Trucking company U.S. Xpress has cut 35 seasonal jobs and plans to reduce the salaries of its highest paid executives while freezing pay for most of its workers, according to an internal company memo.
Max Fuller, co-chairman of U.S. Xpress, said the industry is headed into its fourth year of a freight recession, and in the last four weeks freight volume has seen a significant decline.
“We are just trying to be proactive here, and being prudent at our size is extremely important,” said Mr. Fuller of the Chattanooga-based company.
Executive managers will have their salaries cut by 7 percent with the Dec. 26 payroll, vice presidents’ salaries will be trimmed 5 percent, and directors’ salaries will be down 3 percent. Managers and employees making over $70,000 will see their salaries drop by 2 percent, according to the memo sent late last week.
Managers earning under $70,000 and all other employees will see no pay reductions or increases for 2009, according to the company.
The company, which has 850 trucks and 11,000 employees nationwide, also has implemented a hiring freeze for the next six months, said Mr. Fuller.
“We decided to tighten our belt and go into what appears to be a soft quarter,” he said.
Cost cutting has been ushered in, in part, because the company is nervous about freight demands in the first quarter of the year. Usually, freight drops around 15 percent in January after the Christmas retail season, he said.
However, with the struggling economy, the retail sector is expected to perform poorly this Christmas, having a negative effect on trucking companies such as U.S. Xpress, he said.
“We are really focusing on costs moving forward,” said Mr. Fuller. “We are still profitable at this point, but if freight drops as dramatically as it usually does in the first quarter then we need to be ahead of the curve.”
U.S. Xpress is not the only trucking company challenged by the economy, said Greg Thompson, a spokesman for the trucking firm.
Around 8,000 trucking companies have filed bankruptcy this year, pushed over the edge by lagging freight and rising fuel costs, he said.
Mr. Fuller said times are tough for the trucking industry, but if officials at U.S. Xpress are smart they can come out on top in the end.
“I think I am going to be hiring in the next six months,” he said. “When this thing turns there will be a lot less truckers in the marketplace and we will be one of the beneficiaries from it.”
Joan Garrett has been a staff writer for the Times Free Press since August 2007. Before becoming a general assignment writer for the paper, she wrote about business, higher education and the court systems. She grew up the oldest of five sisters near Birmingham, Ala., and graduated with a master's and bachelor's degrees in journalism from the University of Alabama. Before landing her first full-time job as a reporter at the Times Free Press, she ...
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