Revenues decreased 27% to $429.3 million in third quarter 2009 compared to $584.1 million in third quarter 2008. Trucking revenues, excluding fuel surcharges, declined 13% to $319.3 million in third quarter 2009 compared to $367.4 million in third quarter 2008. Value Added Services ("VAS") revenues declined 22% for the reasons explained later in this earnings release and were $57.7 million in third quarter 2009 compared to $73.6 million in third quarter 2008. VAS revenues increased 14% from second quarter 2009 to third quarter 2009. Earnings per diluted share decreased 16% to 26 cents in third quarter 2009 compared to 31 cents in third quarter 2008. Earnings per diluted share increased from 10 cents in first quarter 2009 to 18 cents in second quarter 2009 to 26 cents in third quarter 2009.

The freight market continued to be challenging in third quarter 2009, however freight volumes showed some encouraging seasonal improvement as the quarter progressed. Shipper destocking of inventory that occurred earlier this year has slowed and stabilized inventory levels, which had a sequentially positive impact on freight shipments. Also, management believes a portion of the Company's improving freight demand is caused by shippers acknowledging and adjusting to the increasing risk of relying on highly leveraged carriers. Freight shipment trends in fourth quarter 2009 will depend on the strength of consumer demand during the holiday season. Pricing remains extremely competitive, due principally to the high level of customer bid programs that occurred in the first half of 2009.

Werner proactively adapted to the softer freight market conditions by reducing its average fleet size by 10% when comparing third quarter 2009 to third quarter 2008. Fewer trucks and 1% lower miles per truck reduced the Company's total miles by 11% over this same period. Having fewer trucks in service also lowered the Company's freight requirements and thereby reduced the Company's need to book less attractive and less profitable freight to keep its trucks and drivers productive. Management believes that excess capacity in the trucking industry continues to be supported by lender leniency that is not ultimately sustainable. Based on current market conditions and as a commitment to its customer base, the Company does not plan to make further reductions to its fleet, unless there is a significant decline in the freight market or a loss of customer business.

Werner continues to diversify its business model with the goal of a balanced portfolio of One-Way Truckload (which includes the Regional, medium-to-long-haul Van, and Expedited fleets), Dedicated, and Logistics. Within One-Way Truckload, the Company continues to reduce its medium-to-long-haul Van fleet and grow its Regional fleet. The Company's specialized services division, primarily Dedicated, increased its fleet in a difficult market to over 3,350 trucks.

Diesel fuel prices were lower by about $1.60 per gallon in third quarter 2009 compared to third quarter 2008. Diesel fuel prices rose during second quarter 2008 and into July 2008, before declining rapidly during the last five months of 2008. Lower diesel fuel prices in third quarter 2009 helped to reduce the cost of non-billable gallons used for truck idle time, empty miles, and out-of-route miles. In addition, the Company continued to achieve meaningful fuel miles per gallon ("mpg") improvements through its ongoing fuel management programs, which also helped reduce the Company's fuel costs. Due strictly to mpg improvements from these fuel management programs, which began in March 2008, Werner purchased 1.2 million fewer gallons of diesel fuel in third quarter 2009 compared to third quarter 2008. This fuel savings alone reduced the Company's carbon emissions by nearly 13,000 tons.

For the first 19 days of October 2009 fuel prices have increased 29 cents per gallon and averaged 81 cents per gallon less than the same period of 2008. During periods of rising fuel prices, a lag occurs between the timing of the fuel cost increases and the delayed recovery of fuel surcharge revenues. As noted in the Company's prior earnings releases, the large decline in diesel fuel prices in the second half of 2008 had a temporary favorable impact on net fuel costs (fuel expense, less fuel surcharge revenues) in third quarter 2008 and fourth quarter 2008.

In the latter months of 2008, the Company intensified its efforts to aggressively manage controllable costs and adapt to a smaller fleet. In addition to raising fuel mpg, during the first nine months of 2009 Werner improved its trucking tractor-to-non-driver ratio by 14% and reduced numerous other operating expenses. Superior service to customers, both external and internal, was not compromised. In addition, a broad-based, company-wide safety campaign was implemented in June 2009 with the objective of reducing the frequency and severity of accidents and lowering insurance and claims expense. Initial results from this safety initiative, while in the early stages of development, are encouraging.

Werner's wholly owned subsidiary, Fleet Truck Sales, realized lower gains on sales of assets, primarily trucks and trailers, of $0.9 million in third quarter 2009 compared to $2.8 million in third quarter 2008. Buyer demand for used trucks and trailers remains low due to the weak freight market and recessionary economy. As a result, the average gains per truck and trailer sold decreased in third quarter 2009 compared to third quarter 2008. Gains on sales are reflected as a reduction of Other Operating Expenses in the Company's income statement.

To provide shippers with additional sources of managed capacity and network analysis, Werner continues to develop its non-asset-based VAS segment. VAS includes Brokerage, Freight Management, Intermodal and Werner Global Logistics.

 Value Added Services (amounts in 000's)                      3Q09                       3Q08                   
 Revenues                                                     $  57,685     100.0  %     $  73,586     100.0  % 
 Rent and purchased transportation expense                       47,840     82.9            62,838     85.4     
 Gross margin                                                    9,845      17.1            10,748     14.6     
 Other operating expenses                                        6,040      10.5            6,429      8.7      
 Operating income                                             $  3,805      6.6          $  4,319      5.9      
                                                                                                                
                                                              YTD09                      YTD08                  
 Revenues                                                     $  155,627    100.0  %     $  203,401    100.0  % 
 Rent and purchased transportation expense                       129,119    83.0            173,358    85.2     
 Gross margin                                                    26,508     17.0            30,043     14.8     
 Other operating expenses                                        18,179     11.7            18,373     9.1      
 Operating income                                             $  8,329      5.3          $  11,670     5.7      


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VAS revenues, gross margins, and operating income declined in third quarter 2009 compared to third quarter 2008 due to three factors: (1) a reduction in the average revenue per shipment of 19% due to lower fuel prices and lower customer rates, (2) shifting significantly more shipments not committed to third-party capacity providers to the Truckload Transportation Services ("Truckload") segment to help cushion the impact of a soft freight market, which resulted in lower revenues and gross margin in the VAS segment and (3) a reduction in the number of industry freight shipments because of the weaker freight market and recessionary economy. The following table shows the change in shipment volume and average revenue (excluding logistics fee revenue) per shipment for all VAS shipments:

                                                       3Q09             3Q08             Difference       % Change    
 Total VAS shipments                                      64,679           60,950        3,729            6         % 
 Less: Non-committed shipments toTruckload segment        (25,290  )       (17,655  )    (7,635      )    43        % 
 Net VAS shipments                                        39,389           43,295        (3,906      )    -9        % 
                                                                                                                      
 Average revenue per shipment                          $  1,325         $  1,642         ($317       )    -19       % 


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Brokerage revenues declined due to the factors described in the paragraph above, however its gross margin percentage improved by 160 basis points. Freight Management revenues declined due to reduced shipments with existing customers. Intermodal revenues and gross margins declined due to an extremely weak and competitive intermodal market in third quarter 2009. Werner Global Logistics achieved meaningful revenue and profit improvement.

Comparisons of the operating ratios (net of fuel surcharge revenues) for the Truckload segment and VAS segment for third quarters 2009 and 2008 and year-to-date 2009 and 2008 are shown below.

 Operating Ratios                      3Q09        3Q08        Difference 
 Truckload Transportation Services     90.5  %     91.0  %     (0.5  )%   
 Value Added Services                  93.4        94.1        (0.7  )    
                                                                          
                                       YTD09       YTD08       Difference 
 Truckload Transportation Services     93.8  %     93.8  %     0.0   %    
 Value Added Services                  94.7        94.3        0.4        


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Fluctuating fuel prices and fuel surcharge collections impact the total company operating ratio and the Truckload segment's operating ratio when fuel surcharges are reported on a gross basis as revenues versus netting against fuel expenses. Eliminating fuel surcharge revenues, which are generally a more volatile source of revenue, provides a more consistent basis for comparing the results of operations from period to period. The Truckload segment's operating ratios for third quarter 2009 and third quarter 2008 are 91.8% and 93.4%, respectively, and for year-to-date 2009 and 2008 are 94.5% and 95.3%, respectively, when fuel surcharge revenues are reported as revenues instead of a reduction of operating expenses.

The Company's financial position remains strong. The Company ended third quarter 2009 with no debt and $105.8 million of cash.