Truckload carrier Werner Enterprises said its operating revenues jumped 3% and net income increased 12% in the first quarter of 2002.
Omaha, NE-based Werner said operating revenues reached $312.6 million this quarter compared to $304.6 million in the first quarter of 2001. Net income jumped to $10.6 million in this quarter, compared to $9.5 million during the same period last year.
Chairman & CEO Clarence Werner said freight volumes started the year noticeably lower than in 2001, but that February showed a modest improvement that strengthened toward the end of March. He added, however, that the carrier's freight volumes for the first half of April have been lower than March, and are about equal to volumes for the first half of April 2001.
"Until freight volumes improve to levels that will enable truckload carriers to recover cost increases in the form of rate increases, operating margins and returns on assets are likely to be lower than returns realized by our company prior to the year 2000," he said.
Werner also noted that rising fuel prices and insurance rates remain major concerns. He said that while average diesel fuel prices were about 25 cents per gallon lower in the first quarter of 2002 compared to the same period last year, fuel prices by March were just 10 cents a gallon lower than March in 2001.
Werner added that renewing insurance coverage and managing skyrocketing insurance rate increases has become a huge problem for many truckload carriers.
"As the insurance market has hardened, some insurers have stopped writing coverage for the truckload industry," he said. "Some truckload carriers have reacted to large premium rate increases by reducing their liability insurance coverage amounts, some as low as the minimum allowable level of $750,000 per claim."