USA Truck Sale End of Long, Strange Trip

USA Truck Sale End of Long, Strange Trip
(USA Truck)

USA Truck CEO James Reed certainly had more than one good reason to not return a phone call from a business reporter.

It was his wedding anniversary. He was in London. He was traveling the next day to Germany.

I’ve had people I cover give flimsier excuses for not calling me back. But Reed called me back, apologized for having to hang up to talk to his wife — back home in Arkansas — on their 30th anniversary before calling me back once more.

If Reed is running around a little hectic these days, it’s no small wonder. He is overseeing the acquisition of USA Truck — nearly given up for dead not so long ago — by German logistics giant DB Schenker in a $435 million deal expected to close by the end of the year.

The Schenker deal, which was announced June 23, will end USA Truck’s run as an independent company when it becomes a division of its parent company, which has been trying to create a truckload footprint in the United States for the past couple of years. The acquisition may also end Reed’s run at USA Truck.

In a June 30 proxy filing with the U.S. Securities & Exchange Commission, USA Truck posted a transcript of Reed’s video message to company employees detailing the DB Schenker deal. At one point he addressed the concerns about his future with the company after the takeover.

“... I’m really kind of flattered that a lot of you are asking this question, ‘but what about James?’” Reed said. “Thank you for your concern, but I’ll say this: I will be here definitely through the transition. It’s my job to ensure that we get this company to the place where it belongs pursuant to the agreement that we have with DB Schenker.”

I asked Reed about his future with USA Truck, but he would not discuss it on the record. He would only say that both companies had agreed he would definitely stay through the transition.

If DB Schenker does decide to have its own person run USA Truck, it is of course its prerogative. It shouldn’t be taken as any slight on Reed, who did a remarkable job stabilizing the sinking ship that was USA Truck before he became CEO.

USA Truck was a mess when he took over in January 2017. He had been hired the previous November as the company’s CFO under CEO Randy Rogers.

Rogers was ousted two months later and the USA Truck board of directors promoted Reed. Rogers had been the company’s fourth CEO since 2013, and the constant leadership turnover had sapped company morale and stability.

“Any organization that has that many leadership changes, it’s like whiplash,” said former CFO James Bates, who worked under Reed for several years. “They had forgotten what it was like to win.”

Reed set about immediately to change that mindset. He drove his people hard, as hard as he drove himself, and one executive even told Reed he was leaving USA Truck because he wasn’t prepared to work as hard as Reed demanded.

Reed said the fruits of the turnaround were evident in improved financials but also in less tangible ways — as in how the company responded to the flood of 2019 by uprooting its entire IT infrastructure and setting up in two new temporary locations by the next morning.

“That galvanized our culture,” Reed said. “I can’t overstate how important that was. Our team realized that in the face of really difficult circumstances, we could pull off a miracle.”

Reed may or may not be around for the rest of USA Truck’s journey. He will be well-compensated if this is it, though; his “golden parachute compensation,” according to the company’s SEC filing about the acquisition, said that Reed could receive more than $7.7 million.

“I feel like I am losing a family member,” Reed said. “In my heart of hearts, this is where I wanted to work the rest of my career. I wanted to see it [through]. I never saw this as an outcome; it’s a great outcome. I don’t want anyone to think we were out trying to sell the company. That was never our intent.”