nit league transportation summit
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NIT LEAGUE TRANSPORTATION SUMMIT
OPENING KEYNOTE SPEAKER
▪ Founded in 1956; grown from one-truck
operation to a $2 billion company
▪ Among five largest U.S. truckload carriers
▪ Largest truckload carrier serving Mexico
▪ Fleet includes more than 7,300 trucks,
24,000 trailers & 16,000 alliance carriers
▪ Conducting business in more than 150
countries with offices in U.S., Canada,
Mexico, China & Australia
2
Derek J. Leathers
President and CEO
Werner Enterprises
Source(s): U.S. Bureau of Economic Analysis, U.S. Bureau of the Census, Stephens Inc., BLS, ATA
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
ECONOMIC ENVIRONMENT
U.S. Real GDP Growth is Expected to Continue
at Healthiest Clip Since 2004-05 Upcycle
3
0
100
200
300
400
2014
2015
2016
2017
Monthly Job Changes (Thousands)
3.0
4.0
5.0
6.0
7.0
201
4
201
5
201
6
201
7
Unemployment Rate (Percent)
2015 2016 2017 2018
5.3% 4.9% 4.4% 3.9%
Source(s): BEA, ATA, Census Bureau, Federal Reserve
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
ECONOMIC ENVIRONMENT (cont.)
4
Real Personal Consumption Growth(Goods Only)
Total Housing Starts(Monthly; Annualized Rate; Millions)
3.3%
4.6%
3.7% 3.8% 3.8%
2.7%
0%
1%
2%
3%
4%
5%
Avg2010 -2014
2015 2016 2017 2018 2019
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
2015 2016 2017 2018 2019
H.S. 1.11 M 1.18 M 1.21 M 1.29 M 1.40 M
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Single-Family Multi-Family
Single-Family vs Multi-Family Units(Monthly; Annualized Rate; Millions)
Source(s): ATA, Census Bureau, Federal Reserve
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
ECONOMIC ENVIRONMENT (cont.)
5
Factory Output(Index)
Factory Output(Year-over-Year Percent)
Total Business Inventory-to-Sales Ratio(Data adjusted for seasonal, holiday, and trading-
day differences, but not price changes)
90
95
100
105
110
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
2015 2016 2017 2018 2019
Output 0.2% 0.2% 1.7% 3.3% 3.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
1.55
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
Likely Optimal Range
Source(s): Cass Information Systems, KeyBanc Capital Markets Inc.
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
ECONOMIC ENVIRONMENT (cont.)
Cass Freight Index: Economic Outlook from Freight’s Perspective
Shipments
Expenditures (inclusive of fuel)
Import Container Volumes
6
Source(s): FactSet Research Systems, U.S. Census Bureau, IMF & Stephens Inc.
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
ECONOMIC ENVIRONMENT (cont.)
Conference Board Consumer Confidence Index Michigan Consumer Sentiment Index (MSCI)
ISM – Manufacturing PMI Retail Sales (Y/Y Change)
7
Source(s): FTR, U.S. Bureau of Labor Statistics
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
EMPLOYMENT & DRIVER SHORTAGE
8
Source(s): ATA’s Truck Driver Shortage Analysis 2017
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
EMPLOYMENT & DRIVER SHORTAGE (cont.)
9
Total Number of Drivers Needed Through 2026 Share of Drivers Needed Through 2026
Source(s): ATA’s Trucking Activity Report
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY
10
TL Tractor Changes: Large vs Small Fleets - Includes company tractors and independent contractor equipment
-7.0%
-5.0%
-3.0%
-1.0%
1.0%
3.0%
5.0%
7.0%
Large TLs Small TLs
-0.2%
4.0%
-5.0%
5.1%
-5.2%
0.0%
2015
2016
2017 YTD
Small Fleet: Less than $30 million in annual revenue
Source(s): ACT Research Co., KeyBanc Capital Markets Inc., FTR
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY (cont.)
Used Truck Blended Wholesale & Retail Pricing Used Truck Units Sold Used Truck Estimated Inventory
New Truck Order Activity New Truck Lead Time New Truck Net Orders & Production
11
Source(s): Buckingham Research Group
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY (cont.)
Buckingham Research Group Dry Van Supply/Demand Index Surges to All-time High
12
Source(s): DAT Solutions
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY (cont.)
Van Load-to-Truck Ratio Van Hot States: Dec. 31 – Jan. 6, 2018 Van Hot States: Jan. 15-21, 2017
Reefer Load-to-Truck Ratio Reefer Hot States: Dec. 31 – Jan. 6, 2018 Reefer Hot States: Jan. 15-21, 2017
13
Source(s): ATA, U.S. Freight Transportation Forecast to 2028
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY (cont.)
14
Distribution of Tonnage by Mode: 2016 vs 2028
2016 2028
Source(s): ATA, U.S. Freight Transportation Forecast to 2028
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
SUPPLY, DEMAND & CAPACITY (cont.)
15
All Modes of Freight Transportation Will Grow – Total Percentage Increase in Tonnage from 2016 to 2028
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
LEGISLATIVE/REGULATORY ENVIRONMENT
▪ Regulations / regulatory reform
▪ Federal Aviation Administration Authorization Act
▪ North American Free Trade Agreement
▪ Electronic logging devices
▪ Infrastructure development and funding
16
Derek Leathers // Developing a Strategic Plan in Times of Uncertainty
TECHNOLOGY/INNOVATION
▪ Advanced safety systems
(ex. collision-mitigation)
▪ Autonomous, alternative fuel
trucks; platooning
17
NIT LEAGUE TRANSPORTATION SUMMIT
OPENING KEYNOTE SPEAKER
werner.com18
Derek J. Leathers
President and CEO
Werner Enterprises
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