nit league transportation summit

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


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



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.



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.



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


EMPLOYMENT & DRIVER SHORTAGE

8

Source(s): ATA’s Truck Driver Shortage Analysis 2017


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


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


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



Buckingham Research Group Dry Van Supply/Demand Index Surges to All-time High

12

Source(s): DAT Solutions



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



14

Distribution of Tonnage by Mode: 2016 vs 2028

2016 2028

Source(s): ATA, U.S. Freight Transportation Forecast to 2028



15

All Modes of Freight Transportation Will Grow – Total Percentage Increase in Tonnage from 2016 to 2028


LEGISLATIVE/REGULATORY ENVIRONMENT

▪ Regulations / regulatory reform

▪ Federal Aviation Administration Authorization Act

▪ North American Free Trade Agreement

▪ Electronic logging devices

▪ Infrastructure development and funding

16


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

nit league transportation summit

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