Werner notes initial effect of HOS rules

| Monday, January 26, 2004

Werner Enterprises Inc. Chairman and CEO Clarence Werner said freight demand for the first three weeks of January 2004 has been stronger than the weaker demand of the same period a year ago. The company also noted that average miles-per-truck might be down due to new hours-of-service rules.

“I anticipate we will continue to see tightened truckload capacity in 2004 due to a more challenging driver market and the impact of the new HOS rules,” Werner said in a Jan. 23 financial statement. “We are continuing to execute our plan of limited fleet growth and remain focused on improving our operating margin."

On Jan. 4, new HOS rules became effective, representing the most significant changes to the regulations in more than 60 years.

Beginning last October, Werner started testing the HOS rules with many of its drivers using its proprietary Paperless Log System software. The system monitors driver hours on a real-time basis and preplans shipment assignments to drivers based on their available driving hours.

This testing, combined with a driver-training program, helped to prepare the company for the HOS changes, Werner said.

Werner's initial data suggests the average miles per truck for the first two weeks compared with the same two weeks a year ago may be slightly lower due to the HOS changes.

The company said it's minimizing that impact through planning via its paperless system and by working with customers to reduce delay time. Effective January 2004, the company increased its accessorial charges to customers for multiple-stop shipments and its rates for equipment detention. Werner also raised its driver stop pay and is implementing pay changes to drivers for delay time due to equipment detention.