Werner Enterprises CEO Derek Leathers told analysts Thursday that ongoing enforcement actions and capacity departures could set the stage for a “more balanced” freight market heading into 2026.
On Thursday, the Omaha-based trucking carrier (NASDAQ: WERN) posted a third-quarter loss of $20.6 million amid a difficult transportation environment and legal settlement costs.
“We are entering the peak season with healthy consumer demand and a strong retail lineup,” Leathers said. “Enforcement on multiple fronts is causing continued capacity attrition, and tariff-related noise appears to be settling in. Ongoing structural improvements in our costs, combined with recent productivity increases, put us in a better position to take advantage as the market levels out further.”
Leathers noted that enforcement actions against non-domiciled and B-1 visa drivers could eliminate a significant number of operators from the market.
“If the desire to enforce the law persists, and I think we would all agree that it does, there will be capacity coming out of this market, and it will be more significant than what we’ve seen so far,” Leathers said.
He added that even if some sidelined drivers returned in response to tight supply and rising fares, it would “pale in comparison” to the number of departures expected due to new enforcement crackdowns and CDL enforcement.
Leathers emphasized that technology automation and AI remain critical to Werner’s cost-savings strategy.
“In logistics, automation is almost fully implemented,” Leathers said. “We’re automating everything we can to remove friction from the process, and you can see how it reflects in our operating expenses.”
He said those systems allow Werner to add volume without proportionally increasing operating costs, while at Truckload Transportation Services (TTS), the digital conversion is still in progress.
“Until you can completely disconnect and convert, it represents a short-term hurdle,” Leathers said, adding that AI is now being implemented in recruiting, billing and collections to “do more with less.”
Leathers said the company’s dedicated portfolio remains strong and most new fleet launches have been deferred until early 2026.
“Our dedicated deployments will be truly dedicated: hard-to-serve, defensible-type fleets, not just a volume disguised as dedicated,” Leathers said. “It’s painful to implement, but once you’re on the other side, the retention value is worth it.”
