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What changed in WERNER ENTERPRISES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WERNER ENTERPRISES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+253 added−267 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-26)

Top changes in WERNER ENTERPRISES INC's 2024 10-K

253 paragraphs added · 267 removed · 202 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

54 edited+15 added−19 removed35 unchanged
Biggest changeDiversity contributes to innovation and connects us to the many communities we serve. We embrace these values as we move toward an increasingly inclusive culture where every associate feels empowered to bring their whole self to Werner. Through our Inclusion, Diversity, Equity, Accountability & Learning (IDEAL) Council, we are proud to support 11 Associate Resource Groups (“ARGs”).
Biggest changeInclusion: At Werner, we embrace inclusion as a core value and support and encourage the different perspectives of our associates, our customers and our suppliers. Inclusion contributes to innovation, connects us to the many communities we serve, and empowers every associate to bring their whole self to Werner.
The Infrastructure Investment and Jobs Act of 2021 required the FMCSA to establish a pilot program to allow persons ages 18, 19, and 20 to operate commercial motor vehicles in interstate commerce.
The Infrastructure Investment and Jobs Act of 2021 required FMCSA to establish a pilot program to allow persons ages 18, 19, and 20 to operate commercial motor vehicles in interstate commerce.
Regulations As a for-hire motor carrier, Werner is subject to federal, state, local, and international laws and regulations and is regulated by various federal, state, and local agencies including DOT, Federal Motor Carrier Safety Administration (“FMCSA”), U.S. Department of Homeland Security, the U.S. Environmental Protection Agency (“EPA”), among others.
Regulations As a for-hire motor carrier, Werner is subject to federal, state, local, and international laws and regulations and is regulated by various federal, state, and local agencies including DOT, Federal Motor Carrier Safety Administration (“FMCSA”), U.S. Department of Homeland Security, and U.S. Environmental Protection Agency (“EPA”), among others.
Our untethered, tablet-based telematics solution implemented in 2020 provides Werner drivers with a more efficient experience through smart workflow, best-in-class navigation, improved safety features and reduced manual data entry. While the trucking industry suffers from high driver turnover rates, we are proud that our efforts in recent years have continued to have positive results on our driver retention.
Our untethered, tablet-based telematics solution provides Werner drivers with a more efficient experience through smart workflow, best-in-class navigation, improved safety features and reduced manual data entry. While the trucking industry suffers from high driver turnover rates, we are proud that our efforts in recent years have continued to have positive results on our driver retention.
As of December 31, 2023, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. We maintain aboveground and underground fuel storage tanks at some of our terminals. Leakage or damage to these facilities could expose us to environmental clean-up costs. The tanks are routinely inspected to help prevent and detect such problems.
As of December 31, 2024, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. We maintain aboveground and underground fuel storage tanks at some of our terminals. Leakage or damage to these facilities could expose us to environmental clean-up costs. The tanks are routinely inspected to help prevent and detect such problems.
Fuel In 2023, we purchased nearly all of our fuel from a predetermined network of fuel truck stops throughout the United States comprised mostly of three large fuel truck stop chains. We negotiate discounted pricing based on historical purchase volumes with these fuel truck stop chains and other factors.
Fuel In 2024, we purchased nearly all of our fuel from a predetermined network of fuel truck stops throughout the United States comprised mostly of three large fuel truck stop chains. We negotiate discounted pricing based on historical purchase volumes with these fuel truck stop chains and other factors.
One-Way Truckload had 2,735 trucks as of December 31, 2023 and includes the following operating fleets: (i) the medium-to-long-haul van (“Van”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; (ii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams; (iii) the regional short-haul (“Regional”) fleet provides comparable truckload van service within geographic regions across the United States; and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers.
One-Way Truckload had 2,610 trucks as of December 31, 2024 and includes the following operating fleets: (i) the medium-to-long-haul van (“Van”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; (ii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams; (iii) the regional short-haul (“Regional”) fleet provides comparable truckload van service within geographic regions across the United States; and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers.
We are committed to supporting global efforts to reduce carbon emissions and we continue to update our fleet of tractors to provide energy-efficient transportation options for our customers, including investing in and testing alternative fuels, advanced equipment technologies, and additional fleet enhancements.
We are committed to supporting global efforts to reduce carbon emissions and we continue to update our fleet of tractors to provide energy-efficient transportation options for our customers, including investing in and testing alternative fuels, utilizing advanced equipment technologies, and making additional fleet enhancements.
On the website, we make certain investor information available free of charge, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, stock ownership reports filed under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
On the website, we make certain investor information available free of charge, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, stock ownership reports filed under Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any amendments to such 6 Table of Contents reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
We have historically grown through organic growth, and more recently through a combination of organic growth and four business acquisitions (discussed below). Our business acquisitions expanded our fleet size, customer base, geographic market presence, and network of operational facilities.
We have historically grown organically, and more recently through a combination of organic growth and business acquisitions (discussed below). Our business acquisitions expanded our fleet size, customer base, geographic market presence, and network of operational facilities.
Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity and, to some degree, on freight rates alone. We believe that few other truckload carriers have greater financial resources, own more 6 Table of Contents equipment or carry a larger volume of freight than us.
Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity and, to some degree, on freight rates alone. We believe that few other truckload carriers have greater financial resources, own more equipment or carry a larger volume of freight than us.
Werner Fleet Sales has been in business since 1992 and operates in seven locations. At times, we may also trade used trucks to original equipment manufacturers when purchasing new trucks.
Werner Fleet Sales has been in business since 1992 and operates in eight locations. At times, we may also trade used trucks to original equipment manufacturers when purchasing new trucks.
We believe that a declining number of, and increased competition for, driver training school graduates, aging truck driver demographics and increased truck safety regulations have tightened driver supply. At Werner, we continue to take actions to strengthen our driver recruiting and retention to make Werner a preferred choice for the best drivers.
We believe that a declining 3 Table of Contents number of, and increased competition for, driver training school graduates, aging truck driver demographics and increased truck safety regulations have tightened driver supply. At Werner, we continue to take actions to strengthen our driver recruiting and retention to make Werner a preferred choice for the best drivers.
Shortages of fuel, increases in fuel prices and rationing of petroleum products can have a material adverse effect on our operations and profitability. Our customer fuel surcharge reimbursement programs generally enable us to recover from our customers a majority, but not all, of higher fuel prices compared to normalized average fuel prices.
Shortages of fuel, increases in fuel prices and rationing of petroleum products can have a material adverse effect on our operations and profitability. Our customer fuel surcharge reimbursement programs generally enable us to recover from our 4 Table of Contents customers a majority, but not all, of higher fuel prices compared to normalized average fuel prices.
We currently maintain a late-model truck fleet to take advantage of the latest technologies to reduce fuel consumption and emissions. Our future environmental goals include doubling intermodal usage by 2030, thereby further reducing emissions, and by 2035, reducing greenhouse gas emissions by 55% compared to a 2020 baseline.
We currently maintain a late-model truck fleet to take advantage of the latest technologies to reduce fuel consumption and emissions. Our future environmental goals include doubling intermodal usage by 2030, thereby further reducing emissions, and by 2035, reducing carbon emissions by 55% compared to a 2020 baseline.
The TTS segment company tractors were primarily manufactured by International (a Navistar company), Freightliner (a Daimler company), Kenworth and Peterbilt (both divisions of PACCAR). The Werner Final Mile company delivery trucks are primarily manufactured by Hino, International, and Freightliner. We adhere to a comprehensive maintenance 4 Table of Contents program for both company tractors and trailers.
The TTS segment company tractors were primarily manufactured by Freightliner (a Daimler company), International (a Navistar company), and Kenworth and Peterbilt (both divisions of PACCAR). The Final Mile delivery trucks are primarily manufactured by Hino, International, and Freightliner. We adhere to a comprehensive maintenance program for both company tractors and trailers.
Revenues generated by Dollar General are reported in both of our reportable operating segments. The industry groups of our top 50 customers are 57% retail and consumer products, 20% food and beverage, 15% manufacturing/industrial, and 8% logistics and other. Many of our One-Way Truckload customer contracts may be terminated upon 30 days’ notice, which is common in the truckload industry.
Revenues generated by Dollar General are reported in both of our reportable operating segments. The industry groups of our top 50 customers are 62% retail and consumer products, 14% food and beverage, 16% manufacturing/industrial, and 8% logistics and other. Many of our One-Way Truckload customer contracts may be terminated upon 30 days’ notice, which is common in the truckload industry.
Our trucks are equipped with tablet-based telematics, and nearly all of our company-owned trucks have collision mitigation safety systems and automated manual transmissions. We operated 30,810 trailers at December 31, 2023, comprised of dry vans, flatbeds, temperature-controlled, and other specialized trailers. Most of our company-owned trailers were manufactured by Wabash National Corporation and Great Dane.
Our trucks are equipped with tablet-based telematics, and nearly all of our company-owned trucks have collision mitigation safety systems and automated manual transmissions. We operated 28,665 trailers at December 31, 2024, comprised of dry vans, flatbeds, temperature-controlled, and other specialized trailers. Most of our company-owned trailers were manufactured by Wabash National Corporation and Great Dane.
Independent Contractors: We also recognize that independent contractors complement our company-employed drivers. As of December 31, 2023, we had 260 independent contractors. Independent contractors supply their own tractors and drivers and are responsible for their operating expenses. Independent contractors also provide us with another source of drivers to support our fleet.
Independent Contractors: We also recognize that independent contractors complement our company-employed drivers. As of December 31, 2024, we had 295 independent contractors. Independent contractors supply their own tractors and drivers and are responsible for their operating expenses. They provide us with another source of drivers to support our fleet.
The average age of our TTS segment company truck fleet was 2.1 years at December 31, 2023, compared to 2.3 years at December 31, 2022. The average age of our trailer fleet was 4.9 years at December 31, 2023, compared to 5.0 years at December 31, 2022.
The average age of our TTS segment company truck fleet was 2.1 years at December 31, 2024 and 2023. The average age of our trailer fleet was 5.3 years at December 31, 2024, compared to 4.9 years at December 31, 2023.
We have a diversified freight base but are dependent on a relatively small number of customers for a significant portion of our revenues. During 2023, our largest 5, 10, 25 and 50 customers comprised 35%, 48%, 65% and 78% of our revenues, respectively. Our largest customer, Dollar General, accounted for 10% of our total revenues in 2023.
We have a diversified freight base but are dependent on a relatively small number of customers for a significant portion of our revenues. During 2024, our largest 5, 10, 25 and 50 customers comprised 36%, 48%, 65% and 77% of our revenues, respectively. Our largest customer, Dollar General, accounted for 11% of our total revenues in 2024.
Dedicated had 5,265 trucks as of December 31, 2023 and provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers.
Dedicated had 4,840 trucks as of December 31, 2024 and provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers.
Freight brokerage and truckload revenues generated by ReedTMS are reported in our Werner Logistics segment and in Dedicated within our TTS segment, respectively. On October 1, 2022, we acquired 100% of the equity interests in FAB9, Inc., doing business as Baylor Trucking, Inc. (“Baylor”). Baylor, based in Milan, Indiana, operates in the east central and south central United States.
On October 1, 2022, we acquired 100% of the equity interests in FAB9, Inc., doing business as Baylor Trucking, Inc. (“Baylor”). Baylor, based in Milan, Indiana, operates in the east central and south central United States. Revenues generated by Baylor are reported in One-Way Truckload within our TTS segment.
To accomplish this, we operate premium modern tractors and trailers. This equipment has fewer mechanical and maintenance issues and helps attract and retain experienced drivers. We continually develop our business processes and technology to improve customer service and driver retention.
This equipment has fewer mechanical and maintenance issues and helps attract and retain experienced drivers. We continually develop our business processes and technology to improve customer service and driver retention.
Human Capital Resources Employee Count: As of December 31, 2023, we employed 9,929 drivers; 707 mechanics and maintenance associates for the trucking operation; 1,587 office associates for the trucking operation; and 1,586 associates for Werner Logistics, international, driving schools and other non-trucking operations. Most of our associates are based in the U.S., with about 1% based in Mexico and Canada.
Human Capital Resources Employee Count: As of December 31, 2024, we employed 9,287 drivers; 696 mechanics and maintenance associates for the trucking operation; 1,552 office associates for the trucking operation; and 1,361 associates for Werner Logistics, international, driving schools and other non-trucking operations. Most of our associates are based in the U.S., with about 1% based in Mexico and Canada.
In 1998, we began a successful pilot program and subsequently became the first trucking company in the United States to receive an exemption from DOT to use a global positioning-based paperless log system as an alternative to the paper logbooks traditionally used by truck drivers to track their daily work activities.
We were the first trucking company in the United States to receive an exemption from DOT to use a global positioning-based paperless log system as an alternative to the paper logbooks traditionally used by truck drivers to track their daily work activities.
We have longer-term Dedicated customer contracts, most of which are two to five years in length (including some contracts with annual evergreen clauses) and generally may be terminated by either party typically upon a notice period following the 2 Table of Contents expiration of the contract’s first year.
We have longer-term Dedicated customer contracts, most of which are two to five years in length (including some contracts with annual evergreen clauses) and generally may be terminated by either party typically upon a notice period following the expiration of the contract’s first year. We typically renegotiate rates with our customers for these Dedicated contracts on an annual basis.
In 2023, TTS segment revenues accounted for 70% of total operating revenues, Werner Logistics revenues accounted for 28% of total operating revenues, and the remaining 2% was recorded in non-reportable segments.
In 2024, TTS segment revenues accounted for 71% of total operating revenues, Werner Logistics revenues accounted for 27% of total operating revenues, and the remaining 2% was recorded in non-reportable segments.
Professional Driver Recruitment: We recognize that our professional driver workforce is one of our most valuable assets. Most of our professional drivers are compensated on a per-mile basis. For most company-employed drivers, the rate per mile generally increases with the drivers’ length of service.
We are widely recognized as a transportation leader in military hiring with veterans and veteran spouses. Professional Driver Recruitment: We recognize that our professional driver workforce is one of our most valuable assets. Most of our professional drivers are compensated on a per-mile basis. For most company-employed drivers, the rate per mile generally increases with the drivers’ length of service.
This information is included on our website as soon as reasonably practicable after we electronically file or furnish such materials to the U.S. Securities and Exchange Commission (“SEC”).
This information is included on our website as soon as reasonably practicable after we electronically file or furnish such materials to the SEC.
Revenue Equipment As of December 31, 2023, we operated 7,740 company tractors and 260 tractors owned by independent contractors in our TTS segment. Our Werner Logistics segment operated an additional 35 drayage company tractors and 115 company delivery trucks at the end of 2023.
Revenue Equipment As of December 31, 2024, we operated 7,155 company tractors and 295 tractors owned by independent contractors in our TTS segment. Our Werner Logistics segment operated an additional 18 drayage company tractors and 134 Final Mile delivery trucks at the end of 2024.
At the end of 2023, our Truckload Transportation Services (“TTS”) segment had a fleet of 8,000 trucks, of which 7,740 were company-operated and 260 were owned and operated by independent contractors. Our Werner Logistics division operated an additional 35 drayage company trucks and 115 company delivery trucks at the end of 2023.
At the end of 2024, our Truckload Transportation Services (“TTS”) segment had a fleet of 7,450 trucks, of which 7,155 were company-operated and 295 were owned and operated by independent contractors. Our Werner Logistics division operated an additional 18 drayage company trucks and 134 Final Mile delivery trucks at the end of 2024.
A conditional or unsatisfactory safety rating could adversely impact Werner’s business, as some of our customer contracts require a satisfactory rating. Werner must also comply with federal, state, and international regulations which govern equipment weight and dimensions. FMCSA’s Compliance, Safety, Accountability (“CSA”) safety initiative monitors the safety performance of motor carriers.
Werner maintains a satisfactory safety rating, which is the highest available rating of the three safety ratings given by FMCSA. A conditional or unsatisfactory safety rating could adversely impact Werner’s business, as some of our customer contracts require a satisfactory rating. Werner must also comply with federal, state, and international regulations which govern equipment weight and dimensions.
Talent Development: We utilize recent driver training school graduates as a significant source of new drivers. These drivers have completed a training program at a driver training school (including those owned and operated by Werner) and hold a commercial driver’s license (“CDL”).
Talent Development: We utilize recent driver training school graduates as a source of new drivers. These drivers have completed a training program at a driver training school (including those owned and operated by Werner) and hold a commercial driver’s license. They continue to gain industry experience through our career track program by partnering with a Werner-certified leader.
The rate was increased from 25% on January 1, 2020 in response to the 2018 FMCSA Drug and Alcohol Testing Survey, which reported an increase to 1.0% of the random testing positive rate for controlled substances. The minimum annual percentage rate for random alcohol testing remains at 10% for 2024.
This rate was increased from 25% to 50% on January 1, 2020, following the 2018 FMCSA Drug and Alcohol Testing Survey, which reported a positive test rate exceeding 1% for controlled substances industry wide. The minimum annual percentage rate for random alcohol testing remains at 10% for 2025.
Our operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased cold weather-related maintenance costs of revenue equipment and increased insurance and claims costs attributed to adverse winter weather conditions.
After the December holiday season and during the remaining winter months, our freight volumes are typically lower because some customers reduce shipment levels. Our operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased cold weather-related maintenance costs of revenue equipment and increased insurance and claims costs attributed to adverse winter weather conditions.
We automatically monitor truck movement and obtain specific data on the location of trucks at fixed intervals. Using the real-time global positioning data obtained from the devices, we have advanced application systems to improve customer and driver service.
Using the real-time global positioning data obtained from the devices, we have advanced application systems to improve customer and driver service.
The FAST Act also instructed FMCSA to study 5 Table of Contents the accuracy of CSA and SMS data and issue a corrective action plan. The FMCSA provided a report to Congress in 2020 outlining the changes it may make to the CSA program; however, it remains unclear if, when, and to what extent any such changes will occur.
The FAST Act also instructed FMCSA to study the accuracy of CSA and SMS data and issue a corrective action plan. FMCSA provided a report to Congress in 2020 outlining the changes it may make to the CSA program and published subsequent notices and information about potential changes to the SMS.
We typically renegotiate rates with our customers for these Dedicated contracts on an annual basis. Our company and independent contractor tractors are equipped with communication devices. These devices enable us and our drivers to conduct two-way communication using standardized and freeform messages. This technology also allows us to plan and monitor shipment progress.
Our company and independent contractor tractors are equipped with communication devices. These devices enable us and our drivers to conduct two-way communication using standardized and freeform messages. This technology also allows us to plan and monitor shipment progress. We automatically monitor truck movement and obtain specific data on the location of trucks at fixed intervals.
Approximately 5% of our truck miles in 2023 were in the state of California. Our operations are subject to applicable federal, state, and local environmental laws and regulations, many of which are implemented by the EPA and similar state regulatory agencies.
Werner is monitoring ongoing litigation to invalidate SB 253 and SB 261. Our operations are subject to applicable federal, state, and local environmental laws and regulations, many of which are implemented by the EPA and similar state regulatory agencies.
DOT and an agency within DOT, the FMCSA, generally govern matters such as safety requirements and compliance, registration to engage in motor carrier operations, drivers’ hours of service (“HOS”), and certain mergers, consolidations, and acquisitions. Werner maintains a satisfactory safety rating, which is the highest available rating of the three safety ratings given by FMCSA.
DOT and FMCSA, an agency within DOT, generally govern matters such as safety requirements and compliance, including drug and alcohol testing, registration to engage in motor carrier operations, entry-level driver training, drivers’ hours of service, and certain mergers, consolidations, and acquisitions.
Prior to the sale of WGL, Werner Logistics provided international services throughout North America and Asia, with additional coverage throughout Australia, Europe, South America, and Africa. 1 Table of Contents Business Acquisitions 2022 Acquisitions On November 5, 2022, we acquired 100% of the equity interests in Reed Transport Services, Inc. and RTS-TMS, Inc., doing business as ReedTMS Logistics (“ReedTMS”).
Business Acquisitions 2022 Acquisitions On November 5, 2022, we acquired 100% of the equity interests in Reed Transport Services, Inc. and RTS-TMS, Inc., doing business as ReedTMS Logistics (“ReedTMS”).
NEHDS is a final mile residential delivery provider serving customers primarily in the Northeast and Midwest United States markets. NEHDS delivers primarily big and bulky products (primarily furniture and appliances) using 2-person delivery teams performing residential and commercial deliveries. Prior to the acquisition, NEHDS achieved revenues of $71 million for the 12-month period ended September 30, 2021.
NEHDS is a final mile residential delivery provider serving customers primarily in the Northeast and Midwest United States markets. NEHDS delivers primarily big and bulky products (primarily furniture and appliances) using 2-person delivery teams performing residential and commercial deliveries. On July 1, 2021, we acquired an 80% equity ownership interest in ECM Associated, LLC ("ECM”).
Additionally, over half of our non-driver associates and our corporate board of directors are female or ethnically diverse. In 2023, Werner was honored to be recognized as No. 3 on the Top 10 Military Friendly® Spouse Employer list and No. 5 on the Top 10 Military Friendly® Employer list by VIQTORY.
In 2024, Werner was honored to be recognized as No. 3 on the Top 10 Military Friendly® Company, Brand, and Spouse Employer lists and No. 5 on the Top 10 Military Friendly® Employer list by VIQTORY.
These groups support our commitment to promoting and maintaining an inclusive culture for all associates by bringing together individuals from a wide range of backgrounds, experiences and 3 Table of Contents perspectives.
We are proud to support 11 Associate Resource Groups (“ARGs”) to promote and maintain an inclusive culture for all associates by bringing together individuals from a wide range of backgrounds, experiences and perspectives to foster a sense of shared community.
Our U.S. or Canadian associates are not represented by a collective bargaining unit with the exception of fewer than 30 employees at two locations of a U.S. subsidiary. We generally consider relations with our associates to be good. Health & Safety: Werner maintains a safety culture that is based on the premise of eliminating workplace incidents, risks and hazards.
None of our U.S. or Canadian associates are represented by a collective bargaining unit, and we generally consider relations with our associates to be good. Health & Safety: Werner ® fosters a robust safety culture focused on minimizing workplace incidents, risks, and hazards. In 2024, Werner continued to achieve reductions in workplace injuries and DOT preventable accidents per million miles.
ReedTMS, based in Tampa, Florida, is an asset-light logistics provider and dedicated truckload carrier that offers a comprehensive suite of freight brokerage and truckload solutions to a diverse customer base. Prior to the acquisition, ReedTMS achieved revenues of $372.0 million for the 12-month period ended September 30, 2022, 90% freight brokerage and 10% trucking.
ReedTMS, based in Tampa, Florida, is an asset-light logistics provider and dedicated truckload carrier that offers a comprehensive suite of freight brokerage and truckload solutions to a diverse customer 1 Table of Contents base. Freight brokerage and truckload revenues generated by ReedTMS are reported in our Werner Logistics segment and in Dedicated within our TTS segment, respectively.
The FMCSA’s Safe Driver Apprenticeship Pilot Program is currently accepting applications by motor carriers who are willing to participate in the pilot program, and FMCSA plans to limit the participation to 1,000 carriers and 3,000 apprentices. EPA and DOT announced in August 2016 Phase 2 of the Greenhouse Gas and Fuel Efficiency Standards for Medium and Heavy-Duty Trucks.
FMCSA’s Safe Driver Apprenticeship Pilot (“SDAP”) Program accepts applications by motor carriers who are willing to participate in the pilot program, and FMCSA plans to limit the participation to 1,000 carriers and 3,000 apprentices. In May 2024, Werner received FMCSA approval for 100 apprentice spots in the SDAP Program.
They continue to gain industry experience through our career track program by partnering with a Werner-certified leader prior to that driver becoming a solo driver with their own truck. At the end of 2023, we operated a total of 23 driver training locations to assist with the training and development of drivers for our company and the industry.
Upon the successful completion of our career track program, drivers will have the option to become a solo or a team driver with us. At the end of 2024, we operated a total of 20 driver training locations to assist with the training and development of drivers for our company and the industry.
In April 2023, EPA announced a proposed rule, Greenhouse Gas Emission Standards for Heavy-Duty Vehicles - Phase 3, which would phase in stronger greenhouse gas emissions standards and zero-emission vehicle requirements for heavy-duty trucks for model years 2028-2032. Werner continues monitoring any EPA-related developments impacting its fleet. California’s ongoing emissions reduction goals have significantly impacted the industry.
Short haul (day cab) and long haul (sleeper cab) tractor GHG standards under the Final Rule phase in starting with model years 2028 through 2032. Werner continues to evaluate the Final Rule and any EPA-related developments impacting its fleet. California’s ongoing emissions reduction goals have significantly impacted the industry.
Responsibilities of the department include developing and delivering all driver training on items such as safety issues, driver certification, driver testing, and hazmat. Our strong safety culture is demonstrated by ongoing investments in advanced equipment technologies, which lead to improved safety for our professional drivers.
Our strong safety culture is demonstrated by ongoing investments in advanced equipment technologies, which lead to improved safety for our professional drivers. Nearly all of our company-owned trucks have collision-mitigation safety systems, automated manual transmissions, and forward-facing cameras.
We were recognized by 50/50 Women on Boards TM as a “3+” company for having three or more women on our corporate board of directors in 2022. At Werner, our female driver workforce is double the national industry average, and over 60% of our driver associates are ethnically diverse.
These recognitions underscore Werner’s ongoing commitment to fostering an inclusive and supportive workplace for women across the organization. At Werner, our female driver workforce is double the national industry average, and over 60% of our driver associates are ethnically diverse. Additionally, over half of our Board of Directors (the “Board”) are female or ethnically diverse.
Revenues generated by ECM are reported in One-Way Truckload within our TTS segment. Additional information regarding these acquisitions is included in Note 2 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K. Marketing and Operations Our business philosophy is to provide superior on-time customer service at a significant value for our customers.
Additional information regarding the 2022 business acquisitions is included in Note 2 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K. 2021 Acquisitions On November 22, 2021, we acquired 100% of the equity interests in NEHDS Logistics, LLC (“NEHDS”).
In 2023, Werner, as well as our recently acquired business, ReedTMS, were both recognized among the Top Companies for Women to Work for in Transportation by the Women in Trucking Association. This was Werner’s sixth consecutive year of being recognized.
In 2024, Werner was recognized among the Top Companies for Women to Work for in Transportation by the Women in Trucking Association. Werner has earned this recognition in each of the seven years it has been awarded. Werner was also recognized by Forbes as One of America’s Best Employers for Women 2024.
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He served as our Chairman until his term ended at the 2021 Annual Meeting of Stockholders, and was then named Chairman Emeritus by the Board of Directors (the “Board”) in recognition of his longstanding leadership.
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ECM provides regional truckload carrier services in the Mid-Atlantic, Ohio and Northeast regions of the United States. Marketing and Operations Our business philosophy is to provide superior on-time customer service at a significant value for our customers. To accomplish this, we operate premium modern tractors and trailers.
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In first quarter 2021, we completed the sale of the Werner Global Logistics (“WGL”) freight forwarding services for international ocean and air shipments to Scan Global Logistics Group. WGL generated revenues of $53 million in 2020.
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Since January 2021, we have used an untethered, tablet-based telematics solution that provides an enhanced and more efficient driver experience. 2 Table of Contents Safety is a high priority for us, which is demonstrated through our continued safety investments and initiatives, such as investing in equipment with the latest collision mitigation systems; leveraging new side-view camera technology; implementing in-cab and desktop technologies aimed at improving weather alerts; rerouting, and other situational awareness for our professional drivers and transportation management teams.
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Prior to the acquisition, Baylor achieved revenues of $81.5 million for the 12-month period ended August 31, 2022. Revenues generated by Baylor are reported in One-Way Truckload within our TTS segment. 2021 Acquisitions On November 22, 2021, we acquired 100% of the equity interests in NEHDS Logistics, LLC (“NEHDS”).
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Improved weather reporting aids in redirecting our professional drivers to safer routes, which may decrease claims and costs associated with claims. Seasonality In the trucking industry, revenues generally follow a seasonal pattern. Peak freight demand has historically occurred in the months of September, October and November.
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Revenues generated by NEHDS are reported in Final Mile within our Werner Logistics segment. On July 1, 2021, we acquired an 80% equity ownership interest in ECM Associated, LLC ("ECM”). ECM provides regional truckload carrier services in the Mid-Atlantic, Ohio and Northeast regions of the United States. Prior to the acquisition, ECM achieved revenues of $108 million in 2020.
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The Werner Safety Department oversees compliance and training for drivers under DOT regulations and Company policies. Key responsibilities include creating and delivering world-class training programs on driver certification, driver onboarding and testing, hazardous materials handling, and anti-human trafficking training.
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Examples of such application systems include: (i) an electronic logging system which records and monitors drivers’ hours of service and integrates with our information systems to pre-plan driver shipment assignments based on real-time available driving hours; (ii) software that pre-plans shipments drivers can trade enroute to meet driver home-time needs without compromising on-time delivery schedules; and (iii) automated “possible late load” tracking that informs the operations department of trucks possibly operating behind schedule, allowing us to take preventive measures to avoid late deliveries.
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In 2024, Werner was also recognized with the National Award for Outstanding Large Employer of Veterans by the American Legion, and as a 5 Star Employer in the VETS Indexes Employer Awards. These awards recognize Werner’s commitment to recruiting, hiring, retaining, developing, and supporting veterans and the military-connected community.
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We have used electronic logging devices (“ELDs”) to monitor and enforce drivers’ hours of service since 1996. Since January 2021, we have used an untethered, tablet-based telematics solution that provides an enhanced and more efficient driver experience. Seasonality In the trucking industry, revenues generally follow a seasonal pattern.
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In July 2024, FMCSA held listening sessions on a prior Safety Fitness Determination (“SFD”) Notice of Proposed Rulemaking and discussed potentially moving to a new fitness rating methodology. Werner continues to monitor any developments on SFDs. FMCSA’s Compliance, Safety, Accountability (“CSA”) initiative monitors the safety performance of motor carriers.
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Peak freight demand has historically occurred in the months of September, October and November. After the December holiday season and during the remaining winter months, our freight volumes are typically lower because some customers reduce shipment levels.
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In November 2024, FMCSA responded to public comments it received on proposed changes. However, it remains unclear if, when, and to what extent, any such changes will occur. Werner continues to monitor FMCSA’s actions and CSA related developments. Motor carriers are required by FMCSA to perform annual random drug tests for 50% of existing drivers.
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In 2023, our trucking business achieved its lowest work injury rate on record, and we achieved our lowest DOT preventable accident rate per million miles in 19 years. The Werner Safety Department is responsible for all compliance and training issues as it relates to drivers under DOT regulation and Werner policy.
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In November 2024, FMCSA proposed a rule to change existing broker transparency regulations.
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Nearly all of our company-owned trucks have collision-mitigation safety systems, automated manual transmissions, and forward-facing cameras. During the COVID-19 pandemic, the transportation industry was designated by the U.S. government as an essential industry for keeping the U.S. supply chain moving.
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The proposed rule would require brokers to maintain records electronically, eliminate the distinction between brokerage and non-brokerage services, mandate records for each shipment including all charges, payments, and related claims, require brokers to provide records as a regulatory obligation, and mandate brokers provide all requested records within 48 hours.
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Our drivers and mechanics were on the front lines to ensure the delivery of essential products, and we take this responsibility seriously. Our primary focus will always be protecting the health and personal safety of our associates, their families and communities, and our customers.
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Werner is evaluating the proposed rule and its potential impact on its broker operations. 5 Table of Contents EPA and DOT announced in August 2016 Phase 2 of the Greenhouse Gas and Fuel Efficiency Standards for Medium and Heavy-Duty Trucks.
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Throughout our offices and terminal network, we follow the safety guidelines set forth by the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO). Diversity & Inclusion: At Werner, we support and encourage the diverse voices and perspectives of our associates, our customers and our suppliers.
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In March 2024, EPA released a Final Rule governing Greenhouse Gas (“GHG”) Emissions Standards for Heavy-Duty Vehicles - Phase 3, which requires more stringent greenhouse gas standards for heavy-duty vehicles and revises the “Phase 2” greenhouse gas standards established in 2016.
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The ARGs seek to foster a sense of shared community and empowerment for associates and allies who share and support a common social identity, such as gender, ethnicity and sexual orientation.
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Approximately 5% of our truck miles in 2024 were in the state of California. The U.S.
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Werner was recognized for our support of gender diversity, flexible hours and work requirements, competitive compensation and benefits, and professional development and career advancement opportunities. In 2023, Newsweek named Werner as one of America’s Greatest Workplaces for Diversity, America’s Greatest Workplaces, and America’s Greatest Workplaces for Parents and Families.
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Securities and Exchange Commission (“SEC”) issued a Final Rule in March 2024 requiring public companies to disclose, among other things, material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial conditions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur business is sensitive to changes in overall economic conditions that impact customer shipping volumes, industry freight demand and industry truck capacity. Such conditions may also impact the financial condition of our customers, resulting in a greater risk of bad debt losses, and that of our suppliers, which may affect the availability or pricing of needed goods and services.
Biggest changeAn epidemic, pandemic or similar outbreak could result in a slowdown of economic activity and a disruption in supply chains. Our business is sensitive to changes in overall economic conditions that impact customer shipping volumes, industry freight demand and industry truck capacity.
If such a shortage were to occur and driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases. Additionally, a shortage of drivers could result in idled equipment, which would affect our profitability and would limit growth opportunities.
If such a shortage were to occur and driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases. Additionally, a shortage of drivers could result in idled equipment, which would affect our profitability and limit growth opportunities.
These regulatory agencies have the authority to govern transportation-related activities, such as safety, authorization to conduct motor carrier operations and other matters. The EPA and CARB subject us to emissions and fuel efficiency regulations, and additional regulations by these and other agencies may occur.
These regulatory agencies have the authority to govern transportation-related activities, such as safety, authorization to conduct motor carrier operations and other matters. EPA and CARB subject us to emissions and fuel efficiency regulations, and additional regulations by these and other agencies may occur.
If we fail to comply with applicable regulations, we could be subject to substantial fines or penalties and to civil and criminal liability. Increasing scrutiny from investors and other stakeholders regarding ESG related matters may have a negative impact on our business.
If we fail to comply with applicable regulations, we could be subject to substantial fines or penalties and civil and criminal liability. Increasing scrutiny from investors and other stakeholders regarding ESG related matters may have a negative impact on our business.
To the extent that we cannot recover the higher cost of fuel through customer fuel surcharges, our financial results would be negatively impacted. As of December 31, 2023, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. We operate in a highly competitive industry, which may limit growth opportunities and reduce profitability.
To the extent that we cannot recover the higher cost of fuel through customer fuel surcharges, our financial results would be negatively impacted. As of December 31, 2024, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. We operate in a highly competitive industry, which may limit growth opportunities and reduce profitability.
We rely on strategic vendors for certain services that impact our systems and communications, such as, for example, integrated GPS and satellite communication services and Internet and telecommunications services.
We rely on strategic vendors for certain services that impact our systems and communications, such as integrated GPS and satellite communication services and Internet and telecommunications services.
We rely increasingly on cloud-based technology and depend on the stability, availability and security of our information systems to manage our business. Much of our software was developed internally or by adapting purchased software applications to suit our needs.
We rely increasingly on cloud-based technology and depend on the stability, availability and security of our information systems to manage our business. Some of our software was developed internally or by adapting purchased software applications to suit our needs.
Additionally, the implementation of these initiatives imposes additional costs on us. If our ESG initiatives and goals do not meet the expectations of our investors or other stakeholders, which continue to evolve, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively impacted.
Additionally, the implementation of these initiatives imposes additional costs on us. If our ESG initiatives and goals do not meet the expectations of our customers, investors or other stakeholders, which continue to evolve and may be conflicting, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment or business partner could be negatively impacted.
The United States, Canada and Mexico ratified the USMCA as an overhaul and update to the North America Free Trade Agreement, and it became effective in July 2020. We believe Werner is one of the largest U.S. based truckload carriers in terms of freight volume shipped to and from the United States and Mexico.
The United States, Canada and Mexico ratified the USMCA as an overhaul and update to the North America Free Trade Agreement, and it 8 Table of Contents became effective in July 2020. We believe Werner is one of the largest U.S. based truckload carriers in terms of freight volume shipped to and from the United States and Mexico.
Risks Related to our Business and Industry Our business is subject to overall economic and geopolitical conditions that could have a material adverse effect on our results of operations and financial condition. We are sensitive to changes in economic or geopolitical conditions that impact customer shipping volumes, industry freight demand, and industry truck capacity.
Risks Related to our Business and Industry Our business is subject to overall economic and geopolitical conditions that could have a material adverse effect on our results of operations and financial condition. We are sensitive to economic or geopolitical conditions, in particular, those that impact customer shipping volumes, industry freight demand, and industry truck capacity.
Our mitigation of these risks includes, without limitation, using certain redundant computer hardware, tools and protocols to monitor and respond to threats, the work of a dedicated internal cybersecurity team, incident and crisis response plans, and enterprise-wide information security policies and trainings.
Our mitigation of these risks includes, without limitation, using certain redundant computer hardware, tools and protocols to monitor and respond to threats, the work of a dedicated internal cybersecurity team, incident and crisis response plans, enterprise-wide information security policies and trainings, and the use of artificial intelligence.
Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week. Fuel shortages, increases in fuel prices and petroleum product rationing could have a material adverse impact on our operations and profitability.
Fuel prices that change rapidly 7 Table of Contents in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week. Fuel shortages, increases in fuel prices and petroleum product rationing could have a material adverse impact on our operations and profitability.
Similarly, our failure, or perceived failure, to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards in a timely manner, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.
Similarly, our failure, or perceived failure, to pursue or fulfill our goals, targets and objectives or to satisfy various reporting standards in a timely 10 Table of Contents manner, or at all, could also have similar negative impacts and expose us to government enforcement actions and private litigation.
We are subject to risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of the countries in which we do business, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and United States export and import laws, and social, political, and economic instability.
We are subject to risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of the countries in which we do business, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and United States export and import laws, changing tariff policies on imported goods, and social, political, and economic instability.
A significant portion of our revenue is generated from key customers. During 2023, our largest 5, 10, 25 and 50 customers accounted for 35%, 48%, 65%, and 78% of revenues, respectively. Our largest customer, Dollar General, accounted for 10% of our total revenues in 2023. We do not have long-term contractual relationships with many of our key One-Way Truckload customers.
A significant portion of our revenue is generated from key customers. During 2024, our largest 5, 10, 25 and 50 customers accounted for 36%, 48%, 65%, and 77% of revenues, respectively. Our largest customer, Dollar General, accounted for 11% of our total revenues in 2024. We do not have long-term contractual relationships with many of our key One-Way Truckload customers.
However, the security risks associated with information technology systems have increased in recent years because of the evolving sophistication, activities and methods of cyber attackers.
However, the security risks associated with information technology systems have increased in recent years because of the evolving sophistication, activities and methods of cyber attackers, including the use of artificial intelligence.
Such ratings are used by some investors to inform their investment and proxy statement voting decisions. Unfavorable ESG ratings may lead to negative 10 Table of Contents sentiment toward us by investors or other stakeholders, which could have a negative impact on our revenues, stock price and access to and costs of capital.
Such ratings are used by some customers to evaluate their relationship with us and by some investors to inform their investment and proxy statement voting decisions. Unfavorable ESG ratings may lead to negative sentiment toward us by stakeholders, which could have a negative impact on our revenues, stock price and access to and costs of capital.
Economic or geopolitical conditions may also impact the financial condition of our customers, resulting in a decreased demand for services or a greater risk of bad debt losses, and that of our suppliers, which may affect negotiated pricing or availability of needed goods and services.
Such conditions may also impact the financial condition of our customers, resulting in a greater risk of bad debt losses, and that of our suppliers, which may affect the availability or pricing of needed goods and services.
Companies across all industries are facing increasing scrutiny from investors and other stakeholders related to ESG matters, including practices and disclosures related to environmental stewardship, social responsibility, and diversity, equity and inclusion. Organizations that provide information to investors and other stakeholders on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
Companies across all industries are facing increasing scrutiny from investors and other stakeholders related to ESG matters, including practices and disclosures related to sustainability. Organizations that provide information to stakeholders (including customers and investors) on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
The 9 Table of Contents techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect, and often are not recognized until launched against a target, and we may be unable or fail to anticipate them or to implement adequate preventative measures.
The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect, and often are not recognized until launched against a target, and we may be unable or fail to anticipate them or to implement adequate preventative measures. We may incur costs in responding to a specific event.
Driver availability may be affected by changing workforce demographics, alternative employment opportunities, national unemployment rates, freight market conditions, availability of financial aid for driver training schools and changing industry regulations.
Driver turnover, recruiting and availability may be affected by changes in our customer base, fleet size, and workforce demographics; alternative employment opportunities and national unemployment rates; freight market conditions; availability of financial aid for driver training schools; and changing industry regulations.
Potential changes, if any, that could impact the legal classification of the independent contractor relationship between us and our independent contractors could have a material adverse effect on our ability to recruit and retain independent contractors.
Changes that impact the classification of the relationship between us and our independent contractors could have a material adverse effect on our ability to recruit and retain them, which could negatively impact our operations.
Our results are affected by the success of our operations in Mexico and other foreign countries in which we operate (see Note 13 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K).
If we cannot effectively manage the challenges associated with doing business internationally, our revenues and profitability may suffer. Our results are affected by the success of our operations in Mexico and other foreign countries in which we operate (see Note 13 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K).
These increases would negatively affect our results of operations to the extent that we would be unable to obtain corresponding freight rate increases. During 2023, union organizing efforts occurred at two locations of a U.S. subsidiary, which resulted in fewer than 30 of our employees being represented by a union.
If pay rates for drivers or per-mile settlement rates for independent contractors increased, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases. During 2023, union organizing efforts occurred at two locations of a U.S. subsidiary, which resulted in fewer than 30 of our employees being represented by a union.
Increases in fuel prices and shortages of fuel can be caused by, among other things, changes in macroeconomic and geopolitical conditions. To lessen the effect of fluctuating fuel prices on our margins, we have fuel surcharge programs with our customers. These programs generally enable us to recover a majority, but not all, of the fuel price increases.
To lessen the effect of fluctuating fuel prices on our margins, we have fuel surcharge programs with our customers. These programs generally enable us to recover a majority, but not all, of the fuel price increases.
Although we took numerous actions to lessen the adverse impact of the COVID-19 pandemic, our future results could be further impacted by the disruptive effects of a future pandemic or outbreak, including but not limited to adverse effects on freight volumes and pricing and availability of qualified personnel.
Our future results could be impacted by the disruptive effects of an epidemic, pandemic or similar outbreak, including but not limited to adverse effects on freight volumes and pricing and availability of qualified personnel.
The risks described herein could create reputational harm or financial liability; disrupt our business and/or impact our customers; result in the loss, disclosure or misuse of operational, confidential or proprietary information; or increase our costs, any of which could harm our reputation and adversely impact our business, results of operations, and financial condition.
The risks described herein could create reputational harm or financial liability; disrupt our business and/or impact our customers; result in the loss, disclosure or misuse of operational, confidential or proprietary information; or increase our costs, any of which could harm our reputation and adversely impact our business, results of operations, and financial condition. 9 Table of Contents A public health crisis, such as an epidemic, pandemic, or similar outbreak may have an adverse impact on our business, as well as the operations of our customers and suppliers.
Many of those providers face the same economic challenges as we do and therefore are actively and competitively soliciting business. These economic conditions may 8 Table of Contents have an adverse effect on the availability and cost of third-party capacity.
Many of those providers face the same economic challenges as we do and therefore are actively and competitively soliciting business. These economic conditions may have an adverse effect on the availability and cost of third-party capacity. If we are unable to secure the services of these third-party capacity providers at reasonable rates, our results of operations could be adversely affected.
We have developed certain initiatives and goals relating to ESG matters. Our ability to successfully execute these initiatives and accurately report our progress presents numerous operational, financial, legal, reputational and other risks, many of which are outside our control, and all of which could have a material negative impact on our business.
Our ability to adequately communicate, through corporate sustainability reports and otherwise, the business reasons and stakeholder priorities that influence our sustainability programs, to successfully execute these initiatives and to accurately report our progress presents numerous operational, financial, legal, reputational and other risks, many of which are outside our control, and all of which could have a material negative impact on our business.
Failure to comply with applicable U.S. and international privacy or data protection regulations or other data protection standards, on which there is heightened focus, may expose us to litigation, fines, sanctions, or other penalties.
Fortifying our systems after a cybersecurity event may be cost prohibitive. Our investments in cybersecurity may not be successful against an attack or malicious action. Failure to comply with applicable U.S. and international privacy or data protection regulations or other data protection standards, on which there is heightened focus, may expose us to litigation, fines, sanctions, or other penalties.
We are subject to claims and litigation risks regarding a variety of issues, including without limitation, over-the-road accidents and contractual, labor and employment, environmental, regulatory, workers’ compensation, and data privacy matters. We are self-insured for a significant portion of liability resulting from bodily injury, property damage, cargo and associate workers’ compensation and health benefit claims.
As a large transportation and logistics company, we are subject to claims and litigation risks regarding a variety of issues, including, without limitation, over-the-road accidents and contractual, labor and employment, environmental, regulatory, workers’ compensation, and data privacy matters.
In recent years, the topic of the classification of individuals as employees or independent contractors has gained increased attention among federal and state regulators as well as the plaintiffs’ bar.
In recent years, the classification of individuals as employees or independent contractors has gained increased attention among tax and other regulators, as well as plaintiffs’ attorneys who have pursued lawsuits against transportation companies alleging misclassification of employees and independent contractors resulting in significant damages.
This is supplemented by premium-based insurance coverage with insurance carriers above our self-insurance level for each such type of coverage.
We are self-insured for a significant portion of liability resulting from bodily injury, property damage, cargo and associate workers’ compensation and health benefit claims. This is supplemented by premium-based insurance coverage with insurance carriers above our self-insurance level for each such type of coverage.
When shipping volumes decline or available truck capacity increases, freight pricing generally becomes more competitive as carriers compete for loads to maintain truck productivity. We may be negatively affected by future economic conditions including employment levels, business conditions, fuel and energy costs, public health crises, interest rates and tax rates.
When conditions cause a decline in shipping volumes or an increase in available truck capacity, freight pricing generally becomes more competitive as carriers compete for loads to maintain truck productivity. Any of the foregoing may impact our results of operations and financial condition.
Independent contractor availability may also be affected by both inflationary cost increases that are the responsibility of independent contractors and the availability and cost of equipment financing. Ongoing federal and state legislative challenges to the independent contractor model could also affect independent contractor availability.
The impact on independent contractors of inflationary cost increases and the market for and cost of financing equipment may affect their availability to us.
Additional unionization, if broad-based, could have a material adverse effect on our costs, efficiency, and profitability. Driver or other employee dissatisfaction and regulations that govern organization procedures could impact our ability to effectively or timely address any organization efforts. Increases in fuel prices and shortages of fuel can have a material adverse effect on the results of operations and profitability.
Increases in fuel prices and shortages of fuel can have a material adverse effect on the results of operations and profitability. Increases in fuel prices and shortages of fuel can be caused by, among other things, changes in macroeconomic and geopolitical conditions.
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Various legislative or regulatory proposals have been introduced at the federal and state levels that may affect the classification status of individuals as independent contractors or employees for either employment tax purposes (e.g., withholding, social security, Medicare and unemployment taxes) or other benefits available to employees (e.g., workers’ compensation benefits and minimum wage).
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Such conditions can include, among others, employment levels, business conditions, fuel and energy costs, public health crises, interest rates, tax rates, political conflict, and global trade policy. Tariffs or trade regulations may impact the cost or availability of materials, equipment, goods, and fuel.
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Recently, certain states have seen significant increased activity by tax and other regulators regarding worker classification, and class action lawsuits alleging misclassification by transportation companies have resulted in significant damage awards or monetary settlements.
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Impacts from any of the foregoing on (i) our suppliers could affect pricing or availability of needed goods and services and (ii) our customers could weaken their financial condition, increase our risk of bad debt losses, and decrease demand for our services (even if preceded by increased demand in anticipation of a trade regulation or other change).
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If a shortage of independent contractors occurs, increases in per-mile settlement rates (for independent contractors) and driver pay rates (for company drivers) may become 7 Table of Contents necessary to attract and retain a sufficient number of drivers.
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In September 2024, that small group of drivers filed a petition seeking to decertify the union and end their union’s representation. The union responded by voluntarily ending its representation of those drivers and, as a result, those drivers are no longer unionized. Unionization, if broad-based, could have a material adverse effect on our costs, efficiency, and profitability.
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If we are unable to secure the services of these third-party capacity providers at reasonable rates, our results of operations could be adversely affected. If we cannot effectively manage the challenges associated with doing business internationally, our revenues and profitability may suffer.
Added
While we believe our sustainability programs are balanced in the context of our business and stakeholder demands, we could draw criticism related to all or a portion of our sustainability initiatives.
Removed
We may incur costs in responding to a specific event. Fortifying our systems after a cybersecurity event may be cost prohibitive. Our investments in cybersecurity may not be successful against an attack or malicious action.
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A public health crisis, such as an epidemic, pandemic, or similar outbreak, has had, and may continue to have an adverse impact on our business, as well as the operations of our customers and suppliers. The COVID-19 pandemic resulted in a slowdown of economic activity and a disruption in supply chains during 2020 and 2021.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY Under our “Cloud First, Cloud Now” strategy, we are increasingly relying on cloud-based technology to enable more innovation, enhance customer service, and keep up with the complex demands of the ever-changing trucking and logistics landscape.
Biggest changeITEM 1C. CYBERSECURITY Under our “Cloud First, Cloud Now” strategy, we prioritize usage of cloud-based technologies to foster innovation, enhance customer service, and meet the demands of the evolving logistics landscape. Cybersecurity is integrated into this strategy through investments in technology and skill development to help protect the confidentiality, integrity, and availability of our systems and electronic data.
The Chief Information Officer regularly shares cybersecurity developments and concerns with the Chief Executive Officer and with other executive officers as concerns arise that impact their areas. 11 Table of Contents The Audit Committee of the Board is responsible for oversight of risk management related to cybersecurity and policies and procedures related to the protection of Company proprietary and customer information and compliance with data privacy requirements.
The CIO regularly reports cybersecurity matters to the Chief Executive Officer and executive leadership, for alignment with broader organizational goals. The Audit Committee of the Board is responsible for oversight of risk management related to cybersecurity, policies and procedures related to the protection of Company proprietary and customer information, and compliance with data privacy requirements.
We have not experienced any such breach in any of the three years shown in the financial statements in this filing or in 2024 through the date hereof, and cybersecurity threat risks have not materially affected our business strategy, results of operations or financial condition.
During the period covered by this Form 10-K and through the date of its filing, we have not experienced, to our knowledge, an information security breach or identified cybersecurity threat risks that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
Our director of cybersecurity is a certified information systems security professional with broad experience in cybersecurity, much of which was gained working for the U.S. military. Various members of the cybersecurity team hold industry certifications.
The CIO, with extensive information technology (“IT”) and strategic leadership experience, is supported by a director of cybersecurity, a Certified Information Systems Security Professional with significant military cybersecurity expertise, and a team holding various industry certifications and having collective cybersecurity experience of over 75 years.
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We are incorporating cybersecurity into this strategy by investing in key technology and skillset development to help protect the confidentiality, integrity, and availability of our systems and electronic data. In addition, we are committed to using reasonable efforts, given identified or reasonably anticipated threats, to prevent information security breaches.
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However, we recognize that cybersecurity threats are continually evolving, as further addressed in Item 1A of Part I of this Form 10-K. Our dedicated cybersecurity team, in coordination with our Chief Information Officer (“CIO”), assesses and manages risks by focusing on identity verification, system access controls, and governance, risk, and compliance processes.
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Based on our analysis of the current threat environment, we do not believe that any such material impacts are reasonably likely to occur. See Item 1A of Part I of this Form 10-K for a discussion of risks and uncertainties related to our information systems and technology infrastructure. We employ a dedicated cybersecurity team.
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It receives quarterly updates from our CIO on trends, threats, and technologies used to prevent, detect and respond to risks; reviews and provides feedback on employee education initiatives, crisis response strategies, and remediation measures; and reports to the Board on fulfillment of its cybersecurity risk management oversight.
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In coordination with our Chief Information Officer, the team assesses and manages cybersecurity threat risks with a focus on identity verification, system access and security, and governance, risk, and compliance. Our Chief Information Officer has extensive information technology and strategic leadership experience, including modernizing and securing business applications and technology stacks.
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We strive to align with the National Institute of Standards and Technology (NIST) cybersecurity maturity framework and leverage a range of tools, including artificial intelligence, software programs, logs, and data analyses, to detect anomalous activity and identify risks across our systems. Threat simulations, such as penetration testing, are conducted periodically to assess vulnerabilities, analyze results, and implement remediations.
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The Audit Committee receives quarterly updates from our Chief Information Officer. Reports may address evolving trends in cybersecurity, major threat developments, and technologies, solutions, policies, and procedures we use to detect, prevent, mitigate and remediate threats, respond to incidents and crises, and educate employees on information security importance and requirements.
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Additionally, we employ third-party services for monitoring risks posed by cyber-attackers, employees, and third-party vendors accessing or contributing to our systems.
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The Audit Committee has regular opportunities to suggest adjustments to the Company’s cybersecurity practices. It regularly reports to the Board on fulfillment of its responsibilities, which include cybersecurity risk management oversight.
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Our oversight of such vendors includes requiring them to undergo cybersecurity analyses through risk assessments, scorecards, and audits. 11 Table of Contents Depending on the services performed, we require certain vendor agreements to contain security and privacy addenda and require vendors to report to us cybersecurity breaches on their systems and/or impacts to our data.
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To design and update our cybersecurity strategy, including awareness, prevention, detection, response and recovery components, we strive to align with a respected maturity framework, and we periodically, with the help of a third-party, analyze our alignment.
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We place high importance on conducting tabletop exercises to test and enhance our readiness for cybersecurity incidents. These exercises involve our Crisis Management Team, which includes representatives from executive management, legal, information technology, finance, operations, and marketing.
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We use a variety of tools to help identify anomalous activity on our systems, including without limitation logs, artificial intelligence, software programs, and data analyses.
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The Crisis Management Team focuses on analyzing the scope, impact, and root cause of simulated incidents, while the marketing and legal departments, along with a team of executives, plan the messaging to customers, employees and other stakeholders deemed necessary or advisable in the circumstances. For compliance readiness, we monitor the legal and regulatory landscape associated with cybersecurity incidents.
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In addition to internal resources, we use third-party services and software to monitor our cyber environment for detected risks, including without limitation risks from cyber-attackers, employees, and third-parties that we allow to access or contribute to our information technology systems, and to block threats.
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These exercises and activities provide valuable insights to improve transparency, messaging, response protocols, stakeholder confidence and organizational resilience in the event of a cyber crisis. To manage material risks and enhance preparedness, we maintain a cyber insurance program integrated into our overall risk management framework.
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To assess system vulnerability, we periodically simulate threats, and following such exercises, we assess penetration results and determine and implement remediations. Executive management fosters a cybersecurity threat awareness and risk mitigation culture by supporting regular educational phishing simulations and advocating the importance of cybersecurity in communications to employees.
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During insurance renewals, we collaborate with brokers and cyber experts to assess our program and align coverages with identified risks. In the event of a cybersecurity incident, our crisis management plan is triggered, mobilizing the Crisis Management Team to assess the situation and oversee critical decisions related to abatement, mitigation, and response.
Removed
We maintain information security policies to promote employee use of our information technology in a safe manner that helps protect our systems and data from cybersecurity events, and we require periodic enterprise-wide security training and testing and analyze test results. Cybersecurity is integrated with our overall risk management program through cyber coverage as an important component of our insurance portfolio.
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Responsive steps, each as deemed necessary or advisable and in addition to other elements of the plan, include engaging third-party forensic and other experts, coordinating communications with stakeholders, contacting law enforcement, and reporting incidents to the Board or Audit Committee. In a post-incident review, lessons learned are analyzed for incorporation into future protocols.
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We maintain cyber insurance to help protect against potential loss or expense arising from a cybersecurity incident or data breach. As part of our cyber insurance renewal, we coordinate with our insurance broker cyber experts to assess our cybersecurity program and align our coverages with our risk management framework.
Added
We foster a culture of cybersecurity awareness through regular phishing simulations, enterprise-wide security training, employee education on safe technology practices, and information security policies. We continue to evaluate cybersecurity risks and enhance our strategy to safeguard our operations and data as part of our commitment to operational resilience and innovation. 12 Table of Contents
Removed
Our oversight processes for reviewing threats from third-parties that we allow to access or contribute to our information technology systems are also important to overall risk management. We subject such third-parties to a variety of cybersecurity analyses, which include our use of risk assessments or scorecards and receipt of third-party audit or other reports related to information security.
Removed
We have a program for organized response in the event of a cybersecurity incident. Our Chief Information Officer receives alerts disseminated via the program and reports to the Chief Executive Officer as deemed prudent. In the event the incident rises to the level of a crisis, the cyber component of our crisis management plan is triggered.
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The plan guides a cyber crisis management team, including representatives from our legal, information technology, finance and operations areas, in analyzing the type, scope, cause, impact and other details of the crisis.
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Our analysis includes without limitation identifying affected systems and exposed data, and in making key decisions to abate, mitigate or respond to the crisis, drawing on pre-identified third-party sources of forensic and other expertise as deemed necessary or advisable.
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Responsive steps include oversight of any warranted or required communications, including without limitation potential outreach to law enforcement, and inform ing the Board or Audit Committee of the incident as required by the plan. A final step is for the team to review lessons learned during the incident with the purpose of strengthening future crisis response.
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The team periodically reviews and practices its protocols to enhance its effectiveness. 12 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur terminal locations are described below: Location Owned or Leased Description Segment Omaha, Nebraska Owned Corporate headquarters, maintenance, truck sales TTS, Werner Logistics, Corporate Omaha, Nebraska Owned Disaster recovery, warehouse Corporate Phoenix, Arizona Owned Office, maintenance, driver training school TTS West Memphis, Arkansas Owned Office, maintenance TTS Fontana, California Owned Office, maintenance, truck sales, driver training school TTS Denver, Colorado Owned Maintenance TTS Lake City, Florida Owned Office, maintenance TTS Lakeland, Florida Leased Maintenance TTS Atlanta, Georgia Owned Office, maintenance, truck sales, driver training school TTS Joliet, Illinois Owned Office, maintenance, truck sales TTS Milan, Indiana Owned Office, maintenance, warehouse TTS Brownstown, Michigan Owned Maintenance TTS Springfield, Ohio Owned Office, maintenance, truck sales TTS Easton, Pennsylvania Owned Office, maintenance TTS Portland, Tennessee Leased Office, maintenance TTS Dallas, Texas Owned Office, maintenance, truck sales, driver training school TTS El Paso, Texas Owned Office, maintenance TTS Laredo, Texas Owned Office, maintenance, transloading, truck sales TTS, Werner Logistics At December 31, 2023, we leased (i) operational facilities, office space, and trailer parking yards in various locations throughout the United States and (ii) office space in Mexico and Canada.
Biggest changeOur terminal and disaster recovery locations are described below: Location Owned or Leased Description Segment Omaha, Nebraska Owned Corporate headquarters, maintenance, truck sales TTS, Werner Logistics, Corporate Omaha, Nebraska Owned Disaster recovery, warehouse Corporate Phoenix, Arizona Owned Office, maintenance, driver training school TTS West Memphis, Arkansas Owned Office, maintenance TTS Fontana, California Owned Office, maintenance, truck sales, driver training school TTS Denver, Colorado Owned Maintenance TTS Lake City, Florida Owned Office, maintenance TTS Lakeland, Florida Leased Maintenance TTS Atlanta, Georgia Owned Office, maintenance, truck sales, driver training school TTS Joliet, Illinois Owned Office, maintenance, truck sales TTS Milan, Indiana Owned Office, maintenance, warehouse TTS Brownstown, Michigan Owned Maintenance TTS Springfield, Ohio Owned Office, maintenance, truck sales TTS Easton, Pennsylvania Owned Office, maintenance TTS Portland, Tennessee Leased Office, maintenance TTS Dallas, Texas Owned Office, maintenance, truck sales, driver training school TTS El Paso, Texas Owned Office, maintenance TTS Laredo, Texas Owned Office, maintenance, transloading, truck sales TTS, Werner Logistics At December 31, 2024, we leased (i) operational facilities, office space, and trailer parking yards in various locations throughout the United States and (ii) office space in Mexico and Canada.
ITEM 2. PROPERTIES Our headquarters are located on approximately 147 acres near U.S. Interstate 80 west of Omaha, Nebraska, 63 acres of which are undeveloped. Our headquarter facilities have suitable space available to accommodate planned needs for at least the next three to five years. We also have several terminals throughout the United States, consisting of office and/or maintenance facilities.
ITEM 2. PROPERTIES Our headquarters are located on approximately 136 acres near U.S. Interstate 80 west of Omaha, Nebraska, 52 acres of which are undeveloped. Our headquarter facilities have suitable space available to accommodate planned needs for at least the next three to five years. We also have several terminals throughout the United States, consisting of office and/or maintenance facilities.
The Werner Fleet Sales network has seven locations, which are primarily located in certain terminals listed above. Our driver training schools operate in 23 locations in the United States, four of which are located in or near certain terminals listed above, five are located in company-owned facilities, and 14 are located in leased facilities. 13 Table of Contents
The Werner Fleet Sales network has eight locations, which are primarily located in certain terminals listed above. Our driver training schools operate in 20 locations in the United States, four of which are located in or near certain terminals listed above, five are located in company-owned facilities, and 11 are located in leased facilities. 13 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOur Peer Group includes companies similar to us in the transportation industry and has the following companies: ArcBest; Covenant Logistics Group; Daseke; Forward Air; Heartland Express; Hub Group; JB Hunt; Knight-Swift Transportation; Landstar System; Marten Transport; Old Dominion Freight Line; Saia; and Schneider National. We added Daseke, Inc. to our 2023 Peer Group and removed US Xpress Enterprises, Inc.
Biggest changeThe 2024 Peer Group has the following companies: Covenant Logistics Group, Inc.; Heartland Express, Inc.; Hub Group, Inc.; JB Hunt Transport Services, Inc.; Knight-Swift Transportation Holdings, Inc.; Landstar System, Inc.; Marten Transport, LTD.; and Schneider National, Inc. ArcBest Corporation; Forward Air Corporation; Old Dominion Freight Line; and Saia, Inc. were removed from our 2024 Peer Group, and Daseke, Inc.
Equity Compensation Plan Information For information on our equity compensation plans, please refer to Item 12 of Part III of this Form 10-K. 14 Table of Contents Performance Graph Comparison of Five-Year Cumulative Total Return The following graph is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933 or the Exchange Act except to the extent we specifically request that such information be incorporated by reference or treated as soliciting material. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Werner Enterprises, Inc.
Equity Compensation Plan Information For information on our equity compensation plans, please refer to Item 12 of Part III of this Form 10-K. 14 Table of Contents Performance Graph Comparison of Five-Year Cumulative Total Return The following graph is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933 or the Exchange Act except to the extent we specifically request that such information be incorporated by reference or treated as soliciting material. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Werner Enterprises, Inc.
As of February 9, 2024, our common stock was held by 425 stockholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
As of February 7, 2025, our common stock was held by 427 stockholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers On November 9, 2021, our Board of Directors approved and announced a new stock repurchase program under which the Company is authorized to repurchase up to 6,000,000 shares of its common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers On May 15, 2024, we announced a new stock repurchase program under which the Company is authorized to repurchase up to 5,000,000 shares of its common stock.
The authorization will continue unless withdrawn by the Board of Directors. 15 Table of Contents No shares of common stock were repurchased during fourth quarter 2023 by either the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act. ITEM 6. RESERVED
The Company may purchase shares from time to time depending on market, economic and other factors. The authorization will continue unless withdrawn by the Board of Directors. No shares of common stock were repurchased during fourth quarter 2024 by either the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act. ITEM 6. RESERVED
(acquired by Knight-Swift Transportation in 2023) and Yellow Corporation (ceased operations in 2023) from our 2023 and 2022 Peer Groups. Our stock price was $42.37 as of December 29, 2023 (the last business day of fiscal year 2023). This price was used for purposes of calculating the total return on our common stock for the year ended December 31, 2023.
(acquired by TFI International Inc. in 2024) was removed from our 2024 and 2023 Peer Groups. Our stock price was $35.92 as of December 31, 2024 (the last business day of fiscal year 2024). This price was used for purposes of calculating the total return on our common stock for the year ended December 31, 2024.
(WERN) $ 100 $ 140 $ 153 $ 187 $ 160 $ 171 Standard & Poor’s 500 $ 100 $ 131 $ 156 $ 200 $ 164 $ 207 2022 Peer Group $ 100 $ 134 $ 176 $ 285 $ 235 $ 307 2023 Peer Group $ 100 $ 134 $ 176 $ 285 $ 234 $ 307 Assuming the investment of $100 on December 31, 2018, and reinvestment of all dividends, the graph above compares the cumulative total stockholder return on our common stock for the last five fiscal years with the cumulative total return of Standard & Poor’s 500 Market Index and our Peer Groups over the same period.
(WERN) $ 100 $ 109 $ 134 $ 115 $ 122 $ 105 Standard & Poor’s 500 $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 2023 Peer Group $ 100 $ 131 $ 212 $ 175 $ 228 $ 206 2024 Peer Group $ 100 $ 115 $ 163 $ 145 $ 166 $ 152 Assuming the investment of $100 on December 31, 2019, and reinvestment of all dividends, the graph above compares the cumulative total stockholder return on our common stock for the last five fiscal years with the cumulative total return of Standard & Poor’s 500 Market Index and our Peer Groups over the same period.
Removed
In 2023, we selected a new Peer Group in order to more closely align with our benchmarking Peer Group.
Added
In 2024, we selected a new Peer Group which includes companies in the trucking industry that are more similar to us than the companies included in the 2023 Peer Group.
Removed
As of December 31, 2023, the Company had purchased 3,688,190 shares pursuant to this authorization and had 2,311,810 shares remaining available for repurchase. The Company may purchase shares from time to time depending on market, economic and other factors.
Added
Upon approval of the new program, the Board of Directors withdrew the previous stock repurchase authorization that was approved on November 9, 2021, which had 1,627,651 shares remaining available for repurchase. As of December 31, 2024, the Company had purchased 1,103,651 shares pursuant to the new authorization and had 15 Table of Contents 3,896,349 shares remaining available for repurchase.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeExhibit 10.21 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 10.1 4 Credit Agreement, dated December 20, 2022 by and among Werner Enterprises, Inc., the lenders thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender, and Issuing Lender, and BMO Harris Bank N.A. as Syndication Agent Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 59 Table of Contents Exhibit Number Description Incorporated by Reference to: 21 Subsidiaries of the Registrant Filed herewith 23.1 Consent of KPMG LLP Filed herewith 31.1 Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) Filed herewith 31.2 Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) Filed herewith 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Biggest changeInsider Trading Policy, effective as of February 14, 2025 Filed herewith 21 Subsidiaries of the Registrant Filed herewith 23.1 Consent of KPMG LLP Filed herewith 61 Table of Contents Exhibit Number Description Incorporated by Reference to: 31.1 Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) Filed herewith 31.2 Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002) Filed herewith 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Clawback Policy, effective as of December 1, 2023 Filed herewith 101 The following audited financial information from Werner Enterprises’ Annual Report on Form 10-K for the year ended December 31, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021, (iii) Consolidated Balance Sheets as of December 31, 2023 and 2022, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021, (v) Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the years ended December 31, 2023, 2022 and 2021, and (vi) the Notes to Consolidated Financial Statements as of December 31, 2023. 104 The cover page from this Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (included as Exhibit 101).
Clawback Policy, effective as of December 1, 2023 Exhibit 97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 101 The following audited financial information from Werner Enterprises’ Annual Report on Form 10-K for the year ended December 31, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022, (iii) Consolidated Balance Sheets as of December 31, 2024 and 2023, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022, (v) Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the years ended December 31, 2024, 2023 and 2022, and (vi) the Notes to Consolidated Financial Statements as of December 31, 2024. 104 The cover page from this Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL (included as Exhibit 101).
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 23, 2023 10. 7 Form of Restricted Stock Award Agreement Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 1, 2009 10. 8 Form of Restricted Stock Award Agreement, effective May 9, 2023 Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 10. 9 Form of Performance-Based Restricted Stock Award Agreement, effective February 7, 2022 Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 7, 2022 10.1 0 Werner Enterprises, Inc.
Item 5.02 on the Company’s Current Report on Form 8-K dated February 13, 2025 1 0 .7 Form of Restricted Stock Award Agreement Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 1, 2009 10. 8 Form of Restricted Stock Award Agreement, effective May 9, 2023 Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 10. 9 Form of Performance-Based Restricted Stock Award Agreement, effective February 7, 2022 Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 7, 2022 10. 10 Form of Performance-Based Restricted Stock Award Agreement, effective February 9, 2024 Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 9, 2024 10.1 1 Werner Enterprises, Inc.
Change in Control Severance Plan Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 10.1 1 Consulting Services Agreement dated July 1, 2023, between John J. Steele and Werner Enterprises, Inc.
Change in Control Severance Plan Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 10.1 2 Credit Agreement, dated December 20, 2022 by and among Werner Enterprises, Inc., the lenders thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender, and Issuing Lender, and BMO Harris Bank N.A. as Syndication Agent Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022 19 Werner Enterprises, Inc.
Removed
Item 5.02 of the Company ’ s Current Report on Fo rm 8-K dated February 9 , 2024 10. 6 Compensation Letter Agreement, dated February 7, 2023, between Christopher Wikoff and Werner Enterprises, Inc.
Removed
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 1, 2023 10.1 2 Facility Letter and Promissory Note Agreement, dated June 30, 2021 between Werner Enterprises, Inc. and BMO Harris Bank N.A.
Removed
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 10.1 3 First Amendment to Term Loan Facility Letter, dated December 20, 2022 between Werner Enterprises, Inc. and BMO Harris Bank N.A.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeOther Information 57 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 57 PART III Item 10. Directors, Executive Officers and Corporate Governance 57 Item 11. Executive Compensation 57 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 57 Item 13. Certain Relationships and Related Transactions, and Director Independence 58 Item 14.
Biggest changeOther Information 59 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 59 PART III Item 10. Directors, Executive Officers and Corporate Governance 59 Item 11. Executive Compensation 59 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 59 Item 13. Certain Relationships and Related Transactions, and Director Independence 60 Item 14.
Item 6. Reserved 16 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 26 Item 8. Financial Statements and Supplementary Data 27 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 55 Item 9A. Controls and Procedures 55 Item 9B.
Item 6. Reserved 16 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 26 Item 8. Financial Statements and Supplementary Data 27 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 57 Item 9A. Controls and Procedures 57 Item 9B.
Form 10-K Summary 60 Table of Contents This Annual Report on Form 10-K for the year ended December 31, 2023 (this “Form 10-K”) and the documents incorporated herein by reference contain forward-looking statements based on expectations, estimates and projections as of the date of this filing. Actual results may differ materially from those expressed in such forward-looking statements.
Form 10-K Summary 62 Table of Contents This Annual Report on Form 10-K for the year ended December 31, 2024 (this “Form 10-K”) and the documents incorporated herein by reference contain forward-looking statements based on expectations, estimates and projections as of the date of this filing. Actual results may differ materially from those expressed in such forward-looking statements.
Principal Accountant Fees and Services 58 PART IV Item 15. Exhibit and Financial Statement Schedules 58 Item 16.
Principal Accountant Fees and Services 60 PART IV Item 15. Exhibit and Financial Statement Schedules 60 Item 16.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

84 edited+19 added−18 removed34 unchanged
Biggest changeResults of Operations: The following table sets forth the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the prior year. 2023 2022 Percentage Change in Dollar Amounts (in thousands) $ % $ % % Operating revenues $ 3,283,499 100.0 $ 3,289,978 100.0 (0.2) Operating expenses: Salaries, wages and benefits 1,072,558 32.7 1,020,609 31.0 5.1 Fuel 345,001 10.5 437,299 13.3 (21.1) Supplies and maintenance 256,494 7.8 253,096 7.7 1.3 Taxes and licenses 102,684 3.1 97,929 3.0 4.9 Insurance and claims 138,516 4.2 147,365 4.5 (6.0) Depreciation and amortization 299,509 9.1 279,923 8.5 7.0 Rent and purchased transportation 886,284 27.0 777,464 23.6 14.0 Communications and utilities 18,480 0.6 15,856 0.5 16.5 Other (12,443) (0.4) (62,639) (1.9) (80.1) Total operating expenses 3,107,083 94.6 2,966,902 90.2 4.7 Operating income 176,416 5.4 323,076 9.8 (45.4) Total other expense (income), net 28,635 0.9 (1,710) (0.1) (1,774.6) Income before income taxes 147,781 4.5 324,786 9.9 (54.5) Income tax expense 35,491 1.1 79,206 2.4 (55.2) Net income 112,290 3.4 245,580 7.5 (54.3) Net loss (income) attributable to noncontrolling interest 92 — (4,324) (0.2) (102.1) Net income attributable to Werner $ 112,382 3.4 $ 241,256 7.3 (53.4) 18 Table of Contents The following tables set forth the operating revenues, operating expenses and operating income for the TTS segment and certain statistical data regarding our TTS segment operations, as well as statistical data for the One-Way Truckload and Dedicated operating units within TTS. 2023 2022 TTS segment (in thousands) $ % $ % % Chg Trucking revenues, net of fuel surcharge $ 1,949,445 $ 1,982,639 (1.7) % Trucking fuel surcharge revenues 332,388 419,240 (20.7) % Non-trucking and other operating revenues 28,977 26,807 8.1 % Operating revenues 2,310,810 100.0 2,428,686 100.0 (4.9) % Operating expenses 2,141,480 92.7 2,134,131 87.9 0.3 % Operating income $ 169,330 7.3 $ 294,555 12.1 (42.5) % TTS segment 2023 2022 % Chg Average tractors in service 8,326 8,437 (1.3) % Average revenues per tractor per week (1) $ 4,502 $ 4,519 (0.4) % Total tractors (at year end) Company 7,740 8,305 (6.8) % Independent contractor 260 295 (11.9) % Total tractors 8,000 8,600 (7.0) % Total trailers (at year end) 27,850 27,650 0.7 % One-Way Truckload Trucking revenues, net of fuel surcharge (in 000’s) $ 713,762 $ 766,013 (6.8) % Average tractors in service 3,042 3,153 (3.5) % Total tractors (at year end) 2,735 3,150 (13.2) % Average percentage of empty miles 14.36 % 12.70 % 13.1 % Average revenues per tractor per week (1) $ 4,512 $ 4,672 (3.4) % Average % change in revenues per total mile (1) (5.5) % 8.6 % Average % change in total miles per tractor per week 2.2 % (7.4) % Average completed trip length in miles (loaded) 595 675 (11.9) % Dedicated Trucking revenues, net of fuel surcharge (in 000’s) $ 1,235,683 $ 1,216,626 1.6 % Average tractors in service 5,284 5,284 — % Total tractors (at year end) 5,265 5,450 (3.4) % Average revenues per tractor per week (1) $ 4,496 $ 4,428 1.5 % (1) Net of fuel surcharge revenues 19 Table of Contents The following tables set forth the Werner Logistics segment’s revenues, purchased transportation expense, other operating expenses (primarily salaries, wages and benefits expense), total operating expenses, and operating income, as well as certain statistical data regarding the Werner Logistics segment. 2023 2022 Werner Logistics segment (in thousands) $ % $ % % Chg Operating revenues $ 910,433 100.0 $ 793,492 100.0 14.7 % Operating expenses: Purchased transportation expense 761,948 83.7 653,185 82.3 16.7 % Other operating expenses 132,606 14.6 104,123 13.1 27.4 % Total operating expenses 894,554 98.3 757,308 95.4 18.1 % Operating income $ 15,879 1.7 $ 36,184 4.6 (56.1) % Werner Logistics segment 2023 2022 % Chg Average tractors in service 37 52 (28.8) % Total tractors (at year end) 35 39 (10.3) % Total trailers (at year end) 2,960 2,315 27.9 % 2023 Compared to 2022 Operating Revenues Operating revenues decreased 0.2% in 2023 compared to 2022.
Biggest changeNet capital expenditures (primarily revenue equipment) in 2025 currently are expected to b e in the ran ge of $185 million to $235 million. 17 Table of Contents Results of Operations: The following table sets forth the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the prior year. 2024 2023 Percentage Change in Dollar Amounts (in thousands) $ % $ % % Operating revenues $ 3,030,258 100.0 $ 3,283,499 100.0 (7.7) Operating expenses: Salaries, wages and benefits 1,034,877 34.1 1,072,558 32.7 (3.5) Fuel 275,413 9.1 345,001 10.5 (20.2) Supplies and maintenance 246,061 8.1 256,494 7.8 (4.1) Taxes and licenses 97,230 3.2 102,684 3.1 (5.3) Insurance and claims 145,398 4.8 138,516 4.2 5.0 Depreciation and amortization 290,405 9.6 299,509 9.1 (3.0) Rent and purchased transportation 844,870 27.9 886,284 27.0 (4.7) Communications and utilities 17,195 0.6 18,480 0.6 (7.0) Other 12,661 0.4 (12,443) (0.4) (201.8) Total operating expenses 2,964,110 97.8 3,107,083 94.6 (4.6) Operating income 66,148 2.2 176,416 5.4 (62.5) Total other expense, net 23,666 0.8 28,635 0.9 (17.4) Income before income taxes 42,482 1.4 147,781 4.5 (71.3) Income tax expense 8,912 0.3 35,491 1.1 (74.9) Net income 33,570 1.1 112,290 3.4 (70.1) Net loss attributable to noncontrolling interest 663 — 92 — 620.7 Net income attributable to Werner $ 34,233 1.1 $ 112,382 3.4 (69.5) 18 Table of Contents The following tables set forth the operating revenues, operating expenses and operating income for the TTS segment and certain statistical data regarding our TTS segment operations, as well as statistical data for One-Way Truckload and Dedicated operations within TTS. 2024 2023 TTS segment (in thousands) $ % $ % % Chg Trucking revenues, net of fuel surcharge $ 1,836,581 $ 1,949,445 (5.8) % Trucking fuel surcharge revenues 263,263 332,388 (20.8) % Non-trucking and other operating revenues 38,449 28,977 32.7 % Operating revenues 2,138,293 100.0 2,310,810 100.0 (7.5) % Operating expenses 2,063,127 96.5 2,141,480 92.7 (3.7) % Operating income $ 75,166 3.5 $ 169,330 7.3 (55.6) % TTS segment 2024 2023 % Chg Average tractors in service 7,619 8,326 (8.5) % Average revenues per tractor per week (1) $ 4,635 $ 4,502 3.0 % Total tractors (at year end) Company 7,155 7,740 (7.6) % Independent contractor 295 260 13.5 % Total tractors 7,450 8,000 (6.9) % Total trailers (at year end) 25,495 27,850 (8.5) % One-Way Truckload Trucking revenues, net of fuel surcharge (in 000’s) $ 672,598 $ 713,762 (5.8) % Average tractors in service 2,695 3,042 (11.4) % Total tractors (at year end) 2,610 2,735 (4.6) % Average percentage of empty miles 15.25 % 14.36 % 6.2 % Average revenues per tractor per week (1) $ 4,799 $ 4,512 6.4 % Average % change in revenues per total mile (1) (1.2) % (5.5) % Average % change in total miles per tractor per week 7.6 % 2.2 % Average completed trip length in miles (loaded) 582 595 (2.2) % Dedicated Trucking revenues, net of fuel surcharge (in 000’s) $ 1,163,983 $ 1,235,683 (5.8) % Average tractors in service 4,924 5,284 (6.8) % Total tractors (at year end) 4,840 5,265 (8.1) % Average revenues per tractor per week (1) $ 4,546 $ 4,496 1.1 % (1) Net of fuel surcharge revenues 19 Table of Contents The following tables set forth the Werner Logistics segment’s revenues, purchased transportation expense, other operating expenses (primarily salaries, wages and benefits expense), total operating expenses, and operating income, as well as certain statistical data regarding the Werner Logistics segment. 2024 2023 Werner Logistics segment (in thousands) $ % $ % % Chg Operating revenues $ 831,337 100.0 $ 910,433 100.0 (8.7) % Operating expenses: Purchased transportation expense 707,493 85.1 761,948 83.7 (7.1) % Other operating expenses 124,725 15.0 132,606 14.6 (5.9) % Total operating expenses 832,218 100.1 894,554 98.3 (7.0) % Operating income (loss) $ (881) (0.1) $ 15,879 1.7 (105.5) % Werner Logistics segment 2024 2023 % Chg Average tractors in service 22 37 (40.5) % Total tractors (at year end) 18 35 (48.6) % Total trailers (at year end) 3,170 2,960 7.1 % Total containers (at year end) 200 — N/A 2024 Compared to 2023 Operating Revenues Operating revenues decreased 7.7% in 2024 compared to 2023.
Business Acquisitions: We acquired the following entities in 2022 and 2021: • 100% of ReedTMS on November 5, 2022. Freight brokerage and truckload revenues generated by ReedTMS are reported in our Werner Logistics segment and in Dedicated within our TTS segment, respectively. • 100% of Baylor on October 1, 2022.
Business Acquisitions: We acquired the following entities in 2022: • 100% of ReedTMS on November 5, 2022. Freight brokerage and truckload revenues generated by ReedTMS are reported in our Werner Logistics segment and in Dedicated within our TTS segment, respectively. • 100% of Baylor on October 1, 2022.
However, fuel savings from mpg improvement is partially offset by higher depreciation expense and the additional cost of diesel exhaust fluid. Although our fuel management programs require significant capital investment and research and development, we intend to continue these and other environmentally conscious initiatives, including our active participation as a U.S. EPA SmartWay 21 Table of Contents Transport Partner.
However, fuel savings from mpg improvement is partially offset by higher depreciation expense and the additional cost of diesel exhaust fluid. Although our fuel management programs require significant capital investment and research and development, we intend to continue these and other environmentally conscious initiatives, including our active participation as a U.S. EPA SmartWay Transport Partner.
In addition to our cash requirements, the Board of Directors has authorized us to deliver value to shareholders through stock repurchases and quarterly cash dividends. The stock repurchase program does not obligate the Company to acquire any specific number of shares.
In addition to our cash requirements, the Board of Directors has authorized us to deliver value to stockholders through stock repurchases and quarterly cash dividends. The stock repurchase program does not obligate the Company to acquire any specific number of shares.
We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our existing credit facility will provide sufficient funds to meet our cash requirements and our planned shareholder returns for the foreseeable future.
We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our existing credit facility will provide sufficient funds to meet our cash requirements and our planned stockholder returns for the foreseeable future.
As discussed further in the comparison of operating results for 2023 to 2022, several industry-wide issues have caused, and could continue to cause, costs to increase in future periods.
As discussed further in the comparison of operating results for 2024 to 2023, several industry-wide issues have caused, and could continue to cause, costs to increase in future periods.
These programs generally enable us to recover a majority, but not all, of the fuel price increases. The 20 Table of Contents remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and tractor idle time.
These programs generally enable us to recover a majority, but not all, of the fuel price increases. The remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and tractor idle time.
These revenues represent collections from customers for the increase in fuel and fuel-related expenses, including the fuel component of our independent contractor cost (recorded as rent and purchased transportation expense) and fuel taxes (recorded in taxes and licenses expense), when diesel fuel prices rise. Conversely, when fuel prices decrease, fuel surcharge revenues decrease.
These revenues represent 20 Table of Contents collections from customers for the increase in fuel and fuel-related expenses, including the fuel component of our independent contractor cost (recorded as rent and purchased transportation expense) and fuel taxes (recorded in taxes and licenses expense), when diesel fuel prices rise. Conversely, when fuel prices decrease, fuel surcharge revenues decrease.
Capital expenditures, business acquisitions, stock repurchases, and dividend 23 Table of Contents payments are components of our cash flow and capital management strategy, which to a large extent, can be adjusted in response to economic and other changes in the business environment.
Capital expenditures, business acquisitions, stock repurchases, and dividend payments are components of our cash flow and capital management strategy, which to a large extent, can be adjusted in response to economic and other changes in the business environment.
Our ability to adapt to changes 16 Table of Contents in customer transportation requirements is essential to efficiently deploy resources and make capital investments in tractors and trailers (with respect to our TTS segment) or obtain qualified third-party capacity at a reasonable price (with respect to our Werner Logistics segment).
Our ability to adapt to changes in customer transportation requirements is essential to efficiently deploy resources and make capital investments in tractors and trailers (with respect to our TTS segment) or obtain qualified third-party capacity at a reasonable price (with respect to our Werner Logistics segment).
We also purchased a $25.0 million subordinated promissory note from Mastery Logistics Systems, Inc. on January 24, 2023, with a maturity date of January 24, 2030 (see Note 9 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for information regarding our notes receivable).
During 2023, we purchased a $25.0 million subordinated promissory note from Mastery Logistics Systems, Inc. with a maturity date of 24 Table of Contents January 24, 2030 (see Note 9 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for information regarding our notes receivable).
At December 31, 2023 and 2022, we had an accrual of $321.5 million and $323.6 million, respectively, for estimated insurance and claims for (i) cargo loss and damage, (ii) bodily injury and property damage, (iii) group health, and (iv) workers’ compensation claims not covered by insurance.
At December 31, 2024 and 2023, we had an accrual of $330.6 million and $321.5 million, respectively, for estimated insurance and claims for (i) cargo loss and damage, (ii) bodily injury and property damage, (iii) group health, and (iv) workers’ compensation claims not covered by insurance.
As of December 31, 2023, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. Supplies and maintenance increased $3.4 million or 1.3% in 2023 compared to 2022 and increased 0.1% as a percentage of operating revenues.
As of December 31, 2024, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations. Supplies and maintenance decreased $10.4 million, or 4.1%, in 2024 compared to 2023 and increased 0.3% as a percentage of operating revenues.
See Note 5 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for further detail of our lease obligations and the timing of expected future payments. • Purchase Obligations – As of December 31, 2023, we have committed to property and equipment purchases of approximately $107.9 million within the next 12 months.
See Note 5 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for further detail of our lease obligations and the timing of expected future payments. • Purchase Obligations – As of December 31, 2024, we have committed to property and equipment purchases of approximately $47.7 million within the next 12 months.
For the policy year that began August 1, 2022 we were responsible for the first $10.0 million per claim on all claims with an annual $10.0 million aggregate for claims between $10.0 million and $20.0 million. We maintain liability insurance coverage with insurance carriers in excess of the $10.0 million per claim.
For the policy year that began August 1, 2023 we were responsible for the first $10.0 million per claim on all claims with an annual $12.5 million aggregate for claims between $10.0 million and $20.0 million. We maintain liability insurance coverage with insurance carriers in excess of the $15.0 million per claim.
At the end of 2023, we believe we are well positioned with a strong balance sheet and sufficient liquidity. Our debt is at $649 million, or a net debt ratio (debt less cash) of 1.2 times earnings before interest, income taxes, depreciation and amortization for the year ended December 31, 2023.
At the end of 2024, we believe we are well positioned with a strong balance sheet and sufficient liquidity. Our debt is at $650 million, or a net debt ratio (debt less cash) of 1.6 times earnings before interest, income taxes, depreciation and amortization for the year ended December 31, 2024.
Considering the freight market outlook, we expect average revenues per total mile, net of fuel surcharge, for the One-Way Truckload fleet to decrease in a range of 6% to 3% in the first half of 2024 when compared to the first half of 2023, and we expect Dedicated average revenues per tractor per week, net of fuel surcharge, to remain flat or increase up to 3% in 2024 compared to 2023.
Considering the freight market outlook, we expect average revenues per total mile, net of fuel surcharge, for the One-Way Truckload fleet to increase in a range of 1% to 4% in the first half of 2025 when compared to the first half of 2024, and we expect Dedicated average revenues per tractor per week, net of fuel surcharge, to remain flat or increase up to 3% in 2025 compared to 2024.
The key statistics used to evaluate trucking revenues, net of fuel surcharge, are (i) average revenues per tractor per week, (ii) average percentage of empty miles (miles without trailer cargo), (iii) average trip length (in loaded miles) and (iv) average number of tractors in service.
The key statistics used to evaluate trucking revenues, net of fuel surcharge, are (i) average revenues per tractor per week, (ii) One-Way Truckload average revenues per total mile, (iii) average percentage of empty miles (miles without trailer cargo), (iv) average trip length (in loaded miles) and (v) average number of tractors in service.
We may also be affected by our customers’ financial failures or loss of customer business. Revenues for our TTS segment operating units (Dedicated and One-Way Truckload) are typically generated on a per-mile basis and also include revenues such as stop charges, loading and unloading charges, equipment detention charges and equipment repositioning charges.
We may also be affected by our customers’ financial failures or loss of customer business. 16 Table of Contents Revenues for the operating segments (Dedicated and One-Way Truckload) within our TTS reportable segment are typically generated on a per-mile basis and also include revenues such as stop charges, loading and unloading charges, equipment detention charges and equipment repositioning charges.
Management’s approach to capital allocation focuses on investing in key priorities that support our business and growth strategies and providing shareholder returns, while funding ongoing operations. Management believes our financial position at December 31, 2023 is strong. As of December 31, 2023, we had $61.7 million of cash and cash equivalents and over $1.5 billion of stockholders’ equity.
Management’s approach to capital allocation focuses on investing in key priorities that support our business and growth strategies and providing stockholder returns, while funding ongoing operations. Management believes our financial position at December 31, 2024 is strong. As of December 31, 2024, we had $40.8 million of cash and cash equivalents and $1.5 billion of stockholders’ equity.
Securities and Exchange Commission on February 27, 2023. Liquidity and Capital Resources: We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management.
Liquidity and Capital Resources: We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management.
A 10% change in actuarial estimates for insurance and claims for bodily injury and property damage at December 31, 2023, would have changed our insurance and claims accrual by approximately $24.8 million. 25 Table of Contents
A 10% change in actuarial estimates for insurance and claims for bodily injury and property damage at December 31, 2024, would have changed our insurance and claims accrual by approximately $26.0 million. 25 Table of Contents
Operating Expenses Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 94.6% in 2023 compared to 90.2% in 2022. Expense items that impacted the overall operating ratio are described on the following pages.
Operating Expenses Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.8% in 2024 compared to 94.6% in 2023. Expense items that impacted the overall operating ratio are described on the following pages.
Werner Logistics also recorded revenue and brokered freight expense of $17.7 million in 2023 and $5.2 million in 2022 for shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
Werner Logistics recorded revenue and brokered freight expense of $14.4 million in 2024 and $17.7 million in 2023 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
We currently estimate our full year 2024 effective income tax rate to be approximately 24.5% to 25.5%. 2022 Compared to 2021 For a comparison of the Company’s results of operations for the fiscal year ended December 31, 2022 to the fiscal year ended December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the U.S.
We currently estimate our full year 2025 effective income tax rate to be approximately 25.0% to 26.0%. 2023 Compared to 2022 For a comparison of the Company’s results of operations for the fiscal year ended December 31, 2023 to the fiscal year ended December 31, 2022, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 26, 2024.
To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts. Fuel surcharge rates generally adjust weekly based on an independent U.S.
To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts.
These issues include shortages of drivers or independent contractors, changing fuel prices, changing used truck and trailer pricing, compliance with new or proposed regulations and tightening of the commercial truck liability insurance market. Our main fixed costs include depreciation expense for tractors and trailers and equipment licensing fees (included in taxes and licenses expense).
These issues include shortages of drivers or independent contractors, changing fuel prices, changing used truck and trailer pricing, compliance with new or proposed regulations and tightening of the commercial truck liability insurance market. Our main fixed costs include depreciation expense for tractors and trailers and non-driver salaries, wages and benefits.
Department of Energy fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline.
Fuel surcharge rates generally adjust weekly based on an independent DOE fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline.
We plan to continue paying a quarterly dividend, which currently results in a cash outlay of nearly $9 million per quarter. Cash Flows We generated cash flow from operations of $474.4 million during 2023, a 5.7% or $25.7 million increase in cash flows compared to $448.7 million during 2022.
We plan to continue paying a quarterly dividend, which currently results in a cash outlay of approximately $9 million per quarter. Cash Flows We generated cash flow from operations of $329.7 million during 2024, a 30.5% or $144.6 million decrease in cash flows compared to $474.4 million during 2023.
Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week. Werner Logistics revenues are generated by its three operating units. Werner Logistics revenues exclude revenues for full truckload shipments transferred to the TTS segment, which are recorded as trucking revenues by the TTS segment.
Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week. Werner Logistics revenues are generated by its three operating units.
We cannot predict whether future driver shortages, if any, will adversely affect our ability to maintain our fleet size. If such a driver market shortage were to occur, it could result in a fleet size reduction, and our results of operations could be adversely affected.
We cannot predict whether future driver shortages, if any, would have a further adverse effect on our fleet size. If such a driver market shortage were to occur, it could result in further fleet size reductions, and our results of operations could be adversely affected.
In July 2023, we entered into four additional variable-for-fixed interest rate swap agreements for a notional amount of $130.0 million to further limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness (see Note 8 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K regarding these interest rate swaps).
Subsequent to May 2024, we entered into three variable-for-fixed interest rate swap agreements with an aggregate notional amount of $225.0 million to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness (see Note 8 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K for further information on our debt and interest rate swaps).
Other Expense (Income) Other expense, net of other income, increased $30.3 million in 2023 compared to 2022 due primarily to a $16.7 million increase in net interest expense, a $12.5 million decrease in the amount of unrealized net gains recognized on our investments in equity securities, and a loss from our equity method investment of $1.0 million (see Note 7 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K for information regarding our investments).
Other Expense (Income) Other expense, net of other income, decreased $5.0 million in 2024 compared to 2023 due primarily to an $8.2 million increase in the amount of gains on our investments in equity securities and a $1.6 million increase in the amount of earnings from our equity method investment (see Note 7 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K for information regarding our investments), partially offset by a $5.5 million increase in net interest expense.
We continue to employ measures to improve our fuel mpg such as (i) limiting tractor engine idle time by installing auxiliary power units, (ii) optimizing the speed, weight and specifications of our equipment and (iii) implementing mpg-enhancing equipment changes to our fleet including new tractors, more aerodynamic tractor features, idle reduction systems, trailer tire inflation systems, trailer skirts and automated manual transmissions to reduce our fuel gallons purchased.
Average diesel fuel prices, excluding fuel taxes, for the full year 2024 were 42 cents per gallon lower than the full year 2023, a 14% decrease. 21 Table of Contents We continue to employ measures to improve our fuel mpg such as (i) limiting tractor engine idle time by installing auxiliary power units, (ii) optimizing the speed, weight and specifications of our equipment and (iii) implementing mpg-enhancing equipment changes to our fleet including new tractors, more aerodynamic tractor features, idle reduction systems, trailer tire inflation systems, trailer skirts and automated manual transmissions to reduce our fuel gallons purchased.
Our material cash requirements include the following contractual and other obligations. • Debt Obligations and Interest Payments – As of December 31, 2023, we had outstanding debt with an aggregate principal amount of $648.8 million, with $88.8 million payable within 12 months.
Our material cash requirements include the following contractual and other obligations. • Debt Obligations and Interest Payments – As of December 31, 2024, we had outstanding debt with an aggregate principal amount of $650.0 million, with $20.0 million expected to be paid within 12 months.
Independent contractor miles increased 1.3 million miles in 2023 and as a percentage of total miles were 4.6% in 2023 compared to 4.5% in 2022.
Independent contractor miles increased 0.8 million miles in 2024 and as a percentage of total miles were 4.9% in 2024 compared to 4.6% in 2023.
Werner Logistics recorded revenue and brokered freight expense of $17.7 million in 2023 and $5.2 million in 2022 for shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
Werner Logistics recorded revenue and brokered freight expense of $14.4 million in 2024 and $17.7 million in 2023 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation. Werner Logistics revenues decreased 8.7% to $831.3 million in 2024 from $910.4 million in 2023.
As of December 31, 2023, we had fixed lease payment obligations of $40.3 million, with $10.1 million payable within 12 months.
As of December 31, 2024, we had fixed lease payment obligations of $57.3 million, with $17.4 million payable within 12 months.
We evaluate the Werner Logistics segment’s financial performance by reviewing operating expenses and operating income expressed as a percentage of revenues. Purchased transportation expenses as a percentage of revenues can be impacted by the rates charged to customers and the costs of securing third-party capacity.
Purchased transportation expenses as a percentage of revenues can be impacted by the rates charged to customers and the costs of securing third-party capacity.
We had available liquidity of $526 million, considering cash and cash equivalents on hand and available borrowing capacity of $464 million. As of December 31, 2023, we were in compliance with our debt covenants and expect to continue to be in compliance in 2024.
We had available liquidity of $460 million, considering cash and cash equivalents on hand and available borrowing capacity of $419 million. As of December 31, 2024, we were in compliance with our debt covenants and expect to continue to be in compliance in 2025. We currently plan to continue paying our quarterly dividend, which we have paid quarterly since 1987.
We were able to make net capital expenditures, make net repayments on our debt, make a strategic loan and investments, and pay dividends with the net cash provided by operating activities and existing cash balances. Net cash used in investing activities was $434.9 million during 2023 compared to $514.3 million during 2022.
We were able to make net capital expenditures, repay debt, make strategic investments, pay dividends, and repurchase company stock with the net cash provided by operating activities and existing cash balances, supplemented by borrowings under our existing credit facility. Net cash used in investing activities was $241.4 million during 2024 compared to $434.9 million during 2023.
The increase in net cash provided by operating activities was due primarily to working capital changes, including a decrease in accounts receivable days sales outstanding, offset by a decrease in net income during 2023.
The decrease in net cash provided by operating activities was due primarily to a decrease in net income during 2024 and working capital changes.
Through February 16, the average diesel fuel price per gallon in 2024 was approximatel y 53 cents lower than the average diesel fuel price per gallon in the same period of 2023 and approxima tely 36 cents lower t han the average for first quarter 2023.
Through February 16, the average diesel fuel price per gallon in 2025 was approximately 21 cents lower than the average diesel fuel price per gallon in the same period of 2024 and approxima te ly 26 cents lower than the average for first quarter 2024.
Rent and purchased transportation expense for the TTS segment increased $10.6 million in 2023 compared to 2022 due primarily to an increase in cloud-based technology fees and more independent contactor miles in 2023, partially offset by lower 22 Table of Contents reimbursements to independent contractors because of lower average diesel fuel prices.
Rent and purchased transportation expense for the TTS segment increased $9.8 million in 2024 compared to 2023 due primarily to higher cloud-based technology fees, more independent contractor miles, and additional operational facility costs. These increases were partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices in 2024.
In 2023, we achieved our lowest DOT preventable accident rate per million miles in the last 19 years. We renewed our liability insurance policies on August 1, 2023 and are responsible for the first $10.0 million per claim on all claims with an annual $12.5 million aggregate for claims between $10.0 million and $20.0 million.
We renewed our liability insurance policies on August 1, 2024 and are responsible for the first $15.0 million per claim on all claims with an annual $7.5 million aggregate for claims between $15.0 million and $20.0 million.
In the truckload sector, we focus on transporting consumer nondurable products that generally ship more consistently throughout the year. In the logistics sector, besides managing transportation requirements for individual customers, we provide additional sources of truck capacity, alternative modes of transportation, a North American delivery network and systems analysis to optimize transportation needs.
In the logistics sector, besides managing transportation requirements for individual customers, we provide additional sources of truck capacity, alternative modes of transportation, a North American delivery network and systems analysis to optimize transportation needs. Our success depends on our ability to efficiently and effectively manage our resources in the delivery of truckload transportation and logistics services to our customers.
We also incurred insurance and claims expense of $5.7 million and $5.4 million in 2023 and 2022, respectively, for accrued interest related to a previously-disclosed adverse jury verdict rendered on May 17, 2018, which we are appealing (see Note 12 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K).
We also incurred insurance and claims expense of $4.5 million and $5.7 million in 2024 and 2023, respectively, for accrued interest related to a previously-disclosed adverse jury verdict rendered on May 17, 2018, which we are continuing to defend.
Fuel decreased $92.3 million or 21.1% in 2023 compared to 2022 and decreased 2.8% as a percentage of operating revenues due to much lower average diesel fuel prices, partially offset by 3.4 million more company tractor miles in 2023.
Fuel decreased $69.6 million, or 20.2%, in 2024 compared to 2023 and decreased 1.4% as a percentage of operating revenues due to lower average diesel fuel prices and 38.7 million fewer company tractor miles in 2024.
Cash is invested primarily in short-term money market funds. In addition, we have a $1.075 billion credit facility, for which our total available borrowing capacity was $463.9 million as of December 31, 2023.
Cash is invested primarily in short-term money market funds. In addition, we have a $1.075 billion credit facility, for which our total available borrowing capacity was $419.1 million as of December 31, 2024. We believe the six commercial banks in our $1.075 billion syndicated credit facility all have strong tier-one capital ratios and good loan-to-deposit ratios.
Net financing activities used $87.1 million during 2023 and provided $118.0 million during 2022. We had net repayments on our debt of $45.0 million during 2023, decreasing our outstanding debt to $648.8 million at December 31, 2023.
Net financing activities used $105.7 million during 2024 compared to $87.1 million during 2023. We had net borrowings on our debt of $1.3 million during 2024, slightly increasing our outstanding debt to $650.0 million at December 31, 2024. We had net repayments on our debt of $45.0 million during 2023.
The average age of our tractor fleet remains low by industry standards and was 2.1 years as of December 31, 2023, and the average age of our trailers was 4.9 years.
These decreases were partially offset by the higher cost of new tractors and trailers. The average age of our tractor fleet remains low by industry standards and was 2.1 years as of December 31, 2024, and the average age of our trailers was 5.3 years.
Trucking revenues, net of fuel surcharge, decreased 1.7% in 2023 compared to 2022 due to a 1.3% decrease in the average number of tractors in service and a 0.4% decrease in average revenues per tractor per week, net of fuel surcharge.
Trucking revenues, net of fuel surcharge, decreased 5.8% in 2024 compared to 2023 due to an 8.5% decrease in the average number of tractors in service, partially offset by a 3.0% increase in average revenues per tractor per week, net of fuel surcharge. During 2024, One-Way Truckload average revenues per total mile, net of fuel surcharge, decreased 1.2%.
Our Dedicated unit ended 2023 with 5,265 tractors (or 66% of our total TTS segment fleet) compared to 5,450 tractors (or 63%) at the end of 2022.
We ended 2024 with 7,450 tractors in the TTS segment, a year-over-year decrease of 550 tractors compared to the end of 2023. Within TTS, Dedicated ended 2024 with 4,840 tractors (or 65% of our total TTS segment fleet) compared to 5,265 tractors (or 66%) at the end of 2023.
Trucking fuel surcharge revenues decreased 20.7% to $332.4 million in 2023 from $419.2 million in 2022 due primarily to lower average diesel fuel prices.
Trucking fuel surcharge revenues decreased 20.8% to $263.3 million in 2024 from $332.4 million in 2023 due primarily to lower average diesel fuel prices and the impact of 38.7 million fewer company tractor miles.
Our coverage levels are the same as the prior policy year. We continue to maintain a self-insurance retention of $2.0 million per claim. Our workers’ compensation insurance premiums for the policy year beginning April 2023 were flat compared to the previous policy year.
Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 8.5% in 2024 compared to 2023. We renewed our workers’ compensation insurance coverage on April 1, 2024. Our coverage levels are the same as the prior policy year. We continue to maintain a self-insurance retention of $2.0 million per claim.
As of December 31, 24 Table of Contents 2023, the Company had purchased 3,688,190 shares pursuant to this authorization and had 2,311,810 shares remaining available for repurchase. The Company has repurchased, and may continue to repurchase, shares of the Company’s common stock. The timing and amount of such purchases depend upon economic and stock market conditions and other factors.
The Company has repurchased, and may continue to repurchase, shares of the Company’s common stock. The timing and amount of such purchases depend upon economic and stock market conditions and other factors.
Gains on sales of property and equipment are reflected as a reduction of other operating expenses and are reported net of sales-related expenses (which include costs to prepare the equipment for sale). Gains on sales of property and equipment were $42.4 million in 2023, compared to $88.6 million in 2022.
These increases were partially offset by decreased costs associated with professional technology services and decreased bad debt expense. Gains on sales of property and equipment are reflected as a reduction of other operating expenses and are reported net of sales-related expenses (which include costs to prepare the equipment for sale).
Additional information regarding these acquisitions is included in Note 2 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K. Overview: We have two reportable segments, TTS and Werner Logistics, and we operate in the truckload and logistics sectors of the transportation industry.
Revenues generated by Baylor are reported in One-Way Truckload within our TTS segment. Additional information regarding these acquisitions is included in Note 2 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K.
While we currently believe the driver recruiting and retention market may be less difficult in the near term, a competitive driver market presents labor challenges for customers and carriers alike. Several factors impacting the driver market include a declining number of, and increased competition for, driver training school graduates, aging truck driver demographics and increased truck safety regulations.
Several factors impacting the driver market include a declining number of, and increased competition for, driver training school graduates, aging truck driver demographics and increased truck safety regulations.
On November 9, 2021, our Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to 6,000,000 shares of its common stock. We did not repurchase any shares of common stock in 2023. Financing activities for 2022 included common stock repurchases of 2,710,304 shares at a cost of $110.4 million.
We did not repurchase any shares of common stock in 2023. On May 14, 2024, the Board of Directors approved a new stock repurchase program under which the Company is authorized to repurchase up to 5,000,000 shares of its common stock.
Other operating expenses increased $50.2 million in 2023 compared to 2022 and increased 1.5% as a percentage of operating revenues due primarily to lower gains on sales of property and equipment (primarily used tractors and trailers), and increased costs associated with professional technology services related to our multi-year technology and innovation strategy.
Other operating expenses increased $25.1 million in 2024 compared to 2023 and increased 0.8% as a percentage of operating revenues due primarily to lower gains on sales of property and equipment (primarily used tractors and trailers) and the impact of a $2.7 million net favorable change to a contingent earnout in 2023 related to the ReedTMS acquisition.
Rent and purchased transportation expense increased $108.8 million or 14.0% in 2023 compared to 2022 and increased 3.4% as a percentage of operating revenues. Rent and purchased transportation expense consists mostly of payments to third-party capacity providers in the Werner Logistics segment and other non-trucking operations, payments to independent contractors in the TTS segment, and cloud-based technology fees.
Rent and purchased transportation expense consists mostly of payments to third-party capacity providers in the Werner Logistics segment and other non-trucking operations, payments to independent contractors in 22 Table of Contents the TTS segment, and cloud-based technology fees. The payments to third-party capacity providers generally vary depending on changes in the volume of services generated by the Werner Logistics segment.
Intermodal revenues (12% of total Werner Logistics revenues) decreased 38% due to a decline in shipments and lower revenue per shipment. Final Mile revenues (11% of total Werner Logistics revenues) increased $11.0 million, or 12%, despite a softer market for discretionary spending on big and bulky products.
Intermodal revenues (13% of total Werner Logistics segment revenues) increased $2.3 million, or 2%, in 2024, due to an increase in shipments, partially offset by a decline in revenue per shipment. Final Mile revenues (11% of total Werner Logistics segment revenues) decreased $9.2 million, or 9%, in 2024 due to lower volume for furniture and appliances.
The largest expense item related to the Werner Logistics segment is the cost of purchased transportation we pay to third-party capacity providers. This expense item is recorded as rent and purchased transportation expense. Other operating expenses consist primarily of salaries, wages and benefits, as well as depreciation and amortization, supplies and maintenance, and other general expenses.
Unlike our TTS segment, the Werner Logistics segment is less asset-intensive and is instead dependent upon qualified associates, information systems and qualified third-party capacity providers. The largest expense item related to the Werner Logistics segment is the cost of purchased transportation we pay to third-party capacity providers. This expense item is recorded as rent and purchased transportation expense.
The effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 24.0% in 2023 compared to 24.4% in 2022. The lower income tax rate in 2023 was attributed primarily to a higher amount of favorable discrete income tax items in 2023, partially offset by the income tax effect of the noncontrolling interest.
Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 21.0% in 2024 compared to 24.0% in 2023. The lower income tax rate was attributed primarily to certain discrete 23 Table of Contents return-to-provision adjustments for a prior year.
Salaries, wages and benefits increased $51.9 million or 5.1% in 2023 compared to 2022 and increased 1.7% as a percentage of operating revenues. The higher dollar amount of salaries, wages and benefits expense in 2023 was due primarily to increased non-driver pay, higher driver pay from 3.4 million more company tractor miles, and higher benefit costs.
Salaries, wages and benefits decreased $37.7 million, or 3.5%, in 2024 compared to 2023 and increased 1.4% as a percentage of operating revenues.
Werner Logistics purchased transportation expense increased $108.8 million as a result of higher logistics revenues, including the ReedTMS logistics business, and increased to 83.7% as a percentage of Werner Logistics revenues in 2023 from 82.3% in 2022.
Werner Logistics purchased transportation expense decreased $54.5 million as a result of lower logistics revenues, but increased to 85.1% as a percentage of Werner Logistics revenues in 2024 from 83.7% in 2023 due to the competitive operating environment in 2024.
Insurance and claims decreased $8.8 million or 6.0% in 2023 compared to 2022 and decreased 0.3% as a percentage of operating revenues, due primarily to lower expense for large dollar liability claims resulting from a lower amount of unfavorable reserve development and lower new claims, partially offset by higher expense for new small dollar liability claims, increasing cost-per-claim, and increased cost for repairs.
We had higher expense for large dollar liability claims, primarily due to a higher amount of unfavorable reserve development and higher expense for new claims. These increases were partially offset by lower expense for small dollar liability claims, resulting primarily from a higher amount of favorable reserve development and lower expense for new claims.
Our liability insurance premiums for the policy year that began August 1, 2023 are $1.0 million higher than premiums for the previous policy year.
Our liability insurance premiums for the policy year that began August 1, 2024 are lower than premiums for the previous policy year as a result of changes in our retention level and aggregate insurance limits.
Net cash invested in our business acquisitions was $0.2 million during 2023 compared to $184.1 million during 2022. Net property and equipment additions (primarily revenue equipment) were $408.7 million during 2023 compared to $317.6 million during 2022. We currently estimate net capital expenditures (primarily revenue equipment) in 2024 to be in the range of $260 million to $310 million.
Net property and equipment additions (primarily revenue equipment) were $234.9 million during 2024 compared to $408.7 million during 2023. We currently estimate net capital expenditures (primarily revenue equipment) in 2025 to be in the range of $185 million to $235 million, which is lower than historical ranges as our portfolio evolves to be more asset light.
We currently expect our fleet size at the end of 2024 to remain flat or decrease up to 3% when compared to the fleet size at the end of 2023, with potential for growth in our Dedicated unit in the second half of the year.
We currently expect our TTS segment fleet size at the end of 2025 to increase in a range of 1% to 5% when compared to the fleet size at the end of 2024, with more weighted to the second half of the year.
Our success depends on our ability to efficiently and effectively manage our resources in the delivery of truckload transportation and logistics services to our customers. Resource requirements vary with customer demand, which may be subject to seasonal or general economic conditions.
Resource requirements vary with customer demand, which may be subject to seasonal or general economic conditions.
Net interest expense increased due to higher interest rates for variable rate debt and an increase in average debt outstanding.
Net interest expense increased due to the impact of replacing lower-cost debt and interest rate swaps with higher-cost debt and interest rate swaps upon certain maturities in 2024 and higher interest rates for variable-rate debt, partially offset by a decrease in average debt outstanding.
We increased our quarterly dividend rate by $0.01 per share, or 8%, beginning with the quarterly dividend paid in July 2023, and we increased our quarterly dividend rate by $0.01 per share, or 8%, beginning with the dividend paid in July 2022.
We paid dividends of $35.1 million during 2024 and $34.2 million during 2023. We increased our quarterly dividend rate by $0.01 per share, or 8%, beginning with the quarterly dividend paid in July 2023. Financing activities for 2024 also included common stock repurchases of 1,787,810 shares at a cost of $67.1 million.
Werner Logistics operating income decreased to $15.9 million in 2023 from $36.2 million in 2022 and operating margin percentage decreased to 1.7% in 2023 from 4.6% in 2022, due to a competitive pricing environment.
Werner Logistics had an operating loss of $0.9 million in 2024 compared to operating income of $15.9 million in 2023, and its operating margin percentage decreased to (0.1)% in 2024 from 1.7% in 2023. The operating environment continues to be competitive, which is pressuring Werner Logistics operating margins.
We continued to invest in new tractors and trailers and our terminals in 2023 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. In 2024, we expect the average age of our tractor and trailer fleets to remain at or near current levels.
We continued to invest in new tractors and trailers, technology, and our terminal network in 2024 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. Rent and purchased transportation expense decreased $41.4 million, or 4.7%, in 2024 compared to 2023 and increased 0.9% as a percentage of operating revenues.
Supplies and maintenance expense increased due to higher costs for over-the-road repairs and the impact of 3.4 million more company tractor miles in 2023. We have taken steps to reduce repair and maintenance expense by growing our in-house maintenance capabilities throughout our terminal network.
We have taken steps to reduce repair and maintenance expense by growing our in-house maintenance capabilities throughout our terminal network. Insurance and claims increased $6.9 million, or 5.0%, in 2024 compared to 2023 and increased 0.6% as a percentage of operating revenues.
In 2023, we sold significantly more tractors and trailers than in 2022 and realized substantially lower average gains per tractor and trailer due to lower pricing in the market for our used equipment, which we believe is due to decreased demand for our used equipment because of carriers increasingly exiting the trucking industry in 2023 due to the challenging freight market and an increase in the availability of new equipment due to fewer production delays in 2023 compared to 2022.
Gains on sales of property and equipment were $15.3 million in 2024, including $7.0 million from the sale of real estate, compared to $42.4 million in 2023. In 2024, we sold fewer tractors and substantially more trailers than in 2023 and realized lower average gains per tractor and trailer due to lower pricing in the market for our used equipment.
Interest will continue to accrue monthly until such time as the outcome of our appeal is finalized. The majority of our insurance and claims expense results from our claim experience and claim development under our self-insurance program; the remainder results from insurance premiums for claims in excess of our self-insured limits.
For additional information related to this lawsuit, see Note 12 in the Notes to Consolidated Financial Statements set forth in Part II of this Form 10-K. The majority of our insurance and claims expense results from our claim experience and claim development under our self-insurance program; the remainder results from insurance premiums for claims in excess of our self-insured limits.
We expect these increases in net interest expense to be partially offset by debt reduction during 2024. Income Tax Expense Income tax expense decreased $43.7 million in 2023 compared to 2022, due primarily to lower pre-tax income.
We expect net interest expense to be flat in 2025 compared to 2024, higher in the first half and lower in the second half of 2025. Income Tax Expense Income tax expense decreased $26.6 million in 2024 compared to 2023, due primarily to lower pre-tax income and a decrease in the effective income tax rate.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign currency translation gains were $6.1 million and $2.4 million for the year ended December 31, 2023 and 2022, respectively, and were recorded in accumulated other comprehensive loss within stockholders’ equity in the consolidated balance sheets. The exchange rate between the Mexican Peso and the U.S.
Biggest changeForeign currency translation losses were $7.4 million for the year ended December 31, 2024 and gains were $6.1 million for the year ended December 31, 2023. These gains and losses were recorded in accumulated other comprehensive loss within stockholders’ equity in the consolidated balance sheets. The exchange rate between the Mexican Peso and the U.S.
We implemented customer fuel surcharge programs with most of our customers to offset much of the higher fuel cost per gallon. However, we do not recover all of the fuel cost increase through these surcharge programs. As of December 31, 2023, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
We implemented customer fuel surcharge programs with most of our customers to offset much of the higher fuel cost per gallon. However, we do not recover all of the fuel cost increase through these surcharge programs. As of December 31, 2024, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
The interest rates on our credit facility are based on Secured Overnight Financing Rate (“SOFR”). See Note 8 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for further detail of our debt.
The interest rates on our credit facility are based on Secured Overnight Financing Rate (“SOFR”). See Note 8 in the Notes to Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for further detail of our debt and interest rate swaps.
Assuming this level of borrowing, a hypothetical one-percentage point increase in the SOFR interest rate would increase our interest expense by approximately $4.3 million for the next 12-month period. 26 Table of Contents
Assuming this level of borrowing, a hypothetical one-percentage point increase in the SOFR interest rate would increase our interest expense by approximately $3.1 million for the next 12-month period. 26 Table of Contents
Dollar was 16.89 Pesos to $1.00 at December 31, 2023 compared to 19.36 Pesos to $1.00 at December 31, 2022. Interest Rate Risk We manage interest rate exposure through a mix of variable interest rate debt and interest rate swap agreements.
Dollar was 20.27 Pesos to $1.00 at December 31, 2024 compared to 16.89 Pesos to $1.00 at December 31, 2023. Interest Rate Risk We manage interest rate exposure through a mix of variable interest rate debt and interest rate swap agreements.
We had $280.0 million of variable interest rate debt outstanding at December 31, 2023, for which the interest rate is effectively fixed at 4.31% with interest rate swap agreements to reduce our exposure to interest rate increases. In addition, we had $280.0 million of variable interest rate debt outstanding at December 31, 2023.
We had $355.0 million of variable interest rate debt outstanding at December 31, 2024, for which the interest rate is effectively fixed at 5.97% with interest rate swap agreements to reduce our exposure to interest rate increases. In addition, we had $295.0 million of variable interest rate debt outstanding at December 31, 2024.

Other WERN 10-K year-over-year comparisons