QUOTE AND NEWS
TheStreet.com  Sep 16  Comment 
NEW YORK (TheStreet) -- Shares of Con-way Inca are falling 3.42% to $51.70 in early-market trading after the freight transportationacompany was downgraded to "neutral" from "outperform" ataRobert W. Bairdatoday. Analysts at the firm...
Benzinga  Sep 16  Comment 
Market Intelligence Center  Sep 2  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on Con-Way Inc (CNW) that includes 9.37% downside protection. Sell one contract of the Dec....
Market Intelligence Center  Aug 22  Comment 
For a hedged play on Con-Way Inc (CNW), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the Dec. '14 $47.50 covered call for a net debit in the $46.50 area. That is also the break-even stock price for the covered call....
Bulk Transporter  Aug 19  Comment 
For the first time in many years, a tank truck driver actually won the Tank Truck Class in the American Truck Associations’ National Truck Driving Championships, which were held August 12-16 in Pittsburgh PA. The winner in the Tank Truck Class...
SeekingAlpha  Aug 1  Comment 
Con-way (NYSE:CNW) Q2 2014 Earnings Call July 31, 2014 8:31 am ET Executives Patrick J. Fossenier - Vice President of Investor Relations Douglas W. Stotlar - Chief Executive Officer, President and Director Stephen L. Bruffett -...
Benzinga  Jul 31  Comment 
Bank of America analyst Ken Hoexter released a note reiterating Con-way's (NYSE: CNW) Neutral rating and raised its price target from $54 to $56 in reaction to its recently released earnings report. Hoexter wrote, “Con-way reported 2Q14 EPS...
Market Intelligence Center  Jul 24  Comment 
After closing Wednesday at $49.51, Con-Way Inc (CNW) presents an attractive opportunity to get a 2.35% return in just 58 days, which is an annualized return of 14.78% (for comparison purposes only). To enter this trade, sell one Sep. '14 $47.50...
Market Intelligence Center  Jul 14  Comment 
Con-Way Inc (CNW) traded between $48.35 and $49.00 before closing at $48.67 Friday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Dec. '14 $45.00 covered call for a net...
Benzinga  Jul 11  Comment 
In a note released Friday morning, Citi analyst Christian Wetherbee downgraded shares of Con-way (NYSE: CNW) from Buy to Neutral and increased the price target from $48 to $52. Wetherbee's downgrade comes amid the sentiment that improvements...
Market Intelligence Center  Jul 9  Comment 
Con-Way Inc (CNW) traded between $50.08 and $50.96 before closing at $50.39 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Sep. '14 $47.50 covered call for a net...




 

Con-way Inc (NYSE: CNW) provides truckload and less-than-truckload shipping services for retail, industrial, and government customers. Con-way's customers typically don't have a full truckload of goods, and the firm consolidates shipments at a central location before sending the goods on the road. Con-way also has a secondary logistics business - managing product transportation, storage, delivery, and other supply-chain details - and while this business is smaller and less profitable than freight, Con-way has grown its presence in this sector by expanding into Asia by acquiring logistics companies in both Singapore and China.

Because Con-way is a nonunion freight carrier, its workers can do several different jobs when they transport goods, differentiating Con-way from their unionized competitors who must hire a separate person to perform each task. This allows Con-way to operate at lower costs and higher margins than its competitors.

Like others in the competitive trucking and logistic industry, Con-way's revenues are closely tied to the overall health of the economy. A decrease in demand of consumer goods means lower trucking demand and a negative impact on Con-way's bottom line. In 2009, the company's net revenues fell 15% due to lower freight volume.[1] Con-way faces additional challenges from fluctuating oil prices and increased government regulations.

Company Overview

Con-way provides a variety of transportation services. The company charges shipping rates, which typically include a fuel surcharge, to transport goods. The transportation and logistics company also makes money by offering supply-chain management and logistics consulting. Con-way operates in over 17 countries, but almost all of its revenue is generated in the United States.

Operating Segments[2]

Con-way's business can be divided into four main operating segments:

  • Freight: With over 460 North American operating locations, Freight provides comprehensive less-than-truckload services throughout the continental U.S. and Canada as well as in Hawaii, Alaska, Puerto Rico, and Mexico. In addition, Con-Way can ship goods for customers from ports located in China, Korea, Singapore, Japan, and Taiwan to U.S. destinations with a day-definite guarantee. Customers pay Con-way for shipments, which typically weigh 100-15,000 pounds. Con-way picks up shipments from customers and consolidates these less-than-truckload shipments at the originating service center. From there, goods are routed to a destination service center, where they are shipped to the final destination. This process is asset-intensive, because Con-way needs to operate several trucks and service facilities. Con-way Freight uses over 8,000 tractors and 24,000 trailers to achieve its 98% on-time performance.
  • Truckload: Using 37 sales centers and over 460 North American operating locations, Con-Way Truckload provides local, regional, and transcontinental truckload transportation services to customers in Canada, the United States, and Mexico. With over 10,000 company-owned tractors and trailers dedicated to truckload services, Con-way can do same-day pick-up and also allow clients access to dry van, intermodal, and flatbed services.
  • Logistics: Menlo Worldwide is the logistics branch of Con-way that provides supply chain management to customers in over 17 countries and span 5 continents. Customers pay Con-way for consulting and/or engineering of supply-chain management. These customers go to Con-way in hopes of reducing costs in transportation, inventory, and order fulfillment. Menlo Worldwide develops, implements, and manages the movement of raw materials to finished goods for businesses. Menlo Worldwide usually utilizes third-party transportation providers for customer's shipping needs.
  • Other: Other includes the subsidiary Road Systems, which manufacturers and refurbishes trailers for Con-way Freight and Con-way Truckload, and any corporate activities that do not fall into any of the prior categories.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue fell 15% to $4.2 billion. The company attributes the loss to the economic environment and competitive industry pricing. Freight revenue declined 14.6%, Logistics revenue declined 11.9%, and Truckload revenue decreased 15.3%.
  • The company reported a net loss of $111 million compared to a net gain of $67 million the year earlier.

Trends and Forces

  • Sensitivity to Economic Conditions: The trucking industry is closely tied to U.S. economic cycles and is particularly vulnerable to fluctuations in the manufacturing and retail sectors. This correlation between economic growth and trucking profits is due to basic supply and demand economics, since customers typically use a bidding system, which tends to keep prices fairly competitive; when shipping volume decreases in a weakening economy with supply held constant, then prices usually decrease. A decrease in demand of consumer goods means lower trucking demand and a negative impact on Con-way's bottom line. In 2009, the company's net revenues fell 15% due to lower freight volume.[1]
  • Government Regulations: Con-way must follow regulations set forth by the US Department of Transportation and Homeland Security, along with the Environmental Protection Agency (EPA). Con-way ships some goods with a guarantee on shipping time. Further restrictions on the industry could potentially disrupt their shipping times and negatively effect business relationships, and the U.S. government's continued response to terrorist threats could lead to more restrictions and guidelines for the transportation industry. In addition, the EPA requires a progressive decrease in diesel truck emissions through 2010 due to environmental concerns. These regulations could lead to higher fuel, trucks, and maintenance expenses. Hours-on-service (HOS) laws govern interstate trucking and regulate the number of hours a truck driver can work. The U.S. Federal Motor Carrier Safety Administration says a worker cannot drive more than 11 hours after being off-duty for 10 hours. Also, a commercial motor vehicle (CMV) driver cannot exceed 60/70 hours in a 7/8 day period.
  • Fuel Expenses: Con-way, along with its peers in the trucking industry, are relatively shielded from changes in fuel prices, because of a generally accepted fuel surcharge system, in which customers agree to pay established shipping rates plus or minus a change in diesel prices. However, if diesel prices continue to increase, it may be harder for the trucking industry to continue its practice of applying the expense to their customers.
  • Con-way's Model depends on a Non-union Workforce: Con-way's business model revolves around the flexibility of its non-union workforce, who can perform a variety of functions in the supply chain. This is different from other transportation companies that are beholden to union regulations that restrict work hours and job functions. If Con-way's workers were to grow discontent and organize into a union, this would lead to new restrictions on the firm's operating model and erode its competitive advantage.

Competition

Con-way competes with a range of regional, national, and global transportation and logisitics company.

Transportation of Goods

Con-way's Freight and Truckload divisions compete primarily with FedEx Freight and YRC Worldwide (YRCW). The national LTL freight service has seen consolidation and liquidation, but remains competitive. This part of industry has seen the least growth, but also involves high barrier to entry. Capital expenses needed to build sorting facilities and operate trucks involve substantial capital contribution. At the regional level, Con-way competes with a wide selection of transportation businesses. The larger competitors are Arkansas Best (ABFS), Old Dominion Freight Line (ODFL), and Saia (SAIA), but there are also entities that only own a few trucks and operate as a for-hire contractor. The asset-based model still requires large expenses to operate facilities but less than the national scale. Transportation companies typically compete based on freight prices, service, reliability, transit times, and scope of operations.

AKAIK you've got the asnwer in one!

References

  1. 1.0 1.1 1.2 CNW 2009 10-K "Selected Financial Data" pg. 15
  2. CNW 2009 10-K "Reporting Segments" pg. 3-5
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki