Stotlar brings team approach to Con-Way, Menlo
In his first public appearance since taking over the helm of CNF Inc. three weeks ago, Douglas Stotlar said he is creating a one-company model that will force the Con-Way trucking unit and the Menlo Worldwide Logistics division to work more closely rather than as disconnected entities.
Con-Way, the Palo Alto-Calif.-based company's highly profitable less-than-truckload segment, and Menlo will no longer set different strategies based on separate business models that duplicate some capabilities, Stotlar said at a transportation conference in New York for investors sponsored by Bear Stearns.
CNF sold its money-losing heavy freight forwarding unit, Menlo Worldwide Forwarding, to UPS in December.
Stotlar said CNF has ceased being a passive holding company that simply sets the strategic direction of the organization without any operational oversight.
'I come from an operations background,' said Stotlar, who was president of Con-Way before being tapped to head the entire company. 'I'm going to be a much more active CEO in the operations and get involved.'
One way CNF can gain efficiency is by coordinating the truckload purchasing of Con-Way and Menlo, Stotlar said. Menlo spends about $500 million per year arranging truckload carriage for its customers, while Con-Way spends about $250 million on truckload service. Last year Con-Way also created its own truckload division to handle long-haul freight and minimize the handoffs between its regional operating units.
Stotlar said Con-Way Logistics was a redundant operation and would be merged into Menlo while some warehouses are also consolidated.
Operational efficiencies from combining security, safety and information technology workforces could net $8 million in annual savings, he added.
Stotlar said he will be more conservative when it comes to acquisitions, especially with a history of big deals such as the purchase of Emery Forwarding that didn't turn out well. Nonetheless, he didn't rule out some niche acquisitions outside the LTL market, such as in regional truckload, truckload brokerage and international logistics.
Stotlar said Menlo has recently won logistics contracts from two large companies within the past couple of weeks, but declined to name the customers.
Shippers should not be worried about a leadership drain at Con-Way and Menlo, despite the departure of Gerald Detter as president of Con-Way in 2004 and the resignation of John Williford as head of Menlo after being passed over to head CNF, Stotlar said. Detter groomed him to take over Con-Way and Williford did the same with his top staff at Menlo. Stotlar said he is setting up meetings with some key customers to reassure them about the ongoing quality of Menlo's work.