Good afternoon, everyone. Earlier today, we issued our earnings release with our second quarter results. The release and a supplemental presentation are available in the Investors section of our website at werner.com. Today’s webcast is being recorded and will be available for replay later today. Please see the disclosure statement on Slide 2 of the presentation, as well as the disclaimers in our earnings release related to forward-looking statements. Today’s remarks contain forward-looking statements that may involve risks, uncertainties, and other factors that could cause actual results to differ materially. The company reports results using non-GAAP measures, which we believe provide additional information for investors to help facilitate the comparison of past and present performance. A reconciliation to the most directly comparable GAAP measures is included in the tables attached to the earnings release and in the appendix of the slide presentation. On today’s call with me are Derek Leathers, Chairman, President and CEO; and Chris Wikoff, Executive Vice President, Treasurer and CFO. Derek will begin with a high-level overview of our performance during the second quarter and an update on execution against our DRIVE strategy, specifically with a focus on innovation. Chris will then provide a deeper dive into our results. We will then open it up for questions followed by closing thoughts from Derek. Now, I’ll turn the call over to Derek.

Thank you, Chris, and good afternoon. Before we get into an overview of our second quarter results, I’d like to thank the 14,000-plus talented Werner team members for staying true to our core values, safely providing superior service to our customers and delivering on our unrelenting DRIVE strategy. We are proud to be the carrier of choice among our deep portfolio of valued customers who are allowing us to solve and service their most complex freight challenges every day. With that, let’s turn to our second quarter results on Slide 6. On our previous two earnings calls, we shared our expectation that freight conditions in the first half of 2023 would be challenging and competitive as retail inventory destocking runs its course, the Fed continues with monetary tightening and excess capacity dissipates. Following a moderating freight environment in February and March, freight was progressively weaker in April and May. However, there was a slight improvement in mid-June, which we’ve seen continue throughout July. In the second quarter, revenues decreased 3% year-over-year to $811 million. Net of fuel surcharges, our second quarter revenue grew by 2%. Adjusted EPS was $0.52. Adjusted operating income was $51 million or an operating margin of 6.3%. Adjusted TTS operating margin was 9.7%. Despite the challenging operating environment, our TTS segment achieved an adjusted operating margin of 12.9% on a trailing 12-month basis, within our long-term guidance range of 12% to 17%. Our primary focus is on operational execution by leaning into the strength of our dedicated fleet, which has performed as expected through superior customer service and fleet efficiency. This focus continues to result in strong customer retention and year-over-year growth in revenue and revenue per truck per week. As anticipated, One-Way Truckload was challenged by overall market conditions with less freight available, elevated spot exposure, and significant pricing pressure. We remain focused on utilization of One-Way assets and optimizing the fleet while maintaining long-term pricing discipline. Within Logistics, Q2 volume and revenue remained strong, delivering double-digit growth year-over-year. We continue to execute on our cost-saving program and have seen sequential and year-over-year progress in multiple expense categories. That said, we continue to experience macro headwinds with lower equipment gains, higher interest expense, and inflationary factors amid a softer freight environment, which collectively contributed to sequentially lower earnings. The second quarter was certainly challenging, but our results continue to reflect a business model that is durable, diversified, and resilient. Even in a lower-for-longer freight environment, which combined with our elevated rigor on cost-saving initiatives puts us in a compelling position to excel as market conditions improve. Let’s move on to Slide 7. In our TTS segment, revenue per truck per week net of fuel has grown year-over-year, 18 of the last 22 quarters. While down year-over-year in Q2 for the first time in 14 quarters, this compares to industry benchmarks showing significantly larger declines. Our Dedicated segment continues to perform and grow revenue per truck, reflective of our reliable, highly integrated, and premium offering for large enterprise customers who look to us to service complex and hard-to-serve networks not easily replicated. Dedicated has steadily grown over the last 10 years across all economic conditions with a customer annual retention rate of over 95%. Our ability to engineer and optimize fleets over time has resulted in dedicated revenue per truck increasing for eight of the last nine years. Within our One-Way Truckload business, revenue per truck net of fuel is also outperforming industry benchmarks despite being down mid-single digits in the first half of 2023. This durability is the result of our investments and deliberate effort to build a business model consisting largely of cross-border Mexico, engineered, and team-expedited freight. Let’s move on to Slide 8. Beginning with our 5Ts strategy, which we launched in 2016, and continuing through today with our DRIVE strategy. Innovation is at the forefront of transforming the way we do business. Our Cloud First, Cloud Now imperative launched in 2020 represents a robust multiyear investment plan to leverage technology and innovation towards growth and operational effectiveness. We launched the Werner EDGE TMS in 2021, a blend of best-of-breed third-party market solutions with proprietary talent and innovation. In 2022, we successfully migrated our entire organic truckload brokerage business to Werner EDGE TMS and are currently transitioning other business units, including Intermodal. Reed, one of our recent acquisitions, is scheduled for full integration by the end of this year. We plan to initiate the migration of our TTS segment in 2024. In July, we were excited and proud to unveil Werner Bridge, our latest tech-driven feature-rich logistics solution designed specifically for shippers and carriers. For our shippers, the Werner Bridge makes it easy to get instant quotes, book shipments, and manage orders smoothly from start to finish with full visibility of their network. Our representatives will continue to be available and engaged at any time. For our carriers, Werner Bridge streamlines the process of finding and booking freight instantly, automating freight matching, providing routing guides and interactive maps for ease and visibility, and a recommended reload feature designed to enhance recurring revenue for the carrier while also further establishing Werner as a recurring and reliable partner. Werner Bridge is a clear demonstration of our commitment to provide innovative and advanced solutions, streamlining operations and delivering top-notch service to carriers and shippers. When we combine tech-enabled customer-facing solutions such as Werner Bridge with our large network of qualified carriers and our deep industry expertise, we have a compelling position to organically grow our brokerage business to significant scale with large, medium, and small customers alike. I want to extend heartfelt congratulations to all the Werner associates who poured their energy, time, and talent into launching this exciting next-gen technology. Before I turn the presentation over to Chris Wikoff, our CFO, I’d like to take a moment to comment that in his first three months with Werner, Chris has hit the ground running, bringing fresh eyes, experience, perspective, and a new and positive presence to our leadership team. We’re just getting started. And with that, let me turn it over to Chris.

Thank you, Derek, and hello, everyone. It’s great to speak with you all today, and I’m thrilled to be here. With 100 days in at Werner, I’ve had a tremendous opportunity to engage broadly with the business and operations, seeing firsthand our operational expertise and momentum for innovation and growth. This is a unique environment with a passion for excellence in winning, and I look forward to the work that we can accomplish together here at Werner. Let’s continue on Slide 10. Second quarter total revenue was $811 million, which was down 3% versus prior year. Net of fuel surcharges, Q2 revenues grew by over 2%. TTS revenues net of fuel were nearly flat despite a softer freight market, while Logistics revenue grew for the 11th straight quarter, reporting double-digit growth. Adjusted operating income was $51 million, and adjusted operating margin was 6.3%, a decrease of 34% and 300 basis points, respectively, versus prior year. Adjusted EPS of $0.52 was down $0.35 year-over-year due to the macro environment, lower equipment gains, higher interest expense, and ongoing inflationary headwinds. Turning to Slide 11 and our Truckload Transportation Services results. As a reminder, we report our TTS adjusted operating results net of fuel. TTS total revenue for the second quarter was $570 million and down 7%, yet demonstrated resiliency and durability with revenues net of fuel surcharges nearly flat at $493 million. Given the macro environment, we are pleased with the top-line performance in TTS. Second quarter TTS adjusted operating income was $48 million, and adjusted operating margin was 9.7%, a year-over-year decrease of 28% and 370 basis points, respectively, due in part to lower equipment gains against a strong prior-year comparison. In the second quarter, gains on the sale of revenue equipment totaled $11.4 million, a decline of $7.3 million or 39% versus the prior year. While we sold over twice as many tractors and nearly three times more trailers compared to the prior year period, average price and gains were significantly lower. Our strategy coming into 2023 was to weight equipment sales more heavily in the first half, which is paying off as equipment values are expected to decline further for the rest of the year. Year-to-date, we have achieved $30 million of equipment gains compared to our full-year guidance of $30 million to $50 million. TTS adjusted operating expenses net of fuel surcharges and equipment gains were up only 2% compared to our TTS rate per mile, which decreased 1.7%. We saw modest improvements in the quarter in various expense categories. TTS insurance and claims were down 13% versus the prior year. We continue to focus on safety and maintaining our 10-year record low for DOT preventable accidents. The rise in cost per claim, record verdicts, and settlements remain an industry headwind, but we are encouraged by modest year-over-year improvement. Driver pay and benefits continue to moderate and were flat year-over-year and down sequentially. Supplies and maintenance expense was up 2% over the prior year, much lower than the 19% increase experienced in the first quarter compared to the same period in 2022. We’re seeing an improvement in the monthly trend as we are starting to recognize the benefits of shifting more of our repair and maintenance capabilities in-house, therefore, reducing our reliance on third parties. We’ve done a lot of work in this area, and we are encouraged by the early results. We are committed to controlling costs and performing within our annual TTS operating margin range of 12% to 17%, which we continue to achieve on a trailing 12-month basis. Turning now to Slide 12. TTS trucks averaged 8,351 during the quarter or up nearly 1% versus the prior year. We ended the quarter with the TTS fleet down 2.2% sequentially and down 1.4% year-over-year. Within TTS, Dedicated revenue was $310 million and up 3%. Dedicated represented 63% of segment revenue net of fuel compared to 61% in the prior year. Dedicated freight demand in the second quarter was generally steady and in line with our expectations. The Dedicated average truck count during the quarter grew 2% to 5,276 trucks. At quarter end, Dedicated represented 63% of the TTS fleet. Dedicated revenue per truck per week increased 1.5% year-over-year and 3% year-to-date. Overall, Dedicated is performing well and remains solid. Our pipeline of opportunities remains healthy given our unique scale, reliability, and strong relationships across our portfolio of large enterprise customers. As customers continue to monitor the macro environment, we are seeing some delays in expanding the existing dedicated fleet, although the dialogue with our customers about future opportunities remains positive. One-Way trucking revenue for the second quarter was $177 million, a decrease of 6% versus the prior year. One-Way average truck count during the quarter was down 1% to 3,075. One-Way revenue per truck per week is down 5.2% year-over-year. We have been diligent in maintaining price discipline with over 80% of the bid season behind us. As such, we experienced an uptick in our spot mix, reaching mid-teens in Q2 within One-Way. One-Way second quarter total miles per truck per week were slightly positive year-over-year, reversing a multi-quarter trend due to more teams, improved terminal velocity, further engineering of our fleet, and less downtime. Turning now to our growing Logistics segment on Slide 13. In the second quarter, Logistics segment revenue was up 10% year-over-year at $225 million and now represents 28% of total Werner revenues. Truckload Brokerage revenues drove the largest portion of the year-over-year growth, increasing over 30% driven by the Reed acquisition and strong performance from our organic business. We completed our second full quarter with Reed as part of the Werner portfolio, and we are very pleased with the performance as Reed is seeing double-digit volume growth compared to its pre-acquisition levels. Excluding Reed, volumes in Truckload Logistics increased 4% sequentially and decreased 3% year-over-year, nearly replacing all of the surge and project volume, which peaked in the prior year quarter. We continue to grow our domestic and Mexico cross-border Power Only solution as both our customers and alliance carriers see tremendous value in the Werner network and growing trailer pool. Power Only represented a growing portion of the Truckload Logistics revenue during the quarter. Final Mile revenues increased 15%, and the business continues to show strong growth, reporting numerous record volume weeks during the quarter. As expected, Intermodal revenues, which make up approximately 11% of segment revenue, declined year-over-year from both a volume decline and lower revenue per load. Second quarter Logistics adjusted operating income was $5.5 million, and adjusted operating margin was 2.4%, down 400 basis points year-over-year, driven by rate and gross margin compression combined with higher operating expenses. We are seeing multipronged benefits from our Logistics and asset-light businesses as they provide diversification, are less capital intensive, and enable broader solution selling that aligns with the needs of our customers. On Slide 14, we provide an update and more color on our cost savings program. As we have previously discussed, we are embedding discipline and rigor around expense management across the enterprise. Our cost-saving program is process-oriented and geared towards collaborative identification, execution, and trackability of numerous initiatives to reduce costs and improve margin. In the current environment of pricing pressure plus inflationary headwinds, our cost-saving program is serving to mitigate some of the impact on operating margins. Through the end of the second quarter, we have now identified in-year run rate savings of over $40 million. The program includes four primary categories of savings. First is driver and non-driver salaries and other wage-related initiatives. Second is recruitment and training savings from lower driver turnover and maintaining a strong driver pool. Third is fuel efficiency savings through investments in updating the fleet, supplier and equipment innovations that improve efficiency such as auxiliary power units and other fuel efficiency initiatives. Finally, savings from growing our in-house maintenance capabilities throughout our terminal network in lieu of third-party repairs. This is in addition to negotiating reduced costs on supplies and parts, lowering facility expenses, and the benefits from technology-driven savings. Although there is more work to do, we are pleased with the progress to date. As of the end of the second quarter, we have realized over 40% of the targeted savings. We’ll continue to emphasize a lean culture, operational innovation, and organizational discipline to contain costs, mitigate inflationary pressure, and improve margins while also strategically investing for future growth. Let’s look now at our cash flow, liquidity, and capital metrics on Slide 15 and Slide 16. We ended June with $47 million in cash and cash equivalents. Operating cash flow was steady at $115 million for the quarter or 14% of Q2 total revenue, up 71 basis points compared to the prior year. Year-to-date operating cash flow was $282 million, or a margin of 17%. Net CapEx in the second quarter was $151 million, or 19% of Q2 total revenue, reflecting lower year-over-year gains and a greater pace of reinvestment in the business. We are catching up the fleet after not receiving all of the equipment we ordered in the last two years. With the increased investment, we are seeing a lower average age of our trucks and trailers benefiting maintenance expense while also preparing for future emission changes. Having the most modern and safest equipment benefits our drivers, customers, and will position us well as the market strengthens. Free cash flow was a negative $36.5 million for the second quarter. Year-to-date free cash flow was positive $27.6 million, or 2% of total revenues due to net CapEx for the first half of the year being elevated. We expect net CapEx for the second half of the year to be lower than the first half. Our total liquidity at quarter end was strong at $511 million, including cash and availability on our revolver. On Slide 16, we ended the quarter with $640 million in debt, down from $691 million at the end of the first quarter. Our debt structure is primarily long-term and provides ample credit capacity for growth and accretive investments with over 90% of our outstanding debt not maturing until the second half of 2027. In July, we increased our fixed-rate debt to 58% from 35% at the end of the first quarter. This was accomplished by entering into additional interest rate swaps and therefore achieving our objective of mitigating rate volatility for the majority of our debt portfolio. At quarter end, our net leverage was 1.1 times compared to one times entering 2023. We remain pleased with our long-term and low-cost access to capital and our overall capital structure. Moving on to Slide 17 to review our capital allocation priorities. We will continue to prioritize strategic reinvestment in the business to fuel growth and competitive advantage, including modernizing the fleet while also investing in safety, technology, and innovation. In addition, we’ll maintain our long-standing commitment to return value to shareholders through our quarterly dividend, which grew 8% in the second quarter, and through periodic evaluation of share repurchases. Our opportunities to grow organically remain clear and compelling, particularly within Dedicated and our asset-light businesses. Accretive acquisitions also remain an avenue for growth where opportunities of relevant size and synergies align with our culture and prioritize competitive advantages. We’re continuing to integrate the four acquisitions that we have executed to date, and progress is in line with our expectations. Lastly, we are committed to preserving a strong and flexible financial position with access to liquidity while maintaining low and modest net leverage. I'll turn it back to Derek for an update on our market outlook for the second half of the year and modeling assumptions on Slide 18.

Thank you, Chris. The freight market has been challenging in the first half of 2023. During July, we have seen modest signs of improvement in truckload. Dedicated demand remains steady, and we anticipate a pipeline of opportunities that we can capitalize on. One-Way pricing will remain disciplined as spot mix gradually moderates, particularly as we flex into more dedicated growth. Despite a very competitive marketplace, we expect continued solid volume in logistics with continued margin pressure given a prolonged competitive rate environment. As we look to the second half of the year, the collective voice of our larger retail customers continues to reflect that destocking is largely complete. Reports indicate that inventories have returned to pre-COVID levels on an inflation-adjusted basis. We remain cautious about consumer behavior given mixed data points and themes impacting spending, particularly for goods versus services. Headwinds remain in terms of further Fed tightening with inflation still well north of the Fed target and potentially ongoing restrictive lending. Further, we expect there will be an accelerated pace of freight capacity exiting the market. Relative freight capacity, FMCSA carrier data reports DOT net truck deactivations for 44 consecutive weeks and now exceeds 110,000 net deactivations over that period. At this point, we believe smaller carriers have been supported by cash reserves generated from the peak 2022 freight market, federal stimulus, and lower fuel costs. Accelerated truck capacity attrition seems more imminent as cash reserves reach a point of depletion. We believe even in a gradually improving freight environment, it is unlikely for those carriers to reenter the market given much higher financing costs and other factors. We are well positioned to benefit from the reduced supply, more normalized demand and upward momentum to lock in more contractual freight at improving rates. For the used truck market, we expect continued declining demand with moderating pricing and equipment gains as the year progresses. We reached $30 million in equipment gains for the first half of 2023 and we are tightening our expected range for the full year to $40 million to $50 million. We expect net interest expense this year will be $20 million to $25 million higher than last year as a result of the continued pace of Fed tightening. As Chris mentioned earlier, we have adjusted our fixed versus floating rate debt to reflect the 58% as effectively fixed. With that background, let’s turn to Slide 19 and review our second-quarter performance compared to our guidance and our updated guidance metrics. During the second quarter, our truck fleet declined by 190 trucks, resulting in a year-to-date decline of 4% as we adapted our fleet size to adjust to the challenging freight conditions. As a result, we are lowering our truck growth guidance range for the full year 2023 to down 4% to down 2%, from down 2% to up 1% previously. We are increasing our net CapEx guidance for the year from $350 million to $400 million to $400 million to $450 million as a result of a greater pace of refreshing the fleet, as Chris mentioned. We anticipate that this will be at the upper end of our long-term net CapEx range of 11% to 13% of revenue. Dedicated revenue per truck per week increased 3% year-to-date. This is at the upper end of our full-year guidance range, which remains unchanged. One-Way Truckload revenue per total mile for the second quarter decreased 5.2% and is down 4.2% year-to-date, within our first-half guidance range. Our guidance range for the third quarter is down 7% to down 4%. Our tax rate in the second quarter was 25.2%, and we are maintaining the full-year range of 24% to 25%. The average age of the truck and trailer fleet in the second quarter was 2.1 and 5.1, respectively. Turning to Slide 20. We have a powerful business model with a large and durable Dedicated fleet, a diversified One-Way Truckload fleet, and a growing Logistics segment. Our approach has created clear competitive advantages that will continue to fuel our growth, durability, and earnings. We have significant scale as a top five public truckload carrier with nearly 8,300 trucks, 14,000-plus associates, and thousands of qualified carriers within Brokerage. We are uniquely positioned to service the most complex freight needs of large enterprise customers, including over half of the largest U.S. retailers, in addition to growing in other verticals with customers who are winning in their space. We have the benefit of broad solution selling to large enterprises across our highly integrated dedicated offering, our branded nationwide Final Mile solution plus cross-border and Logistics while also growing share with small and medium-sized customers within Brokerage. Our comprehensive footprint in terminal network across the country puts Werner within 150-mile reach of 90% of the U.S. population. As nearshoring increases, we have the largest Mexico cross-border franchise in truckload and deep experience operating in this complex market. We have a long history of leading in innovation, and we are primed to benefit from more recent investments in technology aimed at greater operational effectiveness and enhancing the experience of both our customers and associates. We continue to attract and retain top talent, including highly qualified drivers that embrace and carry out our commitment to superior safety and award-winning service, which in turn allows us to retain our strong portfolio of winning customers. I’m extremely proud of our team. We were recently recognized by Inbound Logistics magazine’s annual Excellence Survey as a top 10 3PL provider, coming in at number six. This is the seventh consecutive year of being recognized and a testimony to our commitment to providing a best-in-class experience for our customers. At this point, I’ll turn the call back over to our operator to begin Q&A.

Our first question is from Ravi Shanker with Morgan Stanley. Please go ahead.

Thanks. Good afternoon gentlemen. Thanks for the color here. Would love your views on what your customers are telling you. You kind of hinted about inventory levels kind of coming back to normal here. Kind of how do you think the cycle plays out over the back half of the year and going into 2024, please?

Yes, Ravi, thank you for the question. I guess I’ll start with, obviously, it’s a bit like the weather. It’s localized in nature, meaning each customer is in a little bit of a different setting. But the majority of our customers, as we’ve recently had significant dialogue with them on the subject, have indicated that destocking is largely behind them. So that’s encouraging. They’re also encouraged by some of the macro backdrop data that we all see. Labor is holding up well. Jobs reports are arguably better than what was originally expected. Inflation seems to be waning a little. If nothing else, we’re starting to enter at least easier comps as it relates to that, and people are normalizing their perception of it. We work a lot with winning customers in sort of the discount retail space. Those folks seem to be faring better than most. So as we put all that together and think about the back half, I’d say we’re cautiously optimistic, as are they. But clearly, you’ve still got that tightening ahead of us. You’ve got some pretty stringent kind of lending backdrop. So it’s difficult to say, but it appears to me that we’re seeing the early innings of what could set up more like a normalized Q4 with some difficult headwinds still ahead of us in Q3.

Got it. That’s super helpful. And maybe kind of switching gears for a follow-up to the cost side. Obviously, you had a few challenges this time last year, which gives you a little bit of an easier comp. And you guys have made some good progress there. Can you talk about kind of some of the line items you’re looking at, particularly insurance? I think there have been some significant changes in the insurance market in recent months. How do we think about cost inflation as a potential offset to any pickup in the cycle?

Yes, Ravi, thanks for the question. This is Chris. In terms – specifically on the insurance and claims, we did see some year-over-year benefit there and flat quarter-over-quarter, although admittedly, Q2 of the prior year was a peak for insurance and claims. So that’s somewhat contributing just in terms of the comp of some of the moderation year-over-year in the quarter. But this is still an expense category that just continues to be challenging for the industry. Our frequency of claims is down, remains down. Our safety metrics continue to be positive. Unfortunately, the insurance and claims just broadly for the industry can be difficult given the cost per claim rise and broad issues. We are seeing some other moderation in supplies and maintenance. That was up 4% year-over-year, but it’s down 5% quarter-over-quarter. That’s a particular category that we’ve been very focused on. A couple of metrics there in terms of our trucks that are over 400,000 miles, we’ve continued to see that drop dramatically. It peaked last September. It was still elevated coming into this year. By the time we hit March, it was lower than any month last year. Then we hit June and reached a low point, almost a two-year low point in terms of our trucks that are over 400,000 miles and out of warranty. So that has a knock-on impact on supplies and maintenance. The other thing that we are seeing some benefit from is getting some traction and seeing the benefit from an extended period here of building in-house capability for our repairs and maintenance throughout our terminal network. We’ve been spending several months building that capability, hiring mechanics and developing the means to route trucks to those terminals for in-house repairs and maintenance. Now we’re actually seeing the fruits from that and see some encouraging trends, particularly in June. That was more significantly down. So we’re seeing some categories that are encouraging. That’s on top of our cost savings program, which we talked a little bit about in our scripted comments. There are still a couple of categories that are more elevated, depreciation being one that has some intangibles of the amortization from acquisitions and some impact from the newer fleet and some fuel-enhancing equipment. We think those are good decisions long term in terms of fuel efficiency and impact on margin. Our non-driver salaries, wages, and benefits are also still a bit elevated. But again, part of that is the maintenance headcount that we’ve been building in that category to then move forward with this in-house maintenance capability as well as still some elevated headcount from our acquisitions. We have more work to do in terms of integration. It’s on pace, but we have more opportunity there going forward. We’ve talked about in the past how we have made some investments, go-to-market strategy investments in Final Mile. So that’s a bit elevated, but we’re growing that business to scale. We’re excited about that, and we look for greater profitability there.

Very helpful, Chris. Thank you.

Good evening. As you think about growing the dedicated business over time, can you talk about how some of the in-sourcing or private fleet efforts from your largest customer is impacting that and the strategy you have to offset and overcome that either with other business or other customers or just strategically to stay engaged there? Thank you.

Sure, Bascome. I’ll take that one. I’ll start with the obvious. They are our largest customer. As such, both parties have some – we have a vested interest in making sure that the solutions we put in place are sustainable for both of us. Their growth has been impressive, will remain impressive. As I think about them moving forward, it’s certainly something that excites us. We can’t exclusively be that growth partner or that growth avenue for them because, as you know, we’re going to stay disciplined to the diversity within our portfolio. We’re going to stay disciplined to our approach, both geographic diversity as well as vertical diversity, but probably most importantly, what our representation with any one customer is. With all that said, it’s a mutually executed strategy. We work with them very closely. We’re actually growing with them. Here recently, we have opportunities to continue to do so where it makes sense for us. But we’re well aware that they have a strategy to have a private fleet in addition to that. We have many other customers who have private fleets, and yet we operate Dedicated side by side. I often believe that it makes for better customers because they are exposed to the weather out there, so to speak. They understand better and become better buyers of freight. They’re more educated in their acquisition of capacity. That – all of those things lead me to believe we’re in good shape there. We’re going to continue to have open dialogue. But what it’s really going to do is force us to continue on a plan that we set forth some time ago anyway, which is making sure we’re diversifying across multiple verticals, multiple geographies, and expanding the quality service and product that we have to offer to more new customers as well as what we’ve been good at for a long, long time, which is growing deeper and broader with existing.

Thank you for that expansive answer. I just wanted to touch on one point you made in the middle of it. Did you say that despite them growing their fleet, you’re still growing trucks with this customer? Just wanted to make sure that I heard that.

Yes. I’m saying as they are growing their fleet, we still have opportunities to pick up new opportunities with this customer, yes.

Great. Thank you. Maybe on the Logistics side, you talked about stabilization in the outlook but called out some margin pressure in the back half of the year or in 3Q. Can you maybe parse that out between Truckload, Final Mile, and Intermodal?

Yes. I mean look, I’m going to focus on Truckload with my answer. As it relates to the reality, that is the largest portion of that Logistics portfolio. What we’re really saying there is, look, we’re very proud of not only holding serve on our organic Brokerage business and really sort of outperforming the market in terms of the amount of revenue we’ve held on to and volume, probably more importantly. But with the Reed acquisition and their ability to not just be at scale from the time of acquisition but having grown further since that time, we’re pretty bullish on our capabilities in that space. We also love where we’re at as it relates to the conversion within our EDGE platform and our ability to operate more efficiently over time as we grow into that business. All of that obviously is offset by the reality that as this market does turn, there’s going to be pressure in the non-asset space. You’re going to see buy-side pressure that isn’t always synced with the ability to gain that same relief from a sell-side perspective. There’s going to be some puts and takes as we work our way through all of that. What we’re especially pleased about within Logistics, though, is the resiliency of the Power Only product. That product, in particular, which is really an integrated product within our One-Way network, is holding up remarkably well. We’re very optimistic on our ability to continue to grow that, give our customers a seamless experience but be able to give ourselves as less asset-intensive exposure while also providing ongoing freight via Werner Bridge and more of a digital format to our customer partners and really lowering their operating costs at the same time. So pretty exciting time as I think about that business over the next, call it, two to three years outlook.

Okay, great. Good afternoon guys. Thanks for taking my questions. So I don’t know, if Derek, if you want to take this or if this one is better for Chris. But I guess as you sort of think about the trajectory here as we head into the back half of the year, in the context of the longer-term 12% to 17% TTS margin range, I understand this has been a much more challenging freight recession than I think anybody could have anticipated. But do you still feel like the bottom end of that range is achievable for this year? If so, what sort of fourth quarter do you need to see to be able to get there?

Yes, Jack, thanks for the question. Clearly, that’s going to be challenged. There are a lot of headwinds that we’ve got to continue to work through as it relates to declining used truck values and volumes. We’ve got to continue to deal with the reality that although we’re over three quarters of the way through our bid season, we have some of those bids that are still being implemented in Q3. Hence, the updated guidance on price. Interest rates and where they may go on the portion of our debt that’s variable. There’s a lot of things to think through. But we’re making progress on the cost side. We’re holding serve relative to revenues and volumes, and we’re proud of our positioning there. The pipeline in Dedicated looks good. The opportunities for second half implementations in Dedicated that are sort of one and yet to be implemented are encouraging. Some of the efficiencies we’re finding on the One-Way side, seeing productivity go positive year-over-year for the first time in multiple quarters is encouraging. We believe we have more work to do to gain even further efficiencies and optimization in the network. Bottom line this year, challenging. I don’t believe it’s worthy of us changing our long-term guidance. We may fall out of it for a quarter or two. But over the course of the long term, we still feel very comfortable. That’s where we belong. That’s where we’ll live, and we’ll continue to drive forward from there.

Okay. No, I appreciate that, Derek. And thank you for the context there. I guess for my second question, I’d love to get you to talk a little bit more about Werner Bridge and kind of going back to both the prepared comments into the last question but – or last questioner. Think more about what this means for more of an integrated go-to-market strategy within your business longer term?

Sure, Jack. I’ll do my best to do exactly that. I think I got to back you up before we get to Werner Bridge and talk more broadly about sort of the EDGE TMS strategy overall with MasterMind as kind of the backbone of that strategy. That’s really the platform, if you will, that allows us over the next couple of years to continue to land all of the portfolio on one core platform with full integration, visibility, and thus flexibility in how we execute on our customers’ needs. Werner Bridge is a component within that that’s allowing us to make a large step forward in this sort of digital brokerage space. That puts us in a position, especially at that small to midsize customer level, to be able to operate highly efficiently with human engagement still where required, with the kind of customer service and support that our customers have come to expect. An analogy would be somewhat like pure brokerage versus Power Only brokerage, at least in my mind. Werner Bridge is going to bring all of the qualities, attributes, flexibility, and variability that Brokerage brings. But Power Only brings all of that plus that asset-backed nature and that fully integrated effect within the network. Werner Bridge is similar in that sense. We want to be able to give people that much more high-level visibility, efficiency, the ability to track, reload, use predictive AI to be able to maximize their utilization and minimize inefficiencies in the network but tie it to the Werner brand and tie it to what that means. This is still human engagement where human engagement is necessary and required, and the ability to kind of lift up that customer and their expectations. This is a journey we’re on that path today. It’s not happening overnight or in the next quarter or two, but it’s a journey over the next, call it, 18 months that we’re really excited about.

Thank you very much. I was just looking at the big change in length of haul in the One-Way Truckload, about 692 last year, dropping to 604 this year. I was just wondering if you could talk a little bit about the dynamics in the marketplace that caused that differential. I imagine with the port situation backed up, that was part of it. But I’m just curious if there was something similar in Dedicated. Can you give us an idea of how much that big drop in length of haul might have affected the revenue per total mile?

Yes, I’ll take that one, Jeff. This is Chris Neil. We’ve been having length of haul contraction over the last several quarters, as really the industry has, due to just a number of different things with the regionalization of rate, our Dedicated – I think your question is TTS related. We've had our Dedicated fleet continue to grow as a percentage of TTS. Dedicated length of haul on average is much shorter than what we do on the One-Way side. We’ve got a couple of acquisitions over the last two years, specifically with regard to ECM that had a more regional footprint than what our One-Way Trucking organic fleet had. All those things acting together have resulted in a little bit of lower length of haul. You will notice that on One-Way Trucking this quarter, we were finally able to overcome a year-over-year negative miles per truck trend that had occurred over multiple quarters leading up to this quarter. It didn’t increase significantly, but we did end the sequential declines or the sequential year-over-year declines in One-Way Trucking. We do think that we’re headed toward better utility for a number of different reasons in the future here. We’ve built that One-Way Trucking segment on cross-border Mexico. We’re focused on engineered business, and we’re focused on expedited business. We’ve made progress on all three of those fronts, which have enabled us to kind of turn the corner as it relates to length of haul.

Yes. Well, clearly, as length of haul shortens and we look to engineer more of the fleet, which has been a heavy focus during this downturn is to try to further tighten the belt on the engineered lanes and get less and less random in the application of our assets. You’re going to see a rate per mile offset to the positive because the shorter length of haul is going to have someone to carry a higher rate. That’s why, ultimately, we often will look back and talk in terms of revenue per truck per week or actually, on the One-Way side, it’s more of a revenue per day metric that we’re constantly trying to analyze and make sure we’re utilizing those assets efficiently. Frankly, right now, as we went to the bid season, we talked a lot in the prepared remarks about pricing discipline. We stayed very disciplined with our pricing, which translated, frankly, to a larger portion of our fleet being in that spot market. We were prepared and willing to do that compared to contractually binding the fleet at rates that we felt were not sustainable and not indicative of the reinvestment necessary to serve that business. The shakeout in those One-Way bids was – call it, the turnover in the bid was a little higher than what we’ve experienced for the last several bid cycles, not unexpected in a down market. Whenever you hold discipline in price, you see more mix change in your award. You might hold revenues but have a 60% different mix. It’s about what you then accept and integrate into this new engineered environment that makes the difference. We think we’ve come out of that in the right place with the right amount of business contracted and with more spot exposure than we’d like, but that’s sort of low for a less duration than it would have been had we chased rate through the bid process.

Hey, good afternoon. Thanks for taking my question. I wanted to ask on Dedicated pricing, specifically your guidance for 0% to 3% for the year. I know you’re up 3% in the first half. So the midpoint obviously implies flat for the back half. Just wondering if you could discuss some of the puts and takes there and the outlook. What are the chances that could dip negative and maybe even bleed into early 2024 at that kind of rate?

Yes. I mean we – Dedicated has been a strong, resilient business for us for a while. As we indicated, Dedicated rate per truck per week has increased eight of the last nine years, I think. Through multiple cycles, we proved that we are able to maintain that on a positive year-over-year basis. I think we’re in a good position to do that again this year, being up 3% through the first half, as you mentioned. We do have some comps with the second half that might result in a lower year-over-year improvement as we head into the second half. At the same time, that’s something that we’re able to improve both in terms of efficiency and utility as well as top line. We do have some contractual business or some contractual escalators with Dedicated that will result in a year-over-year increase, a slight one, but will help mitigate some inflation. Part of the productivity gains we think we’re continuing to eke out in Dedicated is through our 95-plus percent retention ratio that enables us to continue to work with customers, really become integrated into their business and improve how the business operates. We work very closely with customers to do that. Part of the gain in revenue per truck is in utility. Part of it’s in efficiency, and then part of it is on top line. We’ve got a lot of really strong customer relationships. In many cases, they understand the inflationary environment we’re in. They understand the importance of keeping their fleet staffed with professional drivers and, in many cases, are helping offset some inflationary impacts just with continued partnership as we go through this tough environment. We stuck with these customers last year and prior during the pandemic. I think we’re seeing the benefits of that now with good partnerships as we enter the rest of – the next half of the year in a tough environment.

Yes. I think op income in Logistics is going to be determined by the ability to continue to eke out on the cost side of the equation, some productivity gains, some advancements in some of the tech that we’re able to start to utilize more fully in the quarter, offset by the reality that it is our belief that the sort of worst in the spot market is behind us. The bottom has been found as it relates to pricing. As pricing starts to bounce, you start to enter into buy-side pressure in Logistics, that represents a headwind as you then work that through the sell-side back to – and through the customer. Where we’re at today is a focus on gaining quality customers into the portfolio, holding serve, if not growing share, maintaining a disciplined focus on finding future efficiencies and cost savings but recognizing that business, in particular, unlike Dedicated that’s multiyear, very sticky, very strategic in nature, that it has a more transactional feel to it at times. There could be or likely would be ongoing pressure in Logistics. If that were – I mean, in Logistics, I apologize. If that happened, that simply bodes well for the asset side of the business because it means we’re right and that capacity has, in fact, started to dissipate at a more rapid rate, that we have, in fact, found bottom, and we’re seeing sustainable improvement in the spot market. There will be puts and takes across the various operating segments.

Thanks. Hi, Derek. Hi Chris. Welcome, Chris Wikoff. Derek, earnings, if I look at trucking earnings – or sorry, TTS earnings, they’re now below pre-COVID levels. If we just look at 2Q this year versus 2Q 2019, I think, about 10% below. We all know it’s a tough market. I guess the real question is, what does the recovery path look from here? You’re a cycle guy. You’ve been doing this for a really long time. What does the normal trajectory look like from where we are today? Given the idiosyncratic or exceptional time that COVID brought in terms of freight, is it just simply going to take several years to get back to where you guys were a couple of years ago? It’s exacerbated by the majority of the assets. It was in Dedicated business, which obviously is inherently less volatile. I’m just trying to understand. We’re back to pre-COVID or below pre-COVID. What does the recovery trajectory look like from here in your opinion?

Sure, Amit. I appreciate the question. Other than the part where I think you implied I was old, but thank you. Look, this cycle is certainly different. You’re right. We’ve all seen several cycles, but this is different. I don’t think we’ve ever seen a cycle where the high was as high as it was, where freight was as robust as it was in 2021 and 2022. The fall was further to go. The closest comparison I would give would be the 2008, 2009 financial crisis. The idea that the pressures have been greater than what they were pre-COVID isn’t surprising to me given how much the consumer behaved during those COVID years. There is a step-level change in the insurance line from pre-COVID until today, not just at Werner, but across the entire industry. That’s certainly eaten into some of those pre-COVID margin levels as you think about it. But how do I see it playing out from here? There are multiple indications and metrics that we watch closely that would indicate that we have, in fact, seen kind of the bottoming from a spot and rate and market condition perspective. What I don’t expect is a sudden and dramatic rebound from here. I think it’s going to be a slow climb. We’ve never seen carriers come into a market as tough as this one, with an abundance of cash accumulated during COVID that allowed them to survive leaner for longer like we have this time. But now that is largely exhausted. We’ve done a lot of internal analytics on what we think the average carrier had coming into this downturn and how many months that might allow them to exist. We think that those months are up. They find themselves in an environment with rising interest rates, financing costs higher than ever. They’ve got expensive equipment. Rates, although bottomed or bottoming and moving up from here, are not looking to move up as aggressively as we might have seen in prior cycles. Fuel back on the rise. You put all that together, I know, I do not believe it’s two to three years out before you see us returning to where we’ve been here in recent years. I think we’re talking about focusing on the cost side of the equation, making sure that our operational execution and our work on our engineering of our fleet stays the course, having a much more disciplined approach to what we led in the building, maybe taking growth and putting that a little bit on the side burner on the One-Way asset side and focusing instead on margin improvement and bottom line above all else. We do all of that while embracing our Dedicated franchise and our cross-border franchise within One-Way as well as the success we’re having in gaining share in logistics, I like the positioning as this turns. When that turn happens precisely, it’s tough to tell.

Yes. And just a quick follow-up, if I may. Do we take another leg down in the OR in 3Q? It looks like based on your guidance, revenue in both Dedicated and One-Way should be flat to up slightly. But obviously, you got a little bit fewer gains sequentially. Are we at the point now where OR is holding the line here? Or do we take another tiny leg down and then recover from there?

Well, the used market is a big gray area right now. The gain on – the gains line is going to play a role in that answer. We know it’s decreasing. We know volumes will be lower and margin per unit will be lower. We also know we’re gaining momentum on the cost side of the equation. We have this opportunity with what is currently a negative, which is an outsized portion of the fleet in the spot market to be able to improve upon that sort of with some immediacy as we see rate improvement in the quarter. At this point – and if you really look back historically at Werner Q2 to Q3, flattish is kind of the best word to describe it. I think that’s a fair way to think about this year as well. But this year has some unknowns in it that we’ve got to grind through. The team is focused on doing exactly that, and we are not going to be looking to grow that One-Way fleet, certainly in this environment. If we have the opportunity through some implementations to do more fleet migration from One-Way to Dedicated, that will also take the pressure off of that OR.

Hey, good evening. Thanks for taking the question. Maybe, Derek, just to go back and drill down on that point, you’re talking about the latency of the inherent upside with the extra spot, which I think you mentioned is about 15% of One-Way or mid-teens. Do you have some shorter-duration contracts in there as well that could help? Help us think about the speed with which you can turn that around and maybe sort of the benefit you’d expect if and when that spot market does start to inflect.

Yes. So in One-Way, we’re about mid-teens on the spot side, and that is essentially immediately fluid capacity that can move either up and to the right within spot to better opportunities and/or support customers’ needs as their cautious optimism comes through with actual volumes. So we’re in those dialogues all of the time. We’ve seen some movement even within July thus far. That’s positive and encouraging. As it relates to some remaining contractual renewals, obviously, the environment and our discipline are only further entrenched as we get into the back half of the year based on trends we’re seeing with capacity. So that allows for some optimism there. Those are countered, of course, with the reality that some of the first-half bids are being implemented as we speak and actually taking effect in the quarter. We are cautiously optimistic we can make some moves up. The biggest one – the biggest two would be movement within or at – we’re moving out of spot with that mid-teen percentage and playing a more active role, and even a muted but relatively normalized peak season would play a pivotal role given that 15% of that fleet is operating at significantly lower rates than where they would traditionally have come into the fall operating at. We’re seeing activity in that as well. It’s a lot to incur – that looks encouraging, but I don’t want to make sure that we’re clear. There’s still a tough fight ahead of us that we’re still in this for a quarter or two, and we’re going to put up that good fight.

Yes. Happy to do that. From the last earnings call and quarter, we have raised the targeted and identified in-year savings for 2023 to over $40 million, and the realization rate has also progressed about the target and the realization. Over 40% is realized through the first half. It's multipronged in terms of what makes up that $40 million. It’s a combination of driver and non-driver salary and wage changes, driver turnover reduction, lower spend on recruiting, and just overall impact by having less turnover. It’s expensive to train and onboard a driver and get them into place only to see turnover. The more we focus on reduced turnover, the more significant savings we have as well as maintaining a strong driver pool. Then investing in fuel efficiency, whether that be through specific equipment that we believe has a big opportunity to improve margins as we invest in certain equipment that helps with fuel efficiency, as well as other initiatives we track data on. We're seeing increases in miles per gallon. In supplies and maintenance, I mentioned earlier, it’s really multi-pronged. It’s across the organization. It’s very process-oriented. We feel good about where we're at and where we’re going.

Thank you. I would just like to thank everyone for joining us on our second quarter earnings call. While Q2 represented a further extension of an already challenging freight environment, capacity rightsizing is gaining momentum across the industry. The consumer is holding up strong. Inventory destocking is largely complete, and the labor market has held up well nationally. We’ve remained and will remain disciplined on price across our organization while staying focused on growth in Dedicated and Logistics. Our tech investments are maturing, as is our disciplined approach to lowering our cost to execute. We remain committed to operational excellence, and I thank the entire Werner team for their passion to deliver it every day. Speaking of the Werner team, I want to take one last moment here and comment on a situation yesterday. It was our driver, a million-mile professional driver that’s been with us for a long time, that was part of the situation in Ohio, where two fugitives abducted a truck with our driver in it and held him hostage for a multi-hour standoff with police. They kept him in the truck in a high-speed police chase. He was, thankfully, through the efforts of the men and women of the police force in Ohio, able to exit that very vulnerable situation safely. Our thoughts and unfettered support are with him and his family. Also, I just would like to add for all truck drivers out there because this is a tough industry; these folks are the backbone of this country. I think we have quickly moved on from COVID and often forgotten about the efforts and the work that they do to make America what it is every day to keep this economy moving. Thank you.

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