Never Stand Still

Hi guys, so it's been a long minute since I updated this, but I have some new information to share as we continue into the 1980's with CF and there rise to the top and then eventual bottom and then total and complete demise.

CF was the biggest and baddest thing out there for a while though and I know a lot of guys don't like there regional carriers, but just according to CF corporate history, there regional carriers when they got going gained steam rather quickly, same with there air freight business.

I have two updates to make to this thread, one on CWX which was Conway Western Xpress and One on CF Air Freight.

 

Alright everyone here we go as we trudge on here into the booming 1980s with CF and it's regional companies all relics of the past now. The color coded regional companies were all merged into the Conway system in 2006 and operated for roughly 10 years before XPO bought them out and finally killed off any remnant of CF.

Anyhow after the success of CCX, CF looked to the west and decided the market was wide open so in March of 1983 Conway Western Xpress CWX was granted Interstate Operating Authority and California Intrastate Operating Authority in April of 1983.

The leader of CWX was a man by the name of Dwiggins and on May 16 1983 CWX started operations.


Dwiggin's to build market share, started with deep discounting on freight in order to gain customers.

The main training center for CWX was in Orange, CA and in April of 1983 tractors were ordered and trailers were built by CF's company Roadsystems which at the time had a facility in Fontana, CA.

At first it was a slow go for CWX as it usually is for new start ups, and O'Brian reported CWX sales as "light, but to soon to tell" but the heavy discounting they were giving ended up working and in summer of 1983 tonnage gradually rose and then shot through the roof.

CWX was overwhelmed by the tonnage load they had to move and was for all intensive purposes over run and over loaded. Dwiggin's had no choice but to rent equipment in order to move the enormous work load.
Dwiggin's was a salesman, he was not an operations man (read numbers guy) CWX was hemorrhaging money because they were renting tractors and trailers at an alarming rate, the rental bill on equipment was driving CWX to the poor house.

By December of 1983 Dwiggins was renting 100 tractors a day. CWX only owned 43 tractors with there markings everything else was rental tractors and the rental costs were killing CWX. Dwiggins did not react fast enough and had to do something so his big idea was to employee owner operators to offset driver need and bring down the bill on rental tractors. Now Dwiggins did order 20 new tractors in December of 1983, but that was a drop in the bucket when you need 100 tractors a day and only actually own 43.

Dwiggin's did not, want to bring in the big boom on CWX and CWX was riddled with operational problems and when no improvements were made CF in 1984 brought in George C. Reid to improve operations at CWX. Reid did increase revenue and tonnage and in 1985 turned a profit.

Also at that time a company called California Motor Express went out of business and CWX took over all there accounts or most of them anyhow and was able to purchase more equipment and open up some new terminals. Things at CWX after that stabilized and then in 2006 they turned into Conway-Freight.

Anyhow stay tuned because were coming back with the story of the failed Penn Yan Express which was also knows as Conway Eastern Xpress.

 

If there are any former CF execs out there reading this thread feel free to chime in with your side of the story.

 

Hello everyone today we are going to talk about Penn-Yann Express Inc.

After the success of CCX and CWX


CF decided that it was time to move east, with there regional hopper service, which is really what these color coded regional carriers were, they specialized in 1-2-3 day shipments. The actual red and green CF was the big long haul LTL carrier where these regional companies were the short haulers, however the whole thing and this has sparked much debate,and it does seem to be rather redundant in a way redundant shipping lanes and terminal's and what not, anyhow with the west and the middle of the country covered it was time to move on to the east and start up an east coast regional carrier.

CF Land Services was the name of the CF shell company that was in charge of all the CF business. Unlike the other CF regional carriers which were all started from scratch. CF decided that they were going to go with a more standard way of doing things at the time and just buy someone out. In the days of regulation that was the only way trucking companies could really grow, kind of. George Craig the man in charge of CF Land Services went shopping and found a company he thought he would buy. That companies name was Penn-Yan Express Inc.
Penn-Yan Express was based in Penn-Yan, New York

In the summer of 1983 CF Land Services bought Penn Yan Express for $3.2 Million Dollars.
Penn-Yan Express was not the best company in the world, when CF went to buy them they were already kind of on the down slope they were having money issues, but CF Land Services thought they could indeed turn Penn Yan around. So they bought the company or 58% of the company stock for $7.50 a share and got 19 terminals located throughout NY, PA, NJ,MD and DE.

Penn Yan was primarily owned by Robert Hinson before they were bought out by CF Land Service's and for one reason or another the book doesn't say Penn Yan was going through a rough patch and had hit hard times and reported a net loss of $722,000 on revenues of more then 31 million.

Now the big caveat with Penn Yan was Penn Yan was a union company where all the other CF Land Services companies were non-union. This was a big problem for CF and also Penn Yan had it's own equipment all New York State thrugh way stuff very unCF Land Services like. Where all of CF Land Services and CF could swap out equipment with each other if they wanted, that wasn't possible with Penn Yan who was running a bunch of non standard CF equipment. According to CF execs Penn Yan's operation was a 1960's operation doing business in a 1980's market. There equipment was old and out dated where as CF Land Services equipment was all brand new and current top of the line and on the cutting edge.

Detter another CF Land Services executive told Craig that Penn Yan was not a good idea and to keep looking, but Craig said he could turn Penn Yan around and the two men agreed to disagree.

Now the men of Craig's top management team were not very happy about the fact that Penn Yan was a union company, but CF decided they could make it work anyhow.

After the purchase CF soon discovered they could not operate Penn Yan effectively and make money running the company. Penn Yan at the time was losing $200,000 a month. The other problem was that Penn Yans labor force was not as "flexible" as the other regional carriers. The other carriers drivers worked the road, dock and city days, nights, weekends when ever. Penn Yan had strict union rules and when CF asked the union to back off on the rules and stuff the union told CF to go blow they had worked long and hard for there spot and were not interested in giving it back to CF.

Also and gee doesn't this sound familiar CF had asked for wage give backs and the union agreed to them, but then CF asked for more and the union said no dice.

CF did however put more money into facilities and equipment,


However later in the 1980's CF pulled the plug on PYX. Many mistakes were made regional carriers in the east coast all had a hard time and CF management ran PYX like a small CF and not like the other two regional carriers, and PYX was deemed a wash out and put to bed in the late 1980's.

Join us next time on CF Master Piece Theater as we discus CF's learning curve of deregulation.

 

You are Welcome we've got more coming. Next bit should be coming today after my nap lol!

The next bit I have to chop up because it's pretty technical and it's all about CFs competitive edge after deregulation.

 

So here we are in the age of trucking deregulation,
back in the days of regulation only certain lines could haul certain commodities and haul in certain areas and take certain routes. Once the industry was deregulated, that was it, it was game on everyone and there brother got into trucking and the first thing that happened was there was the quintessential race to the bottom.

What's so funny is all the people and operations that have come and gone, and came and gone in that time period.

Well CF decided that they were not interested in slashing prices and that they didn't have to slash prices.

Lot of companies hit the dust after deregulation, but CF was way more then a trucking company, although that was there core business and in the 1980s they were out of the manufacturing business, but remember they had a huge glut of cash in there pocket from the sale of freightliner and were making money with all there regional carriers and they owned Road Systems as well and were making there own trailers and converter dollies, they were busy killing it where Uncle Bills Yokel express was busy not killing it and going under.

Plus they were the biggest name in the game nobody was bigger then CF. Oh sure Yellow and Roadway and all the TNT companies of that era were around, but they were not CF.

However in the mid 1980's the transportation industry was plagued with over capacity and aggressive price slashing hence race to the bottom.

However CF strives on and in 1986 became the first trucking based company to reach revenues of $2billion dollars. O' Brien the CEO of CF at the time, urged employees to provide better more efficient service then the other guys. In the mid 1980's CF was top of list if you pulled a top carriers ranking list from 1986 from JOC CF would be #1. I think today FedEx Freight is the largest highest tonnage LTL carrier with Old Dominion being the fastest growing up from the underground carrier there is, but that's today.

Back in those days it was an entire different ball game CF was king, Yellow and Roadway and the TNT companies were right behind them and FedEx wasn't even on the map yet FedEx ground was still Roadway Package Service and FedEx it's self was still Federal Express hauling air mail. Old Dominion was a small time nobody out fit from North Carolina not even on the map. Same with Saia they were a nobody outfit from Louisiana not even on the map yet. However that was an old era a by gone era now and CF is gone, Roadway gone, Yellow Freight, gone, all the TNT companies sold off and disbanded and sold off again. FedEx biggest thing out there and Saia and Old Dominion are now clawing there way to the top of the mountain. Any minute now Old Dominion is going to claw it's way past YRC.

However getting back on topic the 1980's was a big decade though of decadence for the old guard, because the decade that came after the 1980's had a lot of up from the under ground, but were getting a head of our selves.

Anyhow I have to split this up because it's to much for one post, but consider this the introduction to CF during deregulation. Next post is CF's innovation during deregulation to stay on top.

 

Here lets take a visual look at some of CF's competitors in the 1980's.

First up from Australia the TNT Companies:



Second Up from Kansas Yellow Freight:



Third Roadway Freight owned by the Roush Brothers from Akron, Ohio.



Fourth from Richmond, VA Overnite:


There were others like ABF and such, but these guys were the big time players it's funny how much has changed in 30+ years.

 

This was what long haul LTL trucking looked like in the 1980s:



Big CF terminal in Richfield, Ohio one of the most famous CF terminals ever. (After the shut down in 2002) It looks even worse then this now a days, but I remember as a kid in 2000 we took a field trip to Bath, Ohio for school and drove by CF Richfield and it was a busy bustling place it was a sea of trucks and trailers far as the eye could see and all kinds of action. Now it's a cement lot full of weeds.