Menlo Worldwide Forwarding (Acquired by UPS 2004)

Note: This company is no longer trading as a separate enterprise.

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UPS acquired Menlo Worldwide Forwarding (formerly Emery Worldwide) a subsidiary of US transportation company, CNF, in October 2004. The deal was worth US$150m in cash and the assumption of approximately US$110m in long-term debt. The deal was completed during the fourth quarter of 2004. The acquisition did not include Menlo Logistics or its joint venture with General Motors, Vector.

The acquisition will enable UPS to extend its range of services, especially in the US. According to the company it plans to introduce guaranteed heavyweight air freight services around the world, and add new time-definite products such as overnight, two-day and deferred heavy air freight in North America.

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History

Menlo Worldwide Forwarding is a global freight forwarder present in 175 countries providing a range of heavy air freight forwarding services, ocean services and international trade management, including customs brokerage. It had US$2.2bn in gross revenues in 2004. It provides time-definite domestic and international air freight and ocean forwarding services, customs brokerage, and other trade services.

Menlo WF was previously known as Emery Air Freight before re-branding by its parent company. Its revenues included those derived from Menlo Worldwide Expedite! Inc. (formerly Emery Expedite! Inc.) and a portion of the operations of Emery Worldwide Airlines, Inc. ('EWA'), which ceased most of its air carrier operations in December 2001.

The division had been underperforming in recent years, and there was the belief that it was a drag on CNF's other units which include a major US trucking business, Con-Way Transportation. The division made an operating loss for three years, before finally breaking even in 2004.

In June 2001, the division began an operational restructuring to align it with management's estimates of future business prospects for domestic heavy air freight and to address changes in market conditions, which had deteriorated due primarily to a slowing domestic economy and loss of EWA’s contracts with the USPS to transport Express Mail and Priority Mail throughout the USA.

Based on issues identified during inspections conducted by the Federal Aviation Administration ('FAA'), on August 13, 2001, EWA was required to suspend its air carrier operations as part of an interim settlement agreement with the FAA. As a result, EWA furloughed approximately 400 pilots and crew members and Forwarding made arrangements to continue its service to customers by utilizing aircraft operated by several other air carriers. Primarily in response to the FAA action and a worsening global economic downturn, management decided that in 2002 Forwarding would become part of CNF's new Menlo Worldwide group of supply chain services providers and in North America would utilize aircraft operated by other air carriers instead of EWA. At that point EWA permanently ceased air carrier operations.