Werner sees market inching closer to recovery

Fri, Sep 12, 2025, 12:31 PM 3 min read

Werner Enterprises sounded a little more upbeat about the prospects of a recovery at an investor conference this week. Representatives from the company noted a modest improvement in operations from a year ago but acknowledged fundamentals remain unfavorable as the market moves through a fourth year of a freight recession.

Werner (NASDAQ: WERN) said at Morgan Stanley’s (NYSE: MS) 13th Annual Laguna Conference in Laguna Beach, California that demand is largely in line with typical seasonal trends, with “positive momentum” being experienced in both its dedicated and logistics offerings. Werner’s dedicated fleet is benefitting from recent business wins and exposure to discount retail, where demand for non-discretionary goods requiring constant replenishment is largely unfettered by a changing trade landscape.

The company’s peak season typically hinges on just a couple of large customers. So far, conversations with those shippers are signaling the likelihood of slightly higher volumes and rates this year.

Management from multimodal peer Schneider National (NYSE: SNDR) was less bullish at the conference, noting demand has remained in a “tight band” with little fluctuation during the third quarter. The team said market dynamics remain similar to a year ago but highlighted the potential for a better peak season if some project freight opportunities come together.

Schneider also flagged the probability that intermodal peak season could ramp down sooner than normal this year given a recent inventory pull forward ahead of tariff implementations.

Werner noted a continuation of rate increases in its one-way segment, but said pricing still isn’t where it needs to be to offset higher costs. One-way rate per total mile was 2.7% higher year over year in the second quarter, a fourth straight y/y increase. The company’s guidance calls for no change to a 3% y/y increase to the metric in the third quarter, with similar goal posts established for dedicated revenue per truck per week for full-year 2025.

The company is expecting another challenging bid environment in 2026 as spot rates are still roughly “flattish” with a year ago. It said it needs more than the low- to mid-single-digit rate increases it garnered in the 2025 bid season to meaningfully move the margin needle.

Most freight recoveries are demand-led but Werner highlighted some supply catalysts that could make this cycle a little different.

It believes roughly 25,000 drivers could be removed from the industry in the first year of English proficiency enforcement. Also, it said private fleets are reducing unit counts and some are seeking to sell their assets to Werner, which would then seat and operate them in a dedicated capacity. The company believes the changes will put more freight back into the for-hire market.