Never Stand Still

So here it is an actual update, this one is short but it's important.

The year is 1991 Donald Moffitt is elected CEO at CF. The recession of 1991 is killing everyone and hammering the freight industry.

CF LTL is closing terminals firing and laying off and still the bleading will not stop.

Emery Air Freight continues to lose money only $28 million in 1991, did Emery Air Freight ever make CF money? That Emery Air Freight so far has been an awful investment for CF.

Anyhow the money is going down the tubes the entire thing is failing time to turn it around.

But how? CF this CF:


was starting to become obsolete really and trends were shifting away from them.

At last however CF looked at there books and saw that the Conway's while they were not having a stellar year they were busy and making money and actually outpaced and profited CF it's self.

CF Management noted how well the Conway's were doing and took note to remember that, if the gears are tuning in your mind and you have your thinking cap on and are playing connect the dots so am I!

Anyhow that's actually it for that section. Next section is called the logistics revolution.

 

Alright kids ready it's CF 1990-To Labor Day 2002.

I'm going to do something I don't want to do, but in the interest of getting this done and over with since were close to the end I'm going to make a series of short You Tube Films (yes I am taking the lazy way out) because after these next two posts the book circles back to CF Motor Freight which really the book kind of neglected the entire way and now after reading this book everything that had to do with CF in the 1990s was all leading up to the Labor Day 2002 Shut Down.

 

I have to post this date.
Conway Freight:

2006-2016 officially sold to XPO Logistics in October of 2015 .

 

Menlo Logistics 1990

Until 1990 the logistics world was made up of many different companies, trucking operations, contract truck operations, warehousing operations and technology services like inventory control and shipment tracking.

CF thought that the logistics world was changing and that there would be a different way to do things. Basically make a one stop logistics shop.

They wanted a tech sounding name so they went with Menlo which was the headquarters in Menlo Park, CA.

Anyhow, Williford was the name of the man who started Menlo logistics at the time logistics was kind of a new thing, to have one company handle the warehousing and shipping and tracking, but eventually it did take off.

While CF Inc owned Menlo logistics Menlo logistics did not exclusivity use CF for all there shipping they used who ever worked best and was best in that area or had the best price. At the same time Menlo hired there own warehouse people and there own transport people basically hired from outside the company.

Menlo won there first contract to do Sears in 1991 $100,000,000.00

Then after that they did work for Coca Cola, Hewlet Packard and Ford. After that they won a huge contract to do business with Frito Lay to do all there trucking operations. With in 2 years Menlo Logistics paid CF back and was on it's way to profitability.
Moffitt was quoted as saying "Menlo is CF's do it all company."

 

Emery Air Freight 1991

Here is Emery Air Freight in a nut shell, they got rid of there small package business, they were able to get rid of some 1800 delivery trucks because of getting rid of there small package business, they were then able to concentrate and restructure and that helped, but in the 1990s Emery got in a lovers quaral that was politically motivated against there biggest customer The US Post Office. This went on until about 1994 when Emery and the Post Office were done suing each other and Emery won the mail bid that they wanted to win in 1994.

This mail bid ended up boosting Emery a head of the game and putting them into profitability. However Emery was structured in a way that paid them really well for performance different then the rest of the CF companies and Moffitt was very defensive about this because the other CF companies like Con-Way and CF hated Emery. What's funny is all the CF sub companies Conway, CF Motor Freight, Emery and Menlo none of those 4 companies really got along well with each other.

CF and Conway hated each other. Menlo was almost there own entire thing off in the clouds, Emery Air Freight both CF and Conway hated because Emery was just a dud and almost bankrupted the entire CF inc. company in 1990.
I am going to post a video from an exert from the book please watch the video it is from the last couple of pages on Emery Air Freight.

 

CF-YELLOW-ROADWAY a Race To The Bottom and a Race to Labor Day 2002

It was the 1990s and CF Motor Freight was showing signs of weakness. According to the book Conway and Menlo were killing it and the company finally squeezed a profit out of Emery Air Freight.

However CF Motor Freight:

They were not doing so good, the company was watching it's revenue decline and tanking.

1990 CF Motor Freight Revenue $108.5 million
1991 CF Motor Freight Revenue $52 million
1992 CF Motor Freight Revenue $27.5 Million

The market place was changing long haul LTL shipping was out, regional and over night fast paced shorter haul shipments and logistics were in.

The writing was on the wall CF and Roadway and Yellow were all to happy to do a bunch of discounting to gain market share. Well that sure worked they all gained market share, but in the process they discounted there profits away and by 1992 all 3 companies had finished there discounting race and all discounted them selves straight to the bottom.

Donald Moffitt said that all the companies in the early 1990s that were going under were all union carriers and that the companies that were starting up were non union carriers.

Obviously it was clear the writing was on the wall and CF Inc. Was no longer interested in the teamsters union and CF Motor Freight and the times were going to be changing awful quick.

CF

Yellow


and
Roadway

Were all in a race to the bottom and CF Motor Freight was leading the race to the bottom.

 

Union troubles and freight flow system issues were killing CF Inc and the union did allow CF to combine 6 terminals around the Akron, Ohio area which saved CF $750,000 also CF was able to combine 7 terminals in the Philadelphia area. CF was doing what ever it could to cut costs as demand for there service was declining throughout the 1990s.

As you can see the writing was on the wall CF Motor Freight was becoming obsolete.

Please watch my film as I read from the book so you can get the entire gist.

 

1994 Teamsters Strike

In early 1993 Moffitt was determined to turn CF Motorfreight back into a profit center however the master freight agreement was running out and in 1994 it was time to renegotiate the Teamsters Contract.

The 1990s saw a lot of turbulence between companies and the teamsters. The 1994 Teamsters Strike though is often overshadowed by the 1997 UPS strike.

 

1994 Teamsters Strike II
Will be after dinner.

 

1994 Teamsters Strike (Continued)
Ron Carey and CF did not get along very well and in 1993-1994 conditions between the Teamsters and CF and other carriers quickly deteriorated. Ron Carey ushered in a new era of militancy against CF one that had never been seen before.

In the summer of 1993 the union threatened to strike at CF over some minor issues and Donald Moffitt CEO of CF said "The union is looking to pick a fight as part of there so called 'corporate campaign,'".

The Teamsters passed out anti CF post cards in hopes of them getting sent straight to Raymond O'Brien chairman of the board at CF Inc.

However O'Brien only received 3 post cards.

Christmas of 1993 the Teamsters Union and Trucking Management Inc (the LTL Freight Industries bargaining group) started negotiations on the new master freight agreement.

The agreement was supposed to be signed by March 31 1994, but each side went over the agreement line by line word by word and conditions deteriorated.

Donald Moffitt CEO of CF figured the new agreement wouldn't really show up till May of 1994 (That's when I turned 6 years old!)

January 21, 1994 80 Teamsters attempted to gain entry into CF's head quarters in Palo Alto, California. They were locked out of the building and the police were called, but they didn't go away empty handed the Teamsters T-P'd the CF headquarters in Palo Alto California.

Moffitt fired off a letter to Carey saying:

"The new teamsters T-P'd our corporate office building yesterday,"

"My teenagers thought it was funny. I suppose they can identify with such things. Why don't we direct this energy to a new contract and maybe still have a competitive industry and jobs at the end of the decade."

He then added a PS "The cleanup cost was $170.00 and I think it is only fair that you pick it up."

Page 434 Never Stand Still 1999 CNF Publications

Ron Carey never replied to Donald Moffitt's letter.

In the 1990s...
In the 1990s there was a shift away from full time workers to part time workers which is what the 1997 UPS strike was all about.

Well before the great 1997 UPS strike there was the 1994 Teamsters Strike CF wanted to cut wages and hire part time not full time workers. To make the union carriers more competitive.

The Teamsters didn't care for that they wanted protection against down sizing and they wanted full time not part time employees.

Ron Carey was kind of in a bad spot he had been narrowly elected Teamsters president and was not really well liked at the same time before this big national freight agreement fiasco Carey had lost a bid to raise union dues so more money could go to the strike fund and he also lost a one day strike action against UPS so in February of 1994 Ron Carey needed a win and needed one badly and he needed to beat Trucking Management Inc any way possible.

On March 31 1994 Trucking Management Inc came back with a proposal for 13 percent wage hike over 4 years and limits to intermodal use, but the Teamsters were not having it and the Teamsters would not budge on the central issues and at 12:01am April 6 1994 the Teamsters walked out and hit the picket lines at major trucking companies all throughout the land. 80,000 drivers, dock workers and mechanics and other members hand a walk out the first walk out since the 9 day walk out of 1979.

Moffitt called the strike "irrational and irresponsible."

CF figured the union was going to strike no matter what and the strike would last till the end of April and cost CF $75-$80 million dollars.

"However, it seemed likely that the Teamsters also would lose a great deal in the end." - Never Stand Still CNF Publications 1999.