What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-23 compared with 2023-02-17 · 113 added, 75 removed, 126 unchanged (60% of the section changed)

Certain acronyms and terms used throughout this Annual Report are specific to our Company, commonly used in our industry, or are otherwise frequently used throughout our document.

Definitions for these acronyms and terms are provided in the “Glossary of Terms” available at the front of this document.

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

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Schneider National, Inc.

and its subsidiaries (together “Schneider,” the “Company,” “we,” “us,” or “our”) are among the largest providers of surface transportation and logistics solutions in North America.

We offer a multimodal portfolio of services and an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products.

and its subsidiaries (together “Schneider,” the “Company,” “we,” “us,” or “our”) are among the largest providers of multimodal surface transportation and logistics solutions in North America.

We offer a scaled portfolio of services and an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products.

The Company offers truckload, intermodal, and logistics services to a diverse customer base throughout the continental U.S., Canada, and Mexico.

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Our stock is publicly traded on the NYSE under the ticker symbol “SNDR”.

Our diversified portfolio of complementary service offerings enables us to serve the varied needs of our customers and to allocate capital in a manner that seeks to maximize returns across all market cycles and economic conditions.

Our portfolio of complementary service offerings enables us to serve the diverse needs of our customers and to allocate capital in a manner that seeks to maximize returns across all market cycles and economic conditions.

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

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We also provide customized freight movement, transportation equipment, labor, systems, and delivery services tailored to meet individual customer requirements, which 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.

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 optimization.

In addition, we provide comprehensive logistics services with a network of over 50,000 qualified third-party carriers.

We are able to expand capacity through our Power Only offering by leveraging our nationwide trailer pool to match customer demand with third-party carriers.

We categorize our operations into the following reportable segments:

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

Consistent with the transportation industry, our business can be 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.

Operating expenses tend to be higher in the winter months, primarily due to colder weather, which causes higher maintenance expense and higher fuel consumption from increased idle time.

Consistent with the transportation industry, our business can be seasonal across each of our segments, which generally translates to our reported revenues and operating expenses being the lowest in the first quarter and highest in the fourth quarter.

Operating expenses tend to be higher in the winter months, primarily due to colder weather, which causes higher maintenance expense and fuel consumption from increased idle time.

For more information on our reportable segments, see Note 14, Segment Reporting.

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Business Developments

On December 31, 2021, the Company completed the acquisition of MLS, a privately held truckload carrier based in Celina, OH.

MLS is a dedicated carrier that primarily serves the central U.S.

and complements our growing dedicated operations.

In 2022, MLS financial results are reported in dedicated operations as part of our Truckload segment.

On June 7, 2022, the Company completed the acquisition of deBoer, which provided us the opportunity to expand our tractor and trailer fleet primarily within our dedicated Truckload operations, as well as our company driver capacity.

During the second half of 2022, the Company successfully transitioned equipment and employees from deBoer to Schneider, deBoer operations ceased, and drivers and equipment were deployed primarily within Truckload.

Refer to Note 2, Acquisitions, for additional details on our recent acquisitions.

Foreign Operations

During the first quarter of 2022, the Company announced a change in approach to servicing Canada and the sale of its Guelph, Ontario facility, which resulted in the recognition of a net gain of $50.9 million in operating supplies and expenses—net in the consolidated statements of comprehensive income.

The Company still engages in the movement of cross-border Canadian freight, but no longer has Canadian-based operations.

On November 30, 2022, the Company sold 100% of its China-based logistics operations to certain members of the Company’s local management team in China as those operations were no longer profitable or strategic.

The sale resulted in the recognition of a $5.0 million loss, which was recorded within operating supplies and expenses—net in the consolidated statements of comprehensive income.

This sale is not expected to have a material effect on our results of operations or consolidated financial statements.

On August 1, 2023, the Company completed the acquisition of M&M, a privately held truckload carrier based in West Bridgewater, Massachusetts that primarily provides specialty solutions for retail and manufacturing customers.

M&M is a dedicated carrier that complements our growing dedicated operations.

The operating results of M&M are reported in dedicated operations as part of our Truckload segment beginning in the third quarter of 2023.

Refer to Note 2, Acquisitions, for additional details on our acquisition of M&M and other recent acquisitions.

Industry and Competition

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

It is a highly competitive and fragmented industry, characterized by numerous small carriers.

It is a highly competitive and fragmented industry, characterized by numerous small to mid-sized carriers.

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

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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 amongst three of the largest intermodal providers, including our Intermodal segment, and operates a significant portion of the U.S.

domestic container fleet.

The domestic intermodal market is highly consolidated amongst three of the largest intermodal providers, including our Intermodal segment.

Our Intermodal segment competes with intermodal providers and other transportation service companies, including truckload carriers.

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

We have exclusive agreements with three precision-scheduled Class I railroad providers, which augments our differentiation in the market and allows for increased freight reliability.

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

Logistics plans, implements, and controls the movement and storage of goods, generally using the assets of others.

Our Logistics segment competes with other logistics companies, brokerage businesses, and truckload carriers.

During the year ended December 31, 2022, we offered our services to approximately 8,300 customers across our portfolio, including nearly 150 Fortune 500 companies, and all of our top 25 customers used services from all three of our reportable segments.

During the year ended December 31, 2023, we offered our services to approximately 8,400 customers across our portfolio, including nearly 150 Fortune 500 companies, and 24 of our top 25 customers used services from all three of our reportable segments.

Our Logistics segment manages over 50,000 qualified carrier relationships and managed approximately $2.4 billion of third-party freight in 2023.

Our revenue is derived from a diverse customer base.

We maintain a broad end-market footprint, encompassing numerous industries including consumer products, retail, chemicals, electronics and appliances, e-commerce, auto, home improvement, and food and beverage.

Our revenue is derived from a diverse customer base across a broad end-market footprint, encompassing numerous industries including consumer products, retail, auto, chemicals, electronics and appliances, e-commerce, home improvement, and food and beverage.

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

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Schneider is committed to promoting a diverse and inclusive culture that values and respects the varied talents and perspectives of our associates.

We recognize the advantage of hiring and retaining associates who help us create value for our shareholders.

We recognize the advantage of hiring and retaining associates who contribute to the creation of value for our shareholders.

Associates and Workforce

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

We have a highly engaged workforce 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, including remote and blended work configurations.

Associate Recruitment, Development, and Retention

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

Recognizing the essential role that our drivers play in the ability to serve our customers, we remain focused on making our driver experience the best in the industry.

We employ measures to improve retention, and our turnover rate is generally consistent with the industry standard.

Those measures include 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, and maintaining a modern truck fleet with the latest safety technology, all of which focus on improving the overall driver experience.

• Company drivers - Our drivers play an essential role in the ability to serve our customers, and we remain focused on making our driver experience the best in the industry.

We employ measures to improve retention which include 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, and maintaining a modern truck fleet with the latest safety technology, all of which focus on improving the overall driver experience.

• Non-driver Company associates - Our mechanics, warehouse personnel, managers, and other corporate office associates help to facilitate and coordinate service to customers, ensure equipment is operational and well-maintained, and generally support our operations.

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Succession planning is regularly performed to help identify and develop a pipeline of talent in critical roles within our organization.

Additionally, we routinely conduct market analyses to ensure wages and benefits remain competitive, and we offer associates classroom, virtual, and web-based training options through our comprehensive learning program.

Additionally, we routinely conduct market analyses to evaluate the competitiveness of our wages and benefits, and we offer associates classroom, virtual, and web-based training options through our comprehensive learning program.

Associate Engagement

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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.

In 2023, we opened The Grove, a state-of-the-art innovation center located on the campus of our headquarters which is a curated, collaborative workspace for associates and customers aimed at driving innovation in transportation and logistics with a focus on technology.

Compensation Structure and Benchmarking

Our comprehensive compensation and benefits package is designed to enable us to attract and retain high quality talent across the wide variety of roles in the Company.

We routinely benchmark pay and benefits against peers and companies in jurisdictions where we operate to evaluate whether our total package is fair, competitive, and meets the needs of our associates.

Our comprehensive package includes competitive pay, tuition reimbursement, medical, dental, vision, wellness programs, mental health support, 401(k) savings and retirement, work schedule flexibility, paid time off, disability and a wide variety of other voluntary insurance options, recognition programs, and development and career growth opportunities.

Some of our driver pay packages include minimum guarantees while providing increasing pay by experience level and incentivizing for performance.

Our non-driver pay varies by job, is market competitive, and includes short and long-term incentive programs that motivate associates and reward high performance.

Driver Turnover Rate

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

In response to the driver shortage and high driver turnover rate in our industry, we recruit recent driver training school graduates as a source of new drivers or hire driver candidates to participate in our own nationwide network of 19 training academies.

These drivers have completed a training program at a private driver training school and hold a CDL.

For areas of the country where truck driver jobs are in demand and demographics don’t support many qualified drivers, we have established CAT for candidates with no previous truck driving experience.

Our CAT Program enables these candidates to earn their CDL in their first few weeks of training then continue training under the supervision of experienced driver trainers to strengthen and hone their driving skills.

Diversity and Inclusion

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We embrace and seek diversity that is inclusive of thought, race, ethnicity, gender, age, religion, sexual orientation, experience, and background.

Furthering our Company’s diversity goals and objectives has been incorporated into the selection of and performance management process for our leaders and associates.

We have also established Cultural Connections, an internal group committed to educating ourselves and coworkers on ongoing social issues and fostering interpersonal relationships across cultures both at Schneider and in the community, and in 2022, we were named a “Best Employer for Women” and a “Best Employer for Diversity” by Forbes.

Furthering our Company’s diversity and inclusion goals and objectives is incorporated into our hiring, training and development programs, performance management, and community giving programs so that we nurture an environment where associates feel safe, supported, and empowered to share their creativity, experiences, and ideas.

Creating communities rooted in a culture of belonging is the ultimate goal of Schneider’s BRGs.

We have six BRGs for associates who share identity, life experience or common purpose, and who come together to fulfill both individual and group goals that tie to business strategies and objectives.

Finally, we are proud supporters of military veterans and have been recognized as a top military-friendly employer.

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

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• Military drivers .

We have a strong relationship with the U.S.

military and employ many drivers with military experience.

We support service members and veterans and employ many drivers with military experience.

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

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Environmental, Social, and Governance

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

We seek to do 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.

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

We are in the process of adding nearly 100 Class 8 battery-electric zero emission trucks to our California fleet to contribute toward the Company’s goal of cutting its carbon dioxide emissions by 7.5% per mile by 2025 and 60% per mile by 2035, and we continue to look for opportunities to expand our battery-electric fleet.

In addition to efforts to make our fleet more efficient and reduce emissions, we are focused on improving sustainability at our operating facilities including upgrading to high-efficiency lighting, enhancing existing programs for recycling motor oil, tires, and batteries, and building a new innovation center that will leverage geothermal energy and solar energy to maximize resource efficiency.

During 2023, we added nearly 100 Class 8 BEVs to our Intermodal fleet based out of California to contribute toward the Company’s goal of cutting its CO 2 emissions by 7.5% per mile by 2025 and 60% per mile by 2035, and we continue to look for opportunities to expand our battery-electric fleet.

As of mid-2023, we were already more than halfway to our goal of reducing CO 2 emissions by 7.5% per mile by 2025, as compared to our baseline established in 2020, and expect to fully achieve this goal in 2025.

Additionally, in 2023 we delivered over 1 million emission free miles via our BEVs operating in California.

This milestone has kept approximately 3.3 million pounds of CO 2 emissions out of the environment.

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

We established GREEN, an internal BRG, which focuses on educating associates on how to enhance sustainability and improve the environmental health of communities where we operate.

Finally, we opened The Grove on our main campus in Green Bay, WI.

This state of the art facility leverages both geothermal and solar energy to maximize resource efficiency in the facility as part of our commitment to sustainability.

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

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In 2023, we made 99% of our fuel purchases through negotiated volume purchase discounts.

We store fuel in underground storage tanks at five locations and in above-ground storage tanks at two locations.

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

We store fuel in underground storage tanks at five locations and in above-ground storage tanks at eight locations.

We believe that we are in material 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 invest in a fuel-efficient fleet;

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

however, fuel surcharges historically have not protected us against the full effect of increases in diesel fuel prices and are not expected to do so in the future.

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.

We seek to find ways to reduce our carbon dioxide emissions including increasing the fuel efficiency of our current fleet, exploring alternative fuel vehicles, and deploying BEVs.

In recent years, we invested in our existing diesel fleet to improve truck aerodynamics, reduce trailer drag, and implement electric-powered heating, ventilation, and air conditioning systems, which translates to emissions reductions and fuel savings.

We are currently exploring alternative fuel vehicles, including hydrogen vehicles, and are in the process of adding nearly 100 BEVs to our fleet which will replace existing diesel trucks and reduce our diesel fuel usage.

We seek to find ways to reduce our CO 2 emissions including increasing the fuel efficiency of our current fleet, exploring alternative fuel vehicles, and deploying BEVs.

In recent years, we invested in our existing diesel fleet to improve truck aerodynamics, reduce trailer drag, and implement electric-powered heating, ventilating, and air conditioning systems, which translates to emissions reductions and fuel savings.

We are currently exploring alternative fuel vehicles, including hydrogen vehicles, and have added nearly 100 BEVs to our fleet which replaced existing diesel trucks and helped reduce our diesel fuel usage.

Our operations as a for-hire motor carrier are regulated and licensed by various federal, state, and local government agencies in North America, including the U.S.

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These regulatory authorities have broad powers over matters relating to authorized motor carrier operations, as well as motor carrier registration, safety and fitness of transportation equipment and drivers, transportation of hazardous materials, certain mergers and acquisitions, and periodic financial reporting.

Our driver associates and owner-operators must also comply with carrier qualifications and enacted governmental regulations regarding safety, equipment, and operating methods.

Examples include the DOT regulation of equipment weight, equipment dimensions, driver HOS, drug and alcohol testing of our current and prospective driver associates, as well as other driver eligibility requirements, on-board reporting of operations, and ergonomics.

The FMCSA Clearinghouse rule requires employers to report information related to violations of the drug and alcohol regulation for current and prospective driver employees and to query the Clearinghouse for such driver employees before allowing them to operate a commercial motor vehicle on public roads, as well as at least annually for current drivers.

Our driver associates and owner-operators must also comply with carrier qualifications and enacted governmental regulations regarding safety, equipment, and operating methods, including DOT regulation of equipment weight and drug and alcohol testing of our current and prospective driver associates and FMCSA regulation of driver HOS.

In addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration and Customs and Border Protection within the DHS, and our cross-border operations in Canada and Mexico are subject to regulation by each of those countries.

We are subject to various environmental laws and regulations dealing with, among other aspects of our operations, the handling of hazardous materials, underground fuel storage tanks at our terminals, emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.

These laws and regulations have the potential to increase costs, risks, and liabilities associated with our applicable operations.

Additionally, we may be impacted by potential future legislation and regulations related to climate change.

We are also subject to a variety of laws and regulations which are targeted at reducing GHG emissions and improving air quality and fuel efficiency at a national level.

Prominent among those regulations are certain environmental regulations in effect in the State of California, including the Heavy-Duty Vehicle GHG Emission Reduction Regulation which was issued to reduce GHG emissions from certain long-haul tractor-trailers that operate in California by requiring owners of such vehicles or equipment to retrofit their vehicles with aerodynamic elements and accessories and implement technologies that improve fuel efficiency (regardless of where the vehicle is registered), and the ACT regulation, which requires original equipment manufacturers to begin shifting towards greater production of zero-emission heavy duty tractors beginning in 2024.

We are also subject to various environmental laws and regulations dealing with, among other aspects of our operations, the handling of hazardous materials, underground fuel storage tanks at our terminals, emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.

Additionally, we are subject to a variety of laws and regulations which are targeted at reducing GHG emissions, improving air quality and fuel efficiency at a national level, and accelerating a large-scale transition to medium and heavy-duty ZEVs.

Prominent among those regulations are certain environmental regulations in effect in the State of California which have been adopted by CARB, including:

• The Heavy-Duty Vehicle GHG Emission Reduction Regulation which was issued to reduce GHG emissions from certain long-haul tractor-trailers that operate in California by requiring owners of such vehicles or equipment to retrofit their vehicles with aerodynamic elements and accessories and implement technologies that improve fuel efficiency (regardless of where the vehicle is registered);

• CARB’s ACT regulation, as enacted, is intended to accelerate a large-scale transition to medium and heavy-duty ZEVs.

The ACT requires OEMs to begin shifting towards greater production of zero-emission heavy-duty tractors beginning in 2024.

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

While the ACT does not apply to those simply operating tractors in California, it could impact the cost and/or supply of traditional diesel tractors and lead to similar legislation in other states or at the federal level.

The EPA and the NHTSA have also begun taking coordinated steps in support of a new generation of clean vehicles and engines to reduce GHG emissions.

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

These adverse effects, combined with the uncertainty as to the reliability of the newly designed diesel engines and the residual values of our equipment, could materially increase our costs or otherwise adversely affect our business or operations.

However, we cannot predict the extent to which our operations and productivity will be impacted.

We will continue monitoring our compliance with federal and state GHG regulations.

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

The proposals could potentially limit carbon emissions within certain states and municipalities, which would restrict the location and amount of time that diesel-powered tractors may idle.

Such proposals could result in decreased productivity or increased driver turnover.

Regulatory requirements and changes in regulatory requirements may affect our business or the economics of the industry by requiring changes in operating practices that could influence the demand for and increase the costs of providing transportation services.

If current regulatory requirements become more stringent or new environmental laws and regulations regarding climate change are introduced, we could be required to make significant capital expenditures or discontinue certain activities.

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

Additionally, we continue to monitor and evaluate the proposed rule makings of the DOT, FMCSA, NHTSA, EPA, State of California, and other federal and state regulatory agencies to determine the expected impact on our operations.

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.

As of the date of this Annual Report on Form 10-K, the following states have also adopted the ACT regulation:

Colorado, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington;

• CARB’s ACF regulation is intended to work in conjunction with the ACT regulation to require the deployment of medium and heavy-duty ZEVs in California.

Components of the ACF regulation, as adopted by CARB, include the following:

◦ Drayage fleets.

Beginning January 1, 2024, trucks would be required to be registered in the CARB Online System to conduct drayage activities in California.

Any truck that is to conduct drayage activities in California and is added to the California fleet on or after January 1, 2024 will be required to be a ZEV.

◦ High priority fleets.

High priority fleets (defined by the regulation to include an entity that owns, operates, or directs vehicles in California and has $50 million or more in total gross revenue or a fleet that owns, operates, or directs 50 or more vehicles in its California fleet) would be required to either (i) purchase only ZEVs beginning 2024 and, starting January 1, 2025, remove internal combustion engine vehicles at the end of their maximum useful life as specified in the regulation or (ii) use the ZEV Milestones Option to phase-in ZEVs into their fleets to meet ZEV targets as a percentage of their total California fleet.

Our California fleet consists of both a drayage fleet and a high priority fleet as defined in the ACF regulation as adopted by CARB and therefore, is required to be in compliance according to the following schedule:

ZEV Fleet Milestones by Milestone Group and Year

Milestone Group 10% 25% 50% 75% 100%

Box trucks, vans, 2-axle buses, yard

tractors, light-duty package delivery vehicles 2025 2028 2031 2033 2035+

Work trucks, day cab tractors, 3-axle buses 2027 2030 2033 2036 2039+

Sleeper cab tractors and specialty vehicles 2030 2033 2036 2039 2042+

On October 16, 2023, the CTA filed a lawsuit in the Eastern District of California challenging the ACF regulation on several grounds including that the ACF is preempted by federal law under the Federal Clean Air Act and the Federal Aviation Administration Authorization Act of 1994.

The CTA seeks declaratory relief that the ACF regulation is invalid and unenforceable, as well as preliminary and permanent injunctive relief barring the implementation and enforcement of the ACF regulation.

No assurances can be provided regarding the CTA’s litigation challenging the ACF regulation, including the timing of any proceedings relating to the litigation.

Moreover, in 2023, California passed three climate reporting laws which mandate all companies conducting business in California to make climate-related disclosures beginning in 2026.

SB 253 requires companies with revenues greater than $1 billion doing business in California to report their emissions comprehensively, including their Scope 1 and 2 beginning in 2026 and Scope 3 beginning in 2027.

SB 253 also requires reporting companies to obtain third-party auditor assurance of their reports on their Scope 1 and 2 emissions;

for Scope 3 emissions, assurance requirements will be determined by 2027.

SB 261 requires large U.S.

businesses with annual revenues over $500 million operating in California to bi-annually disclose climate-related financial risks and their mitigation strategies to the public.

As of the date of this Annual Report on Form 10-K, New York and Washington State are also considering mandatory GHG emissions disclosures, while Colorado and Minnesota have introduced new laws focused on the disclosure of climate-related risks.

Several business groups including the U.S.

Chamber of Commerce, the California Chamber of Commerce, and the American Farm Federation recently filed a lawsuit seeking to overturn SB 253 and SB 261.

As of the date of this Annual Report on Form 10-K, that lawsuit remains pending.

Finally, in a

significant step toward implementing transparency in voluntary carbon markets, California enacted AB 1305 - the VCMDA.

The VCMDA requires that companies operating in California which market or sell voluntary carbon offsets or make claims regarding the achievement of net zero emissions, carbon neutral status, or significant carbon emissions reductions publicly disclose information documenting how the claim was determined to be accurate or accomplished and the measurement of interim progress.

Companies that purchase carbon credits in conjunction with certain climate-related claims are required to publicly disclose information documenting how the claim was determined to be accurate or accomplished and the measurement of interim progress.

At times, in conjunction with delivering freight transportation services to certain of its customers, the Company purchases carbon credits or offsets to enable or assist such customers with achieving their carbon reduction targets.

In 2022, the SEC issued a proposed rule, SEC Climate Disclosure Rule, that would enhance and standardize the climate-related disclosures provided by public companies.

As proposed, the SEC Climate Disclosure Rule would require public companies to report on the identification and management of climate risks, provide updates on their public climate goals, and annually provide information on their emissions.

All companies would be required to disclose their Scope 1 and 2 emissions, and large companies would also be required to disclose Scope 3 emissions, which are generated by activities in the company’s broader value chain, if material or as part of a set public goal.

There have been repeated delays in finalizing the rule.

As a result, we can not predict when, or if, the proposed rule will be finalized or whether the final rule will have a material adverse impact on the Company’s results of operations.

These laws and regulations historically have resulted in increased costs, decreased equipment productivity, risks, and/or liabilities associated with our operations, and have the potential to further increase such costs, risks, and/or liabilities, particularly if costs are not offset by potential fuel savings.

We cannot predict the extent to which our operations and productivity will be impacted.

We continue to monitor and evaluate the proposed rule makings of the SEC, DOT, FMCSA, NHTSA, EPA, State of California, and other federal and state regulatory agencies to determine the expected impact on our operations.

Our business is executed through an integrated technology platform that encompasses an end-to-end process design which focuses on information accessibility and connectivity 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 loads from pick-up to delivery and customer collection.

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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 to maximize shareholder value.

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

Schneider FreightPower® for carriers and shippers digitally connects the benefits of our integrated technology platform with the strength of our trailer network and carrier relationships to service our customers.

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

One example is the rollout of our new global navigation system.

This system uses real-time maps to generate driver routes to account for traffic, road closures, and route changes to aid our drivers in taking the best route.

Additionally, through our investment in MLSI, in which we are collaborating to develop a TMS using MLSI’s SaaS technology, we aim to further complement our technology platform and enable enhanced decision making, resource allocation, and visibility for our supply chain partners.

During 2022, we successfully transitioned our Power Only business to MLSI’s TMS and are in the process of converting the remainder of our Logistics business.

Our Power Only business was successfully transitioned to MLSI’s TMS in 2022, and we will begin transitioning the remainder of our Logistics business in the near future.

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

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

This comprehensive platform includes messaging 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.

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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.

The “Investors” section of our website also contains corporate governance guidelines, our code of ethics, Board committee charters, and other corporate policies.

In addition, our website contains information on our sustainability goals, including our Corporate Responsibility Report.

The “Investors” section of our website contains corporate governance guidelines, our code of ethics, 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.

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