U.S. Xpress fires head truckload exec and leader of Variant

Ramsdell had been president of U.S. Xpress Ventures since April 2020. His most recent title was president of Variant and OTR operations, a title he held since September 2020, according to the U.S. Xpress SEC filing.

When he was hired, Ramsdell had most recently been the chief technology officer at Coyote Logistics.

On a day when equity markets were down slightly, U.S. Xpress fell significantly, possibly in reaction to the Ramsdell news. At 11:25 a.m. Monday, U.S. Xpress stock was down 6.41% to $5.69 per share. That marks a 52-week low for the stock, down roughly 17% during those 52 weeks and 52% from its 52-week high of $12.33.

The Variant initiative creates a truckload carrier within an existing carrier. It is a technology-driven approach to deploying assets that emphasized its distinct character by locating its staff in Atlanta rather than the headquarters of Chattanooga, Tennessee. Fuller often noted that its offices are across the highway from Georgia Tech and that graduates of such schools were the type of pool it wished to draw from in staffing the “optimizer” that helps plan the routes and operations of Variant.

Variant also takes a unique approach toward driver pay, all with the goal of massively reducing the high turnover rates that have plagued U.S. Xpress and other truckload carriers for a long time. Fuller spelled out the approach in his Stephens presentation. 

In an email to FreightWaves, Brad Carmony, the vice president for brand communications at U.S. Xpress, said that the dismissal of Ramsdell was “an extremely difficult decision to make but was done in the best interest of the long-term future of the company.”

“Nothing is changing about our Variant strategy,” he said in the email. “We are continuing to invest for long-term profitable growth. There are no planned layoffs or other changes to our strategy at this time.”

He reiterated what Fuller has said numerous times, that Variant will “continue to be the main growth engine of our truckload fleet in coming years.”

There is no immediate successor to Ramsdell, Carmony said. “Now that Variant is up and running successfully, our senior leaders will take some time to identify what specific traits and skills will be ideal for the fleet’s next leader,” he wrote in the email. “Once there is a good understanding of what we’re looking for, we’ll begin a search for the right person.”

U.S. Xpress is not a stock that receives a great deal of analyst coverage; just five analysts were on the company’s third-quarter earnings call.

One company not represented on the latest conference call was Morgan Stanley. Last week, the Morgan Stanley team led by Ravi Shanker downgraded U.S. Xpress stock to equal weight following Fuller’s presentation to the Stephens conference.

“Although the financial benefits of the Variant fleet have taken longer than initially expected to drop to the bottom line, we are encouraged by [management’s] confidence and the fact that USX was able to hit their year-end target despite the continued equipment supply challenges we see in the market,” Morgan Stanley wrote in the report. 

However, the downgrade was based on what Morgan Stanley said was “a risk to the cycle in (2022’s second half), which could push out USX achieving normalized $1 EPS to 2023 or beyond.”

Through the first three quarters of this year, U.S. Xpress had adjusted net earnings of 19 cents per share.

Back in October, U.S. Xpress’ third-quarter performance led at least one analyst on that call, Ken Hoexter of Bank of America Merrill Lynch, to downgrade his rating on U.S. Xpress to “underperform” from “neutral.” 

The third-quarter report of U.S. Xpress featured some good news about Variant, such as the fact that its growth had picked up pace enough that its additions to the fleet were outpacing the planned declines in the legacy fleet. But Hoexter focused on the fact that in a quarter when several other truckload carriers posted operating ratios less than 90%, the U.S. Xpress OR was 97.8% for the quarter.

The company “(missed) out on fully participating in the strongest truckload market in a generation,” Hoexter wrote. 

Hoexter said in the report that Variant was a growth program for the next three to four years, and follows “multiple strategy shifts since its 2018 IPO.”

Disclosure: FreightWaves founder and CEO Craig Fuller retains ownership of U.S. Xpress shares through his family trust.

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