Less is more at Con-way Inc .

The $5 billion U.S. trucking and logistics company is systematically shrinking daily shipment volume while raising prices, helping boost first-quarter profit well beyond analyst forecasts.

The company was inefficient and overloaded on some traffic lanes at peak volumes last year, cutting into earnings, and it could take another year before margins are optimal, Con-way said.

Con-way has been using price to discourage some pretty big pieces of business that we didn't feel were compensatory, Chief Executive Douglas Stotlar said in an interview on Thursday.

First-quarter results provided a glimpse of the company's earnings power, Deutsche Bank analysts said in a report, but it will take another year of pricing improvement to return Con-way Freight to margins more consistent with this point in the cycle.

Stotlar agrees: We're another year away from working on our mix and our rate increases and efficiencies to get back to where we're in that kind of ballpark again.

Daily tonnage fell 4.7 percent in the first quarter from a year ago, by design, and that pace intensified in April.

Freight tonnage per day in April dropped to 81 million pounds from 90 million a year earlier. That loftier volume was about to explode the network the company told analysts on a conference call on Thursday.

Not all volume is created equally, Stotlar said.

Pricing rose in the mid single-digits as the company worked to streamline its so-called mix, or what, how and where something is moved.

As we go back through our book of business and renegotiate the price, we're trying to incent customers to give us freight where we need it in the network to leverage the operating costs and not have low-priced freight in lanes where we already have an imbalanced situation, Stotlar said.

Con-way posted a 24 cent per share profit in the first quarter, excluding items, after a 2 cent-per-share loss a year earlier. The company reported results after the market closed on Wednesday.

Yield, or revenue per hundredweight excluding fuel surcharge, rose nearly 6 percent in the first quarter from a year ago for Con-way Freight. The less-than-truckload division contributes about 60 percent of the company's revenue.

Improved pricing and fuel surcharges boosted revenue.

Manufacturing is by far stronger than the consumer side, although we're seeing nice demand from the consumer side as well, Stotlar said.

Shares of Ann Arbor, Michigan-based Con-way are up 6 percent at midday at $39.89, and up about 9 percent this year.

The Dow Jones Transportation Average <.DJT> is up 7.5 percent year-to-date.

Con-way's hiring will also be more strategic, Stotlar said. The company added 900 employees in the freight network in the first three months of the year.

That's a more gradual pace to match seasonal tonnage shifts than last year, when 3,000 jobs were added within in a few months time.

Con-way also raised its guidance on planned 2011 capital spending to $300 million from $275 million, used mainly for upgrading the fleet with 1,200 replacement tractors.

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