September 2, 2025 • 46 mins
The pace of the truckload-rate recovery could be driven by the Trump administration’s focus on the enforcement of English-language proficiency (ELP) requirements, its pause on trucker work visas and the strength of this year’s peak season. In this Talking Transports podcast, Derek Leathers, Werner Enterprises’ chairman and CEO, joins Lee Klaskow, Bloomberg Intelligence senior transportation and logistics analyst, to share what could be around the corner for trucking. ELP enforcement on the state and national level might affect 5-15% of truckers, according to Leathers. He also reflects on the pending Union Pacific–Norfolk Southern merger, EPA engine mandates, the impact of the US’ more protectionist policies on freight demand and how he opted for the open road over a job on Wall Street.
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Episode Transcript
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Lee Klaskow (00:07):
Hi, everyone, This is Lee Klask
ow. When we're talking transports, I'm your host Lee Claskow,
senior freight, transportation and logistics analysts at Bloomberg Intelligence, Bloomberg's
in house research team made up of nearly five hundred
analysts and strategists around the world. Today's episode's a big one.
We've officially hit one hundred. That's right, one hundred conversations, insights, interviews,
(00:28):
and deep dives into the world of freight, logistics and transportation.
Whether you've been with us from the start or just
jumped on board, thank you. Your support and curiosity is
help make talking transports what it is today. And a
quick psa before we dive in. If you'd enjoy the
ride so far, help us keep it going. Like it,
share it and leave a comment Wherever you're listening, And
(00:51):
if you've got feedback, ideas, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn, or on a logistics late. Now
let's get into it. Our hundredth episode should be a
fantastic one, and that's because we have with us. Derek Leathers,
Warner Enterprises Chairman and CEO. He's held integral roles in
(01:12):
many facets at Warner, including the establishment of its Mexico
operations and oversights for all the asset operating groups. Derek
has worked in the transportation logistics industry for over thirty years.
Prior to joining Warner in nineteen ninety nine, he was
with Schneider National for eight years, during which time he
was based out of Mexico City for several years and
(01:35):
was one of the first foreign members of Mexico's Trucking Association.
Warner is listed on nastak under the ticker WERN and
has a market cap of around one point seven billion dollars.
Welcome back to the podcast, Derek, thanks so much for
joining us.
Derek Leathers (01:51):
Yeah, thanks for having me Lee. I'm happy to be
here and I look forward to it.
Lee Klaskow (01:54):
And for those that aren't familiar with Warner Enterprises, there's
the nice what do you call him, light blow powder
blue trucks.
Derek Leathers (02:02):
Yeah, the original Warner blue color was kind of a
light blue color and over the years, it's obviously transitioned
some over time, and now we have the majority of
our fleet in either is what the color is called
sovereign blue. It's a bit of a dark blue color.
Lee Klaskow (02:15):
Now, all right, and get you to talk a little
bit about Warner's Fleet and your other businesses.
Derek Leathers (02:21):
Yeah, sure, I mean, obviously we have a long history.
Next year will we are seventieth anniversary. The company was
founded in nineteen fifty six by Seal Warner, started with
one truck and kind of a true American success story
and has grown a lot from there. As we sit
here today, you know, we're roughly about three billion dollars
in revenue, split across two major segments what we refer
(02:43):
to as TTS, which is our truckload Transportation services. So
that's the dedicated fleet of assets in our business that
work predominantly in a dedicated environment for our specific customers.
And then our one way network, which is as the
name implies, more over the road freight regional that's where
our cross border Mexico business lives. All of that collectively
(03:06):
kind of rolls up and becomes TTS. And then a
very growing part of our business is in the logistics
space where weren't Logistics now is right around nine hundred
million on its way to one billion dollars in annualized revenue,
and that's where you would find truckload brokerage. That's where
our power only we refer to as Powerlink solution exists.
(03:31):
That's also where a final mile and in our CA
center model operates through out of our logistics part of
our portfolio, about thirteen thousand associates, just under thirty thousand
trailers in the network and really coast to coast coverage
with also a heavy emphasis on cross border Mexico great.
Lee Klaskow (03:52):
And so that the freight market, I don't need to
tell you, but maybe our listeners might not be familiar with,
hasn't been great over the last two or three years.
Can you give us an update on the state of
the trucking market from your vantage point?
Derek Leathers (04:07):
Yeah, sure, I'll do my best to do so obviously. Yeah,
it has been tough. I think it's only fair to
go back to kind of how we got here, and
that really started with COVID. When COVID came along, you know,
people were kind of shut in for a long period
of time. They took their wallet share and dramatically shifted
it away from experiences to products. Demand kind of skyrocketed.
(04:28):
A lot of supply came into the market on the
carrier side to support that demand, and then post COVID,
we saw that inverse of the wallet share shift, people
came out of the house and decided that they didn't
need as many products anymore, and they haven't for several years,
and instead the percent of wallet going to experiences, concerts, ballgames,
and travel has been higher than historical levels by double
(04:52):
digits kind of year over year over year, And only recently,
I would say, have we started to see it return
to its sort of long term average run rate, where
now we're looking at the average consumer kind of roughly
splitting their expenditures their disposable income between buying things and
doing things. So the consumer has stabilized, but because of
(05:13):
that COVID boom and how many carriers and how much
capacity came into the market during those years, that has
continued to be a slow bleed off over time for
that capacity to kind of exit the market. Recent weeks
we've seen some larger failures of some companies, you know,
in that sort of three hundred to five hundred truck range,
but also just an ongoing attrition of some of the
(05:35):
small five ten, one two truck type operators, and all
of that collective movement is really bringing the market closer
and closer equilibrium.
Lee Klaskow (05:44):
And from your experience, when you know, because rates have
been depressed what usually drives it? Is it the supply
side or the demand side that usually drives or rebounding rates.
Derek Leathers (05:54):
Well, I think, to be fair, normally it is a
demand driven rebound more often than not. I mean, you
always have a supply correction that goes with it. So
rates go down. You know, marginal carriers can't exist and
can't operate at that level, they go out of the market.
And usually at some point that's coupled with some sort
of demand inflection, and so when the demanded flex, then
(06:15):
carriers have already been exited. There isn't enough supply out
there to service that new demand, and that causes up
fairly sudden and generally, you know, sustained lift in rates
that didn't last another two, three, four years, and that
until you find yourself in another downcycle. I think this
one's a little different. I think right now there's enough
economic uncertainty and there's enough kind of noise economic noise
(06:39):
in general, whether you talk interest rates, tariffs, or anything else,
that this is more driven at present by the supply side.
And I think as we look out to the coming quarters,
it's most likely that it'll be supply side driven more
than demand, but it's hard to say. You know, the
consumers hanging in there pretty well. Retailers are doing surprisingly
(07:00):
well despite how long you know, some of this consumer
pressure has existed. And so I think if you see
some interest rate reductions and some you know, rebounded housing,
all of a sudden you've got you know, more mouths
to feed from a trucking capacity perspective, but less capacity
to do so. And so ultimately it will always be both.
But I think this will be more supply driven than demand,
(07:20):
whereas the normal rebound is usually more demand driven than supply.
Lee Klaskow (07:26):
And so you know, you know, I know you have
a diversified business, but you're kind of like a little
heavy on you know, consumer staples and correct me if
if I'm wrong. So, so obviously you're probably a little
more defensive than other the other transportation providers that that
are in the freight markets. Can you talk about what
(07:48):
your customers are saying about the upcoming peak season? You know,
what they're saying, how they're reacting or operating under uh,
you know, the uncertainty that's been created by by the
tariffs out of the Trump ministration.
Derek Leathers (08:01):
Yeah, I mean, so first off, yes, we are more
exposed to retail in general than most carriers, so we're
you know, well over sixty percent of our businesses with retailers.
But in that space, our real focus is on that
non discretionary end of retail, and specifically in the value
and so discount retail value retail and home improvement. And
(08:24):
I think you know, most of the year has been
filled with lots of ups and downs for those folks
trying to navigate tariffs on tariffs off, tariff suspensions or
delays and then ultimate implementations, and so it's been pretty
chaotic for them. So we have had a lot more
focus and conversations about sort of the fits and starts
than we've been able to have on kind of the
(08:45):
normal type of dialogue, which is how's your business doing?
Where do you see it? Two to three quarters because
people are navigating more tactically right now than they are strategically. However,
with all that said, our customers and we focus on
this heavily here, trying to what we call alignment, you know,
alignment with winners, so looking at people winning in their space,
because those folks tend to do well in good times
(09:06):
and bad, and so far that's proven to be true.
Several of the retailers have released journings recently. You can
kind of see they're having some good success as people
migrate down into a more value based product, and yet
they retain their existing clientele who's always been with them,
and then after things improve or maybe some of the
pressures off, you know, they have lots of data to
(09:27):
show that a chuck of those consumers will stay with
them even in better times because they've now unlocked the
value of shopping at some of these stores. So so
overall pretty good as it released to peak, you know,
that's a bit of a mixed bag. It kind of
depends on what their strategies were relative to tariffs, but
by and large, most of the retailers have you know,
(09:47):
they always kind of go back to rule number one,
which is I can't sell it if it's not on
the shelf. So they absolutely, you know, have a plan
to bring a nexcess freight over the next several months
compared to the rest of the year so that they're
prepared for peak season. Those conversations have been going pretty well.
We play a major role with several of our largest
retailers four peak season. And at this point, although you
(10:10):
know everything isn't all inked yet, the agreements that are
in place as well as the ones that are in
the latter endings all look pretty good at this point.
You know.
Lee Klaskow (10:18):
So you know, your your trucking business is separated into
one way which is marg an over the road irregular
route truck and business, and you have your dedicated business.
You know, historically Dedicated has had less volatility, better margins,
and kind of consistent growth. You know, he gives us
an update of what's going on in the dedicated market,
(10:38):
you know at Werner.
Derek Leathers (10:40):
Yeah, sure, I mean, so Dedicated is more consistent, It
performs better and up and down cycles, you know, more
consistently and up and down cycles. I should say, our
dedicated business has done that during this downturn. It has
certainly been much more stable than the one way side
of our business. We did have some attrition in Dedicated
over the last couple of year where we've felt like
(11:01):
pricing discipline was critical. We're big believers in kind of
saying what we do and doing what we say, and
so you know, at certain points you just get to
a fork in the road. Where we didn't think the
pricing was commiserate with the work, and so we had
to walk away from a few fleets, a few opportunities
that had previously done business with us. But as we
(11:21):
sit here today, what we've seen is a really robust
dedicated pipeline. Dedicated has come back into favor as people
know this cycle is you know, either over or soon
to be over, and so they want the safety of dedicated.
They want to get back to service above all. Else,
they want the reliability of a portfolio company that can
meet them where they're at across multiple modes. All of
(11:42):
that has kind of worked in our favor, and so
we you know, we've indicated a pretty successful Q one
relative to new dedicated wins, followed by a pretty solid
Q two. Now we're in the interesting part of the
year where we're Q three is going fairly well relative
to dedicated wins, but most of those don't actually start
until Q one of next year because very few people
(12:02):
want to make a change in their dedicated provider provider
during peak season, so it'll be a little delay or
lag here as we wait to implement another round of
fleets early early next year. Overall, I like the product.
I think our customers do as well, and probably most
proud of the fact that, even under all of this duress,
in twenty twenty four, we kind of set new records
(12:25):
in the number of awards that we won from various customers,
both in dedicated and in one way.
Lee Klaskow (12:31):
And on the dedicated side, you know, because this podcast
treats a lot of people that might not be that familiar,
could you give some examples of what a dedicated services.
I know there's not a typical service, but maybe the
closest typical service that you guys provide.
Derek Leathers (12:46):
Sure, yeah, I would say the closest thing to typical,
because you're right, they all do look different and take
on different shapes and sizes. But the closest thing the
typical would be operating out of a major distribution center
on behalf of a customer where we're taking very very
specific drivers, usually with some sort of specific equipment that
either we provide or it's a combination. It's their trailer
(13:07):
and our truck. We're doing multi stop deliveries across their
retail network. Oftentimes driver there's driver engagement involved in each
of those deliveries. Maybe it's a tailgating of all of
the freight. Maybe it's a full unload, it could be
even product placement in some extreme cases. So it's very
high service sensitivity. It's short haul in nature, low miles
(13:29):
per week, but high driver engagement, and the drivers are
paid very very well because it's a it's a it's
a higher level service product. So the drivers are happy,
the customers are happy. We're certainly happy with the stability,
and over time those fleets tend to lead to more
fleets with the same customer as they open up or
expand their footprint geographically.
Lee Klaskow (13:51):
And drivers it's it's a it's a great job for
drivers because there they're home work, uh you know, or
there they know when they're going to be home, and
it's more a little more regular than kind of the
over the road trucking business where people are home less.
Derek Leathers (14:09):
Yeah. Absolutely, we have many, many fleets and dedicated where
the drivers are home every night. We have others with
their home multiple times a week, and certainly in almost
every dedicated fleet their home at least every week, and
that is obviously harder to do in the over the
road environment. We've done a lot of work in the
over the road environment to do more engineered lanes and
kind of build our own patterns of freight inside of
(14:30):
the larger network to try to get more and more
drivers home weekly or at a minimum. And then at
the far end of the spectrum, you still have a
group of drivers that people tend to forget about, but
they actually like going out too, three four weeks at
a time. That's a shrinking population, by the way, but
some of the most ten year drivers, that's what they know.
It's what they like, and they'll go out and work
(14:52):
three four weeks and take a week off and then
go out and do it again. And there's some of
the most successful drivers you know in trucking, but there's
just they're few and far between as well, right, So, just.
Lee Klaskow (15:06):
Sticking on drivers for a little bit. Warner operates some
driving schools. Has enrollment been up down in this economy.
Derek Leathers (15:15):
Yeah, I think it's been a little bit all over
the place over the last several years, but in general,
I would just call it steady. I think interest in
trucking has risen as wages have risen, So you know,
trucking wages right now. Used to always be that it
was sort of a neck and neck race between trucking
and some of the trade activities and construction and other things.
(15:36):
Whereas if you look at what happened what's happened with
driver wages nationally over the last several years, you know,
they're up to twenty five percent really in kind of
a call it a three three and a half year period,
and that really put trucking out in front. You combine
that with the fact that these jobs now get home
nightly or multiple times a week, and it takes the
biggest negative away, which was being away from their family.
(15:56):
So that causes interest level to be high. The harder
part is sifting through applications and applicants in general as
well as even people that are looking to come to
the school to make sure that they're actually going to
be employable. On the other end, you know, I don't
want to end up in a situation where lots of
folks aren't paying to go to school and there really
isn't a good solid employment opportunity. On the other end,
(16:18):
based on background, based on driver record, criminal history record,
things like that. There's all kinds of noise right now
out there in the news about is there a driver
shortage or isn't there a driver shortage? And people being
vocal on both sides of the argument. You Know, what
I've always said is the shortage, to the extent it exists,
is a qualified driver shortage. I mean, I've never believed
there's a shortage of CDL holders. There are significantly more
(16:41):
CDL holders than there are driver jobs in the country.
The problem is a very large population of them are
not able to be employed based on historical records, whether
it be driving, criminal or otherwise.
Lee Klaskow (16:54):
Right, So, sticking on that point, the Trump administration has
made transportation and every industry pretty interesting with you know,
uh tweets here and there about different policies. A couple
of policies related to drivers are about, uh, you know,
enforcing English proficiency and reducing the number of visas that
(17:17):
we give to foreign drivers. Can you is that going
to have a major impact on the driver's supply side.
Derek Leathers (17:25):
I think it's completely dependent on the level of enforcement.
I think if the administration, both federally but then also
more importantly at the state level, actually goes down the
enforcement road and we actually start seeing enforcement of ELP
the English language proficiency, I do believe it'll have an impact.
I think it'll be a noticeable one. You know, we
(17:45):
feel pretty good here at Werner about our standing relative
to that because even during the eight or so years
where it was not being enforced at all, we never
took away our English language proficiency examinations that we do
at the time of hiring. So we should like our
fleet's in great shape on that front. And we do
believe it's a safety issue. I mean not being able
to read dynamic road signs, in particular dynamic road signs.
(18:08):
I mean, that's the thing that matters the most. We
all see stop signs, yield signs. You can memorize those
pretty well without knowing the language at all. But when
it comes to road signs that are giving you the
most important instructions like road closure ahead, exit now, traffic ahead,
slow down now, or changing speed limits based on time
of day, all that type of stuff where you need
(18:28):
to read in context what it's telling you, it can
become a real issue. So I do believe it could
have an impact on capacity. I do believe it's good
for safety. I do believe it's the right thing to do. Obviously,
I'm concerned. I don't want to see overzealous enforcement where
you start having people kind of going out of their
way to fail somebody who is in fact able to
read dynamic road signs and speak with an officer on
(18:51):
the road side, and then to the visa issue. Kind
of similar story. We never went down the B one
driver visa route, of which we could have obviously to
and from Mexico. Just believed that if you were going
to do it legally, the restrictions were such that it
really didn't make economic sense, and it certainly didn't seem
to make sense to take jobs that we already had
(19:12):
US drivers that were willing to fill and fill them
with foreign drivers. Nor do we have any any you know,
commitment or program in place relative to the two to
three other visa programs that are out there to bring
folks from other countries around the world. With that said,
I'm not anti visa as long as it's done legally.
I mean if people have and so we have a
(19:35):
few visa holders in our fleet, but they have legal
immigration status, they have a legal CDL that they got
it at actual dm V the legal way and past
the same tests and requirements of all of our other drivers.
And I don't think we should ever look down on
those types of individuals that do it. The right way.
They belong here as much as you and I do.
(19:55):
It's all of the other stories that you hear out
there that are increasingly looking to have some validity to
them that need to be addressed. And I think we'll
see increased enforcement and over the next several quarters. I'd
better be able to answer that question of what the
impact is. It's still my belief fundamentally that somewhere in
the neighborhood of five to fifteen percent of the driver
(20:16):
workforce falls into one of these categories of either not
being able to pass English language proficiency and or not
having the right visa credentials and or immigration status to
be able to be legally driving on the road, or
they have the right visa like the B one program
for instance, but they're not operating it legally. That's usually
(20:36):
not the driver's fault, by the way, that's the company
behind the driver that is using them for cabotage opportunities,
which is strictly prohibited under that program. And all of
the above needs to be cleaned up so that we've
got a profession that honors the men and women that
do it every day the right way.
Lee Klaskow (20:51):
Gotcha, and sticking on regulations you know, before the Trump
administration game into his administration, there was a twenty twenty
seven EPA engine mandate which the goal was to reduce
pollution and emissions.
Derek Leathers (21:12):
Is that in limbo?
Lee Klaskow (21:13):
Are you changing your strategy in terms of how you're
buying or planning to buy trucks? Like, are you planning
on pre buying?
Derek Leathers (21:20):
What are you guys.
Lee Klaskow (21:21):
Doing as it relates to these EPA mandates?
Derek Leathers (21:26):
Yeah, great question, Lee. I mean, it's certainly in limbo.
I think it'll hopefully gain clarity in the coming weeks.
And I really say weeks because months is if it
takes months, it's too late. You know, the OEMs are
up against a pretty hard deadline to make final decisions
on the types of engines they're going to be building.
The engine makers have you put a lot of work
(21:49):
into converting to the new technology that they if they're
going to fall back on the existing technology, They need
to know that answer quickly. And then the consumer in
this case, the truckers buying those trucks and engines. You know,
we deserve that same clarity. So we hope a final
decision will be forthcoming shortly. You know, I for one
hope that we can just stay at the standard we're
at today. You know, a modern clean diesel engine at
(22:12):
the two hundred milligram standard of today is sixty times
less polluting than a truck that would have existed as
recently as like two thousand and eight. So the real
issue is how do we get people to run more
modern fleets under the existing standard. And then I would
just remind your listeners that with all of this banter
about it quote being better for the environment to go
to from two hundred to thirty five, what we're really
(22:35):
talking about is the first few minutes of operation only
because even under the existing standards, once that truck is
at speed over the road, the gap between what it
operates at versus this new standard engine is negligible difference
at all. It's that cold start impact. So we're spending
billions and billions of dollars potentially raising the cost of goods,
(22:56):
definitely raising the cost of trucks to essentially address a
cold start issue that has a duration of impact in minutes,
not ours. And so it just seems to me to be,
you know, throwing bad money after good for a problem
that that we would better address in other ways, such
as modernizing the US trucking fleet.
Lee Klaskow (23:18):
And I'm just curious, have the OEMs kind of prepared
you as a large buyer with these new trucks, like
how much more of these new trucks could cost.
Derek Leathers (23:27):
Yeah, there's certainly been tons of dialogue. We won't get
into our exact pricing, but I can tell you that,
you know, there's there's sort of layers to this onion.
Right in the original proposal, the twenty seven proposal, it
wouldn't have just been the new engine cost. It would
also been a new expected life definition as well as
new mandatory warranties. If you collectively put all that together,
(23:50):
you know you're talking about a significant cost increase somewhere
the neighborhood of fifteen percent per truck. And that is
too much money for an industry right now that is
not making any money. I mean, it's pretty alarming when
you take a step back and think about all of
the publicly traded trucking companies in America and you average
their earnings and you get to a number that looks
something like zero to one percent over several of the
(24:13):
last quarters. That's not a way for this economy to
continue long term. If you're going to add fifteen percent
cost every engine and really address a very short period
of life or of operation, which is sort of that
cold start, you know, initial few minutes. It's just bad
policy in my view at a time the industry literally
cannot afford it, and instead we need to focus those
(24:36):
efforts on, you know, how to do more with less,
how to eliminate empty miles, how to make sure that
we're maximizing cube, and then how do you modernize the
fleet and all of those things can make a bigger
impact and do so quicker anyway, because those things endure
over the entire route, not just for a few minutes
of additional knocks, savings ed launch.
Lee Klaskow (25:00):
And so again, sticking on this whole policy track that
we're discussing right now, just because there's so much going on.
You know, you guys have a great cross border business
with Mexico. How has the tariffs or the more protections
policies coming out of Washington, how has that been impacting
buomes and rates in that business?
Derek Leathers (25:21):
Yeah, I mean, I think that'll end up being a
tailor two cities, and the short term it's been painful.
In the short term, you have a lot of uncertainty,
and anytime uncertainty is in the market, it causes interruptions
and flows. And when you have interruptions and flows, your
network doesn't operate like a network anymore. It starts to
fall apart. Like little everybody's been to the airport where
(25:41):
weather's perfect, and they look upon the screen and it
says weather delay, and they're all frustrated and don't understand
how that could be true. And it's because weather delay
anywhere in the country messes up the entire network for
that airline, including where you're standing in perfect weather, same
thing and trucking. So when we have the southern border
kind of turned on and on off and on and
off irregularly because of tariffs, it impacts across our entire
(26:05):
network and it causes lots of inefficiencies to start to exist.
What's happened as of late is those have kind of settled,
realizing that tariffs are not in fact totally settled. I
think the difference is people have accepted that they are
here to stay in some form, and so people are
no longer trying to make overly reactionary decisions to the tariffs,
(26:26):
and so we've seen a settling of some of that
erratic shipping pattern. Long term, we think it's fantastic for
Mexico and probably pretty good for the US as well,
because we do know from shippers customers of ours, both
in manufacturing, retail and otherwise, that there is in fact
an overt search to near shore and bring back both
(26:50):
products opportunities component parts closer to the shores in Mexico.
Lee Klaskow (26:57):
Is.
Derek Leathers (26:58):
If it isn't the US, it's certainly to be Mexico
more so than any other location. And we're a significant player,
if not the largest, certainly one of the largest cross
border players. So we're excited about the long term. We've
dealt with some pain in the short term, but it
made us more bullish, not less on our Mexico operation.
Lee Klaskow (27:16):
Yeah, another cross border player is Union Pacific. You know
they've been in the news as of late because of
their acquisition or merger plans with Southern Obviously it faces
some significant regulatory hurdles. Just giving your perspective, do you
think that's good or bad for the supply supply chain shippers?
(27:39):
What's your thought?
Derek Leathers (27:41):
Yeah, that one's interesting. I mean I think that could
be the inverse tail of two cities that I just
talked about. I think in the short term there's some
efficiencies to be gained. I think, you know, we work
with both n S and UP. Those are our two
primary rale partners. We think it's good selfishly, it's good
for our intermodal business. We think it probably does ultimately
(28:01):
create a more efficient path for transcon rail freight if
you take out some of the network inefficiencies at all
the swap points. Longer term, I have fears and concerns
relative to the competitive landscape and whether there's sufficient competition
and sufficient consumer choice to be able to compete effectively.
(28:26):
Some of those fears are alleviated by the simple reality
that truck and rail are still at times competitive to
one another. So although there may only be one, you know,
transnational or trans continental railroad, and while the b N
and the CSX continue to go it alone, if things
were to get overly egregious relative to pricing or something,
(28:47):
someday you would see freight move back to truck. I
could ask a lot about fears of vath swaths of
truckload freight suddenly find its way on this new efficient
model post merger, and that I have less concerns. I'm
not saying no concerns, but less concerns about simply because
if you look at what's happened with truckload length of
(29:09):
haul over the last ten to fifteen years because of
intermodal gaining momentum and gaining share, the current length of
halls just don't support or lend themselves to further conversion
to rail, and in most cases there's certainly not long
enough to even need a trans gone railroad to produce
a product to be able to move it. The stuff
(29:30):
that does go transcond on truck generally is expedited in nature.
It's super high service, high security type freight, where truck
is simply a better solution for that, And so there'll
be some marginal modal shift, but there's always going to
be marginal modal shift, just like we've seen in this
trucking downturn, freight shift from rail to truck simply because
(29:50):
truck is so affordable right now, given a choice, they
would prefer the reliability of it. So it'll go back
and forth over time. I don't know that it'll get approved.
It's obviously going to face a lot of regulatory hurdles,
but it is probably the best opportunity to gain approval
that we would have seen in the last several decades,
just given the current administration and current approach toward, you know,
(30:14):
focusing on efficiencies and doing things in a lower cost model.
Lee Klaskow (30:18):
Yeah, it definitely be interesting in the months to come
to see the various stakeholders that provide their insights into
whether or not it's it's it's a good deal for
that's in the public interest and it enhances competition to
things that they have to prove. I guess, I guess
could we shift to insurance a little bit. You guys
(30:40):
had an insurance win recently. Can you talk about, you know,
a the rising cost of insurance for you guys, what's
driving that and kind of how you're trying to mitigate
those rising costs?
Derek Leathers (30:55):
Sure, I mean, insurance is a headwind for really everybody
in America, not just truckers, but I think people see
it at the household level, on the auto policy level,
and we certainly see it in trucking. The entire industry
has seen just a dramatic increase in insurance costs and
probably more importantly, in overall outlay because insurance doesn't does
(31:17):
not in fact cover all of the exposure you get
higher premiums and you often take on more risk as
part of trying to secure your insurance program a year
over year. I think the reality of what we have
to focus on, and we have been focusing on, is
eliminating accidents. And so over the last several years, we've
set multiple new records in our accident per million miles
(31:40):
DOT preventable accidents, multiple different categories where we are simply
laser focused on safety above all. Else. When you do
three million miles plus a day, it doesn't mean you're
ever going to get to a zero incident here. But
if you can minimize the number of incidents and accidents,
obviously the starting pool for the PROBLEMBS to grow out
(32:00):
of is smaller the the you know, the real problem
in my view is really the nuclear verdict backdrop. So
in fairness to the insurance companies, you know, it used
to be that you could kind of from an actual perspective,
have some idea of what a bad day looked like.
Now it really kind of everything's up for grabs. I mean,
(32:22):
accidents that in our view are completely literally not our
fault at all, can bloom into something that took us,
you know, nearly a decade to get final resolution on
like the one in Texas, and it had to go
all the way to the Texas Supreme Court. That wouldn't
have existed previously. You see three hundred thousand dollars accidents now,
(32:44):
or actually three million, three million, or actually thirty and
so with a significant less number of actual accidents, the
cost outlay per accident more than offsets the shrinking number
of accidents year in and year out, and there has
been real, no real relief for several years. We're excited
about car technology as much as truck technology because as
(33:08):
cars get more and more safety features built in, the
distracted driver issue that our folks deal with every day
gets some level of improvement because the cars doing the
improvement versus the driver. And then on our own technology,
you know, we deploy you know, forward facing cameras to
record what that driver has just had to go through
or try to avoid, lane keeping technology, collision mitigation, active
(33:33):
breaking technologies, and are currently installing side view cameras on
our fleet as well because the number of side swipe
incidents is where you know, we know and have confidence
that somebody came into our lane, but without a visual proof,
it's very difficult because the human mind tends to go
to it must be the bigger vehicle's fault, and that's
(33:54):
unfair to our drivers, it's unfair the industry, and we
want to make sure to do everything we can to
get you know, DA driven decisions into the courtroom, right.
Lee Klaskow (34:03):
And you know you mentioned technology. Can we maybe talk
a little bit more about that, you know, we start
talking about AI, it might get another turn on your stock.
So what are you guys doing with AI and machine learning?
You know, is it Is it more useful for your
back office functions? Is it more useful for your brokerage business?
(34:25):
Can you just talk about, you know, what your guys
are doing with that?
Derek Leathers (34:29):
Yeah, as part of our tech journey, I mean, so
we're on the biggest tech journey really in our history
and have been for the last several years as we
you know, work to feel a fully digital platform whereby
all of our tech is in the cloud, it's built
on new sort of tech infrastructure, so it's more appliable,
more more amendable to changing environments, et cetera. And AI
(34:53):
has been a part of that. And so, uh, I
don't really want to get out on the bleeding edge
of AI at this point, but we absolutely want to
use it in places where there's tangible and immediate results
for increased efficiencies. So it does lend itself very well
toward back office function but repetitive behavior functions, functions where
process matters a ton and and adherence to process matters
(35:17):
a ton. We're using you know, agenic AI as it
relates to you know, uh, various call functions, check in functions,
prepp and drivers for the welcome experience when they're coming
on board working with you know AI, relative to scheduling
of trucks for maintenance and and doing more predictive analytics
(35:39):
and diagnostics and doing maintenance before things break. There's a
lot of different places that you can utilize it. And
then you've got kind of the more traditional AI, you know,
machine learning type stuff that does play a role within
our optimization and our core system relative to dispatch. So
I like where we're at. I think we're on a
(36:01):
leading edge but not bleeding edge, and we're trying to
stick to vertically functional improvement of processes type implementations versus
some big bang approach that if it works, great, but
if it doesn't, it can bring the whole organization to
its nees.
Lee Klaskow (36:18):
And for CAPEX, you know, obviously you're an acid intensive business.
Roughly how much you plan on spending this year and
what percentage of that is going towards tech?
Derek Leathers (36:28):
Yeah, I mean our tech spend obviously is op X
and CAPEX depending on what we're referring to and what
part of it we're spending. I can tell you that
our tech spend, We've talked about this publicly, has increased
significantly over the last several years and probably and I'm
talking this is not all CAPEX. This is op X
and CAPEX, but you know, roughly runs right around one
(36:50):
hundred million dollars a year. That will that's sort of
where it peaks, and then we believe as we start
to gain efficiencies and consunset some of the legacy systems,
we'll start to gain back a little bit of cost there. Overall,
CAPEX is driven still predominantly by trucks and trailers, but
clearly there is some tech Capex mixed in there. Our
(37:13):
Capex guide for the year we actually recently lowered and
it kind of ties back to your environmental questions earlier
until we get more clarity on that and tariffs we're
just not yet committed to the full amount of what
we would call normalized CAPEX in twenty twenty five. And
that's also partly driven because our fleets just in a
(37:35):
really good place right now from an age perspective, both
truck and trailer. So we have some optionality to kind
of wait for this decision to come out to make
sure we know and can prepare properly based on the
latest news.
Lee Klaskow (37:46):
Any of you guys like leveraging technology to combat fraud,
which has become a growing problem within the trucking industry.
Derek Leathers (37:55):
Yeah, we're using technology heavily on that front. We tend
to stay away from real detailed explanations because one thing
we learned quickly is the fraudsters can adapt and pivot
as well as anybody. But yes, we use a multi
layer set of tech stacks relative to carrier qualifications and
(38:16):
monitoring to make sure we have kind of redundant systems
that are that are concurrently monitoring carrier status relative to
all of their metric, their safety metrics, their insurance standing
when that insurance is up for renewal, whether or not
there are any you know, safety audits or other things underway.
(38:37):
But then kind of at the most basic level, just
some two factor authentication work that we're trying to get
fully rolled out, just to make sure the carrier is
actually the carrier. A lot of this fraud happens to
innocent bystanders as it relates to the small carrier community.
You know, they hack their systems, not ours, and they
end up in their systems being able to imitate that
(38:58):
they are them and end up as a result, being
able to get their hands on valuable information about cargo, etc.
The other thing we're realizing with all this cargo fraud
stuff is it's not dissimilar from any other crime spree
where they look for soft targets. And so I'm referring
to the customer on that side when I make that statement.
(39:20):
We see trends with certain customers who maybe don't take
physical security of their ship locations as serious as we
think they should. They become a target quickly, and so
it doesn't matter who their underlying carrier is, they're still
going to be targeted because their own processes are not
robust enough. And so we've been working with shippers to
try to increase their own focus on security as well,
(39:44):
because to just turn and blame the carrier may seem
easy or logical, but in fact, if you multiple different
carriers were hit out of the same location inside your
own network, it could very well be a location problem
that needs to be investigated further.
Lee Klaskow (40:00):
And so you know, as we come up towards the
end of our time, I'd be an idiot if I
didn't ask you about your outlook on rates, and you know,
what will the recovery look like with rates? Because I
thought we'd be in a better rate environment six months ago.
So I got this kind of wrong. So I'm curious
(40:20):
to hear your perspective on where rates go from here.
Derek Leathers (40:24):
Yeah, I certainly thought we'd be in a better rate
environment six months ago as well. We have seen four
consecutive quarters of rate increase in our network, but they've
been fairly marginal increases, not the kind of rate relief
that we really need to return our business to the
health that it deserves if we're going to keep supporting
these customers long term. I do believe you're going to
(40:45):
continue to see rate movement upward as we go forward
through the remainder of the year and then into twenty six.
I think the slope of the curve is really dependent
on of several different things. But this enforcement issue that
we talked about earlier in the call could play a
pretty major role. We need effective enforcement. I think if
we can't as a country all agree that we want
(41:07):
safe drivers that are qualified, that have been vetted on
the road, all in eighty thousand pounds, then we have
a problem, Like we need to be able to at
least coal less around that. Now, then how we get there?
There could be differences of opinion, but I think part
of it is starting with ELP enforcement, making sure that
that is a focus. We need to make sure that
(41:28):
people can interact with officers at the roadside and redynamic signs.
I think any and all examples of people being able
to gain CDLs without going through the CDL process needs
to be eliminated. And we have long advocated for the
kind of minimum training standards and kind of a more
(41:51):
focus on some of the CDL mills that are out
there where you see open advertisement in the light of day.
You know, come here get your CDL in five days
is come here and get your CDL overnight. I mean,
there's no credible way that you can get a driver
prepared to drive in an environment like that, and that
has a lot to do with why we developed our
own school network where people are going to go to
(42:12):
that school for multiple weeks to be able to be
trained properly, and then even after doing so, when they
come to Warner, we then assign them to a leader
Werner leader in the truck and they're going to spend
multiple more weeks getting acclimated to the road. They've already
passed their CDL, they're fully qualified by the law, but
we want to make sure and leaned into that further
and get them better prepared. That's really the right standard,
(42:35):
and to the extent we can get to a standard
that looks something like that nationwide, I think it's the
right thing. So enforcemental plan major role the consumer's holding up.
If peak season looks and acts like a normal peak season.
Now that wallet shares coming back into balance, I think
there are better times ahead for trucking. The only question
now is what's the slope of that line. How quickly
(42:57):
does it get good or better enough to make a
difference in the underlying financials because there is a lot
a lot of hurting truckers out there right now.
Lee Klaskow (43:07):
Absolutely, and you know, to wrap things up. Can you
talk about, you know, how he ended up at a
trucking company, A guy for Princeton.
Derek Leathers (43:19):
It's kind of a wild story. I took a job
in investment banking actually coming out of Princeton, and it
was a weird year nineteen ninety one. They pushed my
start date until November, and obviously, like every other college
graduate or most college graduates, I should say that graduation
happens in May, and so I had to fill the
gap from May till November. So I took what I
(43:39):
thought was going to be a temporary job at Schnyder
National dispatching trucks, in a role at the time they
referred to as a service team leader. And kind of
from day one, sitting there with a headset on my head,
you're talking to drivers all day, I just kind of
fell in love with the industry. So my family, my friends,
really everybody in my inner circle thought I had lost
(44:00):
my mind when I told him I was not in
fact quitting at the end of October and going off
to my banking job, but instead going to stay in trucking.
And I kind of haven't ever looked back. I really
am glad I've made this life choice. It's certainly been
more painful, probably at times, than being in banking or
some more sort of white collar role or or you know,
theoretical role, but I've enjoyed it. I think the folks
(44:23):
I get to work with every day are some of
the best people in the country. Going out to our
terminals and talking to drivers and hearing their stories. I mean,
these are real people doing real stuff, and they're pretty impressive.
So it's been a lot of fun, and it probably
fit me better than banking. To be honest, anybody who
knows my personality probably wouldn't have held up all that
well inside of a bank for a living. So I
(44:45):
think for everybody involved, they're probably all happy that.
Lee Klaskow (44:47):
I ended up in this industry and that one well,
it seems like you definitely made the right choice, and
lucky for Werner that you did. Derek, I really wanted
to thank you for your time and your insights today
and also thanking you for coming back onto the podcast.
Derek Leathers (45:02):
Yeah, thanks Ley, thanks for having me, and congratulations on
your one hundredth podcast. Pretty impressive.
Lee Klaskow (45:08):
I was excited that you were my hundredth guest, so,
you know, just just let you know. I also want
to thank you for tuning in. If you liked the episode,
please subscribe and leave a review. We've lined up a
number of great guests for the podcast, so please check
back to your conversations with C suite executives, shippers, regulators,
and decision makers within the freight markets. Also, if you
(45:28):
want to learn more about freight transportation and the markets,
check out our work on the Bloomberg terminal at big
and on social media. And before I go, I wanted
to thank the people who make Talking Transports possible. That
includes Bloomberg Intelligence Team Transport, which includes Angel Eich and
Tara Tajabash, and bi's digital content specialist Mariam Traore and
(45:52):
Aditya Somani. And I also want to thank all my
previous guests and for their insights that they've shared with us,
and I'm looking forward to the next one hundred conversations.
This is Lee Klasgal signing off and thanks for talking
transports with me.
Hi, everyone, This is Lee Klask
ow. When we're talking transports, I'm your host Lee Claskow,
senior freight, transportation and logistics analysts at Bloomberg Intelligence, Bloomberg's
in house research team made up of nearly five hundred
analysts and strategists around the world. Today's episode's a big one.
We've officially hit one hundred. That's right, one hundred conversations, insights, interviews,
(00:28):
and deep dives into the world of freight, logistics and transportation.
Whether you've been with us from the start or just
jumped on board, thank you. Your support and curiosity is
help make talking transports what it is today. And a
quick psa before we dive in. If you'd enjoy the
ride so far, help us keep it going. Like it,
share it and leave a comment Wherever you're listening, And
(00:51):
if you've got feedback, ideas, or just want to talk transports,
I'm always happy to connect. You can find me on
the Bloomberg terminal, LinkedIn, or on a logistics late. Now
let's get into it. Our hundredth episode should be a
fantastic one, and that's because we have with us. Derek Leathers,
Warner Enterprises Chairman and CEO. He's held integral roles in
(01:12):
many facets at Warner, including the establishment of its Mexico
operations and oversights for all the asset operating groups. Derek
has worked in the transportation logistics industry for over thirty years.
Prior to joining Warner in nineteen ninety nine, he was
with Schneider National for eight years, during which time he
was based out of Mexico City for several years and
(01:35):
was one of the first foreign members of Mexico's Trucking Association.
Warner is listed on nastak under the ticker WERN and
has a market cap of around one point seven billion dollars.
Welcome back to the podcast, Derek, thanks so much for
joining us.
Derek Leathers (01:51):
Yeah, thanks for having me Lee. I'm happy to be
here and I look forward to it.
Lee Klaskow (01:54):
And for those that aren't familiar with Warner Enterprises, there's
the nice what do you call him, light blow powder
blue trucks.
Derek Leathers (02:02):
Yeah, the original Warner blue color was kind of a
light blue color and over the years, it's obviously transitioned
some over time, and now we have the majority of
our fleet in either is what the color is called
sovereign blue. It's a bit of a dark blue color.
Lee Klaskow (02:15):
Now, all right, and get you to talk a little
bit about Warner's Fleet and your other businesses.
Derek Leathers (02:21):
Yeah, sure, I mean, obviously we have a long history.
Next year will we are seventieth anniversary. The company was
founded in nineteen fifty six by Seal Warner, started with
one truck and kind of a true American success story
and has grown a lot from there. As we sit
here today, you know, we're roughly about three billion dollars
in revenue, split across two major segments what we refer
(02:43):
to as TTS, which is our truckload Transportation services. So
that's the dedicated fleet of assets in our business that
work predominantly in a dedicated environment for our specific customers.
And then our one way network, which is as the
name implies, more over the road freight regional that's where
our cross border Mexico business lives. All of that collectively
(03:06):
kind of rolls up and becomes TTS. And then a
very growing part of our business is in the logistics
space where weren't Logistics now is right around nine hundred
million on its way to one billion dollars in annualized revenue,
and that's where you would find truckload brokerage. That's where
our power only we refer to as Powerlink solution exists.
(03:31):
That's also where a final mile and in our CA
center model operates through out of our logistics part of
our portfolio, about thirteen thousand associates, just under thirty thousand
trailers in the network and really coast to coast coverage
with also a heavy emphasis on cross border Mexico great.
Lee Klaskow (03:52):
And so that the freight market, I don't need to
tell you, but maybe our listeners might not be familiar with,
hasn't been great over the last two or three years.
Can you give us an update on the state of
the trucking market from your vantage point?
Derek Leathers (04:07):
Yeah, sure, I'll do my best to do so obviously. Yeah,
it has been tough. I think it's only fair to
go back to kind of how we got here, and
that really started with COVID. When COVID came along, you know,
people were kind of shut in for a long period
of time. They took their wallet share and dramatically shifted
it away from experiences to products. Demand kind of skyrocketed.
(04:28):
A lot of supply came into the market on the
carrier side to support that demand, and then post COVID,
we saw that inverse of the wallet share shift, people
came out of the house and decided that they didn't
need as many products anymore, and they haven't for several years,
and instead the percent of wallet going to experiences, concerts, ballgames,
and travel has been higher than historical levels by double
(04:52):
digits kind of year over year over year, And only recently,
I would say, have we started to see it return
to its sort of long term average run rate, where
now we're looking at the average consumer kind of roughly
splitting their expenditures their disposable income between buying things and
doing things. So the consumer has stabilized, but because of
(05:13):
that COVID boom and how many carriers and how much
capacity came into the market during those years, that has
continued to be a slow bleed off over time for
that capacity to kind of exit the market. Recent weeks
we've seen some larger failures of some companies, you know,
in that sort of three hundred to five hundred truck range,
but also just an ongoing attrition of some of the
(05:35):
small five ten, one two truck type operators, and all
of that collective movement is really bringing the market closer
and closer equilibrium.
Lee Klaskow (05:44):
And from your experience, when you know, because rates have
been depressed what usually drives it? Is it the supply
side or the demand side that usually drives or rebounding rates.
Derek Leathers (05:54):
Well, I think, to be fair, normally it is a
demand driven rebound more often than not. I mean, you
always have a supply correction that goes with it. So
rates go down. You know, marginal carriers can't exist and
can't operate at that level, they go out of the market.
And usually at some point that's coupled with some sort
of demand inflection, and so when the demanded flex, then
(06:15):
carriers have already been exited. There isn't enough supply out
there to service that new demand, and that causes up
fairly sudden and generally, you know, sustained lift in rates
that didn't last another two, three, four years, and that
until you find yourself in another downcycle. I think this
one's a little different. I think right now there's enough
economic uncertainty and there's enough kind of noise economic noise
(06:39):
in general, whether you talk interest rates, tariffs, or anything else,
that this is more driven at present by the supply side.
And I think as we look out to the coming quarters,
it's most likely that it'll be supply side driven more
than demand, but it's hard to say. You know, the
consumers hanging in there pretty well. Retailers are doing surprisingly
(07:00):
well despite how long you know, some of this consumer
pressure has existed. And so I think if you see
some interest rate reductions and some you know, rebounded housing,
all of a sudden you've got you know, more mouths
to feed from a trucking capacity perspective, but less capacity
to do so. And so ultimately it will always be both.
But I think this will be more supply driven than demand,
(07:20):
whereas the normal rebound is usually more demand driven than supply.
Lee Klaskow (07:26):
And so you know, you know, I know you have
a diversified business, but you're kind of like a little
heavy on you know, consumer staples and correct me if
if I'm wrong. So, so obviously you're probably a little
more defensive than other the other transportation providers that that
are in the freight markets. Can you talk about what
(07:48):
your customers are saying about the upcoming peak season? You know,
what they're saying, how they're reacting or operating under uh,
you know, the uncertainty that's been created by by the
tariffs out of the Trump ministration.
Derek Leathers (08:01):
Yeah, I mean, so first off, yes, we are more
exposed to retail in general than most carriers, so we're
you know, well over sixty percent of our businesses with retailers.
But in that space, our real focus is on that
non discretionary end of retail, and specifically in the value
and so discount retail value retail and home improvement. And
(08:24):
I think you know, most of the year has been
filled with lots of ups and downs for those folks
trying to navigate tariffs on tariffs off, tariff suspensions or
delays and then ultimate implementations, and so it's been pretty
chaotic for them. So we have had a lot more
focus and conversations about sort of the fits and starts
than we've been able to have on kind of the
(08:45):
normal type of dialogue, which is how's your business doing?
Where do you see it? Two to three quarters because
people are navigating more tactically right now than they are strategically. However,
with all that said, our customers and we focus on
this heavily here, trying to what we call alignment, you know,
alignment with winners, so looking at people winning in their space,
because those folks tend to do well in good times
(09:06):
and bad, and so far that's proven to be true.
Several of the retailers have released journings recently. You can
kind of see they're having some good success as people
migrate down into a more value based product, and yet
they retain their existing clientele who's always been with them,
and then after things improve or maybe some of the
pressures off, you know, they have lots of data to
(09:27):
show that a chuck of those consumers will stay with
them even in better times because they've now unlocked the
value of shopping at some of these stores. So so
overall pretty good as it released to peak, you know,
that's a bit of a mixed bag. It kind of
depends on what their strategies were relative to tariffs, but
by and large, most of the retailers have you know,
(09:47):
they always kind of go back to rule number one,
which is I can't sell it if it's not on
the shelf. So they absolutely, you know, have a plan
to bring a nexcess freight over the next several months
compared to the rest of the year so that they're
prepared for peak season. Those conversations have been going pretty well.
We play a major role with several of our largest
retailers four peak season. And at this point, although you
(10:10):
know everything isn't all inked yet, the agreements that are
in place as well as the ones that are in
the latter endings all look pretty good at this point.
You know.
Lee Klaskow (10:18):
So you know, your your trucking business is separated into
one way which is marg an over the road irregular
route truck and business, and you have your dedicated business.
You know, historically Dedicated has had less volatility, better margins,
and kind of consistent growth. You know, he gives us
an update of what's going on in the dedicated market,
(10:38):
you know at Werner.
Derek Leathers (10:40):
Yeah, sure, I mean, so Dedicated is more consistent, It
performs better and up and down cycles, you know, more
consistently and up and down cycles. I should say, our
dedicated business has done that during this downturn. It has
certainly been much more stable than the one way side
of our business. We did have some attrition in Dedicated
over the last couple of year where we've felt like
(11:01):
pricing discipline was critical. We're big believers in kind of
saying what we do and doing what we say, and
so you know, at certain points you just get to
a fork in the road. Where we didn't think the
pricing was commiserate with the work, and so we had
to walk away from a few fleets, a few opportunities
that had previously done business with us. But as we
(11:21):
sit here today, what we've seen is a really robust
dedicated pipeline. Dedicated has come back into favor as people
know this cycle is you know, either over or soon
to be over, and so they want the safety of dedicated.
They want to get back to service above all. Else,
they want the reliability of a portfolio company that can
meet them where they're at across multiple modes. All of
(11:42):
that has kind of worked in our favor, and so
we you know, we've indicated a pretty successful Q one
relative to new dedicated wins, followed by a pretty solid
Q two. Now we're in the interesting part of the
year where we're Q three is going fairly well relative
to dedicated wins, but most of those don't actually start
until Q one of next year because very few people
(12:02):
want to make a change in their dedicated provider provider
during peak season, so it'll be a little delay or
lag here as we wait to implement another round of
fleets early early next year. Overall, I like the product.
I think our customers do as well, and probably most
proud of the fact that, even under all of this duress,
in twenty twenty four, we kind of set new records
(12:25):
in the number of awards that we won from various customers,
both in dedicated and in one way.
Lee Klaskow (12:31):
And on the dedicated side, you know, because this podcast
treats a lot of people that might not be that familiar,
could you give some examples of what a dedicated services.
I know there's not a typical service, but maybe the
closest typical service that you guys provide.
Derek Leathers (12:46):
Sure, yeah, I would say the closest thing to typical,
because you're right, they all do look different and take
on different shapes and sizes. But the closest thing the
typical would be operating out of a major distribution center
on behalf of a customer where we're taking very very
specific drivers, usually with some sort of specific equipment that
either we provide or it's a combination. It's their trailer
(13:07):
and our truck. We're doing multi stop deliveries across their
retail network. Oftentimes driver there's driver engagement involved in each
of those deliveries. Maybe it's a tailgating of all of
the freight. Maybe it's a full unload, it could be
even product placement in some extreme cases. So it's very
high service sensitivity. It's short haul in nature, low miles
(13:29):
per week, but high driver engagement, and the drivers are
paid very very well because it's a it's a it's
a higher level service product. So the drivers are happy,
the customers are happy. We're certainly happy with the stability,
and over time those fleets tend to lead to more
fleets with the same customer as they open up or
expand their footprint geographically.
Lee Klaskow (13:51):
And drivers it's it's a it's a great job for
drivers because there they're home work, uh you know, or
there they know when they're going to be home, and
it's more a little more regular than kind of the
over the road trucking business where people are home less.
Derek Leathers (14:09):
Yeah. Absolutely, we have many, many fleets and dedicated where
the drivers are home every night. We have others with
their home multiple times a week, and certainly in almost
every dedicated fleet their home at least every week, and
that is obviously harder to do in the over the
road environment. We've done a lot of work in the
over the road environment to do more engineered lanes and
kind of build our own patterns of freight inside of
(14:30):
the larger network to try to get more and more
drivers home weekly or at a minimum. And then at
the far end of the spectrum, you still have a
group of drivers that people tend to forget about, but
they actually like going out too, three four weeks at
a time. That's a shrinking population, by the way, but
some of the most ten year drivers, that's what they know.
It's what they like, and they'll go out and work
(14:52):
three four weeks and take a week off and then
go out and do it again. And there's some of
the most successful drivers you know in trucking, but there's
just they're few and far between as well, right, So, just.
Lee Klaskow (15:06):
Sticking on drivers for a little bit. Warner operates some
driving schools. Has enrollment been up down in this economy.
Derek Leathers (15:15):
Yeah, I think it's been a little bit all over
the place over the last several years, but in general,
I would just call it steady. I think interest in
trucking has risen as wages have risen, So you know,
trucking wages right now. Used to always be that it
was sort of a neck and neck race between trucking
and some of the trade activities and construction and other things.
(15:36):
Whereas if you look at what happened what's happened with
driver wages nationally over the last several years, you know,
they're up to twenty five percent really in kind of
a call it a three three and a half year period,
and that really put trucking out in front. You combine
that with the fact that these jobs now get home
nightly or multiple times a week, and it takes the
biggest negative away, which was being away from their family.
(15:56):
So that causes interest level to be high. The harder
part is sifting through applications and applicants in general as
well as even people that are looking to come to
the school to make sure that they're actually going to
be employable. On the other end, you know, I don't
want to end up in a situation where lots of
folks aren't paying to go to school and there really
isn't a good solid employment opportunity. On the other end,
(16:18):
based on background, based on driver record, criminal history record,
things like that. There's all kinds of noise right now
out there in the news about is there a driver
shortage or isn't there a driver shortage? And people being
vocal on both sides of the argument. You Know, what
I've always said is the shortage, to the extent it exists,
is a qualified driver shortage. I mean, I've never believed
there's a shortage of CDL holders. There are significantly more
(16:41):
CDL holders than there are driver jobs in the country.
The problem is a very large population of them are
not able to be employed based on historical records, whether
it be driving, criminal or otherwise.
Lee Klaskow (16:54):
Right, So, sticking on that point, the Trump administration has
made transportation and every industry pretty interesting with you know,
uh tweets here and there about different policies. A couple
of policies related to drivers are about, uh, you know,
enforcing English proficiency and reducing the number of visas that
(17:17):
we give to foreign drivers. Can you is that going
to have a major impact on the driver's supply side.
Derek Leathers (17:25):
I think it's completely dependent on the level of enforcement.
I think if the administration, both federally but then also
more importantly at the state level, actually goes down the
enforcement road and we actually start seeing enforcement of ELP
the English language proficiency, I do believe it'll have an impact.
I think it'll be a noticeable one. You know, we
(17:45):
feel pretty good here at Werner about our standing relative
to that because even during the eight or so years
where it was not being enforced at all, we never
took away our English language proficiency examinations that we do
at the time of hiring. So we should like our
fleet's in great shape on that front. And we do
believe it's a safety issue. I mean not being able
to read dynamic road signs, in particular dynamic road signs.
(18:08):
I mean, that's the thing that matters the most. We
all see stop signs, yield signs. You can memorize those
pretty well without knowing the language at all. But when
it comes to road signs that are giving you the
most important instructions like road closure ahead, exit now, traffic ahead,
slow down now, or changing speed limits based on time
of day, all that type of stuff where you need
(18:28):
to read in context what it's telling you, it can
become a real issue. So I do believe it could
have an impact on capacity. I do believe it's good
for safety. I do believe it's the right thing to do. Obviously,
I'm concerned. I don't want to see overzealous enforcement where
you start having people kind of going out of their
way to fail somebody who is in fact able to
read dynamic road signs and speak with an officer on
(18:51):
the road side, and then to the visa issue. Kind
of similar story. We never went down the B one
driver visa route, of which we could have obviously to
and from Mexico. Just believed that if you were going
to do it legally, the restrictions were such that it
really didn't make economic sense, and it certainly didn't seem
to make sense to take jobs that we already had
(19:12):
US drivers that were willing to fill and fill them
with foreign drivers. Nor do we have any any you know,
commitment or program in place relative to the two to
three other visa programs that are out there to bring
folks from other countries around the world. With that said,
I'm not anti visa as long as it's done legally.
I mean if people have and so we have a
(19:35):
few visa holders in our fleet, but they have legal
immigration status, they have a legal CDL that they got
it at actual dm V the legal way and past
the same tests and requirements of all of our other drivers.
And I don't think we should ever look down on
those types of individuals that do it. The right way.
They belong here as much as you and I do.
(19:55):
It's all of the other stories that you hear out
there that are increasingly looking to have some validity to
them that need to be addressed. And I think we'll
see increased enforcement and over the next several quarters. I'd
better be able to answer that question of what the
impact is. It's still my belief fundamentally that somewhere in
the neighborhood of five to fifteen percent of the driver
(20:16):
workforce falls into one of these categories of either not
being able to pass English language proficiency and or not
having the right visa credentials and or immigration status to
be able to be legally driving on the road, or
they have the right visa like the B one program
for instance, but they're not operating it legally. That's usually
(20:36):
not the driver's fault, by the way, that's the company
behind the driver that is using them for cabotage opportunities,
which is strictly prohibited under that program. And all of
the above needs to be cleaned up so that we've
got a profession that honors the men and women that
do it every day the right way.
Lee Klaskow (20:51):
Gotcha, and sticking on regulations you know, before the Trump
administration game into his administration, there was a twenty twenty
seven EPA engine mandate which the goal was to reduce
pollution and emissions.
Derek Leathers (21:12):
Is that in limbo?
Lee Klaskow (21:13):
Are you changing your strategy in terms of how you're
buying or planning to buy trucks? Like, are you planning
on pre buying?
Derek Leathers (21:20):
What are you guys.
Lee Klaskow (21:21):
Doing as it relates to these EPA mandates?
Derek Leathers (21:26):
Yeah, great question, Lee. I mean, it's certainly in limbo.
I think it'll hopefully gain clarity in the coming weeks.
And I really say weeks because months is if it
takes months, it's too late. You know, the OEMs are
up against a pretty hard deadline to make final decisions
on the types of engines they're going to be building.
The engine makers have you put a lot of work
(21:49):
into converting to the new technology that they if they're
going to fall back on the existing technology, They need
to know that answer quickly. And then the consumer in
this case, the truckers buying those trucks and engines. You know,
we deserve that same clarity. So we hope a final
decision will be forthcoming shortly. You know, I for one
hope that we can just stay at the standard we're
at today. You know, a modern clean diesel engine at
(22:12):
the two hundred milligram standard of today is sixty times
less polluting than a truck that would have existed as
recently as like two thousand and eight. So the real
issue is how do we get people to run more
modern fleets under the existing standard. And then I would
just remind your listeners that with all of this banter
about it quote being better for the environment to go
to from two hundred to thirty five, what we're really
(22:35):
talking about is the first few minutes of operation only
because even under the existing standards, once that truck is
at speed over the road, the gap between what it
operates at versus this new standard engine is negligible difference
at all. It's that cold start impact. So we're spending
billions and billions of dollars potentially raising the cost of goods,
(22:56):
definitely raising the cost of trucks to essentially address a
cold start issue that has a duration of impact in minutes,
not ours. And so it just seems to me to be,
you know, throwing bad money after good for a problem
that that we would better address in other ways, such
as modernizing the US trucking fleet.
Lee Klaskow (23:18):
And I'm just curious, have the OEMs kind of prepared
you as a large buyer with these new trucks, like
how much more of these new trucks could cost.
Derek Leathers (23:27):
Yeah, there's certainly been tons of dialogue. We won't get
into our exact pricing, but I can tell you that,
you know, there's there's sort of layers to this onion.
Right in the original proposal, the twenty seven proposal, it
wouldn't have just been the new engine cost. It would
also been a new expected life definition as well as
new mandatory warranties. If you collectively put all that together,
(23:50):
you know you're talking about a significant cost increase somewhere
the neighborhood of fifteen percent per truck. And that is
too much money for an industry right now that is
not making any money. I mean, it's pretty alarming when
you take a step back and think about all of
the publicly traded trucking companies in America and you average
their earnings and you get to a number that looks
something like zero to one percent over several of the
(24:13):
last quarters. That's not a way for this economy to
continue long term. If you're going to add fifteen percent
cost every engine and really address a very short period
of life or of operation, which is sort of that
cold start, you know, initial few minutes. It's just bad
policy in my view at a time the industry literally
cannot afford it, and instead we need to focus those
(24:36):
efforts on, you know, how to do more with less,
how to eliminate empty miles, how to make sure that
we're maximizing cube, and then how do you modernize the
fleet and all of those things can make a bigger
impact and do so quicker anyway, because those things endure
over the entire route, not just for a few minutes
of additional knocks, savings ed launch.
Lee Klaskow (25:00):
And so again, sticking on this whole policy track that
we're discussing right now, just because there's so much going on.
You know, you guys have a great cross border business
with Mexico. How has the tariffs or the more protections
policies coming out of Washington, how has that been impacting
buomes and rates in that business?
Derek Leathers (25:21):
Yeah, I mean, I think that'll end up being a
tailor two cities, and the short term it's been painful.
In the short term, you have a lot of uncertainty,
and anytime uncertainty is in the market, it causes interruptions
and flows. And when you have interruptions and flows, your
network doesn't operate like a network anymore. It starts to
fall apart. Like little everybody's been to the airport where
(25:41):
weather's perfect, and they look upon the screen and it
says weather delay, and they're all frustrated and don't understand
how that could be true. And it's because weather delay
anywhere in the country messes up the entire network for
that airline, including where you're standing in perfect weather, same
thing and trucking. So when we have the southern border
kind of turned on and on off and on and
off irregularly because of tariffs, it impacts across our entire
(26:05):
network and it causes lots of inefficiencies to start to exist.
What's happened as of late is those have kind of settled,
realizing that tariffs are not in fact totally settled. I
think the difference is people have accepted that they are
here to stay in some form, and so people are
no longer trying to make overly reactionary decisions to the tariffs,
(26:26):
and so we've seen a settling of some of that
erratic shipping pattern. Long term, we think it's fantastic for
Mexico and probably pretty good for the US as well,
because we do know from shippers customers of ours, both
in manufacturing, retail and otherwise, that there is in fact
an overt search to near shore and bring back both
(26:50):
products opportunities component parts closer to the shores in Mexico.
Lee Klaskow (26:57):
Is.
Derek Leathers (26:58):
If it isn't the US, it's certainly to be Mexico
more so than any other location. And we're a significant player,
if not the largest, certainly one of the largest cross
border players. So we're excited about the long term. We've
dealt with some pain in the short term, but it
made us more bullish, not less on our Mexico operation.
Lee Klaskow (27:16):
Yeah, another cross border player is Union Pacific. You know
they've been in the news as of late because of
their acquisition or merger plans with Southern Obviously it faces
some significant regulatory hurdles. Just giving your perspective, do you
think that's good or bad for the supply supply chain shippers?
(27:39):
What's your thought?
Derek Leathers (27:41):
Yeah, that one's interesting. I mean I think that could
be the inverse tail of two cities that I just
talked about. I think in the short term there's some
efficiencies to be gained. I think, you know, we work
with both n S and UP. Those are our two
primary rale partners. We think it's good selfishly, it's good
for our intermodal business. We think it probably does ultimately
(28:01):
create a more efficient path for transcon rail freight if
you take out some of the network inefficiencies at all
the swap points. Longer term, I have fears and concerns
relative to the competitive landscape and whether there's sufficient competition
and sufficient consumer choice to be able to compete effectively.
(28:26):
Some of those fears are alleviated by the simple reality
that truck and rail are still at times competitive to
one another. So although there may only be one, you know,
transnational or trans continental railroad, and while the b N
and the CSX continue to go it alone, if things
were to get overly egregious relative to pricing or something,
(28:47):
someday you would see freight move back to truck. I
could ask a lot about fears of vath swaths of
truckload freight suddenly find its way on this new efficient
model post merger, and that I have less concerns. I'm
not saying no concerns, but less concerns about simply because
if you look at what's happened with truckload length of
(29:09):
haul over the last ten to fifteen years because of
intermodal gaining momentum and gaining share, the current length of
halls just don't support or lend themselves to further conversion
to rail, and in most cases there's certainly not long
enough to even need a trans gone railroad to produce
a product to be able to move it. The stuff
(29:30):
that does go transcond on truck generally is expedited in nature.
It's super high service, high security type freight, where truck
is simply a better solution for that, And so there'll
be some marginal modal shift, but there's always going to
be marginal modal shift, just like we've seen in this
trucking downturn, freight shift from rail to truck simply because
(29:50):
truck is so affordable right now, given a choice, they
would prefer the reliability of it. So it'll go back
and forth over time. I don't know that it'll get approved.
It's obviously going to face a lot of regulatory hurdles,
but it is probably the best opportunity to gain approval
that we would have seen in the last several decades,
just given the current administration and current approach toward, you know,
(30:14):
focusing on efficiencies and doing things in a lower cost model.
Lee Klaskow (30:18):
Yeah, it definitely be interesting in the months to come
to see the various stakeholders that provide their insights into
whether or not it's it's it's a good deal for
that's in the public interest and it enhances competition to
things that they have to prove. I guess, I guess
could we shift to insurance a little bit. You guys
(30:40):
had an insurance win recently. Can you talk about, you know,
a the rising cost of insurance for you guys, what's
driving that and kind of how you're trying to mitigate
those rising costs?
Derek Leathers (30:55):
Sure, I mean, insurance is a headwind for really everybody
in America, not just truckers, but I think people see
it at the household level, on the auto policy level,
and we certainly see it in trucking. The entire industry
has seen just a dramatic increase in insurance costs and
probably more importantly, in overall outlay because insurance doesn't does
(31:17):
not in fact cover all of the exposure you get
higher premiums and you often take on more risk as
part of trying to secure your insurance program a year
over year. I think the reality of what we have
to focus on, and we have been focusing on, is
eliminating accidents. And so over the last several years, we've
set multiple new records in our accident per million miles
(31:40):
DOT preventable accidents, multiple different categories where we are simply
laser focused on safety above all. Else. When you do
three million miles plus a day, it doesn't mean you're
ever going to get to a zero incident here. But
if you can minimize the number of incidents and accidents,
obviously the starting pool for the PROBLEMBS to grow out
(32:00):
of is smaller the the you know, the real problem
in my view is really the nuclear verdict backdrop. So
in fairness to the insurance companies, you know, it used
to be that you could kind of from an actual perspective,
have some idea of what a bad day looked like.
Now it really kind of everything's up for grabs. I mean,
(32:22):
accidents that in our view are completely literally not our
fault at all, can bloom into something that took us,
you know, nearly a decade to get final resolution on
like the one in Texas, and it had to go
all the way to the Texas Supreme Court. That wouldn't
have existed previously. You see three hundred thousand dollars accidents now,
(32:44):
or actually three million, three million, or actually thirty and
so with a significant less number of actual accidents, the
cost outlay per accident more than offsets the shrinking number
of accidents year in and year out, and there has
been real, no real relief for several years. We're excited
about car technology as much as truck technology because as
(33:08):
cars get more and more safety features built in, the
distracted driver issue that our folks deal with every day
gets some level of improvement because the cars doing the
improvement versus the driver. And then on our own technology,
you know, we deploy you know, forward facing cameras to
record what that driver has just had to go through
or try to avoid, lane keeping technology, collision mitigation, active
(33:33):
breaking technologies, and are currently installing side view cameras on
our fleet as well because the number of side swipe
incidents is where you know, we know and have confidence
that somebody came into our lane, but without a visual proof,
it's very difficult because the human mind tends to go
to it must be the bigger vehicle's fault, and that's
(33:54):
unfair to our drivers, it's unfair the industry, and we
want to make sure to do everything we can to
get you know, DA driven decisions into the courtroom, right.
Lee Klaskow (34:03):
And you know you mentioned technology. Can we maybe talk
a little bit more about that, you know, we start
talking about AI, it might get another turn on your stock.
So what are you guys doing with AI and machine learning?
You know, is it Is it more useful for your
back office functions? Is it more useful for your brokerage business?
(34:25):
Can you just talk about, you know, what your guys
are doing with that?
Derek Leathers (34:29):
Yeah, as part of our tech journey, I mean, so
we're on the biggest tech journey really in our history
and have been for the last several years as we
you know, work to feel a fully digital platform whereby
all of our tech is in the cloud, it's built
on new sort of tech infrastructure, so it's more appliable,
more more amendable to changing environments, et cetera. And AI
(34:53):
has been a part of that. And so, uh, I
don't really want to get out on the bleeding edge
of AI at this point, but we absolutely want to
use it in places where there's tangible and immediate results
for increased efficiencies. So it does lend itself very well
toward back office function but repetitive behavior functions, functions where
process matters a ton and and adherence to process matters
(35:17):
a ton. We're using you know, agenic AI as it
relates to you know, uh, various call functions, check in functions,
prepp and drivers for the welcome experience when they're coming
on board working with you know AI, relative to scheduling
of trucks for maintenance and and doing more predictive analytics
(35:39):
and diagnostics and doing maintenance before things break. There's a
lot of different places that you can utilize it. And
then you've got kind of the more traditional AI, you know,
machine learning type stuff that does play a role within
our optimization and our core system relative to dispatch. So
I like where we're at. I think we're on a
(36:01):
leading edge but not bleeding edge, and we're trying to
stick to vertically functional improvement of processes type implementations versus
some big bang approach that if it works, great, but
if it doesn't, it can bring the whole organization to
its nees.
Lee Klaskow (36:18):
And for CAPEX, you know, obviously you're an acid intensive business.
Roughly how much you plan on spending this year and
what percentage of that is going towards tech?
Derek Leathers (36:28):
Yeah, I mean our tech spend obviously is op X
and CAPEX depending on what we're referring to and what
part of it we're spending. I can tell you that
our tech spend, We've talked about this publicly, has increased
significantly over the last several years and probably and I'm
talking this is not all CAPEX. This is op X
and CAPEX, but you know, roughly runs right around one
(36:50):
hundred million dollars a year. That will that's sort of
where it peaks, and then we believe as we start
to gain efficiencies and consunset some of the legacy systems,
we'll start to gain back a little bit of cost there. Overall,
CAPEX is driven still predominantly by trucks and trailers, but
clearly there is some tech Capex mixed in there. Our
(37:13):
Capex guide for the year we actually recently lowered and
it kind of ties back to your environmental questions earlier
until we get more clarity on that and tariffs we're
just not yet committed to the full amount of what
we would call normalized CAPEX in twenty twenty five. And
that's also partly driven because our fleets just in a
(37:35):
really good place right now from an age perspective, both
truck and trailer. So we have some optionality to kind
of wait for this decision to come out to make
sure we know and can prepare properly based on the
latest news.
Lee Klaskow (37:46):
Any of you guys like leveraging technology to combat fraud,
which has become a growing problem within the trucking industry.
Derek Leathers (37:55):
Yeah, we're using technology heavily on that front. We tend
to stay away from real detailed explanations because one thing
we learned quickly is the fraudsters can adapt and pivot
as well as anybody. But yes, we use a multi
layer set of tech stacks relative to carrier qualifications and
(38:16):
monitoring to make sure we have kind of redundant systems
that are that are concurrently monitoring carrier status relative to
all of their metric, their safety metrics, their insurance standing
when that insurance is up for renewal, whether or not
there are any you know, safety audits or other things underway.
(38:37):
But then kind of at the most basic level, just
some two factor authentication work that we're trying to get
fully rolled out, just to make sure the carrier is
actually the carrier. A lot of this fraud happens to
innocent bystanders as it relates to the small carrier community.
You know, they hack their systems, not ours, and they
end up in their systems being able to imitate that
(38:58):
they are them and end up as a result, being
able to get their hands on valuable information about cargo, etc.
The other thing we're realizing with all this cargo fraud
stuff is it's not dissimilar from any other crime spree
where they look for soft targets. And so I'm referring
to the customer on that side when I make that statement.
(39:20):
We see trends with certain customers who maybe don't take
physical security of their ship locations as serious as we
think they should. They become a target quickly, and so
it doesn't matter who their underlying carrier is, they're still
going to be targeted because their own processes are not
robust enough. And so we've been working with shippers to
try to increase their own focus on security as well,
(39:44):
because to just turn and blame the carrier may seem
easy or logical, but in fact, if you multiple different
carriers were hit out of the same location inside your
own network, it could very well be a location problem
that needs to be investigated further.
Lee Klaskow (40:00):
And so you know, as we come up towards the
end of our time, I'd be an idiot if I
didn't ask you about your outlook on rates, and you know,
what will the recovery look like with rates? Because I
thought we'd be in a better rate environment six months ago.
So I got this kind of wrong. So I'm curious
(40:20):
to hear your perspective on where rates go from here.
Derek Leathers (40:24):
Yeah, I certainly thought we'd be in a better rate
environment six months ago as well. We have seen four
consecutive quarters of rate increase in our network, but they've
been fairly marginal increases, not the kind of rate relief
that we really need to return our business to the
health that it deserves if we're going to keep supporting
these customers long term. I do believe you're going to
(40:45):
continue to see rate movement upward as we go forward
through the remainder of the year and then into twenty six.
I think the slope of the curve is really dependent
on of several different things. But this enforcement issue that
we talked about earlier in the call could play a
pretty major role. We need effective enforcement. I think if
we can't as a country all agree that we want
(41:07):
safe drivers that are qualified, that have been vetted on
the road, all in eighty thousand pounds, then we have
a problem, Like we need to be able to at
least coal less around that. Now, then how we get there?
There could be differences of opinion, but I think part
of it is starting with ELP enforcement, making sure that
that is a focus. We need to make sure that
(41:28):
people can interact with officers at the roadside and redynamic signs.
I think any and all examples of people being able
to gain CDLs without going through the CDL process needs
to be eliminated. And we have long advocated for the
kind of minimum training standards and kind of a more
(41:51):
focus on some of the CDL mills that are out
there where you see open advertisement in the light of day.
You know, come here get your CDL in five days
is come here and get your CDL overnight. I mean,
there's no credible way that you can get a driver
prepared to drive in an environment like that, and that
has a lot to do with why we developed our
own school network where people are going to go to
(42:12):
that school for multiple weeks to be able to be
trained properly, and then even after doing so, when they
come to Warner, we then assign them to a leader
Werner leader in the truck and they're going to spend
multiple more weeks getting acclimated to the road. They've already
passed their CDL, they're fully qualified by the law, but
we want to make sure and leaned into that further
and get them better prepared. That's really the right standard,
(42:35):
and to the extent we can get to a standard
that looks something like that nationwide, I think it's the
right thing. So enforcemental plan major role the consumer's holding up.
If peak season looks and acts like a normal peak season.
Now that wallet shares coming back into balance, I think
there are better times ahead for trucking. The only question
now is what's the slope of that line. How quickly
(42:57):
does it get good or better enough to make a
difference in the underlying financials because there is a lot
a lot of hurting truckers out there right now.
Lee Klaskow (43:07):
Absolutely, and you know, to wrap things up. Can you
talk about, you know, how he ended up at a
trucking company, A guy for Princeton.
Derek Leathers (43:19):
It's kind of a wild story. I took a job
in investment banking actually coming out of Princeton, and it
was a weird year nineteen ninety one. They pushed my
start date until November, and obviously, like every other college
graduate or most college graduates, I should say that graduation
happens in May, and so I had to fill the
gap from May till November. So I took what I
(43:39):
thought was going to be a temporary job at Schnyder
National dispatching trucks, in a role at the time they
referred to as a service team leader. And kind of
from day one, sitting there with a headset on my head,
you're talking to drivers all day, I just kind of
fell in love with the industry. So my family, my friends,
really everybody in my inner circle thought I had lost
(44:00):
my mind when I told him I was not in
fact quitting at the end of October and going off
to my banking job, but instead going to stay in trucking.
And I kind of haven't ever looked back. I really
am glad I've made this life choice. It's certainly been
more painful, probably at times, than being in banking or
some more sort of white collar role or or you know,
theoretical role, but I've enjoyed it. I think the folks
(44:23):
I get to work with every day are some of
the best people in the country. Going out to our
terminals and talking to drivers and hearing their stories. I mean,
these are real people doing real stuff, and they're pretty impressive.
So it's been a lot of fun, and it probably
fit me better than banking. To be honest, anybody who
knows my personality probably wouldn't have held up all that
well inside of a bank for a living. So I
(44:45):
think for everybody involved, they're probably all happy that.
Lee Klaskow (44:47):
I ended up in this industry and that one well,
it seems like you definitely made the right choice, and
lucky for Werner that you did. Derek, I really wanted
to thank you for your time and your insights today
and also thanking you for coming back onto the podcast.
Derek Leathers (45:02):
Yeah, thanks Ley, thanks for having me, and congratulations on
your one hundredth podcast. Pretty impressive.
Lee Klaskow (45:08):
I was excited that you were my hundredth guest, so,
you know, just just let you know. I also want
to thank you for tuning in. If you liked the episode,
please subscribe and leave a review. We've lined up a
number of great guests for the podcast, so please check
back to your conversations with C suite executives, shippers, regulators,
and decision makers within the freight markets. Also, if you
(45:28):
want to learn more about freight transportation and the markets,
check out our work on the Bloomberg terminal at big
and on social media. And before I go, I wanted
to thank the people who make Talking Transports possible. That
includes Bloomberg Intelligence Team Transport, which includes Angel Eich and
Tara Tajabash, and bi's digital content specialist Mariam Traore and
(45:52):
Aditya Somani. And I also want to thank all my
previous guests and for their insights that they've shared with us,
and I'm looking forward to the next one hundred conversations.
This is Lee Klasgal signing off and thanks for talking
transports with me.
Host
Lee Klaskow
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