XPO Logistics says it has received offers for Con-way Truckload

On the heels of announcing it plans to acquire freight transportation and logistics services provider Con-way Inc. for $3 billion, XPO Logistics may be considering selling off Con-way Truckload, the company’s truckload arm.

Con-way Truckload reported $142.7 in revenue for the second quarter, which was down 14 percent annually, with the company saying revenues were impacted by lower fuel surcharge revenues and lower total loaded miles that were somewhat offset by base rates. When these results were announced, Con-way said that it expects over all performance to improve as it continues to improve asset utilization and complete annual rate negotiations with customers.

Including independent contractors, Con-way Truckload has 2,632 tractors and 7,774 trailers.

Through the first two quarters of 2015, total revenue for Con-way Truckload is down 11 percent at $281.5 million. According to data provided to LM by SJ Consulting, Con-way Truckload is the 20th largest truckload carrier by annual revenue at $632 million.

XPO Chairman and CEO Brad Jacobs told LM in an e-mail that XPO has received some unsolicited inbounds (offers) from interested buyers of Con-way Truckload but has not made any decision whether to keep it or sell it. 

“The argument to sell it is it would reduce our debt,” he said. “The argument to keep it is there’s a ton of synergy with our brokerage group. We can significantly reduce the empty miles. The other argument to keep it is we’ve done some town halls with the Con-way truckers and they are an extremely professional and focused group.”

Stifel Nicolaus analyst John Larkin commented in a research note that while many customers like the notion of XPO handling base volumes with its own truckload assets, Con-way Truckload is not viewed as a strategic asset given its industry positioning.