Werner Enterprises (WERN) investor relations material

Freight market and peak season trends

• Peak season volumes are flat to slightly up year-over-year, with a later start and more compressed shipping window, driven by improved customer forecasting and resilient consumer demand.

• Black Friday sales exceeded expectations, prompting a race to replenish inventory, with gift card-driven demand extending peak into January.

• Pricing opportunities remain attractive, especially on the West Coast, but a more distributed approach is being taken to manage costs and improve economics.

• Risk for peak season is now seen as skewed to the upside compared to mid-summer expectations.

Strategic fleet and business adjustments

• Fleet size guidance for year-end shifted from flat/down 2% to down 4-6%, mainly in the one-way segment, to support margin expansion.

• Dedicated fleet continues to grow, with willingness to increase its mix to 70% or higher, leveraging synergies and focusing on less commoditized business.

• One-way fleet is being restructured to emphasize expedited and cross-border services, with asset-light solutions supporting commoditized freight.

• Margin expansion in 2026 is targeted through cost discipline, rate improvements, and operational efficiency, with 150-200 basis points improvement seen as reasonable if rate increases materialize.

Regulatory and industry environment

• Multiple enforcement actions are underway: English proficiency, B-1 cabotage, non-domiciled CDLs, electronic logging device (ELD) certification, and entry-level driver training.

• Enforcement is expected to remove up to 200,000 drivers from the over-the-road one-way market, significantly impacting supply and supporting a tighter market.

• Shippers are increasingly focused on de-risking by partnering with quality carriers, with early bid season activity allowing for marginal rate increases and improved network stability.