Letter to Investors

Letter to Investors

Dear Fellow Shareholders,

In 2013, Con-way continued its emphasis on strategic improvement of core capabilities, deploying investments in our people, systems and decision-support resources to position our company for long-term success. While we did not deliver the financial results we expected for 2013, we made meaningful progress upgrading and improving management tools and operational processes. For 2014, our focus is to harvest the benefits from the hard work of the past several years. We recognize it is time to deliver bottom-line results from these investments.

Con-way Freight:

Our less-than-truckload company improved its financial results year-over-year, but at a slower pace than our expectations. However, we made significant progress in a number of foundational areas. Con-way Freight improved its operational capabilities with linehaul optimization and lane-based pricing models, expanded Lean standard work practices and deployed new onboard technologies to improve safety and fuel efficiency. These were complex undertakings, in many cases requiring comprehensive training, significant investment and changes in operating processes and management practices.

Our LTL company managed these changes while operating a comprehensive North American network of 300 service centers. Our 21,500 employees handled nearly 59,000 shipments and more than 78 million pounds of freight daily, while serving a customer base of more than 350,000 accounts and delivering industry-leading transit times and on-time service.

Entering 2014, Con-way Freight is focused on delivering improved financial results by utilizing the tools now in place and by pursuing targeted growth initiatives. While there are cost headwinds to overcome from the unprecedented harsh weather in January and February, we expect our LTL company to improve profits through 2014 with an emphasis on cost discipline, driving higher operating efficiencies through Lean standardized work and improved revenue management.

Menlo Logistics:

Menlo’s sales efforts benefited significantly from a revamped sales and business development process, which delivered a record year for new net revenue with 88 project wins. However, increased margin pressures from a changing business mix, coupled with a surge in start-up costs from this increased volume, resulted in a year-over-year decline in financial results for Menlo. By the close of the year, significant progress was made stabilizing operations and improving financial performance.

Overall, 2013 stretched Menlo, but our logistics team was able to overcome many of the year’s challenges. Entering 2014, Menlo is focused on absorbing last year’s growth, deploying key IT investments to support increasingly complex customer requirements, and utilizing Lean continuous improvement processes to complement stringent cost management practices. Menlo expects 2014 to be a year of improving results driven by margin expansion and profitable growth.

Con-way Truckload:

Our full-truckload company’s 2013 financial results were essentially flat with the previous year, reflecting a challenging demand and pricing environment and cost pressures from new regulatory mandates. New hours of service regulations impacted productivity, exacerbated the driver shortage and pressured the economics of the business. New emissions technologies mandated by federal regulations negatively impacted engine reliability and fleet productivity industrywide.

Going into 2014, Con-way Truckload continued to benefit from one of the industry’s lowest driver turnover rates. Our truckload company also welcomed a new leader in Joseph M. Dagnese, who in February became Truckload’s new president following a distinguished 19-year career with sister company Menlo Logistics, where he was one of our most accomplished Lean advocates. With an improving demand environment in 2014, new leadership and opportunities for increased operating efficiencies, we are encouraged about Con-way Truckload’s prospects.


Our mission for 2014 is clear. We are intensely focused on operational excellence, cost discipline and targeted growth initiatives — all designed to drive margin expansion.

We appreciate the support of our shareholders throughout this journey. We have made strategic investments to position our company to compete and grow in our core markets. Our goal for 2014 and beyond is clear: to increase shareholder value by leveraging these investments to deliver improved and sustainable financial performance. I’m confident we have the management team in place to drive the earnings growth we and our shareholders expect.

In closing, I want to commend our nearly 30,000 employees around the world for their hard work, perseverance and commitment to safety as the first responsibility we have every day. It is those employees who allow us to fulfill the promises we make to customers and shareholders while always making safety their top priority.

Douglas W. Stotlar
President and Chief Executive Officer
Con-way Inc.
March 31, 2014

Truckload Logistics Freight