Werner Enterprises Profile
Werner Enterprises, Inc. operates as a transportation and logistics company.
The company engages primarily in transporting truckload shipments of general commodities in both interstate and intrastate commerce.
Segments
The company operate through two segments - TTS and Werner Logistics.
TTS
TTS segment consists of Dedicated and One-Way Truckload. Dedicated had 5,265 trucks as of December 31, 2023. The company provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers. One-Way Truckload had 2,735 trucks as of December 31, 2023 and includes the following operating fleets the medium-to-long-haul van (Van) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; the expedited (Expedited) fleet provides time-sensitive truckload services utilizing driver teams; the regional short-haul (Regional) fleet provides comparable truckload van service within geographic regions across the United States; and the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers. The company's TTS fleets operate throughout the 48 contiguous U.S. states pursuant to operating authority, both common and contract, granted by U.S. Department of Transportation (DOT) and pursuant to intrastate authority granted by various U.S. states. The company also has authority to operate in several provinces of Canada and to provide through-trailer service into and out of Mexico. The principal types of freight the company transports include retail store merchandise, consumer products, food and beverage products and manufactured products. The company focuses on transporting consumer nondurable products that generally ship more consistently throughout the year and whose volumes are generally more stable during a slowdown in the economy. As of December 31, 2023, the company's Truckload Transportation Services (TTS) segment had a fleet of 8,000 trucks, of which 7,740 were company-operated and 260 were owned and operated by independent contractors.
Werner Logistics
Werner Logistics segment is a non-asset-based transportation and logistics provider. Werner Logistics provides services throughout North America and generates the majority of the company's non-trucking revenues through three operating units. These three Werner Logistics operating units are as follows Truckload Logistics, which uses contracted carriers to complete shipments for brokerage customers and freight management customers for which the company offers a full range of single-source logistics management services and solutions; the intermodal (Intermodal) unit offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; and Werner Final Mile (Final Mile) offers residential and commercial deliveries of large or heavy items using third-party agents, independent contractors, and company employees with two-person delivery teams operating a liftgate straight truck. The company's Werner Logistics division operated an additional 35 drayage company trucks and 115 company delivery trucks at the end of 2023. The company also provides logistics services through its Werner Logistics segment.
Marketing and Operations
The company's business philosophy is to provide superior on-time customer service at a significant value for its customers. To accomplish this, the company operates premium modern tractors and trailers. The company continually develops its business processes and technology to improve customer service and driver retention. The company focuses on customers who value the broad geographic coverage, diversified truck and logistics services, equipment capacity, technology, customized services and flexibility available from a large, financially-stable transportation and logistics provider.
The company operates in the truckload and logistics sectors of the transportation industry. The company's TTS segment provides specialized services to customers based on each customer's trailer needs (such as van and temperature-controlled trailers), geographic area (regional and medium-to-long-haul van, including transport throughout Mexico and Canada), time-sensitive shipments (expedited) or conversion of their private fleet to it (dedicated). In 2023, TTS segment revenues accounted for 70% of total operating revenues, Werner Logistics revenues accounted for 28% of total operating revenues, and the remaining 2% was recorded in non-reportable segments. The company's Werner Logistics segment manages the transportation and logistics requirements for customers, providing customers with additional sources of truck capacity, alternative modes of transportation, and systems analysis to optimize transportation needs. Werner Logistics services include truck brokerage, freight management, intermodal transport, and final mile. Werner Logistics is highly dependent on qualified associates, information systems and the services of qualified third-party capacity providers.
The company has a diversified freight base but are dependent on a relatively small number of customers for a significant portion of its revenues. During 2023, the company's largest 5, 10, 25 and 50 customers comprised 35%, 48%, 65% and 78% of its revenues, respectively. Revenues generated by Dollar General are reported in both of the company's reportable operating segments. The industry groups of its top 50 customers are 57% retail and consumer products, 20% food and beverage, 15% manufacturing/industrial, and 8% logistics and other.
The company is operating under the jurisdiction of the U.S. Department of Transportation, similar governmental transportation agencies in the foreign countries in which it operates and various the U.S. state regulatory authorities. The company's ten largest customers consist of 48% of its revenues for the year ended December 31, 2023. The company's largest customer, Dollar General, accounted for 10% of its total revenues in 2023. Revenues generated by Dollar General are reported in both of the company's reportable operating segments. Dollar General accounted for 10% of the company's accounts receivable, trade balance as of December 31, 2023.
The company and independent contractor tractors are equipped with communication devices. These devices enable the company and its drivers to conduct two-way communication using standardized and freeform messages. This technology also allows the company to plan and monitor shipment progress. The company automatically monitors truck movement and obtains specific data on the location of trucks at fixed intervals. Using the real-time global positioning data obtained from the devices, the company has advanced application systems to improve customer and driver service. Examples of such application systems include an electronic logging system which records and monitors drivers' hours of service and integrates with its information systems to pre-plan driver shipment assignments based on real-time available driving hours; software that pre-plans shipments drivers can trade enroute to meet driver home-time needs without compromising on-time delivery schedules; and automated possible late load tracking that informs the operations department of trucks possibly operating behind schedule, allowing it to take preventive measures to avoid late deliveries.
Seasonality
In the trucking industry, revenues generally follow a seasonal pattern. Peak freight demand has historically occurred in the months of September, October and November. After the December holiday season and during the remaining winter months, the company's freight volumes are typically lower because some customers reduce shipment levels. The company's operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased cold weather-related maintenance costs of revenue equipment and increased insurance and claims costs attributed to adverse winter weather conditions. The company attempts to minimize the impact of seasonality through its marketing program by seeking additional freight from certain customers during traditionally slower shipping periods and focusing on transporting consumer nondurable products.
Revenue Equipment
As of December 31, 2023, the company operated 7,740 company tractors and 260 tractors owned by independent contractors in its TTS segment. The company's Werner Logistics segment operated an additional 35 drayage company tractors and 115 company delivery trucks at the end of 2023. The TTS segment company tractors were primarily manufactured by International (a Navistar company), Freightliner (a Daimler company), Kenworth and Peterbilt (both divisions of PACCAR). The Werner Final Mile company delivery trucks are primarily manufactured by Hino, International, and Freightliner. The company adheres to a comprehensive maintenance program for both company tractors and trailers. The company inspects independent contractor tractors prior to acceptance for compliance with Werner and DOT operational and safety requirements. The company periodically inspects these tractors, in a manner similar to company tractor inspections, to monitor continued compliance. The company also regulates the vehicle speed of company trucks to improve safety and fuel efficiency.
The average age of the company's TTS segment company truck fleet was 2.1 years as of December 31, 2023. The average age of the company's trailer fleet was 4.9 years as of December 31, 2023. The company's trucks are equipped with tablet-based telematics, and nearly all of its company-owned trucks have collision mitigation safety systems and automated manual transmissions.
The company operated 30,810 trailers at December 31, 2023, consisted of dry vans, flatbeds, temperature-controlled, and other specialized trailers. Most of the company-owned trailers were manufactured by Wabash National Corporation and Great Dane. Nearly all of the company's dry van trailer fleet consisted of 53-foot composite trailers, and it also provides other trailer lengths to meet the specialized needs of certain customers. Substantially all of the company's trailers have satellite tracking devices. The company's wholly-owned subsidiary, Werner Fleet Sales, sells its used trucks and trailers.
Fuel
In 2023, the company purchased nearly all of its fuel from a predetermined network of fuel truck stops throughout the United States comprised mostly of three large fuel truck stop chains. The company's customer fuel surcharge reimbursement programs generally enable it to recover from its customers a majority.
Regulations
As a for-hire motor carrier, the company is subject to federal, state, local, and international laws and regulations and is regulated by various federal, state, and local agencies including DOT, Federal Motor Carrier Safety Administration (FMCSA), the U.S. Department of Homeland Security, the U.S. Environmental Protection Agency (EPA), among others.
The company's operations are subject to applicable federal, state, and local environmental laws and regulations, many of which are implemented by the U.S. Environmental Protection Agency (EPA) and similar state regulatory agencies. These laws and regulations govern the management of hazardous wastes, discharge of pollutants into the air and surface and underground waters and disposal of certain substances.
History
Werner Enterprises, Inc. was founded in 1956 by Clarence L. Werner. The company was incorporated in the state of Nebraska in 1982.
