US Xpress Operating Revenues Up 7.9%

Truckload carrier US Xpress reported operating revenues for 2003 were $930.5 million, up 7.9% from $862.3 million in 2002. Net income also rose to $7.6 million. Prior-year net income was $3.2 million before a litigation charge of $1.4 million in the fourth quarter of 2002. After the charge, 2002 net income was $522,000.

"During the second half of 2003, we experienced an increasingly difficult environment recruiting drivers and owner-operators," said Pat Quinn, co-chairman. "Our industry faces a number of challenges," Quinn continued. Hours-of-service regulations, which went into effect Jan. 4, 2004, had little effect when the company announced 2003 results and commented on company performance. However, the carrier had increased accessorial charges in January along with accessorial pay for drivers. This was in addition to a three-cent-per-mile increase to help retain and recruit new drivers and owner-operators. US Xpress executives said the supply of drivers continued to be tight, causing it to have 150 unseated trucks beyond expectation. (They usually expect to have 100 trucks in transition as drivers and owner-operators move in and out of the company, but the tight supply of drivers left them with 150 more than expected.) The company doesn't expect the driver situation to improve, especially as they see increased freight volumes and corresponding demands for more capacity moving into March and April.

EPA requirements for cleaner burning engines also presented problems in fuel economy and maintenance for the carrier, in addition to the $3,000 to $4,000 cost added to the price of a new tractor.

Rate increases held at slightly higher than 4% and the carrier said it was getting good compliance on accessorial charges. Asked about shippers who refused to pay the additional charges, on US Xpress executive said, "Those are the people who are volunteering not to have capacity." US Xpress did spend time with shippers before introducing the accessorials, coaching them to "clean up their docks." Many of the worst offenders did just that, and both carrier and shipper have seen improved efficiency and better ability to control cost increases.

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