Dive Brief:
- Driver training schools contributed to Q3 losses in one segment for Werner Enterprises, executives said on an earnings call last month, following company investments to grow its workforce.
- The segment generated $1.4 million in operating income in Q3 2021, but that turned to a loss of nearly $1.1 million for Q3 2022, according to a quarterly filing. The segment also covers miscellaneous items such as third-party equipment maintenance and leasing.
- Trainings can bring in revenue for carriers. Schools are typically not profitable during the first 12 to 18 months, but they gradually improve their financial results over time, CFO, Executive Vice President and Treasurer John Steele said on the call.
Dive Insight:
Werner expanded its driver schools from 13 in late 2020 to 22 in Q1 2022 as part of its recruitment, Steele said, but the push came with challenges.
Details were sparse, but two training school locations had “temporary issues” in Q3 2022, according to Steele. Hurricane Ian affected five schools, but only for “days, not weeks,” CEO Derek Leathers said on the call.
Quarterly reports suggest the company added drivers throughout the year. Werner had 14,245 employees at the end of Q3, not including independent contractors, according to an investor presentation.
The driver push comes as acquisitions, such as the purchase of ReedTMS Logistics, have helped the logistics provider grow. While the number of new employees wasn’t disclosed in that deal, Werner onboarded 234 drivers in its acquisition of Baylor Trucking.
An approximately $525 million deal by Heartland Express marked a milestone for the year: The company anticipated it would involve taking on 2,800 employees. But it wasn’t the only such expansion. Purdy Brothers Trucking and P.A.M. Transportation Services picked up drivers in other deals this year, too.
Even with the acquisitions in recent months, Werner may not be finished just yet.
“We continue to evaluate acquisitions in North America truckload and logistics,” Leathers, who also serves as the company’s president and chairman, said on the call. “We are remaining disciplined and we are searching for companies with strong management teams that we expect to retain.”
