Usa Truck Warns Of Third Quarter Loss

With the second quarter earnings season just ending, Van Buren-based USA Truck warned it expects to post a quarterly loss in the third quarter.

"We expect to report a net loss for the third quarter of 2011," said Cliff Beckham, USA Truck President and CEO. "It is too early in the quarter to predict a range of expected net loss."

USA Truck posted a $600,000 profit in its 2010 third quarter. Last quarter, the trucking firm recorded net income of $598,000.

Beckham blamed the expected loss on a software conversion that was complicating operations as well as soft market conditions.

"We believe the main factor is a temporary but significant decrease in the efficiency of our truckload operations associated with our efforts in implementing our new enterprise management software.  We are actively addressing this issue and expect the negative impact to be short-term," he said.

Beckham added:

"On July 7, 2011, after several months of planning and testing, we implemented live usage of the new operating system across our Trucking operations.  We had previously implemented the software for our Strategic Capacity Solutions and Intermodal operations. During the month of July and continuing into the first part of August, we have experienced unanticipated difficulties with load visibility, load planning, and load dispatching associated with the transition. These issues became apparent upon live cutover because of the huge transactional volume in comparison with the volumes experienced during testing.  We had planned for a modest reduction of efficiency during July associated with initial live usage and refinement of the new system.  The magnitude and duration of the reduction in efficiency have been greater than we anticipated. 

"We also believe the drop in efficiency is related in part to a deterioration in general truckload market conditions.  Our average loaded rate per mile and the percentage of loads moved in our Spider Web network remain within our range of expectations.  But our velocity, miles per tractor per week, and empty mile factor have been impacted.  Revenue miles were approximately 15% below those experienced in July 2010 but they are trending somewhat better during the first half of August.

"Our entire executive and operations teams are dedicated to correcting these problems, and we are gaining some improvement in August. We are also receiving strong support from our software provider.  We continue to believe we selected the right system for the long term, and upon resolution of our internal issues, we fully anticipate that the new operating system will enhance our operation efficiencies."