Never Stand Still

I'm working on it, I'll have something hopefully today or tomorrow.

 

Yeah sorry I got way off track over on First Second First Date ever in the past two days we covered the oddest amount of ground, we ended up having a discussion about SOHIO and it's change to BP, and then we have an entire page dedicated to analog broad cast TV back as it pertains to the year television stations stopped signing on and off and the down fall of Gulf Corporation and UNOCAL/UNION 76. The reason it all ties in, is because Analog TV and SOHIO are old school things and SOHIO used to have a weather sounder, "You go or SOHIO pays the tow."
Gulf and 76 in Ohio are also old school same with Standard Oil of Indiana which is now waaayyyy defunct and better known as AMERICAN or STANDARD which you all probably recognize as this brand:

I bet that logo looks familiar to us here in the east.


Anyhow all that old school stuffs been taking up most of my time and some other odds n ends like Mystic Music and there CD Cool Rock and Sweet Love any one remember those commercials on TV?

Also we had a discussion about Alanna Myles and French Actress Hafsia Herzi (whom I was temporarily in love with), so that took up all weekend. Check it out for some good reading and good history. So that's how that goes. The problem is I ask questions and then more questions get asked and then the next thing you know there's 3 pages dedicated to the analog television, SOHIO (Stnadard Oil of Ohio), Gulf Corporation, UNOCAL/UNION 76 and a post on Standard Oil of Indiana and this all started with a french actress of middle eastern descent, how do you go down that rabbit trail?

So that's where I have been and will get this thread back on track sorry for the long winded explanation.

 

Well everyone here, we are back at it and back on track in this episode were going to be wrapping up CF Air Freight because in the next installment were going to get back to actual trucking because at the end of the day the air planes can only do so much and there limited to size and scope.

Anyhow in this episode CF gets it's wings that's right CF Air Freight becomes the real deal.

It was now the later 1980's things at Eastern Air Lines were deteriorating rapidly the pilots union and the board of directors were having trouble seeing eye to eye and Eastern Air Lines who was the air haul provider for all of CF air freight was going down the tubes fast! At first CF thought this was good they could squeeze Eastern Air Lines for even cheaper prices and rates, but Eastern was starting to get pretty rocky and while it was tempting CF also figured one more price reduction maybe the straw that breaks the camels back and that'll be the end of that.

Eastern Air Lines share holders and unions were feuding Eastern Air Lines balance sheet looked similar to that of the Penn Central Rail Road the clock was being to strike twelve on Eastern Air Lines and CF was stuck in the middle getting ready to watch there air freight business go to pot, because Eastern Air Lines was ready to go belly up and didn't give a whoot anymore.

In February of 1986 Borman the president of Eastern sold the air line to Texas Air Corporation. Frank Lorenzo was the controller of Texas Air Corp which ran two other air lines known as Continental and New York Air, both were considered low cost air lines at the time.
Lorenzo was known as "a union basher and thrasher of labor" he liked to cut cut cut cut cut.

Lorenzo didn't give a hoot about CF air freight he was busy cutting labor, and when Texas Air took over Eastern Air Lines they cut cut cut cut cut. CF tried to negotiate with Lorenzo Berger of CF Air Freight tired to work things out with Lorenzo, but Lorenzo wasn't having it and as Lorenzo cut cut cut cut cut, so did the service at Eastern.

Remeber CF still at this point does not control or operate or have there logo on a single air plane and they were heavily reliant on Eastern Air Lines, well, all the cuts at Eastern Air Lines, caused major quality problems, reliability issues CF's big important AM service suffered heavily and CF Air Freights service began to decline in quality at a huge level. This was no good.

Eastern Air Lines could not be trusted at all when it came to on time arrivals and departures and air freight is all about fast on time service right now. Van Hallen put out a song in the 1980's from there album Unlawful Carnal Knowledge called "Right Now."

Anyhow Berger the head of CF Air Freight believed that CF had to do something, to keep the business afloat and that was to sell more premium service.

At the time CF picked up White-VolvoGMC, Nabisco and Eaton all major air freight clients.

CF-CF the parent company decided that CF Air Freight was good enough and they couldn't offer premium service if they weren't in control and Eastern Air Lines didn't care about CF anymore so that relationship had run it's course and by the end of 1986 CF Air Freight had 186 terminals and a new $8million dollar facility in Los Angeles and by fourth quarter of 1986 CF Air Freight was turning a profit so, the parent company was confident in CF air freight plus by the fall of 1986 CF Air Freight "Moon Light Special" had pretty much deteriorated and that was it CF terminated it's relationship with Eastern Air Lines. It was like a divorce and like a divorce you could see it coming.

CF then decided they were going to do things on there own and signed a lease on Boeing 727 cargo jets and some DC-8's and began operating CF Air Freight out of there air freight hub in Indianapolis.
Berger named the new system CF "TOPGUN"

CF had great success with it's own fleet of CF marked jets and they did so well that in spring of 1988 CF bought 8 DC-8 Freighters.

The DC-8 was more of a long range plane and this allowed CF to offer services to Europe.

So now CF had there own fleet of pretty air planes with there logo plastered all over them and there red and green stripe flying through the sky faster and better then everyone else.

CF Air Freight had a fleet of 18 jet mother ship freighter planes and a variety of smaller hopper and feeder air craft. CF also started to notice a jump in revenue and profits, air freight operations earned 2.4 million in 1987 compaired to a $5.2 million dollar loss in 1985. In 1988 CF Air Freight operations income rose to $10.2 million at this point in time Berger and CF Air Freight were flying high!

That's going to conclude it for CF Airfreight right now.

Next Installment were hitting back to the road getting back into the big trucks with the 28' trailers because after all air freight is only good for a few things, the real whole sale work was still being done by the big trucks.

 

Alright guys, I haven't forgotten about this thread there will be something here by mid week so stay tuned I'm working on it.

 

Alright guys were back. Here we go were into the late 1980's it's not yet the gogo 90's but were getting closer.

So lets review in the 1980s CF got into the air freight business they had a few ups and downs, but eventually got up. Eastern Airlines went down the tubes, and CF leased there own set of planes. While the planes were flying high in the sky, they still were not CF's core business.

CF's core business was still longhaul trucking as seen here:


However the trucking industry at that time was being deregulated this led to an onslaught of competitors, some 30,000 that came and went during the 1980s.

CF though was still the biggest and baddest and still had plenty of money from Freightliner, however in the late 1980s the trend most business were switching over to was a JIT or just in time logistics model and lots of these rummy out fits you know trucking low entry level barrier it'll be easy how hard can it be type companies couldn't provide the service needed for the hot JIT hauling contracts and went under and then the bigger companies like CF helped them selves to the customers.

In the 1980s both CF and Conway saw a major increase in tonnage and sales, but because of the competition being so fierce both companies had to play the rate game. CF often said that there services were under-priced for the amount of service the customers were getting from them.

However CF in 1989 when they celebrated there 60th birthday was the biggest and the baddest they had 41,000 employees, 1400 terminals, 500,000 customers and revenues of $3.8 billion dollars which was a record for CF.

Conway way in the 1980s had totally stream lined the regional LTL system, they had a freight flow system second to none all the different terminals kept feeding there system and they did not have to interline at all, plus they way better technology at the time then mostly anyone else.


Conway at the end of 1989 had 665 terminals and operated a hub and spoke system same way airlines did they were the largest regional LTL carrier at that time. Eventually they would be eclipsed by FedEx Freight, but that is way way down the road in 2016. FedEx at this time wasn't even on the map yet.

Now in mid 1984 there was an economic rebound which everyone knows from reading this post:


(
This is Union Pacific Unit 6936 also known as "The Centennials" These locomotives are one of a kind there pretty much 2 Gp-40s put together, but at any rate they were special to Union Pacific they were designed by Union Pacific chief mechanical engineer David Newhart and Electro Motive Diesel. Union Pacific at the time was getting ready to retire it's fleet of gas turbine locomotives in the late 1960's and needed something to replace them.

They worked with EMD and EMD built 45 of these units for Union Pacific.

Union Pacific ran these units from 1969 to 1974 and averaged about 22,000 miles a month per unit. They are the largest single unit diesel electric locomotive ever built and come in at 3,300 horse power.

However, by 1974 the locomotives which were test units were starting to show signs of ware and Union Pacific parked all 45 of these units in 1980, also other locomotives newer technology and newer power was more efficient and better running. The SD-40-2

Was gaining major popularity in the 1980s in fact many SD40-2 locomotives are still in service today either as helper units pushing trains up horseshoe curve in PA or doing local runs. Burlington Northern was a major buyer of SD40-2 locomotives and used them in the early 1980s as there primary mainline hauler specifically out west on the Orion line which is Wyoming's Powder River Basin area which is the worlds highest tonnage railway transporting low sulfur western coal to power generating plants in the east and west.

Any how the SD40-2 while not as powerful as far as single units go, was more efficient and newer and had a much longer economic life span then the DDA40X. However the top picture is famous, because it was taken in 1984, during the summer of 1984 Union Pacific ended up running into a major freight increase and was scrambling for power. They pulled 25 of the DD40AX locomotives out of service. The locomotive in the picture unit 6936 is the only DD40AX locomotive still in service to this day. It lives at the Cheyenne, Wyoming Union Pacific Shop and is used now to haul excursion trains for big wigs and stuff.

However in the photograph that train 6936 is seen pulling out of I think Los Angeles, CA yard one last time on an actual revenue freight run. So there it is really working one last time during the summer of 1984. Pretty cool if your interested in stuff like that.

I think as far as some of the other statistics the fuel tank I think is a 7,000 gallon capacity and it cost like $20,000 to fill up that locomotive with a full tank of fuel.

The axle trucks on that locomotive are huge it has 8 wheels 4 wheels per axle 4 axles per truck, the wheels are like as tall as me or any regular sized person. The rest of the locomotives are either scrapped or in museums. One is in Kenefick Park in Omaha, NB. Omaha is the city where Union Pacific is headquartered and Kenefick was the president of Union Pacific years ago, like back in the late 1960s early 1970s, which obviously is why the park is named after him.

Alright that's today's random history lesson.)


Alright so were back to CF,
In 1984, shipping prices were fairly high and the standard shipping discount was around 30%, however crude oil prices were fairly cheap and CF imposed strict fuel conservation methods, and also worked on improving it's maintenance program.
CF also started using wind deflectors and radial tires.

At the time in the late 1980s CF had one of the largest fleets in the world. If you ever wondered there rolling stock fleet clocked in at 41,000 units. That's trucks, trailers and semi tractors.

Also to remain competitive CF's use of double trailers was another major tool. CF lobbied hard and in 1984 President Reagan signed the Tandem Truck Safety Act in 1984 which legalized doubles and by 1990 CF was the industry leader in doubles pulling.

In the 1980s CF also equipped trucks with on board computers which flagged the shop for preventative maintenance work and also dispatchers used the computers for up to the minute real time dispatching on shipments and tracking and who's doing what and going where type of things.

Of course this was all made very easy by the abundance of money CF had, see CF had money and other companies didn't so CF could do all this stuff.
The Freightliner sale was CF's biggest source of money but, Moffitt the president of CF at the time also made some other investments and stuff and that helped make a "strong cash flow" for CF and set them up to be in good shape when Moffit retired in 1988.

However the 1980s were not so kind to the Teamsters union they took a few big hits with the recession of the 1980s and goofy pricing and what not.

Now CF's business model was always high quality freight and high quality service, however that was 1930's era mentality and 30,000 companies came and went in the 1980s and along the way they kept prices down so revenue went up, but prices were kind of low. CF did raise rates now and then when the market stabilized from time to time in the 1980's, but it was all that darn competition that kept prices down, I hate when that happens.

Now in1987 there was a huge price war, It lasted from April of 1987 to October of 1987 and it was a real race to the bottom, Wall Street analysists said few carriers would make it out alive, but CF with all there money was able to make it. Plus some of the competition there serves was so bad that customers filed back to CF.

However a huge thorn in CF's side and one of the biggest problems to CF's fancy price structure was actually a major competitor of CF and a company that ended up outlasting CF a company called OVERNITE

See in the 1980's LTL prices were low and CF fought real hard tooth and nail to get the prices to go up and finally were able to raise shipping rates. Problem was Overnite didn't give a hoot and nickle about CF and came along and kept undercutting everyone. Overnite in the 1980s was kind of in bad shape they weren't operating real efficiently and the owner who just died by the way was getting ready to retire Overnite just kept undercutting and underbidding everything almost bid them selves out of business.

They were number one enemy on CF's competitors report, now Overnite eventually dug them selves such a hole there was almost no way out until Union Pacific came along and bought out Overnite and then 2 decades later sold Overnite to UPS and they became UPS Freight, but that's a different story.

However Overnite was not successful in there quest to destroy the nice higher prices CF had established and then Overnite eventually went away and stopped being a bother to CF.

CF in the 1980's was able to eventually get there price and get there rates although they still thought they were undervalued, but over all they were set up pretty good and made some big strides in the trucking end.

Next time will discuss operating rules for the regional companies.