Werner Enterprises (WERN) Morgan Stanley’s 13th Annual Laguna Conference summary

Macro environment and demand trends

• Dedicated and logistics segments showed positive momentum in Q2, with fleet growth and new customer wins across various verticals.

• Logistics returned to mid-single-digit year-over-year growth, driven by brokerage, PowerLink, and intermodal volumes.

• Customers have adapted to ongoing tariff volatility, with non-discretionary retail and food and beverage sectors remaining resilient.

• Shippers are increasingly seeking providers with scale and high service, leading to more constructive conversations and dedicated wins.

• Gradual improvement continues, with Q2 better than Q1 and overall trends more positive than a year ago.

Segment priorities and growth outlook

• Dedicated and logistics are prioritized for growth, with logistics as the fastest-growing segment and dedicated fleet expansion ongoing.

• One-Way business remains valuable for new customer acquisition and supports nearshoring and cross-border operations.

• Peak season outlook is generally positive, with early customer projections indicating stable or slightly higher volumes and rates.

• Logistics growth is supported by new awards, cross-selling, technology adoption, and project freight, with OpEx and labor costs declining.

• Technology and automation, including AI and no-touch loads, are increasingly integrated into logistics and brokerage operations.

Pricing, capacity, and industry dynamics

• One-Way pricing increased 2.7% year-over-year in Q2, with low single-digit increases expected to persist into 2026 bid season.

• Spot rates remain muted, and capacity attrition is rising due to enforcement of English language proficiency and B1 driver regulations.

• Enforcement actions could remove up to 25,000 drivers annually, impacting smaller carriers more significantly.

• Insurance costs are rising industry-wide, but investments in safety technology and driver quality are reducing accident trends.

• Growth in private fleets during the pandemic has shifted some volume away from for-hire carriers, but private fleet conversions are now increasing.