Werner Enterprises (WERN) investor relations material

Market environment and cycle dynamics

• Fundamentals remain strong, with supply-driven tightness and steady freight flows, especially in dedicated segments.

• Contractual rates are rising, with high single to low double-digit increases in renewals; spot rates show seasonal ebbs and flows but are less critical than contract trends.

• Retail, food, and beverage volumes are stable, supporting consistent performance through Q2 and Q3.

• Peak season rate premiums are expected to surpass recent years, though volume outlooks are still forming.

• Capacity attrition and tightness are anticipated to drive strong rate increases into 2027, especially for one-way business.

Regulatory and structural changes

• Enforcement actions on non-domiciled CDLs and CDL mills are in early stages, with only about 15% of targeted capacity exited so far.

• Montgomery ruling is prompting shippers to prioritize safety and risk management, benefiting larger, sophisticated carriers.

• Insurance impacts from Montgomery vary, but larger, well-vetted carriers see minimal increases and gain share as shippers seek risk buffers.

• Private fleet conversions are increasing as smaller fleets face challenges from driver shortages, equipment costs, and regulatory pressures.

Operational performance and strategic initiatives

• One-way trucking rates per mile rose 10% in Q2, with revenue per truck per week up 28%; dedicated revenue per truck per week grew 5% (legacy close to 8%).

• FirstFleet acquisition is integrating well, delivering immediate accretion and on track for $18 million in synergies by 2027.

• Logistics and brokerage divisions benefit from increased customer focus on safety and vetting, with margin corrections underway.

• Intermodal offerings are expanding as shippers shift modes in response to fuel volatility and tight truckload capacity.

• CapEx is elevated in 2026, focused on reducing tractor age and supporting operational efficiency.