USA Truck (NASDAQ: USAK) reported Q3 EPS of $0.29, $0.23 better than the analyst estimate of $0.06. Revenue for the quarter came in at $141.8 million versus the consensus estimate of $132.63 million.

President and CEO James Reed commented, “The third quarter of 2020 was the tale of two freight markets. The first half of the quarter was similar to the second quarter of 2020, with unpredictable week to week swings in freight, pricing and seasonally softer demand. The market turned toward the middle of August as capacity constraints emerged and demand strengthened. The tightening capacity was driven by many factors including the implementation of the new Drug and Alcohol Clearinghouse screening requirements, driver school shut downs in the face of COVID-19 concerns, general COVID-19 cautiousness among drivers, and expanded unemployment insurance and federal and state relief programs.

Despite the difficult driver market, during the quarter we were able to improve our Trucking segment operating ratio and adjusted operating ratio(a) by 380 basis points and 410 basis points year over year and 220 basis points and 200 basis points sequentially to 96.5% and 95.8%, respectively. We were able to drive the improved results through a disciplined approach to our network, targeted repricing efforts with customers, moderating truck counts by reducing our average available tractor count by 94 tractors sequentially, and by executing our previously discussed self-help initiatives through our migration to a more regionalized business model.

USAT Logistics capitalized on the increasing market rates and executed through increased volume during the quarter, which generated the two highest revenue months in the history of this operating segment during this quarter. This powerful combination of volume and rate helped grow the overall gross margin, return to operating profitability and improve the segment operating ratio and adjusted operating ratio(a) by 130 basis points year over year and 250 basis points sequentially to 98.1% and 98.0%, respectively. We expect the combination of tighter supply and traction gained on self-help initiatives will set us up well for the fourth quarter of 2020 and beyond.

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