NIT LEAGUE TRANSPORTATION SUMMIT OPENING KEYNOTE SPEAKER Derek J. Leathers President and CEO Werner Enterprises Founded in 1956; grown from one-truck operation to a $2 billion company Among five largest U.S. truckload carriers Largest truckload carrier serving Mexico Fleet includes more than 7,300 trucks, 24,000 trailers & 16,000 alliance carriers Conducting business in more than 150 countries with offices in U.S., Canada, Mexico, China & Australia 2
2014 2015 2016 2017 2014 2015 2016 2017 Derek Leathers // Developing a Strategic Plan in Times of Uncertainty ECONOMIC ENVIRONMENT U.S. Real GDP Growth is Expected to Continue at Healthiest Clip Since 2004-05 Upcycle 400 300 200 100 Monthly Job Changes (Thousands) 0 7.0 Unemployment Rate (Percent) 6.0 5.0 4.0 3.0 2015 2016 2017 2018 5.3% 4.9% 4.4% 3.9% Source(s): U.S. Bureau of Economic Analysis, U.S. Bureau of the Census, Stephens Inc., BLS, ATA 3
2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Derek Leathers // Developing a Strategic Plan in Times of Uncertainty ECONOMIC ENVIRONMENT (cont.) 5% 4% 3% 2% 1% Real Personal Consumption Growth (Goods Only) 3.3% 4.6% 3.7% 3.8% 3.8% 2.7% 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 Total Housing Starts (Monthly; Annualized Rate; Millions) 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Single-Family vs Multi-Family Units (Monthly; Annualized Rate; Millions) Single-Family Multi-Family 0% Avg 2010-2014 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 H.S. 1.11 M 1.18 M 1.21 M 1.29 M 1.40 M 0.1 0.0 Source(s): BEA, ATA, Census Bureau, Federal Reserve 4
2010 2011 2012 2013 2014 2015 2016 2017 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2010 2011 2012 2013 2014 2015 2016 2017 Derek Leathers // Developing a Strategic Plan in Times of Uncertainty ECONOMIC ENVIRONMENT (cont.) 110 105 Factory Output (Index) 10.0% 9.0% 8.0% Factory Output (Year-over-Year Percent) 1.55 1.50 Total Business Inventory-to-Sales Ratio (Data adjusted for seasonal, holiday, and tradingday differences, but not price changes) 7.0% 1.45 100 95 6.0% 5.0% 4.0% 3.0% 1.40 1.35 1.30 Likely Optimal Range 90 2015 2016 2017 2018 2019 2.0% 1.0% 0.0% -1.0% 1.25 1.20 1.15 Output 0.2% 0.2% 1.7% 3.3% 3.0% Source(s): ATA, Census Bureau, Federal Reserve 5
ECONOMIC ENVIRONMENT (cont.) Cass Freight Index: Economic Outlook from Freight s Perspective Import Container Volumes Shipments Expenditures (inclusive of fuel) Source(s): Cass Information Systems, KeyBanc Capital Markets Inc. 6
ECONOMIC ENVIRONMENT (cont.) Conference Board Consumer Confidence Index Michigan Consumer Sentiment Index (MSCI) ISM Manufacturing PMI Retail Sales (Y/Y Change) Source(s): FactSet Research Systems, U.S. Census Bureau, IMF & Stephens Inc. 7
EMPLOYMENT & DRIVER SHORTAGE Source(s): FTR, U.S. Bureau of Labor Statistics 8
EMPLOYMENT & DRIVER SHORTAGE (cont.) Total Number of Drivers Needed Through 2026 Share of Drivers Needed Through 2026 Source(s): ATA s Truck Driver Shortage Analysis 2017 9
SUPPLY, DEMAND & CAPACITY 7.0% 5.0% 3.0% TL Tractor Changes: Large vs Small Fleets - Includes company tractors and independent contractor equipment 2015 2016 2017 YTD 4.0% 5.1% 1.0% -1.0% -0.2% 0.0% -3.0% -5.0% -7.0% -5.0% Large TLs -5.2% Small Fleet: Less than $30 million in annual revenue Small TLs Source(s): ATA s Trucking Activity Report 10
SUPPLY, DEMAND & CAPACITY (cont.) Used Truck Blended Wholesale & Retail Pricing Used Truck Units Sold Used Truck Estimated Inventory New Truck Order Activity New Truck Lead Time New Truck Net Orders & Production Source(s): ACT Research Co., KeyBanc Capital Markets Inc., FTR 11
SUPPLY, DEMAND & CAPACITY (cont.) Buckingham Research Group Dry Van Supply/Demand Index Surges to All-time High Source(s): Buckingham Research Group 12
SUPPLY, DEMAND & CAPACITY (cont.) Van Load-to-Truck Ratio Van Hot States: Dec. 31 Jan. 6, 2018 Van Hot States: Jan. 15-21, 2017 Reefer Load-to-Truck Ratio Reefer Hot States: Dec. 31 Jan. 6, 2018 Reefer Hot States: Jan. 15-21, 2017 Source(s): DAT Solutions 13
SUPPLY, DEMAND & CAPACITY (cont.) Distribution of Tonnage by Mode: 2016 vs 2028 2016 2028 Source(s): ATA, U.S. Freight Transportation Forecast to 2028 14
SUPPLY, DEMAND & CAPACITY (cont.) All Modes of Freight Transportation Will Grow Total Percentage Increase in Tonnage from 2016 to 2028 Source(s): ATA, U.S. Freight Transportation Forecast to 2028 15
LEGISLATIVE/REGULATORY ENVIRONMENT Regulations / regulatory reform Federal Aviation Administration Authorization Act North American Free Trade Agreement Electronic logging devices Infrastructure development and funding 16
TECHNOLOGY/INNOVATION Advanced safety systems (ex. collision-mitigation) Autonomous, alternative fuel trucks; platooning 17
NIT LEAGUE TRANSPORTATION SUMMIT OPENING KEYNOTE SPEAKER Derek J. Leathers President and CEO Werner Enterprises werner.com 18