Never Stand Still

Hi guys I will have a report on the birth of the regional carriers tomorrow because there's lots to say about them. I think you'll be interested to know how they all came about.

 

Alright so here we are the regional carriers. Unlike big bloated CF with it's fancy terminals and long haul operations and labor unions, the regional companies were a different breed.

Originally CF had trouble operating in the east coast New York and New Jersey area. The mafia and the labor unions and the fact that they were in cahoots with one another made things very difficult for CF. Also due to union rules and the inflexibility of those rules CF had a hard time with certain operational things. CF was big and bloated and they wanted something meaner and leaner and that was how the regional carriers got started.

Originally CF didn't quite know how it was going to start rolling out the regional carriers, were they going to buy up other companies or start from scratch?

Originally people in charge of the CF regional project wanted to do both, more so buy up existing companies, but CF had a hard time finding existing companies to buy. Originally CF wanted to buy a company called Motor Freight Express which would be known as Con-Way . CF had trouble figuring out the names of there carriers they didn't know what to name the regionals and one day at lunch one of the CF executives said "Can't we just do it the Consolidated Way?"

Another executive said "Brilliant! That's the name! Will call the company Con-Way!"

Then they all went "HERE HERE!" and that's how they got the name Con-Way.

See and stories like that are why these executives make the big bucks. I would have named the business something stupid like Billy's Over Night Freight Hauling Spectacular.

In the beginning there were only 3 regional's Con-Way Central Express and Con-Way Western Express which were formed from the ground up. I think Pennyan Express was the Con-Way Eastern Arm that was the company they bought out on the east coast. In Ohio we were CCX also known as Conway Central Xpress a CNF Company.

Gerald Detter was the man in charge of Conway Central Xpress and Con-Way had a different culture to it the CF.

Con-Way's job was to offer 1 and 2 day over night freight service to industrialized cities and across the midwest or where ever. And Con-Way really tried hard to keep to that, in fact a Con-Way executive even said "If were going to sell overnight then we must do overnight!"

CCX which was the flag ship Con-Way had the goal of delivering 85% of its freight over night.

CCX started with 11 terminals the major makets they started in were Chicago, Indianapolis, Cleveland, Cincinnati, Pittsburgh, Detroit, Milwaukee and Minneapolis.
Detter figured in time CCX would grow to 32 terminals and be profitable by 1986.

Unlike CF CCX was not big and bloated and wasn't run by a bunch of fat cats in California it was mean lean small and needed to scrap and fight. Detter didn't much screw around and quickly threw all he learned at CF management school out the window.

He got aggressive in his marketing because he had to, they bombarded the radio with commercials for CCX, much like Old Dominion does today, they sent out mailers, they hired young aggressive sales people who knew nothing about trucking similar to the sales people most LTL companies especially the ones who work for @road_runner s company.

The sales people would get on the phone and high pressure sales people into shipping with Con-Way. They would call up job shops and places like that and brow beat the owners into shipping with them.

Detter set a goal of having Con-Way sales people make 3,000 sales calls a month to medium and small sized business. Detter also threw lavish great gatsby style ####tail parties were people would come and they would hear all about the great services CCX had to offer.

Now CCX was different then CF in the sense that not only were they short range and non-union, but employees were also multi purpose drivers drove and also worked the dock, much like the ex-Conway that everyone knew and loved.

They were dubbed as "Dedicated people willing to work when and where needed and compensated at a rate."

CCX wasn't headquartered in some big snooty office building in Menlo Park, California oh no, they were a gorilla operation small time instead they were head quartered in an old farm house in Ann Arbor, Michigan. The sales people made phone calls from the basement and the kitchen was some kind of meeting room as well as lunch room.

Now from an operations stand point CCX was simple they had 11 terminals, and each terminal had a dispatcher and a sales representative.

As far as the trucking went during the day the drivers all pulled singles and used the 28' trailers for pick ups and deliveries and at night they coupled them together and ran doubles over the road. Actually you still see a lot of that practice going on I see many XPO trucks pulling single trailers.

Conway was grouped under the CF Land Services group which was a collection of 3 CF companies those companies were Con-Way or CCX the regional carriers as well as CF Forwarding which hauled shipping containers as well as @DougA CF Arrow Head which was an irregular route truck load hauler.

On May 16 1983 CWX Conway Western Express Opened up headquartered in Orange, California they were the first regional carrier to get going.

On June 20th 1983 CCX head quartered in Ann Arbor, Michigan started rolling as well.

Now one thing was interesting and I'm not sure what this means, but while interstate trucking was deregulated, intrastate trucking was not, which meant that the Detroit Terminal could not sell to the Grand Rapids Terminal and Con-Way could not compete against or look for customers from CF, at any rate though at the time the future of the regionals was uncertain, well but we all know how that turned out.

Anyhow stick around because next instalment were taking to the skies as CF works on there purchase of AEI, will CF purchase AEI and dominate the air freight market? Or will it bust? Who knows stay tuned find out.

 

So in this installment CF attempts to take to the skies and become king of international air freight or so they thought....

Before CF rolled out the "Con-Ways" they wanted to have total air supremacy in air shipping. CF had a domestic air freight business, but they weren't big time like Airbrone Express (remember them?) or UPS and Fed Ex and actually this was early 1980's FedEx and UPS were not really on the air freight map then anyhow.

So anyhow CF wanted to become international on the air freight stage and there was an international air freight forwarder known as AEI that was based in New York City and had many offices all over the world and CF thought BINGO we buy them out and were world wide hip hop superstar over night.

So like a man in love CF looked at AEI to be it's blushing bride. Well as so many mirages tend to have rocky starts and finishes this one was no different.

At first it looked like a match made in heaven, but there were some problems.

The first problem was AEI's main terminal at JFK was all teamsters labor and that labor was heavily regulated by the Mafia this was of great concern to CF. The Mafia one day walked into the negotiating room and handed CF management there labor contract and said to CF management "Do not bother reading this as nothing in here is negotiable."

So that was the first problem with AEI, so CF decided fine maybe we can side step the mafia and move operations to another New York City air port, of that didn't work either.

Second was AEI was publicly traded company wanted to purchase the stock from the president/majority stake holder and founder Joe Mailman.

However, there were squabbles over stock prices and actual values and CF and AEI eventually both got involved in law suits actually AEI wanted to sure CF and CF knew they were going to get sued, but figured no matter what there was going to be a law suit so CF fired the first shot and sued AEI in a California Federal court and the reason they did California even though AEI was NY, NY company was because CF was headquartered out in California and it was easier to sure AEI out there then the other way around less costly for CF with expensive legal travel and what not.

Eventually they both paid each other off and it was a big legal mess and AEI and CF had kind of a strained relationship, however the CF board of directors still wanted CF to buy AEI.

The problem was the mafia that controlled the labor union was trying to boss CF around and told CF if they wanted the company they were to go near a bench in central park and deliver a brown paper bag full of cash.

CF said "Nope, no we don't do business like that were Consolidated Freightways you don't know who your dealing with, deals off."

The FBI ended up showing up at CF's corporate office in Palo Alto, CA and ended up subpoenaing Moffit who was a big shot at CF, because his voice was on many wire tapped phone calls between Joe Mailman the owner of AEI and CF executive Moffit. It turns out the FBI had a racketering investigation going on the whole time CF was trying to buy out AEI and CF didn't know that and got thrown right in the middle of it and it caused them much trouble. Eventually CF ended up dropping the AEI deal and CF bought out some small time air freight company and did some other little odds and ends in the air freight business, but nothing like they would have been if they bought out AEI it was all small potatoes stuff to small potatoes for CF.

However CF did expand Air Freight Operations into Canada at that time and actually I think in the 1980s Air Freight ended up being a bad investment for CF.

At any rate our next installment is back to every one's favorite part of CF, that's right the regionals! So stay tuned!

 

Alright guys so were back! Were also in the beginning of the new age for CF. That's right the birth of the regional carriers. As far as CF it's self goes company corporate management wasn't really interested in there core LTL business that was just long haul LTL trucking, boring if you will.

They had there eyes set on visions of grandeur mainly air freight, but the future wasn't in air freight the future was in regional carriers which CF or should I say CNF management was all about.

Con-Way Central Xpress CCX:


In late spring of 1983 CCX rolled out on the road with 24 trucks and handled 89 shipments that day. Detter was excited in the beginning of the day, but sad at the end of the day, but the sadness would not last.

By August of 1983 CCX handled over 8,000 shipments and business was growing by 40% each month.

At the current rate CCX would have there first million dollar month by first business quarter of 1984.

In 2 months CCX employee roster went from 72 in June of 1983 to 97 employees by the end of August.

The culture at CCX was different too, for years, the old US business model was employees have a union and management has management and management gives the union what they want and nothing else.

Well that business model was becoming unproductive and by the 1970s CNF was tired of labor unions and felt they should have no say in company operations. Which was where CCX came in and this is where they figure over time CCX killed CF.

However Detter who was the boss of CCX was actually a pretty transparent guy, Detter said that customers were responding positively to CCX said they have good rates, good equipment and most importantly good people. Detter wanted things though at CCX to be peaceful and wanted a team culture that paid well and where everyone worked together to help everyone out.

Detter insisted that all CCX employees recieve the same corporate benefits that all management employees like him self had and he was pretty open about stuff the CCX news letter had profit and losses right in it. Usually at other companies that information was never shared with rank and file employees, but Detter wanted different and wanted to do different.

CCX grew at a rapid pace and competitors paid them little mind, but by the time competitors caught on to CCX it was to late they were offering break neck over night services to more places then a lot of people thought and other companies gave away a lot of market share and that meant huge growth for CCX plus CCX had a much easier pricing system then CF. CF's pricing was customer hostile and hard to figure out.

CCX on the other hand though gave one price for inbound and out bound shipments and rates were based on zip codes. CF on the other hand nobody really knows how they did there pricing, but it was customer hostile.
CCX had to raise prices quite a bit to slow growth, but all it ended up doing was growing there business faster and made them more cash. It was a good problem to have and CCX was well loved for there fast over night service.

From 89 shipments on day one to 1,000 shipments a day 12 months later before they knew it CCX was turning a profit and show boating the rest of the Con-Way regional system.

Next installment we talk about Con-Way Western Express CWX and Penn-Yan which ended up becoming Con-Way Eastern Expres CEX.

 

I bought this picture from eBay. This picture was a promo shot and spent most of its life in a CF terminal in Oregon.

Then the CF employee who worked there took it with him when CF closed.
Pretty cool:

 

Yes I do have more comming and thank you for the reply. I do have more coming and a lot of people feel the same way. Conway was the monster CF created and then that a few years later killed CF. A lot of guys at CF knew the writing was on the wall older CF branded equipment and stuff like that.

Next were going to dive into the history of Penn Yan Xpress which eventually was CEX which ended up being CCX at the end of the day. The regional carriers as you know all merged in 2006 and then became XPO last year when they were bought out. Who knows what will happen now that there XPO, but I bet a few years from now they get sold to someone else and spun off again. You know how that goes.