Stockholders’ Letter

Our industry is changing. USA Truck’s historical bread-and-butter, the medium length of haul (800-1,200 mile) segment of the truckload market, is being eroded by a growing intermodal railroad option for our customers and by the proliferation of the regional distribution center concept among big box retailers. Customers continue to shrink their bases of core carriers while simultaneously raising the bars for service and capacity requirements. Cost pressures abound from inflationary forces that can often outpace growth in our industry’s pricing power and from increasing regulatory hurdles.

USA Truck must and will change to meet these challenges. While we have always taken pride in offering premium services, the changes in our industry now also require us to broaden the range of services we offer to our customers. By expanding our service offerings, we intend to generate demand for our services that will lead to greater consistency of earnings and pave the way for us to improve our margins. We must also overcome cost pressures in the labor, energy, regulatory and safety arenas.

USA Truck’s core business strategy for revenue and earnings growth is to increase and sustain demand for our services by positioning ourselves as a premium service provider for all of our customers’ dry van, full truckload needs, thus serving a greater portion of their needs. This strategy requires a two-pronged approach to execute: (1) consistently providing our customers with a reliability of service not generally available in our industry, and (2) providing a greater scope of service beyond our traditional medium length-of-haul business.

Since the summer of 2007, we have undertaken an extensive effort to refine USA Truck’s corporate strategy. We have implemented sweeping organizational/cultural, technological and business model changes within the company to set the stage for successful execution of our strategy.

· Culturally, we believe that employees who are challenged, empowered and rewarded are the key to total customer satisfaction. Total customer satisfaction is the key to shareholder returns. Our three-legged-stool concept focuses equally on the employee, customer and shareholder and is the foundation of our organization. We value intellectual honesty, a “do the right thing” ethical environment, strong leadership in addition to capable management, and a results-oriented, performance-driven culture that promotes teamwork and continual improvement. We have also devoted considerable attention to reorganizing our various operating departments to execute our strategy, placing the right people into the right jobs where they can add the most value and providing them the proper training and tools. That process is still underway.

· In order to serve our customers effectively and efficiently, we must provide our employees with the proper technology. After an exhaustive process, we have determined that our legacy mainframe software applications no longer provide the competitive advantage that they once did. Over the next three years, we will redesign our technology system and will replace our enterprise-wide software applications with more user-friendly, higher capacity products that will dramatically improve our visibility into our operations and the speed at which critical information is made available to decision-makers. Once complete, we believe that our enhanced technological capability should improve our competitiveness in our industry from both cost and service perspectives. We are not, however, relying on the software migration to drive our strategy; rather, we intend to use it as a catalyst to accelerate the pace of change within our organization.

· Our customers want a more diversified bundle of services from their core carriers. Our strategy is to provide those additional services in carefully selected areas where we believe we can provide superior service and reliability.

o We began offering intermodal railroad services to our customers in late 2007 and have set a modest revenue goal for 2008. To reach that goal, we have staffed intermodal with just a few strong, experienced employees, and given them clear responsibilities and goals, and we have done it in a way that did not detract from our focus on our core Trucking operations.

o We are expanding our capabilities to outsource truckload freight through our Strategic Capacity Solutions (“SCS”) division. To execute this, we have streamlined the interaction between our Trucking divisions and SCS and we have employed several new freight brokers.

o We are aggressively pursuing opportunities to move tractors from our General Freight and Regional Freight divisions where considerable pricing and empty mile pressures exist into our Dedicated Freight division where freight lanes and volumes are more consistent. Our goal is to move at least 100 tractors during 2008. To accomplish that goal, and as part of a broader reorganization of our sales force, we have injected a more focused effort into Dedicated Freight sales which has provided us with more opportunities and leads.

o We nearly tripled the size of our small owner-operator fleet to 66 in 2007. We intend to grow the size of that fleet by another 82% to 120 during 2008. Owner-operators provide a flexible source of capacity for our fleet and have proven to be reliable, safe and productive. With our driver turnover at its lowest level this decade and while the driver hiring market has softened during this economic slowdown, we have utilized our considerable driver recruiting resources to target owner-operators. We will continue to do so during 2008 until we reach our goal.

While we believe that we must improve our ability to consistently produce revenue volume throughout the economic cycle, we know that controlling costs will always be critical to our success. We typically post one of the lowest operating costs per mile in the truckload industry, but we can do much better, particularly in the area of insurance and claims costs, which continue to run a nickel per mile higher than our historical average. Our efforts to contain safety-related costs have not produced the sustained results that we desired over the past several years. In response, we are implementing a comprehensive loss prevention program rooted in hiring quality drivers and training them effectively. We will continue marketing safety to all our drivers, but to get the costs under control we must ensure that safety is the key factor in our future hiring decisions and driver training.

Our management team is deeply dissatisfied with our 2007 performance, and we are committed to taking the necessary steps to return USA Truck to its historic place of prominence in the truckload industry. Ultimately, we want to be the company that everyone wants to work for, the company that customers call when service matters and the stock that investors want to own. Our passion and decision-making are driven by that overarching mission.

As always, thank you for your support.