ANN ARBOR, Mich. — Con-Way Transportation Services, Inc. says it will spend $181 million this year to purchase additional highway tractors, trailers, forklifts and on service center development to accommodate growth at its four regional less-than-truckload companies.
That’s double what the subsidiary of CNF Inc. was going to initially spend.
The company had planned to spend about $90 million on capital expenditures, but strong growth triggered by a vigorous economy in North America and continued consolidation in the LTL trucking industry has spurred the larger levels of spending.
These expenditures are primarily for additional rolling stock, defined as tractors, trailers and dock equipment used for the movement of freight, including 1,300 new tractors and 1,950 trailers.
It also includes start-up equipment for the Con-Way Truckload operation that will open in the first quarter of 2005. The combination of the original capital budget and additions bring the total planned capital expenditures to $181 million for 2004.
"This investment for our customers was a very easy and logical decision to make," said Gerald L. Detter, president and chief executive officer of Con-Way. "Con-Way’s growth and earnings have been very strong over the past 12 months. Our return on assets is excellent and the prospects for continued growth will be enhanced by providing Con-Way the equipment it needs to respond to its customers’ service expectations."
Last week Con-Way reported record operating income of $67.1 million for the quarter ending June 30 on revenue of $657.5 million. Regional carrier tonnage per day was up 16 percent and the carriers had an operating ratio of 88.8.
Con-Way’s LTL carrier operations cover all the United States, Puerto Rico and Canada.
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