U.S. Xpress (CCJ Top 250 No. 19) announced on Wednesday a significant business overhaul that includes layoffs and rolling its once-lauded Variant subsidiary into its larger over-the-road operations segment as the fleet admits defeat on the technology-driven experiment and shuts down its Atlanta headquarters.
With the goal of decreasing driver turnover and boosting freight efficiency, Variant leaned heavily on a route planning program the company developed called Optimizer. However, the tech platform ultimately delivered results mostly to the contrary.
"The big thing is utility. We saw a big drop in our utility," U.S. Xpress President & CEO Eric Fuller said on a call with investors Thursday, adding the drop in utilization resulted in "drivers making less money" and increased driver turnover.
For now, the company will return its focus to keeping trucks moving.
"A lot of things from a tech standpoint were designed around driving utility and, for a number of reasons, those strategies were not successful. So we're getting back to the basics from a utility standpoint," Fuller said.
Asked point blank if Variant was "dead," Fuller said not entirely, adding the brand retains a lot of value and technology, but the "startup strategy where there was a lot being thrown against the wall" had to end, and that the company will return to a more targeted approach.
"Our vision to build a digitally enabled OTR fleet was ambitious and achieved certain successes, but with the freight market softening, it is important that we right size our cost structure for the current environment to protect our corporate health, our commitments to our customers and our stockholders’ investment," Fuller said.
