US diesel at $6.35 and Werner’s Q3
Werner’s fuel bill doubled. Now it wants double-digit rate rises. Werner’s third-quarter fuel bill doubled to $130.3m. US diesel went back up to $6.35 a gallon on 26 October. Our view: fuel surcharges are now covering the fuel bill, so carriers will push on base rates next. Werner’s surcharge revenue rose to $125.2m from $59.5m. Its one-way rates, net of fuel, rose 9.7%, and it guides 10–13% for Q4. FreightWaves reports Werner wants double-digit increases on renewals. Knight-Swift’s CEO expects bids to open at “probably low-to-mid double digits”. Our call: diesel stays above $6 through November. By end of Q4, carriers hold surcharges firm and ask 10% or more on base rates.
Werner’s surcharges covered the diesel. Base rates are next.
Werner Enterprises spent $130.3m on fuel in the third quarter of 2026, up from $64.1m a year earlier. Fuel took 13.7% of its revenue, against 8.3% a year ago. The Omaha-based truckload carrier reported on 27 October. The day before, the US Energy Information Administration (EIA) put the national diesel average back up to $6.35 a gallon.
Our view: Werner’s numbers show that the fuel surcharge is broadly working. A fuel surcharge is the extra per-mile charge on a freight bill that moves with the weekly EIA diesel price. Fuel is not what US truckload carriers will fight over in 2027 contracts. They will fight over the base rate, the linehaul price before fuel. Shippers and forwarders who expect fuel relief to bring total trucking costs down next year are likely to be disappointed.
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What Werner reported
Werner’s revenue rose 23% to $950.5m, according to its results release. Part of that growth came from FirstFleet, the dedicated carrier it bought earlier this year. Adjusted operating income almost doubled, up 92% to $21.0m, but the adjusted operating margin was still only 2.2%. Diluted earnings were 11 cents a share, or 16 cents on an adjusted basis. FreightWaves reports that consensus was 36 cents before Werner warned on profits earlier this month.
Chairman and CEO Derek Leathers put it this way in the release: “While rapidly rising fuel costs and elevated claims temporarily impacted near-term margins, our underlying strategy is working, driving a near-doubling of adjusted operating income.” He added: “We remain confident in our trajectory and our ability to capitalize on the early stages of this freight upcycle.”
The bigger story is how Werner is reshaping its fleet. Its trucking business has two parts. Dedicated means trucks assigned to one customer under a multi-year contract. One-way truckload means irregular-route trucks that take loads across many customers and are more exposed to spot-market swings.
- Average one-way trucks in service fell 36.6%, to 1,673 from 2,638.
- Average dedicated trucks rose 43.8%, to 6,995.
- At quarter end, dedicated made up 81% of the trucking fleet (7,090 trucks), up from 67% a year earlier.
The one-way trucks that remain are earning much more. One-way revenue per total mile, net of fuel, rose 9.7%. Revenue per truck per week rose 34.3%, to $6,244 from $4,649. The average loaded trip grew to 674 miles from 558.
Werner Logistics, the brokerage arm that buys trucks from other carriers, went the other way. Its revenue fell 7% to $215.8m, and it made an operating loss of $0.4m against a $3.0m profit a year earlier.
Guidance points the same direction. Werner expects one-way revenue per total mile, net of fuel, to rise 10–13% in Q4 2026 against Q4 2025. It narrowed its dedicated revenue per truck per week guidance to 4–5% growth, from 3–5%. It also cut planned net capital spending for 2026 to $190–205m, from $215–250m.
Where the fuel money went
The release lets you compare fuel cost with fuel recovery. Trucking fuel surcharge revenue was $125.2m, up from $59.5m. On our arithmetic, that is $65.8m more surcharge income against $66.2m more fuel spend. The gap between fuel cost and surcharge income grew only slightly, from about $4.6m to about $5.0m. Fuel expense covers the whole company, so treat this as an approximate comparison.
That is why we read the margin squeeze as more than a fuel story. Surcharges reset on a lag, usually weekly off the EIA number, so a fast rise in diesel hurts for a few weeks before recovery catches up. Leathers also named claims. The release adds a third cost: Werner said it “made the deliberate decision to accelerate investments in driver recruiting and onboarding to capture rising customer demand and support fleet expansion as industry capacity tightens.”
FreightWaves reports that Werner “also said some cost headwinds will linger into the first quarter.” It adds that Werner’s Q4 result will probably come in “materially below the current 38-cent fourth-quarter consensus estimate.” If surcharges cover fuel and margins are still thin, the carrier’s only real lever is the base rate.
FreightWaves gives the timing. About 60% of Werner’s one-way revenue book renews in the first half of 2027, and the outlet writes: “Management is eyeing double-digit increases on many of these renewals.”
Diesel turned back up
Werner has no relief coming from the pump. According to Capital Press, the EIA national average on 26 October was $6.35 a gallon. That was up 7.6 cents on the week and $2.63 above a year earlier. It is about 18 cents below the record of $6.53 set on 21 September.
The regional picture matters for inland pricing:
- Rocky Mountains: $6.52, up 9.9 cents. Capital Press says prices there “hit an all-time high.”
- California: about $8.16, down 8.7 cents, below its $8.25 record of 21 September.
- West Coast outside California: about $6.61, down 4.5 cents.
So the West Coast is easing while the interior climbs. A container moving from Los Angeles or Long Beach to Denver or Salt Lake City picks up more fuel cost on the inland leg than a short dray in Southern California.
Supply does not point to a quick fall. Discovery Alert, a market analysis site, reports US distillate stocks at 104.3m barrels, about 9% below the five-year average. Citing World Oil Monitor, it puts the diesel crack spread at $84.74 a barrel against Brent on 27 October. The crack spread is the refiner’s margin for turning crude into diesel. A spread that wide means diesel is tight in its own right, not just following crude. Capital Press links the high prices to Russia’s war with Ukraine and to the closure of the Strait of Hormuz during the Iran war.
The rest of the market is asking for the same
Werner is not alone. On 22 October, FreightWaves reported that Knight-Swift, the largest US asset-based truckload carrier, lifted truckload revenue per loaded mile, excluding fuel, by 10% year on year in Q3. CEO Adam Miller told analysts: “I think we’ll start the bid season with the idea of probably low-to-mid double digits and see how it develops from there.”
The spot market backs up those requests. DAT reports that dry van spot linehaul rates paid to carriers averaged $2.26 a mile, excluding fuel, in the week ending 17 October. That is up 34.5% on a year earlier and 43 cents above the nine-year seasonal average of $1.83. DAT’s van load-to-truck ratio (posted loads per posted truck) was 9.70, eased from 10.27 two weeks earlier. “Capacity remains the key factor in pricing,” DAT industry analyst Dean Croke said, as reported by AJOT.
When spot rates sit well above contract rates, carriers have little reason to accept flat renewals. They can leave contract freight and take the spot load instead. Werner’s shrinking one-way fleet makes the point: trucks are being moved to locked-in dedicated contracts, so less capacity is left to chase irregular freight.
What it means for forwarders’ 2027 pricing
For forwarders and NVOCCs (non-vessel-operating common carriers, which sell ocean space without owning ships) quoting door-to-door US imports, this has four practical effects.
First, price the inland leg with two increases, not one. Expect a base-rate rise of around 10%, in line with Werner’s Q4 guide and Knight-Swift’s opening ask, plus a fuel surcharge pegged to diesel above $6.
Second, do not assume a surcharge rollback in the first half. Distillate stocks are below normal and the crack spread is wide. Even if crude eases, diesel can stay high.
Third, irregular one-way capacity is getting scarcer. The Werner and Knight-Swift moves point to fewer trucks for ad hoc, spot-style moves out of ports and rail ramps. Shippers with steady volume may get better terms by offering dedicated or committed capacity deals rather than spot tenders.
Fourth, brokerage margins are under pressure. Werner’s brokerage arm lost money while its asset fleet repriced. Forwarders who buy US trucking through brokers should expect brokers to pass on carrier increases quickly. Brokers that cannot pass them on may struggle to cover loads at quoted rates.
The regional split also matters for routing. Interior destinations such as the Rockies are absorbing record diesel, while West Coast prices are slipping. Where cargo can be transloaded near the port, or moved on rail into the interior, the inland fuel gap is a reason to compare options again.
Our calls
These are our predictions, not company guidance.
The EIA weekly on-highway diesel average stays above $6 a gallon through the end of November. With stocks about 9% below normal and refining margins near $85 a barrel, we see no route back below $6 in the next five weeks.
By the end of Q4 2026, US truckload carriers hold fuel surcharges firm and open first-half 2027 contract renewals asking for at least 10% more on base linehaul rates, before fuel. Forwarders quoting US inland legs for 2027 should build both into their prices now.
When Werner reports its fourth quarter in early 2027, we expect adjusted earnings below the current 38-cent consensus, and one-way revenue per total mile, net of fuel, up at least 10% year on year. That combination would show the repricing is real, and that it will still take into 2027 to reach carrier margins.
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