Okay, we're going to go ahead and get started. Keep us on schedule here. Excited to have Werner Enterprises joining us for the next leg of the transport track this morning. To my left, we have Chris Neil, SVP Pricing and Strategic Planning, also Nathan Meisgeier, who's president of the company and first time at the Citi conference. So, gentlemen, thanks for joining us. Really appreciate having you here.
Thanks for having us.
Yeah, pleasure.
Really appreciate it.
I think I'm going to turn it over to you for a couple of comments to start, and then we'll dig into questions. And of course, if anybody in the audience wants to ask questions, don't hesitate to raise your hand. We'll get you a microphone and keep it interactive. So, gentlemen, over to you.
Okay, great. Thanks, Chris. Thanks for the welcome. Again, Nathan Meisgeier, I'm the President, Chief Legal Officer of the company. I've been with Werner for 18 years. Chris Neil's been with the company for 20 going on 27 years, so a couple of veterans with you here today. So, I'll do a quick background. For those of you who aren't familiar with the Werner story, we're a 68-year-old company, like a lot of truckers, founded one man, one truck, and then have grown into 8,000 trucks and almost a billion-dollar brokerage logistics portfolio. In our truckload segment, which is about 70% of the business, it's 66% dedicated, 34% one-way. So dedicated, high service, high expectations, hard to serve, hard to displace business, 93% customer retention rate in that part of the business.
So sticky business, long-term contracts, three to five-year contracts tend to be the business in the dedicated side. The one-way side is a mix of engineered lanes, expedited, cross-border Mexico. And the cross-border Mexico, which we might get into later on, on a nearshoring topic, is something that we've been in for 25 years. Our Chairman and CEO, Derek Leathers, founded that part of the business, started that part of the business for us, 25 years ago. We just celebrated his 25th anniversary with the company. So we have 100 associates in country, in Mexico. We have the largest Laredo cross-border location in Texas. Laredo just became the largest port in the United States recently. So that's something we're proud of and a part of the business that we do lean into and are able to lean into even more.
And then, as I mentioned a minute ago, $900 million going on $1 billion worth of business in our logistics and brokerage part of the business. That's heavily leaning into truckload logistics with also smaller portions but growing portions of intermodal and final mile. So, in-home delivery, large bulky as well. So, that's what the portfolio looks like. It's a business that is built to serve large customers. The name brands, the top 50 largest retailers in the United States, more than half of those are in our book of business. And we serve large enterprise companies like what you probably are following. And then in the logistics side of the business, we're more and more able to build that business for small and medium-sized customers so that we can serve really across the entirety of the market.
Great. So let's start with the market and the general sort of, you know, outlook. We heard from a few folks over the course of the last couple of days, but in particular, J.B. Hunt had talked a little bit about the, bid season, early bid season. And I think this was maybe a little bit more of an intermodal comment than it was a truckload or brokerage. They had some comments along those lines, but the general sense was through the first 20% or so of bid season, the, level of competitiveness was higher than what they were hoping for. So kind of wanted to get your take.
You guys have reported relatively recently, but wanted to get a sense of how you're thinking about that, if you have any comments on what you've seen, at least initially, and probably more from a truckload perspective, but generally what the mood is out there in bid season.
Yeah, so my comments will be centered more on the truckload side. You know, as Nathan mentioned, our dedicated piece, three to five-year contracts, those don't come up near as frequently. But as we're talking about the one-way bid season and how it started, I think it started about as we would have expected, which is competitive.
Yeah.
You know, there's really not been any stimulus or anything here early in the year that would have created any kind of change. And so, you know, our business has been the words we're using is steady and stable, you know, through the last half of 2023 and now into 2024. Obviously, Q1 is typically the weakest quarter of the year. February typically tends for us at least to be the weakest month of the year. And so we anticipated a challenging and competitive bid season. And I would agree, I don't know that we're quite 20% done. It's pretty early. We only have a handful of bid events that have been finalized. But it continues to be very competitive, no doubt.
And I guess as we think about that January to February transition, we've also heard some discussion in the market that maybe February, at least from a spot perspective, which I know is not necessarily a core piece of your truckload business, but that the spot market has maybe been a little bit softer in terms of overall activity. I don't know that we've seen it necessarily pronounced too much in the spot rates, but in terms of overall activity, it's kind of softened up a little bit. I know you mentioned February is a weaker seasonal month. Any comments around that? Does that sound about right?
That sounds about right. You know, we did see a little lift in January. I think that had to do with some weather events that occurred early in the year. And so that created some, you know, production challenges on the truckload side. I think that created some pent-up demand a little bit. And so there was a little bit of a lift there with spot. But I think, probably not surprisingly, that's starting now to ease as we head into, you know, typically just a February that doesn't have a lot of news and probably less weather. So that makes sense. But, you know, for us, spot is it's been mid-teens, a little lower than that right now in our one-way truckload sector. So we don't have a huge exposure to spot right now. We're going to continue to maintain discipline as we go through this one-way bid cycle.
So if that means that we might be a little bit more exposed to spot than we are now, then I think we're willing to do that. Our one-way fleet sizes come down a bit as well as we've maintained that discipline throughout 2023. We've guided toward a fleet size. This is TTS fleet, so including dedicated that's down 3% to flat for the year. Expect some challenges here early in the first half and hopefully then better second half experience with fleet. Any growth would most likely be in the dedicated side. We're waiting for that spot inflection. We're taking a look at that. That's one of the early indicators for sure. That will help us on the one-way side with that portion of the business that's exposed to spot.
I think more than that, it will help with just sentiment, just sentiment that we're closer to the end of this weaker cycle. I think that then will translate into maybe shippers seeing that it's at the end and improved bid results in that segment. That's kind of how we're looking at Q1 and Q2 in terms of the bid season.
Yeah, and if I could add, Chris, on the weather front, so there's lots of puts and takes there. So as Chris said, it created that a lift to rate for a short period of time. It created a hit to production, so kind of offset those two things. The maintenance side of the equation takes a little bit of a hit because you've got more tows. You've got more.
Trucks not starting.
Yeah, trucks that aren't starting that need some help. And yet we're proud of the fact that we strategically planned for that and we knew what parts of the country were going to have those problems. So we were able to shut down trucks in advance. And so, like I said, lots of puts and takes that also lead to improved safety metrics because of our ability to see the weather coming, shut down trucks before they're driving into a winter storm, make sure our drivers are safe, make sure that the motoring public is safe. So the insurance line looks a little better as a result of it too.
And what do you think, where are we on capacity, you know, in the truckload market broadly? I think that's something that we've all been, and I know Derek has talked about it on calls as well, been surprised and kind of wrong about in terms of when that capacity would ultimately come out, just given how soft the rate environment is and the pressure on truck pricing and all of that. So I guess where are we in that sort of capacity dynamic? And maybe do we need the first part of the year to be softer than hoped in order to finally flush some of this last capacity out to get to a better equilibrium?
Yeah, great question. So we're at 72 straight weeks of more net deactivations than activations under the FMCSA's metrics. So that's trucks coming out of capacity. The Bureau of Labor Statistics, BLS data, also shows a reduction in overall trucking employment. So that shows that it's actual reduction in capacity. It's been a trickle, as you said, Derek. And Werner talks we talk a lot about how we would have expected more of a reduction faster. There's some data out there about cash reserves that small truckers were able to hold onto from the COVID spike and from basically printing money in the spot market for a couple of years, that those cash reserves were what we think has kept people afloat through 2023. Those metrics show that those cash reserves are about running out now.
And then early in the year, we see a couple of other push moments to push people out maybe on the capacity side. We see more truck registrations coming due. So truckers have to go out and register their equipment. And maybe they just decide, I'd rather shut off the lights and lock the door instead. So we're waiting to see that data maybe come through on the metrics as well. But it's a great point, Chris, of it does feel like we still need a little last push to get to the true balance on the supply and demand side of the equation. And there are other things that can help with that. If the consumer hangs in a little bit more on the demand side and a little bit better, that might give some help.
And yet, as you just said, Chris, that might keep some small truckers afloat a little bit longer.
Yeah, yeah, exactly. Before we get to the bigger business and dedicated, I wanted to talk a little bit about logistics and brokerage and your general take there because sometimes that can be a little bit of an early indicator of what might be happening in the market. We've heard that from some other players that maybe the early part of 2024 has been still challenged, but maybe not quite as bad. But I don't know. What's your perspective on the broader brokerage market and how you guys are seeing things here in the first quarter?
Well, I'd agree that it continues to be challenging. I don't know how it can get much worse when you see spot rates where they are and you just see the macro market where it is. It's been at a low level for a while. I don't know that I would say it's getting appreciably better here early in the season. Again, I think part of the weather in January may have helped a little bit, create some additional opportunities. I think we need to read the chapter yet to see how the book ends. I wouldn't be surprised if there wouldn't continue to be just this steady floor through February, at least. Then as you get into some spring shipping patterns, I think there might be an opportunity to see maybe a little bit of improvement.
But definitely a leading indicator, something that we're reviewing and looking at all the time, whether it's spot rates, whether it's rejection rates, those kind of things I think are going to be the first things that give us some sense as to when we can get a better, more balanced market.
Tender rejections are still running at low levels.
Sub five.
Yeah.
OK. OK, so let's talk a little bit about dedicated and obviously a significantly steadier business that's got more predictable profitability through the cycle. And I think it's been that way through this one as well. So I guess how would you compare that market and the outlook for 2024 relative to what you saw on the one-way truckload side? You talk about retention levels are relatively high, multi-year contracts where I'm guessing there's some pricing involved on a regular basis in there. So what's the outlook for you in terms of customer interest and demand in that market?
Well, first, I'd just say from a high level, our dedicated division has performed very well, has performed as expected through really an unprecedented weak cycle. So it's maintained double-digit margins all the way through 2023. I'm talking adjusted margins net at fuel. So that's been positive. Revenue per truck per week was up for the year. That makes nine out of 10 years where that metric has been positive on a year-over-year basis. So we're really happy with how it's performed. As Nathan mentioned, our retention rates have continued to be really, really good. And so it's been a stable business. It's been a durable business. Part of the reason for that is because of the high-service type business that that dedicated is. Very high service requirements, hard to do, in many cases, driver involvement.
And so that really can't be replicated in the one-way segment at all or very little. Some people will talk about dedicated. What we mean by dedicated is really that hard-to-serve business that can't be replicated in the one-way segment. So you just can't take a group of one-way lanes, package it together, and call it dedicated. Some call those dedicated. Those fleets are under pressure. We are very careful about what we let into the door and call dedicated in our building. And as a result, I think that's one of the reasons why we've had this steady fleet size for the last half of the year. It did drop a little bit in the first half of 2023. It's been steady in the second half. But nonetheless, at the end of a very long cycle like this, you're going to see a little bit more pressure.
So we are seeing a little bit more pressure in the dedicated side. That's part of the reason why our fleet size guidance is down three to flat. Talked about some pressure with some renewals with dedicated here early in the year, expecting that then to be offset with growth later in the year.
And so when you see pressure in the market, does it just mean that your retention levels drop? I guess how does it reflect itself in that measure, but also pricing?
Well, a couple of different ways. One of the ways that we've already seen it a little bit is just some fleets that have decreased in size within contract parameters but are a little lower than what they were. So that happened more in the first half of 2023. We were able to hold that steady, but a fleet that was 20 trucks maybe turned into 17, 40 trucks maybe turned into 35. So we saw that pressure in fleet size. Now, as we're a little bit further into the cycle, we're seeing a little bit more pressure on some renewals. So it's just a macro market. You see shippers out there trying to just knowing that we're toward the end, trying to get one more bite of the apple, I think, is kind of the language we've used in the past.
So the good news is our contracts are three to five- years. They don't all come up at once. They're spread out, which definitely limits exposure. But nonetheless, we have line of sight to a few fleets that are probably leaving early in the year. But all in all, we feel good about the long-term trajectory of that. We'll get through the disruption that we might feel here early. And we feel comfortable with our guidance at down three to flat for the full year.
When you think about the years that are not if we're within a contract that's not up for renewal, are we thinking kind of CPI-type based increases? What are the types of increases that you generally embed in those multi-year contracts?
A lot of those indexes are CPI-based. Some of them are employment-based, given the large driver expense, obviously, is the significant expense in those fleets. But regardless, most of those, you're going to expect 1%-3% increases over time with most of those indexes. Not all of our fleets are indexed, but a good number of them are.
OK, OK. That's helpful. So I guess as we think about the cycle and dedicated as well relative to truckload, I guess it's not that dissimilar in the respect that first part of 2024, maybe some pressure from a fleet perspective, maybe a little bit of pressure as we go through some renewals that are up there. But as we move into the second half of the year, maybe clouds break a little bit, more opportunity for some both fleet growth as well as maybe kind of getting back into what could be historical norms from a pricing standpoint?
Yeah, I mean, I think as you look at the broader macro environment with inventory destocking, that feels like it's, if not done, really close to the end. A couple of retailers have reported recently and continue to talk about the fact that their inventories are down on a year-over-year basis, that they feel good about where those are at. And so we're not going to have that inventory destocking headwind in 2024 that we had in 2023. Now, whether or not that turns into significant restocking, hard to say when that'll happen. But regardless, the fact that we won't have that overhang, I think, will be helpful with demand moving forward. So the pressure that we felt early in the first half of 2023 when some of those fleets dropped a few % with trucks should enable us then to create some leverage when that comes back.
And so we're going to these fleets that are 20 now that dropped to 17 might come back to 20. And you're going to see that happen. And that's typically what happens in the early stages of some of these cycles where you start to see people concerned about capacity. You see demand pick up on their business. That enables our fleet size to increase a little bit. And all that leverage is one of the ways that the dedicated can capitalize on an improving market. So you're adding trucks back, but you're not adding management back. You're not really adding any overhead back. It's just a variable cost associated with bringing those new trucks on. And that will enable us to gain some operating income back on the dedicated side.
And then, Chris, when it comes to growing those fleets to get from the 17 back to the 20, we have the ability to use our one-way side of the business to move trucks and move drivers in so that we can grow that really on an immediate turnaround basis. And then something else that I should have talked about earlier is we have the largest truck driving school network in the United States under the Roadmaster brand that Werner owns. That's 24 truck driving schools around the country so that we can turn on the pipeline of driver inflow a little bit faster. It's not an immediate. It's about an eight-week cycle to get somebody through a school and through our finishing program at the company. But we can seat those trucks a little bit faster maybe than the average trucking company.
If inventory goes from a destocking to sort of a normal scenario, is that enough to potentially trigger some step-ups in fleet sizes? Or do you actually need to see a full pivot towards a restock activity for that to happen?
I think it's really customer-specific. We work with a lot of customers who are in the replenishment business, not so much discretionary, more replenishment. So that if there is a turn to some expanded demand, whether that's in the discretionary or the durable segment or the non-durable segment, that's going to help. What we don't know is when exactly is that going to happen. And so our focus really is on what we can control. And we've talked cost savings as one of the ways that we can mitigate both the lower equipment gains we're experiencing again 2024 after experiencing that in 2023. So we've got lower gains that we know is a headwind. That's part of the reason why our cost savings program is now over $40 million again for the second consecutive year.
A little bit of lift in the second half would go a long way toward helping. Now, I guess it gets back to just my original answer, which is it's just very customer-specific in terms of whether you need a broad-based lift or just a lack of destocking.
Yeah. Before we get to the cost savings, because I do want to dig into that a little bit, in terms of the health of your specific customers, because you do have some concentration. There's some value in there. How do you think about inventories there? How right-sized do you feel like everything is in really your key end markets?
Yeah. From the customers that we do business with, and we lean into making sure we're doing business with customers that are winning in their space, as Chris mentioned, there's some releases this week that have indicated that we're at a right-sized inventory level. Really, that's so the balance that we need. Then with other geopolitical unrest, so Suez Canal, Panama Canal problems, if retailers decide that replenishment isn't really what they want, they need replenishment plus some what-if stock inventory, that could also provide that same sort of lift. We're not hearing that maybe loud and clear from our customers right now. And yet, the Port of Los Angeles just recently talked about their January import numbers were 20% 19% up year-over-year and 21% sequentially. So that freight is that spike seems to be coming through the pipeline. The bubble there we go.
The bubble seems to be there. Where that lands in terms of customer-specific is yet to be seen.
I think that's one of the wild cards really of the year. You have customers who, in the not too distant past, were really disrupted with inventories all the way through both on the upside, not having enough, and then having too much. And so that's fresh in the memory. So I think the desire is there to keep a right-sized inventory. But then you run up against some of these geopolitical issues with some of the imports that you've seen. And so now, all of a sudden, folks are thinking, well, do I need to move from a just-in-time to more of a just-in-case and have a little bit of buffer there, as Nathan said? So I think that'll be one of the really interesting things to watch play out through the rest of the year.
It's interesting you mention it because this has come up in a couple of conversations that we've had over the last two days, is the degree of containerized import growth that we've seen really through the second half of last year carrying over, as you noted, into the beginning of 2024, not necessarily translating that directly into what we're seeing. We see some of it in the railcar loading data. But we don't really see it in the trucking market all that much. And I wonder, is it just getting absorbed because capacity is still too high? Or there's been some discussion of potentially retailers leaving volume at or near the port, some stuff moving inland, consolidated, like I mentioned, on the rails. So how do you guys think about that?
I think yes to all the above that you just mentioned, probably. Through January, we saw reasonable volumes through the port on the truckload side, steady and stable again. But yeah, to your point, it's not like we've seen tender rejection rates out on the West Coast jump to 10% or 15% or something. Yeah, so yeah, probably a little excess capacity that's just being absorbed. Perhaps there's some containers moving all the way inland or staying out in warehouses somewhere, just ready to move.
So let's talk about cost savings a little bit. You mentioned $40 million for another year in a row. I think there's also a little bit of carryover that you've had in there as well. So what are the kind of key areas that you guys are focused on? And how do you think about sort of your success rate or opportunity with that $40 million for 2024?
Yeah, so a big one is salary, wages, and benefits that we're making sure that we're leaning into our efficiencies through our technology initiatives so that that investment on the one side turns into a cost savings on the other. Our maintenance line is improving all the time in terms of pushing more and more of the maintenance on our equipment into our terminals so that we're doing it at a lower rate than done by our personnel. So in 2023, you might recall, there was actually a spike on the salary, wages, and benefits as we were upsizing the mechanics at terminals and at dedicated sites. But those are probably the two big buckets that we're seeing. Another one that isn't in that $40 million because it's not something that we can really put a stake in the ground on it but we're proud of is the insurance line.
The insurance line was a help throughout 2023 and has started off well in 2024. Some of our competitors, as you all know, have had a bumpy ride on that in 2023. And really, that's a question of when does it hit a trucker, not if it's going to hit a trucker. We had our own experience in 2022. We had some rough insurance numbers in 2022. So maybe we took our bites of the rough sandwich earlier than others have. And others are seeing it develop. But that's another help on the P&L line. Chris, I don't know if you have anything to add.
I think the only thing I'd add to that is just the fact that I think the cost culture at Werner probably has changed a little bit over the last couple of years. I mean, there's been a tremendous focus both last year and this year on just better controlling costs. Part of that's technology. Part of that's just leaning into continuing to be more efficient. But when you've got truckload rates like they are, it forces you to do some things. And we've always been a company with an eye on cost. But I would just say that it's been an elevated issue over the last couple of years. And I think that's going to then result in benefits down the line because when things get better, we're going to be a leaner, more efficient organization, more based on technology.
I think that will provide long-term benefits for us as we move out of this weaker environment into a stronger one.
As we think about this translating down to margins, I guess, as we think from 4Q to 1Q, maybe 1Q to 2Q, how should we be thinking about this maybe relative to normal seasonality? Historically, 1Q is a somewhat challenged quarter. We're coming off of a period of time with a lot of headwinds. So it's not performance across the industry, not necessarily Werner specifically, hasn't been great in the back half of 2023. So how do we think about that progression this year?
Well, I'd start by just reminding the group that we don't give specific EPS guidance. We can talk about some specific puts and takes. In our call, we talked about traditionally looking out over the past 10 years that EPS has the normal sequential decline is around 30% from Q4 to Q1. We talked about the fact that even though our peak volumes in Q4 were 20% higher in 2023 versus 2022, which was even a little better than what we had anticipated, the revenue associated with that, of course, was way down. And so we didn't get the lift in Q4 from peak that we traditionally would have received during those past 10-year period of time. And so we're not expecting that significant of a drop from Q4 to Q1. But nonetheless, Q1 is Q1 for a reason. It is the toughest quarter.
And so it is going to be challenging. And then, as we just continue to head out through the rest of the year, I think it's just really hard to tell. A lot of it just depends on when we're going to see some of this lift that we're talking about. Does that happen earlier in the second quarter? Does that happen later in the second quarter? Maybe even into the third. Part of that will dictate the pace by which we can see some improvement. But at the end, we've signaled that our goal is to get back to a 12%-17% range in terms of TTS, adjusted operating margin net of fuel, by the end of the year. And so we're going to work hard to make that happen. We're going to have to execute on our cost savings program to enable that to happen.
We're going to have to continue to hopefully grow dedicated a little bit in the back half. 66% of the fleet now. Wouldn't be surprised if that didn't get a little bit higher. Our base case assumes some improvement in spot as we go through the year. I don't think we're expecting a hockey stick level of improvement in spot, but some level of spot improvement probably later in Q2 and then into the back half. So that's kind of our thinking in terms of how the year plays out. But the timing and the cadence and the scale of those things are yet to be determined.
Probably more confidence in the second half of the year looking a little bit more normal as you try to make that run into that 12%-17% range.
I think so.
Got it. OK. Can we talk a little bit about the fleet and sort of how your thought process maybe taking a step back in terms of the CapEx you want to spend and what you think what you're seeing from the OEMs and then just sort of your general appetite for fleet replenishment and orders that you might be thinking about over the course of this year and then maybe beyond that, obviously, coming into what is a challenging year. But arguably, the last couple of years, it's been more difficult to get trucks. So how do you think about that, generally speaking?
Yeah, so in 2023, our CapEx was a little outsized for us. We wanted to make sure that we were refreshing the fleet at the right pace, getting our average age of truck back down to the 2.1 years, which is where we sit right now, to make sure that we're ready to lean in when the turn comes. So we did our pit stop in 2023 to spend more on that CapEx. As a result, we've guided for 2024, our guide is $260 million-$310 million of CapEx in 2024, a little bit lighter. But you average out those two years, and that's about where we intend to be. We've guided to a long-term range of 11%-13% of revenue as our CapEx number. We were heavy and, like I just said, we were heavy in 2023 and will be a little lighter than that.
We'll be below the bottom end of that probably in 2024, and yet not at the expense of aging the fleet. We want the fleet to be new. It keeps our drivers happy, keeps the truck on the road, increases that production, which Chris talked about earlier. The better safety equipment on the truck, on a newer truck, is going to be better because of just the incremental improvements on that safety technology, which, again, back to something that I harp on probably too much, but the safety of our drivers and the safety of the motoring public. We talk all the time about nothing we do is worth getting hurt or hurting others. And so that new, improved next-generation safety equipment on the trucks helps us get there, too.
And as you guys, oh, we have a question in the front microphone coming your way.
Thanks. Just to follow up on that, maybe extend the lens a bit as you look beyond or look ahead to what could be a fairly significant increase related to emission standards in 2027. Is there an eye towards managing or kind of basically buying ahead of that to ease the burden? So question one.
Yeah, it's a good question. So in the past, we've done more of a lumpy prebuy, which then creates a strange cycle for us on the other end because as we're trying to keep the fleet age at a stable level, when you have that balloon that comes through in terms of a lot of trucks that are all aging out at the same time, we don't like the way that turns into our retail of used trucks on the used equipment market. So that's a long-winded way of saying I wouldn't expect to see a big spike on the CapEx going into the 2027 emission standards. Chris, I don't know if you've got.
No, the only thing I would add is you already mentioned that our fleet age is already down to two years old, right? So I think we've already anticipated some of that by getting our fleet back down to two. We'll continue at that low age leading up to the time of those regulatory changes. And then your point on the sales is a good one because we have a retail sales network that disposes of our used trucks. I think it's a competitive advantage for Werner. And part of that is making sure that we have newer used equipment that it's coming through at the same time. So we're always having a four-year-old-ish kind of a truck around 400,000 miles. And so as long as you have even buys, you can then sell those evenly at the end.
I think that creates some opportunity for us on the end.
Got it. And just part two on the tenor of your conversations with the OEM is that as the supply chain issues appear to be kind of largely behind us, they presumably had a bit more on the back foot in recent years just given that imbalance of supply. And how are things now in terms of, to say bluntly, tractor purchases probably expectations for 2024, basically?
Yeah, great question. So that supply chain hiccup for the OEMs, you're right, is past us. Order numbers across the market, not just Werner, order numbers are up. And yet a lot of those orders are slots that people are the what-if slots that Chris was talking about, that there's truckers out there who are wanting to make sure that they have them if they need them but might not actually utilize them. Our OEM partners that we deal with, it's a small group you can count on one hand, stood by us even in the COVID years. We were fortunate with those relationships that we've built over decades that we were able to get upwards of 80% of our orders filled even in the COVID years when small and medium truckers had all of their orders canceled just because of supply chain problems. So it's a pricing environment there.
Because we're buying hundreds and, in fact, thousands of trucks a year to keep that age lower, we can bring that scale forward to keep the prices a little bit lower. We don't talk about what our prices are compared to others. But we would hope to see an improvement, as you said. But really, those OEMs stood by us in the lean years, too. And we're happy with that relationship.
So I wanted to talk about the longer-term mix between dedicated and one-way truckload. I feel like I asked Derek that on almost every other earnings conference call. But curious, 66 is a big number relative to history. And I understand why we are where we are. Does that go higher over time? And do you guys, maybe not the best way to ask the question, but how committed are you guys to the truckload piece of the business? Will we be there in some sense, or will it just continue to get smaller from here?
Yeah, so I'll take the first part. 66 is as high as we've been on the dedicated mix. And we do have an appetite for that number to go higher. It won't ever be 100%, second part of your question. So on the one-way side, there are parts of the one-way enterprise that are cold to our customer's success. So the expedited freight goes through the one-way side. The cross-border Mexico is in the one-way part of the enterprise. Because of nearshoring, friendshoring, and the growth of that that we see coming, frankly, in near term, meaning right now, and the growth that we see coming in the longer term, that will continue to be part of the one-way fleet. And so it's an important part of the enterprise to have that broad portfolio that we can support all of our customers' needs.
And as I mentioned a little bit ago, a great part of the one-way fleet is two things, two great parts. One is it's kind of the farm club for the dedicated side. So when we're looking to grow dedicated, the first place we look is the one-way side so we can move trucks and move drivers that way. And two, it's a way for us to get our foot in the door with maybe some smaller customers as well that allows that relationship to grow, the customer relationship to grow, and maybe turn into a dedicated opportunity when the customer sees the kind of reliability and service that we can provide through that part of our business.
I would also just mention on the one-way side, our utility, our production is up. So even though the fleet size is down a little bit, we've now had three straight quarters of improvement on a year-over-year basis in terms of miles per truck. And so that just is a result of the engineering that we're talking about, the cross-borders are longer length of haul. So you can drive some of that production. But the thing that's dramatically different this time around versus prior cycles, when one-way would have been a little larger percentage of the total, is the advent of just the concept of power only and the ability now to have a trailer pool that customers can utilize that we can then either execute on a Werner asset or on a third-party partner's asset.
Our capability to provide one-way solutions, even though the one-way fleet size is down a bit, is still robust. If you look at a total miles perspective, it's not all that different when you consider the fact that your production is way up and you consider the fact that now we have a growing group of power-only carriers that also then can provide that same service. We have the ability to service our customers, to offer solutions, and do that in some of the same scale that we've done in the past with a little bit smaller one-way fleet. It's just going to be more efficient. We're going to get done a lot of the same work with just a smaller fleet by driving that efficiency and then relying on less capital-intensive third parties to help make some of those deliveries.
My last question would just be on the nearshoring because we touched on it a couple of times. I guess what do you think the growth rate of that is over time as you think about that specific opportunity for you with the cross-border Mexico business? Can you put some numbers around what you think that that might be in terms of growth for you guys within the one-way truckload business?
Yeah, the numbers part, Chris, I don't know if you've got an answer there. As I mentioned earlier, what we're seeing in the near term, meaning now already, is for manufacturers who have a presence in Mexico, they're increasing the throughput of those factories already. So adding a second shift, adding a third shift to get more production. So that part of nearshoring doesn't require buying real estate, building a factory, and then hiring workers. That can be done pretty quickly in the near term. The longer term, really, which is an 18-24-month tail on it, is the manufacturers who don't currently have a presence in Mexico and who are trying to build that presence. And we're cultivating those relationships as well. As far as a percentage growth pattern, Chris, I don't know if we've got metrics.
I don't have a number that I would share. But what I would say is regardless of what that is, I mean, we are a big player in that market. We have a lot of capabilities. We've been there for 25 years. We've got a lot of facilities. We've got infrastructure in Mexico. And we're going to be prepared to catch whatever comes our way and aggressively sell into it and continue to provide solutions that are going to be very creative with our transload facility in Laredo specifically and then really all the border crossings.
Yeah, and that's Werner trailers, Werner equipment going into the country for customers to load, get to the border. And then once it's at the border, as Chris just said, we've got an awful lot of opportunities where at our cross-dock facility in Laredo, we can cross-dock it onto a third-party carrier's trailer and move it that way. We can keep it on the Werner trailer and hook it up to a Werner truck and have it be a Werner driver delivering it. Or we can go with the power-only solution and have it still stay on the same trailer, different motor carrier hauling it and delivering it. So it gives us a lot of flexibility and a way to use our left hand or our right hand, whichever one works better.
Yeah, that's helpful. Chris, Nathan, thanks so much for the time. Appreciate it.
Thank you, Chris.
Thank you.
Thanks, guys.