U.S. Xpress Enterprises, Inc. operates as an asset-based truckload carrier in the United States.
The company provides services throughout the United States, with a focus in the densely populated and economically diverse eastern half of the United States. The company offers customers a broad portfolio of services using its own truckload fleet and third-party carriers through the company’s asset-light freight brokerage network.
As of December 31, 2022, the company’s fleet consisted of approximat...
U.S. Xpress Enterprises, Inc. operates as an asset-based truckload carrier in the United States.
The company provides services throughout the United States, with a focus in the densely populated and economically diverse eastern half of the United States. The company offers customers a broad portfolio of services using its own truckload fleet and third-party carriers through the company’s asset-light freight brokerage network.
As of December 31, 2022, the company’s fleet consisted of approximately 7,200 tractors and approximately 14,400 trailers, including approximately 1,000 tractors provided by independent contractors. The company’s terminal network is established and capable of handling significantly larger volumes without meaningful additional investment.
Segments
The company operates through two reportable segments, Truckload and Brokerage.
Truckload
The Truckload segment offers asset-based truckload services, including the OTR and dedicated contract services.
OTR: This transports a full trailer of freight for a single customer from origin to destination, typically without intermediate stops or handling. This includes short-term contracts and spot moves that include irregular route moves without volume and capacity commitments; tractors that are operated with one driver or a team of two drivers to handle more time-sensitive, higher margin freight; routes that are generally between 450 and 1,050 miles in length; and fuel surcharge programs that help the company offset most of the negative impact of rising fuel prices associated with loaded or billed miles.
Brokerage
The company’s Brokerage segment principally provides asset-light freight brokerage services through which loads are contracted to third-party carriers. This segment includes allocation strategy designed to maximize profitability of its Truckload fleet before outsourcing loads to third-party carriers. The company has utilized the capacity of approximately 22,000 third-party carriers.
Customer Relationships
The company maintains a diverse, long-standing customer base that includes many Fortune 500 companies, including Dollar General, Dollar Tree, FedEx, Home Depot, Kroger, Procter & Gamble, Target, Tractor Supply and Walmart. The company’s customers fall within a broad spectrum of geographies and end markets, including retail, food and beverage, e-commerce and packages, manufacturing, consumer products and third-party logistics.
Tractor and Trailer Fleets
The company operates a modern fleet of approximately 6,200 company-owned tractors and approximately 14,400 trailers. The company also contracts for additional tractor capacity through approximately 1,000 independent contractors, who provide both the tractor and a driver and, except for the trailer, which the company generally provides, bear the operating expenses of each load. The company’s tractor fleet continues to include the most advanced technology in market, including electronic logging devices (‘ELDs’), electronic speed limiters, electronic roll stability, improved aerodynamics and fuel efficiency technologies, enhanced tractor connectivity with remote updating capabilities, improved automatic transmissions, lane departure and collision warning / avoidance systems, upgraded braking systems and event recorders. Each of the company’s company tractors is also equipped with onboard communication units that offer both real time freight positioning to the company’s customers and communication between its drivers and the company.
The company’s tractors had an average age of approximately 1.9 years as of December 31, 2022.
Strategies
The company’s strategies are to improve asset productivity by using advanced technology to optimize dispatch miles in all cycles and actively upgrade freight mix when volumes permit; seek efficiencies throughout the enterprise; pursue driver training and safety initiatives as a core cultural value; continue to leverage the company’s service mix to manage through all market cycles; reduce spot market exposure by obtaining more contracted freight; convert equipment financing over time toward owned equipment from operating leased equipment to gain tax benefits and flexibility in trade cycles; target a conservative leverage profile, taking into consideration both owned and leased financing; and use of digital technologies to reduce the impact of market cycle downturns.
Independent Contractors
In addition to the company drivers that it employs, the company enters into contracts with independent contractors. Independent contractors operate their own tractors (although some employ drivers they hire) and provide their services to the company under contractual arrangements. As of December 31, 2022, the approximately 1,000 independent contractors the company engage comprised approximately 14% of the company’s available capacity, as measured by tractor count.
Services offered to independent contractors include insurance, maintenance and fuel. Through the company’s wholly owned insurance captive subsidiary, Xpress Assurance, Inc. (‘Xpress Assurance’), independent contractors can purchase occupational accident, physical damage and other types of insurance. Independent contractors can also procure fuel and maintenance services at the company’s truckload service centers at their expense.
Regulation
The company’s operations are regulated and licensed by various government agencies, including the Department of Transportation (‘DOT’), Environmental Protection Agency (‘EPA’) and the Department of Homeland Security (‘DHS’). These and other federal and state agencies also regulate the company’s equipment, operations, drivers and third-party carriers.
The DOT, through the Federal Motor Carrier Safety Administration (‘FMCSA’), imposes safety and fitness regulations on the company and its drivers, including rules that restrict driver hours-of-service.
In addition to the foregoing laws and regulations, the company’s operations are subject to other federal, state and local environmental laws and regulations, many of which are implemented by the EPA and similar state agencies.
The FSMA is applicable to the company not only as a carrier, but the company is also considered a shipper when acting in the role of broker.
Seasonality
Over the past several years, the company has seen increases in demand at varying times, including surges between Thanksgiving and the year-end holiday season (year ended December 2022).
History
U.S. Xpress Enterprises, Inc., a Nevada corporation, was founded in 1985 by Max Fuller and Patrick Quinn.
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