Werner Enterprises has achieved over 70% of a targeted savings goal as of Q3 and plans to find more reductions, executives said on an earnings call Nov. 1.
The carrier projected it will reach $43 million in annual savings through its cost savings program, which calls for shifting to more in-house maintenance, among other measures, EVP, CFO and Treasurer Chris Wikoff said on the call.
To help manage costs, it’s investing in new equipment to cycle out older trucks. A year ago, Werner had over 500 trucks that each had over 400,000 miles, but the number of those high-mileage trucks was reduced to 50, CEO, President and Chairman Derek Leathers told investors.
“We’re still continuing to work more aggressively on in-house maintenance, quality of that maintenance, but also the fresher fleet gives us a pretty good head start on that,” Leathers said.
Supplies and maintenance costs were $60.1 million in Q3, a $7.8 million decrease from the same period last year.
The decrease was “due to the lower costs for over-the-road tractor maintenance, tires, and the impact of 3.4 million fewer company tractor miles,” the carrier stated in an earnings report filed Wednesday.
Werner reduces maintenance, supplies line item
“We’re certainly past the middle innings in some of the initiatives relative to supplies and maintenance,” Leathers said. “But there is still room to grow.”
The carrier also said it’s developing digital solutions to further optimize routing and scheduling of tractors and trailers for preventative maintenance, per the earnings report.
In May, Werner identified annualized projected savings of about $34 million, coming from areas such as lower driver turnover and fuel efficiency.
Meanwhile, the carrier reduced the number of its company trucks to 7,905 at the end of Q3, a 5% decrease year-over-year, and it’s preparing for future emission standards.