What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-19 compared with 2020-02-19 · 132 added, 166 removed, 119 unchanged (71% of the section changed)

In this report, when we refer to “the Company,” “us,” “we,” “our,” “ours,” or “Schneider,” we are referring to Schneider National, Inc.

and its subsidiaries.

References to “notes” are to the notes to consolidated financial statements included in this Annual Report on Form 10-K.

Company Overview

We are a leading transportation and logistics services company providing a broad portfolio of premier truckload, intermodal, and logistics solutions and operating one of the largest for-hire trucking fleets in North America.

We were founded in 1935 by Al J.

Schneider in Green Bay, Wisconsin.

In April 2017, we completed our IPO.

We believe we have developed a differentiated business model that is difficult to replicate due to our scale, breadth of complementary service offerings, and proprietary technology platform.

Our highly flexible and balanced business combines asset-based truckload services with asset-light intermodal and non-asset logistics offerings, enabling us to serve our customers’ diverse transportation needs.

We believe we have become an iconic and trusted brand within the transportation industry by adhering to a culture of “safety first and always” and upholding our responsibility to our customers, our associates, and the communities we serve.

Our service offerings include one-way, dedicated, team, bulk, intermodal, dray, brokerage, cross dock, warehousing, and supply chain management.

We are one of the largest providers of surface transportation and logistics solutions in North America.

Schneider National, Inc.

is a publicly held holding company that, together with our wholly owned subsidiaries, provides safe, reliable, and innovative truckload, intermodal, and logistics services to a diverse group of customers throughout the continental United States, Canada, and Mexico.

Unless otherwise indicated by the context, “we,” “us,” “our,” “ours,” the “Company,” and “Schneider” refer to Schneider National, Inc.

and its consolidated subsidiaries.

We were founded in 1935 and have been a publicly held company since our initial public offering in 2017.

Our stock is publicly traded on the NYSE under the ticker symbol SNDR and is included in the Russell 1000 Index.

Schneider possesses an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the movement of products timely, safely, and effectively, thus adding value to our customers’ supply chains.

Our diversified portfolio of complementary service offerings combines truckload services with intermodal and logistics offerings, enabling us to serve our customers’ varied needs.

Our service offerings include transportation of full-truckload freight, which we directly transport utilizing either our company-controlled revenue equipment and company drivers or owner-operators under contract with us.

We have arrangements with most of the major North American rail carriers to transport freight in containers.

We also provide customized freight movement, revenue equipment, labor, systems, and delivery services tailored to meet individual customer requirements and typically involve long-term contracts.

These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local deliveries, freight handling, specialized equipment, and freight network design.

We also provide comprehensive logistics services with a network of thousands of reliable third-party carriers, and through a China-based subsidiary, we offer limited transportation and logistics services in China which consist primarily of brokerage services.

We categorize our operations into the following reportable segments:

Truckload – which consists of freight transported and delivered with standard and specialty equipment by our company-employed drivers in company trucks and by owner-operators.

These services are executed through either for-hire or dedicated contracts.

Our truckload services include standard long-haul and regional shipping services primarily using dry van, bulk, temperature-controlled, and flat-bed equipment, as well as customized solutions for high-value and time-sensitive loads to offer vast coverage through North America, including Mexico and Canada.

Intermodal – which consists of door-to-door container on flat car (“COFC”) service by a combination of rail and over-the-road transportation, in association with our rail carrier partners.

Our intermodal service uses company-owned containers, chassis, and trucks, with primarily company dray drivers, augmented by third-party dray capacity to offer vast coverage throughout North America, including Mexico and Canada.

Logistics – which consists of non-asset freight brokerage, supply chain (including 3PL), and import/export services.

Our logistics business typically provides value-added services using third-party capacity, augmented by our trailing assets, to manage and move our customers’ freight.

• Truckload – which consists of freight transported and delivered by our company-employed drivers in company trucks and by owner-operators.

These services are executed through either network (formerly called for-hire) or dedicated contracts and include standard long-haul and regional shipping services primarily using dry van, bulk, temperature-controlled, and flat-bed equipment, as well as cross dock and customized solutions for high-value and time-sensitive loads with coverage throughout North America.

• Intermodal – which consists of door-to-door container on flat car (“COFC”) service through a combination of rail and dray transportation, in association with our rail carrier providers.

Our intermodal service uses company-owned containers, chassis, and trucks with primarily company dray drivers, augmented by third-party dray capacity.

• Logistics – which consists of freight brokerage (including Power Only which leverages our nationwide trailer pools to match capacity with demand), supply chain (including 3PL), warehousing, and import/export services.

Our logistics business provides value-added services using both our assets and third-party capacity, augmented by our trailing assets, to manage and move our customers’ freight.

Our business is seasonal across each of our segments which generally translates to our reported revenues being the lowest in the first quarter and highest in the fourth quarter.

For more information on our reportable segments, see Note 15, Segment Reporting .

We also lease equipment to third parties through our wholly owned subsidiary Schneider Finance, Inc., which is primarily engaged in leasing trucks to owner-operators, including, but not limited to, owner-operators with whom we contract.

Additionally, we provide insurance for both company drivers and owner-operators through our wholly owned insurance subsidiary, and we conduct limited China-based trucking operations consisting primarily of brokerage services.

We have established a network of facilities across North America to maximize the geographic reach of our company trucks and owner-operators and provide maintenance services, driver training, and personal amenities for our drivers.

Our portfolio diversity, network density throughout North America, and large fleet allow us to provide an exceptional level of service to our customers and consistently excel as a reliable partner, especially at times of peak demand.

Our early investment, adoption, and continued investment in next generation technology and data analytics is a competitive advantage.

Our custom quote-to-cash Quest platform leverages proprietary decision science algorithms and real-time data analytics to optimize network density and equipment use across our entire network.

This state-of-the-art platform allows us to make informed decisions at every level of our business.

We believe the success of our business is not materially dependent on the existence or duration of any patent, license, or trademark other than trademarks relating to the Schneider name and brand.

Additionally, we provide insurance for both company drivers and owner-operators through our wholly owned insurance subsidiary.

Our Mission and Strategy

We are driven by our uncompromising values to safely deliver the goods that enhance the lives of people everywhere.

We forge long-term relationships with key customers as an integral partner in, and extension of, their supply chains.

Our strategy is based on delivering superior experiences to our customers utilizing an integrated, multimodal approach to provide capacity-oriented

solutions centered on delivering customer value and industry-leading service.

We believe our operating strategy adds value to customers, fuels our earnings, and generates returns to stockholders.

We continually analyze opportunities for capital investment and effective capital deployment to provide more benefits to our customers and increase returns to our shareholders.

Business Developments

On July 29, 2019, the Company's Board of Directors approved a structured shutdown of its FTFM service offering within its Truckload reporting segment which was substantially complete as of August 31, 2019.

As part of the shutdown, we incurred $63.7 million of restructuring charges in 2019.

With the uncertainties of COVID-19, the Company continues to monitor the impact of the pandemic on all aspects of its business, including the impact to its customers, associates, owner-operators, and business partners.

Our operational and financial performance were negatively impacted by a reduction in volumes across our Truckload and Intermodal segments primarily during the second quarter of 2020, however we experienced improvement as the year progressed.

Cost reduction initiatives implemented by the Company lessened the impact of reduced volumes, but uncertainty remains regarding the ongoing impact of COVID-19 on our financial condition and future results of operations.

Industry and Competition

The trucking industry is the core of the U.S.

The trucking industry is at the core of the U.S.

economy and moves the vast majority of freight volume in the U.S.

Trucking continues to attract shippers due to the mode’s cost advantages relative to air transportation and flexibility relative to rail.

Growth in freight volume is largely tied to Gross Domestic Product growth and generally moves in line with the U.S.

truckload industry sector, both dry van and specialty equipment are used to transport goods over a long haul and on a regional basis.

Dry van carriers represent an integral component of the transportation supply chain for most retail and manufactured goods in North America.

Specialty carriers employ equipment such as flat-bed trailers, straight trucks, temperature-controlled trailers, over-sized trailers, and bulk transport, dump, and waste equipment.

These carriers can transport temperature-controlled products and bulk commodities such as specialty chemicals and petrochemicals.

Specialty equipment offerings are characterized by higher equipment costs and more extensive driver training requirements relative to dry van offerings, resulting in higher barriers to entry and creating opportunities for differentiated value propositions for customers.

truckload industry is highly competitive and fragmented, characterized by many small carriers with revenues of less than $1 million per year, fewer than 65 carriers with revenues exceeding $100 million per year, and less than 10 carriers with revenues exceeding $1 billion per year, according to the most recent rankings published by Transport Topics, an American Trucking Association publication.

Regulations and initiatives to improve the safety of the U.S.

trucking industry have impacted industry dynamics.

We believe the recent trend is for industry regulation to become progressively more restrictive and complex, which constrains the overall supply of trucks and drivers in the industry.

“Domestic” or “North American domestic” intermodal is the term used in the trucking industry to refer to intermodal operations within North America (such as a shipment by rail and by truck either all within the U.S.

or throughout North America).

Freight is transported in a 53-foot container or trailer, using multiple modes of transportation (rail and truck) within the U.S., Canada, and Mexico.

Intermodal transportation eliminates the need for customers to directly handle freight when changing modes between rail and truck, and holds significant productivity, cost, and fuel-efficiency advantages when moving freight.

Containers are typically moved from truck onto rail and then back onto trucks before they reach their final destination.

Domestic intermodal volumes are largely driven by over-the-road conversions from truckload to intermodal and from the volume of overseas imports into the U.S., such as from China.

The domestic intermodal market is comprised of service providers of differing asset intensity, with customers being served by either non-asset IMCs or asset-light network intermodal providers, such as Schneider.

While IMCs are the most prevalent intermodal solution providers, we believe that asset-light network intermodal providers offer differentiated higher-value solutions to customers given the reliability and high service levels of company assets (trucks, containers, and even chassis) compared to non-asset IMCs.

Overall, it is a highly competitive and fragmented industry, characterized by many small carriers.

Increased regulations and initiatives to improve the safety and reduce emissions of the U.S.

trucking industry have impacted industry dynamics in recent years and are discussed in the Regulation section below.

Our Truckload segment competes with thousands of dry van and specialty equipment carriers.

While we compete with many smaller carriers on a regional basis, only a limited number of carriers represent competition in all markets across North America.

The domestic intermodal segment is highly consolidated, where the top three intermodal providers, including our Intermodal segment, operate a significant portion of the U.S.

dry van domestic container fleet.

Network density, size, and scale are critical barriers to entry in the intermodal market.

Increasing sophistication and complexity of shippers’ needs require network density and the ability to deliver reliable capacity.

Railroads have been investing significant amounts in recent years to maintain and improve their infrastructure, equipment, and efficiency, which we believe supports growth of the intermodal industry and improves the efficiency and reliability of the railroad component of our intermodal service.

We are currently one of the largest domestic intermodal providers in North America by revenue and believe that we are well positioned for future growth in intermodal freight through our nationwide network and company-owned container/chassis model.

We focus on intermodal service as an alternative to placing additional trucks and drivers in lanes for which rail service otherwise provides competitive service or that are significantly longer in distance.

Our longstanding railroad relationships with

Burlington Northern Santa Fe (BNSF) Railway, CSX Transportation, Union Pacific Railroad, Norfolk Southern Railway, Canadian National Railway, Kansas City Southern Railway, and other regional rail carriers, such as Florida East Coast Railway, provide rail access nationwide.

Our customers value our intermodal network over IMCs due to our consistent access to capacity through our company assets and high-quality drayage services that provide a larger geographic reach around intermodal terminals.

We operate under a company-owned chassis model.

As compared to a rented chassis model, we believe this model allows for lower all-in chassis operating costs, improved service reliability and driver efficiency, and a higher level of control over the chassis operations of our intermodal business.

We believe that our balanced network and large base of company assets provide a significant competitive advantage that would be difficult for other carriers to replicate.

Our logistics business provides value-added services using a combination of company-owned and third-party capacity and assets to manage and move our customers' freight.

domestic container fleet.

Our Intermodal segment competes with intermodal providers and other transportation service companies.

The logistics industry is a large, fast-growing, and fragmented market that represents an integral part of the global economy.

Increased material costs, combined with enhanced global competition, impose margin pressure on manufacturers, often resulting in the outsourcing of non-core transportation logistics to supply chain specialists who offer a combination of scale, expertise, strong technology platforms, and lower costs.

Additionally, more shipments are transported using multiple modes and technical expertise, driving shipper preferences for logistics providers with an asset-based network to complement their third-party capacity.

Transportation asset owners often provide logistics services to meet excess demand and provide customers with greater breadth of services.

Our logistics business provides additional services to existing customers and incremental freight to our assets, which helps to facilitate the expansion of our customer base and offers opportunities for cross-selling our suite of services.

As of December 31, 2019 , we offered our services to approximately 14,900 customers across our portfolio, including nearly 200 Fortune 500 companies.

We believe customers value our breadth of services, demonstrated by 22 of our top 25 customers using services from all three of our reportable segments.

Transportation asset owners often provide logistics services to meet excess demand and provide customers with greater breadth of services which results in our Logistics segment competing with other logistics companies and brokerage businesses, and to a lesser extent other truckload carriers.

During the year ended December 31, 2020, we offered our services to approximately 9,250 customers across our portfolio, including nearly 200 Fortune 500 companies, and 24 of our top 25 customers used services from all three of our reportable segments.

Our Logistics segment manages over 36,000 qualified carrier relationships and managed approximately $1.9 billion of third-party freight in 2020.

Our broad portfolio limits our customer and industry concentration as compared to other carriers.

Our broad portfolio helps limit customer and industry concentration.

We receive revenue from a diversified customer base, none of which generated revenues in excess of 10% in 2020.

We maintain a broad end-market footprint, encompassing over ten distinct industries including general merchandise, chemicals, electronics and appliances, and food and beverage, among others.

Our diversified revenue mix and customer base drive stability throughout the fiscal year, even though many of our customers are affected by seasonal fluctuations.

For example, our consumer goods and big box retail sales experience the greatest demand in the fourth quarter, our food and beverage sales peak during the summer, and home improvement sales peak in spring and early summer, creating more balanced year-round demand.

Our balanced customer base allows for stable revenue and yield management through the fiscal year, allowing for more efficient seasonality management.

Our diversified revenue mix and customer base allows for revenue and yield management stability throughout the year, despite the fact that many of our customers are affected by seasonal fluctuations.

Revenue Equipment

Our revenue equipment fleet was comprised of the following equipment at December 31, 2019 :

Revenue Equipment Type

Approximate Number of Units

Our company owned revenue equipment fleet was comprised of the following at December 31, 2020:

Revenue Equipment Type Approximate Number of Units

Over-the-road sleeper cab tractors 7,200

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Other tractors (yard tractors, straight trucks, and training tractors) 100

As of December 31, 2019 , we employed approximately 15,650 associates, 66% of whom are drivers and the remaining 34% are mechanics and warehouse personnel, managers, and other corporate office employees.

Approximately 17% of our associates are based in our headquarters in Brown County, Wisconsin.

Trailers 36,900

Containers 22,300

Chassis 20,600

Human Capital Matters

As of December 31, 2020, we employed approximately 15,225 as sociates, 66% of whom are drivers with the remaining 34% consisting of mechanics and warehouse personnel, managers, and other corporate office employees.

Approximately 17% of our associates are based at our headquarters in Green Bay, Wisconsin.

We have not experienced any work stoppages and consider our associate relations to be good.

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None of our other associates are represented by a labor union.

As a result of our performance, integrity, and collaborative culture, we have a highly engaged workforce.

Our workforce is deployed over a diverse set of positions across our segments, geographies, and businesses.

Where consistent with our operational needs, we offer a variety of flexible working arrangements to associates, which include remote work arrangements.

As a result of retirements, high turnover rates, and the slow pace of attracting new drivers to the industry, the industry and the long-haul truckload sector, in particular, have been characterized by persistent shortages of truck drivers.

Recognizing the indispensable role that our truck drivers play in our ability to serve our customers, making our driver experience the best in the industry and retaining our drivers is a high priority.

We employ a number of measures to offset driver turnover, remain focused on driver retention, and maintain a turnover rate which is generally consistent with the industry standard.

Those measures include establishing monthly hiring targets, offering drivers competitive salaries and benefits, establishing driver pay scales which provide for increasing pay by experience level and performance, offering both live and remote driver training by experienced driving instructors, maintaining a modern truck fleet with the latest safety technology, and improving the overall driver experience.

We conduct biennial associate surveys to measure associate satisfaction and garner ideas to improve workforce engagement.

Survey results are used to implement programs that will enhance associate connectivity with the Company which is believed to lead to increased innovation, productivity, and profitability.

The Company believes that a diverse workforce leads to innovative ideas and a culture that drives unique and inclusive perspectives.

We promote an environment where respect for others and their rights are expected.

Owner-Operators

In addition to the company drivers we employ, we enter into contracts with owner-operators.

Owner-operators are small business owners who operate their own trucks (some may employ drivers they hire) and provide us with services under a contractual arrangement whereby they are generally responsible for the costs of ownership and operating expenses and are compensated on a per load basis.

Owner-operators select their own load assignments and have control over their schedule.

In addition to the company drivers we employ, we enter into contracts with independent contractors who operate as “owner-operators”.

Owner-operators select their own load assignments, have control over their schedule, and are compensated on a per load basis.

Owner-operators tend to be experienced drivers and represented approximately 22% of driver capacity as of December 31, 2020.

We believe our owner-operator model, which includes self-dispatch, technology platform, and truck financing, is unique in our industry and positions us as a preferred partner for owner-operators.

Environmental, Social, and Governance

We prioritize doing business responsibly and embrace that we have a role to play in the betterment of society.

At Schneider, we define sustainability broadly as safe and responsible practices that strengthen the economy and create a safer world.

We seek to accomplish this by maintaining a modern fleet to maximize fuel efficiency, leveraging our intermodal service to convert loads from truck to rail, consolidating freight whenever possible, and introducing technologies to coordinate the movement of

products timely, safely, and efficiently.

Additionally, we continue to evaluate alternative fuel vehicles, and our efforts to improve overall fleet fuel efficiency and reduce greenhouse gas emissions are ongoing.

We are an EPA SmartWay® Transport Partner and are proud to be one of only four freight carriers to receive the EPA’s SmartWay® Excellence Award each year since the award was created.

We were the first company to receive the National Safety Council’s Green Cross for Safety Award for two consecutive years.

As always, we continue to ingrain safety into our corporate culture and strive to conduct all of our operations as safely as possible.

“Safety first and always” is a Schneider core value.

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• Driver hiring and drug testing .

We have a comprehensive driver hiring process.

We voluntarily choose to use hair follicle testing in addition to urine-based drug testing.

While costing more per driver, hair follicle testing is generally more accurate than the alternative.

We hire both experienced drivers and drivers new to the industry through a comprehensive hiring process.

As part of that process, we voluntarily choose to use hair follicle testing in addition to mandated urine-based drug testing.

While costing more per driver, hair follicle testing is generally more accurate than urine-based testing.

• Military drivers .

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military and employ many drivers with military experience.

This experience produces quality truck drivers due to the discipline instilled through the military training programs.

This experience produces quality truck drivers due to the discipline instilled through military training programs.

Initial training is complemented by regularly scheduled follow-up training to sustain and enhance basic skills.

We hire both experienced drivers and drivers new to the industry.

We operate company-sponsored driver training facilities and have invested in simulators for both initial and sustainment training.

• Equipment and technology .

We invest in trucks that are configured with roll stability capability, collision mitigation, lane departure warning, and forward-facing cameras.

We invest in trucks that are configured with roll stability, collision mitigation, lane departure warning, and forward-facing cameras.

Driving behavior is electronically monitored, alerts are provided to the driver situationally, and performance is documented for subsequent coaching.

We also employ electronic logging, which ensures HOS compliance and reduces the instance of fatigue.

We also employ electronic logging, which ensures HOS compliance and reduces fatigue occurrences.

• Active management .

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Truckload carriers share safety performance information in monitored peer-to-peer forums.

These comparisons show that we are one of the safest truckload carriers on the road today.

We have always maintained a satisfactory DOT safety rating, which is the highest available rating.

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In 2020, we made 99% of our fuel purchases through negotiated volume purchase discounts.

We store fuel in underground storage tanks at eleven locations and in above-ground storage tanks at one location.

We store fuel in underground storage tanks at ten locations and in above-ground storage tanks at one location.

We believe that we are in substantive compliance with applicable environmental laws relating to the storage of fuel.

In response to fluctuations in fuel prices, we use surcharge programs to adjust fuel costs charged to our customers.

We believe the most cost-effective protection against variability in fuel costs is to continue the fuel surcharge programs and to invest in a fuel-efficient fleet.

We believe the most cost-effective protection against variability in fuel costs is to continue the fuel surcharge programs and invest in a fuel-efficient fleet.

However, fuel surcharges may not adequately cover potential future increases in fuel prices.

additional measure, we leverage fuel consumption metrics in driver evaluation, and drivers utilize a fuel optimizer program where they purchase fuel at the most cost-effective locations based on distance to empty and fuel purchase commitments.

As an additional measure, we leverage fuel consumption metrics in evaluating drivers’ performance, and drivers utilize a fuel optimizer program where they purchase fuel at the most cost-effective locations based on distance to empty and fuel purchase commitments.

Industry Regulation

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We are subject to the FMCSA’s HOS rule, which was effective on July 1, 2013.

The key provisions include:

an 11-hour daily driving time limit;

a maximum number of hours a truck driver can work within a week of 70 hours;

a limit of eight consecutive driving hours a truck driver can work before being required to take a 30-minute break.

Since December 2010, the FMCSA has ranked both fleets and individual drivers on seven categories of safety-related data.

These categories, known as BASICs, currently include Unsafe Driving, Fatigued Driving (HOS), Driver Fitness, Controlled Substances/Alcohol, Vehicle Maintenance, Hazardous Materials Compliance, and Crash Indicator.

Certain BASICs information was initially published and made available to carriers, as well as the general public.

However, in December 2015, as part of the Fixing America’s Surface Transportation Act, Congress mandated that the FMCSA remove all Comprehensive Safety Analysis scores from public view until a more comprehensive study regarding the effectiveness of BASICs improving truck safety can be completed, and the recommendations from that study are evaluated for implementation.

Implementation and effective dates of these recommended changes are unclear, as there is currently no proposed rulemaking with respect to BASICs.

This leaves SafeStat, a national system instituted by the Federal Highway Administration for evaluating the safety of motor carriers, as the authoritative safety measurement system in effect.

We currently have a satisfactory SafeStat DOT rating, which is the best available rating under the current safety rating scale.

Moving Ahead for Progress in the 21st Century Bill

The FMCSA issued its final rule mandating the use of ELDs in December 2015.

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In December 2019, the next phase of the ELD mandate went into effect requiring carriers previously grandfathered-in for the use of automatic on-board recording devices to switch to ELDs for logging HOS.

As of December 31, 2019, the Company is compliant with the rule's requirements.

Drug and Alcohol Clearinghouse

The FMCSA issued its final rule establishing the Commercial Driver’s License Drug and Alcohol Clearinghouse (“Clearinghouse”) in 2016 (effective date January 4, 2017).

Compliance was required January 6, 2020.

Compliance was required by January 6, 2020.

The Clearinghouse requires FMCSA-regulated employers and others to report information related to violations of the drug and alcohol regulation for current and prospective driver employees.

It also requires the employers to query the Clearinghouse (a) for current/prospective employees before allowing them to operate a commercial motor vehicle on public roads and (b) for current employees, at least annually for each driver.

We are now subject to the Clearinghouse rule, and although we believe it may have an impact on overall industry capacity, we do not expect the impact on the Company to be significant.

Prohibiting Coercion of Commercial Motor Vehicle Drivers

The Prohibiting Coercion of Commercial Motor Vehicle Drivers rule, as published in the Federal Register and adopted by the FMCSA, explicitly prohibits motor carriers and other parties in the supply chain from coercing drivers to violate certain FMCSA regulations, including driver HOS limits, commercial driver's license regulations, drug and alcohol testing rules, and hazardous materials regulations, among others.

The Prohibiting Coercion of Commercial Motor Vehicle Drivers rule, as adopted by the FMCSA, explicitly prohibits motor carriers and other parties in the supply chain from coercing drivers to violate certain FMCSA regulations, including, but not limited to, driver HOS limits, commercial drivers’ license regulations, drug and alcohol testing rules, and hazardous materials regulations.

Under the rule, drivers can report incidents of coercion to the FMCSA, which is authorized to issue penalties against the offending party.

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We are subject to various environmental laws and regulations dealing with the hauling and handling of hazardous materials, fuel storage tanks, emissions from our vehicles and facilities, engine idling, discharge and retention of storm water, and other environmental matters that involve inherent environmental risk.

We maintain bulk fuel storage and fuel islands at many of our terminals.

We also have vehicle maintenance, repair, and washing operations at some of our facilities.

We maintain bulk fuel storage and fuel islands at some of our terminals.

We also have vehicle maintenance and repair operations at some of our facilities.

Our operations involve the risks of fuel spillage and seepage, discharge of contaminants, environmental damage, and hazardous waste disposal, among others.

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We are a partner in the EPA’s SmartWay Transport Partnership, a voluntary program promoting energy efficiency and air quality.

We believe that our operations are in substantial compliance with current laws and regulations and do not know of any existing environmental condition that would be reasonably expected to have a material adverse effect on our business or operating results.

If we are held responsible for the cleanup of any environmental incidents caused by our operations or business, or if we are found to be in violation of applicable laws or regulations, we could be subject to liabilities, including substantial fines or penalties, or civil and criminal liability.

We have paid penalties for, and have incurred costs to remediate, spills and violations in the past.

In 2008, the State of California’s ARB approved the Heavy-Duty Vehicle GHG Emission Reduction Regulation in efforts to reduce GHG emissions from certain long-haul tractor-trailers that operate in California by requiring them to use technologies that improve fuel efficiency (regardless of where the vehicle is registered).

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The regulation also contained certain emissions and registration standards for temperature-controlled trailer operators.

Thereafter, the U.S.

EPA and the NHTSA began taking coordinated steps at a national level in support of a new generation of clean vehicles and engines through reduced GHG emissions and improved fuel efficiency.

In September 2011, the U.S.

EPA finalized federal regulations for controlling GHG emissions, beginning with model year 2014 medium and heavy-duty engines and vehicles and increasing in stringency through model year 2018 and later.

Thereafter, the EPA and the NHTSA began taking coordinated steps at a national level in support of a new generation of clean vehicles and engines through reduced GHG emissions and improved fuel efficiency.

In September 2011, the EPA finalized federal regulations for controlling GHG emissions, beginning with model year 2014 medium and heavy-duty engines and vehicles and increasing in stringency through model year 2018 and later.

The federal regulations relate to efficient engines, use of auxiliary power units, mass reduction, low rolling resistance tires, improved aerodynamics, improved transmissions, and reduced accessory loads.

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In October 2016, the EPA and the NHTSA published a Final Rule for Phase 2 of the GHG emissions and fuel efficiency standards for medium and heavy-duty engines and vehicles.

The Final Rule, which became effective as of December 27, 2016, is expected by the EPA to lower CO 2 emissions by 1.1 billion metric tons and reduce oil consumption by up to 2 billion barrels over the lifetime of vehicles sold under the Phase 2 program.

First-time GHG and fuel efficiency standards for trailers began with model year 2018 for EPA and will start with model year 2021 for NHSTA, and CO 2 and fuel consumption standards for combination tractors and engines (which are subject to individual and separate regulatory requirements) commence with model year 2021, increase incrementally with model year 2024, and achieve a fully phased-in requirement with model year 2027.

EPA and NHSTA expect that motor carriers will meet the increased standards using technology improvements in multiple areas, including the engine, transmission, driveline, aerodynamic design, extended idle reduction technologies, and the use of other accessories.

The Final Rule, which became effective as of December 27, 2016,

is expected to lower CO 2 emissions by 1.1 billion metric tons and reduce oil consumption by up to 2 billion barrels over the lifetime of vehicles sold under the Phase 2 program.

First-time CO 2 and fuel consumption standards for combination tractors and engines (which are subject to individual and separate regulatory requirements) commence in calendar year 2021, increase incrementally in 2024, and achieve a fully phased-in requirement in 2027.

EPA and NHTSA expect that motor carriers will meet the increased standards using technology improvements in multiple areas, including the engine, transmission, driveline, aerodynamic design, extended idle reduction technologies, and the use of other accessories.

Since its adoption of the Phase 2 Final Rule, the EPA has received various petitions for reconsideration based on the position that the EPA lacked legal authority to regulate certain types of vehicles, including glider vehicles and trailers.

In light of these petitions, the EPA decided to revisit certain provisions in the Phase 2 Final Rule.

In November 2017, the EPA issued a proposal to repeal the emissions standards and other requirements for heavy-duty glider vehicles, glider engines, and glider kits based

upon a proposed interpretation of the CAA under which glider vehicles would be found not to constitute “new motor vehicles” within the meaning of CAA Section 216(3), glider engines would be found not to constitute “new motor vehicle engines” within the meaning of CAA Section 216(3), and glider kits would not be treated as “incomplete” new motor vehicles.

In November 2017, the EPA issued a proposal to repeal the emissions standards and other requirements for heavy-duty glider vehicles, glider engines, and glider kits based upon a proposed interpretation of the CAA under which glider vehicles would be found not to constitute “new motor vehicles” within the meaning of CAA Section 216(3), glider engines would be found not to constitute “new motor vehicle engines” within the meaning of CAA Section 216(3), and glider kits would not be treated as “incomplete” new motor vehicles.

Under this proposal interpretation, the EPA would lack authority to regulate glider vehicles, glider engines, and glider kits under CAA Section 202(a)(1).

The public comment period for this proposal expired on January 5, 2018.

The public comment period for this proposal expired on January 5, 2018, and the EPA has not taken further action on the proposed rule.

Current and proposed GHG regulations could impact us by increasing the cost of new trucks, impairing productivity, and increasing our operating expenses.

Federal and state lawmakers are considering a variety of climate-change proposals related to carbon emissions and GHG emissions.

Federal and state lawmakers are considering a variety of climate-change proposals related to carbon and GHG emissions.

The proposals could potentially limit carbon emissions for certain states and municipalities, which continue to restrict the location and amount of time that diesel-powered trucks may idle.

In September 2019, California passed AB 5, which codifies the standard known as the “ABC test” in order to determine whether a worker is considered an independent contractor or an employee for purposes of employee benefits such as sick leave, paid vacation, and overtime, among other legal requirements.

In September 2019, California passed California Assembly Bill 5, more commonly referred to as “AB 5”, which codifies the standard known as the “ABC test” in order to determine whether a worker is considered an independent contractor or an employee for purposes of employee benefits such as sick leave, paid vacation, and overtime, among other legal requirements.

Observers generally view AB 5 as lowering the threshold for classifying a worker as an employee as opposed to an independent contractor.

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however, a California Federal District judge has issued a preliminary injunction enjoining California from enforcing AB 5 as to motor carriers while the case is pending.

California can appeal the decision to grant the preliminary injunction.

As the Company does not utilize a large population of owner-operators in California, the impact if AB 5 is upheld is expected to be insignificant.

This decision was appealed and a panel of the Ninth Circuit Court of Appeals heard oral arguments on September 2, 2020.

If AB 5 is upheld, capacity and rates throughout the industry could be widely impacted.

Other Regulation

In the aftermath of the September 11, 2001 terrorist attacks, federal, state, and municipal authorities implemented and continue to implement various security measures on large trucks, including checkpoints and travel restrictions.

The TSA adopted regulations that require drivers applying for or renewing a license for carrying hazardous materials to obtain a TSA determination that they are not a security threat.

Technology and Research and Development

We are a technology leader in the transportation industry.

Our in-cab telematics platform delivers on-board technology through our private application store to enable regulatory compliance and driver productivity needs.

We believe our platform is one of the most comprehensive solutions in the industry.

It includes message capabilities, applications that scan and automate paperwork, and customer and location specific step-by-step work assignments.

This comprehensive platform includes message capabilities, applications that scan and automate paperwork, and customer and location specific step-by-step work assignments.

Our telematics platform is fully integrated with our back-office planning and execution systems and delivers real-time data in our business.

Our trailer and container fleets are equipped with monitoring devices which function both when tethered to a tractor and standing alone.

Our tractors are equipped with stability control and collision avoidance technology, lane departure warning, and forward-facing cameras.

Trailer and container fleets are equipped with monitoring devices which function both when tethered to a tractor or standing alone.

Our tractors are equipped with stability control and collision mitigation technology, lane departure warning, and forward-facing cameras.

All tractor technology interfaces with the in-cab device and provides the driver and the driver’s leader with real-time performance data.

We execute our business on Quest, an integrated technology platform that encompasses an end-to-end process design with focus on information accessibility and insight across our value chain.

Quest enables an integrated approach to cash process including load/order acceptance based on driver and network optimization, vehicle dispatch, continuous quote monitoring, and visibility to the load from pick-up to delivery and customer billing.

Our technology is enhanced by the work of a team of operations research engineers and data scientists.

Proprietary decision support tools are embedded throughout the Quest platform.

Our business is executed through an integrated technology platform that encompasses an end-to-end process design which focuses on information accessibility across our value chain.

Our platform enables an integrated approach to cash processing including load/order acceptance based on driver and network optimization, vehicle dispatch, continuous quote monitoring, and visibility to the load from pick-up to delivery and customer collection.

Proprietary decision support tools are embedded throughout the platform and assist our associates in making the right trade-offs among drivers’ needs for earnings and work-life balance, customers’ needs for reliable capacity and service, and our business and its shareholders’ needs for an adequate return.

Decision support tools improve our ability to, among other things, situationally coach drivers, minimize fuel costs, and maintain the fleet in the most cost-effective manner.

The most significant application of such “decision science” technology is in planning and dispatch.

These tools assist our associates in making the right trade-offs among drivers’ needs for earnings and work-life balance, customers’ needs for reliable capacity and service, and our business and its shareholders’ needs for an adequate return.

We continue to expand business capabilities by extending the foundational Quest platform.

Development of the next generation of in-cab technology is well underway.

We have committed to purchase a limited number of Tesla's electric tractors to improve the driver experience, decrease our carbon footprint, and lower operating costs.

We continue to expand our business capabilities by extending our foundational Quest platform and making advancements to our in-cab technology.

We are also leveraging mobile applications to better connect with company drivers and customers.

One example is a mobile application that prompts our company drivers to rate the shipping, receiving, and driver support locations that they visit.

Our gathering and sharing of this information with customers and providers have been well received and is driving action to improve the drivers' experience.

One example is a mobile application that prompts our company drivers to rate the shipping, receiving, and driver support locations

that they visit.

Our gathering and sharing of this information with customers and providers have been well received and are driving action to improve the drivers' experience.

Schneider FreightPower® digitally connects the benefits of Quest with the strength of our trailer network and carrier relationships to service our customers.

Available Information

We file annual, quarterly, and current reports and other information with the SEC.

Our filings with the SEC are made available to the public as soon as reasonably practicable on our website for free via the “Investors” section at

https://investors.schneider.com/investors/overview/default.aspx.

The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference herein and is not part of this Annual Report on Form 10-K.

We make a number of reports and other information available free of charge on our website, www.schneider.com, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.

Our investor relations website also contains corporate governance guidelines, our code of ethics and whistleblower policy, Board committee charters, and other corporate policies.

The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.

Information About Our Executive Officers

Our executive officers as of February 19, 2021, together with their ages, positions, and business experience are below:

President, Chief Executive Officer and Director

Executive Vice President, Chief Financial Officer

Shaleen Devgun

Executive Vice President, Chief Information Officer

Executive Vice President, Chief Administrative Officer

Executive Vice President, Group President of Transportation & Logistics

Executive Vice President, General Counsel

Name Age Position

Rourke 56 President, Chief Executive Officer and Director

Bruffett 57 Executive Vice President, Chief Financial Officer

Shaleen Devgun 48 Executive Vice President, Chief Information Officer

Robert Reich 54 Executive Vice President, Chief Administrative Officer

David Geyer 56 Executive Vice President, Group President of Transportation & Logistics

Jackson 55 Executive Vice President, General Counsel

Rourke has served as our Chief Executive Officer and President, and as a Director, since April 2019.

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Rourke served as Executive Vice President and Chief Operating Officer and held various other roles within Schneider including President of our Truckload Services Division and General Manager of Schneider Transportation Management, where he was responsible for the effective delivery to market of sole source, promotional, and brokerage service offerings.

Mark also held a variety of other leadership roles at Schneider with increasing responsibility including Vice President of Customer Service, Director of Transportation Planning for Customer Service, Midwest Area Service Manager for Customer Service, and Director of Driver Training.

Mark held a variety of other leadership roles at Schneider with increasing responsibility including Vice President of Customer Service, Director of Transportation Planning for Customer Service, Midwest Area Service Manager for Customer Service, and Director of Driver Training.

Rourke joined our company in 1987, holds a bachelor’s degree in marketing from the University of Akron, Ohio, and has attended programs on corporate governance and strategic leadership at Harvard University.

He also serves on the Board of Directors for the U.S.

Chamber of Commerce.

He currently serves on the Board for the U.S.

Chamber of Commerce and The Shyft Group.

Bruffett has served as our Chief Financial Officer and Executive Vice President since April 2018.

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He holds bachelor’s degrees in economics and math from the University of Pune and a master’s degree in business administration from the University of Detroit Mercy.

He also serves on the Board of Directors for the Fox Cities Performing Arts Center.

He also serves on the Board for the Fox Cities Performing Arts Center.

Robert Reich has served as our Executive Vice President and Chief Administrative Office since April 2019.

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Army and was a member of the 1st Cavalry Division at Fort Hood.

He holds a bachelor's degree in electrical engineering from Pennsylvania State University and a master's degree in business administration from the University of Wisconsin-Oshkosh.

He holds a bachelor’s degree in electrical engineering

from Pennsylvania State University and a master’s degree in business administration from the University of Wisconsin-Oshkosh.

He also serves as the Chair for the Board of the North American Council for Freight Efficiency.

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He previously served as our Senior Vice President, Group Manager of Truckload Services from 2012 to 2019 and led Schneider’s Global Commercial Services.

Geyer holds a bachelor's degree in industrial technology from the University of Wisconsin-

Stout and has completed executive programs in corporate governance at UCLA and finance at the University of Chicago.

He also serves on the Board of Directors for the Northeastern Wisconsin chapter of the American Red Cross.

Geyer holds a bachelor’s degree in industrial technology from the University of Wisconsin-Stout and has completed executive programs in corporate governance at UCLA and finance at the University of Chicago.

He also serves on the Board for the Northeastern Wisconsin chapter of the American Red Cross.

Jackson has served as Executive Vice President and General Counsel since July 2019.

Prior to joining Schneider, Mr.

Jackson served as Senior Vice President, Secretary, and General Counsel of Knowles Corporation, a global provider of advanced micro-acoustic, audio processing, and precision device solutions, from 2014 to 2019.

Jackson served as Senior Vice President, Secretary, and General Counsel of Knowles Corporation from 2014 to 2019.

Prior to joining Knowles, Mr.

Jackson served as Vice President and Assistant General Counsel at Jabil Circuit, Inc., a provider of electronic manufacturing services from March 2012 to December 2013.

Jackson served as Vice President and Assistant General Counsel at Jabil Circuit, Inc.

from March 2012 to December 2013.

In addition, he served as Vice President, General Counsel, and Secretary at P.H.

Glatfelter Company, a manufacturer of specialty papers and fiber-based engineered materials from June 2008 to November 2011, and as its Assistant General Counsel, Assistant Secretary, and Director of Compliance from September 2006 to June 2008.

Glatfelter Company from June 2008 to November 2011, and as its Assistant General Counsel, Assistant Secretary, and Director of Compliance from September 2006 to June 2008.

Jackson holds both a juris doctor and a master of business administration from Villanova University, as well as a bachelor of science degree in mechanical engineering from Drexel University.

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