After about a year and a half at USA Truck, the president of its struggling truckload segment, Martin Tewari, resigned in early March, continuing a recent series of leadership changes.
While Tewari did not respond to requests for comment, the Van Buren trucking and brokerage company's chief executive, James Reed, said that Tewari is leaving to take another job at a private company. "We're excited for him, and I hope he's really successful."
"But, I'll also tell you, whoever his replacement is will have more urgency, will be more accountable and will move faster than we were moving before," he said.
Tewari joined the company in September 2015 with over 25 years of industry experience, most recently as vice president of operations for Con-Way Truckload.
USA Truck has not made a profit in a year, primarily because of its trucking segment, which lost $15 million in 2016, more than reversing an $11 million profit in 2015.
Reed pointed out that the operating ratio for the segment was 109 last year. An operating ratio determines a company's efficiency by comparing operating expenses to net sales. The smaller the ratio, the greater the ability to turn a profit.
"We're accountable to our shareholders, to our employees and to the community, and our trucking business is not going to be successful if we run it at a 109 [operating ratio]," Reed said.
"During the peak of cycle, best-in-breed carriers operate at a low 80s [operating ratio] while public company industry average is in the low 90s [operating ratio] range," said Brad Delco, transport analyst at Stephens Inc. He defined a "healthy" operating ratio range throughout a year as "at least better than a 93."
"To be clear, Martin resigned," said Reed. "But those results were not going to be acceptable for much longer."
A search for Tewari's replacement is underway, Reed said. He also expects to fill the positions of chief financial officer and chief technology officer within a few weeks. Reed vacated the financial-officer job to take over as chief executive in January, a few weeks after Chris Rhodes, chief information officer, was terminated.
"Some of the things that will be different in the person we're looking for is, we expect to be more urgent," Reed said. "We expect to get better results. We expect to be more timely. We expect to meet our commitments more readily."
"Martin chose to leave because, I believe, he saw that in this new high-energy, take-no-prisoners environment, 'That's not my style. I'm going to be a fish out of water here,'" said Jim Craig, president of USAT Logistics and chief commercial officer who joined the company just over a year ago.
Craig said that he and Reed have had to make quick, tough decisions to improve USA Truck's current situation as fast as possible.
"Martin has proven to be a very effective leader. But here we have to be so much faster," he said.
"He was too nice of a guy and didn't hold people to the same standard he held himself to."
Craig explained that improving USA Truck's situation calls for urgency and decisiveness.
"In a lot of organizations you have time to be patient and let things evolve naturally. We're too hurried now to let things improve and give our shareholders and employees the results they deserve."
In regard to the perception of ongoing executive turnover at the company, Craig said, "It's good turnover. If your team's not winning, you bring in a new coaching staff. The new coaches then have to determine if we need to improve the roster."
Business on 04/01/2017