Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Derek, can you share your view on the supply side over the next 12 months and how you're navigating the bid season while maintaining optionality for upside utilization of the One-Way fleet?
A: Derek J. Leathers - Werner Enterprises, Inc. - Chairman & CEO: On the supply side, we see some encouraging signs but still need capacity to exit the market to achieve balance. We're closer to equilibrium, evidenced by load bookings and customer interactions. Regarding the bid season, we're maintaining a disciplined approach to ensure rates are reinvestable. We're focused on agreements that allow us to honor our commitments and provide shareholder value, even if it leads to some difficult conversations.
Q: Chris, will the operating ratio (OR) improve as we progress through the second quarter?
A: Christopher D. Wikoff - Werner Enterprises, Inc. - Executive VP, Treasurer & CFO: Yes, we expect improvement in the OR as we continue our cost savings program and focus on our long-term strategy. Each month of the quarter has shown improved margins, and we aim to maintain this trend.
Q: Jason, have the productivity gains and miles per truck per week resulted in any significant mix shift in your business?
A: Derek J. Leathers - Werner Enterprises, Inc. - Chairman & CEO: The shift is intentional but not large. We're focusing on what we do well, like Mexico cross-border operations, and engineering our assets for better productivity. This includes leveraging technology to select the most efficient lanes for our assets.
Q: Chris, do you expect improvement in used equipment values in the second half of the year?
A: Christopher D. Wikoff - Werner Enterprises, Inc. - Executive VP, Treasurer & CFO: We anticipate modest improvement in used equipment values as the year progresses. We're maximizing gains through our national fleet sales operation and expect the market to improve, although it's hard to predict exact timing.
Q: Ravi, considering the prolonged down cycle, is it time to implement more tactical cost actions, or would that be counterproductive given the cycle's potential inflection?
A: Derek J. Leathers - Werner Enterprises, Inc. - Chairman & CEO: We're trimming costs prudently where it makes sense without damaging long-term strategic initiatives. Our vertically integrated school network provides elasticity to our fleet, giving us a competitive advantage and confidence in our approach.
Q: Scott, with the fleet guidance down and CapEx guidance barely changed, what are your thoughts? Also, how do you view mid-cycle margins given the current low starting point?
A: Derek J. Leathers - Werner Enterprises, Inc. - Chairman & CEO: The fleet guidance is for the full year, reflecting cautious optimism for the second half. We aim to be prepared for potential growth opportunities in Dedicated. Regarding mid-cycle margins, we reaffirm our long-term guidance, anticipating unique challenges and opportunities in the upcoming cycle due to regulatory and environmental factors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
