refraining from even listing their company names in employment ads… read more >