What changed in this filing

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Item 1A. Risk Factors

2023-02-24 compared with 2022-02-25 · 95 added, 83 removed, 239 unchanged (43% of the section changed)

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reliance on us to market their intermodal transportation services.

We depend on the major railroads in North America for virtually all of the intermodal services we provide.

In many regions, rail service is limited to one or a few railroads.

We depend on major railroads in North America for the intermodal services we provide.

In many regions, rail service is provided by one or a limited number of railroads.

We primarily rely on contractual relationships with two railroads to support our intermodal business.

Consequently, a reduction in, or elimination of, rail service to a particular market is likely to materially adversely affect our ability to provide intermodal transportation services to some of our customers.

Rate increases result in higher intermodal transportation costs, reducing the attractiveness of intermodal transportation compared to truck or other transportation modes, which could cause a decrease in demand for our services.

Rate increases to our customers may reduce the attractiveness of intermodal transportation compared to truck or other transportation modes, which could cause a decrease in demand for our services.

Further, our ability to continue to expand our intermodal transportation business is dependent upon the railroads’

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Our ability to expand our business or maintain our profitability is adversely affected by a shortage of drivers and capacity.

We derive significant revenue from our intermodal, logistics, truck brokerage and dedicated services and depend on qualified drivers to provide these services.

We derive significant revenue from our transportation services and depend on qualified drivers to provide these services.

There is significant competition for qualified drivers in the transportation industry.

Additionally, interventions and enforcements under the Federal Motor Carrier Safety Administration (“FMCSA”) Compliance, Safety, Accountability program or other programs may shrink the industry’s pool of drivers as those drivers with unfavorable scores may no longer be eligible to drive for us.

Driver shortages and reliance on third-party companies for the operation of our intermodal, logistics, truck brokerage and dedicated services has, and in the future could, adversely affect our profitability and limit our ability to expand our business or retain customers.

Driver shortages and reliance on third-party companies for the operation of our services has, and in the future could, adversely affect our profitability and limit our ability to expand our business or retain customers.

Most drayage, truckload, final mile, and certain less-than-truckload companies operate relatively small fleets and have limited access to capital for fleet expansion.

Particularly during recent and future periods of economic expansion, it is difficult for our dedicated and HGT operations, and third-party trucking companies, to expand their fleets due to chronic driver shortages.

Particularly during recent and future periods of economic expansion, it is difficult for our trucking operations and third-party trucking companies, to expand their fleets due to chronic driver shortages.

Driver shortages have resulted in increases to drivers’

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we compete with many other transportation and logistics service providers, some of which have greater capital resources or lower cost structures than us;

our inability to compete with new entrants in the transportation and logistics market that may offer similar services at lower cost or have greater technological capabilities;

our inability to compete with new entrants in the transportation and logistics market that may offer similar services at lower cost or have greater technological capabilities, including capabilities offering lower greenhouse gas (“GHG”) emissions with competitive pricing;

customers may choose to provide for themselves the services that we now provide;

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and suppliers’

businesses may be negatively affected by various economic and other factors such as recessions, downturns in the economy, global uncertainty and instability, the effects of pandemics, changes in United States social, political, and regulatory conditions and/or a disruption of financial markets, which may decrease demand for our services or increase our costs.

Adverse economic and other conditions, both in the United States and internationally, can negatively affect our customers’

business levels, the amount of transportation services they need, their ability to pay for our services and overall freight levels, any of which might impair our asset utilization and profitability.

For example, the effects of pandemics (including the coronavirus) may affect international trade, supply chains, travel, employee productivity and other economic activities.

Additionally, uncertainty and instability in the global economy, geopolitical events, and any other action that governments may take to withdraw from or materially modify international trade arrangements may lead to fewer goods being transported and could have an adverse effect on our business, financial conditions and results of operations.

The United States government and foreign governments may take other actions that may impact United States trade, including imposing tariffs on certain goods, that may have an adverse impact on our business and on goods imported into, or exported from, the United States.

These potential “trade wars”

could increase costs for goods transported globally, which may reduce customer demand for these products if the parties having to pay those tariffs increase their prices, or if trading partners limit their trade with countries that impose anti-trade measures.

If these consequences are realized, the volume of global economic activity may be significantly reduced.

Such a reduction could have a material adverse effect on our business, results of operations, and financial condition.

Customers adversely affected by changes in United States trade policies or otherwise encountering adverse economic or other conditions may be unable to obtain additional financing or financing under acceptable terms.

businesses may be negatively affected by various economic and other factors such as recessions, downturns in the economy, global uncertainty and instability, the effects of pandemics, the effects of climate change, changes in United States social, political, and regulatory conditions and/or a disruption of financial markets, which may decrease demand for our services or increase our costs.

Our primary business is to transport, and arrange for the transport of, goods and, as a result, our business levels are directly tied to the purchase and production of goods and the rate of growth or decline in domestic and global trade, which are key macroeconomic measurements influenced by, among other things, inflation and deflation, supply chain disruptions, interest rates and currency exchange rates, labor costs and unemployment levels, regulatory initiatives and other government activity, fuel and energy prices, public health crises, inventory levels, buying patterns and disposable income, debt levels, and credit and capital availability.

When companies purchase and produce fewer goods, we transport and arrange for the transport of fewer goods.

Any broad decline in the activity of our customers could result in a decline in our revenue and our ability to maintain our profitability unless we are able to continue growing our business and replace such declining customer demand with new customers and demand.

In general, while we endeavor to prepare for changes in macroeconomic conditions, we have limited ability to foresee macroeconomic changes, including the drivers influencing such changes.

Nonetheless, we believe certain trends will likely affect the economy, and by extension our business, in the near and long term.

Among these are, uncertainty and instability in the global or domestic economy, geopolitical events, and any other action that governments may take to withdraw from or materially modify international trade arrangements or decrease economic production, consumption and inflation.

Significant weather events or patterns, which may become more frequent or common as a result of climate-change, could also affect market conditions in ways that we cannot foresee and impact the volume or health of our customers’

business or our suppliers’

ability to provide us with goods or services.

The United States government and foreign governments may take other actions that may impact the purchase and production of goods, including imposing tariffs or other regulations on certain goods shipped by our customers, that may increase costs for goods transported globally and reduce end-user demand for these products.

Demand for, or production of, goods could also decline due to capital constraints, increased interest rates, and non-trade related regulatory actions such as regulations to address climate change

Customers encountering adverse economic or other conditions may be unable to obtain additional financing or financing under acceptable terms.

These customers represent a greater potential for bad debt losses, which may require us to increase our reserve for bad debt.

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Our suppliers’

business levels also may be negatively affected by adverse economic and other conditions and changes in the political and regulatory environment, as well as the effects of geopolitical events, pandemics and other public concerns, both in the United States and internationally, or financial constraints, any one of which could lead to disruptions in the supply and availability of equipment, parts and services critical to our operations.

business levels also may be negatively affected by adverse economic and other conditions, which could lead to disruptions in the supply and availability of equipment, parts and services critical to our operations.

A significant interruption in our normal supply chain could disrupt our operations, increase our costs and negatively impact our ability to serve our customers.

We are also subject to cost increases outside of our control that could materially reduce our profitability if we are unable to increase our rates sufficiently.

Such cost increases include, but are not limited to, increases in wage rates, fuel prices, interest rates, taxes, tolls, license and registration fees, insurance, equipment and healthcare for our employees.

Such cost increases include, but are not limited to, capital expenditures to update our tractor fleet to meet climate change-focused regulatory requirements or market demands for lower emission equipment, increases in wage rates, fuel prices, interest rates, taxes, tolls, license and registration fees, insurance, equipment and healthcare for our employees.

Our business could be adversely affected by strikes or work stoppages by truck drivers, warehouse employees, port employees and railroad employees, or the decision of our employees to unionize.

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We could lose business due to any significant work stoppage or slowdown and, if labor unrest results in increased rates for transportation providers, we may not be able to pass these cost increases on to our customers.

Strikes, work slowdowns, or labor shortages among longshoremen and other workers at ports in recent years have resulted in reduced activity at the ports for a time, creating an impact on the transportation industry.

Strikes, work slowdowns, or labor shortages among longshoremen and other workers at ports may result in reduced activity at the ports for a time, creating an impact on the transportation industry.

Work stoppages occurring among owner-operators in a specific market have increased our operating costs periodically in the past.

In recent years, there have been strikes involving railroad workers.

Future strikes by railroad employees in the United States, Canada or anywhere else that our customers’

Strikes, work slowdowns, or labor shortages among railroad employees in the United States, Canada or anywhere else that our customers’

freight travels by railroad would impact our operations.

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Transportation and warehouse costs represented 83% of our consolidated revenue in 2022, 86% in 2021 and 88% in 2020.

Because transportation and warehouse costs represent such a significant portion of our costs, any increases in the operating costs of railroads, warehouse vendors, and other transportation providers can be expected to result in higher freight rates that we pay to such providers.

Transportation costs may increase if we are unable to contract with owner-operators or recruit Company employee drivers as this may increase the costs we pay for drivers or force us to use more expensive purchased transportation.

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Our business depends on the availability of fuel.

Fuel availability and cost are affected by natural or man-made disasters, adverse weather conditions, political events, disruption or failure of technology or information systems, price and supply decisions by oil producing countries and cartels, terrorist activities, armed conflict and world supply and demand imbalance.

Fuel availability and cost are affected by natural or man-made disasters, adverse weather conditions, political events, disruption or failure of technology or information systems, price and supply decisions by oil producing countries and cartels, government actions including climate change regulations, terrorist activities, armed conflict and world supply and demand imbalance.

We do not maintain fuel storage and pumping stations at all of our facilities.

Therefore, a disruption in the global fuel supply resulting from factors outside of our control, hence increasing the demand for fuel traditionally used by trucks could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Additionally, fuel costs can be very volatile and fuel price fluctuations occur due to factors outside our control.

Therefore, a disruption in the global fuel supply resulting from factors outside of our control, that increases the demand for fuel traditionally used by trucks, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Fuel costs can be very volatile and fuel price fluctuations occur due to factors outside our control.

Significant increase in fuel prices or fuel taxes that we are unable to offset by any fuel surcharges or freight rate increases could have an adverse impact on our business operations.

We have a fuel surcharge program in place with many of our customers.

These fuel surcharges typically allow us the ability to recover the costs associated with volatile fuel prices.

We have a fuel surcharge program in place with many of our customers that typically allows us to recover the costs associated with volatile fuel prices.

Our inability to time the fuel surcharges billed to customers with the change in fuel costs could affect our operations.

Rapid increases in fuel costs could also have a material adverse effect on our operations or future profitability.

Additionally, proposed and potential new legislation intended to encourage the adoption of alternative fuel technologies, including electric vehicles (“EVs”), as well as potential customer demand driven by similar legislation and market-driven expectations, could accelerate or expand our plans for a transition to EVs.

The Company has piloted the use of EVs but has no immediate plans for a broad transition to EVs.

The Company’s broader usage of EVs will depend on several factors including availability of EVs, access to charging infrastructure, consistent availability of electrical supply, and availability of tax incentives to mitigate the required capital expenditures for EV fleet purchases, charging, maintenance, replenishment and expansion.

If legislative or market forces require the accelerated deployment of EVs before other cost and operational factors are adequately addressed, then such transition could have a material adverse effect on our operations and future profitability.

Extreme or unusual weather conditions can disrupt our operations, impact freight volumes, and increase our costs, all of which could have a material adverse effect on our business results.

Our operations are affected by external factors such as severe weather and other natural occurrences, including floods, fires, hurricanes and earthquakes that adversely impact operating locations where we have vehicles, warehouses and other facilities.

As a result, our vehicles and facilities may be damaged, our workforce may be unavailable, fuel costs may rise, and significant business interruptions could occur.

In addition, the performance of our vehicles could be adversely affected by extreme weather conditions.

Our operations are affected by external factors such as severe weather and other natural occurrences, which may increase in frequency and severity due to climate change, that adversely impact operating locations where we have vehicles, warehouses and other facilities.

These events may disrupt fuel supplies, increase fuel costs, affect the performance of our vehicles, disrupt freight shipments or routes, restrict the availability of our workforce, affect regional economies, destroy our assets, interrupt our business, adversely affect the business or financial condition of our customers, or limit or interrupt the availability of goods or services from our suppliers.

While we have been able to avoid or mitigate the impact of these events by, for example, re-routing our equipment or passing on increased costs associated with these events, we may not be able to do so in the future.

Insurance to protect against loss of business and other related consequences resulting from these natural occurrences is subject to coverage limitations, depending on the nature of the risk insured.

This insurance may not be sufficient to cover all of our damages or damages to others and this insurance may not continue to be available at commercially reasonable rates.

Such insurance may not be sufficient to cover all of our damages or damages to others and this insurance may not continue to be available at commercially reasonable rates.

Even with insurance, if any natural occurrence leads to a catastrophic interruption of service, we may not be able to mitigate a significant interruption in operations.

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compensation and vehicle liability is subject to a considerable degree of variability.

The causes of this variability include litigation trends, claim settlement patterns and fluctuations in the frequency or severity of accidents.

The causes of this variability include litigation trends, changes in medical costs, claim settlement patterns and fluctuations in the frequency or severity of accidents.

If actual losses incurred are greater than those anticipated, our self-insurance reserves may be insufficient and additional costs could be recorded in our consolidated financial statements.

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If the number or severity of claims increases, our operating results could also be adversely affected if the cost to renew our insurance was increased when our current coverage expires.

If these expenses increase, and we are unable to offset the increase with higher freight rates to our customers, our earnings could be materially and adversely affected.

If these expenses increase, and we are unable to offset the increase with higher rates to our customers, our earnings could be materially and adversely affected.

In addition, insurance companies generally require us to collateralize our SIR or deductible levels.

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If these collateralization requirements increase, our borrowing capacity could be adversely affected.

Pandemics could materially and adversely affect our business, financial condition and results of operations, the ultimate impacts of a pandemic, including COVID-19, on our business, financial condition and results of operations depends on future developments and other factors that are highly uncertain and will be affected by the scope and duration of a pandemic (including variants and resurgences) and actions taken by individuals, companies and governmental authorities in response to such a pandemic.

The ongoing COVID-19 pandemic (including variants and resurgences) has caused and is expected to continue to cause significant disruption in the international and United States economies and financial markets and has had and may continue to have a significant effect on our business, financial condition and results of operations.

In response to the COVID-19 pandemic, federal, state and foreign governments have taken actions, such as imposing restrictions on travel and business operations, advising or requiring individuals to limit or forego their time outside of their homes, ordering temporary closures or other restrictions of businesses, and imposing requirements related to vaccines, masks, testing and other measures on companies and individuals, that may continue to impact our business, financial conditions and results of operations and those of our customers and suppliers.

The ultimate duration of the pandemic and of responsive governmental actions is uncertain and evolving, particularly as new variants have emerged.

New and changing government and private actions to address the COVID-19 pandemic have been occurring regularly.

We have been closely monitoring the COVID-19 pandemic and government responses thereto and its impacts and potential impacts on our business, including operational challenges from the need to protect employee health and safety.

These circumstances and other consequences of the pandemic, have resulted in significant adverse effects for many different types of businesses who are our customers or suppliers, including, among others, those in the retail, travel, hospitality and food and beverage industries, which can result in volatility in customers’

Our business, financial condition, and results of operations have been adversely affected and could in the future be materially adversely affected by the COVID-19 pandemic.

The global outbreak of COVID-19 and variants of the virus continue to rapidly evolve.

While business interruption due to COVID-19 began to abate during 2022, businesses have continued to be subject to intermittent closures and countries around the world have continued to sporadically limit travel.

The extent to which COVID-19 may impact our business, financial condition or results of operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate impact of the disease on specific geographies, the duration of the outbreak, travel restrictions and social distancing, business closures or business disruptions and the effectiveness of actions taken to contain and treat the disease.

The COVID-19 pandemic has resulted in significant adverse effects for our customers and suppliers, including, among others, those in the retail, travel, hospitality and food and beverage industries, which can result in volatility in customers’

need for our services or suppliers’

availability to provide products and services to us.

We have been deemed an essential business and have been permitted to continue to operate in all of the jurisdictions in which we operate, including jurisdictions that have mandated the closure of certain businesses, and we expect to be permitted to continue to operate in the future.

Nevertheless, there is no assurance that we will continue to be permitted to operate under every future government order or other restriction and in every location and government requirements may have an adverse impact on our business operations, including with respect to availability of truck drivers in the sectors in which we operate.

In addition, the COVID-19 pandemic has caused, and may in the future continue to cause, disruptions, and in some cases severe disruptions, to the business and operations of our customers and suppliers as a result of quarantines, worker absenteeism as a result of illness or other factors, social distancing measures, consumer concerns, and other travel, health-related, business or other restrictions.

Certain of our customers have been, and may in the future be, required to close or operate at a lower capacity.

There can be no assurance that any decrease in revenues or volume resulting from the COVID-19 pandemic will be offset by increased revenues or volume in the future.

The ultimate effects of the COVID-19 pandemic on the broader economy and the markets that we serve are not known nor is the ultimate length of the restrictions and circumstances described above and any accompanying effects.

The further spread of the COVID-19 virus, as well as ongoing or new governmental, regulatory and private sector responses to the pandemic, may materially disrupt economic activity generally and in the areas in which we operate.

As such, there can be no assurance that any decrease in revenues or volume resulting from the COVID-19 pandemic will be offset by increased revenues or volume in the future.

Although certain COVID-19 restrictions have been relaxed, significant uncertainty remains as to the potential impact of the COVID-19 pandemic on our operations, and on the global economy as a whole.

Further spread of the COVID-19 virus, as well as ongoing or new governmental, regulatory and private sector responses to the pandemic, may materially disrupt economic activity generally and in the areas in which we operate.

This could result in further decline in demand for our services, and could negatively affect, among other things, our liquidity, regulatory capital and our growth strategy.

Any one or more of these developments could have a material adverse effect on our business, financial condition and results of operations.

Although we are taking precautions to protect the safety and well-being of our team members, customers and suppliers, no assurance can be given that the steps being taken will be adequate or deemed to be appropriate, nor can we predict the level of disruption which will occur to our team members’

ability to provide customer support and service.

If we are unable to recover from a business disruption on a timely basis, our business, financial condition and results of operations could be materially and adversely affected.

We may also incur additional costs to remedy damages caused by such disruptions, which could further adversely affect our business, financial condition and results of operations.

To the extent the COVID-19 pandemic adversely affects our business, financial condition or results of operations, it may also have the effect of heightening many of the other risks described in this Part I, Item 1A of this Form 10-K.

Technology and Cybersecurity Risks

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To keep pace with changing technologies and customer demand, we continue to make investments in our technology, as well as invest in emerging technology to further drive innovation and efficiency.

Recent investments include implementing new order management, transportation management, contract management and financial management processes and systems.

Recent investments include implementing new order management, transportation management, warehouse automation, contract management and financial management processes and systems.

Technology and new market entrants may also disrupt the way we and our competitors operate.

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We depend on third parties for transportation equipment, such as tractors, containers, chassis, and trailers and certain services such as transportation, warehousing and cross docks necessary for the operation of our business.

Our industry has experienced equipment, transportation and warehouse capacity shortages in the past, particularly during the peak shipping season in the fall.

Our industry has experienced equipment, transportation and warehouse capacity shortages in the past, particularly during the peak shipping season leading up to the December holidays.

Market disruptions related to the COVID-19 pandemic have contributed to recent shortages of such equipment and services and this situation may continue.

A substantial amount of intermodal freight originates at or near the major West Coast ports, which have historically had the most severe equipment shortages.

As an asset-light freight transportation management company, if we cannot secure sufficient transportation equipment and warehouse services at a reasonable price from third parties to meet our customers’

A substantial amount of intermodal freight originates at or near major West Coast ports, which have historically had the most severe equipment shortages.

If we cannot secure sufficient transportation equipment and warehouse services at a reasonable price from third parties to meet our customers’

needs, our customers may seek to have their transportation and warehousing needs met by other providers with their own assets.

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The ability to hire or retain management and other employees is critical to our continued success, and the loss of or inability to hire such personnel could have a material adverse effect on our business, financial condition and results of operations.

There is substantial competition for qualified personnel in the transportation services industry.

Many individuals in the industry are subject to non-competition agreements, severely limiting our ability to hire qualified personnel to compete in the market-place.

There is substantial competition for qualified personnel in the transportation and logistics services industry.

As all key employees devote their full time to our business, the loss of any member of our management team, or other key persons, or the inability to hire key persons, could have an adverse effect on us.

We do not have written employment agreements with any of our executive officers and do not maintain key man insurance on any of our executive officers, although we do have restrictive covenant agreements with all of them.

Many individuals in the industry are subject to non-competition agreements, reducing the immediate availability of some qualified candidates for job openings.

A proposed rulemaking by the Federal Trade Commission (“FTC”), if it is made effective and sustains effective legal challenges, would prevent the use of non-competition agreements in most circumstances in the future.

We cannot predict the impact this proposed rule, or potential future rulemaking at the state level, might have on the recruiting and retention of management and other employees (or our ability to enforce post-termination restrictive covenants).

If we lose key members of our senior management team or are unable to effect successful transitions from one executive to another as part of our succession plan, we may not be able to effectively manage our current operations or meet ongoing and future business challenges, and this could have a material adverse effect on our business, financial condition and results of operations.

Our growth could be adversely affected if we are not able to pursue our acquisition strategy or to successfully integrate acquired businesses.

Our growth could be adversely affected if we are not able to pursue our acquisition strategy, to successfully integrate acquired businesses or to achieve the anticipated benefit from acquired companies.

We cannot guarantee that we will be able to execute acquisitions on commercially acceptable terms.

Furthermore, the failure to successfully integrate an acquired business or assets, including implementing financial controls and measures or achieving cross-selling objectives, could significantly impact our financial results.

Although we believe we have adequate liquidity and capital resources to fund our operations internally, our inability to access the capital markets on favorable terms, or at all, to obtain adequate financing from debt or capital sources could adversely affect our ability to pursue growth through acquisitions.

Although we believe we have adequate liquidity and capital resources to fund our operations internally, our inability to access the capital markets on favorable terms, or at all, to obtain adequate financing could adversely affect our ability to pursue growth through acquisitions.

Financial results most likely to be negatively affected include, but are not limited to, revenue, gross margin, salaries and benefits, general and administrative expenses, depreciation and amortization, interest expense, net income and our debt level.

Furthermore, we may not be able to realize the anticipated benefits from acquired companies.

Achieving those benefits depends on the timely, efficient and successful execution of a number of post-acquisition events.

Factors that could affect our ability to achieve these benefits include the integration risks described above as well as the failure of acquired businesses to perform in accordance with our expectations;

the failure to achieve anticipated synergies between our business units and the business units of acquired businesses;

the loss of customers of acquired businesses;

or the loss of key managers of acquired businesses.

If acquired businesses do not operate as we anticipate, it could materially impact our business, financial condition and results of operations.

In addition, acquired businesses may operate in new markets in which we have little or no experience.

In such instances, we will be highly dependent on existing managers and employees to manage those businesses, and the loss of any key managers or employees of the acquired business could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

Legal, Regulatory and Compliance Risks

We use a significant number of independent contractors, such as owner operators, in our businesses.

Legislative, judicial and regulatory authorities may continue to take actions or render decisions that could affect the independent contractor classification, which could have a significant adverse impact on our gross margin and operating income.

We do business with a large number of independent contractors, such as owner-operators, consistent with longstanding industry practices.

We use a significant number of contingent workers, including independent contractors, such as owner operators and warehouse staff, in our businesses.

We do business with many independent contractors, such as owner-operators, consistent with longstanding industry practices.

Legislative, judicial, and regulatory (including tax) authorities have taken actions and rendered decisions that could affect independent contractor classifications.

Class action and individual lawsuits have been filed against us and others in our industry, challenging independent contractor classifications.

See Item 3 - Legal Proceedings for further discussion and see Note 15 to the consolidated financial statements under “Legal Matters”

for a description of material pending litigation and regulatory matters affecting us and certain risks to our business presented by such matters.

If independent contractors are determined to be employees, or the Company a joint employer of warehousemen used for our consolidation or final mile delivery business, then we may incur legal liabilities associated with that determination, such as liability for unpaid wages, overtime, employee health insurance and taxes.

If we were to change how we treat independent contractors or reclassify independent contractors to employees, then we would likely incur expenses associated with that reclassification, could incur additional ongoing expenses and face the loss of those independent contractor drivers who choose not to become employees.

If contingent workers, including independent contractors and temporary workers used for our warehousing, consolidation, fulfillment or final mile delivery business, are determined to be employees, or the Company a joint employer, then we may incur legal liabilities associated with that determination, such as liability for unpaid wages, overtime, employee health insurance and taxes.

If we were to change how we treat contingent workers or reclassify them as employees, then we would likely incur expenses associated with that reclassification, could incur additional ongoing expenses and face the loss of those contingent workers who choose not to become employees.

The costs associated with these matters could have a material adverse effect on results of operations and our financial position.

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rules that can affect the economics of the industry by requiring changes in operating practices or influencing the demand for, and cost of providing, transportation services.

The FMCSA, under the DOT, also manages a compliance and enforcement initiative partnering with state agencies designed to monitor and improve commercial vehicle motor safety.

The Federal Motor Carrier Safety Administration (“FMCSA”), under the DOT, also manages a compliance and enforcement initiative partnering with state agencies designed to monitor and improve commercial vehicle motor safety.

We are audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and other rules and regulations.

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We may also become subject to new or more restrictive regulations relating to carbon emissions under climate change legislation or limits on vehicle weight and size.

Future laws and regulations may be more stringent and require changes in operating practices, influence the demand for transportation services or increase the cost of providing transportation services, any of which could materially adversely affect our business and results of operations.

Future laws and regulations may be more stringent and require changes in operating practices, influence the demand for transportation services or increase the cost of providing transportation and logistics services, any of which could materially adversely affect our business and results of operations.

We are subject to a wide variety of U.S.

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laws, regulations and government policies, including in the areas of employment, privacy, cybersecurity, securities, anti-corruption, competition and trade, that may change in significant ways.

We are not able to accurately predict how new governmental laws and regulations, or changes to existing laws and regulations, will affect the transportation industry generally, or us in particular.

We are not able to accurately predict how new governmental laws and regulations, or changes to existing laws and regulations, will affect the transportation and logistics industry generally, or us in particular.

We are also unable to predict how political changes will affect government regulation of the transportation industry.

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Our fleet, other key infrastructure and information technology systems may be targets or indirect casualties of acts of terror, other harmful acts, or war.

Further, because transportation assets continue to be a target of terrorist activities, federal, state, local and foreign governmental bodies are proposing and, in some cases, have adopted legislation and regulations relating to security issues that impact the transportation industry, including checkpoints and travel restrictions on large trucks.

Further, because transportation assets have been a target of terrorist activities, federal, state, local and foreign governmental bodies are proposing and, in some cases, have adopted legislation and regulations relating to security issues that impact the transportation industry, including checkpoints and travel restrictions on large trucks.

If additional security measures disrupt or impede the timing of our operations, we may fail to meet the requirements of our customers or incur increased expenses to do so.

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We maintain insurance coverages addressing these risks;

however, such insurance may be inadequate or become unavailable, be limited in scope of coverage, premiums charged for some or all of the insurance could increase dramatically, or regulations may change.

however, such insurance may be inadequate, become unavailable or be limited in scope of coverage, premiums charged for some or all of the insurance could increase dramatically, or regulations may change.

These changes could exacerbate the effects of an act of terrorism or other event on our business, resulting in a significant business interruption, increased costs and liabilities and decreased revenues or an adverse impact on results of operation.

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Environmental laws have become and may continue to be increasingly more stringent over time, and there can be no assurance that our costs of complying with current or future environmental laws or liabilities arising under such laws will not have a material adverse effect on our business, operations or financial condition.

From time to time, we arrange for the movement of hazardous materials at the request of our customers.

From time to time, we arrange for the movement or warehousing of hazardous materials at the request of our customers.

As a result, we may be subject to various environmental laws and regulations relating to the handling of hazardous materials.

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We may become subject to enforcement actions, new or more restrictive regulations, or differing interpretations of existing regulations, which may increase the cost of providing transportation services or adversely affect our results of operations.

In addition to EPA and state agency regulations on exhaust emissions with which we must comply, there is an increased legislative and regulatory focus on climate change, greenhouse gas emissions and the impact of global warming that enhances the possibility of increased regulation of greenhouse gas emissions and potentially exposes us to significant new taxes, fees and other costs.

We are also subject to environmental, sustainability and governance (“ESG”) issues.

This increased focus on ESG issues may result in new regulations and/or customer, supplier or market requirements that could adversely impact our business, or certain shareholders who may reduce their holdings of our stock.

Limitations on the emission of greenhouse gases, other environmental legislation, or customer ESG requirements have had and could have an adverse impact on our financial condition, results of operations and liquidity.

In addition to EPA and state agency regulations on exhaust emissions with which we must comply, there is an increased legislative and regulatory focus on climate change, greenhouse gas (“GHG”) emissions and the impact of climate change that enhances the possibility of increased regulation of GHG emissions and potentially exposes us to significant new capital or operating expenditures, taxes, fees and other costs.

Additionally, the SEC has proposed regulations regarding the disclosure of Scope 1, 2 and 3 GHG emissions.

Compliance with these regulations could add material costs to our business, including securities and other potential litigation costs arising from our reporting of our GHG emissions, and could increase customer focus on our GHG direct and indirect emissions, which may affect the market for transportation and logistics services in ways that we cannot foresee.

Such regulations, together with increased investor and stakeholder interest in climate change and other environmental topics may result in new regulations and/or customer, supplier or market requirements that could adversely impact our business, or certain shareholders may reduce their holdings of our stock.

Limitations on the emission of GHGs, other environmental legislation, or customer GHG requirements could also have an adverse impact on our financial condition, results of operations and liquidity.

We are subject to the risks of litigation and governmental inquiries, which could have a material adverse effect on our business.

The nature of our business exposes us to a variety of litigation risks related to a number of issues, including without limitation, accidents involving our trucks and employees, alleged violations of federal and state labor and employment laws, securities laws, environmental liability and other matters.

Accordingly, we are, and in the future may be, subject to legal proceedings and claims that have arisen in the ordinary course of our business, including class and collective allegations.

13 unchanged sentences

Adverse developments in laws, policies or practices in the United States and internationally can negatively impact our business and the business of our customers.

Negative domestic and international global trade conditions as a result of social, political or regulatory changes or perceptions (such as those that might be associated with pandemics) could materially affect our business, financial conditions and results of operations.

Recent legislative initiatives, including the Inflation Reduction Act of 2022 and the CHIPs and Science Act of 2022, have included provisions designed to reduce dependence on goods from China and restrict the transfer of certain intellectual property to China.

Some importers are considering changes in their supply chain that may include shifting manufacturing capacity to North America and/or an increase in the importation of goods that are manufactured offshore through ports other than ports on the West Coast of the United States.

These initiatives, and future potential initiatives, may result in changes to demand for our services including the potential for less demand for longer haul routes including intermodal services which could materially affect our business, financial conditions and results of operations.

Negative domestic and international global trade conditions as a result of social, political or regulatory changes or perceptions (such as those that might be associated with pandemics or an increased focus on production in the United States), could reduce demand for our intermodal services and materially affect our business, financial conditions and results of operations.

We provide services both domestically and to a lesser extent outside of the United States, which subjects our business to various additional risks, including:

changes in tariffs, trade restrictions, trade agreements and taxes;

varying tax regimes, including consequences from changes in applicable tax laws;

varying tax regimes, including consequences from changes in applicable tax laws and tax incentives;

difficulties in managing or overseeing foreign operations and agents;

complying with laws applicable to international business, such as anti-corruption, trade, foreign currency and maritime laws;

the burden of complying with laws applicable to international business, such as anti-corruption, trade, foreign currency and maritime laws;

different liability standards;

the price and availability of fuel;

foreign currency exchange rate fluctuations;

exposure to local economic conditions in the jurisdictions in which we operate;

higher levels of credit risk;

2 unchanged sentences

geopolitical conditions, such as national and international conflict, including terrorist acts and the effects of pandemics (such as COVID-19) and government responses to pandemics.

If we do not correctly anticipate changes in social, political or regulatory conditions or their impact on the transportation industry, we may not alter our business practices in time to avoid adverse effects.

If we do not correctly anticipate changes in social, political or regulatory conditions or their impact on the transportation and logistics industry, we may not alter our business practices in time to avoid adverse effects.

Additionally, the occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region.

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Adverse publicity (whether or not justified) relating to activities by our employees, contractors, suppliers, agents or others with whom we do business, such as customer service mishaps or noncompliance with laws, could tarnish our reputation and reduce the value of our brand.

With the increase in the use of social media outlets such as Facebook, YouTube, Instagram, LinkedIn and Twitter, adverse publicity can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond.

With the increase in the use of social media outlets such as Facebook, YouTube, TikTok, Instagram, LinkedIn and Twitter, adverse publicity can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond.

This unfavorable publicity could also require us to allocate significant resources to rebuild our reputation.

15 unchanged sentences

General market price declines or market volatility in the future could adversely affect the price of our common stock, and the current market price of our common stock may not be indicative of future market prices.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors