As we quickly wrap up the second quarter, we continue to experience unique freight market challenges. While the transportation industry faces inevitable economic uncertainties, Werner remains cautiously optimistic as we analyze trends and do our best to forecast. Ultimately, it becomes a match of ‘knowns’ versus ‘unknowns’ moving forward. We know the spot market has plateaued, and we do not foresee it regressing further after a delayed spring, especially relative to produce and other weather-impacted products. As we anticipate the market to pick up now in terms of seasonal produce and contractual volumes in general, our exposure to the spot market also continues to decrease. The Federal Reserve will more than likely raise interest rates again at the back half of the year, and it’s unclear when rates will begin decreasing. As for inventory, most of our key customers have had success in reducing inventories these past few quarters, although this isn’t the case across the board.
There isn’t a crystal ball to forecast the future; rather, we will lean into what we can control: customer selection and customer experience. We’re highly deliberate about who we do business with and look for companies with strong financials, bright futures and those who are in it for the long haul. These deeply rooted customer relationships, coupled with strong execution and solid communication, give us great confidence for what’s next.
Setting the Bar High
Our team at Werner stays disciplined in our approach to business operations, while simultaneously raising the bar on quality service and innovative solutions. We’re thrilled to unveil Werner Premium Services to further diversify the industries we serve and generate premium returns and profitable growth. Werner Premium Services’ focus entails:
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- Complex and multifaceted verticals, primarily automotive/OEM, healthcare and pharma and technology.
- Solutions for complexities entailing high value cargo, guaranteed on-time service and non-standard contract terms.
- Expedited team transits and options for unique equipment configurations.
We’re confident about the potential Werner Premium Services unlocks in solving your freight challenges and will keep you updated with more information as this program evolves.
With new service offerings and opportunities for growth, we continue exercising organizational discipline. We are intentional about foregoing new business opportunities requiring us to move freight at break-even margin levels. Instead, we’re leaning into our core areas of differentiation that allow us to put our best foot forward with our customers. Our robust and financially strong Dedicated Service Offering, rapidly growing Werner Final Mile program and highly anticipated new PowerLink Program are areas with untapped potential for growth.
What’s New at Werner
We added to the strength of our executive team by welcoming our new Chief Financial Officer to our team in March, Chris Wikoff. An accomplished and strategic finance leader, Chris has more than 20 years of strong financial leadership and business transformation experience. We look forward to Chris’s evolving integration into our operations and thank his predecessor, John Steele, for his outstanding contributions during his more than 34-year career.
This quarter also unveiled announcements from an innovation and technology standpoint with our Werner DRIVESM strategy serving as the roadmap for our future.
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- We strengthened our Durability by expanding our Power Only initiative to Powerlink. We are eager to provide the resources and solutions carriers need to grow their business. PowerLink helps carriers reduce costs and haul consistent freight, while using our extensive drop and hook network of more than 30,000 trailers.
- We contributed to Innovation and ESG goals through testing and validating the 2023 X15N Cummins natural gas engine in our fleet, and our first two Freightliner eCascadia battery electric vehicles, (BEVs), officially transporting freight in Southern California. We look forward to providing real-world learnings and data from these opportunities.
Our team is here to make a lasting difference now and in the future for our customers, shareholders, associates, professional drivers and the communities we serve. It’s our pleasure to serve you and hopefully, help you make a lasting difference as well. For those who are able to join us at the upcoming Transportation Forum July 16-17, we look forward to seeing you soon!
