11 unchanged sentences
In general, we are subject to the same general risks and uncertainties that impact many other companies such as general economic, industry, and/or market conditions and growth rates;
−Removed: risks and uncertainties associated with or arising out of COVID-19 and possible future pandemics;
+Added: risks and uncertainties associated with or arising out of possible future pandemics;
possible future terrorist threats or armed conflicts and their effect on the worldwide economy;
6 unchanged sentences
Our business and results of operations are sensitive to changes in overall economic conditions that impact customer shipping volumes, industry freight demand, industry truck capacity, inflation, and our operating costs.
−Removed: Regarding our operating costs, inflationary pressures are occurring and are expected to persist in the near-term.
−Removed: We cannot predict future economic conditions, fuel price fluctuations, revenue equipment resale values, or how consumer confidence could be affected by such conditions.
+Added: Regarding our operating costs, inflationary pressures persist but are generally expected to decline in the U.S.
+Added: in the near-term due to easing of supply chain constraints.
+Added: We cannot predict future economic conditions, fuel price fluctuations, transportation equipment resale values, or how consumer confidence could be affected by such conditions.
Economic conditions that decrease shipping demand, including but not limited to public health crises, outbreaks of infectious diseases, or increases in truck capacity in the North American transportation and logistics industry, can exert downward pressure on rates and equipment utilization.
In general, significant decreases in shipping volumes within the industry or increases in available truck capacity result in more aggressive freight pricing as carriers compete for loads and to maintain truck productivity.
−Removed: Likewise, we are also subject to cost increases outside our control that could materially reduce our profitability if we are unable to offset such increases either through rate increases or cost reductions.
−Removed: Such cost increases include, but are not limited to, driver wages, fuel and energy prices, taxes and interest rates, tolls, license and registration fees, insurance premiums, regulations, revenue equipment and related maintenance costs, and healthcare and other employee benefit costs.
+Added: Likewise, we are also subject to cost increases outside our control that could materially reduce our profitability if we are unable to offset such increases through rate increases or cost reductions.
+Added: Such cost increases include, but are not limited to, driver wages, third-party carrier costs, fuel and energy prices, taxes and interest rates, tolls, license and registration fees, insurance premiums, regulations, transportation equipment and related maintenance costs, and healthcare and other employee benefit costs.
We cannot predict whether, or in what form, any such cost increases could occur.
1 unchanged sentence
We operate in a highly competitive and fragmented industry that is characterized by intense price competition which could have a materially adverse effect on our results of operations.
−Removed: Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity, and to some degree, on freight rates alone.
−Removed: In addition, some of our customers have, and others may in the future, use or expand their own private fleets rather than outsourcing loads to us.
Our operating segments compete with many other truckload carriers, logistics, brokerage, and transportation service providers of varying sizes, and to a lesser extent, LTL carriers, railroads, and other transportation or logistics companies, some of which have a larger fleet, greater access to equipment, preferential customer contracts, greater capital resources, or other competitive advantages.
+Added: Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity, and to some degree, on freight rates alone.
Our competitors periodically reduce their freight rates to gain business, especially when economic conditions are present which negatively impact customer shipping volumes, truck capacities, or operating costs.
1 unchanged sentence
Other of our customers periodically accept bids from multiple carriers for their shipping needs, which also periodically results in the loss of business to competitors.
+Added: Some of our customers have, and others may in the future, used or expanded their own private fleets rather than outsourcing loads to us.
+Added: Further, our industry has experienced market entrance by well-resourced, non-traditional firms or startups who, in some cases, have undercut market prices to capture market share.
+Added: Finally, our existing competitors, as well as new market entrants, have and continue to introduce new brokerage platforms or technologies, which has increased competition.
+Added: Although we believe we are well positioned and have adopted technologies, developed strategies, and heavily invested in our own digital service offerings to deter, compete with, or supplant existing competitors and new market entrants, there can be no assurance that our investments, technologies, or strategies will be successful in enabling us to sustain or grow our current market share in each of our segments.
These competitive dynamics could have an adverse effect on the number of shipments we transport and the freight rates we receive, which could limit our growth opportunities and reduce our profitability.
−Removed: Well-resourced, non-traditional competitors have entered our industry and markets who appear to be willing to operate at little or no margin in order to gain market share which, individually or collectively, could cause us to lower our pricing and have a materially adverse effect on our results of operations.
−Removed: O ur industry has experienced market entrance by well-resourced, non-traditional firms or startups who, in some cases, have undercut market prices via digital brokerage platforms to take market share in the fragmented North American transportation and logistics industry.
−Removed: Our existing competitors, as well as new market entrants, may also introduce or adopt new brokerage platforms or technologies, which could increase competitive pressures.
−Removed: Although we believe we are well positioned and have adopted technologies, developed strategies, and heavily invested in our own digital service offerings to deter, compete with, or supplant existing competitors and new market entrants, there can be no assurance that our investments, technologies, or strategies will be successful.
We derive a significant portion of our revenues from our major customers, the loss of one or more of which could have a materially adverse effect on our business.
We strive to maintain a diverse customer base however, a significant portion of our operating revenues is generated from a number of major customers, the loss of one or more of which could have a material adverse effect on our business.
−Removed: Aside from our dedicated operations, we generally do not have long-term contractual relationships or rate agreements or minimum volume guarantees with our customers.
+Added: Aside from our dedicated operations and supply chain management, we generally do not have long-term contractual relationships, rate agreements, or minimum volume guarantees with our customers.
Furthermore, certain of the long-term contracts in our dedicated operations are subject to cancellation.
There is no assurance any of our customers, including our dedicated customers, will continue to utilize our services, renew our existing contracts, or continue at the same volume levels.
−Removed: Despite the existence of contractual arrangements, certain of our customers may nonetheless engage in competitive bidding processes that could negatively impact our contractual relationship.
+Added: Despite the existence of contractual arrangements, certain of our customers may engage in competitive bidding processes that could negatively impact our contractual relationships.
In addition, certain of our major customers may increasingly use their own truckload and delivery fleets, which would reduce our freight volumes.
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Difficulties attracting and retaining qualified drivers could materially, adversely affect our profitability and ability to maintain or grow our fleet.
−Removed: Like many truckload carriers, we experience difficulty in attracting and retaining sufficient numbers of qualified drivers, both new and experienced, including owner-operators, and such shortages have and could continue to require us to significantly increase driver compensation, rely more on higher-cost third-party carriers, idle revenue equipment, or dispose of the equipment altogether, any of which could adversely affect our growth and profitability.
+Added: The trucking industry continues to experience difficulty in attracting and retaining sufficient numbers of qualified drivers, both new and experienced, including owner-operators, and such shortages have and could continue to require us to significantly increase driver compensation, rely more on higher-cost third-party carriers, idle transportation equipment, or dispose of the equipment altogether, any of which could adversely affect our growth and profitability.
Our challenge with attracting and retaining qualified drivers is driven by several factors including intense market competition for a limited pool of qualified drivers, inconsistent driver pay, the preference among drivers to work closer to home and be home most nights, and our highly selective hiring standards.
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These increases could negatively affect our results of operations to the extent that we would be unable to obtain corresponding freight rate increases.
−Removed: The global COVID-19 pandemic has adversely affected, and could continue to adversely affect, our operations, supply chains, and workforce, and we have experienced, and expect to continue to experience, volatility in freight volumes and demand for certain of our service offerings.
−Removed: There is continued uncertainty around the duration, breadth, and economic impacts of the COVID-19 pandemic.
−Removed: Government and public health officials continue to recommend or mandate precautions to mitigate its spread, including prohibitions on unvaccinated individuals congregating in large groups, mask mandates, and vaccination requirements to attend certain events or places of business.
−Removed: The pandemic has significantly curtailed global economic activity and caused substantial volatility and disruption in global supply chains.
−Removed: Consequently, we and our customers, suppliers, third-party business partners, and contractors may continue to experience business disruptions, including worker absenteeism and resignations, office and factory closures, disruptions to ports, shipping lanes, and other shipping infrastructure, border closures, or other travel or health-related restrictions.
−Removed: Collectively, these disruptions could adversely impact our ability to operate efficiently.
−Removed: The Company is continuing to monitor the progression of the pandemic and take appropriate actions in accordance with the recommendations and requirements of relevant authorities.
−Removed: The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on many factors outside the Company’s control, including, without limitation, the timing, extent, trajectory, and duration of the pandemic;
−Removed: potential employee lawsuits alleging that unsafe workplaces have caused employees to contract COVID-19, or otherwise relating to the pandemic;
−Removed: the imposition of protective public safety measures;
−Removed: and the impact of the pandemic on the global economy and supply chain, and demand for consumer products.
−Removed: To the extent the COVID-19 pandemic adversely affects the Company’s business, results of operations, financial condition, and stock price, it may also have the effect of heightening many of the other risks described throughout the “Risk Factors” section.
−Removed: The mandated precautions to mitigate the spread of COVID-19 have had, and may continue to have, an impact on the Company’s freight volumes, affecting our revenues and earnings.
−Removed: Additional future impacts on the Company (some of which have already occurred as described in this risk factor) may include, but are not limited to, material adverse effects on demand for the Company’s services, the Company’s supply chain and sales and distribution channels, the Company’s ability to execute its strategic plans, the Company’s ability to hire and retain drivers, and the Company’s profitability and cost structure.
−Removed: While no one can predict with any certainty the scale, length of disruption, or liabilities resulting from the COVID-19 pandemic, it is possible that our results of operations could be negatively affected by the impact of the virus on the Company’s associates, customers, and suppliers or further governmental, regulatory, fiscal, and public health responses.
−Removed: We are unable to predict any future impacts of the COVID-19 pandemic on our business, financial condition, and results of operations at this time.
−Removed: A subset of our employee population works remotely (prompted by the COVID-19 pandemic) which may exacerbate the cybersecurity risks to our business, including an increased demand for information technology resources, increased risk of phishing, and other cybersecurity attacks.
+Added: We face risks associated with unionization.
+Added: Although we believe that our relations with our associates are good and the number of our associates who are currently represented by a labor union is not significant, we face risks associated with the potential unionization of certain of our associates.
+Added: We have recently been the subject of isolated unionization efforts involving a relatively small number of associates, which efforts were defeated.
+Added: If a significant number of our associates opt to be represented by a labor union, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition, and liquidity.
+Added: Additionally, our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results.
+Added: These responses could also expose us to legal risk or reputational harm and cause us to incur costs to defend legal and regulatory actions.
+Added: Moreover, any labor disputes or work stoppages, whether or not our other associates unionize, could disrupt our operations and reduce our revenues.
+Added: A subset of our employee population works remotely which may exacerbate the cybersecurity risks to our business, including an increased demand for information technology resources, increased risk of phishing, and other cybersecurity attacks.
We have, and will continue to have, a portion of our workforce that works from home full-time or under flexible work arrangements, and we have provided associates with expanded remote network access options which enable them to work outside of our corporate infrastructure and, in some cases, use their own personal devices, which exposes the Company to additional cybersecurity risks.
−Removed: The United States Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (“CISA”) has warned that cybercriminals will take advantage of the uncertainty created by the COVID-19 pandemic to launch attacks which will further disrupt operations.
Specifically, our associates working remotely expose the Company to cybersecurity risks in the following ways:
−Removed: (1) unauthorized access to sensitive information as a result of increased remote access, including associates use of company-owned and personal devices and videoconferencing functions and applications to remotely handle, access, discuss, or transmit confidential financial data, (2) increased exposure to phishing and other scams as cybercriminals use the fear and uncertainty surrounding the COVID-19 pandemic to further manipulate associates through phishing schemes to, among other things, install malicious software on Company systems and equipment and surrender sensitive information, and (3) violation of international, federal, or state-specific privacy laws.
−Removed: We believe that the increased number of associates working remotely as a result of the COVID-19 pandemic has incrementally increased our cyber risk profile, but we are unable to predict the extent or impacts of those risks at this time.
+Added: (1) unauthorized access to sensitive information as a result of increased remote access, including associates use of company-owned and personal devices and videoconferencing functions and applications to remotely handle, access, discuss, or transmit confidential financial data, (2) increased exposure to phishing and other scams as cybercriminals manipulate associates through phishing schemes to, among other things, install malicious software on Company systems and equipment and surrender sensitive information, and (3) violation of international, federal, or state-specific privacy laws.
+Added: We believe that the increased number of associates working remotely has incrementally increased our cyber risk profile, but we are unable to predict the extent or impacts of those risks at this time.
A significant disruption of our information technology systems, unauthorized access to or loss of confidential information, or legal claims resulting from our violation of privacy laws could each have a material adverse effect on our business.
4 unchanged sentences
If fuel prices rise or fall significantly, our results of operations could be adversely affected.
−Removed: Our truckload operations are dependent upon diesel fuel, and accordingly, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition if we are unable to pass increased costs on to customers through rate increases or fuel surcharges or if shippers opt for intermodal rail over trucking their freight.
+Added: Our truckload operations are largely dependent on diesel fuel, and accordingly, significant increases in diesel fuel costs could materially and adversely affect our truckload operations, and if we are unable to pass increased costs on to customers through rate increases or fuel surcharges or if shippers opt for intermodal rail over trucking their freight, our results of operations and financial condition could be adversely affected.
Likewise, if diesel fuel prices decrease significantly, the results of our intermodal operations could be adversely affected as shippers shift intermodal freight to over the road trucking.
Prices and availability of petroleum products are subject to political, economic, geographic, weather-related, and market factors that are generally outside our control and each of which may lead to fluctuations in the cost of fuel.
−Removed: Our fuel surcharge program does not protect us against the full effect of increases in fuel prices, and the terms of our fuel surcharge agreements vary by customer.
−Removed: In addition, because our fuel surcharge recovery lags behind changes in fuel prices, our fuel surcharge recovery may not capture the increased costs we pay for fuel, especially when prices are rising.
+Added: Our fuel surcharge program does not protect us against the full effect of increases in diesel fuel prices, and the terms of our fuel surcharge agreements vary by customer.
+Added: In addition, because our fuel surcharge recovery lags behind changes in diesel fuel prices, our fuel surcharge recovery may not capture the increased costs we pay for fuel, especially when prices are rising.
There is variability in the compensatory nature of individual customer fuel surcharge programs that can affect inflationary cost recovery of fuel.
1 unchanged sentence
Our results of operations would be negatively affected to the extent we cannot recover higher fuel costs or fail to improve our fuel price protection through our fuel surcharge program.
−Removed: Increases in fuel prices, or a shortage or rationing of diesel fuel, could also materially and adversely affect our results of operations.
+Added: Increases in diesel fuel prices, or a shortage or rationing of diesel fuel, could also materially and adversely affect our results of operations.
As of December 31, 2022, we did not have any derivative financial instruments to reduce our exposure to fuel price fluctuations.
−Removed: We depend on railroads in the operation of our intermodal business, and therefore, our ability to offer intermodal services could be limited if we experience instability from third parties we use in that business.
−Removed: Our Intermodal segment utilizes railroads and some third-party drayage carriers to transport freight for our intermodal customers.
−Removed: The majority of these services are provided pursuant to contractual relationships with the railroads.
−Removed: While we have had agreements with all of the Class I railroads, our primary contracts are currently with the BNSF and CSX Transportation (“CSX”) freight railroads to provide rail-based freight transportation services in support of our intermodal operations.
−Removed: One of our competitors has a preferential contractual arrangement with BNSF, which limits the market share and relative profitability of the services we provide through the BNSF.
−Removed: Beginning in 2023, UP will replace BNSF as our primary rail service provider in the western U.S.
−Removed: The transition to UP and away from BNSF will be complete by January 2023.
−Removed: The transition will require cooperation and coordination by Schneider with both BNSF and UP to be successful and to ensure no interruptions in our intermodal service results.
−Removed: Our results of operations could be adversely affected by any extended interruption of our intermodal service offering due to this transition or UP's ability to manage our rail volumes following the transition.
−Removed: In certain markets and rail corridors, rail service is limited to a few railroads or even a single railroad due to the lack of competition.
−Removed: Our ability to provide intermodal services in certain traffic lanes is likely to be reduced or constricted if any of the Class I railroads were to discontinue service in those lanes or if the overall state of rail service in those lanes were to deteriorate.
−Removed: Our contracts with the railroads are subject to periodic renewal, and our intermodal business may be adversely affected by any adverse change in our contract terms with the railroads, our relationships with the railroads, or declines in service and volume levels provided by the railroads.
+Added: We depend on railroads and access to the nation’s ports of call in the operation of our intermodal business, and therefore, our ability to offer intermodal services or our results of operations could be adversely impacted if our rail partners or certain ports of call were to perform poorly or experience service disruptions.
+Added: Our Intermodal segment utilizes railroads and, in some cases, third-party drayage carriers to transport freight for our intermodal customers.
+Added: The majority of these services are provided pursuant to contracts with our service partners which are subject to periodic renewal.
+Added: While we have had agreements with all of the Class I railroads, our primary contracts for railroad transportation in support of our intermodal operations are currently with CSX Transportation and the Union Pacific Railroad Company.
+Added: In certain areas of the U.S., rail service is limited to a few railroads, or even a single railroad due to the lack of competition.
+Added: Our ability to provide intermodal services in certain traffic lanes is, therefore, likely to be adversely affected if any of the Class I railroads were to discontinue service in certain lanes, or if either of our rail partners experience service interruptions, or if the overall quality of their rail service were to deteriorate.
+Added: In addition, our intermodal business may be adversely affected by declines in service and volume levels provided by the railroads.
+Added: All of the Class I railroads in the U.S., including our current rail partners, are unionized and have a history of disruption due to labor disputes and collective action, including strikes.
+Added: For example, a national rail strike that could have paralyzed much of the U.S.
+Added: economy appears to have been averted in December 2022 after the U.S.
+Added: Congress intervened to bind the railroads and rail workers to a proposed settlement that was reached earlier in the year between the railroads and union leaders.
+Added: There can be no guarantee that rail workers who disagree with the proposed settlement will not take actions that disrupt rail service on a wide scale.
+Added: As a result, we cannot predict whether or when a rail strike or labor dispute involving our rail partners could occur.
In addition, a portion of the freight we deliver through both our Intermodal and Truckload segments is imported to the U.S.
−Removed: through ports of call where workers are largely unionized, and which recently have been, subject to COVID-induced congestion, backlogs, and unloading delays.
−Removed: The ILWU is a labor union which primarily represents dock workers on the West Coast of the U.S.
−Removed: The ILWU’s current coast wide contract with west coast port owners is scheduled to expire on July 1, 2022.
−Removed: In the previous four contract negotiations between the ILWU and port owners dating back to the late 1990s, negotiations went past the July 1 deadline, and in those contract years, work slowdowns or an employer lockout ensued.
−Removed: Work stoppages, shipping backlogs, port congestion, or other disruptions at any of these ports could have a materially adverse effect on our business.
−Removed: The valuation of the Company’s investments in strategic partners and technologies is subject to volatility.
−Removed: The market valuation of our strategic investments, especially as it relates to our investment in TuSimple which is publicly traded, may experience substantial price volatility which, when accounted for under GAAP, could have a material adverse affect on the Company’s financial condition and results of operations.
−Removed: Refer to Note 5, Investments , to our consolidated financial statements for information on our strategic investments.
−Removed: Those investments can be negatively affected by market and economic factors including liquidity, credit deterioration, financial results, interest rate fluctuations, or other factors.
−Removed: As a result, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Company’s financial condition and results of operations.
+Added: through ports of call where workers are represented by the ILWU, a labor union which primarily represents dock workers on the west coast of the U.S., or the International Longshoremen’s Association, a labor union representing longshore workers along the east coast of the U.S.
+Added: The ILWU’s current coast wide contract with west coast port owners expired on July 1, 2022.
+Added: As of the date of this Annual Report on Form 10-K, the ILWU and Pacific Maritime Assocation, which represents west coast port owners, had not entered into a new contract.
+Added: In the previous four contract negotiations between the ILWU and port owners dating back to the late 1990s, negotiations went past the expiration of the contract and work slowdowns or employer lockouts ensued.
+Added: Although, as of the date of this Annual Report on Form 10-K, there have been no reports or signs of work stoppages or strikes, there can be no guarantee that work stoppages or other disruptions at any of the west coast ports will not occur.
We are making strategic investments in new offerings and technologies and expect to continue to make such investments in the future.
These ventures are inherently risky, and we may never realize any expected benefits from them which could have a material adverse effect on our business and financial results.
−Removed: We engage in strategic transactions and make strategic investments including investments in autonomous vehicle technology, cloud-based transportation management system software platforms, telematics, and mobile software applications which are focused on establishing a competitive advantage in the transportation and logistics services offered by the Company or exploiting new market opportunities.
+Added: We engage in strategic transactions and make strategic investments including investments in autonomous vehicle technology, cloud-based TMS software platforms, telematics, and mobile software applications which are focused on establishing a competitive advantage in the transportation and logistics services offered by the Company or exploiting new market opportunities.
Refer to Note 5 , Investments, to our consolidated financial statements for information on our strategic investments.
3 unchanged sentences
If our strategic investments fail to meet our expectations, our business and results of operations may be adversely impacted.
+Added: The valuation of the Company’s investments is subject to volatility.
+Added: The market valuation of our strategic investments in various public and private companies may experience substantial price volatility which, when accounted for under GAAP, could have a material adverse effect on the Company’s financial condition and results of operations.
+Added: Refer to Note 5, Investments , to our consolidated financial statements for information on our strategic investments.
+Added: Those investments can be negatively affected by market and economic factors including liquidity, credit deterioration, financial results, interest rate fluctuations, or other factors.
+Added: As a result, future fluctuations in their value could result in significant losses and have a material adverse impact on the Company’s financial condition and results of operations.
We depend on third-party capacity providers, and issues of performance, availability, or pricing with these transportation providers could increase our operating costs, reduce our ability to offer intermodal and brokerage services, and limit growth in our brokerage and logistics operations, which could adversely affect our revenue, results of operations, and customer relationships.
3 unchanged sentences
If we are unable to secure the services of these third-party capacity providers at reasonable rates, our results of operations could be adversely affected.
−Removed: Severe weather and similar events could harm our results of operations or make our results more volatile.
−Removed: From time to time, we may suffer impacts from severe weather and similar events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions, which may become more severe in the future as a result of climate change.
+Added: Severe weather, climate, and similar events could harm our results of operations or make our results more volatile.
+Added: From time to time, we may suffer impacts from severe weather, climate, and similar events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions, which may become more severe in the future as a result of climate change.
These events may disrupt freight shipments or routes, affect regional economies, destroy our assets, disrupt fuel supplies, increase fuel costs, cause lost revenue and productivity, increase our maintenance costs, or adversely affect the business or financial condition of our customers, any of which could harm our results of operations or make our results of operations more volatile.
Risks Relating to Our Financial Condition, Taxation, and Capital Requirements
−Removed: Our goodwill or long-lived assets may become impaired, which could result in a significant charge to earnings.
+Added: Our goodwill, other intangible assets, internal use software, or long-lived assets may become impaired, which could result in a significant charge to earnings.
We hold significant amounts of goodwill and long-lived assets, and the balances of these assets could increase in the future if we acquire other businesses.
−Removed: At December 31, 2021, the balance of our goodwill, internal use software, and long-lived assets was $2.4 billion, and the total market value of the Company’s outstanding shares was $4.8 billion.
−Removed: Under GAAP, our goodwill and long-lived assets are subject to an impairment analysis when events or changes in circumstances indicate the carrying value of such goodwill or long-lived assets may not be recoverable.
+Added: At December 31, 2022, the balance of our goodwill, other intangible assets, internal use software, and long-lived assets was $2.6 billion, and the total market value of the Company’s outstanding shares was $4.2 billion.
+Added: Under GAAP, our goodwill, other intangible assets, internal use software, and long-lived assets are subject to an impairment analysis when events or changes in circumstances indicate the carrying value of such assets may not be recoverable.
In addition, we test goodwill for impairment annually.
−Removed: Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill or long-lived assets may not be recoverable include, but are not limited to, a sustained decline in stock price and market capitalization, significant negative variances between actual and expected financial results, reduced future cash flow estimates, adverse changes in applicable laws or regulations or legal proceedings, failure to realize anticipated synergies from acquisitions, and slower growth rates in our industry.
−Removed: We may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or long-lived assets is determined to exist, negatively impacting our results of operations.
+Added: Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, other intangible assets, internal use software, and long-lived assets may not be recoverable include, but are not limited to, a sustained decline in stock price and market capitalization, significant negative variances between actual and expected financial results, reduced future cash flow estimates, adverse changes in applicable laws or regulations or legal proceedings, failure to realize anticipated synergies from acquisitions, and slower growth rates in our industry.
+Added: We may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill, other intangible assets, internal use software, and long-lived assets is determined to exist, negatively impacting our results of operations.
If our market capitalization was to fall below the book value of our total stockholders’ equity for a sustained period, we may conclude that the fair value of certain of our long-lived assets is materially impaired.
In this case, we would be required under GAAP to record a noncash charge to our earnings which could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We have significant ongoing capital requirements that could affect our profitability if our capital investments do not match customer demand for invested resources, or we are unable to generate sufficient cash from operations.
−Removed: Our operations are capital-intensive, and our strategic decision to invest in newer equipment requires us to expend significant amounts in capital expenditures annually.
+Added: We have significant ongoing capital requirements that could affect our profitability if we either fail or are unable to match the timing of our capital investments with customer demand, or we are otherwise unable to generate sufficient returns on our invested capital.
+Added: Our truckload and intermodal operations are capital-intensive, and our strategic decision to invest in newer equipment requires us to expend significant amounts in capital expenditures annually.
The amount and timing of such capital expenditures depend on various factors, including anticipated freight demand and the price and availability of new or used tractors.
Recently, the amount and timing of capital expenditures also has been affected by delayed truck deliveries by original equipment manufacturers due to semiconductor and other component shortages.
−Removed: If anticipated demand differs materially from actual usage, our capital-intensive truckload operations may have too many or too few assets.
−Removed: Moreover, resource requirements vary based on customer demand, which may be subject to seasonal or general economic conditions.
−Removed: During periods of decreased customer demand, our asset
−Removed: utilization may suffer, and we may be forced to sell equipment on the open market in order to rightsize our fleet.
+Added: If anticipated freight volume differs materially from our forecasts or customer demand, our truckload operations may have too many or too few assets.
+Added: During periods of decreased customer demand, our asset utilization is challenged, and we may be forced to sell equipment on the open market in order to rightsize our fleet.
This could cause us to incur losses on such sales, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on our profitability.
−Removed: Should demand for freight shipments weaken or our margins suffer due to increased competition or general economic conditions, we may have to limit our fleet size or operate our revenue equipment for longer periods, either of which could have a materially adverse effect on our operations and profitability.
+Added: Should demand for freight shipments weaken or our margins suffer due to increased competition or general economic conditions, we may have to limit our fleet size or operate our transportation equipment for longer periods, either of which could have a materially adverse effect on our operations and profitability.
Our effective tax rate may fluctuate, which would impact our future financial results.
1 unchanged sentence
We cannot give any assurance as to the stability or predictability of our effective tax rate in the future because of, among other things, uncertainty regarding the tax laws and policies of the countries where we operate.
−Removed: Although we do not expect current U.S.
−Removed: federal income tax proposals (including, for example, those included in President Biden’s Build Back Better Act released at the end of October 2021) to have a material impact on our effective tax rate or tax payments, we cannot predict what changes to U.S.
−Removed: federal income tax law may be proposed in the future or whether they are likely to be passed.
−Removed: In addition, while our review of the corporate tax proposals introduced in the draft legislation did not indicate that any such proposals would have an impact on Schneider’s effective tax rate or tax payments, we cannot predict what legislation may be proposed in the future or its likelihood of passing.
−Removed: Our estimates of the impact of any proposed legislation may not reflect the actual impact of such legislation once it is implemented and enforced by governmental authorities.
Further, our tax returns are subject to periodic reviews or audits by domestic and international authorities, and these audits may result in adjustments to our provision for taxes or allocations of income or deductions that result in tax assessments different from amounts that we have estimated.
35 unchanged sentences
Our Class B common stock price has experienced volatility in the past and may remain volatile in the future.
−Removed: Volatility in our stock price can be driven by many factors including divergence between our actual or anticipated financial results and published expectations of analysts or the expectations of the market, the gain or loss of customers, announcements that we, our competitors, our customers, or our vendors or other key partners may make regarding their operating results and other factors which are beyond our control such as market conditions in our industry, new market entrants, technological innovations, and economic and political conditions or events.
+Added: Volatility in our stock price can be driven by many factors including divergence between our actual or anticipated financial results and published expectations of analysts or the expectations of the market, the gain or loss of customers, announcements that we, our
+Added: competitors, our customers, or our vendors or other key partners may make regarding their operating results and other factors which are beyond our control such as market conditions in our industry, new market entrants, technological innovations, and economic and political conditions or events.
These and other factors may cause the market price and demand for our Class B common stock to fluctuate substantially.
8 unchanged sentences
These provisions include, among others:
−Removed: • a dual class common stock structure, which provides the Schneider National, Inc.
−Removed: Voting Trust the ability to control the outcome of matters requiring shareholder approval, even if the Schneider National, Inc.
−Removed: Voting Trust beneficially owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock;
+Added: • a dual class common stock structure, which provides the Voting Trust the ability to control the outcome of matters requiring shareholder approval, even if the Voting Trust beneficially owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock;
• a requirement that certain transactions be conditioned upon approval by 60% of the voting power of our capital stock, including any transaction which results in the Schneider family holding less than 40% of the voting power of our capital stock, a sale of substantially all of our assets, and a dissolution;
25 unchanged sentences
In the U.S., the regulatory and statutory landscape relating to the classification status of independent contractors (or workers) who work in temporary or flexible jobs and who are paid by the task or project is evolving.
−Removed: Some state governments and federal and state regulatory authorities, as well as independent contractors themselves, have asserted that independent contractor drivers in the trucking industry, such as those operating under our owner-operator model, are employees rather than independent contractors for a variety of purposes, including income tax withholding, workers’ compensation, wage and hour compensation, unemployment, and other issues.
−Removed: Some states have enacted, or are considering, new laws to make it harder to classify worker as independent contractors and easier for tax and other authorities to reclassify independent contractors as employees.
−Removed: Additionally, federal legislators, among other things, have sought to abolish a safe harbor which allows taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice and extend the FLSA which establishes minimum wage, overtime pay, recordkeeping, and other employment standards affecting employees in the private sector and in federal, state, and local governments, to independent contractors.
−Removed: Additionally, courts in certain jurisdictions have recently issued decisions that could result in a greater likelihood that independent contractors will be judicially classified as employees.
+Added: Various federal and state regulatory authorities, as well as independent contractors themselves, have asserted that independent contractor drivers in the trucking industry, such as those operating under our “owner-operator choice model”, are employees rather than independent contractors for a variety of purposes, including income tax withholding, workers’ compensation, wage and hour compensation, unemployment, and other issues.
+Added: Some state and federal authorities have enacted, or are considering, new laws to make it harder to classify workers as independent contractors and easier for tax and other authorities to reclassify independent contractors as employees.
+Added: Most recently, in October 2022, the U.S.
+Added: DOL published a Notice of Proposed Rulemaking and request for comments on its proposal to revise its interpretation of independent contractor status under the FLSA.
+Added: The FLSA establishes minimum wage, overtime pay, recordkeeping, and other employment standards affecting employees and independent contractors in the private sector and in federal, state, and local governments.
+Added: The DOL’s proposal would rescind the independent contractor regulation adopted by the prior administration in January 2021 and would shift the current analysis of whether a worker is an employee of a business for purposes of the FLSA from a more streamlined “economic reality” test to a more complex “totality-of-the-circumstances” standard which is widely expected to make it more difficult for workers to be classified as independent contractors under the FLSA.
+Added: While the final rule may differ from the current proposal, we believe that if the DOL’s current proposal is adopted, it could dramatically limit the circumstances under which we may classify our current independent contractor “owner-operators” as independent contractors under FLSA.
+Added: Any federal legislation or regulation which significantly limits our ability to classify owner-operators as independent contractors could result in driver shortages or adversely impact our freight capacity which, in turn, could adversely impact our results of operations.
+Added: Additionally, courts in certain jurisdictions have issued decisions that could result in a greater likelihood that independent contractors will be judicially classified as employees.
As a result, we are, from time to time, party to administrative proceedings and litigation, including class actions, alleging violations of the FLSA and other state and federal laws which seek retroactive reclassification of certain current and former independent contractors as employees.
6 unchanged sentences
Our failure to comply with any applicable laws, rules, or regulations to which we are subject, whether actual or alleged, could expose us to fines, penalties, or potential litigation liabilities, including costs, settlements, and judgments.
−Removed: Further, these agencies or governments could institute new laws, rules or regulations, or issue interpretation changes to existing regulations at any time.
+Added: Further, these agencies or
+Added: governments could institute new laws, rules or regulations, or issue interpretation changes to existing regulations at any time.
The short and long-term impacts of changes in legislation or regulations are difficult to predict and could materially and adversely affect our earnings and results of operations.
Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties.
−Removed: We are subject to various environmental laws and regulations dealing with the handling of hazardous materials, underground fuel storage tanks, and discharge and retention of storm water.
+Added: We are subject to various environmental laws and regulations dealing with emissions from our tractor fleet, the handling of hazardous materials, underground fuel storage tanks, and discharge and retention of storm water.
We operate in industrial areas where truck terminals and other industrial activities are located and where groundwater or other forms of environmental contamination have occurred.
1 unchanged sentence
Certain of our facilities have waste oil or fuel storage tanks and fueling islands.
−Removed: If a spill or other accident involving hazardous substances occurs, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable laws or regulations, we could be liable for cleanup costs or other damages or fines or penalties, any of which could be in material amounts or have a materially adverse effect on our business and operating results.
+Added: If a spill or other accident involving hazardous substances occurs, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable laws or regulations, we could be liable for cleanup costs, other damages, fines, or penalties, any of which could be in material amounts or have a materially adverse effect on our business and operating results.
General Risk Factors
7 unchanged sentences
Our information technology systems may also be susceptible to interruptions or failures for a variety of reasons including software or hardware failure, user error, power outages, natural disasters, computer viruses, or other types of interruptions.
−Removed: For example, in February 2022 we experienced a firmware defect (which was not related to a cyber event and did not involve a breach of data) relating to a third-party vendor’s equipment that interrupted the functioning of our computer systems and disrupted our operations.
−Removed: As a result of this incident, we were required to rely on manual operations to book freight, execute loads and pay carriers for two business days and otherwise execute our business continuity plans.
−Removed: While this disruption resulted in lost revenue and operating profit, it is not expected to have a material impact on our annual results of operations.
−Removed: However, a significant disruption or failure in our information technology systems could have a material adverse effect on our business, including operational disruptions, loss of confidential information, external reporting delays or errors, legal claims, or damage to our business reputation.
+Added: For example, in 2022 our operations were temporarily disrupted due to a firmware defect (which was not related to a cyber event and did not involve a breach of data) in a third-party vendor’s equipment, which caused certain critical computer applications to not function properly.
+Added: As a result of this incident, we were required to rely on manual processes to book freight, execute loads, and pay carriers for two business days and otherwise execute our business continuity plans.
+Added: While this disruption resulted in lost revenue and operating profit, it did not have a material impact on our annual results of operations.
+Added: However, a significant disruption or failure in our computer networks or applications could have a material adverse effect on our business, including operational disruptions, loss of confidential information, external reporting delays or errors, legal claims, or damage to our business reputation.
Our success depends on our ability to attract and retain key employees, and if we are unable to attract and retain such qualified employees, our business and our ability to execute our business strategies may be materially impaired.
3 unchanged sentences
Failure to recruit, develop, and retain a core group of service center managers could have a materially adverse effect on our business.
−Removed: We are subject to various claims and lawsuits in the ordinary course of business which could adversely affect us.
−Removed: From time to time, we are involved in various legal proceedings and claims arising in the ordinary course of our business, including those related to accidents involving our trucks, cargo claims, commercial disputes, property damage, and environmental liability, which may not be covered by our insurance.
−Removed: Such proceedings include claims by current or former employees or third parties, and certain proceedings have been certified or purport to be class actions.
+Added: As a result of the nature and scope of our operations, we are subject to various claims and lawsuits in the ordinary course of business, which could adversely affect us.
+Added: As a result of the nature and scope of our operations, we are involved in various legal proceedings and claims and exposed to a variety of litigation, including those related to accidents involving our trucks and our brokerage operations, cargo claims, commercial disputes, property damage, and environmental liability, which may not be fully covered by our insurance.
+Added: Such litigation may include claims by current or former employees or third parties, and certain proceedings may be certified or purport to be class actions.
In appropriate cases, we have taken and will seek subrogation from third parties who are responsible for losses or damages that we may become legally obligated to pay to claimants.
−Removed: The costs of defending or maintaining such legal proceedings, particularly class-action litigation, may be substantial and, in any period, could have a material adverse effect on our results of operations.
+Added: In particular, the defense of trucking accidents is challenging for a variety of reasons, one of which is the recent rise in “nuclear verdicts” - excessive jury awards that surpass what would generally be regarded as reasonable or rational compensation for the injuries or damages suffered, social inflation, societal perceptions of the trucking industry, and ultimately, litigation financing, where third parties are financing litigation in return for a share of settlement proceeds or awarded damages.
+Added: Litigation is inherently uncertain, and the costs of defending litigation, particularly class-action litigation, may be substantial, and in any period, we could experience significant adverse results, which could have an adverse effect on our financial condition or results of operations.
+Added: While we purchase insurance coverage at levels we deem adequate, future litigation may exceed our insurance coverage or may not be covered by insurance.
+Added: In addition, adverse publicity surrounding an allegation or claim that results in litigation may cause significant reputational harm that could have a significant adverse effect on our financial condition or results.
+Added: Our long-term sustainability and GHG reduction goals are predicated on large scale customer adoption of intermodal, the operational feasibility and reliability of heavy-duty ZEVs, and the corresponding build out of a national support infrastructure to reasonably and efficiently manufacture, distribute, or store electricity or alternative fuels for ZEVs, none of which can be assured.
+Added: Although priority and focus vary, like many public companies, we are under pressure from certain stakeholders, including investors and customers, to establish goals focused on sustainability and, in particular, decarbonization.
+Added: The Company is also subject to certain federal and state environmental laws and regulations, including those of the U.S.
+Added: EPA and state environmental agencies which are aggressively focused on the reduction of GHG emissions.
+Added: Most notably, the CARB is currently developing a medium and heavy-duty zero-emission fleet regulation with the goal of achieving a zero-emission truck and bus California fleet by 2045 everywhere feasible and significantly earlier for certain market segments such as last mile delivery and drayage applications.
+Added: Other states have signed a multi-state agreement to require 100% sales of zero-emission trucks by 2050.
+Added: In response, we set the ambitious goal to reduce our per-mile CO2 emissions by 7.5% by 2025, and by 2035, we are aiming to reduce our per-mile CO 2 emissions by 60%.
+Added: A critical component of our multi-pronged plan to reduce our carbon emissions and comply with California’s and other states’ emissions requirements is the deployment of ZEVs in significant numbers in these states together with leveraging our intermodal capability.
+Added: As an early adopter of ZEVs, there can be no assurance that we will be successful deploying ZEVs in our operations in significant numbers, that we will be successful converting more over the road freight to intermodal, that the national support infrastructure, including the nation’s electricity grid, for heavy-duty ZEVs will be built-out as expected.
+Added: Should any of those things fail to occur, we may fail to meet our published sustainability goals, which could result in losing the support of our investors, customers, and other stakeholders;
+Added: become subject to regulatory enforcement actions;
+Added: or suffer reputational harm which, in any case, may increase the cost of providing transportation services or adversely affect our financial condition, results of operations, and liquidity.
UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.