Answers from the conference call held by USX Thursday morning gave more information.
Some cost saving and consolidation efforts are planned for USX’s future
Eric Fuller, CEO of U.S. Xpress held a conference call on September 8,for market analysts and media. . Following two rounds of office layoffs, Fuller took questions about the recent events and what future plans were for the trucking company.
Some are speculating that the Variant program, a “offshoot” of U.S. Xpress focused on using AI and digital platform science to dispatch drivers, might be headed for the dustbin of trucking history. Fuller announced a plan to go back to fundamentals – “blocking and tackling” as he put it.
When Morgan Stanley’s Ravi Shanker asked about Variant’s future, Fuller said:
“I wouldn’t say 100% that Variant is dead. Variant as a brand has value from a driver’s perspective, and a lot of the technology has value. But with all that said, we are kind of skinnying down the strategy.”Eric Fuller, CEO of U.S. Xpress
U.S. Xpress is combining Variant, the company’s OTR operations, and the brokerage house into a new “Highways Services” group. Justin Harness, who has been the president of the Dedicated division, will become president of Highway Services.
Brandon Danneffell was the senior vice president of the brokerage division. He will now become president of the Dedicated division. Dedicated has become a separate division.
Back to basics includes working on driver retention
Companies can order all the shiny new trucks with all the options they like, but without drivers holding the seats down, those companies will drown in debt.
Fuller said that U.S. Xpress plans to focus on driver retention, which was a big issue that developed in Variant. Variant’s retention was around 150% in the second quarter of 2022, up slightly from 147% in the first quarter and 74% from last year’s second quarter.
Drivers that sit are unhappy drivers, and will soon leave for greener pastures. Variant’s weekly revenue miles were 1,607 miles per week in the second quarter. Knowing a good driver can do over 600 miles per day in an OTR setting, a key to Variant’s troubles is plain to see.
Other cost-cutting measures in the U.S. Xpress plans include increasing truck service lifetimes from 22 months to 27 months. This will add approximately 100,000 to each power unit before its sale.
This is a developing story and BTU will be monitoring for more news as it is released
Author’s note: Craig Fuller, founder and CEO of FreightWaves, is the brother of Eric Fuller and holds U.S. Xpress stock through a family trust.