Menlo Wins $1.6 Billion DoD Contract
Con-way Inc.’s third-party logistics unit Menlo Worldwide has been selected as the prime contractor for the U.S. Defense Department’s Defense Transportation Coordination Initiative.
The contract is potentially worth $1.6 billion, the company said late Friday.
Menlo Worldwide Government Services will run logistics for DTCI, a strategic logistics program set up to streamline and improve transportation and distribution operations supporting all four branches of the U.S. military.
Once the contract is fully operational in 2009, Con-way expects Menlo to receive about $250 million annually in gross revenue from the contract, which is for three years with a fourth year option, transportation analyst Ed Wolfe of Bear Stearns wrote in a note to clients Monday.
Con-way estimates that about 60% of the DTCI business moves via less-than-truckload, 30% by airfreight and 10% via truckload, Wolfe wrote.
DTCI is focused on improving performance while injecting new efficiencies into the military’s domestic transportation network by better synchronizing up to 260 independent shipping sites and hundreds of transportation service providers, Con-way said.
Con-way is ranked No. 6 on the 2007 Transport Topics 100 listing of U.S. and Canadian for-hire carriers.