According to FreightWaves, Werner Enterprises CEO Derek Leathers characterized the ongoing driver attrition in the trucking industry as being only in the 'third inning,' despite significant regulatory and market shifts already reshaping capacity.
Driver Attrition and Regulatory Pressures
Leathers stated that the structural capacity attrition the company has discussed for several quarters 'is playing out as predicted.' He attributed the tightening to 'intensifying regulatory pressure, specifically around non-domiciled CDOs, English language proficiency, and cabotage enforcement.' Enforcement efforts are continuing, and Leathers expects greater agency collaboration and data exchange to further accelerate enforcement.
A notable factor is the Federal Motor Carrier Safety Administration's (FMCSA) ongoing withdrawal of approval for various Electronic Logging Devices (ELDs). Leathers noted that about one-third of all ELDs 'either are gone or on the way out,' dismantling shadow capacity and compounding supply contractions.
Additionally, the fallout from the Montgomery vs. Caribe case, which increases broker liability risk, is benefiting Werner. A Dallas jury recently ruled against broker C.H. Robinson in a related case. Leathers said the ruling has made shippers and brokers more cautious about whom they do business with, playing directly into Werner's strengths.
Financial Performance Highlights
Werner's quarterly earnings, released Tuesday, showed improved metrics. The adjusted operating margin for all trucking operations rose to 4.6% from 2.5% a year ago. On the earnings call, Leathers noted that the One-Way Truckload segment's operating margin was up more than 700 basis points year-over-year.
Key revenue per truck per week figures:
| Segment | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| One-Way Truckload | $4,787 | $6,114 | +27.7% |
| Dedicated | $4,542 | $4,789 | +5.4% |
The Dedicated segment now includes the operations of FirstFleet, acquired by Werner earlier in 2026. One-Way Truckload revenue was $138 million compared to Dedicated's $434 million in the quarter.
Despite the improvements, Citi analyst Ariel Rosa noted in a quick-hit note that 'continued thin margins (97% adj. Operating Ratio, 3% adj. op. margin vs. our 97.1%/2.9% estimates) reflect ongoing operational challenges as Werner continues its restructuring and cost-cutting efforts.'
Implications for Shippers and Carriers
The tightening driver supply, driven by regulatory enforcement and ELD removals, suggests that truckload capacity will remain constrained. Shippers can expect continued upward pressure on spot and contract rates as carriers pass on higher compliance costs and limited driver availability. Brokers face increased liability risk from the Montgomery vs. Caribe ruling, which may further reduce the pool of available capacity as they become more selective.
Leathers predicted a year ago that the recovery would be supply-driven rather than demand-driven, and that forecast has materialized. Werner's stock had risen about 54% year-to-date before a recent selloff, reflecting investor confidence in the carrier's positioning.
Watch List
- FMCSA ELD approvals: Further withdrawals could accelerate driver attrition and reduce shadow capacity.
- Legal developments: Additional jury decisions related to Montgomery vs. Caribe may reshape broker-carrier relationships.
- Regulatory enforcement: Increased data sharing among agencies could tighten the driver pool further.
- Werner's restructuring: Continued cost-cutting efforts will determine margin recovery pace.
Sources:
