Never Stand Still

Yes that's exactly what I am saying and that was the arguments the railways used back 50-60 odd years ago. They said Air Planes only had to pay part of the way same with trucks, but we had to pay the entire way. I've seen it in various railway films over the years and I can picture the one, but I can't remember the name of it.

 

I don't know if that plane is still in service, but it has the old school UPS livery.

 

So here we are the real deal. The 1990-1991 recession that put a stall on Emery's recovery also put additional trouble on CF it's self.

By the end of the first quarter of 1991 tonnage was off at CF by more then 18 percent.

CF Motor Freight the core company laid off about 1000 people and sent back all of it's rental trucks and trailers. I'm sorry maybe it wasn't around here and it was long ago, but I never remembered seeing CF with rental equipment.

CF also cancelled taking delivery of newer trucks and trailers and tightened there belts on the old spending.

By spring of 1991 CF was operating on "paper thin" margins.

Also a new national master freight agreement was up for negotiation and that included a pay raise for the teamsters. Mean while diesel fuel prices continued to climb.

CF tried to pass a rate increase in April of 1991, but with "overcapacity" in the market place there rate increase was offset also other carriers were busy discounting and that also made the rate increase a bust.

I guess there was a short railroad strike in 1991, but that did nothing to help CF.

The bottom fell out in 1991 and CF was hanging on by a thread pricing got so bad and so cheap and everyone was under cutting everyone else, Leach informed the board:

"We've just about reached the point where we cannot stand aside and lose any more large volume contracts due to price discounting."-Never Stand Still Page 411 Copyright 1999 CNF Publications.

Even the great CCX Conway-Central Xpress was not immune to this.

For the first time ever in it's history CCX watched it's quarterly revenue decline. It was very sad.

Even the other Conways were having trouble as well during the 1991 recession:



Now Conway there profits took a good hit in 1991 and it was looking like they were getting real close to having to lay people off.

Will break this into two parts.

 

Now during the 1980s and 1990s "Just in Time" logistics changed the way distribution patterns worked and CF was caught a little bit off-guard if you will.

Smaller more frequent shipments were becoming the norm and companies like UPS, FedEx and the Air Freight companies as well as regional companies were really taking a big portion of CF's pie.

Naturally CF Motor Freight the trucking and main core business of CF was slow to react and acted inefficiently.

CF's old business model back in the day consisted of constant freight filling up it's terminal pipeline. It never took into account for any kind of economic shrink.

Anyhow with a contracting economy and lowering prices CF could no longer support a huge terminal and road network like they currently had.

"You had to keep the pipleline full until you could start cutting costs out, and at the same time you were trying to price based on costs." -Lawrence Page 413 Never Stand Still 1999 CNF Publishing.

CF had to change and Lawrence wanted CF to offer high quality service at low costs.

CF realized that customers expected something different and that regional shipping transit times was in and CF was kind of stuck back in the old times with there old timey Freight flow system. People wanted two day service not pony express coast to coast it gets there when it gets there service.

Anyhow the costs of the old Freight flow from break bulk to break bulk model was no longer acceptable to customers and CF had to start re-evaluating how many terminals and break bulk centers it needed.

CF laid off and streamlined many managers and administrators in 1991.

Also CF's terminal count in 1976 was 194.
In 1991 CF had 689 Terminals within two years 100 terminals were closed and the 48,000 square foot Jackson, Mississippi Break Bulk was shut down and moved over to Memphis, TN where it was merged with another terminal.

Also CF started looking at technological improvements computers in the office and trucks and to start getting away from paper.

CF also started to copy the Japaneese model of a quality circle where everyone is responsible for doing good or bad. the program was known as CF EXCEL. basically it got rid of middle management and made the workers in the field responsible for quality control.

So a decade after deregulation the old way of LTL trucking was out and the new way of LTL trucking that favored the way regional carriers operated was in and basically the recession of 1991 pushed the traditional LTL carriers harder and faster and farther.

It also pushed the regional carriers out side of there 500 mile operating limit.

By 1992 CF had revised it's linehaul operations and also extended it's sleeper cab runs. CF also added a bunch of 2 day runs and now CF Motor Freight and Conway were competing for the same clientele base and this caused trouble for the master company CF Inc.

 

I just bought a book off Amazon about Conway it's self will get to it when Never Stand Still is done.

 

I printed out this entire thread. It's almost as thick as a reem of paper.