TORONTO, Ont. — Con-Way Transportation Services, Inc. says that effective January 1, 2004 it will begin applying a surcharge of 2 % to all shipments moving in its less-than-truckload (LTL) operations.

The Con-Way operating companies affected will be: Con-Way Central Express, Con-Way Southern Express, Con-Way Western Express and Con-Way Canada Express. The surcharge will be applied against the net (after discount) linehaul charges.

“This surcharge will only cover a small portion of the overall cost increase we’re experiencing in health care benefits and other insurance expenses. We’re a service industry and people costs are the largest proportion of our expenses. The continuing rapid rise of these costs and its effect on our company and on our industry can’t be ignored any longer, “said Gerald L. Detter, president and chief executive officer of Con-Way.

The company said it recognized that all industries are facing hard decisions on insurance costs, especially health care insurance costs. Since labor, health care and other employee welfare expenses are such a large proportion of a motor carrier’s operating expense, the financial consequences to Con-Way and other motor carriers must be addressed. Con-Way will begin assessing all its employees 1 percent of their salary for health care costs beginning January 1, 2004. In addition, a number of co-pay fees to doctors and hospitals have been increased. This is the first time employees have been required to contribute a portion of their pay (other than co-pays) to support the cost of health care, said the company.

Beginning January 1 the 2 percent insurance surcharge will be applied to each shipment’s net linehaul charges and appear on the invoice as a separate line and charge. The surcharge will be added as an item in the Con-Way Rules and Accessorial Services Tariff CNWY-199