Clarence 'C.L.' Werner
Opportunity came because he had the fortitude to gamble and risk everything.
For the first six years, Werner's business was run from his 900-square-foot home. C.L. was salesman, driver, mechanic and bookkeeper.
As one of seven children growing up on a Nebraska farm, Clarence "C.L." Werner learned all about hard work - milking cows, tending livestock, picking corn. By age 10 he was driving farm trucks and pickup trucks, a job that appealed to him far more than his other farm chores.
The Legend of Werner Enterprises, by Jeffrey Rodengen and Richard Hubbard, he recalls, "I had more ambitions than to put in a lot of hours of work and make very little money." So in 1956, the 19-year-old headed to Omaha, Neb., with his new wife, Gloria. He started out working in a steel mill, but soon realized that wasn't any better than life on the farm.
Werner turned to his one tangible asset, a 1953 Mercury, and used it as a down payment on a gas-powered 1956 Ford F800 truck. As a 19-year-old, Werner could only haul intrastate in Nebraska. But the doctor's certificate that was the standard document used at the time for proof of age was smeared and illegible. The age listed looked as much like 21 as it did 19. So C.L. got his interstate license.
For the first six years, the business was run from his 900-square-foot home. C.L. was salesman, driver, mechanic and bookkeeper. In 1959, he named his company Werner Enterprises and bought his first diesel truck, then purchased a second truck later that year. Switching to diesel was a big step - the trucks ran on less fuel, and the fuel was cheaper. Back then, diesel fuel was 20 cents a gallon, compared to 35 cents for gasoline. And the diesels got 5 mpg, compared to the Ford's 2.5 mpg.
Werner hauled exempt cargo in a five- or six-state area - things like grain, watermelons, livestock feed and fence posts. He hauled rock and gravel in the winter, grain in the spring and produce in the summer.
Because exempt freight meant low rates, Werner had to keep his cost structure low and his service standards high.
"Regulation was God's blessing," he told Rodengen and Hubbard. "That's what made us the company we are today. Regulation kept all the good freight from us. All we got was what the large carriers didn't want. So we had to have low costs. We had to pound every penny out of that."
The company grew slowly but surely from the time it was founded until the late 1970s. As Werner paid off a truck, he would trade it in and buy two more.
By the mid-1960s, Werner had a fleet of about a dozen trucks, painted the distinctive metallic blue that would synonymous with the company. By this time, C.L. had stopped driving in order to oversee his growing company, although he would occasionally take a load in an emergency. He built a small shop and office in Council Bluffs, Iowa, just across the Missouri River from Omaha.
By 1970, the fleet reached 35 to 40 trucks. Werner trucks were hauling grain, soybean meal, lumber, potatoes and onions on flatbed trailers with collapsible, hinged sides. In the early '70s, the company bought its first van trailers.
Around the same time, Werner hired a transportation attorney, Donna Johnson, to start going after regulated business, according to the Legend book. The company's first authority was hauling for Skinner Macaroni. The new account helped Werner reach revenues of $1.45 million in 1972.
A big breakthrough came in 1975, when Werner landed its first Fortune 500 account - Maytag.
The Maytag account was landed, the story goes, when Clarence saw a story on TV about a Maytag plant in Newton, Iowa, that was in trouble because the railroad that serviced the plant was filing for bankruptcy. Clarence jumped in the car and drove to Newton, where he met with the traffic manager.
Lee Hays, Maytag's traffic manager, recalled his first meeting with C.L. for authors Rodengen and Hubbard. "C.L. was dressed in blue jeans, cowboy boots and a huge belt buckle. He also had an Afro hairdo. I thought, 'Who is this guy?' We had an immediate chemistry."
There was one problem: Werner didn't have the ICC authority to serve Newton, nor for the cities where Maytag needed to ship. Hays agreed to support his application before the ICC. Because the railroad failure created a significant void in Maytag's shipping ability, the application for authority was promptly approved. Werner was to become Maytag's primary distance carrier.
In 1977, Werner moved back to Omaha, building a 30,000-square-foot terminal on five acres to serve its fleet of 100 trucks. The move was prompted by several things: Half the employees lived in Omaha, Werner could find more drivers in a bigger city, and Iowa had tax laws that made it more expensive to operate in the state. At this point, Werner's routes ran in nearly 40 states - everywhere but the northeast coast. So building a facility at the junction of Interstate 80 and Highway 50 was a strategic move.
Revenues grew from $7.6 million in 1977 to $13.1 million in 1979. During the late '70s, as pro-deregulation ICC commissioners loosened the reins, authority became much easier to obtain.
"We were moving along pretty good," C.L. recalled in the Legends book. "Even if they hadn't deregulated, we probably would have done pretty well."
Yet there's no doubt deregulation was a boon to the company, which was now able to move into commodities it never had access to before.
"Deregulation opened up the gates for any trucking company to be able to haul any type of freight anywhere in the country," Werner says. "It really opened the opportunity for us to develop markets that weren't so commodity-based," including paper, food, appliances and retail goods.
To take advantage of the opportunity, Werner focused on getting the equipment to handle these new loads. While many large trucking companies had become complacent under regulation and ran outdated equipment, C.L. was using his excellent credit rating to expand his fleet with the newest equipment, including 48-foot trailers that eclipsed the competition's 40-footers.
"That was a period of time when there was great opportunity if you had the equipment, because you could go out and solicit business anyplace," said Irving Epstein, who came on as outside counselor to Werner in 1976. "What C.L. did was, he basically hocked himself to his eyeballs to get equipment," Epstein said in the book. "It was really a period of time when there was opportunity for anybody who had the fortitude to really gamble and risk everything, and C.L. did that. That really was, I think, the impetus for the beginning of good growth."
Werner was able to compensate for lower rates in the deregulated environment partly because the company had far fewer deadhead miles than it did under regulation. Those trucks coming back weren't hauling low-commodity exempt freight anymore; they hauled more lucrative loads that made Werner more money instead of less.
The company, which had operated as a sole proprietorship until it was incorporated in 1982, went public in April 1986 with a fleet of 630 trucks. Going public gave the company the capital to take full advantage of the post-deregulation opportunities for growth. In the '90s, it entered the refrigerated market and took advantage of the North American Free Trade Agreement to set up operations in Mexico and sharpen its focus on Canada. In 1999, Werner Enterprises reached the $1-billion mark in revenue.
Today, the company operates more than 7,500 company tractors and nearly 1,000 owner-operator units, with nearly 23,000 trailers. As of the third quarter of 2004, when the company reported record operating revenues and earnings, Werner had enjoyed 12 consecutive quarters of improved year-over-year earnings.
"He's an astute businessman," says Randy Marten, CEO of Marten Transport, who has relied on C.L. Werner's advice and friendship over the past 20 years. "He's just done a hell of a job with the company, obviously. He's always been willing to help out."
As an example of C.L.'s business acumen, Marten points to the fact that Werner put profits ahead of growth, even when Wall Street was putting pressure on trucking companies to expand.
"A few years ago, he was chastised for pulling back on buying new trucks" when it looked like the economy was heading downhill, Marten recalls. "He's the one that said, we're not going to grow, we're going to concentrate on profits. He was chastised for it then, and now he's a shining star. Which he probably knew all along."
According to its 2003 annual report, Werner emphasizes transporting consumer, nondurable products that are purchased in all types of economies and seasons of the year, such as grocery products and retail store merchandise. This creates less volatility in the freight base relative to the economy, and it gives the company's drivers more consistent miles.
Like many successful truckload fleets, Werner has been an advocate of technology. In fact, C.L. likes to say the company's success is due to "trucks, technology and talent."
In 1981, computers were used in the office for the first time. In the late '80s, Werner was one of the first fleets to adopt Detroit Diesel's new Series 60 engine - an electronic engine at a time when the industry was using mechanically fueled engines. In 1992, the company installed Qualcomm satellite tracking and communications systems on its trucks. In 2001, it became the first trucking company to adopt widespread use of simulators for training, opening a 18,240-square-foot training center at its headquarters.
Last September, the Federal Motor Carrier Safety Administration made Werner's exemption for its paperless log system permanent, moving it from the status of pilot program that began in 1998. (The exemption must be renewed every two years.)
The Paperless Log System replaces traditional paper logbooks. With the help of the Qualcomm satellite tracking system, drivers no longer have to manually draw lines in their logbooks or calculate their work hours. Without the responsibility of completing paper logbooks, drivers can focus more on driving and transporting freight.
"Our Paperless Log System is an innovation that we believe changes the way the trucking industry views safety," C.L. Werner said in a 1998 press release announcing the government's approval. "The system was developed entirely by Werner's team of professionals, representing many company departments. We spent the last three years developing a system that eliminates the hassle for truck drivers in manually tracking their work and hours."
C.L. Werner has been a director of the company since its incorporation, and served as president until 1984. Since 1984, he has been chairman of the board and chief executive officer.
Although the company is public, the Werner family still owns about 40% of the stock. Besides Clarence, its chairman and CEO, two of his children are on the board of directors, and two hold management positions. Gary Werner is vice chairman and Gregory Werner is president and chief operating officer.
"I am extremely optimistic for our future," C.L. Werner wrote in the company's 2003 annual report. "Our balance sheet has never been stronger. Our record of on-time service is among the best in the industry. The Werner customer base is very diversified. Our truck fleet is among the newest in the industry. We have a superior, professional driver workforce. Our company has an enviable record of consistent and credible financial results, and I believe we have the best management team in the business."
— Deborah Lockridge
