Con-way CEO Sees Evidence Of Bottoming In Volume Slide
March 10 2009 - 2:57PM
Dow Jones News
Con-way Inc. (CNW) Chief Executive Doug Stotlar voiced some
optimism Tuesday that a persistent slide in freight volumes could
be stemming, citing a seasonal uptick so far in March.
"We hope that we're at the bottom," Stotlar said, speaking at a
Raymond James conference in Orlando, Fla.
Con-way's stature as a top trucking and logistics company gives
it a bird's-eye perch to "see the uptick before it's being
discussed in the mainstream media and before it's being discussed
by analysts," he said.
But Stotlar, whose comments were broadcast over the Internet,
added that he can't quantify the March increase yet nor say for
certain that it signifies a bottom.
Tonnage at Con-way's main unit, its less-than-truckload freight
business, was off about 13% in January and about 12% last month.
Stotlar said the company is getting a seasonal lift so far in March
- indicating the trend may have bottomed - although "we're at a
much lower level than we were prior to the economic downturn."
He also cautioned that the less-than-truckload business has
about 15% too much capacity, indicating the sector could be in for
a shakeout. Less-than-truckload freight haulers consolidate cargo
from more than one customer on a single truck.
Stotlar's comments came a day after Con-way announced it is
cutting salaries, suspending its 401(k) matching contributions and
taking other steps to lower costs amid the overall lower trucking
demand.
Industry analysts have projected this year to be one of the
worst for freight-transportation volume in three decades or more,
as weak consumer spending prompts retailers and other businesses to
delay or reduce orders.
Still, Stotlar couched his company's moves mainly as
precautionary. Combined with what he described as a strong cash
position, he said the cost-cutting will have Con-way positioned
well "when get to other side of this economic hurricane."
Con-way's cuts are expected to save from $100 million to $130
million in 2009. Con-way previously announced it was eliminating
about 2,500 jobs.
The stock rallied along with the broad market Tuesday. Con-way
shares were trading recently at $14.37, up $1.17, or 8.9%.
-By Bob Sechler; Dow Jones Newswires; 512-394-0285;
bob.sechler@dowjones.com