What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-18 compared with 2021-02-23 · 85 added, 62 removed, 241 unchanged (38% of the section changed)

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Description of Business

Landstar is a worldwide asset-light provider of integrated transportation management solutions.

Landstar is a worldwide technology-enabled, asset-light provider of integrated transportation management solutions.

The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third party logistics solutions to meet all of a customer’s transportation needs.

Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world.

The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of over 1,100 independent commission sales agents and approximately 79,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.

The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of over 1,200 independent commission sales agents and over 101,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.

The nature of the Company’s business is such that a significant portion of its operating costs varies directly with revenue.

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contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads.

Through this network of agents and capacity providers linked together by Landstar’s series of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.1 billion during the most recently completed fiscal year.

Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $6.5 billion during the most recently completed fiscal year.

The Company reports the results of two operating segments:

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Transportation services are provided by Landstar’s “Operating Subsidiaries”:

Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., and as further described below under “ Truck Services

”, Landstar Metro, Landstar Servicios and Landstar Blue.

Transportation services offered by the Company include truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.

de C.V., and as further described below under “ Truck Services

”, Landstar Blue.

Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.

Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment.

In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics, small package and less-than-truckload service providers.

Each of the independent commission sales agents has the opportunity to market all of the services provided by the transportation logistics segment.

The independent commission sales agents market services provided by the transportation logistics segment.

Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue.

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Truck Services

The transportation logistics segment’s truck transportation services include a full array of truckload transportation for a wide range of commodities and, to a lesser degree, less-than-truckload transportation services.

A significant portion of the Company’s truckload services is priced in the spot market and delivered over irregular or non-repetitive

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During fiscal year 2021, revenue generated by BCO Independent Contractors and Truck Brokerage Carriers was 40% and 51%, respectively, of consolidated revenue.

Also, during fiscal year 2020, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 66% and 32%, respectively, of truck transportation revenue and less-than-truckload revenue was 2% of truck transportation revenue.

The Company’s truck services contributed 92% of consolidated revenue in fiscal years 2020 and 2019, respectively, and 93% of consolidated revenue in fiscal year 2018.

Also, during fiscal year 2021, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 59% and 26%, respectively, of truck transportation revenue and less-than-truckload and other truck transportation revenue was 2% and 13%, respectively, of truck transportation revenue.

The Company’s truck services contributed 91% of consolidated revenue in fiscal year 2021 and 92% of consolidated revenue in both fiscal years 2020 and 2019, respectively.

On May 6, 2020, the Company formed a new subsidiary that was subsequently renamed Landstar Blue.

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On June 15, 2020, Landstar Blue completed the acquisition of an independent agent of the Company whose business focused on truckload brokerage services.

The results of operations from Landstar Blue are presented as part of the Company’s transportations logistics segment.

Revenue from Landstar Blue represented less than 1% of the Company’s transportation logistics segment revenue in fiscal year 2020.

The results of operations from Landstar Blue are presented as part of the Company’s transportation logistics segment.

Revenue from Landstar Blue represented less than 1% of the Company’s transportation logistics segment revenue in both fiscal years 2021 and 2020.

Rail Intermodal Services.

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The transportation logistics segment’s rail intermodal service capabilities include trailer on flat car, container on flat car, box car and railcar.

The transportation logistics segment’s rail intermodal services contributed 3% of consolidated revenue in each of fiscal years 2020, 2019 and 2018.

The transportation logistics segment’s rail intermodal services contributed 2% of consolidated revenue in fiscal year 2021 and 3% in both fiscal years 2020 and 2019.

Air and Ocean Services.

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break bulk, consolidations, full container loads, less-than container loads and refrigerated freight.

The transportation logistics segment’s air and ocean services contributed 3% of consolidated revenue in each of fiscal years 2020, 2019 and 2018.

The transportation logistics segment’s air and ocean services contributed 5% of consolidated revenue in fiscal year 2021 and 3% of consolidated revenue in both fiscal years 2020 and 2019.

Insurance Segment

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The independent commission sales agents use a variety of digital technologies provided by the Company to service the requirements of shippers.

For truckload services, the Company’s independent commission sales agents primarily use Landstar proprietary software which enables agents to enter available freight, dispatch capacity and process most administrative procedures and then communicate that information to Landstar and its capacity providers via the internet.

For truckload services, the Company’s independent commission sales agents primarily use Landstar proprietary software which enables agents to enter available freight, dispatch capacity and process most administrative tasks and then communicate that information to Landstar and its capacity providers through either web-based

or mobile tools.

The Company’s web-based

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For modes of transportation other than truckload, the independent commission sales agents utilize both proprietary and third party information technology applications provided by the Company.

Commissions to agents are based on contractually agreed-upon percentages of revenue or net revenue, defined as revenue less the cost of purchased transportation, or net revenue less a contractually agreed upon percentage of revenue retained by Landstar.

Commissions to agents as a percentage of consolidated revenue will vary directly with fluctuations in the percentage of consolidated revenue generated by the various modes of transportation and reinsurance premiums and with changes in net revenue margin, defined as net revenue divided by revenue, on services provided by Truck Brokerage Carriers, railroads, air cargo carriers and ocean cargo carriers.

Commissions to agents are based on contractually agreed-upon percentages of (i) revenue, (ii) revenue less the cost of purchased transportation, or (iii) revenue less a contractually agreed upon percentage of revenue retained by Landstar and the cost of purchased transportation (the “retention contracts”).

Commissions to agents as a percentage of consolidated revenue vary directly with fluctuations in the percentage of consolidated revenue generated by the various modes of transportation and reinsurance premiums and, in general, vary inversely with changes in the amount of purchased transportation as a percentage of revenue on services provided by Truck Brokerage Carriers, railroads, air cargo carriers and ocean cargo carriers.

Commissions to agents are recognized over the freight transit period as the performance obligation to the customer is completed.

The Company had 508 and 555 agents who each generated at least $1 million in Landstar revenue (the “Million Dollar Agents”) during fiscal years 2020 and 2019, respectively.

The Company had 593 and 508 agents that each generated at least $1 million in Landstar revenue (the “Million Dollar Agents”) during fiscal years 2021 and 2020, respectively.

Landstar revenue from the Million Dollar Agents in the aggregate represented 94% and 92% of consolidated revenue in 2021 and 2020, respectively.

Included among the Company’s Million Dollar Agents, the Company had 115 independent sales agencies that generated at least $10 million in Landstar revenue during the 2021 fiscal year, which in aggregate comprised approximately 71% of Landstar’s consolidated revenue.

Management believes that the majority of the Million Dollar Agents choose to represent the Company exclusively.

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Annual terminations of Million Dollar Agents have typically been less than 3% of the total number of Million Dollar Agents.

In fiscal year 2020, the change in the number of Million Dollar Agents was entirely attributable to agents generating under $5 million of Landstar revenue per year, as the Company experienced no change in fiscal year 2020 compared to fiscal year 2019 in the number of independent sales agents generating $5 million or more of Landstar revenue.

During fiscal year 2020, the COVID-19

pandemic impacted the number of agents generating under $5 million of Landstar revenue both with respect to existing agents, some of whom had difficulty operating their small businesses during the pandemic due to personal issues, staffing issues and/or customer issues, and with respect to the Company’s ability to recruit new independent sales agents to the Landstar network, given the uncertain operating environment and challenges we experienced in building personal relationships with prospective agent candidates during the pandemic.

Third Party Capacity

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Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Company’s consolidated revenue during fiscal year 2021.

Historically, the gross profit margin (defined as gross profit, which is defined as revenue less the cost of purchased transportation and commissions to agents, divided by revenue) generated from freight hauled by BCO Independent Contractors has been greater than that from freight hauled by other third party capacity providers.

Historically, variable contribution margin (defined as variable contribution, which is defined as revenue less variable costs of revenue, divided by revenue) generated from freight hauled by BCO Independent Contractors has been greater than that from freight hauled by other third party capacity providers.

However, the Company’s insurance and claims costs, depreciation costs and other operating costs are incurred primarily in support of BCO Independent Contractor capacity.

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The Company maintains an ecosystem of digital technologies and applications through which BCO Independent Contractors can view a comprehensive listing of the Company’s available freight, allowing them to consider rate, size, origin and destination when planning trips.

The Company’s digital applications also provide BCO Independent Contractors information on fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations.

The Company’s LandstarOne ™

mobile application provides BCO Independent Contractors information on loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations.

The Landstar Contractors’ Advantage Purchasing Program (“LCAPP”) leverages Landstar’s purchasing power to provide discounts to eligible BCO Independent Contractors when they purchase equipment, fuel, tires and other items.

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The number of trucks provided by BCO Independent Contractors fluctuates daily as a result of truck recruiting and truck terminations.

More trucks were recruited in fiscal year 2020 than in fiscal year 2019 and trucks terminated were lower in fiscal year 2020 than in fiscal year 2019, resulting in an overall net increase of 748 trucks during fiscal year 2020.

Landstar’s BCO Independent Contractor truck

turnover was approximately 27% in fiscal year 2020, compared to 36% in fiscal year 2019.

Less trucks were recruited in fiscal year 2021 than in fiscal year 2020 and trucks terminated were lower in fiscal year 2021 than in fiscal year 2020, resulting in an overall net increase of 873 trucks during fiscal year 2021.

Landstar’s BCO Independent Contractor truck turnover was approximately 21% in fiscal year 2021, compared to 27% in fiscal year 2020.

Approximately 35% of 2021 turnover was attributable to BCO Independent Contractors who had been with the Company for less than one year.

Management believes the factors that have historically favorably impacted turnover include the Company’s extensive agent network, the quantity and quality of available freight, the Company’s programs to reduce the operating costs of its BCO Independent Contractors and Landstar’s reputation for quality, service, reliability and financial strength.

Management believes the factors that have historically favorably impacted turnover include the Company’s extensive agent network, the quantity and quality of available freight, the proprietary technology-based tools the Company makes available to BCO Independent Contractors to empower them to manage their businesses, the Company’s programs to reduce the operating costs of its BCO Independent Contractors and Landstar’s reputation for quality, service, reliability and financial strength.

In October 2020, the Company announced a new initiative in further support of its network of BCO Independent Contractors.

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The Company’s customer base is highly diversified and dispersed across many industries, commodities and geographic regions.

The Company’s top 100 customers accounted for approximately 46% and 42%, respectively, of consolidated revenue during fiscal years 2020 and 2019.

Management believes that the Company’s overall size, ecosystem of digital technologies and applications, geographic coverage, access to equipment and diverse service capability offer the Company significant competitive marketing and operating advantages.

The Company’s top 100 customers accounted for approximately 46% of consolidated revenue during both fiscal years 2021 and 2020.

operating advantages.

These advantages allow the Company to meet the needs of even the largest shippers.

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No customer accounted for more than 4% of the Company’s 2021 revenue.

Management believes leadership in the development, operation and support of an ecosystem of digital technologies and applications is an ongoing part of providing high quality service.

Landstar focuses on providing integrated transportation management solutions which emphasize customer service and information coordination among its independent commission sales agents, customers, capacity providers and employees.

The Company continues to focus on identifying, purchasing or developing and implementing software applications and tools which are designed to:

(i) assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of the independent businesses, (ii) assist customers in meeting their transportation needs, (iii) assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses, and (iv) improve operational and administrative efficiency throughout the Company.

(i) assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of their independent businesses, (ii) assist customers in meeting their transportation needs, (iii) assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses, and (iv) improve operational and administrative efficiency throughout the Company.

Landstar intends to continue to improve its technologies to meet the total needs of its agents, customers and third party capacity providers and remains engaged in various multi-year projects aimed at increasing efficiencies, primarily through technology, at Landstar and across our agent and third party capacity network.

Management believes leadership in the development, operation and support of an ecosystem of digital technologies and applications is an ongoing part of providing high quality service.

The Company has engaged in a multi-year effort to implement a comprehensive strategy focused on the long-term development of leading edge digital tools to empower participants in our network to succeed in the technology-driven transportation logistics marketplace.

As part of the execution of this strategy, the Company has launched the following tools to participants within our network:

A new, cloud-based platform for truckload freight agent workflow.

A suite of business intelligence applications powered by Microsoft Power BI for independent sales agents and BCO Independent Contractors to access information and identify trends in their businesses.

Landstar-proprietary pricing tools developed with data scientists using historical Company information and third party pricing data to provide independent commission sales agents with near real time market data.

LandstarOne ™

Mobile application available to BCO Independent Contractors and third party motor carriers providing a one-stop

location for available loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations.

Landstar’s proprietary freight tracking exception management tool that incorporates geo-positional

data from, among other sources, electronic logging devices, trailer tracking devices and third party data aggregators.

Trailer Tools:

Applications empowering independent commission sales agents through the automation of the Company’s trailer request and trailer pool management processes.

Application that automates the credit request process for independent commission sales agents.

Since the launch of this initiative in 2016, the Company has invested approximately $90 million in this strategic development effort, including approximately $27 million in fiscal year 2021.

The Company’s information technology systems used in connection with its operations are located in Jacksonville, Florida and, to a lesser extent, in Rockford, Illinois.

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Potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable.

For periods prior to May 1, 2019, Landstar retains liability for commercial trucking claims up to $5,000,000 per occurrence and maintains various third party insurance arrangements for liabilities in excess of its $5,000,000 self-insured retention.

Effective May 1, 2019, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5,000,000 and $10,000,000 (the “Initial Excess Policy”) with a third party insurance company.

For commercial trucking claims incurred on or after May 1, 2019 through April 30, 2022, the Initial Excess Policy provides for a limit for a single loss of $5,000,000, with an aggregate limit of $15,000,000 for each policy year, an aggregate limit of $20,000,000 for the thirty-six

For periods prior to May 1, 2019, Landstar retains liability for commercial trucking claims up to $5 million per occurrence and maintains various third party insurance arrangements for liabilities in excess of its $5 million self-insured retention.

Effective May 1, 2019, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “Initial Excess Policy”) with a third party insurance company.

For commercial trucking claims incurred on or after May 1, 2019 through April 30, 2022, the Initial Excess Policy provides for a limit for a single loss of $5 million, with an aggregate limit of $15 million for each policy year, an aggregate limit of $20 million for the thirty-six

month term ended April 30, 2022, and options to increase such aggregate limits for pre-established

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If aggregate losses under the Initial Excess Policy exceed either the annual aggregate limit or the aggregate limit for the three year period ending April 30, 2022, and the Company did not elect to increase such aggregate limits for a pre-established

amount of additional premium, Landstar would retain liability of up to $10,000,000 per occurrence, inclusive of its $5,000,000 self-insured retention for commercial trucking claims during the remainder of the applicable policy year(s).

Moreover, as a result of the Company’s aggregate loss experience since it entered into the Initial Excess Policy, the Initial Excess Policy required the Company to pay additional premium up to a pre-established

maximum amount of $3,500,000, which was provided for in insurance and claims costs for the Company’s 2020 fiscal first quarter.

The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10,000,000.

amount of additional premium, Landstar would retain liability of up to $10 million per occurrence, inclusive of its $5 million self-insured retention for commercial trucking claims during the remainder of the applicable policy year(s).

maximum amount of $3.5 million, which was provided for in insurance and claims costs for the Company’s 2020 fiscal first quarter.

The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10 million.

These third party arrangements provide coverage on a per occurrence or aggregated basis.

Due to the increasing cost of commercial auto liability claims throughout the United States in recent years, the availability of such excess coverage has significantly decreased and the pricing associated with such excess coverage, to the extent available, has significantly increased.

Effective May 1, 2020 with respect to the annual policy year ending April 30, 2021, the Company experienced an increase of approximately $14 million, or over 170%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10,000,000.

In recent years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.

Within the transportation logistics industry, these verdicts are often referred to as “Nuclear Verdicts.” The increase in Nuclear Verdicts has had a significant impact on the cost of commercial auto liability claims throughout the United States.

Due to the increasing cost of commercial auto liability claims, the availability of excess coverage has significantly decreased, and the pricing associated with such excess coverage, to the extent available, has significantly increased.

With respect to the annual policy year ending April 30, 2021, as compared to the annual policy year ended April 30, 2020, the Company experienced an increase of approximately $14 million, or over 170%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.

Effective May 1, 2021, with respect to the annual policy year ending April 30, 2022, as compared to the annual policy year ended April 30, 2021, the Company experienced an increase of approximately $3 million, or 19%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.

Moreover, the Company increased the level of its financial

exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.

For example, with respect to a hypothetical claim in the amount of $100 million incurred during the annual policy year ending April 30, 2022, the Company would have an aggregate financial exposure of approximately $18 million.

Furthermore, the Company’s third party insurance arrangements provide excess coverage up to an uppermost coverage layer, in excess of which the Company retains additional financial exposure.

No assurances can be given that the availability of excess coverage for commercial trucking claims will not continue to deteriorate, that the pricing associated with such excess coverage, to the extent available, will not continue to increase, nor that insurance coverage from third party insurers for excess coverage of commercial trucking claims will even be available on commercially reasonable terms at certain levels.

Moreover, the occurrence of a Nuclear Verdict, or the settlement of a catastrophic injury and/or fatality claim that could have otherwise resulted in a Nuclear Verdict, could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.

Further, the Company retains liability of up to $1,000,000 for each general liability claim, up to $250,000 for each workers’ compensation claim and up to $250,000 for each cargo claim.

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The FMCSA’s commercial driver’s license and drug and alcohol testing requirements have not adversely affected the Company’s ability to source the capacity necessary to meet its customers’ transportation needs.

However, on January 6, 2020 the FMCSA implemented new requirements applicable to drug and alcohol testing by motor carriers.

The new regulation expands motor carrier reporting requirements to include reporting of all operators who test positive and/or refuse to submit to a test as prescribed in the regulation.

The new regulation also expands rules relating to the obligation of motor carriers to conduct queries to check if current or prospective operators are prohibited from operating a commercial motor vehicle due to a positive or unresolved drug or alcohol test.

The expanded reporting of positive results, or of an operator’s refusal to meet FMCSA testing requirements, to a centralized clearinghouse prescribed by FMCSA has the potential to remove operators from service that may otherwise have been undetected or unreported.

In addition, FMCSA mandated the use of electronic logging devices (“ELDs”) in certain over-the-road

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government is one of the Company’s customers, the Company must comply with and is affected by laws and regulations relating to doing business with the federal government.

The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.

changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.

For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, “Risk Factors.”

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We engage firms nationally recognized in the benefits area to objectively evaluate our programs and benchmark them against peers and other similarly situated organizations.

Landstar seeks to compensate employees in a manner that is fair, consistent, and reflective of the external market and provides recognition for the achievement of individual goals, corporate objectives, and professional competencies while maintaining fiscal responsibility.

To help us achieve this goal, in 2021, Landstar completed a review of employee compensation that included the establishment of new pay grades and applicable salary ranges for all exempt positions.

This review followed a similar review of employee compensation for all IT positions completed in 2020 and a review of all non-exempt

positions completed in 2019.

As of December 25, 2021, the Company and its subsidiaries employed 1,399 individuals.

Three Landstar Ranger drivers (out of a Company total of approximately 11,864 drivers for BCO Independent Contractors) are members of the International Brotherhood of Teamsters.

The turnover rate in 2021 for Landstar employees located in the United States and Canada was 13% in 2021, 9% in 2020 and 12% in 2019.

The Company considers relations with its employees to be good.

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The Company also uses employee roundtable and focus group discussions as well as exit interviews to monitor engagement and satisfaction.

Landstar also provides comprehensive professional development opportunities to employees at all levels.

Landstar provides comprehensive professional development opportunities to employees at all levels.

Various learning tracks include Leadership, Workplace Safety & Security, Customer Service and other core skills.

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All of our employees must adhere to a code of ethics and employee compliance code that set standards for appropriate behavior and includes required annual training.

During 2020, to address the safety and health of our employees, BCO Independent Contractors, and independent sales agents amidst the COVID-19

pandemic, we implemented the following, among other steps:

Shifting the vast majority of our employees to a remote work environment;

Initiating regular communication to employees regarding impacts of the COVID-19

During 2020 and 2021, we implemented the following steps to address the safety and health of our employees, BCO Independent Contractors, and independent sales agents amidst the COVID-19

Shifted the vast majority of our employees to a remote work environment;

Initiated regular communication to employees regarding impacts of the COVID-19

pandemic, including health and safety protocols and procedures to address actual and suspected COVID-19

cases and potential exposure of our employees;

Establishing physical distancing procedures and providing personal protective equipment and cleaning supplies for employees who need to be on-site;

Increasing cleaning protocols at our offices;

Modifying work spaces with plexiglass dividers, rearranged office layouts and touchless faucets;

Expanding the use of virtual interactions in all aspects of our business;

Cancelling the annual agent convention, BCO All-Star

Celebration and various other events;

Instituting a pandemic relief program whereby Landstar paid an extra $50 for each load delivered by a BCO Independent Contractor with a confirmed delivery date from April 1, 2020 through May 30, 2020 to both the BCO Independent Contractor hauling the load and the independent sales agent dispatching the load;

Providing up to $2,000 to a BCO Independent Contractor who tests positive for COVID-19

or is placed under a mandatory quarantine by a public health authority;

Providing paid time-off

Established physical distancing procedures and providing personal protective equipment and cleaning supplies for employees who need to be on-site;

Increased cleaning protocols at our offices;

Modified work spaces with plexiglass dividers, rearranged office layouts and touchless faucets;

Expanded the use of virtual interactions in all aspects of our business;

Cancelled or modified various events, including the annual agent convention and BCO All-Star

Instituted a pandemic relief program whereby Landstar paid an extra $50 for each load delivered by a BCO Independent Contractor with a confirmed delivery date from April 1, 2020 through May 30, 2020 to both the BCO Independent Contractor hauling the load and the independent sales agent dispatching the load;

Provided up to $2,000 to a BCO Independent Contractor who tested positive for COVID-19

or was placed under a mandatory quarantine by a public health authority;

Provided paid time-off

for employees directly impacted by COVID-19,

and instructing those who are infected to stay home;

Prohibiting non-essential

business travel for all employees.

Limited non-essential

business travel for employees.

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 1. Business