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Van Buren, Ark.-based truckload carrier USA Truck says in the fourth quarter it reduced its nondriver staff by 8% as the company reported a quarterly loss of $4.8 million or 56 cents per share, compared with net income of $5.3 million or 64 cents per share for the same period last year.
Revenue also declined 13% to $121.1 million from nearly $141.1 million in 2019’s fourth quarter.
For the year, USA Truck lost nearly $4.7 million, or 55 cents per share, compared with a profit of $12.2 million or $1.49 per share in 2019.
The company’s 2019 revenue declined 2.1% to $522.6 million compared with $534 million in 2018.
“The soft spot market and widely reported supply-demand imbalance affected both our contract and spot market opportunities during the quarter,” CEO James Reed said during a conference call with reporters and analysts Jan. 31. “Market rates remained pressured during the quarter and shippers allocated large portions of their freight spend to the lowest cost alternatives.”
The company’s quarterly and annual operating ratio worsened. The fourth-quarter ratio was 102.9 compared with 93.8 last year. For the year, the ratio was 99.6 compared with 96 as 2019’s figure.
Operating ratio, or operating expenses as a percentage of revenue, is used to measure efficiency. The lower the ratio, the higher the company’s ability to generate profit.
Officials believe by shrinking its nondriver staff and going to a more regional structure — adding terminals this year in Atlanta, Dallas and Carlisle, Pa. — will make the company more competitive in a tight freight market.
“Market rates remained pressured during the quarter and shippers allocated large portions of their freight spend to the lowest cost alternatives. Adding to the near-term pressures were organizational changes we expect will enhance our business in the long term, but which resulted in our experiencing the effects of a tough market more severely than our peers,” Reed said.
The company said it would continue to look at additional cost savings depending on the health of the trucking economy.
USA Truck’s truckload unit saw revenue decline $7.8 million, or 7.8%, to $92.1 million from $99.9 million in 2018. But for the year revenue was up 7.3% to $377 million from $351.2 million in 2018.
USA Truck’s logistics unit also showed a significant decline in revenue in the fourth quarter and for the entire year.
Fourth-quarter revenue declined 24.4% to $33.6 million compared with nearly $44.5 million in 2018. On an annual basis, the logistics division revenue dropped 19.3% to $154 million compared with almost $191 million in 2018.
The company said in the last year it has added more than 225 new customers, and it believes its turnaround plan to grow the amount of freight it carries is beginning to work and will pay dividends in 2020.
“January has begun with what we believe is a positive market inflection — customer bid activity and freight volumes are improved over recent trends,” Reed added. “We have also increased our win percentage in the bid process, including recent dedicated contracts, which speaks to our customers’ confidence in the changes we are making.”
USA Truck ranks No. 64 on the Transport Topics Top 100 list of for-hire carriers in North America.
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