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In unusual move, Werner releases update on COVID-19’s impact on its business 

In an announcement that is along the lines of what less-than-truckload (LTL) carriers do virtually every quarter, truckload carrier Werner (NASDAQ: WERN) has released an update on its first-quarter operations.

The release held no major surprises about conditions so far in the quarter. Regarding the recent surge in trucking demand, Werner said its March book in its truckload division this year was comparable to March of last year, “with demand strengthening in the latter two weeks of March 2020.”

But between February and March, demand in the latter month “has not declined sequentially from February as we expected it would, due in part to increased replenishment shipments from many of our core customers.”

However, the size of the one-way truckload fleet is being reduced from its end-2019 level of 3,370 trucks “to adjust to changing market conditions.”

That isn’t a surprise. In its guidance for full-year 2020, the company had projected that growth in its truck division would be negative 3% to plus 1%. It foresaw a “flat to slightly lower truck count in the first half of 2020 due to current market conditions.”

Both rates and miles per truck are sequentially higher in March from January and February of this year, the company said. It did not offer specific figures.

In its guidance for the first half of 2020 issued in early February, Werner said its revenues per total mile would decline 5% to 7% compared to 2019. “RPTM comparisons are expected to remain difficult in the first half of 2020,” the company said then.

Freight demand in January and February was “seasonally normal and slightly lower than the same period a year ago,” Werner said in its update.

In a March 13 research report, Bank of America Merrill Lynch’s transportation research team said of Werner: “Pricing is trending well above targets given the strong demand market, partially offset by reduced miles/tractor given mix impacts from its Dedicated focus.”

As far as the reason for the unusual release, Werner noted “unprecedented times” and that it wanted to discuss “how Werner is proactively navigating the fast-changing landscape.”

Werner’s guidance in February did not change in the update. However, the company said it will be “reevaluating those guidance metrics as we prepare for our first quarter 2020 earnings release” on April 28.

In that guidance, Werner did not project first-half or full-year earnings.

Werner’s Dedicated division is heavily tied to retail. In its update, Werner said demand in the Dedicated division “has remained steady with some above normal demand for store replenishment in March.”

“Customer bid activity remains solid,” Werner said. “However, customer decisions are being delayed as they attempt to get more clarity on the impact of COVID-19.”

Its logistics division, accounting for 20% of total revenues last year, is facing a tougher market, Werner indicated. Brokerage volumes are “challenged” and “lower due to the slowing freight economy.” Gross margins are “challenged” this month “as the cost of capacity increased due to higher replenishment activity.”

The company’s cash stockpile has grown considerably. Werner listed $26.4 million of cash at the end of last year. In its update, it said that had grown to $61 million.

“We have a strong balance sheet and ample liquidity,” Werner said in its update.

Werner’s stock is slightly lower for both the one-month and three-month period — minus 0.04% and minus 1.45%, respectively — and slightly higher for the 12-month period, up 1.45%, according to Barchart. It closed Thursday at $34.84, down 7 cents.


  1. Werner is not giving its employees PPE gear. They said in an article that they were protecting the Essential Employee with a care package. When them employee received the quart size ziplock bag it linteled a travel size Hans sanitizer and wipes. No gloves, No mask, and nothing to protect them on a daily while making them money. Bad company. I am reporting them to the CDC and BBB.

  2. Here’s an interesting article

    March 26 2020

    ECONOMIC WATCH: Covid crisis to take toll on trucking

    BLOOMINGTON, Ind. – The U.S. economy was rocked today by shocking numbers of 3.3 million people filing unemployment claims for the first time, but the worst is still to come for trucking.

    “To put it in perspective, we were seeing somewhere in the neighborhood of 180,000 to 250,000 at any given point in time,” Eric Starks, CEO of industry forecaster FTR said on a webinar today, to discuss how the trucking industry will be impacted by the Covid-19 pandemic. “When we hit the peak in the Great Recession, we were north of 500,000, but we’ve never seen anything like this.”
    FTR has recently reduced its economic forecast, predicting U.S. real GDP will drop 11% in the second quarter.

    This has a huge impact on the marketplace and the transport system specifically,” Starks warned, adding the GDP goods transport sector – or freight in the system – could fall by 24% in the second quarter. “This is huge. There is no getting around this. There are significant impacts in the system as we move into the second quarter.”

    Industrial output is also expected to take it on the chin, falling nearly 15% in the second quarter, as factories are temporarily locked up to deal with the virus.

    Starks said FTR doesn’t expect to see a noticeable rebound until the fourth quarter, and freight won’t return to the peak levels seen in 2019 until mid-2021.

    “We are talking somewhere between a year, to a year-and-a-half recovery just to get back to the levels we were at in the first quarter of 2019,” Starks warned. “We are going to be having a very difficult time as we move through the summer. What we don’t know is how long does the virus stick around? All indications we see right now say this is not a quick turn.”

    What’s in store for trucking providers?

    “Trucking is going through something it has never experienced before,” said Avery Vise, FTR’s vice-president of trucking, likening the situation to a catastrophic hurricane, but one that is nationwide in scope and with no set end date.

    So far, there have been some benefits to trucking. Refrigerated load availability spiked, and spot market rates for dry van and reefer loads moved sharply higher over the past couple weeks. But non-essential freight has already felt an impact, with flatbed and specialized load availability on the decline.

    Vise predicted the retail restocking efforts driving a spike in dry van and reefer freight “could go away quickly.”
    “The spot market itself may stay elevated for a while, but clearly overall freight volumes are going to begin to fade,” Vise warned, calling for overall truck loadings to decrease 4% this year compared to a pre-crisis prediction of a modest 1.3% gain.

    Flatbed, bulk, and dump segments will be hit hardest, with loadings expected to decrease from 6-9%, barring an infrastructure bill that would kickstart construction. Refrigerated loads, however, should finish the year up slightly compared to 2019, FTR predicts.

    “There will be people who will make more money on unemployment than at their jobs, especially in the near-term.” Avery Vise, FTR vice-president of trucking

    Capacity utilization is likely to slide as drivers exit the industry. As available mileage dwindles and government supports workers with substantial payments, some drivers may opt to stay home, Vise noted.

    “There will be people who will make more money on unemployment than at their jobs, especially in the near-term.”

    Carrier bankruptcies are likely to continue, but “We think the loss of freight demand will outpace the loss of capacity,” Vise said.
    Underlying issues driving an increase in carrier bankruptcies before the crisis – such as rising insurance costs – are not likely to abate, putting further pressure on weak performers.

    FTR doesn’t expect the U.S. government bailout to significantly impact the freight picture, though it could mean consumers are in better shape to resume spending when the crisis passes.
    “This is a rescue plan, not a stimulus plan,” Vise pointed out.

    FTR’s forecast assumes consumer spending will drop for a period of time.

    “When we look at what happened with the latest data out this morning, and seeing over three million people applying for (unemployment) benefits, that suggests there is additional downside pressure on our numbers in the second quarter,” Starks said. If companies are able to keep their workforces in place, the economy should rebound more quickly when the virus is contained.
    The effect on equipment demand

    FTR has reduced its equipment demand forecast to recession levels. It’s anticipating North American Class 8 production of 150,000 units this year, and predicts the second quarter will kick off the worst three months of Class 8 production seen since the Great Recession.

    Its trailer production forecast has similarly been cut to 155,000 units, explained Don Ake, FTR’s vice-president, commercial vehicles. The medium-duty market is not immune to the downturn, either.

    Higher cancellations can make matters worse for truck manufacturers.

    “We are looking for elevated cancellations in March, and we would expect order levels in the truck and trailer markets to be below 10,000 units at least for the next several months,” Ake said, noting fleets began showing “anxiety” about the impact of the virus through their ordering activity as early as late February.

    OEMs may also struggle to get plants back up and running, following temporary closures over the past couple weeks, Ake cautioned.

    “Two things are going to hurt them in the second quarter: a lack of orders to build, and also a disruption to society that’s going on,” Ake said, noting it may be difficult to get employees back on the job. “Another factor that comes into play is how well the supplier base can snap back. We’re not just talking about the U.S. supplier base, we’re talking worldwide. We have heard reports it’s been very difficult for a few weeks to get any supplies out of India.”

    End quote.

  3. They are purging drivers again, using a program to track speed and then using the information to fire drivers after they said multiple times over the Qualcomm and quarterly safety meetings that they would not be terminated.
    So much for Werner cares, more like cares to lie to the drivers.
    After 19 + years with zero csa points and a clean moter vehicle record a coward had someone else tell me I was no longer needed, and a few weeks after I asked my account supervisor why I was still getting the same pay as a driver with 2 years experience, the lame excuse was the contract for the dedicated account.
    No, its because Werner enterprise does not care about it’s long term employees.
    I never received any cost of living raise, unlike the corporate staff at HQ who don’t make the company a dime.
    No respect because Werner does not care.

  4. You have the nerve to advertise that kind of increase and you not follow JB Hunt’s lead to give your drivers a bonus. Werner Enterprises would not exist if it weren’t for your truck drivers..I really hope you take this to heart. C.L. Werner would never ignor his drivers.

    1. You are so right.
      The corporate HQ is full of people who think their degrees in logistics and management makes them more valuable than the drivers who deliver the goods.
      But they are too stupid to realize Werner enterprise is a trucking company and makes its money when the freight is delivered, not when some desk jockey signs a contract.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.