7/16/07

Well, as expected, the truck was ready first thing this morning when I called the dealership. I picked it up and called the Taylor terminal to have them put me on the ready board. I was told that there were four trucks ahead of me, so I let the dispatcher know that I was going to come by my apartment and grab some laundry and things. I told them to give me a call when my turn came up. When I got home, I signed in to the web portal and found that I was actually #10 on the board. I'm not sure where the other five trucks came from, but whatever. In reality I was hoping my truck wasn't ready yet because I have been pretty tired all day. Being a little further down the list gave me more time to rest.

I got to choose from a few loads when my turn came up, so I took one picking up right down the street from our terminal late tonight and then delivering in Nashville, Illinois tomorrow night. It's a drop/hook delivery, so I can arrive early and get rid of the load without waiting if I want to. Whenever I've been home for a while, I tend to get tired after only a few hours on the road. The fact that my scheduled arrival isn't until tomorrow night means I can pull over and sleep if necessary. That flexibility was the main reason I chose this run. Plus the 512 miles for my first day back on the job is a pretty solid day's work.

When I read my e-mail this morning, there was an announcement that many would consider a bombshell, although it sounds to me like it shouldn't have been a huge surprise. According to a press release CFI is going to be acquired by ConWay this fall. ConWay is another trucking company that focuses less on long-haul truckload operations and more on shorter less-than-truckload operations. They have a small, rather unprofitable, truckload division that will now be folded into CFI's outfit. In exchange, the entire CFI operation will fall under the ConWay umbrella.

What does this mean for OTR drivers like me? Nothing really. That's the humorous part about the hysteria surrounding this type of announcement. We perform an unskilled job. We pick up freight at point A and drop it off at point B. As long as the companies involved continue to move freight from A to B, we'll continue to pull it. "Will we lose the family atmosphere?" Who gives a damn? "What will the logo on the trucks be?" Who gives a damn? "Will we have to change the way we run in bad weather?" Who gives a damn? "Will we get more days off / higher pay / better benefits?" Who gives a damn? "Will we have to wear uniforms?" Who gives a damn? If I were ever that concerned about any of these things, I would leave my employer and go in search of a company that offered what I was seeking. Freedom is a beautiful thing.

I listened to the conference call held for the investment bankers. I was struck at just how unprepared the people hosting the call appeared to be. Several questions were met with contradictory answers. Several others were swept aside. The only answers that made any sense were not really the types that investment bankers want to hear. The financial guys were noticeably unimpressed, as they should have been. Leaving the financial end aside, some potential positives, as far as the driving job goes, seemed to make a lot of sense to me:

1. We'll have access to several hundred of ConWay's locations across the country. The extra real estate is a huge help to OTR drivers. We'll never be far from a place to rest, a place to fuel, a place to shower, a place to drop off or pick up a load, a place to scale a load, or a place to eat.
2. We'll have priority status with respect to another ConWay division, Menlo Logistics. When Menlo has a customer in need of service from point to point, that service can be provided by CFI trucks first if they are available. More pre-planning and less sitting are always good things.
3. The nature of ConWay's terminal network is such that several new dedicated lanes are likely to be established. On a given day there is quite a bit of freight being shipped from one ConWay terminal, past other Conway terminals, and on to a final ConWay terminal. ConWay typically farms out most of this kind of work since they don't have many truckload drivers. CFI has been the largest provider of these services. It doesn't seem to be a huge leap that some CFI drivers will soon be able to take the same runs every day or every other day, relaying them at outlying terminals and ending up back at a terminal near their homes.
4. Many OTR drivers, after acquiring the necessary experience, like to move into LTL or local positions. One of the most reputable companies providing these positions has been ConWay Freight. Now, a CFI driver hoping to gain one of these positions will not be an outsider, but rather an inside hire. This seems like a benefit to me.
5. Insurance is an issue for a lot of drivers. It really doesn't matter to me because I am bulletproof, but some people like to whine about 'benefits' even though they have no clue what they're whining about. Because CFI is a relatively small company, the benefit options are limited and CHEAP. The cheap part is what I like because, as I said, I'm bulletproof. Guys like me pay our insurance premiums so the sickly people of the world can save money on healthcare. The population at large is mostly ignorant about how insurance works, but they sure love to bitch about it when things don't go their way. As part of a larger company, the insurance options should spread the risk more thinly and keep premium costs down for those of us who don't care whether or not we can bilk $2 million from our plan.

There are some negatives that will certainly crop up, but those are likely to affect office personnel and maintenance personnel more than drivers. The two companies are holding onto the spin that any redundancies will be offset by growth opportunities but that's just stupid. You don't merge two companies without streamlining the combined company in the process. To do so would be irresponsible to shareholders. The fact that the execs were unprepared for some pretty simple questions during today's conference call tells me that they are really not as prepared for a $750 million transaction as they should be.

One of my pet theories that I have been developing over the past several weeks and months is related to the open border issue. I have listened to our CEO, Herb Schmidt, as he's done radio interviews professing that CFI is against an open border. I assumed that the reason was CFI's smaller size in the truckload marketplace and their fear of being undercut by the bigger carriers. The real story became more clear to me today. What follows is an unsubstantiated hypothesis formed solely in my own mind. It has not received feedback nor input from anyone at my company or any other company for that matter. I'll say what I have to say, but I don't want to give the impression that I have any information other than what I have observed.

• The NAFTA treaty was formed to provide North America with open-bordered trade in various forms. It is opposed by unions who know their members in the U.S. are overpaid. It is opposed by small businesses who are not positioned to take advantage of open borders the way that big businesses are. It is supported by the bigger businesses that stand to become much more profitable through the movement of jobs to cheaper markets.
• The recently debated pilot program to allow 150 Mexican trucks on our roads is much ado about nothing. If people really thought the trucks would be deemed unsafe by our standards, they would welcome a small number and then shout from the rooftops after those trucks had been inspected. Instead the opponents of the plan want to decry the lack of safety before the Mexican firms have even had a chance. 150 trucks added to America's highways, when the industry points to a shortage of several thousand trucks a year, would do little more than slightly alleviate a growing problem. The issue is a selfish one, just like every other issue pitting one industry against a growing nation's interests.
• Investment analysts have long pointed to two companies as the best plays in the trucking industry for those looking to seize upon the adoption of NAFTA - Celadon and... that's right, CFI. Until today I didn't know just how deeply entrenched CFI had become in Mexican freight, but during the conference call it was learned that 40% of CFI's revenue is derived from freight either going to Mexico or coming from Mexico. So, if Mexican companies no longer had to dump their northbound freight at the border and pick up their southbound freight at the border, who stands to lose the most? A company doing very little international business or a company doing a lot of international business? Hmm...
• ConWay owns Menlo Logistics, a company with a strong base in the worldwide logistics business. Their job is to, in their own words, "optimize the distribution of freight and freight-flow information from manufacturer to consumer." As manufacturers become more prevalent in Mexico, the process of getting their goods to the service-based American consumer will be very lucrative. With CFI's hooks in the border locations and Menlo's worldwide reach, the new ConWay Truckload will be positioned to employ Mexican drivers to pick up the slack and keep the megacarriers and smaller Mexican carriers from taking too big a bite out of CFI's international freight. CFI, on its own, wasn't big enough to leverage Mexican shippers if cheaper alternatives presented themselves. The only way to prevent cheaper alternatives from presenting themselves was to keep the border under wraps. I suspect that CFI, while not actively promoting the open border, won't be taking as hard a line against it as they had to before.

Well kids, I guess that's enough of Godfather's Black Helicopter Corporate Theatre for today. I think I'll head out for some dinner and take a nap before it's time to hit the road.