What changed in this filing

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Item 1A. Risk Factors

2024-02-27 compared with 2023-02-24 · 71 added, 99 removed, 235 unchanged (42% of the section changed)

Business Environment and Competition Risks

A significant portion of our revenue is derived from intermodal transportation services and from our significant customers.

We derived 62% of our revenue from our intermodal services in 2022, 63% in 2021 and 66% in 2020.

A significant portion of our revenue is derived from intermodal and transportation solutions and from our significant customers.

We derived 59% of our revenue from our intermodal and transportation solutions in 2023, 62% in 2022 and 63% in 2021.

As a result, any decrease in demand for intermodal transportation services could have a material adverse effect on our results of operations.

Our 10 largest customers accounted for approximately 42% of our total revenue in 2023, 43% in 2022 and 42% in 2021.

In each of the years ended December 31, 2022, 2021 and 2020, one customer accounted for more than 10% of our annual revenue.

In each of the years ended December 31, 2023, 2022 and 2021, one customer accounted for more than 10% of our annual revenue in both segments.

While our dedicated and logistics businesses may involve long-term customer contracts, those contracts may contain cancellation clauses, and there is no assurance that our current customers will continue to utilize our services or continue at the same levels.

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While we continue to focus our efforts on diversifying our customer base, we may not be successful in doing so.

Because we depend on railroads for our operations, our operating results and financial condition are likely to be adversely affected by any increase in rates, reduction or deterioration in rail service or change in the railroads’

reliance on us to market their intermodal transportation services.

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

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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 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’

ability to increase capacity for intermodal freight and provide consistent and reliable service.

Our business has, at times, been adversely affected by situations impacting one or more railroads, including labor shortages, slowdowns or stoppages, adverse weather conditions, changes to rail operations, or other factors that hinder the railroads’

ability to provide reliable transportation services and these situations may occur again in the future.

To date, our primary railroad providers have chosen to rely on us and other intermodal competitors to market their intermodal services rather than fully developing their own marketing capabilities.

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’ ability to increase capacity for intermodal freight and provide consistent and reliable service.

To date, our primary railroad providers have chosen to rely on us and other intermodal providers to market their intermodal services rather than fully developing their own marketing capabilities.

If one or more of the major railroads reduced their dependence on us or decreased the capacity that they made available to us, including by servicing additional intermodal marketing companies, the volume of intermodal shipments we arrange would likely decline, which could have a material adverse effect on our results of operations and financial condition .

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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.

Additionally, interventions and enforcement 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 services has, and in the future could, adversely affect our profitability and limit our ability to expand our business or retain customers.

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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’

compensation that we may be unable to fully pass on to our customers and have left trucks sitting idle and created difficulty meeting customer demands, all of which could adversely affect our growth and profitability.

Driver shortages have resulted in increases to drivers’ compensation that we may be unable to fully pass on to our customers and have left trucks sitting idle and created difficulty meeting customer demands, all of which could adversely affect our growth and profitability.

We operate in a highly competitive industry and our business may suffer if we are unable to adequately address potential downward pricing pressures and other competitive factors.

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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, including capabilities offering lower greenhouse gas (“GHG”) emissions with competitive pricing;

• 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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• because cost of capital is a significant competitive factor, any increase in either the cost of our debt or equity as a result of increases in our level of credit risk or stock price volatility could have a significant impact on our competitive position.

Our customers’

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, 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 customers’ 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, the effects of climate change, changes in United States social, political, and regulatory conditions 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.

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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.

Customers encountering adverse economic or other conditions, including a high interest rate environment, 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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Further, when adverse economic times arise, customers may select competitors that offer lower rates in an attempt to lower their costs and we might be forced to lower our rates or lose freight volumes.

Our suppliers’

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.

Our suppliers’ 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, 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.

Such cost increases include 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.

We also rely on the timely and free flow of goods through open and operational international shipping lanes and ports.

Disruptions of these shipping lanes, such as the drought impacting the Panama Canal and ongoing geopolitical conditions, including terrorist acts, impacting the Suez Canal, could create significant risks for our business or provide opportunities with changes to shipping patterns.

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

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.

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.

Any significant work stoppage, slowdown or other disruption, including disruption due to restrictions imposed as a result of a pandemic, involving port employees, railroad employees, warehouse employees or truck drivers could adversely affect our business and results of operations.

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If in the future our employees decide to unionize, this would increase our operating costs and force us to alter the way we operate causing an adverse effect on our operating results.

Relatively small increases in our transportation and warehouse costs that we are unable to pass through to our customers are likely to have a significant adverse effect on our gross margin and operating income.

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

Relatively small increases in our transportation and warehouse costs, including fuel, that we are unable to pass through to our customers are likely to have a significant adverse effect on our operating income.

Purchased transportation and warehousing costs represented 75% of our consolidated revenue in 2023, 76% in 2022 and 75% in 2021.

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 rates that we pay to such providers.

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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.

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 or other 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.

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Self-insurance reserves, net income, and cash flows could be materially affected if future claims differ significantly from our historical trends and assumptions.

We are partially self-insured for vehicle liability and workers’

compensation claims.

We are partially self-insured for vehicle liability and workers’ compensation claims.

Our self-insurance accruals are based on actuarially estimated, undiscounted cost of claims, which includes claims incurred but not reported.

While we believe that our estimation processes are well designed and comply with generally accepted accounting principles and other accounting and finance best practices, any projection of losses concerning workers’

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

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

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We also are exposed to various other types of claims, including cargo loss and damage, property damage, and personal injury.

We maintain insurance coverage with third-party insurance carriers for these types of claims as well as for other business and operational risks (including cybersecurity, data privacy, directors & officers), but we assume a significant portion of the risk associated with these claims due to high self-insured retention (“SIR”) and deductibles.

Our operating results could be adversely affected if any of the following were to occur:

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

At December 31, 2022, we had insurance-related letters of credit totaling $42.7 million.

At December 31, 2023, we had insurance-related surety bonds totaling $46.9 million and letters of credit totaling $0.2 million.

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

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.

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

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.

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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human error or systems modernization initiatives;

and/or other disruptions, may adversely affect our business, which could increase our costs or result in a loss of customers that could have a material adverse effect on our results of operations and financial position.

or other disruptions, may adversely affect our business, which could increase our costs or result in a loss of customers that could have a material adverse effect on our results of operations and financial position.

Our information technology systems are subject to cyber and other risks some of which are beyond our control.

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It is difficult to fully protect against the possibility of power loss, telecommunications failures, cyber-attacks, ransomware and other cyber incidents in every potential circumstance that may arise.

A significant cyber incident, including system failure, security breach, disruption by malware or ransomware, or other damage, could interrupt or delay our operations, damage our reputation and brand, cause a loss of customers, expose us to a risk of loss or litigation, result in regulatory scrutiny, investigations, actions, fines or penalties and/or cause us to incur significant time and expense to remedy such an event, any of which could have a material adverse impact on our results of operations and financial position.

In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.

A significant cyber incident, including system failure, security breach, disruption by malware or ransomware, or other damage, could interrupt or delay our operations, damage our reputation and brand, cause a loss of customers, expose us to a risk of loss or litigation, result in regulatory scrutiny, investigations, actions, fines or penalties or cause us to incur significant time and expense to remedy such an event, any of which could have a material adverse impact on our results of operations and financial position.

Furthermore, any failure to comply with data privacy, biometric privacy, data security or other laws and regulations could result in claims, legal or regulatory proceedings, inquiries or investigations.

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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 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.

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.

This could have a material adverse effect on our business, results of operations and financial position.

Our residential final mile delivery service exposes us to risks associated with vendors delivering to residential customers.

While we do not operate any equipment or employ any drivers that are used in the provision of final mile services, our vendors’

trucks and drivers operate in residential environments that expose such vendors (and potentially us) to the risk of property damage, personal injury and other claims including from operating on residential streets and from entering into end-consumers’

If any of these vendors do not reliably and safely perform their obligations, our vendors and us could be exposed to liability or reputational harm.

Our residential final mile delivery service exposes us to risks associated with our and our vendors’ trucks and drivers delivering to residential customers.

While we operate limited equipment and employ limited drivers that are used in the provision of final mile services, our and our vendors’ trucks and drivers operate in residential environments, including the in-home installation of appliances and other over-the-threshold services, that expose them and us to the risk of property damage, personal injury and other claims including from operating on residential streets and from entering into end-consumers’ homes.

If we or any of these vendors do not reliably and safely perform their obligations, we and our vendors could be exposed to liability or reputational harm.

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 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.

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 person 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.

A proposed rulemaking by the Federal Trade Commission (“FTC”), if it is made effective and withstands 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).

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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.

Financial results most likely to be negatively affected include 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.

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Legal, Regulatory and Compliance Risks

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

We use a significant number of contingent workers, including independent contractors, such as owner operators, independent service providers, contract carriers and warehouse staff, 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 operating income.

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

We do business with many independent contractors, such as owner operators, contract carriers and warehouse staff, 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.

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 contingent workers, including independent contractors and temporary workers used for our trucking, 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.

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We operate in a highly regulated industry, and changes in existing regulations or costs of compliance with, or liability for violation of, existing or future regulations or antiterrorism measures could have a material adverse effect on our business.

The Company and various subsidiaries are regulated by the DOT as motor carriers and/or freight brokers.

The Company and various subsidiaries are regulated by the DOT as motor carriers or freight brokers.

The DOT prescribes qualifications for acting in these capacities, including surety bond requirements.

The transportation industry is subject to DOT regulations regarding, among other things, driver breaks and “restart”

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 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.

The transportation industry is subject to DOT regulations regarding, among other things, driver breaks and “restart” 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.

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 are subject to a wide variety of U.S.

federal and state and non-U.S.

federal, state and local non-U.S.

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.

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The Company is also subject to certain federal and state environmental laws and regulations, including those of the U.S.

Environmental Protection Agency (“EPA”) and the California Air Resources Board (“CARB”).

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 (“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.

Environmental Protection Agency (“EPA”) and the California Air Resources Board (“CARB”).

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.

Additionally, the State of California recently passed legislation and 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.

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

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The parties in such actions may seek amounts from us that may not be covered in whole or in part by insurance.

The defense of such lawsuits could result in significant expense and the diversion of our management’s time and attention from the operation of our business.

In recent years, several insurance companies have stopped offering coverage to trucking companies as a result of increases in the severity of automobile liability claims and higher costs of settlements and verdicts.

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Changes in immigration laws could increase the costs of doing business or otherwise disrupt our operations.

We have hired individuals, including Information Technology (“IT”) employees, from outside the United States.

We have employee drivers and owner-operator drivers who are immigrants to the United States.

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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.

Some importers are considering changes in their supply chain that may include shifting manufacturing capacity to North America 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.

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• foreign currency exchange rate fluctuations;

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

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

• higher levels of credit risk;

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• uncertainty and changes to political and regulatory regimes as a result of changing social, political, regulatory and economic environments in the United States and internationally;

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.

• geopolitical conditions, such as national and international conflict, including terrorist acts and the effects of pandemics and government responses to pandemics.

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.

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

Our suppliers may also be affected by changes in the political and regulatory environment, both in the United States and internationally.

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If we add new services, we may not identify trends correctly or may not be able to bring new services as quickly, effectively or price-competitively as our competitors.

Our failure to implement new services or market any existing or future services to our current customer base and/or new customers could have a material adverse impact on our operations and profitability.

Our failure to implement new services or market any existing or future services to our current customer base or new customers could have a material adverse impact on our operations and profitability.

Our inability to defend our intellectual property could damage our reputation and incur costs that have a negative impact on our operations or financial condition.

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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, TikTok, 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 X (formerly 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.

The market value of our common stock may fluctuate and could be substantially adversely affected by various factors.

We expect that the market price of our common stock will continue to fluctuate due to a variety of factors, many of which are beyond our control.

The market value of our Class A Common Stock may fluctuate and could be substantially adversely affected by various factors.

We expect that the market price of our Class A Common Stock will continue to fluctuate due to a variety of factors, many of which are beyond our control.

These factors include, among others:

actual or anticipated variations in earnings, financial or operating performance or liquidity;

changes in industry research analysts’

recommendations or projections;

failure to meet analysts’

and our Company's projections;

general political, social, economic and capital market conditions;

announcements of developments related to our business;

operating and stock performance of other companies deemed to be peers;

actions by government regulators;

• actual or anticipated variations in earnings, financial or operating performance or liquidity;

• changes in industry research analysts’ recommendations or projections;

• failure to meet analysts’ and our Company's projections;

• general political, social, economic and capital market conditions;

• announcements of developments related to our business or the business of our key customers or vendors;

• operating and stock performance of other companies deemed to be peers;

• actions by government regulators;

• news reports of trends, concerns and other issues related to us or our industry, including changes in regulations;

• geopolitical conditions such as acts or threats of terrorism, military conflicts, and the effects of pandemics (such as the coronavirus).

Our common stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to our performance.

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

Our Class A Common Stock price may fluctuate significantly in the future, and these fluctuations may be unrelated to our performance.

General market price declines or market volatility in the future could adversely affect the price of our Class A Common Stock, and the current market price of our Class A Common Stock may not be indicative of future market prices.

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