Consolidated Freightways Inc. is uncovering a new subsidiary to provide comprehensivedistribution services for manufacturers.
The creation of Menlo Logistics Inc. signals a continued growth in ''contract logistics" where a shipper, instead of performing its own traffic management and inventory control, hires a transportation firm to handle the entire transportation and distribution function.There are already several transportation companies offering contract logistics services, making CF a late entrant in the field.
But some think CF will overcome any drawbacks that might pose because of its size and power as one of the largest trucking companies in the United States.
''They represent a potentially formidable player in the market because of CF's resources and because of the variety of services CF can offer, including air and intermodal," said Dan Smith, a consultant with the San Francisco-based firm of Manalytics Inc.
Menlo Logistics has actually been operating since the beginning of the year, but CF didn't announce its creation until late last month.
Menlo Logistics also has been formulating a business plan and strategy, including interviews with about 500 potential customers, for the previous 2 1/2 years.
''I don't think we're late," said John Williford, general manager of the new company. "Most customers know that CF has been looking at this business for a long time."
Mr. Williford said the company already has developed a client base, but he refused to quantify how large it is.
Menlo Logistics will concentrate on offering services in three areas: dedicated contract carriage, logistics management and dedicated contract warehousing.
Because of CF's trucking experience, Mr. Williford said the company will have a particular advantage in managing truck operations.
He also said Menlo Logistics will draw upon CF's huge pool of employees to provide shippers with the best employee available to handle their account.
"We call it 'rent a traffic manager,' " he said.
Menlo Logistics will use other transportation services besides CF when it's appropriate, Mr. Williford explained.
''We're an independent company created to serve the customer, not put freight on CF trucks," he said.
Both CF and Menlo Logistics are based in Menlo Park, Calif.