U.S. Xpress Founders Look Back, Forward During 25th Anniversary Event

U.S. Xpress Enterprises celebrated the 25th anniversary of its first load of freight Friday - but its co-chairmen said it would be very difficult to duplicate their accomplishments in today's business and regulatory environment.

To commemorate the milestone, Co-Chairmen and Co-Founders Max Fuller and Patrick Quinn hosted a celebration at the U.S. Xpress corporate headquarters in Chattanooga, Tenn. In attendance were drivers, employees, and local dignitaries, including Congressman Chuck Fleischmann and Hamilton County Mayor Jim Coppinger.

"The U.S. Xpress story is a classic example of how two hard-working, risk-taking, smart young men created a terrific company that has provided economic opportunity for thousands of employees - while also serving the needs of thousands of customers," said Bill Graves, president & CEO of the American Trucking Associations.

U.S. Xpress began operations in 1986 as a cross-country truckload provider with 48 trucks and has grown to a fleet of more than 8,000 trucks and 22,000 trailers with international operations. U.S. Xpress' annual revenue in 2010 was in excess of $1.5 billion, and it has experienced a compounded annual growth of 16 percent since 1994. U.S. Xpress is now recognized as the second largest privately owned truckload carrier in the United States.

A Different World from 1986

During the event, as well as in an interview with the press the day before, Fuller and Quinn recalled the highs and lows of 25 years in the industry and what they see for the future of the company.

"The whole transportation environment has changed so drastically from what we started with in 1986, it's almost like being in a totally different industry," Fuller said.

When asked by a reporter if they could build this company as far and as fast today, Quinn replied, "I think it would be very, very challenging. We hauled our first load of freight when fuel had taken the biggest drop in history. When you'd already negotiated with customers based on a higher level, that's a huge windfall."

Fuller chimed in, "It's almost a can't do unless you start with millions of dollars."

Some of the challenges the two identified were equipment financing — trucks are more expensive today and right now the credit market is still fairly tight — and the increased amount of regulation.

Quinn pointed out that they founded the company in the 1980s, when the truckload business was in a major growth period following deregulation of the industry in 1980.

Hours of Service

Quinn also had some frank words about the hours of service proposal currently being considered by the Federal Motor Carrier Safety Administration. The company has calculated that the new rule could affect productivity by 4 percent to 8 percent if it is finalized as currently written. But he's skeptical as to how much the final rule will resemble the proposal announced last month.

"It's so convoluted, it's so confusing; Gov. Graves has called it out and out stupid," Quinn said. He said he doesn't know how drivers or enforcement are going to be able to understand the new rules, and believes it's even too complex for makers of on-board electronic logs to write software for. "Even Joan Claybrook [board chairman for the Truck Safety Coalition and longtime trucking critic] came out and said this is too confusing. It's a nightmare right now. There may be a different version, but this version is just awful."

Keeping Ahead of Changes

The company has diversified greatly since it started out as a primarily coast-to-coast, long-haul driver team operation with 48 trucks. Today, that business makes up at most 15 percent of its operations, as the company offers a range of transportation solutions, including Solo Truckload, Team, Dedicated, Demand Critical, Intermodal, Logistics, Brokerage, Specialty LTL, and International.

"Our average length of haul 10 years ago was probably 1,400 to 1,500 miles," Fuller said. "Today we're barely under 500 miles per trip."

Some of the supply chain trends driving the changes include more products coming in to the country from Asia or Mexico, and a move to build more, smaller warehouses closer to the customer.

"We continue to look at changes taking place in the marketplace and continue to evolve our business in those directions, and I can tell you that's not simple by any means," Fuller said. "You can read 20 articles and 20 different people have 20 different ideas, so you have to pick the one or two that probably has the most merit, and go in that direction. I probably spend three hours a day reading, and you'll find some nugget of gold in almost every article you read."

It's especially challenging right now as the industry recovers from the worst recession in memory.

"This was the ninth downturn we've been through," Quinn said. "But the other ones all rolled together don't look like this one. It's not that we haven't learned how to manage in good times and bad, but this one's left some scar tissue that's gong to take time for everyone to recover from."