of its most recent earnings report, Werner Enterprises Inc. discussed several
issues affecting the trucking industry, including new hours-of-service
regulations that became effective Jan. 4, 2004.
that the new regulations could have an overall negative impact on our average
miles per tractor due to operational changes, primarily resulting from
the new 14-hour on-duty rule. However, for first quarter 2004 compared
to first quarter 2003, average miles per tractor increased 1.3 percent,
even after considering the 13 percent decline in average trip length.”
said those results are attributable to its HOS planning efforts and driver
training, effective use of its paperless log software, improved freight
demand, improved customer shipping and receiving operations, the new 34-hour
restart driving rule, and one more business day in the first quarter of
2004 compared with the first quarter of 2003 (64 business days compared
with 63 business days).
As a result
of the HOS rule changes, Werner increased rates with customers for multiple-stop
shipments and tractor detention in the first quarter of 2004.
very pleased that our medium- to long-haul drivers did not experience a
decline in miles per truck,” the company said. “We also increased driver
pay for multiple stop shipments and unanticipated delays that cause truck
also noted that tractor detention revenue increased only slightly because
many customers made operational changes to improve shipping and receiving
operations, thereby reducing tractor delays.
recruitment, fuel costs remain problematic
for recruiting drivers became increasingly challenging in the first quarter
of 2004, the company said.
two years, the owner-operator driver market has been difficult. In recent
months, the market for recruiting experienced drivers tightened. While
also challenging, the company continues to have success recruiting drivers
from driver training schools,” Werner said.
the company said fuel prices in the first quarter of 2004 were significantly
higher than historical price levels and were 33 cents a gallon higher than
average prices during the first quarters of the four years prior to 2003.
the effect of fluctuating fuel prices, Werner collects fuel surcharges
from its customers. The surcharge programs automatically adjust as fuel
that current fuel price levels in the first half of April continue through
the remainder of second quarter 2004, the company anticipates that fuel
will have a negative impact of approximately five cents per share in second
quarter 2004 compared to second quarter 2003,” the company said.
said it was testing EPA-compliant truck engines, in particular the Caterpillar
ACERT engines and the Detroit Diesel EGR engines. As of March 31, 2004,
approximately 15 percent of the company's fleet consisted of company-owned
trucks with these engines.
the company's testing indicates that the fuel mile per gallon degradation
is a reduction of approximately 0.3 mpg to 0.5 mpg. Also, depreciation
expense is increasing due to the higher cost of the new engines. The company
now plans to maintain its three-year sale/trade cycle for tractors and
does not expect the age of its truck fleet to increase significantly during