Werner CEO Says Trucking Crackdown Has 'A Long Way To Go' — Shippers Face Double-Digit Rate Resets
Only 3% to 4% of trucking capacity has exited so far, the CEO said, and early 2027 one-way bids need double-digit increases.
Werner Enterprises CEO Derek Leathers said on the company's third-quarter earnings call that federal enforcement against noncompliant truckers is far from finished, with only 3% to 4% of capacity gone so far. Shippers that leaned on cheaper, lower-quality carriers, he said, face a costly reset to market rates.
Fourth inning, by his math
Werner, an Omaha-based truckload carrier with dedicated, one-way and logistics businesses, reported third-quarter revenue of $951 million, up 23%, and adjusted earnings of $0.16 a share.
An analyst from UBS suggested much of the regulatory impact may already have played out. Leathers rejected that, saying earlier call conversations put about 15% of capacity out of alignment with regulations, while 3% to 4% has actually come out.
He likened that pace to the baseball analogy the federal motor carrier regulator has used, entering the fourth inning of its efforts. "There's a long way to go from here," he said. He added that these are executive branch actions, with no new legislation, and that the net now reaches schools, driver training and CDL issuance.
Shippers face a reset
Asked why more shippers have not moved to asset-based carriers, Leathers said they will never say they are moving to quality, because that would imply they used less than quality carriers before. Those carriers, he said, often charged a significant discount to market.
Rates "need to be reset," he said, and the gap between past and future payments is "directly proportionate to the quality of the carriers that they were working with previously."
Chris Neil, Werner's senior vice president of pricing and strategic planning, said about 60% of one-way business should be repriced in the first half of next year, a little less than that effective in the first quarter. Early bids, he said, would probably need to be up double digits on average, though every customer is specific.
Costs and the demand caveat
Leathers said the outlook assumes flat growth of 1% to 2% and is supply driven, so a rebound in consumer demand would be upside.
He also said that third parties handling driver advertising told him rejection rates on driver applications are up 170% since January, as sorting real applicants from noise gets harder. Werner's driver recruiting investments, part of an 18-cent-per-share sequential drag alongside fuel and insurance reserve development, will continue at a measured pace in the fourth quarter, Chief Financial Officer Chris Wikoff said.
Neil's starting point for the early 2027 bid season is double-digit one-way increases, with about 60% of that business repricing in the first half.
Sources
- Werner’s (NASDAQ:WERN) Q3 2026 earnings results: revenue in line with expectations — Yahoo Finance
- 3 Truckload Stocks With Pricing Power as Freight Contracts Reset — Yahoo Finance
- Werner Enterprises Reports Third Quarter 2026 Results — businesswire.com
