Knight-Swift Transportation Holdings has transformed U.S. Xpress’ network to feature more shorter length of hauls, in a bid for greater profits, according to a Knight-Swift earnings call last week.
The new network with 11 locations generates higher revenue per mile and has increased rates, CEO Adam Miller told investors. That density has also meant more home time for drivers.
“And so that's really changed the type of freight that we're hauling and the length of haul and the rate per mile,” Miller said on the call.
Knight-Swift closed on the deal effective July 1, 2023, saving the troubled Tennessee carrier from operating losses posted in 2022 and 2023.
Since the acquisition, U.S. Xpress’ over-the-road operating ratio has improved 7 percentage points — at a time when competitors in the industry have seen that metric trend in the opposite direction, CFO Andrew Hess said on the call.
The company has seen some challenges, though. Insurance expenses picked up in the segment, the company said, even as companywide insurance and claims costs declined in Q4 year over year. Nonetheless, executives said the business had momentum in Q4.
Going forward, Knight-Swift’s plans for U.S. Xpress involve focus on five areas, Hess said:
- Bringing rates up as the market allows
- Increasing its seated truck count
- Adding to its dedicated fleet
- Building on its safety culture
- Replacing high-cost leases with purchased equipment
“So all of those strategies together give us confidence that we guided. We’re going to be profitable in 2025 and start working to close the gap from an OR perspective to our legacy businesses,” he said.
