Con-Way Transportation Services, Inc., a subsidiary of CNF Inc., announced it will apply a surcharge of 2 percent to all shipments moving in its less-than-truckload (LTL) operations starting January 1, 2004.
"Health insurance costs are now at crisis proportions," said Gerald L. Detter, president and chief executive officer of Con-Way. "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."
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.
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, company officials said.
"Our employees work hard. The work is physical and demanding. They deserve good wages and health care benefits," said Detter. "We're competing in the market for quality employees and health care benefits are a critical part of the compensation package needed to attract and retain qualified individuals. We've just asked our employees to help pay for a small part of their health care benefits. It's only right that we ask our customers to participate as well. It's a valid, easily understood cost. It has to be covered in order to continue the excellent service Con-Way employees perform, day-in and day-out."