New "Interim" Chief Operations Officer

Can't be bad. Can only go up from here!

 

Seriously man? Can only go up from here? Ok your right. USA can only get better and not worse at this point since the fundamentals point in that direction.

 

I'm not a driver there anymore and their success or failure won't effect me. I think however the problem at USA Truck is systemic and starts with Cliff Beckham. I think the damage this idiot inflected over the last few years is fatal, and the death will be a slow one. Cliff Beckham is the mental pygmy that ran people off that tried to warn the company this so called new system would not work. Over most of 2010 and 2011 a lot of good quality drivers quit because of their lack of miles. These drivers have been replaced by new unseasoned drivers. Just search the posts in this forum and you will see example after example of the damage this caused. Cliff Beckhams mia culpa aside I refuse to believe he will do the things needed to get that company turned around. Credit is almost as addicting as a narcotic in a lot of ways maybe more. The upper management of USA Truck has a bad addiction because over the last 2 quarters they continue to live on that credit card. Over the last several months I have spoken with a lot of business people and an accountant. All have told me virtually the same thing! Look at the debt it's the 1000 pound gorilla in the room, till USA Truck deals with this debt by first not adding anymore then getting it down their not turning anything around. Add to this the fact that the larger carriers are cutting rates means the future just don't bode well for the company. It's a sad fact that the damage is self inflected and the nucleus of the company that did this damage is still there. As far as this new operations person goes, am I the only one that finds it a bit odd his job seems to be temporary?

 

I wish him luck. But that's only part of the problem. You can bring in all the good people. But if you can't get those people in Van Buren to do what he wants, Forget it. They'll find a way to stonewall him. He'll have to fire 80 % of the people in the office. That's the way it is at USA.

 

The reason they will continue to do poorly financially is because there isn't really many areas where they can cut back. The only area they could immediatley cut back that might make a small difference is the driver bonuses they pay out to new hires. Hiring students from the school is kind of a hit and miss as far as wether it cost them money or makes them money. Yes our cost would be 6 grand but I doubt USA pays anywhere near that considering the quantity they bring to the table. I never saw them spend lavishly on anything. The debt which doesn't just go away is what keeps them under water. Unless they can find a way to get more out their customers and find new customers they will keep sinking deeper and deeper till no one will finance this company.

 

We are getting a lot of new customers. Valley Protiens, FedEx etc. refers coming soon from what I'm hearing

 

Its the net customer gain that matters. No one really knows what customers they are losing versus what they gain except for upper management. We shall see in the coming earnings I suppose.

 

Actually I think the better question is how profitable will these new customers be. There is no telling how low the rates are. Just remember if this is the case USA Truck can not afford to get into a rate war with anybody. As far as reefers go Werner and Marten will eat them alive if they stray into that market. Also The company will lose a lot of drivers because of the long waits at all these warehouses. FYI the average wait is about 3 hours, I have sit at warehouses so long I got a 10 hour break in.

 

Grain hauling and reefers are not anymore profitable than dry van. Meaning the bottom line is no bigger. Revenue is higher and so are costs. Take a 100% reefer like KLLM. A friend of mine used to drive for them and told about the red ink they talked about just as bad and sometimes worse than USA. Though KLLM is not a publically traded company.