What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-20 compared with 2024-02-22 · 146 added, 173 removed, 413 unchanged (44% of the section changed)

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Knight-Swift uses a nationwide network of business units and terminals in the US and Mexico to serve customers throughout North America.

In addition to operating one of the country's largest truckload fleets, Knight-Swift also contracts with third-party equipment providers to provide a broad range of transportation services to our customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.

During 2023, we covered 1.6 billion loaded miles for shippers throughout North America, contributing to consolidated total revenue of $7.1 billion and consolidated operating income of $0.3 billion.

In addition to operating one of the country's largest truckload fleets, Knight-Swift also contracts with third-party carriers to provide a broad range of transportation services to our customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.

During 2024, we covered 1.8 billion loaded miles for shippers throughout North America, contributing to consolidated total revenue of $7.4 billion and consolidated operating income of $243.4 million.

During 2024, the Truckload segment operated an average of 22,791 tractors (comprised of 20,644 company tractors and 2,147 independent contractor tractors) and 92,831 trailers.

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We have historically grown through a combination of organic growth and through mergers and acquisitions (discussed below).

Mergers and acquisitions have enhanced our business and service offerings with additional terminals, driving associates, revenue equipment, and capacity.

Mergers and acquisitions have enhanced our business and service offerings with additional terminals, driving associates, revenue equipment, and customer relationships.

Our multiple service offerings, capabilities, and transportation modes enable us to transport, or arrange transportation for, general commodities for our diversified customer base throughout the US and Mexico using our equipment, information technology, and qualified driving associates and non-driver employees.

We are committed to providing our customers with a wide range of full truckload, LTL, logistics, and intermodal services and continuing to invest considerable resources toward developing a range of solutions for our customers across multiple service offerings and transportation modes.

We are committed to providing our customers with a wide range of full truckload, LTL, logistics, and intermodal services and continuing to invest in developing a range of solutions for our customers across multiple service offerings and transportation modes.

Our overall objective is to provide full truckload, LTL, logistics, and intermodal services that, when combined, lead the industry in margin and growth, while providing efficient and cost-effective solutions for our customers.

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on September 8, 2017 through the 2017 Merger transaction.

Since 1966, we have continuously expanded our nationwide network and our service offerings through organic growth, as well as through the acquisition of twenty-four companies.

Since 1966, we have continuously expanded the reach of our network, the depth of our capacity, and our service offerings through organic growth, as well as through the acquisition of twenty-five companies.

See Note 1 and Note 4 in Part II, Item 8 in this Annual Report, for more information regarding the 2017 Merger and our recent acquisitions.

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LTL shipments are then sent through a network of service centers where they may be conveyed to other trailers with nearby destinations.

Generally, the full truckload industry is compensated based on miles, whereas the LTL industry is compensated based on freight density and length of haul.

Generally, the full truckload industry is compensated based on miles, or length of haul, whereas the LTL industry is compensated based on freight density, weight, and length of haul.

Overall, the US transportation and logistics industry is large, fragmented, and highly competitive.

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The COVID-19 pandemic continued to be a source of volatility throughout the global market in 2021 creating supply chain disruptions, increased demand for many products, tight transportation capacity and congestion at ocean ports and rail terminals.

2022 — 2023 some momentum from 2021 continued into the first quarter of 2022, but the remainder of 2022 and 2023 was characterized by uncertainty in the broader economy based on continuing responses to the COVID-19 pandemic abroad, conflicts overseas, waning consumer confidence, and significant inflationary pressures on equipment, fuel, maintenance, labor, and other cost items.

2022 — 2024 Some momentum from 2021 continued into the first quarter of 2022, but the remainder of 2022 and beyond was characterized by uncertainty in the broader economy based on continuing responses to the COVID-19 pandemic abroad, conflicts overseas, a shift in consumer spending from goods toward services, and significant inflationary pressures on equipment, fuel, maintenance, labor, and other cost items.

Overall consumer demand moderated and shippers worked through inventory overhangs as we experienced ongoing congestion at ports and labor challenges in the rail industry.

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These factors culminated in muted peak seasons with fewer spot and project opportunities.

The freight environment in 2024 saw a stabilization in demand and pricing trends while carrier capacity continued to exit.

These factors allowed for seasonal patterns of demand to reemerge, some levels of holiday season project activity to return, and an improvement in spot market rates late in the year.

The principal means of competition in our industry are customer service and relationships, capacity, and price.

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• cumulative impacts of regulatory initiatives, such as ELDs, hours-of-service limitations for drivers, and others;

• uncertainty in the economic environment, including inflation, rising interest rates, and changing supply chain and consumer spending patterns;

• uncertainty in the economic environment, including inflation, interest rates, and changing supply chain and consumer spending patterns;

• driver shortages;

• increased insurance costs as significant verdicts and settlement amounts for accident claims impact the industry;

• significant and rapid fluctuations in fuel prices and availability, including in connection with the conflicts in Ukraine and the Middle East;

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• increased prices for and constrained availability of new revenue equipment, design changes of new engines, advancements in technology of revenue equipment, and volatility in the used equipment sales market and insurance market.

• increased insurance costs as significant verdicts and settlement amounts for accident claims impact the industry;

• significant and rapid fluctuations in fuel prices and availability, including in connection with the conflicts in Ukraine and the Middle East;

• increased prices for new revenue equipment, design changes of new engines, advancements in technology of revenue equipment, and volatility in the used equipment sales market.

Our Competitive Strengths

As a provider of multiple transportation solutions, including one of North America's largest truckload fleets, we believe that our principal competitive strengths are our regional presence, customer service (including our ability to provide multiple transportation solutions and configuration of equipment that satisfies customers' needs), operating efficiency, cost control, and technological enhancements in our revenue equipment and supporting back-office functions, and our diverse offerings that allow us to offer multiple transportation services.

As a provider of multiple transportation solutions, including one of North America's largest truckload fleets, we believe that our principal competitive strengths are our regional presence, service quality, operating efficiency, cost control, technological enhancements in our revenue equipment and supporting back-office functions, and our diverse offerings that allow us to provide multiple transportation services and configuration of equipment that satisfies customers' needs.

Regional Truckload and LTL Presence

We believe that regional truckload operations, which expanded with the 2017 Merger and our recent acquisitions of U.S.

Xpress, and other companies, combined with our entrance into the LTL industry through our acquisitions of ACT and MME, offer several advantages, including:

Xpress and other companies, combined with our LTL capabilities through our acquisitions of ACT, MME, and DHE, offer several advantages, including:

• obtaining greater freight volumes,

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• furthering our full truckload capabilities to provide various shipping solutions to our customers,

• expanding into the LTL space,

• expanding our LTL network,

• furthering our logistics capabilities to contract with more third-party capacity providers, and

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By providing customers a high level of service, we believe we avoid competing solely based on price.

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Using Technology that Enhances Our Business

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Substantially all of our company-owned tractors are equipped with in-cab communication devices that enable us to communicate with our driving associates, obtain load position updates, manage our fleets, and provide our customers with freight visibility, as well as with ELDs that automatically record our driving associates' hours-of-service.

The majority of our trailers are equipped with trailer-tracking technology that allows us to better manage our trailers.

The significant majority of our trailers are equipped with trailer-tracking technology that allows us to better manage our trailers.

We have purchased and developed software for our logistics businesses that provides greater visibility of the capacity of our third-party providers and enhances our ability to provide our customers with solutions that offer a superior level of service.

We have automated many of our back-office functions, and we continue to invest in technology that we expect will allow us to better serve our customers and improve overall efficiency.

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Diverse Service Offerings with Multiple Transportation Solutions

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We believe our diversified mix and scope of full truckload, LTL, logistics and intermodal services, combined with our value-added service offerings, allows us to provide our customers with one source to meet their shipping and logistics needs, and represents a significant advantage over most of our competitors.

We continue to invest considerable resources toward developing a range of solutions for our customers across multiple service offerings and transportation modes to continue to provide efficient and cost-effective solutions for our customers.

We continue to invest toward developing a range of solutions for our customers across multiple service offerings and transportation modes to continue to provide efficient and cost-effective solutions for our customers.

Our Mission and Company Strategy

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Most recently, we have expanded our Truckload operations with the addition of U.S.

Xpress in the third quarter of 2023.

Our LTL segment was established in 2021 by the ACT and MME acquisitions, and we have since added 14 service centers, representing 368 doors as we seek to expand our LTL network to provide nationwide in-house coverage.

Our operating strategy for our LTL segment is to provide regional direct service and serve our customers' national transportation needs by utilizing key partner carriers for coverage areas outside of our network.

Xpress in 2023.

Our LTL segment was established in 2021 by the ACT and MME acquisitions and expanded with the DHE Acquisition in 2024.

We further added 47 service centers through organic expansion, of which 37 of these service centers were added in 2024, as we seek to expand our LTL network to provide nationwide in-house coverage.

The strategy for our LTL segment is to leverage our existing super-regional brand network, which already provides regional service transit speed and efficiency while concurrently offering national coverage as we complete our objective of forty-eight contiguous state coverage.

Our LTL regional brand network operates on a shared single LTL enterprise operating and financial system for end-to-end visibility, continuity, and scale.

Significant investment is needed to establish and maintain a network of LTL service centers.

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We anticipate that we can accomplish this objective through increased miles driven and rate per mile in our Truckload businesses.

In our LTL business, our primary focus is increasing density, realizing efficiencies from connecting our ACT and MME networks, and obtaining appropriate yield, measured by revenue per hundredweight.

In our LTL business, our primary focus is increasing density, realizing efficiencies from connecting our ACT, MME, and DHE networks, and obtaining appropriate yield, measured by revenue per hundredweight.

Acquiring and growing opportunistically

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on September 8, 2017 through the 2017 Merger transaction.

Since 1966, we have expanded our nationwide network and our service offerings through organic growth, as well as through the acquisition of twenty-four companies including our most recent U.S.

Xpress Acquisition.

Since 1966, we have expanded our nationwide network and our service offerings through organic growth, as well as through the acquisition of twenty-five companies including our most recent U.S.

Xpress Acquisition and DHE Acquisition.

Expanding existing Truckload terminals and LTL door count

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Although we continue to seek opportunities to further increase our Truckload business in this manner, our primary focus is on developing and expanding our existing terminals by strengthening our customer relationships, recruiting qualified driving associates and non-driver employees, adding new customers, and expanding the range of transportation and logistics solutions offered from these terminals.

With our acquisitions of ACT and MME we have created a super-regional LTL footprint and continue to seek opportunities to expand our door count and expand network coverage.

With our acquisitions of ACT, MME, and DHE we have created a super-regional LTL footprint and continue to seek opportunities to expand our door count and expand network coverage.

Diversifying our service offerings

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Customers and Marketing

Our marketing mission is to be a strategic, efficient transportation capacity partner for our customers by providing transportation and logistics solutions customizable to the unique needs of our customers.

Our marketing mission is to be a strategic, efficient transportation capacity partner for our customers by providing transportation and logistics solutions that are responsive to the unique needs of our customers.

We deliver these capacity solutions through our network of owned assets, independent contractors, third-party capacity providers, and rail providers.

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Our sales team emphasizes our industry-leading service, environmental leadership, and ability to accommodate a variety of customer needs, while providing consistent capacity and financial strength and stability.

Our customers are typically large corporations in the retail (including discount and online retail), food and beverage, consumer products, paper products, transportation and logistics, housing and building, automotive, and manufacturing industries.

Our customers are typically large corporations in the retail (including discount, general merchandise, and online retail), food and beverage, consumer products, paper products, transportation and logistics, housing and building, automotive, and manufacturing industries.

Many of our customers have extensive operations, geographically distributed locations, and diverse shipping needs.

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Under our dedicated transportation services, we provide driving associates, equipment, maintenance, and, in some instances, transportation management services that supplement the customer's in-house transportation department.

A majority of our terminals are linked to our corporate information technology systems at our headquarters.

The capabilities of this system and its software enhance our operating efficiency by providing cost-effective access to detailed information concerning equipment location and availability, shipment tracking, on-time delivery status, and other specific customer requirements.

The system also enables us to respond promptly and accurately to customer requests and assists us in geographically matching available equipment with customer loads.

A majority of our terminals are linked to our corporate information technology systems at our brand headquarters.

The capabilities of this system and its software enhance our operating efficiency by providing cost-effective access to detailed information concerning equipment location and availability, drivers' hours of service, shipment tracking, on-time delivery status, and other specific customer requirements.

The system also enables us to respond promptly and accurately to customer requests and assists us in optimally matching available equipment with customer loads.

Additionally, our customers can track shipments and obtain copies of shipping documents via our website.

We also provide electronic data interchange services to customers desiring these services.

We believe our fleet capacity, terminal network, customer service and breadth of services offer a competitive advantage to major shippers, particularly in times of rising freight volumes when shippers must quickly access capacity across multiple facilities and regions.

We believe our fleet capacity, terminal network, customer service and suite of services offer a competitive advantage for major shippers, particularly in times of rising freight volumes when shippers must quickly access capacity across multiple facilities and regions.

We strive to maintain a diversified customer base.

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The strength of our company is our people, working together with common goals.

There were approximately 34,300 full-time employees in our total headcount of approximately 34,800 employees as of December 31, 2023, which was comprised of:

As of December 31, 2024, our full-time employee headcount was comprised of:

Company driving associates (including driver trainees) 25,100

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Customer service representatives are assigned specific customers to ensure specialized, high-quality service, and frequent customer contact.

Diversity, Equity, and Inclusion

Diversity, equity, and inclusion are pillars supporting our innovative culture.

We are committed to fostering a diverse workforce and an inclusive environment, which we believe allows us to leverage the effects of diversity to achieve a competitive business advantage.

These efforts are evidenced in our hiring practices and employee training programs.

Additionally, our diversity and inclusion networks demonstrate that when diverse voices and perspectives are heard, unique, powerful, and creative solutions are the result.

It is with this commitment in mind that we build upon our Employee Resource Groups ("ERG"s) now and in the immediate future.

Sponsored and supported by leadership, we have ERGs representing six unique employee cultures and their allies as of December 31, 2023 and we continue to monitor the need for additional resource groups.

These groups are integral to ensuring that different voices and perspectives contribute to our strategy for long-term profitable growth.

Succession Planning and Talent Management

We regularly review talent development and succession plans to identify and develop a pipeline of talent to maintain business operations.

We understand the potential costs and risks of bringing in an outside executive officer in today’s environment, and that businesses are often, but not always, more successful in promoting internal

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We understand the potential costs and risks of bringing in an outside executive officer and that businesses are often, but not always, more successful in promoting internal candidates.

Accordingly, the Board makes an effort to identify potential successors for those positions long in advance of any potential positional vacancies, perform skills gap analyses for those internal candidates, and provide training and exposure on those gap areas to those candidates in order to develop better potential successors.

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We believe that our culture, compensation structure, long-term equity program, and robust training and development program provide motivation for talented leaders to remain with the Company.

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Independent Contractors

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Mohave and Red Rock provide reinsurance associated with a share of our automobile liability risk.

In addition to insuring a proportionate share of our corporate casualty risk, Mohave provides reinsurance to third-party insurance companies who provide insurance coverage for affiliated carriers and independent contractors.

Please refer to Note 12 in Part II, Item 8 of this Annual Report for more information about our insurance policies and self-insurance retention limits.

Based on results of operations of this business, including the continued unfavorable development of insurance reserves, the Company ceased all third-party insurance operations and canceled any remaining policies as of March 31, 2024.

Please refer to Note 10 in Part II, Item 8 of this Annual Report for more information about our insurance policies, self-insurance retention limits, and the third-party insurance carrier business.

We actively manage our fuel purchasing network in an effort to maintain adequate fuel supplies and reduce our Truckload and LTL fuel costs.

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The volumes we purchase at terminals and through the fuel network vary based on procurement costs and other factors.

We seek to reduce our fuel costs by routing our driving associates to

We seek to reduce our fuel costs by routing our driving associates to truck stops when fuel prices at such stops are more affordable than the bulk rate paid for fuel at our terminals.

We primarily store fuel in above-ground storage tanks at most of our other bulk fueling terminals.

We believe that we are

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truck stops when fuel prices at such stops are more affordable than the bulk rate paid for fuel at our terminals.

We primarily store fuel in above-ground storage tanks at most of our other bulk fueling terminals.

We believe that we are sufficiently in compliance with applicable environmental laws and regulations relating to the storage and dispensing of fuel.

sufficiently in compliance with applicable environmental laws and regulations relating to the storage and dispensing of fuel.

See Note 1 in Part II, Item 8 in this Annual Report, regarding the impact of seasonality on our operations.

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The regulation also contained certain emissions and registration standards for refrigerated trailers.

In February 2018, California's ARB approved California Phase 2 Standards that generally align with the federal Phase 2 Standards ( the "Phase 2 Standards," discussed in further detail below), with some minor additional requirements, and which would stay in place even if the Phase 2 Standards are affected.

In February 2019, the California Phase 2 Standards became final.

In 2019, the California Phase 2 Standards, which generally align with the federal Phase 2 Standards (the "Phase 2 Standards," discussed in further detail below), with some minor additional requirements, became final.

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In June 2020, ARB passed the Advanced Clean Trucks ("ACT") regulation, requiring original equipment manufacturers to begin shifting towards greater production and sales of zero-emission heavy-duty tractors starting in 2024.

The Advanced Clean Trucks ("ACT") regulation became effective in 2021, requiring original equipment manufacturers to begin shifting towards greater production and sales of zero-emission heavy-duty tractors starting with model year 2024.

Under ACT, by 2045, every new tractor sold in California will need to be zero-emission.

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Among other impacts, ACT could affect the cost and/or supply of traditional diesel tractors.

It has also led to similar legislation in other states, with several already adopting ACT, and a number of other states either considering adoption of ACT or affirmatively conducting a preliminary rulemaking process to that effect.

In 2023, ARB finalized what is known as the Advanced Clean Fleets ("ACF") regulation, also aimed at transitioning to zero emission vehicles which became effective in January 2024.

In January 2024, the Advanced Clean Fleets ("ACF") regulation became effective, also aimed at transitioning to zero emission vehicles.

ACF is a purchase requirement for medium and heavy-duty fleets to adopt an increasing percentage of zero emission trucks, designed to complement the sell-side obligations of ACT.

The ACF regulations apply to three categories of fleet operators:

(1) high priority fleets who meet certain thresholds of trucks or revenue (including fleets that operate 50 or more trucks, or generate $50 million or more in gross annual revenue), (2) drayage fleets, and (3) state and local government public fleets.

For high priority fleets who meet the applicable thresholds, compliance can be achieved by either (a) ensuring that all new vehicles added to the fleet be zero emission, and commencing in 2025, removing older vehicles once their statutory useful life is reached, or (b) meeting certain fleet composition requirements (e.g., percentage of zero emission vehicles in the fleet) by certain dates, with the percentage of zero emission vehicles increasing over time, and resulting in 100% zero emission fleets by 2042 (or earlier for certain classes of vehicles).

As with ACT, adoption and implementation of ACF could materially and negatively impact our business by increasing our compliance obligations, operating costs, and related expenses.

The periodic testing portion of California’s Clean Truck Check (as a part of ARB's Clean Truck program), known as Phase 3 of the Clean Truck Check, is set to begin in July 2024.

Once Phase 3 commences, heavy duty vehicles will be subject to periodic emissions testing.

Additionally, in October 2023, the California State Senate and State Assembly approved two bills, Senate Bill 253 ("SB 253") and Senate Bill 261 ("SB 261"), that could require thousands of companies doing business in California to disclose greenhouse gas ("GHG") emissions and climate-related financial risks, with reporting beginning in 2026.

If signed into law, SB 253 would require ARB to adopt regulations before January 2025 requiring public and private companies that exceed $1 billion in annual revenue and that do business in California to begin publicly disclosing their GHG emissions, and SB 261 would require companies doing business in California and earning revenue exceeding $500 million to report on their climate-related financial risks and measures taken to mitigate such risks on or before January 2026.

However, given legal challenges to the ACF and a lack of public support for environmental regulation from the current administration, ARB withdrew its request for the EPA to provide a waiver of certain federal regulations necessary for ARB to impose the environmental restrictions and mandates in the ACF that are more stringent than federal law, which effectively tabled the ACF.

If ARB seeks to adopt and implement the ACF in the future, it could materially and negatively impact our business by increasing our compliance obligations, operating costs, and related expenses.

The periodic testing portion of California’s Clean Truck Check (as a part of ARB's Clean Truck program), known as Phase 3 of the Clean Truck Check, began in July 2024.

Under Phase 3, heavy duty vehicles are subject to periodic emissions testing and annual compliance fees, increasing our operating costs and related expenses.

Additionally, in October 2023, California enacted two bills into law, Senate Bill 253 ("SB 253") and Senate Bill 261 ("SB 261"), which could require certain companies doing business in California to disclose greenhouse gas ("GHG") emissions and climate-related financial risks, with reporting beginning in 2026.

SB 253 requires companies that exceed $1 billion in annual revenue and that do business in California to publicly disclose their GHG emissions, while SB 261 requires companies doing business in California and earning annual revenue exceeding $500 million to report on their climate-related financial risks and measures taken to mitigate such risks on or before January 2026.

Further legislation was enacted in 2024, delaying effectiveness of the final regulations under SB 253 until July 2025, and permitting subsidiaries of reporting companies to file on a consolidated basis with their parent companies.

These laws are currently facing legal challenges, which could result in delays or modifications to the laws.

Additional reporting requirements will likely result in increased compliance costs.

EPA and NHTSA — The EPA and the National Highway Traffic Safety Administration ("NHTSA") have begun taking coordinated steps in support of a new generation of clean vehicles and engines through reduced GHG emissions and improved fuel efficiency at a national level.

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This rule would have marked the first time federal mandates would have been applied to trailers, with respect to aerodynamics and low-rolling resistance tires.

The final rule was effective in December 2016, but has since been subject to challenges and delays.

Additionally, implementation of the Phase 2 Standards as they relate to trailers was challenged in the US Court of Appeals for the District of Columbia.

In November 2021, a panel for the US Court of Appeals for the District of Columbia ruled in favor of the association challenging the standards and vacated all portions of the Phase 2 Standards that applied to trailers.

The final rule was effective in December 2016.

However, implementation of the Phase 2 Standards as they relate to trailers was successfully challenged in the US Court of Appeals for the District of Columbia.

As a result, the Phase 2 Standards will only require reductions in emissions and fuel consumption for tractors.

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Even though the trailer provisions of the Phase 2 Standards have been removed, we will still need to ensure the majority of our fleet is compliant with the California Phase 2 Standards.

In January 2020, the EPA announced it is seeking input on reducing emissions of nitrogen oxides and other pollutants from heavy-duty trucks.

In March 2022, the EPA issued a proposed rule that included nitrogen oxide emission standards which are more stringent than the Phase 2 Standards for certain heavy-duty motor vehicles.

In December 2022, the EPA adopted a final rule that reflected a compromise of the options previously proposed, with new emissions standards of nitrogen oxides for heavy-duty motor vehicles beginning with model year 2027 being

In 2022, the EPA adopted a final rule that established new emissions standards of nitrogen oxides for heavy-duty motor vehicles beginning with model year 2027 being more than 80% stronger than current emission standards, with the intent to reduce heavy-duty emissions by almost 50% from 2022 levels by 2045.

The EPA has indicated that the December 2022 rule is the first part of a three part plan focusing on greenhouse gas emissions, which is commonly referred to as the "Cleaner Trucks Initiative," or the "Clean Trucks Plan." In April 2023, the EPA released the second and third parts to the Clean Trucks Plan, including a proposed rule relating to GHG standards for heavy-duty vehicles, known as "Phase 3," to the EPA's GHG program.

A final rule with respect to the Phase 3 regulations was issued in March 2024 and establishes new GHG emission standards for heavy-duty motor vehicles which are phased-in starting with model year 2027 and increasing in stringency annually through model year 2032.

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more than 80% stronger than current emission standards, with the intent to reduce heavy-duty emissions by almost 50% from today’s levels by 2045.

A final rule with respect to these regulations is expected by the end of 2024.

Upon finalization, any such regulation could increase our equipment and compliance costs, which could materially adversely affect our financial condition.

Complying with these and any future GHG regulations enacted by California’s ARB, the EPA, the NHTSA and/or any other state or federal governing body has increased and will likely continue to increase the cost of our new tractors, may increase the cost of new trailers, may require us to retrofit certain of our trailers, may increase our maintenance costs, and could impair equipment productivity and increase our operating costs, particularly if such costs are not offset by potential fuel savings.

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Moving Ahead for Progress in the 21st Century Bill

Commercial Driver's License Drug and Alcohol Clearinghouse — In December 2016, the FMCSA amended the Federal Motor Carrier Safety Regulations to establish requirements of the Commercial Driver's License Drug and Alcohol Clearinghouse, a database under its administration containing information about violations of the FMCSA's drug and alcohol testing program for holders of commercial driver's licenses.

The final rule became effective in 2017, with an initial compliance date of January 2020 and certain compliance dates extended until January 2023.

Commercial Driver's License Drug and Alcohol Clearinghouse — There is a national Drug and Alcohol Clearinghouse, a database containing information about violations of the FMCSA's drug and alcohol testing program for holders of commercial driver's licenses.

Currently, the Company is required to (1) report drug and alcohol violations to the Clearinghouse;

(2) query the Clearinghouse regarding drug and alcohol violations for current and prospective employees prior to permitting such employees to operate a commercial motor vehicle ("CMV");

and (3) query the Clearinghouse for each currently employed driver annual.

Commencing in November 2024, states will be required to query the Clearinghouse when issuing, renewing, transferring, or upgrading a commercial driver’s license and must revoke a driver’s commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.

and (3) query the Clearinghouse for each currently employed driver annually.

In November 2024, a new rule referred to by the FMCSA as "Clearinghouse II," a program which relates to drivers with drug and alcohol violations, took effect.

Under Clearinghouse II, a driver with a drug or alcohol violation resulting in a "Prohibited" status in the Clearinghouse may not operate a CMV and must complete the FMCSA's return-to-duty education, treatment, and testing prior to regaining CMV driving privileges.

With Clearinghouse II now in effect, states will be required to query the Clearinghouse when issuing, renewing, transferring, or upgrading a commercial driver’s license and must revoke a driver’s commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.

It is expected that the rule may exacerbate the already existing shortage of drivers.

In September 2020, the Department of Health and Human Services ("DHHS") announced proposed mandatory guidelines to allow employers to drug test truck drivers and other federal workers for pre-employment and random testing using hair specimens.

However, the proposal also requires a second sample using either urine or an oral fluid test if a hair test is positive, if a donor is unable to provide a sufficient amount of hair for faith-based or medical

In 2020, the Department of Health and Human Services ("DHHS") announced proposed mandatory guidelines to allow employers to drug test truck drivers and other federal workers for pre-employment and random testing using hair specimens.

DHHS indicated the two-test approach is intended to protect federal workers from issues that have been identified as limitations of hair testing, and related legal deficiencies identified in prior court cases.

In 2022, an industry group known as the Trucking Alliance, of which the Company is a member, sought an exemption from the FMCSA that would allow positive hair specimen tests to be uploaded into the Clearinghouse.

This request was denied by the FMCSA, however, noting they cannot act until DHHS finalizes these guidelines, which have been delayed by DHHS until May 2025.

Additionally, in 2022 the DOT issued a notice of proposed rule making that would include oral fluid testing as an alternative to urine testing for purposes of the

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reasons, or due to an insufficient amount or length of hair.

This request was denied by the FMCSA, however, noting they cannot act until the DHHS finalizes these guidelines.

Additionally, in February 2022 the DOT issued a notice of proposed rulemaking that would include oral fluid testing as an alternative to urine testing for purposes of the DOT’s drug testing program, with a goal of improving the integrity and effectiveness of the drug testing program, along with potential cost savings to regulated parties.

In May 2023, a final rule was published amending DOT’s drug testing program to include oral fluid testing, and became effective June 2023;

DOT’s drug testing program, with a goal of improving the integrity and effectiveness of the drug testing program, along with potential cost savings to regulated parties.

In June 2023, a final rule became effective amending the DOT’s drug testing program to include oral fluid testing;

however, implementation cannot take effect until DHHS approves at least two laboratories to conduct oral fluid testing.

Currently, DHHS has not approved any laboratories.

Any final rule may reduce the number of available drivers.

We currently perform hair follicle testing and will continue to monitor any developments in this area to ensure compliance.

Any changes to drug testing programs may reduce the number of available drivers.

We currently perform hair follicle testing and will continue to monitor any developments in this area.

Finally, federal drug regulators have announced a proposal to add fentanyl to a drug testing panel that would detect the use of such drug among safety-sensitive federal employees, which would include truck drivers if adopted by the DOT.

If the proposal is accepted, DHHS expects to add fentanyl to the testing panel at some point in 2024.

Entry-Level Driver Training — In December 2016, the FMCSA established new minimum training standards (the "ELDT Regulations") which unified curriculum to be followed and completed by certain individuals applying for (or upgrading) a Class A or Class B commercial driver's license, or obtaining a hazardous materials, passenger, or school bus endorsement on their commercial driver's license.

Currently, fentanyl testing is expected to be added to the urine panel beginning as soon as July 2025.

Entry-Level Driver Training — Effective in 2022, the FMCSA established minimum training standards (the "ELDT Regulations") which unified curriculum to be followed and completed by certain individuals applying for (or upgrading) a Class A or Class B commercial driver's license, or obtaining a hazardous materials, passenger, or school bus endorsement on their commercial driver's license.

Such individuals are subject to the entry-level driver training requirements and must complete a prescribed curriculum of theory and behind-the-wheel instruction prior to taking the skills test.

The final rule had an initial compliance date in February 2020.

However, in May 2020, the FMCSA approved an interim rule delaying implementation of the ELDT Regulations by two years, which extended the compliance date until February 2022.

Now that the rule is effective, training schools and other programs (including ours) are required to implement the prescribed curriculum and register with the FMCSA's Training Provider Registry to certify that their program meets the classroom and driving standards.

Training schools and other programs (including ours) are required to implement the prescribed curriculum and register with the FMCSA's Training Provider Registry to certify that their program meets the classroom and driving standards.

We are also required to comply with this rule in the course of operating our driving schools.

The effects of these rules may result in a decrease in fleet production and driver availability or an increase in the time and expense required to operate or expand our driving academies and driver training programs (or both), any of which could adversely affect our business, operations or profitability.

Brokerage Operations — In a November 2023 final rule, the FMCSA implemented more oversight of truck brokers, freight forwarders, and the surety bond and trust companies that back them.

The final rule, which became effective in January 2024, modified regulations in five areas:

Brokerage Operations — In January 2024, the FMCSA implemented more oversight of truck brokers, freight forwarders, and the surety bond and trust companies that back them modifying regulations in five areas:

(1) assets readily available, (2) immediate suspension of broker/freight forwarder operating authority, (3) surety or trust responsibilities, (4) enforcement authority, and (5) entities eligible to serve as BMC-85 trustees.

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The rule also stipulates that "available financial security" falls below $75,000 when there is a drawdown on the broker or freight forwarder’s surety bond or trust fund.

Compliance with this final rule has been pushed back until January 2026.

Implementation and compliance with these changes may negatively impact our business by increasing our compliance obligations, operating costs, and related expenses.

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Additionally, in October 2024, the FMCSA published a notice of proposed rulemaking relating to brokerage operations which, among other things, proposes to increase transparency and the maintenance of recordkeeping procedures.

It is uncertain what changes, if any, will result from the notice of proposed rulemaking.

Infrastructure Investment and Jobs Act

Among other things, the Infrastructure Investment and Jobs Act ("IIJA"), signed into law by President Biden in November 2021, created an apprenticeship program for drivers ages 18 to 20 years old to eventually qualify to drive commercial trucks in interstate commerce.

The FMCSA announced the establishment of this apprenticeship program in January 2022 in an effort to begin to help the industry’s ongoing driver shortage.

Among other things, the Infrastructure Investment and Jobs Act ("IIJA"), signed into in 2021, created an apprenticeship program for drivers ages 18 to 20 years old to eventually qualify to drive commercial trucks in interstate commerce.

The FMCSA announced the establishment of this apprenticeship program in 2022 in an effort to begin to help the industry’s ongoing driver shortage.

This program, known as the Safe Driver Apprenticeship Pilot Program ("SDAP"), is open to 18 to 20-year-old drivers who already hold intrastate commercial driver’s licenses and sets a strict training regimen for participating drivers and carriers to comply with.

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The SDAP is limited to 3,000 driver-apprentices at any given time, with new driver-apprentices allowed into the program to replace those that leave or age out.

If not renewed, the SDAP is currently set to conclude in November 2025.

In May 2023, the DRIVE Safe Integrity Act of 2023 was introduced, which supports participation in the SDAP and would permit 18- to 20-year-olds to operate across state lines if data from the SDAP does not indicate such drivers are less safe than current CMV drivers.

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Certain of the Company’s subsidiaries currently hold FMCSA brokerage authority, so while the impact of this guidance remains to be seen, the Company does not currently anticipate an adverse impact on its operations.

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Hours-of-service

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Any future changes to hours-of-service regulations could materially and adversely affect our operations and profitability.

Future rulemaking relating to ELDs may occur in the future, which may affect our ELD technology, compliance, and compliance efforts.

Safety and Fitness Ratings

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Carriers are grouped by category with other carriers that have a similar number of safety events (i.e., crashes, inspections, or violations) and carriers are ranked and assigned a rating percentile or score to prioritize them for interventions if they are above a certain threshold.

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Certain CSA scores were initially published and made available to the general public.

However, in December 2015, as part of the Fixing America's Surface Transportation ("FAST") Act, Congress mandated that the FMCSA remove all CSA scores from public view until a more comprehensive study regarding the effectiveness of CSA improving truck safety could be completed.

Although the FMCSA has since provided a report to Congress outlining the changes it may make to the CSA program, it remains unclear if, when, and to what extent any such changes will occur.

However, in 2015, as part of the Fixing America's Surface Transportation ("FAST") Act, Congress mandated that the FMCSA remove all CSA scores from public view until a more comprehensive study regarding the effectiveness of CSA improving truck safety could be completed.

For more information about proposed changes to the CSA program, please refer to the "Safety Fitness Determination" section, below.

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However, any changes that increase the likelihood of us receiving unfavorable scores could adversely affect our results of operations and profitability.

In May 2020 the FMCSA announced that effective immediately it is making permanent a pilot program that will not count a crash in which a motor carrier was not at fault when calculating the carrier’s safety measurement profile, called the Crash Preventability Demonstration Program ("CPDP").

The CPDP will expand the types of eligible crashes, modify the Safety Measurement System ("SMS") to exclude crashes with not preventable determinations from the prioritization algorithm and note the not preventable determinations in the Pre-Employment Screening Program.

In 2020 the FMCSA announced permanent effectiveness of a pilot program that does not count a crash in which a motor carrier was not at fault when calculating the carrier’s safety measurement profile, called the Crash Preventability Demonstration Program ("CPDP").

The CPDP expanded the types of eligible crashes, modified the Safety Measurement System ("SMS") to exclude crashes with not preventable determinations from the prioritization algorithm and noted the not preventable determinations in the Pre-Employment Screening Program.

Currently, CSA scores generally do not have a direct impact on a carrier's safety rating.

However, the occurrence of unfavorable scores in one or more categories may affect driving associate recruiting and retention by causing qualified driving associates to seek employment with other carriers, cause our customers to direct their business away from us and to carriers with more favorable scores, subjecting us to an increase in compliance reviews and roadside inspections, or cause us to incur greater than expected expenses in our attempts to improve unfavorable scores, any of which could adversely affect our results of operations and profitability.

Safety Fitness Determination — In January 2016, the FMCSA published a notice of proposed rulemaking regarding carrier safety fitness determination, which proposed new methodologies that would have determined when a motor carrier was not fit to operate a commercial motor vehicle.

In March 2017, the FMCSA withdrew the notice of proposed rulemaking, but noted that a similar process may be initiated in the future.

In February 2023, the FMCSA published a notice of proposed changes to its SMS methodology, including the BASIC categories.

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Safety Fitness Determination — In February 2023, the FMCSA published a notice of proposed changes to its SMS methodology, including the BASIC categories.

In August 2023, the FMCSA announced in an advanced notice of proposed rulemaking and request for comments that it was interested in developing a new methodology to determine whether a carrier is fit to operate CMVs.

Additionally, the US Government Accountability Office made a suggestion in 2023 to the FMCSA to make complaint data public.

Currently, it is uncertain what changes, if any, the FMCSA will make to the CSA rating system or the SMS methodology;

however, any change which would result in the Company or its subsidiaries receiving less favorable scores, or an increased visibility of less favorable scores or of complaints against the Company may have an adverse effect on our operations and financial position.

In November 2024, the FMCSA published a notice announcing a revised SMS methodology implementing certain changes proposed in the February 2023 notice, including, among other changes, (i) rebranding BASICs as "Compliance Categories" and revising certain categories, (ii) consolidating existing road violations into simplified and distinct violation groups and simplifying the scale used to measure the severity of violations, (iii) adjusting intervention thresholds, and (iv) revising the SMS methodology to focus more heavily on recent violations.

Whether this revised SMS methodology will take effect is uncertain, however, any change which results in the Company or its subsidiaries receiving less favorable scores, or an increased visibility of less favorable scores or of complaints against the Company may have an adverse effect on our operations and financial position.

Moreover, in September 2023, the FMCSA announced a proposal that would allow carriers to undergo an appeal process for requests of data review, which are in relation to such requests through the agency’s DataQs system.

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Equipment Developments

In May 2021, the Cullum Owings Large Truck Safe Operating Speed Act was reintroduced into the US House of Representatives and would require commercial motor vehicles with a gross weight of more than 26,000 pounds to be equipped with a speed limiter that would limit the vehicle's speed to no more than 65 miles per hour.

In 2021, legislation was reintroduced into the US House of Representatives and would require commercial motor vehicles with a gross weight of more than 26,000 pounds to be equipped with a speed limiter that would limit the vehicle's speed to no more than 65 miles per hour.

Whether this legislation will ultimately become law is uncertain.

Furthermore, in April 2022, the FMCSA issued a notice of intent announcing its intention to propose a rule during 2023 which will require certain commercial vehicles to be equipped with speed limiters;

The FMCSA issued a notice of intent announcing its intention to propose a rule during 2023 which will require certain commercial vehicles to be equipped with speed limiters;

however, no final rule was proposed.

It is now expected that the DOT will issue a rule sometime in 2024.

It is now expected that the DOT will issue a rule sometime in May 2025.

While we electronically govern the speed of substantially all of our company tractors and require our independent contractors to comply with the Company's speed policy, such legislation could result in a decrease in fleet production and driver availability, either of which could adversely affect our business or operations.

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In September 2022, the FMCSA issued an advance notice of proposed rulemaking that would require fleets and independent contractors to equip their trucks with unique electronic identification systems designed to streamline roadside inspections and provide transparency and accountability in day-to-day trucking operations.

In 2022, the FMCSA issued an advance notice of proposed rulemaking that would require fleets and independent contractors to equip their trucks with unique electronic identification systems designed to streamline roadside inspections and provide transparency and accountability in day-to-day trucking operations.

The petition was generally disfavored by transportation industry participants, citing, among other things, the petition’s failure to address privacy and data security risks.

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However, in February 2023 the FMCSA announced a new operational test for monitoring and enforcing driver and motor carrier safety compliance standards.

In March 2024, the FMCSA began proof-of-concept testing to determine whether the technology required for electronic identification systems is sufficient and the information and data being provided is secure, reliable, and useful for the FMCSA.

In February 2023, the FMCSA issued a supplemental notice of proposed rulemaking requesting additional information on automated driving systems ("ADS") and seeking comment on regulatory approaches that would enable it to obtain relevant safety information and the current and anticipated size of the population of carriers operating ADS-equipped commercial motor vehicles.

Public comment closed in March 2023, and it remains to be seen, what, if any, final rules will stem therefrom.

Public comment closed in March 2023, and it remains to be seen, what, if any, final rules will result therefrom.

The FMCSA, in conjunction with the NHTSA, have announced their intention to propose a rule for performance standards and maintenance requirements for automatic emergency braking on heavy trucks.

In June 2023, FMCSA and NHTSA issued a joint proposed rule that would require automated emergency braking on all new heavy-duty trucks.

In June 2023, the FMCSA and NHTSA issued a joint proposed rule that would require automated emergency braking on all new heavy-duty trucks.

Additionally, in April 2023, NHTSA issued an advance notice of proposed rulemaking that would require side underride guards to be installed on all new heavy-duty trucks.

Public comment on the FMCSA and NHTSA joint proposed rule and the NHTSA notice of proposed rulemaking closed in 2023, and it remains to be seen, what, if any, final rules will stem therefrom.

Public comment on the FMCSA and NHTSA joint proposed rule and the NHTSA notice of proposed rulemaking closed in 2023, and, while a final rule with respect to automatic braking is expected to be issued in 2025, it remains to be seen, what, if any, final rules will stem therefrom.

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Food Safety Modernization Act of 2011 ("FSMA")

In April 2016, the Food and Drug Administration ("FDA") published a final rule establishing requirements for shippers, loaders, carriers by motor vehicle and rail vehicle, and receivers engaged in the transportation of food, to use sanitary transportation practices to ensure the safety of the food they transport as part of the FSMA.

In 2016, the Food and Drug Administration ("FDA") published a final rule establishing requirements for shippers, loaders, carriers by motor vehicle and rail vehicle, and receivers engaged in the transportation of food, to use sanitary transportation practices to ensure the safety of the food they transport as part of the FSMA.

This rule sets forth requirements related to among other things, equipment used to transport food, measures taken during such transportation, personnel training, and record retention.

These requirements took effect for larger carriers such as us in April 2017 and are also applicable when we perform as a carrier or as a broker.

We believe we have been in compliance with these requirements since that time.

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As the FDA continues its efforts to modernize food safety, it is likely additional food safety regulations will take effect in the future.

In July 2020, the FDA released its "New Era of Smarter Food Safety" blueprint, which creates a ten year roadmap to create a more digital, traceable and safer food system.

This blueprint builds on the work done under the FSMA, and while it is still unclear what, if any, changes to the current governing framework may ultimately take effect, further regulation in this area could negatively affect our business by increasing our compliance obligations and related expenses going forward.

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In 2020, the FDA released its "New Era of Smarter Food Safety" blueprint, which creates a ten year roadmap to create a more digital, traceable and safer food system.

This blueprint builds on the work done under the FSMA, generally requiring persons who manufacture, process, pack, or hold foods on the FDA's "Food Traceability List" to maintain detailed records of key data elements for critical tracking events in a manner that can be provided to the FDA within 24 hours of request.

It is still unclear what impact of the Food Traceability Rule will have on the Company and others in the industry, but further regulation in this area could negatively affect our business by increasing our compliance obligations and related expenses going forward.

Legislation Regarding Independent Contractors

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Federal legislators continue to introduce legislation concerning the classification of independent contractors as employees, including legislation that proposes to increase the tax and labor penalties against employers who intentionally or unintentionally misclassify employees as independent contractors and are also found to have violated employees' overtime or wage requirements.

The Protecting the Rights to Organize ("PRO") Act was passed by the US House of Representatives and received by the US Senate in March 2021, which was further sent to the Senate's Committee on Health, Education, Labor, and Pensions.

The Protecting the Rights to Organize ("PRO") Act was passed by the US House of Representatives and received by the US Senate in 2021, which was further sent to the Senate's Committee on Health, Education, Labor, and Pensions.

In 2023, a substantially similar bill was introduced to the US House of Representatives and referred to the House Committee on Education and Workforce.

These bills propose to apply the "ABC Test" for classifying workers under Federal Fair Labor Standards Act claims.

In January 2024, the Department of Labor published a final rule regarding independent contractor classification, which is set to take effect on March 11, 2024.

In January 2024, the Department of Labor published a final rule regarding independent contractor classification, which took effect in 2024.

The final rule rescinded the Independent Contractor Status Under the Fair Labor Standards Act.

Under the 2024 rule, workers’ relationship with a principal will be classified under six factors, including:

Under the 2024 rule, workers’ relationship with a principal are classified under six factors, including:

(1) opportunity for profit and loss depending on managerial skill;

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Federal and state taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status.

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Recently, courts in certain states have issued decisions that could result in a greater likelihood that independent contractors would be judicially classified as employees in such states.

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We currently observe and monitor our compliance with current related and applicable laws and regulations, but we cannot predict whether future laws and regulations, judicial decisions, or settlements regarding the classification of independent contractors will adversely affect our business or operations.

In September 2019, California enacted A.B.

In 2019, California enacted A.B.

5 ("AB5"), a new law that changed the landscape of the state’s treatment of employees and independent contractors.

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• the worker is customarily engaged in an independently established trade, occupation, or business.

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How AB5 will be enforced is still to be determined.

In January 2021, the California Supreme Court ruled that the ABC Test could apply retroactively to all cases not yet final as of the date the original decision was rendered, April 30, 2018.

While it was set to go into effect in January 2020, a federal judge in California issued a preliminary injunction barring the enforcement of AB5 on the trucking industry while the California Trucking Association ("CTA") went forward with its suit seeking to invalidate AB5.

The Ninth Circuit Court of Appeals rejected the reasoning behind the injunction in April 2021, ruling that AB5 is not pre-empted by federal law, but granted a stay of the AB5 mandate in June 2021, preventing its application and temporarily continuing the injunction, while the CTA petitioned the US Supreme Court to review the decision.

In November 2021, the US Supreme Court requested that the US solicitor general weigh in on the case.

The injunction remained in place until the US Supreme Court declined to hear the matter.

As a result, the injunction was lifted and retroactively placed AB5 into law as of January 2020.

Litigation surrounding the matter continues, and the Ninth Circuit is currently scheduled to hear arguments on a case concerning AB5 in March 2024;

however, it remains unclear whether such challenges will be successful in invalidating the law.

While it was set to go into effect in January 2020, it was subject to various court proceedings, and ultimately AB5 was retroactively placed into law as of January 2020, with the ABC Test being applied in certain circumstances retroactively to April 2018.

Litigation surrounding the matter continues, and it remains unclear whether such challenges will be successful in invalidating the law.

It is also possible AB5 will spur similar legislation in states other than California, which could adversely affect our results of operations and profitability.

Wage and Hour Legislation

In December 2018, the FMCSA granted a petition filed by the American Trucking Associations and in doing so determined that federal law does preempt California’s wage and hour laws, and interstate truck drivers are not subject to such laws.

In 2018, the FMCSA granted a petition filed by the American Trucking Associations and in doing so determined that federal law does preempt California’s wage and hour laws, and interstate truck drivers are not subject to such laws.

The FMCSA’s decision has been appealed by labor groups and multiple lawsuits have been filed in federal courts seeking to overturn the decision.

In January 2021, the Ninth Circuit Court of Appeals upheld the FMCSA’s determination that federal law does preempt California's meal and rest break laws, as applied to drivers of property-carrying commercial motor vehicles.

In 2021, the Ninth Circuit Court of Appeals upheld the FMCSA’s determination that federal law does preempt California's meal and rest break laws, as applied to drivers of property-carrying commercial motor vehicles.

Other current and future state and local wage and hour laws, including laws related to employee meal breaks and rest periods, may also vary significantly from federal law.

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If enacted, this could have a material adverse effect on our business, financial condition, and results of operations.

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Other Regulation

Recently, the Trump administration issued a memorandum directing federal departments and agencies to freeze regulatory actions.

In particular, the memorandum prohibited new rules from being proposed or issued until such rules are reviewed and approved by heads of departments or agencies appointed under the Trump administration.

Rules previously sent to the Federal Register but not already published are also to be withdrawn to permit additional review and permission to proceed.

Additionally, existing rules could be delayed for up to 60 days to allow for additional review, including the assessment of their impacts, and to allow for public comments.

Inflation Reduction Act

President Biden has indicated his intent to make a green infrastructure package a top priority for his administration.

In August 2022, the Inflation Reduction Act of 2022 was signed into law by President Biden.

Among other considerations, the Inflation Reduction Act contains provisions relating to energy, climate change, and tax reform.

The Inflation Reduction Act of 2022 contains provisions relating to energy, climate change, and tax reform.

In particular, the Inflation Reduction Act shifts timing for certain tax payments, imposes an excise tax on certain corporate stock buybacks, and creates a 15% corporate alternative minimum tax, which is generally applicable to corporations that reported over $1 billion in profits in each of the three proceeding tax years.

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However, adoption and implementation could negatively impact our business by increasing our compliance obligations and related expenses.

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Infrastructure Spending

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It would also allow for truck parking expansion at commercial truck stops and travel plazas.

Industry groups are generally in favor of the bill, as a lack of available parking has negatively impacted the industry as a whole, including the Company and its subsidiaries.

More recently, the DOT has provided funding to increase parking in certain heavily congested areas of Nevada, Ohio, and Wisconsin, and Congressional leaders have included a provision in the House funding bill introduced in June 2024 to allocate $200 million for truck parking projects.

Industry groups are generally in favor of additional funding to improve parking infrastructure as a lack of available parking has negatively impacted the industry as a whole, including the Company and its subsidiaries.

Brokerage Liability

Recently, federal courts have reached different decisions on the issue of whether preemption applies to broker liability.

In June 2022, the US Supreme Court declined to review a Ninth Circuit Court of Appeals decision involving a personal injury suit alleging that a freight broker had liability for an accident because it breached its duty to select a competent contractor to transport the load in question.

In its petition to the US Supreme Court, the broker unsuccessfully argued that the Ninth Circuit’s decision improperly disallowed federal preemption and would expose freight brokers to a patchwork of state regulations across the United States.

In April 2023, the Eleventh Circuit Court held that the Federal Aviation Administration Authorization Act ("FAAAA") expressly preempted such personal liability claims against a broker.

Additionally, in July 2023, the Seventh Circuit Court of Appeals affirmed the holding of a lower court that the FAAAA's preemption provision applied and that a certain safety exception within the FAAAA did not save the plaintiff’s claim from preemption.

In January 2024, the US Supreme Court declined to review the case from the Seventh Circuit Court of Appeals.

It is uncertain how long the current circuit split will continue and whether the US Supreme Court will decide to review similar cases in the future.

If additional circuit courts, or the US Supreme Court, adopt the Ninth Circuit view, freight brokers’ ability to rely on federal agency standards in selecting motor carriers would be called into question.

It could also lead to primary (as opposed to contingent) liability being imposed upon freight brokers, and increased insurance premiums for brokerage operations generally.

In June 2022, the US Supreme Court declined to review a Ninth Circuit Court of Appeals decision holding that broker liability is not preempted by federal regulation, which would expose freight brokers to a patchwork of state regulations across the United States.

In April 2023, the Eleventh Circuit Court held that the Federal Aviation Administration Authorization Act ("FAAAA") expressly preempted such personal liability claims against a broker, and subsequently in July 2023, the Seventh Circuit Court of Appeals provided a supporting decision holding that the plaintiff’s claim was preempted by the FAAAA.

The US Supreme Court declined to review the issue, and is uncertain how long the current circuit split will continue and whether the US Supreme Court will decide to review similar cases in the future.

If additional circuit courts, or the US Supreme Court, adopt the Ninth Circuit view that freight broker liability is not preempted by federal regulation, it could lead to a patchwork of regulations across the United States and also result in primary (as opposed to contingent) liability being imposed upon freight brokers, and increased insurance premiums for brokerage operations generally.

Although we are committed to selecting safe and secure motor carriers in carrying out our brokerage activities, if we are found to be negligent in the motor carrier selection process it could lead to significant liabilities in the event of an accident, which could have a materially adverse effect on our business and operating results.

The IIJA was signed into law by President Biden in November 2021.

The roughly $1.2 trillion bill contains an estimated $550 billion in new spending, which will impact transportation.

In particular, it dedicates more than $100 billion for surface transportation networks and roughly $66 billion for freight and passenger rail operations.

Provisions in the law specific to trucking are discussed above.

It otherwise remains unclear how the IIJA will be implemented into and affect our industry in the long term.

The IIJA may result in increased compliance and implementation related expenses, which could have a negative impact on our operations.

In January 2023, the Safer Highways and Increased Performance for Interstate Trucking Act (the “SHIP IT Act”) was introduced into the US House of Representatives.

As proposed, the SHIP IT Act would allow states to issue special permits for overweight vehicles and loads during emergencies, allow drivers to apply for Workforce Innovation and Opportunity Act grants, attempt to recruit truck drivers to the industry through targeted and temporary tax credits, streamline the CDL process in certain respects, and expand access to truck parking and rest areas for commercial drivers.

It remains unclear whether the SHIP IT Act will ultimately become law, however, and what changes it may undergo prior to finalization.

A similar bill, the Truck Parking Safety Improvement Act, was introduced into the Senate in March of 2023

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and if enacted as proposed, would dedicate $755 million in funding over the next three years to expand access to truck parking and rest areas for commercial drivers.

It remains unclear whether such acts will ultimately become law, however, and what changes they may undergo prior to finalization.

Truck Leasing Task Force

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The TLTF is a committee tasked with evaluating lease agreements in the industry and their effects on industry participants, including independent contractors.

Any future laws or regulations stemming from the TLTF could disrupt the Company’s leasing practices and cause materially adverse effects on our operations and financial position.

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Regulatory Impacts from COVID-19

Given COVID-19’s considerable effect on our nation and the transportation industry, the FMCSA previously issued and extended various temporary measures in response to the COVID-19 pandemic.

However, as additional tools, protective equipment, policies, practices, and medicines have been developed in response to COVID-19, in October 2022, the FMCSA ended the hours of service waiver previously issued with respect to certain types of shipments, such as, livestock, medical supplies, vaccines, groceries, and diesel fuel.

Although to date these response measures have largely been enacted in order to assist industry participants in operating under adverse circumstances, any further responsive measures or the lapsing of temporary measures previously enacted, remain unclear and could have a negative impact on our operations.

Any similar future outbreak, border restrictions, or vaccination, testing or mask mandates that are allowed to go into effect, could, among other things, (1) cause our unvaccinated employees (particularly our unvaccinated driving associates) to go to smaller employers, if such employers are not subject to future mandates, or leave the trucking industry, (2) result in logistical issues, increased expenses, and operational issues from arranging for weekly tests of our unvaccinated employees, especially our unvaccinated driving associates, (3) result in increased costs for recruitment and retention of driving associates, including the cost of weekly testing, and (4) result in decreased revenue if we are unable to recruit and retain driving associates.

Any future vaccination, testing or mask mandates that apply to driving associates could significantly reduce the pool of driving associates available to us and our industry, which would further impact the ongoing extreme shortage of available driving associates.

Accordingly, any vaccination, testing or mask mandates, if allowed to go into effect, could have a material adverse effect on our business, financial condition, and results of operations.

In January 2025, the TLTF provided a report to Congress and the Secretaries of Transportation and Labor recommending Congress ban truck lease-purchase programs where motor carriers have control over the work, compensation, and debts of the driver-lessee.

It is unclear what, if any, actions will be taken as a result of the report;

however, any future laws or regulations stemming from the TLTF could disrupt the Company’s leasing practices and cause materially adverse effects on our operations and financial position.

Available Information

General information about the Company is provided, free of charge, regarding Knight at www.knighttrans.com and regarding Swift at www.swifttrans.com .

These websites also include links to Knight-Swift's investor site, http://investor.knight-swift.com , which includes our annual reports on Form 10-K with accompanying XBRL documents, quarterly reports on Form 10-Q with accompanying XBRL documents, current reports on Form 8-K with accompanying XBRL documents, and amendments to those reports that are filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable once the material is electronically filed or furnished to the SEC.

Our investor site, http://investor.knight-swift.com , includes our annual reports on Form 10-K with accompanying XBRL documents, quarterly reports on Form 10-Q with accompanying XBRL documents, current reports on Form 8-K with accompanying XBRL documents, and amendments to those reports that are filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, free of charge as soon as reasonably practicable once the material is electronically filed or furnished to the SEC.

The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov .

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What changed 10-K

Item 1. Business