The cross-border freight market between the United States and Mexico is entering a new chapter, and Werner is positioning itself at the center of it. The Omaha-based carrier is scaling an asset-based intermodal service into Mexico, deploying Werner-owned containers and leveraging nearly three decades of cross-border operational expertise to meet what its leadership sees as a structural shift in North American supply chains.
In a recent interview, FreightWaves’ Thomas Wasson sat down with Werner’s Nate Browne, SVP of Intermodal, and Lance Dixon, SVP of Mexico, Canada and Temperature Controlled Operations. They outlined the carrier’s strategy for expanding intermodal service into Mexico, the role nearshoring is playing in reshaping cross-border demand, and why the timing is right for shippers to rethink how freight moves between the two countries.
Werner’s Cross-Border Expertise in Mexico
Werner’s cross-border operations aren’t new. The company launched its Mexico service in 1999, and Dixon, who has been with Werner for 34 years, was one of the people who built it from the ground up.
“We’re no longer testing things or trying things,” Dixon said. “We know what we’re doing. The team is very tenured.”
That institutional knowledge spans 12 border crossing ports, more than 100 associates in Mexico, and a customer base that reads like a who’s who of global manufacturing and consumer brands. Werner’s Mexico operations support dry van, temperature-controlled, logistics and intermodal services.
The intermodal piece, Dixon explained, is a natural extension that rounds out Werner’s portfolio of services for customers in Mexico.
A Closer Look at Cross-Border Intermodal
The mechanics of cross-border intermodal aren’t dramatically different from domestic operations, but border crossings add layers of complexity that require deep expertise. Browne explained that Werner’s intermodal service can function like a traditional over-the-road crossing, e.g, running a train from Chicago to Laredo and then clearing customs at the border. But the real advantage, he said, comes from a different approach.
“Where we’ve seen advantages for intermodal versus over the road is the Mexico Direct solution,” Browne said. “That means clearing customs at origin, whether you’re going north or south, and bypassing some of the border congestion that can delay processes at the border.”
Werner’s C-TPAT (Customs-Trade Partnership Against Terrorism) protocols underpin the entire operation. With teams on both sides of the border working in close coordination, the carrier has built a system designed to catch problems before they become disruptions.
“As long as those [procedures] get followed, rarely do we ever see an issue that we can’t solve before it becomes a problem,” Dixon said.
Protecting Your Cargo
Security is a persistent concern in cross-border freight, and Werner is investing in both technology and people to address it. Browne described a multilayered approach that goes beyond basic GPS tracking on assets.
“We use cargo cameras as well,” Browne said. “It’s an extra layer of theft deterrent and gives us a good line of sight into when equipment is being loaded or unloaded.”
Technology alone isn’t the differentiator, according to Browne. Having Werner associates physically present at border crossings and inside Mexico grants the kind of institutional knowledge and responsiveness that remote operations can’t replicate.
Scaling Capacity to Meet Demand
The scale of Werner’s intermodal investment is tangible. Dixon said the company currently operates around 400 Werner-owned containers, with plans to double that fleet to approximately 800 by the end of the year.
“This becomes just another way for our customers to rely on Werner to serve them in a slightly different way,” Dixon said.
Shippers Shift to Mode-Agnostic Thinking
There’s a meaningful shift in how Mexican shippers view intermodal. A decade ago, according to Dixon, the conversations simply weren’t happening, but in the last few years, that’s completely changed.
Large multinational shippers are becoming increasingly mode-agnostic. They want capacity and on-time delivery, and they’re less concerned about whether the freight moves on a truck or a train.
“[Shippers] don’t really care how their product moves, just that it moves safely and it meets on-time delivery at the other end,” Dixon said. “We can do that in just about every single case.”
Breaking Down the Barriers to Entry
One of the barriers to intermodal adoption has always been the perceived complexity of switching from over-the-road.
“Often, the customers that we look at are shipping that same product over the road,” Browne said. “We bring a consultative approach to make sure our customers are clearing with their customs brokers. If you’re going to clear at origin, oftentimes you can deal with the same broker,” he said.
The goal is to make the transition seamless rather than requiring shippers to overhaul their customs processes before they can even get started.
Closing the Gap with Truckload
Browne characterized the Mexican intermodal market as being several years behind the U.S. in terms of adoption, but said the fundamental value proposition is converging. The traditional objections (cost, transit time, service reliability) are falling away.
“Cost really isn’t a huge obstacle,” Browne said. “The railroads have worked very hard with us to make that not a limiting factor in a lot of lanes. Transit is what I would say has changed the most. When you think about going from central Mexico to Chicago, it’s truck-like transit today, whereas 10 years ago, that was not the case.”
He credited significant railroad infrastructure investment for improving service levels across the board, calling current conditions the best he has seen in his career.
“The railroad service is right now the best it’s been in my 14 years of intermodal,” Browne said. “Let alone sustainability. When it comes up in a board meeting or when it comes up in a discussion for a customer thinking about making a change, that’s just another feather in the cap.”
Sustainability Moves to the Forefront
The sustainability angle carries real weight in conversations with large enterprise shippers. Werner’s scale on the truckload side, where the company is testing battery-powered and hydrogen-powered tractors, pairs with intermodal’s inherent emissions advantages to create a compelling story for customers with aggressive sustainability targets.
“We often talk to customers about what a potential carbon emission looks like on a central Mexico to Chicago over-the-road lane and then compare it to that same volume moving intermodal,” Browne said. “We can show shippers the facts that they can take to their board of directors or their supply chain team to make decisions. It’s pretty powerful.”
It’s a topic, he noted, that has gone from an afterthought to a front-and-center discussion in customer conversations over the past decade.
The Long Tail of Nearshoring
The wave of foreign direct investment flowing into Mexico is the clearest signal that cross-border freight volumes are only headed in one direction, according to Dixon. The nearshoring trend, he argued, has a long tail, but the capital is already committed.
“If you look at foreign direct investment in Mexico over the last two or three years, it’s set a record every year,” Dixon said. “By the time a customer decides to build a second plant or third plant in Mexico, they have to secure a site, and they have to pull in some infrastructure — think water, sewer, data lines, electricity, etc. Then they have to prop a building up… they’ve got to get machinery in it, then they’ve got to train their folks. All that takes a couple of years, best-case scenario.”
The manufacturing capacity being built in Mexico today will generate freight demand for years to come, and truckload capacity alone won’t be able to absorb it.
Why Intermodal Becomes Essential
“Truckload capacity can be constrained already today. With border delays, that’s going to get worse,” Dixon said.
Werner’s intermodal expansion into Mexico is a calculated response to structural forces reshaping North American supply chains. With record foreign direct investment fueling new manufacturing in Mexico, border congestion intensifying, and large shippers demanding flexible capacity solutions, the carrier is leveraging 27 years of cross-border expertise and a growing fleet of owned containers to meet the moment. The freight is coming, but thankfully, the intermodal infrastructure to move it is already in place.
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Knight-Swift Transportation anticipates significant contractual rate hikes during the current and upcoming bid cycles as the freight market emerges from a nearly four-year downturn. Strict regulatory enforcement and the recent fuel price shock are driving non-compliant and underperforming operators out of the market. Even without a notable pickup in demand, supply constraints have been severe enough to force shippers to contemplate realignment with asset-based carriers providing meaningful scale.
The Phoenix-based company’s CEO, Adam Miller, told analysts on a Wednesday quarterly call that mini-bid activity is increasing as shipper routing guides fail. He said some carriers are no longer honoring rates negotiated just one or two months ago and that some of its customers are already looking to lock up peak-season capacity. After capturing mid-single-digit contractual rate increases in its truckload business to start the year, the company is now eyeing high-single- to low-double-digit increases on the remaining 70% of its book.
“I don’t think we’ve ever really seen the pressure on capacity … coming from regulatory forces versus just normal economics,” Miller said. “I think we could see more capacity coming out of the network than we typically would see in a cycle, and I feel like that could be a catalyst to really drive a strong bid season this year [and] also into next year.”
Knight-Swift (NYSE: KNX) reported a headline net loss of $1.3 million, or 1 cent per share, for the first quarter. Adjusted earnings per share of 9 cents were in line with the negative earnings revision the company provided last week. Analysts were expecting adjusted EPS of 25 cents heading into earnings season.
Adjusted EPS included several nonrecurring items. Headwinds included: 8 cents per share from a negative less-than-truckload claim development, 5 to 6 cents per share from weather and fuel headwinds, and 2 cents per share from an adverse value-added-tax ruling in its Mexico business. A roughly $8 million decline in net interest expense largely offset a similar decline in gains on equipment sales during the period.
The company reiterated its second-quarter adjusted EPS guidance range of 45 to 49 cents, which it also provided last week.
U.S. Xpress fleet appears to be right-sized
Truckload revenue was flat y/y at $1.05 billion, excluding fuel surcharges. A 4% increase in revenue per tractor offset a 4% decline in average tractors in service. The company has culled the fleet count over the past several quarters to improve asset utilization. Loaded miles per tractor improved 2.3% in the period, with revenue per loaded mile (excluding fuel) increasing 1.6%.
The segment booked a 96.3% adjusted operating ratio (inverse of operating margin), which was 70 basis points worse y/y. Inclement weather and surging fuel costs were among the headwinds.
The bulk of the tractor drawdown occurred at the U.S. Xpress fleet, which Knight-Swift acquired in 2023. Total annual revenue at U.S. Xpress is roughly $1.7 billion currently, down from $2.2 billion in 2022, which had the benefit of the tail-end of the upcycle. The actions were taken to improve freight mix and margins. U.S. Xpress is closing the gap to the legacy Knight and Swift fleets, operating at a margin that lagged by 300 bps in the quarter.
The TL unit typically operates at a mid-80s OR in a normal market. Roughly 70% of its assets are currently operating in one-way and over-the-road configurations, which Miller said are the most levered to an upcycle. True spot exposure in the business has increased a couple of percentage points to a low- to mid-teens range. The midpoint of management’s second-quarter guidance implies a 93.1% adjusted OR.
LTL could get back to double-digit margins by year-end
Costs associated with acquisition integrations and rapid organic terminal growth have weighed on LTL margins. The segment reported a 99.6% adjusted OR in the quarter, which was 540 bps worse y/y. However, the adverse claim development was a 570-bp headwind. Guidance calls for a low-90s OR in the second quarter, with the potential for sub-90% later this year.
The freight mix is improving. Weight per shipment was up 5% y/y to the highest level since 2021, when Knight-Swift entered the business. Also, variable wage per shipment (notably dock wages) and other variable costs are declining, and the aforementioned growth-oriented expenses are largely in the rearview. However, Knight-Swift still needs to acquire a Northeast carrier to complete its national terminal network.
Revenue increased 3% y/y to $313 million as a 1% decline in daily shipments was more than offset by a 4% increase in revenue per shipment (excluding fuel). Tonnage accelerated throughout the quarter—up 1.6% y/y in January, up 2.6% in February and 6.9% higher in March. Management said rate renewals continue to increase by a mid-single-digit percentage.
Other Q1 takeaways
Brokerage load count was down 19% y/y as the company continued to screen against non-compliant carriers and mitigate cargo theft risks across the platform. A 10% increase in revenue per load helped limit the segment’s revenue decline to 10%. A 96.2% adjusted OR was 70 bps worse y/y as a spike in purchased transportation costs compressed gross margin by 150 bps to 16.6%.
The company expects improving brokerage results as it reprices its contractual book of business throughout bid season.
The intermodal unit booked another operating loss. A 101.5% adjusted OR was 140 bps worse sequentially but 50 bps better y/y. Revenue increased 3% as load count and revenue per load “improved progressively throughout the quarter.”
Intermodal load count is expected to be up y/y by a high-single- to low-double-digit percentage in the second quarter, with the unit likely seeing breakeven or better operating results (OR to improve 150 to 250 bps sequentially).
All other segments, which include revenue from support services to third parties, combined for a $7.1 million operating loss in the quarter. A change in accounts receivable financing was a $5.2-million headwind. The unit also had startup costs from new warehousing contracts, and some warehousing project activity was pushed into the second and third quarters.
All other segments are forecast to generate $14 million to $18 million in adjusted operating income in the second quarter.
Shares of KNX were up 3.9% at 11:46 a.m. EDT on Thursday compared to the S&P 500, which was flat.
More FreightWaves articles by Todd Maiden:
- Werner doubling intermodal fleet in Mexico
- Knight-Swift cuts Q1 guide; remains upbeat on TL fundamentals
- J.B. Hunt says TL inflection ‘structural,’ not temporary
The post Knight-Swift says shippers already seeking peak-season capacity appeared first on FreightWaves.
DQS Solutions & Staffing announced it has further expanded its transportation and logistics platform with the acquisition of contract logistics provider Comprehensive Logistics, Inc.
The deal merges CLI, DQS and McLaren Transport, which DQS acquired last year, under parent company Axvor. Each company will continue to operate under its current banner.
Financial terms of the transaction were not disclosed.
The acquisition provides Dearborn, Michigan-based DQS with infrastructure and scale. Bonita Springs, Florida based CLI operates over 20 facilities spanning 17 states, totaling more than 5 million square feet of warehouse space. It also gives DQS control of CLI’s proprietary warehouse management system, which oversees inventory, sequencing and manufacturing logistics.
“Having previously served as the Plant Manager of the CLI Dearborn Plant as well as on the CLI Leadership Team, I witnessed firsthand the company’s tremendous potential,” said DQS CEO Joshua Morris in a Wednesday news release. “Our goal is to build on CLI’s strong foundation while investing in the people, facilities, and expanded services our clients need.”
The CLI acquisition is part of a multi-year pivot for DQS. DQS was originally launched as Detroit Quality Staffing, an employment agency focused on manufacturing workforce solutions. However, over the past few years it began layering in security, transportation and warehousing services.
The April 2025 acquisition of Detroit-based McLaren onboarded trucking assets and a 75,000-square-foot cold storage facility, along with two decades of automotive supply chain leadership experience. With these acquisitions, DQS now offers complex cross-border and inbound-to-manufacturing logistics.
“CLI has always been execution-driven and customer-focused,” said Brad Constantini, chairman and owner of CLI. “Joining DQS under the leadership of CEO Joshua Morris is a strategic step that expands our capabilities and reach while preserving the discipline and culture that define CLI.”
More FreightWaves articles by Todd Maiden:
- Knight-Swift cuts Q1 guide; remains upbeat on TL fundamentals
- J.B. Hunt says TL inflection ‘structural,’ not temporary
- Yield discipline, fuel price surge driving LTL rates to new highs in Q2
The post DQS nets contract logistics provider in latest acquisition appeared first on FreightWaves.
Alaska Air Group has renegotiated a cargo transportation contract with Amazon that was unprofitable, but executives on Tuesday suggested improvements to the deal didn’t go far enough.
Alaska Airlines (NYSE: ALK) operates 10 Airbus A330-300 converted freighter aircraft for the retail and logistics behemoth, shuttling e-commerce packages between nodes in its U.S. air distribution network. Alaska inherited the Amazon (NASDAQ: AMZN) flying contract when it acquired Hawaiian Airlines 18 months ago. Under the transport agreement, Amazon supplies the aircraft and Alaska Airlines provides crews, maintenance and insurance to operate them.
“We’ve restructured the Amazon deal from losses to not having losses, and we’ve got a little more work to do there as well,” said Alaska Air CEO Ben Minicucci during a call with analysts after the company reported first-quarter earnings.
The first public sign that Alaska Air was unhappy with its Amazon partnership came in December when Chief Financial Officer Shane Tackett said the airline wasn’t making money from it.
People familiar with Amazon’s culture say the company typically forces vendors to accept very small profit margins. A contract that was marginally profitable at the start could have turned negative with the transition to a new airline, which has different crew bases and other operating needs, and compensates pilots differently.
Both companies are headquartered in Seattle.
“We’ve really enjoyed getting to work more closely with the folks at Amazon. We know them because they’re neighbors of ours. We have folks who used to work in Alaska over there. We’ve worked on deepening the partnership, and I think it’s going well,” a less-than-enthusiastic Minicucci said. “The partnership is getting better. It’s getting healthier. We’re continuing to talk about how we can deepen it further, in a way that’s mutually beneficial to each other. We had a nice sort of update to the agreement that’s in force today that helps us on the economic side, and we’re hopeful that we can expand that through more partnership over time.”
Hawaiian agreed to become an Amazon contractor in 2022 as a way to diversify revenue when it was losing money following the Covid crisis. Amazon had leased the Airbus A330 passenger-to-freighter aircraft and was looking for an operator because it isn’t a licensed airline. Hawaiian was one of only two A330 operators in the United States.
Alaska Air, the parent of Alaska Airlines and regional carrier Horizon Air, has not disclosed specific concerns with the Amazon contract. But an aviation professional told FreightWaves in December that Amazon drove a hard bargain, leaving Hawaiian with an uneconomical fixed-fee deal with little room to decrease costs and enhance margins.
Another logistics expert, speaking on condition of anonymity at the time, speculated that the lack of coordinated passenger and cargo crew bases could be a challenge for Alaska Airlines. Periodic changes to Amazon’s route structure, or the number of flight hours required each month, could conflict with Hawaiian’s original pricing assumptions on pilot staffing levels and expenditures, or make it more difficult to rotate crews to passenger flying.
“I won’t share where the specific economics on the freighters were. But, if we’re going to put time into flying aircraft around, we feel like we need to earn a reasonable margin — not a break-even margin. That’s not really our philosophy in terms of investment,” Tackett said on Tuesday. “We’ll be focused on generating decent returns on this flying.”
Q1 results
Cargo revenue, most of which comes from shipments carried on Alaska Airlines passenger aircraft and five Boeing 737-700 and 737-800 converted freighters, increased 23% year over year to $150 million in the first quarter.
“Over the next year or two, we’re excited regardless of the freighter contract, about the opportunities with belly cargo on the widebodies, the opportunities to continue to grow our own freight market share up in the state of Alaska and along the West Coast,” Tackett said.
Alaska Airlines, traditionally a narrowbody carrier, began operating from its Seattle hub to Tokyo and Seoul, South Korea, last year using Airbus A330-200 passenger jets from Hawaiian’s fleet. In January, the carrier switched to Boeing 787-9 Dreamliners on the Tokyo route, increasing passenger and cargo capacity. Alaska begins daily 787-9 passenger service to Rome next Tuesday and to London Heathrow airport on May 21.
Chief Operating Officer Jason Berry noted that the cargo division’s quarterly performance was aided by the integration of Hawaiian and Alaska Airlines cargo systems, with combined booking systems and a unified sales approach allowing the carrier to leverage wider network connectivity.
Overall, Alaska Air posted a net loss of $193 million as the carrier felt the brunt of surging jet fuel prices and revenue pressure because of heavy flooding in Hawaii and drug cartel violence in Mexico, two of its key leisure markets. The airline pulled its full-year guidance, warning of a profit cut due to rising fuel costs.
Management said it expects fuel expenses to jump by about $600 million as it pays about $4.50 per gallon this quarter. Minicucci last month said the carrier has been tankering fuel from Singapore to Seattle because West Coast refinery margins are extremely high.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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