Summary of Werner Enterprises FY Conference Call (November 11, 2025) Industry Overview - The freight industry has experienced significant volatility in 2025, with challenges including inventory front-loading, government shutdowns, and regulatory developments [2][3][4] - The current economic environment for freight is described as benign, but there are signs of improvement as the year progresses [3][4] - The peak season for freight is expected to resemble pre-COVID levels, indicating a potential upside compared to the previous year [3][4][6] Company Performance and Strategy - Werner Enterprises has maintained a long-term investment strategy despite the challenging market conditions, focusing on enhancing its portfolio across various service areas [9][10] - The company is well-positioned with a robust fleet setup, which is crucial given the anticipated constrained OEM market in 2026 [10][11] - The tax rebate expected in 2026 is seen as a significant stimulus for the consumer base that Werner serves, potentially benefiting the company's operations [12] Regulatory Environment - Increased enforcement of regulations, particularly regarding English language proficiency (ELP) and non-domicile CDLs, is viewed positively by Werner, as it addresses safety and capacity issues in the industry [14][15][19] - The company has been proactive in maintaining ELP standards during driver onboarding, positioning itself favorably amidst regulatory changes [15][18] Freight Rates and Inflation - The company has experienced five consecutive quarters of modest rate increases, but acknowledges the need for more substantial rate recovery to offset inflationary pressures [22][23] - Inflation has impacted financial returns across the industry, and Werner emphasizes the importance of pursuing higher rates as demand improves [21][22][23] Dedicated Market Insights - Demand in the dedicated market remains strong, and Werner is focused on maintaining fleet size while selectively expanding into true dedicated services [28][29] - The company aims to avoid irregular route freight being misclassified as dedicated, ensuring stability in its dedicated operations [29][30] Used Equipment Market - The used equipment market has shown signs of recovery, with resale values improving significantly from two-year lows to two-year highs [35] - Factors such as tariffs and OEM manufacturing constraints are expected to support used equipment values in the long term [36] Conclusion - Werner Enterprises is optimistic about the future, with a strong portfolio and strategic focus on regulatory compliance, dedicated services, and rate recovery amidst a challenging freight environment [10][12][21][28]