When your company has been doing business in Nebraska for the past 60 years, you tend to learn the lay of the land.
When that firm is global trucking giant Werner Enterprises, others take notice.
With more than 7,500 trucks operating on US roadways, Omaha-based Werner is not just a mover and shaker in Nebraska. It is a bellwether of two things — the Midwestern economy and the entire transportation and logistics industry.
In a wide-ranging interview with Site Selection, Bill Luttrell, senior locations strategist for Werner, discusses the reasons why his company continues to invest heavily into its operations in Nebraska and beyond.
How is Werner Enterprises growing in Nebraska?
LUTTRELL: We are a home-grown operation. We started here in 1956. Our founder and owner started with one truck here. Today we have over 7,500 trucks on the road in the US. We have had great growth, and a lot of that is due to our being here and the pro-growth business climate in Nebraska. We are very happy with our location.
We are a $2.2-billion company on NASDAQ and we are celebrating our 60th anniversary this year. This is our 30th anniversary of being on NASDAQ. We have 13 terminals in the US. We are building new terminals in Joliet near Chicago and in Allentown, Pennsylvania. We haul more than anybody else truck-wise in Mexico. We are also in Canada, China and Australia. We are also a big 3PL; we do intermodal, rail and air cargo. We have business in over 130 countries. We are pushing close to 12,000 employees, including 9,500 drivers.
We are going to add an additional 1,000 trucks this year on the road for the first time in about 10 years. We have 24,000 trailers, and we own all our assets. We do not lease. To be sure, we are a growing company.
What does your company like best about the Nebraska business climate?
LUTTRELL: Nebraska is a pro-business climate. It is fiscally sound and it is gives us an ability to get the type of workers we want. The Midwestern work ethic is strong here. I moved here from California. There is a reasonable business cost of workforce here as well. The quality of life in Nebraska is very good, and it offers a safe, clean and friendly environment.
It is very diversified here in Omaha. Omaha never hit 5 percent unemployment even during the downturn. It has a central geographic location. It has the east-west and north-south Interstates and two major Class I railroads going through here. Public power via Omaha Public Power District and Nebraska Public Power District is here. Good investments into back office and call centers are here as well. For the size of the population, it is a testament to Omaha that there are some big companies here — Union Pacific, Berkshire Hathaway, Mutual of Omaha, Werner Enterprises, etc.
What do you like best about the Greater Omaha workforce?
LUTTRELL: It is a microcosm of the state. It is the biggest metro area in the state. It does attract a great deal of the population that comes here to seek and find jobs. It is a good mix. The quality of life is good for them. And other big cities in other states are a lot more congested.
How is the trucking industry changing in America?
LUTTRELL: It runs into the headwinds like everyone else. The market is softer than normal nationally. There is some volatility there. The driver shortage is affecting all trucking companies. We are all facing that same situation. The current shortage number in the US is 25,000.
Secondly, the regulatory situation is very difficult to keep up with. Tens of thousands of independent truckers have gone out of business over the past five to 10 years due to regulations and the high cost of equipment generated by those regulations. We have been fortunate. We have always been on the cutting edge of technology. We were one of the first national carriers to adopt GPS in all our trucks. Also, with the advent of paperless logging, we were one of the first trucking firms to do this. We had to go to the federal government to see if they would accept us doing that. Now, at the end of this year, it will be mandatory for all truckers. We started doing that in the 1990s.
We are also very flexible. We go where the demand is and serve the markets that need our delivery services. There will be continuous growth — 25 percent-plus over the next 10 years in trucking — especially due to manufacturing. Consumer spending is starting to heat up a bit. International trade is a big impact on trucking and other transportation.
The slowdown on the West Coast hurt everybody. There is an inventory overhang in the national economy. If capacity utilization rates are around 80 percent, then they need to add new facilities. The downturn saw it decline to 65 percent across the board for all manufacturers. Oil refineries are at 98 percent, but otherwise we have not recovered from the recession. It has been a slow process. It is between 77 and 78 percent among all industries now.
Do you foresee a time when Werner may consider some form of autonomous vehicles for any portion of its fleet?
LUTTRELL: There will be a time. Even right now, we pride ourselves on having one of the youngest fleets out there. Our average truck right now is around 1.7 years old. It helps us attract drivers. They like to drive new trucks. That gives us a big advantage in safety and maintenance. From now on, all our new trucks that we order will have the new collision mitigation systems on board. This is the first step toward the autonomous truck. We are talking about things like automatic braking, etc. It is a lot different for the longer-haul trucks. There will be a period where it becomes like an airplane with an autopilot.
There will always be someone at the controls. Now, the drivers can’t fix their own trucks. The technology continues to grow. People are going to have to realize that the definition of a truck driver is changing. Over time, even the image of trucking will change. Just-in-time delivery is improving all the time. Historically, trucking has very high turnover. We are very interested in retaining our drivers. We do this by paying them well. We gave a major pay raise to our drivers earlier this year.
What advice would you give about site selection in Nebraska to business leaders in other states?
LUTTRELL: In site selection, every project is so unique. Overall, my advice would be to consider Nebraska, but do a site visit here. Nebraska shows itself very well. At least take the time to do a site visit and check it out. A lot of the surveys have good things to say about Nebraska. Whether it is based on taxation or others, it scores well. There is a good education system here in the state. It is an agricultural state, and there are a lot of rural areas.
I worked for the World Bank for seven years. The population of the world right now is 7.3 billion and it will be 9 billion by 2040. Most are being born in developing countries. The need to feed that growing population is going to be immense. Nebraska is providing the most sophisticated farm equipment and processes and is in position to help feed a rapidly growing global population.
What is the best incentive that Nebraska offers?
LUTTRELL: Probably the best incentive in the Nebraska Advantage Program is the wage credit program they offer. It is awarded on a tiered system based on a percentage of compensation paid. The higher the pay, the more credits you get. It is good even for a small business. You can qualify for as few as 10 jobs. The higher the wage level, the higher the credit. They base this on looking at the percentile at the state level. It goes from 3 percent to 10 percent of the wages. It can be used to eliminate the state withholding tax. That is the best part of the Nebraska Advantage Program.
