U.S. Xpress Celebrates 25 Years of Service

This story appears in the Jan. 31 print edition of Transport Topics. Click here to subscribe today.

CHATTANOOGA, Tenn. — On Jan. 21, a quarter-century to the day after U.S. Xpress Enterprises hauled its first load of freight, business “stinks,” said Max Fuller, the company’s co-founder and chief executive officer.

U.S. Xpress Enterprises has been around long enough to know what a recession feels like. Pat Quinn, Fuller’s business partner and president of U.S. Xpress, said that the company has ridden out nine downturns in its 25-year history.

When the company got into the transportation business in 1986, the U.S. economy was beginning to find its legs after the crash of 1982.

By the time the Chattanooga, Tenn., truckload carrier marked the 25th anniversary of its first load of freight hauled, U.S. Xpress had also survived — to name two of the big ones — the dot-com bust of 2001 and the 2008 financial disaster that some have dubbed “The Great Recession.”

In 2011, with the economy seemingly on the rebound, “you’d think business would feel better,” Fuller said.

It did not, as of Jan. 21, he said. But the view from the top isn’t all bad, the co-chairmen of U.S. Xpress told Transport Topics.

For example, the pace at which merchants are replenishing their inventories is quickening to the point where it soon may create marked tightness in truckload capacity, said Quinn.

By next year, “there’s going to be some tight spots where the freight has to sit a day or two longer than the shipper would like,” said Quinn, a former American Trucking Associations chairman.

Fuller and Quinn spoke with TT at U.S. Xpress headquarters here on Jan. 21, just before the two executives received co-workers, elected officials, old friends, family, and members of the news media to mark the 25th anniversary of the day that their company moved its first revenue load.

Fuller and Quinn expect something close to a full-swing recovery in 2012. The build-up will start this year, they said.

Coincidentally, 2012 is also the date that the partners expect other operational pressures — mostly related to drivers — to come to bear.

“Driver wages will be a big issue late this year and early next,” Fuller said.

Quinn said that the federal government’s new Compliance, Safety, Accountability rating system, rolled out late last year, will be the driving force behind that particular cost factor.

“The driver with the [best] CSA score will be like a free agent in sports,” said Quinn, drawing attention to the high price tag that he believes well-qualified operators will be able to demand for their services.

In addition, “we’re starting to see customers in their contracts say ‘Your [CSA] score has to be a certain level,’ ” said Quinn.

Besides paying more to seat a truck, carriers are also paying more to acquire trucks, Quinn said.

With a 3-to-1 ratio of trailers to tractors, and with the increased costs of 2010 emission control technology, U.S. Xpress now spends about $195,000 each time it procures a new truck — and that’s discounting the wages of the driver who operates it and the cost of the fuel that powers it, Quinn said.

The latest incarnation of the federal hours-of-service rule also stands to bump up the cost of doing business, Quinn said.

Highlighting the Obama Administration’s HOS proposal as one of the “ridiculous regulations” coming out of Washington, D.C., Quinn said that the proposed changes to the regulation could reduce trucking productivity by 6% to 8%, compared with current levels.

Among other possible changes to the HOS rule, the Federal Motor Carrier Safety Administration has said that it favors shortening the maximum driving time between breaks to 10 hours from the current 11 hours.

None of these concerns were even on the radar 25 Januaries ago when Fuller, a second-generation fleet owner, and Quinn, who Fuller called a “reformed lawyer,” banded together to found U.S. Xpress Enterprises.

At that time, the company was running 48 trucks and wondering how many years it would take before the business became profitable, Quinn told the gathering in the company boardroom.

Earlier this month, by its own tally, U.S. Xpress’ fleet was 8,000 trucks strong. The closely held company wouldn’t say how profitable it is in 2011, but the carrier did mention that it brought in more than $1.5 billion in revenue last year. In its first year of business, U.S. Xpress grossed about $11 million (3-21-94, p. 14).

“We didn’t think it would get this big,” Fuller said.

U.S. Xpress has also become broader since its inception. What started as a stock-in-trade truckload concern has expanded into intermodal haulage, dedicated contract service, transportation manage, and even warehousing services for floor coverings.

All of this helped propel the carrier to No. 17 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.

Coinciding with its anniversary celebration, U.S. Xpress announced that it became a gold sponsor of the Wounded Warrior Project, a Jacksonville, Fla., non-profit that helps severely wounded armed-services veterans find jobs.

U.S. Xpress hopes that some of the wounded will consider trucking jobs — driving jobs, in particular.

Already, competition for qualified drivers is “heating up,” said Russ Moore, the company’s vice president of driver recruiting.

Moore said that the traditional sluggishness of the recruiting market seen during the winter months is dissipating more quickly this year than it has in prior years.

The intensely costly business of truckload recruiting and equipment procurement today contrasts starkly with the reports of one old family friend and truck salesman, who spoke during the anniversary event.

Harold Lee has sold trucks to the Fuller family since Max’s late father, Clyde Fuller, was buying them. Lee recounted the story of how the elder Fuller, founder of Southwest Motor Freight, procured one of his early tractors and hired one of his first drivers.

Clyde Fuller once “needed about a $1,000 down payment” for a new tractor, Lee said from the podium in the U.S. Xpress boardroom. “Clyde said, ‘I bet it’ll take about an hour to win that $1,000’ ” at a poker game.

Clyde Fuller did indeed win the $1,000, which he turned over to Lee. With the down payment on the new tractor secure, Lee asked Fuller if he was going to cash out of the card game.

Fuller reminded Lee that the new truck still needed a driver. The truck salesman said that Fuller told him, “ ‘I’ve got to get back and win enough money to get that driver out there!’ ”

This and other stories recounted by those in attendance here prompted Max Fuller to reflect on the past quarter century.

“The whole transportation environment has changed so drastically from what we started with,” Fuller said. “It’s almost like being in a totally different industry.”