OMAHA, Neb.– Werner Enterprises’ first quarter results showed financial hits in all sectors.
“Freight conditions remained challenging in the first quarter with persistent excess industry capacity driving broad pricing pressure combined with adverse weather and one-off expense headwinds. Despite these market challenges, we focused on controlling the controllables,” said Derek J. Leathers, Werner’s chairman and CEO. “We continued a favorable production trend in One-Way, grew revenue per truck in dedicated and realized outsized volume growth in our power only offering within Logistics. We generated solid cash flow, executed on additional cost takeout, reduced our debt and repurchased shares during the quarter.
Total revenue for the quarter rang in at $769.1 million, a decrease of $63.6 million compared to the prior year quarter, according to a company news release.
This was due to a $37.2 million, or 6%, decrease in truckload transportation services (TTS) revenues and a decline in logistics revenues of $26.2 million, or 11%, Werner officials noted.
A portion of the TTS revenue decline was due to $15.3 million lower fuel surcharge revenues.
Net of trucking fuel surcharge revenues, consolidated total revenues decreased $48.3 million, or 6%, during the quarter.
TTS operating income decreased $30.1 million, and TTS adjusted operating income decreased $31.0 million.
Logistics had an operating loss of $2.3 million, a decrease of $7.3 million, and Logistics had an adjusted operating loss of $1.2 million, a decrease of $7.5 million. Corporate and other (including driving schools) operating income decreased $0.4 million.
In the truckload sector, Werner reported revenues of $551.1 million, a decrease $37.2 million year-over-year.
Operating income of $20.8 million decreased $30.1 million year-over-year. Average segment trucks in service totaled 7,935, a decrease of 626 trucks year-over-year, or 7%. Dedicated unit trucks at quarter end totaled 5,080, or 65% of the total TTS segment fleet, compared to 5,345 trucks, or 63%, a year ago. Average revenues per truck per week, net of fuel surcharge, increased 2.8% for TTS and increased 1.3% for dedicated.
During the first quarter of 2024, dedicated experienced net reduction in average trucks, down 4.1% year-over-year and down 1.7% sequentially.
Dedicated average revenues per truck per week, net of fuel surcharge, increased 1.3% year-over-year, and despite a highly competitive environment and isolated fleet losses, pipeline opportunities remain healthy and client retention remains strong at more than 93%.
One-way truckload volume during first quarter 2024 was steady and seasonally consistent, but revenues remained challenged by ongoing rate pressure.
One-way revenues per total mile was down 5.1% and fleet size was smaller year-over-year (down 12.7%), offset with the fourth consecutive quarter of higher total miles per truck per week (up 11.3%). As a result, One-Way Truckload miles were down only 2.8% despite a more sizable fleet reduction year-over-year.
While we cannot control the macro,” Leathers said, “we are focused on our long-term strategy and structural improvements to position Werner well for capitalizing on a tighter market.”
Since retiring from a career as an outdoor recreation professional from the State of Arkansas, Kris Rutherford has worked as a freelance writer and, with his wife, owns and publishes a small Northeast Texas newspaper, The Roxton Progress. Kris has worked as a ghostwriter and editor and has authored seven books of his own. He became interested in the trucking industry as a child in the 1970s when his family traveled the interstates twice a year between their home in Maine and their native Texas. He has been a classic country music enthusiast since the age of nine when he developed a special interest in trucking songs.
