Werner's Profit Slips, But Demand Rises

Stronger freight shipping helped Werner Enterprises hold a fourth-quarter decline in its profit to 3.5 percent, as operating revenue fell 10.4 percent from a year ago.

The truckload carrier reported net income of $18 million for the quarter on $439.6 million in revenue for the quarter. Pricing remained "competitive," the Omaha-based company said, with many shipper contracts coming up for bid in early 2010.

Despite the pressure on its revenue and profit, Werner increased loaded miles per truck 2.5 percent from a year ago and empty miles per trip declined 25 percent.

"Freight shipment volumes continued to firm in fourth quarter," the company said in a statement. "The daily pre-books (ratio of loads to trucks) for the one-way truckload fleets in fourth quarter 2009 held steady from levels achieved in September 2009."

The company said it believes a portion of its new business comes from shippers who are adjusting to the increased risk of relying on "highly leveraged carriers."

"Excess capacity in the truckload sector continues to be supported by lender leniency that is not ultimately sustainable," the company said in a statement. "There are early signs that trucking company failures are beginning to accelerate."

For the full year, Werner's net income last year fell 16.3 percent to $56.6 million. Revenue fell 23 percent to $1.7 billion, compared with $2.2 billion in 2008. Trucking revenue, excluding fuel surcharges, dropped 12 percent to $1.3 billion.

Revenue from fuel surcharges dropped 60.1 percent, from $442.6 million in 2008, when diesel fuel prices hit record highs, to $176.7 million in 2009.

Revenue from non-asset-based value-added services, including intermodal, forwarding, brokerage and freight management, fell 18.9 percent to $222.2 million for the year.

Contact William B. Cassidy at wcassidy@joc.com.