U.S. Xpress Enterprises, Inc. (USX) 2021年年度報告「NYSE」.pdf

《U.S. Xpress Enterprises, Inc. (USX) 2021年年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《U.S. Xpress Enterprises, Inc. (USX) 2021年年度報告「NYSE」.pdf（96頁珍藏版）》請在三個皮匠報告上搜索。

1、2021ANNUAL REPORTMISSIONWERE ON AWERE ON A MISSION TO MAKE GOODS MOVE BETTER EVERY DAYThe past two years have demonstrated the critical role professional truck drivers and companies like U.S.Xpress play in keeping goods moving.The hoped-for“return to normal”in 2021 did not materialize.Instead,the pa

2、ndemic continued to drive supply chain delays and strong demand for tangible goods.“Supply chain”became part of the American lexicon as manufacturers waited for the raw materials they needed to build their products,and retailers struggled to keep shelves stocked amid a perfect storm of inventory del

3、ays and increased demand for goods causing prices to surge.Meanwhile,consumers who previously took for granted that goods were always available on store shelves until they werent began to understand and appreciate how important our industry is to their quality of life.At U.S.Xpress,we continued to e

4、xecute our multi-year digital transformation,adopting technology to improve the experience for our customers,professional truck drivers,and third-party carriers.During the year,we continued to expand capacity in Variant,our digitally enabled over-the-road(OTR)fleet,expand our carrier network in our

5、brokerage segment,and drive adoption of technology-enabled solutions throughout the enterprise designed to help goods move better every day now and in the years to come.U.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT12U.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT3COMBINING TALENT AND TECHNOLOGY TO DRI

6、VE IMPROVED RESULTSVariant,our driver-first,digitally enabled OTR fleet,grew to more than 1,500 trucks surpassing our year-end goal.In 2021,we introduced the latest version of our Optimizer,Variants fleet optimization platform,that was developed to streamline route planning and load matching to maxi

7、mize miles and home time for our professional truck drivers,and profitability for the company.The Optimizer is a purpose-built technology stack that analyzes data including current and forecasted truck position,telematics data,current and forecasted hours of service,freight orders,and other operatio

8、nal characteristics.Its another example of how we are making goods move better every day.Sandeep Madamanchi,Head of Engineering&Cloud Operations4Our Dedicated division provides committed capacity for shippers who want a private fleet-like experience without having to manage a private fleet.Our Dedic

9、ated division works with some of the nations largest retailers,keeping goods and shelves stocked throughout the years supply chain challenges and the most stressful days of the pandemic.This year,our Dedicated division was honored by several major customers:FedEx Ground Carrier of the Year based on

10、high performance in on-time service and customer contact Michaels Stores Dedicated Carrier of the Year for volume of hauls and on-time service Procter&Gamble Driver of the Year went to George Dalhouse for his attitude,safety record,and great working relationship Doug Morales,Manager of Dedicated Tra

11、iningU.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT56U.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT7Xpress Technologies,our reimagined brokerage segment,provides selectivity for our assets along with expanded capacity solutions for our customers.Xpress Technologies rolled out a new operating system in

12、 2021,making it easier than ever for carriers to connect and plan loads and overall operations.The new app saves carriers time by understanding preferred lanes and freight characteristics and making recommendations for future loads they may take.From there,it recommends profitable loads,meaning they

13、 can spend less time searching for loads and more time on the road.Our brokerage division grew load count 8.4%in 2021 compared to the previous year,demonstrating our ability to provide expanded capacity for our customers while also providing additional selectivity for our asset-based fleet.Tracy Mar

14、shall,Head of Program Delivery8INVESTING IN OUR PEOPLE AND PARTNERSHIPSWere focused on creating an inclusive and diverse workforce and believe in giving back to the causes our people feel passionately about.U.S.Xpress places a priority on serving and engaging with the communities where we do busines

15、s,particularly supporting organizations aligned with our four pillars of giving:safety and well-being,military veterans programs,education and innovation,and families and health.Last year,our company and our people gave generously to causes aligned with these pillars.We also continued our Full Ride

16、program,which provides free college education to our professional drivers,shop technicians,and their dependents.This year,we also expanded our commitment to inclusion and diversity,bringing on our first chief inclusion partner and launching three Employee Resource Groups in a journey to make our wor

17、kplace more inclusive.We also launched an English as a second language(ESL)program that aims to recruit more diverse professional drivers and operations support roles.Continuing momentum in the years to comeWere excited about the progress U.S.Xpress made in 2021 across our Variant,Xpress Technologie

18、s,and Dedicated divisions and are eager to continue this momentum in the years ahead.Were combining some of the best minds in technology with established operational experience to continue our digital transformation.Along the way,were improving the experience for our people and our partners.In short

19、,were on a mission to make goods move better every day.Sharia Sandoval,ESL operations supportU.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT910U.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT112021:A YEAR OF SIGNIFICANT GROWTH IN THE FACE OF INCREDIBLE CHALLENGES Letter to ShareholdersAs I sat down to wr

20、ite this years letter,I was struck by the sheer amount of change thats impacted our world,our industry,and our company over the past couple of years.For the previous two,Ive opened with a nod to COVID-19,and unfortunately,2021 is no different.Eric Fuller,President and Chief Executive Officer12As the

21、 pandemic slogged on,“supply chain”became part of the nations lexicon.It put a spotlight on how goods move how one click online leads to a package on your front door a day or two later.It also highlighted how easily the magic of one-click ordering can be strained,as shortages of everything from comp

22、uter chips to cream cheese rippled globally.For me,and many in our industry,this pandemic reaffirmed that professional truck drivers are truly the heroes of our economy.These hard-working men and women never had the choice to work from home or quarantine.While many of us were able to work remotely a

23、nd purchase groceries and other goods online from the comfort of our homes,professional drivers have been on the road,delivering necessary goods and keeping store shelves stocked throughout this now two-plus-year pandemic.I remain in awe of not only our professional drivers,but of all our employees

24、who have continued to support our customers while juggling family responsibilities,health and safety protocols,and constantly changing information.These folks are committed to our mission to make goods move better every day.U.S.Xpress is accomplishing that mission through three complementary service

25、 offerings.These include our established Dedicated fleet servicing some of the nations largest shippers;Variant,our driver-first over-the-road fleet;and our brokerage segment,Xpress Technologies,that provides additional capacity for our shipper customers,and for third-party carriers,tools,and resour

26、ces to help grow and better manage their businesses.First,Id like to take a moment to discuss Variant.We incubated Variant outside of our headquarters,in non-traditional infrastructure,with many individuals new to our industry.We gave it the autonomy and investment necessary to build something subst

27、antial.During this process it was important to identify the point where Variant moves toward maturity and where we need to make the transition from nimble startup to a sustainable,growing business.The second half of 2021 saw this inflection point,and we made the decision to begin implementing a more

28、 disciplined management approach focused on metrics and earnings growth.With organizational changes late in the year,were bringing more domain knowledge to the Variant team,combining that with our truly innovative technology team.Im confident in Variants business model and continue to believe we can

29、 use technology to better serve our customers while providing a better experience for our professional drivers.With a few refinements to our technology and more structure and discipline in our processes,I believe we can get back on track quickly.We remain committed to our long-term Variant strategy,

30、and were moving full speed ahead.U.S.XPRESS ENTERPRISES,INC.2021 ANNUAL REPORT13We launched Variant in the summer of 2019 with just a handful of trucks.We closed out 2021 surpassing our truck count goal with more than 1,500 seated tractors in the fleet.This was accomplished during a global pandemic

31、with unprecedented headwinds.Additional progress with Variant is illustrated in the release of our next-generation Optimizer,our fleet optimization platform that drastically reduces manual touchpoints,helping drive greater efficiency in load planning and scheduling,and gets our professional drivers

32、more pay and more reliable home time.We also grew our first-in-the-industry Ambassador program in which our drivers earn cents per mile for every professional driver they recruit.This is one example of how we are building what we expect to be a stable and reliable pipeline of professional drivers as

33、 the broader industry continues to struggle with a persistent driver shortage.While our attention remains focused on growing Variant and implementing operational improvements,we also saw incredible progress with our Xpress Technologies brokerage segment,which delivered solid revenue and increased gr

34、oss margin in 2021.We continued to grow revenue per load and overall load count,with more than three quarters of loads processed on our purpose-built digital platform during the year.Serving some of the nations largest shippers,our Dedicated division delivered steady improvement throughout the year

35、with revenue per tractor per week increasing sequentially each quarter.Im thrilled with the progress that both the Xpress Technologies and Dedicated teams continue to make.We continue to make significant investments in bringing on talented people with diverse technology experience in deep learning,a

36、rtificial intelligence,and software engineering.These investments are paying off now and we expect will well into the future through the fine-tuning of our Variant Optimizer,digital brokerage tools and resources,and enterprise-wide IT systems.In fact,CIO Magazine recognized our deep IT bench in 2021

37、,naming U.S.Xpress to its“CIO 100,”which recognizes the worlds most innovative IT teams and initiatives.To attract and retain the nations best talent,Im also focused on building a culture of inclusivity here at U.S.Xpress.In 2021,we established three Employee Resource Groups to better support specif

38、ic segments of our workforce.This includes groups for women,veterans,and multicultural employees,each with an executive sponsor and individual leadership.We also grew our existing Inclusion&Diversity Council and brought on our first chief inclusion partner to define goals,map strategies,and outline

39、deliverables toward becoming a more inclusive organization.Im proud of the work that our teams have done in creating a more inclusive and diverse workplace.This work culminated in multiple awards in 2021 including being named a Great Place to Work,a Military Friendly company,and U.S.Xpress was honor

40、ed by Women 14in Trucking for our commitment to advancing women in our industry.In addition,earlier this year,we made our debut on the Human Rights Campaigns Corporate Equality Index,further proof of the progress we are making in our inclusion and diversity efforts.In 2021,we published our first Cor

41、porate Responsibility Report,which outlined our commitment to the environment,safety,and the communities where we do business.This past year we also developed an enterprise wide ESG strategy focused on our long-term ESG goals and objectives.We are in the early stages of this journey,but we believe c

42、ontinuing to advance our environmental stewardship is key to our long-term success.To date,our environmental efforts have focused mainly on improving the efficiency of our fleet and lowering energy and water consumption within our facilities.The safe operation of our fleet remains one of our top pri

43、orities.In 2021,we saw continued improvement in our key safety metrics including our preventable accident rate per million miles,which declined 21%year-over-year.Our improved safety metrics are due in part to new safety technology and processes,including those to prevent lapses in driver credentials

44、,pre-employment hair testing for drugs,and our in-cab event recorders and driver coaching.In our Corporate Responsibility Report,we also outlined our four pillars of community giving:safety and well-being,military veterans programs,education and innovation,and families and health.U.S.Xpress and our

45、people gave generously to causes aligned with these pillars last year,and we hope to strengthen these partnerships in the coming years.Additionally,since launching in 2018,our Full Ride program has funded more than$1.1 million in college coursework for more than 850 drivers,shop technicians,and thei

46、r dependents.Through this unique program,were continuing to put education first among many who once thought it was out of reach.Im proud of the progress we made in 2021.All these accomplishments were in the face of a prolonged global pandemic,ongoing supply chain constraints,and an industry wide dri

47、ver shortage.Our accomplishments in 2021 give me confidence in the future of the company and our place in the global supply chain.I couldnt be prouder of our people and the progress were making in transforming our company.On behalf of all our employees,I thank you for your continued support and inve

48、stment in U.S.Xpress.Eric FullerPresident and Chief Executive OfficerMISSION2021ANNUAL REPORTWERE ON A1 BUSINESS Cautionary Note Regarding Forward-looking Statements This Annual Report(this“Annual Report”)contains certain statements that may be considered forward-looking statements within the meanin

49、g of Section 21E of the Securities Exchange Act of 1934,as amended(the“Exchange Act”),and Section 27A of the Securities Act of 1933,as amended(the“Securities Act”)and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995,as

50、amended.All statements,other than statements of historical or current fact,are statements that could be deemed forward-looking statements,including without limitation:any projections of earnings,revenues or other financial items;any statement of plans,strategies,outlook,growth prospects or objective

51、s of management for future operations;our operational and financial targets;general economic trends,performance or conditions and trends in the industry and markets;the competitive environment in which we operate;any statements concerning proposed new services,technologies or developments;and any st

52、atement of belief and any statements of assumptions underlying any of the foregoing.In this Annual Report,statements relating to the impact of new accounting standards,future tax rates,expenses,and deductions,expected freight demand,capacity,and volumes,potential results of a default under our Credi

53、t Facility or other debt agreements,expected sources of working capital and liquidity(including our mix of debt,finance leases,and operating leases as means of financing revenue equipment),as well as the adequacy of working capital and liquidity,expected capital expenditures,expected fleet age and m

54、ix of owned versus leased equipment,expected impact of technology,including our strategic initiatives,our ability to profitably scale and achieve operational efficiencies in Variant,as well as our Brokerage segment,future performance of our Dedicated division,including pricing and margins,future cus

55、tomer relationships,future utilization of independent contractors,future fluctuations in purchased transportation expense and fuel surcharge reimbursement,future driver market conditions and driver turnover and retention rates,any projections of earnings,revenues,cash flows,dividends,capital expendi

56、tures,operating ratio,margins,or other financial items,expected cash flows,expected operating improvements,any statements regarding future economic conditions or performance,any statement of plans,strategies,programs and objectives of management for future operations,including the anticipated impact

57、 of such plans,strategies,programs and objectives,future rates and prices,future utilization,future depreciation and amortization,future salaries,wages,and related expenses,including driver compensation,future insurance and claims expense,future fluctuations in fuel costs and fuel surcharge revenue,

58、including the future effectiveness of our fuel surcharge program,strategies for managing fuel costs,political conditions,legislation,and regulations,future fleet size and management,including allocation of trucks among Variant,Dedicated and legacy Over-the-Road,future shortages and pricing of new re

59、venue equipment,any statements concerning proposed acquisition plans,new services or developments,the anticipated impact of legal proceedings on our financial position and results of operations,the future impact and the anticipated effect of the COVID-19 pandemic and any related vaccination mandates

60、 on our business and results of operations,among others,are forward-looking statements.Such statements may be identified by their use of terms or phrases such as“believe,”“may,”“could,”“should,”“expects,”“estimates,”“projects,”“anticipates,”“plans,”“intends,”“outlook,”“strategy,”“target,”“optimistic

61、,”“focus,”“seek,”“potential,”“goal,”“continue,”“will,”derivations thereof,and similar terms and phrases.Such statements are based on currently available operating,financial and competitive information.Forward-looking statements are inherently subject to risks and uncertainties,some of which cannot b

62、e predicted or quantified,which could cause future events and actual results to differ materially from those set forth in,contemplated by,or underlying the forward-looking statements.Factors that could cause or contribute to such differences include,but are not limited to,those discussed in the sect

63、ion entitled“Risk Factors,”set forth below.Readers should review and consider the factors discussed in“Risk Factors,”along with various disclosures in our press releases,stockholder reports,and other filings with the Securities and Exchange Commission(“SEC”).All such forward-looking statements speak

64、 only as of the date of this Annual Report.You are cautioned not to place undue reliance on such forward-looking statements.We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our

65、 expectations with regard thereto or any change in the events,conditions,or circumstances on which any such statement is based.References in this Annual Report to“we,”“us,”“our,”or the“Company”or similar terms refer to U.S.Xpress Enterprises,Inc.,and its subsidiaries.2 GENERAL Our Business We are on

66、e of the largest asset-based truckload carriers in the United States by revenue,generating over$1.9 billion in total operating revenue in 2021.We provide services primarily throughout the United States,with a focus in the densely populated and economically diverse eastern half of the United States.W

67、e offer customers a broad portfolio of services using our own truckload fleet and third-party carriers through our non-asset-based truck brokerage network.As of December 31,2021,our fleet consisted of approximately 6,400 tractors and approximately 13,600 trailers,including approximately 1,200 tracto

68、rs provided by independent contractors.Our terminal network is established and capable of handling significantly larger volumes without meaningful additional investment.For much of our history,we focused primarily on scaling our fleet and expanding our service offerings to support sustainable,multi-

69、faceted relationships with customers.More recently,we have focused on our core service offerings and refined our network to focus on shorter,more profitable lanes with more density,which we believe are more attractive to drivers.We believe we have the strategy,management team,revenue base,modern fle

70、et,and capital structure that position us very well to execute upon our initiatives,drive further operational gains,and deliver long term value for our stockholders.We are currently focused on three main priorities.The first is optimizing our Truckload network and resulting average revenue per tract

71、or per week through repositioning equipment and allocating capacity to our Dedicated service offering and Variant,our digital fleet,from certain portions of our Over-the-Road(“OTR”)service offering.The second is improving the experience of our professional truck drivers,including their safety and se

72、curity.The third is advancing our technology initiatives centered on digitization of our loads and business,automated load acceptance and prioritization.During 2021,we continued to see tangible,financial benefits of our strategic initiatives focused on utilizing technology to improve our processes,a

73、ccelerate the velocity of our business,reduce the number of our preventable accidents,improve our customers and drivers satisfaction,and lower our costs.We intend to continue successfully developing and implementing these digital initiatives that we believe are re-engineering our Company to be a mar

74、ket leader in growth and profitability over the next decade.We believe the result of these initiatives will provide for a more scalable model with significantly lower costs.Our Service Offerings We organize our service offerings into two reportable segments,Truckload and Brokerage.The Truckload segm

75、ent offers asset-based truckload services,including the OTR and dedicated contract services described below.Our Brokerage segment is principally engaged in non-asset-based freight brokerage services.We believe many customers seek truckload operators that offer both asset-based and non-asset-based se

76、rvices to help ensure capacity will be available as needed.We believe that each of our service offerings,on a stand-alone revenue basis,would represent one of the largest participants in its respective market.3 Below is a brief overview of our service offerings:Approximate%of 2021 Revenue(1)Descript

77、ion Truckload(75%)OTR 43%Transports a full trailer of freight for a single customerfrom origin to destination,typically withoutintermediate stops or handling Includes our Variant fleet Short-term contracts and spot moves that includeirregular route moves without volume and capacity commitments Tract

78、ors are operated with one driver or a team of twodrivers to handle more time-sensitive,higher margin freight Routes are generally between 450 and 1,050 miles inlength Fuel surcharge programs help us offset most of the negative impact of rising fuel prices associated withloaded or billed miles Dedica

79、ted Contract 32%Contractually assigned equipment,drivers and on-site personnel to address customers needs for committedcapacity and service levels Multi-year initial contract term with guaranteedvolumes and pricing We have renewed substantially all of our dedicatedcontracts after the initial contrac

80、t term Fuel costs are typically more predictable and lessvolatile under the fixed and variable pricing of thesecontracts Historically,our dedicated contract customersgenerally adjust pricing to account for driver wageincreases,although these adjustments may not becontractually required Brokerage 23%

81、Non-asset-based freight brokerage service throughwhich loads are contracted to third-party carriers Allocation strategy designed to maximize profitability of our Truckload fleet before outsourcing loads tothird-party carriers In the past 12 months,we have utilized the capacity ofapproximately 24,000

82、 third-party carriers (1)Based on revenue,before fuel surcharge.Approximately 2%of revenue is attributable to other ancillary services.We primarily operate in the eastern half of the United States.We also have business to and from Mexico via a more variable cost model using third party carriers.The

83、revenue from such model is generated in the United States.During 2021 and 2020,all of our operating revenue was generated in the United States.Customer Relationships We maintain a diverse,long-standing customer base that includes many Fortune 500 companies,including Dollar General,Dollar Tree,FedEx,

84、Home Depot,Kroger,Procter&Gamble,Target,Tractor Supply and Walmart.Our customers fall within a broad spectrum of geographies and end markets,including retail,food and beverage,e-commerce and packages,manufacturing,consumer products and third-party logistics.No other category comprised more than five

85、 percent of the end markets we served at December 31,2021.Relationships with our top ten customers exceed ten years on average.For the year ended December 31,2021,our largest customer accounted for approximately 11%of our revenue,excluding fuel surcharge.4 Tractor and Trailer Fleets We operate a mod

86、ern fleet of approximately 5,200 company-owned tractors and approximately 13,600 trailers,and we also contract for additional tractor capacity through approximately 1,200 independent contractors,who provide both the tractor and a driver and,except for the trailer,which we generally provide,bear the

87、operating expenses of each load.Our company tractor fleet continues to include the most advanced technology in todays market including electronic logging devices(“ELDs”),electronic speed limiters,electronic roll stability,improved aerodynamics and fuel efficiency technologies,enhanced tractor connec

88、tivity with remote updating capabilities,improved automatic transmissions,lane departure and collision warning/avoidance systems,upgraded braking systems and event recorders.Each of our company tractors is also equipped with onboard communication units that offer real time freight positioning to our

89、 customers and instant communication between our drivers and us.Tractors and trailers represent our most substantial capital investments.In general,we expect to operate a tractor for approximately 475,000 to 575,000 miles,which when averaged across our fleet as of December 31,2021 equates to approxi

90、mately 4.5 years of operation and a trailer for up to 10 years or more of operation.We depreciate or finance our equipment over their useful lives and down to salvage values that we expect to represent fair market value at the expected time of sale.Our ongoing capital expenditures are significant,an

91、d our annual depreciation expense is expected to be approximately equal to maintenance capital expenditures,net of proceeds of dispositions,assuming a constant percentage of leased versus owned equipment and a constant trade cycle.In practice,we vary our trade cycle and financing based on the market

92、 for new and used tractors,the quality,dependability and cost per mile to operate the equipment,our capital budget,expected tax benefits and other factors.Based on the volumes we purchase,we believe that we have a cost advantage in the procurement of new tractors and trailers compared to the prices

93、paid by small trucking companies.Our company tractors had an average age of approximately 1.7 years at December 31,2021.Our Competitive Strengths We believe the following competitive strengths provide us with a strong foundation to continue to improve our profitability and stockholder value:Industry

94、 leading truckload operator with significant scale We are one of the largest asset-based truckload carriers in the United States in 2021 by total operating revenue and we believe our large scale provides us with significant benefits.These benefits include economies of scale on major expenditures suc

95、h as tractors,trailers and fuel,as well as our overall infrastructure.Additionally,we can offer an enhanced value proposition for large customers who seek efficiency in sourcing capacity from a limited number of carriers and flexible capacity to accommodate seasonal surge volumes.Our established and

96、 well-maintained terminal network is capable of handling meaningfully larger volumes without meaningful additional investment.Complementary mix of services to afford flexibility and stability throughout economic cycles Our service offerings have unique characteristics and are subject to differing ma

97、rket forces,which we believe allows us to respond effectively through economic cycles.OTR OTR business involves short-term customer contracts without pricing or volume guarantees that allow us to benefit from periods of supply and demand imbalance and price volatility.This is the largest part of our

98、 business and the overall truckload market.Dedicated Dedicated business features committed rates,lanes and volumes under contracts that generally afford us greater revenue predictability over the contract period and help smooth the impact of market cycles.Additionally,our dedicated contract service

99、offering generally has higher driver retention rates than our OTR service offering,which we believe is because our professional drivers prefer the more predictable time at home that dedicated routes offer.In addition,this increased visibility allows us to commit and invest fleet resources with a mor

100、e predictable return profile.We intend to grow this portion of our business as a percentage of our average tractors.5 Brokerage Brokerage capacity allows us to aggregate volume and to flex the amount allocated to our own fleet with freight cycles.Typically,we allocate more loads to our OTR fleet dur

101、ing slow freight demand to keep our assets productive,and more loads to third-party carriers during higher freight demand to maintain control over customer freight and make a margin on outsourcing the moves.By retaining control over significantly more freight than we are able to serve with our own a

102、ssets,and allocating the available loads first to our own tractors,we have more choices for optimizing the utilization and pricing of our fleet every day and throughout market cycles.Technology We are focused on continual development and implementation of the digital initiatives that we believe are

103、re-engineering our company to be a market leader in growth and profitability over the next decade.Within our Truckload reportable segment,Variant represents an entirely new paradigm for operating trucks in an Over-the-Road environment utilizing artificial intelligence and digital platforms to recrui

104、t,plan,dispatch and manage its fleet.The divisions operating model,powered by cutting edge technology,has generated improvement in utilization while significantly reducing driver turnover,and preventable accidents per million miles,all as compared to our legacy OTR fleet.During the second half of 20

105、21,Variants turnover,utilization,and revenue per tractor per week began to deteriorate and those trends accelerated in the fourth quarter.In December 2021,the Variant team began to transition its focus from idea generation to execution and scale the product that was developed.Since December 2021,the

106、 operational changes that we have made have translated to improvements in utilization,revenue per truck and overhead per truck.During 2020,we purchased a small business with a technology platform and an experienced and talented team.Their approach to the brokerage business is to utilize a digital fr

107、amework for handling transactions which we expect to be scalable.Importantly,we believe this platform will enable our team to continue scaling the business and drive a high level of growth in the years to come.Our team processed 76.7%of our Brokerage transactions digitally in 2021.As we drive more v

108、olume over our digital platform,we believe our Brokerage segment will become much more scalable and allow us to profitably drive growth as we look to the years ahead.Long-standing,diverse and resilient customer base We maintain a long-standing customer base that includes many Fortune 500 companies w

109、ith national footprints,including Dollar General,Dollar Tree,FedEx,Home Depot,Kroger,Procter&Gamble,Target,Tractor Supply and Walmart.As of December 31,2021,relationships with our top ten customers exceeded ten years on average.Our portfolio of blue-chip customers allows us to benefit from the less

110、cyclical and more-stable demand from grocery and dollar stores in addition to increasing demand due to secular growth trends in end-markets such as e-commerce.We also benefit from significant cross-selling opportunities among large key customers,as all of our top ten customers use at least two of ou

111、r three service offerings,which allows us to have multiple points of contact with our customers and take advantage of varying bid cycles.Modern fleet and maintenance system designed to optimize life cycle investment and minimize operating costs Our fleet represents our largest capital investment,a v

112、isible representation of our brand for customers and drivers and a large portion of our controllable costs.We select,maintain and dispose of our fleet based on rigorous analysis of our investments and operating costs.Our modern and well-maintained fleet consisted of approximately 5,200 company tract

113、ors with an average age of approximately 1.7 years and approximately 13,600 trailers at December 31,2021.We also contracted for approximately 1,200 tractors provided by independent contractors at December 31,2021.We equip our tractors with carefully selected components based on initial cost,maintena

114、nce requirements,warranty coverage,safety and efficiency advantages,driver preference and resale value.Our company tractor fleet is technologically advanced and equipped with safety and efficiency features,including using electronic logs since 2012,electronic speed limiters,automatic transmissions,l

115、ane departure and collision warning systems,air disc brakes and high performance wide brake drums,electronic roll stability and event recorders.Over the past several years,we have developed a disciplined and effective in-house maintenance program designed to actively manage these assets based on cus

116、tomized timetables for preventive maintenance and replacement of parts.We believe this approach,coupled with our in-house maintenance facilities and in-house technicians dedicated to fleet 6 maintenance,helps us effectively manage our maintenance cost per mile,keeps drivers on the road efficiently a

117、nd creates an attractive asset and record for resale.Motivated management team focused on tactical execution and leadership in the truckload market Our management and operations team has been carefully assembled to obtain a mix of industry veterans from successful competitors and high-performing int

118、ernal candidates,all of whom are motivated to perform in our transparent,metric-driven environment.Our President and Chief Executive Officer,Eric Fuller,has over 20 years of experience at U.S.Xpress and has been responsible for developing the team and spearheading our transformation program over the

119、 last several years.Our management teams compensation and ownership of our common stock provide further incentive to improve business performance and profitability.In addition,with active positions in industry associations,such as the American Trucking Associations,Inc.(“ATA”),our management team pr

120、ovides us with a key role in the discussions that we believe are shaping the future of the industry.We believe our leadership team is well-positioned to execute our strategy and remains a key driver of our financial and operational success.Our Strategies We believe we possess the scale,infrastructur

121、e and service offerings to compete effectively in our markets,our opportunity for further improvement is significant,and our strategies are designed to enhance stockholder value.Improve profitability and grow revenue Improve asset productivity by using advanced technology to optimize dispatch miles

122、in all cycles and actively upgrade freight mix when volumes permit Control non-essential costs and seek efficiencies throughout the enterprise Pursue driver training and safety initiatives as a core cultural value Continue to leverage our service mix to manage through all market cycles Grow our reve

123、nue base prudently with a focus on dedicated contract service and brokerage by cross-selling our services with existing customers and pursuing new customer opportunities Capitalize on high return on investment potential of advanced technology,automation,and optimization Continue to use our scale and

124、 relationships to gain early access to technological advances and evaluate the costs and benefits Incubate,develop,and implement operating efficiencies across our enterprise using our USX Variant technology development group Pursue use of artificial intelligence to accommodate individual drivers pre

125、ferences with the goal of improving driver satisfaction and retention Apply data analytics across the billions of dollars of freight spend we see every year to capture and optimize the execution of our customers loads and our network Partner with equipment manufacturers to test,evaluate and refine e

126、lectric,autonomous and other advanced vehicle technology Maintain flexibility through long-term enterprise planning and conservative financial policies Maximize our free cash flow generation by managing expenses,taxes and capital expenditures Convert equipment financing over time toward owned equipm

127、ent from operating leased equipment to gain tax benefits and flexibility in trade cycles Allocate capital toward dedicated contract services,which offers more predictable revenue streams and greater asset productivity,Variant,which is our digital fleet and brokerage,which requires limited capital in

128、vestment and affords network-balancing freight volumes 7 Target a conservative leverage profile,taking into consideration both owned and leased financing Use of digital technologies to reduce the impact of market cycle downturns Independent Contractors In addition to the company drivers that we empl

129、oy,we enter into contracts with independent contractors.Independent contractors operate their own tractors(although some employ drivers they hire)and provide their services to us under contractual arrangements.Except for generally providing independent contractors with the use of our trailers,they a

130、re responsible for the ownership and operating expenses and are compensated by us primarily on a rate per mile basis.By operating safely and productively,independent contractors can improve their own profitability and ours.We believe that the fleet of independent contractors we engage provides signi

131、ficant advantages that primarily arise from the motivation of business ownership.Independent contractors tend to produce more miles per tractor per week.As of December 31,2021,the approximately 1,200 independent contractors we engage comprised approximately 17%of our available capacity,as measured b

132、y tractor count.Services offered to independent contractors include insurance,maintenance and fuel.Through our wholly owned insurance captive subsidiary,Xpress Assurance,Inc.(“Xpress Assurance”),independent contractors can purchase occupational accident,physical damage and other types of insurance.I

133、ndependent contractors also are able to procure at their expense fuel and maintenance services at our truckload service centers.Human Capital Resources General As of December 31,2021,we employed approximately 8,689 employees,of whom approximately 5,952 were drivers,approximately 321 were maintenance

134、 technicians and approximately 2,416 were office employees,including operations staff,sales and marketing,recruiting,safety and other support personnel.None of our employees are covered by a collective bargaining agreement.To attract and retain the best-qualified talent,we offer competitive benefits

135、,including market-competitive compensation,healthcare,paid time off,401(k),employee stock purchase,tuition assistance,employee skills development and leadership development.Professional truck drivers are the backbone of our success and the heart of the Company.Responsibility for driver retention flo

136、ws throughout our organization and every office and maintenance employee is expected to take the necessary steps to keep our drivers satisfied and productive.Keeping our drivers satisfied and safe is the guiding principle behind our modern fleet,training programs and driver compensation.We continue

137、to focus on driver centric initiatives such as increased miles and modern equipment,to both retain the professional drivers who have chosen to partner with us and attract new professional drivers to our team.Corporate Culture&Diversity We recruit,develop,and retain diverse talent.This strategy is pa

138、ying huge dividends not only for the organization,but for our employees.To foster their and our joint success,we seek to create an environment where people can do their best worka place where they can proudly be their authentic selves,and where they know their needs can be met.Over the past several

139、years we have committed to providing increased transparency on our inclusion and diversity commitments and are making progress in applying and advancing inclusiveness and diversity practices across our workplace.Workforce culture is key to successfully achieving our operational objectives.In an indu

140、stry that changes rapidly and as part of our intentional efforts to lead digital transformation throughout the organization,we understand ongoing training and development is needed for all employees.To address these evolving needs,we fill skill gaps through talent acquisition and through numerous tr

141、aining programs for our employees such as Leadership Excellence at the Peak,Leadership Excellence Fundamentals for new managers,Leadership Excellence Relationomics,Digital Communities of Practice,Digital Upskilling,access to over 4,000 courses through our learning management system.For our drivers w

142、e have re-envisioned our driver training program and developed and launched our new Professional Driver Onboarding Program in 2021.We aspire to the highest standards of inclusiveness,diversity and equity.During 2021,we continued to focus on inclusion as we partnered with Wade Hinton as our Chief Inc

143、lusion Partner to conduct a detailed assessment of our 8 inclusion and diversity efforts and develop a best-in-class strategy focused on culture of place and inclusion for the future.We launched our self-identify survey to assist in making decisions from an inclusion and diversity standpoint.We laun

144、ched three Employee Resource Groups(“ERG”),Womens ERG,Multi-Cultural ERG and Veterans ERG with great participation from our employees.We have a strong commitment to creating a culture where everyone is included and respected.We are committed to diverse representation across all levels of the workfor

145、ce while working to find the most qualified candidate for every position.We believe our differences make us stronger as a team,and it is through creating an environment that maximizes each individuals contributions,intentional focus on our cultural goals,and continuous training and development that

146、we and our employees succeed.Safety We are committed to pursue safety as one of our core cultural values.Our drivers are subject to certain hiring guidelines related to driving history,accident and safety history,physical standards and drug and alcohol testing.Upon meeting certain criteria,applicant

147、s are invited to attend an orientation at one of our service centers.The on-site orientation is focused on introducing a driver to the concepts and training necessary to be a successful,professional driver,including training related to safety,life on the road,our operations and equipment and electro

148、nic log operation.The on-site orientation also includes a road test.As a result of the COVID-19 pandemic,we have leveraged our new driver training program as well as created a virtual orientation program that allows new drivers to complete work remotely and,therefore,avoiding a majority of classroom

149、 work.In addition to our hiring criteria,our tractors are equipped with electronic speed limiters,automatic transmissions,lane departure and collision warning systems,air disc brakes and high performance wide brake drums,electronic roll stability and,more recently,forward-facing cameras.COVID-19 Upd

150、ate In response to the COVID-19 pandemic,we moved quickly to enable our office employees to work remotely starting March 2020.Since then,non-remote personnel have largely been limited to employees working on-site at customer locations and shop technicians working in our facilities,all of whom are fo

151、llowing strict protocols to ensure their safety and the safety of our customers.We have instituted policies to facilitate effective communication in this environment.For non-driving employees,we ensure multiple daily contacts with direct reports and have developed key performance indicators,facilita

152、ted by our digital capabilities,to measure our operational effectiveness.We have also implemented a hotline and support staff to ensure employees have access to necessary medical services as well as ensuring an adequate supply of safety equipment,including masks and gloves,for our workers who are on

153、 the frontlines,and providing regular cleaning and disinfecting of our facilities.U.S.Xpress employees are playing an essential role in the countrys fight against COVID-19 as they work to keep critical supplies moving and store shelves stocked.We are working daily with our drivers to keep them infor

154、med and safe in this rapidly changing environment.Insurance We retain high deductibles on a significant portion of our claims exposure and related expenses associated with third party bodily injury and property damage,employee medical expenses,workers compensation,physical damage to our equipment an

155、d cargo loss.See“Risk Factors.”We currently carry the following material types of insurance,which generally have the retention amounts,maximum benefits per claim and other limitations noted:commercial automobile liability excess coverage:approximately$75.0 million of coverage per occurrence effectiv

156、e September 1,2020,subject to a$3.0 million retention per occurrence with annual aggregate limits within the$3.0 to$10.0 million layer of$14.0 million and a three-year policy aggregate of$28.0 million;general liability,business auto liability and excess employers liability coverage:approximately$75.

157、0 million of coverage per occurrence subject to a$25,000 deductible per occurrence for general liability claims,$50,000 deductible per occurrence for business auto claims and$500,000 deductible for excess employers liability:cargo damage and loss:$2.0 million limit per tractor or trailer subject to

158、a$250,000 retention per occurrence;9 workers compensation/employers liability:statutory coverage limits subject to a$500,000 retention for each accident or disease;employment practices and wage and hour liability:$25.0 million aggregate limit in coverage subject to a$1.0 million retention for employ

159、ment practices and$2.5 million retention for wage and hour for either a single claim or a class action;directors and officers insurance:$75.0 million aggregate limit of coverage subject to a$1.0 million retention with various sub-limits;fiduciary liability policy:$10.0 million aggregate limit of cov

160、erage subject to a$10,000 retention;employee healthcare:we retain each employee health care claim and maintain stop loss insurance of$1.0 million;crime insurance:$5.0 million of coverage subject to a$250,000 retention;and underground storage tank liability:$5.0 million in coverage with deductibles r

161、anging from$25,000 to$75,000.Regulation Transportation Regulations Our operations are regulated and licensed by various government agencies,including the Department of Transportation(“DOT”),Environmental Protection Agency(“EPA”)and the Department of Homeland security(“DHS”).These and other federal a

162、nd state agencies also regulate our equipment,operations,drivers and third-party carriers.The DOT,through the Federal Motor Carrier Safety Administration(“FMCSA”),imposes safety and fitness regulations on us and our drivers,including rules that restrict driver hours-of-service.Changes to such hours-

163、of-service rules can negatively impact our productivity and affect our operations and profitability by reducing the number of hours per day or week our drivers may operate and/or disrupting our network.However,in August 2019,the FMCSA issued a proposal to make changes to its hours-of-service rules t

164、hat would allow truck drivers more flexibility with their 30-minute rest break and with dividing their time in the sleeper berth.It also would extend by two hours the duty time for drivers encountering adverse weather,and extend the shorthaul exemption by lengthening the drivers maximum on-duty peri

165、od from 12 hours to 14 hours.In June 2020 the FMCSA adopted a final rule substantially as proposed,which became effective in September 2020.Certain industry groups have challenged these rules in court,and it remains unclear what,if anything,will come from such challenges.Any future changes to hours-

166、of-service rules could materially adversely affect our results of operations and profitability.There are two methods of evaluating the safety and fitness of carriers.The first method is the application of a safety rating that is based on an onsite investigation and affects a carriers ability to oper

167、ate in interstate commerce.We currently have a satisfactory DOT safety rating for our U.S.operations under this method,which is the highest available rating under the current safety rating scale.If we were to receive a conditional or unsatisfactory DOT safety rating,it could materially adversely aff

168、ect our business,as some of our existing customer contracts require a satisfactory DOT safety rating.In January 2016,the FMCSA published a Notice of Proposed Rulemaking outlining a revised safety rating measurement system,which would replace the current methodology.Under the proposed rule,the curren

169、t three safety ratings of“satisfactory,”“conditional”and“unsatisfactory”would be replaced with a single safety rating of“unfit,”and a carrier would be deemed fit when no rating was assigned.Moreover,the proposed rules would use roadside inspection data in addition to investigations and onsite review

170、s to determine a carriers safety fitness on a monthly basis.Under the current rules,a safety rating can only be given upon completion of a comprehensive onsite audit or review.Under the proposed rules,a carrier would be evaluated each month and could be given an“unfit”rating if the data collected fr

171、om roadside inspections,investigations and onsite reviews did not meet certain standards.The proposed rule underwent a public comment period extending into May 2016 and several industry groups and lawmakers have expressed their disagreement with the proposed rule,arguing that it violates the require

172、ments of the Fixing Americas Surface Transportation Act(the“FAST Act”),and that the FMCSA must first finalize its review of the Compliance,Safety,Accountability program(“CSA”)scoring system,described in further detail below.Based on this feedback and other concerns raised by industry stakeholders,in

173、 March 2017,the FMCSA withdrew the Notice of Proposed Rulemaking related to the new safety rating system.In its notice of withdrawal,the 10 FMCSA noted that a new rulemaking related to a similar process may be initiated in the future.Therefore,it is uncertain if,when or under what form any such rule

174、 could be implemented.The FMCSA has also indicated that it is in the early phases of a new study on the causation of crashes.Although it remains unclear whether such study will ultimately be completed,the results of such study could spur further proposed and/or final rules in regard to safety and fi

175、tness.In addition to the safety rating system,the FMCSA has adopted the CSA program as an additional safety enforcement and compliance model that evaluates and ranks fleets on certain safety-related standards.The CSA program analyzes data from roadside inspections,moving violations,crash reports fro

176、m the last two years and investigation results.The data is organized into seven categories.Carriers are grouped by category with other carriers that have a similar number of safety events(e.g.,crashes,inspections or violations)and carriers are ranked and assigned a rating percentile to prioritize th

177、em for interventions if they are above a certain threshold.Currently,these scores do not have a direct impact on a carriers safety rating.However,the occurrence of unfavorable scores in one or more categories may(i)affect driver recruiting and retention by causing high-quality drivers to seek employ

178、ment with other carriers,(ii)cause our customers to direct their business away from us and to carriers with higher fleet rankings,(iii)subject us to an increase in compliance reviews and roadside inspections,(iv)cause us to incur greater than expected expenses in our attempts to improve unfavorable

179、scores or(v)increase our insurance expenses,any of which could adversely affect our results of operations and profitability.Under the CSA,these scores were initially made available to the public in five of the seven categories.However,pursuant to the FAST Act which was signed into law in December 20

180、15,the FMCSA was required to remove from public view the previously available CSA scores while it reviews the reliability of the scoring system.During this period of review by the FMCSA,we will continue to have access to our own scores and will still be subject to intervention by the FMCSA when such

181、 scores are above the intervention thresholds.A study was conducted and delivered to the FMCSA in June 2017 with several recommendations to make the CSA program more fair,accurate,and reliable.In late June 2018,the FMCSA provided a report to Congress outlining the changes it may make to the CSA prog

182、ram in response to the study.Such changes include the testing and possible adoption of a revised risk modeling theory,potential collection and dissemination of additional carrier data and revised measures for intervention thresholds.The adoption of such changes is contingent on the results of the ne

183、w modeling theory and additional public feedback.Therefore,it is unclear if,when and to what extent such changes to the CSA program will occur.However,any changes that increase the likelihood of us receiving unfavorable scores could materially adversely affect our results of operations and profitabi

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

185、 will expand the types of eligible crashes,modify the Safety Measurement System to exclude crashes with not preventable determinations from the prioritization algorithm and note the not preventable determinations in the Pre-Employment Screening Program.Under the program,carriers with eligible crashe

186、s that occurred on or after August 2019,may submit a Request for Data Review with the required police accident report and other supporting documents,photos or videos through the FMCSAs DataQs website.If the FMCSA determines the crash was not preventable,it will be listed on the Safety Measurement Sy

187、stem but not included when calculating a carriers Crash Indicator Behavior Analysis and Safety Improvement Category measure in SMS.Additionally,the not preventable determinations will be noted on a drivers Pre-Employment Screening Program report.The final rule requiring the use of ELDs was published

188、 in December 2015.This rule required drivers of commercial motor vehicles that are required to keep logs to be ELD-compliant by December 2017.Use of automatic onboard recording devices was permitted until December 2019,at which time use of ELDs became required.We were fully converted to ELDs by the

189、December 2019 deadline.We believe that more effective hours-of-service enforcement under this rule may improve our competitive position by causing all carriers to adhere more closely to hours-of-service requirements.In December 2016,the FMCSA issued a final rule establishing a national clearinghouse

190、 for drug and alcohol testing results and requiring motor carriers and medical review officers to provide records of violations by commercial drivers of FMCSA drug and alcohol testing requirements.Motor carriers are required to query the clearinghouse to ensure drivers and driver applicants do not h

191、ave violations of federal drug and alcohol testing regulations that prohibit them from operating commercial motor vehicles.The final rule became effective in January 2017,with a compliance date in January 2020.In December 2019,however,the FMCSA announced a final rule extending by three years the dat

192、e for state drivers licensing agencies to comply with certain Drug and Alcohol Clearinghouse requirements.The December 2016 commercial drivers license rule required states to request information from the Clearinghouse about 11 individuals prior to issuing,renewing,upgrading or transferring a CDL.Thi

193、s new action will allow states compliance with the requirement,which was set to begin January 2020,to be delayed until January 2023.That being said,the FMCSA has indicated it will allow states the option to voluntarily query Clearinghouse information beginning January 2020.The compliance date of Jan

194、uary 2020 remained in place for all other requirements set forth in the Clearinghouse final rule,however.Upon implementation,the rule may reduce the number of available drivers in an already constrained driver market.Pursuant to a new rule finalized by the FMCSA,effective November 2021,states are re

195、quired to query the Clearinghouse when issuing,renewing,transferring,or upgrading a commercial drivers license and must revoke a drivers commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.In September 2020,the Department

196、 of Health and Human Services(“DHHS”)announced proposed mandatory guidelines to allow employers to drug test truck drivers and other federal workers for pre-employment and random testing using hair specimens.However,the proposal also requires a second sample using either urine or an oral swab test i

197、f a hair test is positive,if a donor is unable to provide a sufficient amount of hair for faith-based or medical reasons,or due to an insufficient amount or length of hair.The proposal specifically requires that the second test be done simultaneously at the collection event or when directed by the m

198、edical review officer after review and verification of laboratory-reported results for the hair specimen.DHHS indicated the two-test approach is intended to protect federal workers from issues that have been identified as limitations of hair testing,and related legal deficiencies identified in two p

199、rior court cases.The American Trucking Associations(“ATA”)has voiced concerns with the new guidelines,characterizing them as“weak”and“misguided,”and specially taking issue with the second sample requirement,which the ATA feels diminishes the value of hair testing.It is unclear if,and when,a final ru

200、le may be put in place.Any final rule may reduce the number of available drivers.We currently perform hair follicle testing and will continue monitor any developments in this area to ensure compliance.Other rules have been recently proposed or made final by the FMCSA,including(i)a rule requiring the

201、 use of speed limiting devices on heavy duty tractors to restrict maximum speeds,which was proposed in 2016,and(ii)a rule setting forth minimum driver-training standards for new drivers applying for commercial drivers licenses for the first time and to experienced drivers upgrading their licenses or

202、 seeking a hazardous materials endorsement,which was made final in December 2016,with a compliance date in February 2020.However,in May 2020,the FMCSA approved an interim rule delaying implementation of the final rule by two years which extended the compliance date to February 2022.In July 2017,the

203、DOT announced that it would no longer pursue a speed limiter rule,but left open the possibility that it could resume such a pursuit in the future.In May 2021,however,the Cullum Owings Large Truck Safe Operating Speed Act was reintroduced into the U.S.House of Representatives and would require commer

204、cial motor vehicles with a gross weight of more than 26,000 pounds to be equipped with a speed limiter that would limit the vehicles speed to no more than 65 M.P.H.The effect of these rules,to the extent they become effective,could result in a decrease in fleet production and driver availability,eit

205、her of which could materially adversely affect our business,financial condition and results of operations.The Infrastructure Investment and Jobs Act(“IIJA”),signed into law by President Biden in November 2021,created an apprenticeship program for drivers younger than 21 to eventually qualify to driv

206、e commercial trucks in interstate commerce.The provision drew certain mechanics from the bills introduced in Congress in 2019 related to lowering the age requirements for interstate commercial driving.The FMCSA announced the establishment of this apprenticeship program in January 2022 in an effort t

207、o help the industrys ongoing driver shortage.The program is open to 18 to 20-year-old drivers who already hold intrastate commercial drivers licenses and sets a strict training regimen for participating drivers and carriers to comply with.Motor carriers interested in participating must complete an a

208、pplication for participation and submit monthly data on an apprentices driver activity,safety outcomes,and additional supporting information.It remains unclear whether any regulatory changes will stem from the apprenticeship program.In December 2018,the FMCSA granted a petition filed by the ATA and

209、in doing so determined that federal law does preempt Californias wage and hour laws,and interstate truck drivers are not subject to such laws.The FMCSAs decision has been appealed by labor groups,and multiple lawsuits have been filed in federal courts seeking to overturn the decision.In January 2021

210、,the Ninth Circuit upheld the FMCSAs determination that federal law does preempt Californias meal and rest break laws,as applied to drivers of property-carrying commercial motor vehicles.Other current and future state and local wage and hour laws,including laws related to employee meal breaks and re

211、st periods,may also vary significantly from federal law.Further,driver piece rate compensation,which is an industry standard,has been attacked as non-compliant with state minimum wage laws and lawsuits have recently been filed and/or adjudicated against carriers demanding compensation for sleeper be

212、rth time,layovers,rest breaks and pre-trip and post-trip inspections,the outcome of which could have major implications for the treatment of time that drivers spend off-duty(whether in a trucks sleeper berth or otherwise)under applicable wage laws.Both of these issues are 12 adversely impacting the

213、Corporation and the industry as a whole,with respect to the practical application of the laws,thereby resulting in additional cost.As a result,we,along with other companies in our industry,are subject to an uneven patchwork of wage and hour laws throughout the United States.In the past,certain legis

214、lators have proposed federal legislation to preempt state and local wage and hour laws;however,passage of such legislation is uncertain.If federal legislation is not passed,we will either need to comply with the most restrictive state and local laws across our entire fleet,or revise our management s

215、ystems to comply with varying state and local laws.Either solution could result in increased compliance and labor costs,driver turnover,decreased efficiency,and amplified legal exposure.Tax and other regulatory authorities,as well as independent contractors themselves,have increasingly asserted that

216、 independent contractor drivers in the trucking industry are employees rather than independent contractors and our classification of independent contractors has been the subject of audits by such authorities from time to time.Federal legislation has been introduced in the past that would make it eas

217、ier for tax and other authorities to reclassify independent contractors as employees,including legislation to increase the recordkeeping requirements for those that engage independent contractor drivers and to increase the penalties for companies who misclassify their employees and are found to have

218、 violated employees overtime and/or wage requirements.The most recent example being the Protecting the Rights to Organize(“PRO”)Act,which was passed by the House of Representatives and received by the Senate in March 2021 and remains with the Senates Committee on Health,Education,Labor,and Pensions.

219、The PRO Act proposes to apply the“ABC Test”for classifying workers under Federal Fair Labor Standards Act claims.It is unknown whether any of the proposed legislation will become law or whether any industry-based exemptions from any resulting law will be granted.Additionally,federal legislators have

220、 sought to abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing,recognized practice,extend the Fair Labor Standards Act to independent contractors and impose notice requirements based on empl

221、oyment or independent contractor status and fines for failure to comply.Some states have put initiatives in place to increase their revenue from items such as unemployment,workers compensation and income taxes and a reclassification of independent contractors as employees would help states with this

222、 initiative.Recently,courts in certain states have issued decisions that could result in a greater likelihood that independent contractors would be judicially classified as employees in such states.In September 2019,California enacted A.B.5(“AB5”),a new law that changed the landscape of the states t

223、reatment of employees and independent contractors.AB5 provides that the three-pronged“ABC Test”must be used to determine worker classification in wage-order claims.Under the ABC Test,a worker is presumed to be an employeeand the burden to demonstrate their independent contractor status is on the hir

224、ing company through satisfying all 3 of the following criteria:the worker is free from control and direction in the performance of services;and the worker is performing work outside the usual course of the business of the hiring company;and the worker is customarily engaged in an independently estab

225、lished trade,occupation,or business.How AB5 will be enforced is still to be determined.In January 2021,however,the California Supreme Court ruled that the ABC Test could apply retroactively to all cases not yet final as of the date the original decision was rendered,April 30,2018.While AB5 was set t

226、o go into effect in January 2020,a federal judge in California issued a preliminary injunction barring the enforcement of AB5 on the trucking industry while the California Trucking Association(“CTA”)moves forward with its suit seeking to invalidate AB5.The Ninth Circuit Court of Appeals rejected the

227、 reasoning behind the injunction in April 2021,ruling that AB5 is not pre-empted by federal law,but granted a stay of the AB5 mandate in June 2021(preventing its application and temporarily continuing the injunction)while the CTA petitioned the U.S.Supreme Court(the“Supreme Court”)to review the deci

228、sion.In November 2021,the Supreme Court requested that the U.S.solicitor general weigh in on the case.The injunction will remain in place until the Supreme Court makes a decision on whether to proceed in hearing the case.While the stay of the AB5 mandate provides temporary relief to the enforcement

229、of AB5,it remains unclear how long such relief will last,and whether the CTA will ultimately be successful in invalidating the law.It is also possible AB5 will spur similar legislation in states other than California,which could adversely affect our results of operations and profitability.Further,cl

230、ass actions and other lawsuits have been filed against certain members of our industry seeking to reclassify independent contractors as employees for a variety of purposes,including workers compensation and health care coverage.Taxing and other regulatory authorities and courts apply a variety of st

231、andards in their determination of independent contractor status.If independent contractors we contract with are determined to be employees,we would incur additional exposure under federal and state tax,workers compensation,unemployment benefits,labor,employment and tort laws,including for prior peri

232、ods,as well as potential liability for employee benefits and tax withholdings.13 Environmental Regulations From time to time we engage in the transportation of hazardous substances.Additionally,some of our tractor terminals are located in areas where groundwater or other forms of environmental conta

233、mination could occur.Our operations involve the risks of fuel spillage or seepage,environmental damage,and hazardous waste disposal,among others.Certain of our facilities have wash facilities,waste oil or fuel storage tanks and fueling islands.If we are involved in a spill or other accident involvin

234、g hazardous substances,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 subject to cleanup costs and liabilitie

235、s,including substantial fines or penalties or civil and criminal liability,any of which could have a materially adverse effect on our business,financial condition and results of operations.In August 2011,the National Highway Traffic Safety Administration(the“NHTSA”)and the EPA adopted a new rule tha

236、t established the first-ever fuel economy and greenhouse gas standards for medium and heavy-duty vehicles,including the tractors we employ(the“Phase 1 Standards”).The Phase 1 Standards apply to tractor model years 2014 to 2018 and require the achievement of an approximate 20 percent reduction in fue

237、l consumption by the 2018 model year,which equates to approximately four gallons of fuel for every 100 miles traveled.In addition,in February 2014,President Obama announced that his administration would begin developing the next phase of tighter fuel efficiency and greenhouse gas standards for mediu

238、m-and heavy-duty tractors and trailers(the“Phase 2 Standards”).In October 2016,the EPA and NHTSA published the final rule mandating that the Phase 2 Standards will apply to trailers beginning with model year 2018 and tractors beginning with model year 2021.The Phase 2 Standards require nine percent

239、and 25 percent reductions in emissions and fuel consumption for trailers and tractors,respectively,by 2027.The final rule was effective in December 2016,but has since faced challenges and delays.In October 2017,the EPA announced a proposal to repeal the Phase 2 Standards as they relate to gliders(wh

240、ich mix refurbished older components,including transmissions and pre-emission-rule engines,with a new frame,cab,steer axle,wheels,and other standard equipment).The outcome of such proposal is still undetermined.Additionally,implementation of the Phase 2 Standards as they relate to trailers has been

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

242、ly,the Phase 2 Standards will only require reductions in emissions and fuel consumption for tractors.The Companys new tractor purchases in 2021 complied with the emission and fuel consumption reductions required by the Phase 2 Standards.Even though the trailer provisions of the Phase 2 standards hav

243、e been removed,we will still need to ensure the majority of our fleet is compliant with the California Phase 2 standards.In January 2020,the EPA announced it is seeking input on reducing emissions of nitrogen oxides and other pollutants from heavy-duty trucks.The EPA anticipates taking final action

244、on the new plan,commonly referred to as the“Cleaner Trucks Initiative,”as soon as 2022.The EPA is targeting 2027 for these new standards to take effect and is also working on enacting more stringent greenhouse gas emission standards(beginning with model year 2030 vehicles)by the end of 2024.The Cali

245、fornia Air Resources Board(“CARB”)also adopted emission control regulations that will be applicable to all heavy-duty tractors that pull 53-foot or longer box-type trailers within the State of California.The tractors and trailers subject to these CARB regulations must be either EPA SmartWay certifie

246、d or equipped with low-rolling resistance tires and retrofitted with SmartWay-approved aerodynamic technologies.Enforcement of these CARB regulations for 2011 model year equipment began in January 2010 and have been phased in over several years for older equipment.In order to comply with the CARB re

247、gulations,we submitted a large fleet compliance plan to CARB in June 2010.In addition,in February 2017 CARB proposed California Phase 2 standards that would generally align with the federal Phase 2 Standards,with some minor additional requirements,and as proposed would stay in place even if the fede

248、ral Phase 2 Standards are affected.In February 2019,the California Phase 2 standards became final.Thus,even though the trailer provisions of the Phase 2 Standards were removed,we will still need to ensure the majority of our fleet is compliant with the California Phase 2 standards,which may result i

249、n increased equipment costs and could adversely affect our operating results and profitability.CARB has also recently announced intentions to adopt regulations ensuring that 100%of tractors operating in California are operating with battery or fuel cell-electric engines in the future.Whether these r

250、egulations will ultimately be adopted remains unclear.We will continue monitoring our compliance with the CARB regulations.Federal and state lawmakers also have proposed potential limits on carbon emissions under a variety of climate-change proposals.Compliance with such regulations has increased th

251、e cost of our new tractors,may increase the cost of any new trailers that will operate in California,may require us to retrofit certain of our pre-2011 model year trailers that operate in California and could impair equipment productivity and increase our operating expenses.These adverse effects,com

252、bined with the uncertainty as to the reliability of the newly designed diesel engines and the residual values of these vehicles,could materially increase our 14 costs or otherwise materially adversely affect our business,financial condition and results of operations.In June 2020 CARB also passed the

253、 Advanced Clean Trucks(“ACT”)regulation,which became effective in March 2021 and generally requires original equipment manufacturers to begin shifting towards greater production of zero-emission heavy duty tractors starting in 2024.Under ACT,by 2045,every new tractor sold in California will need to

254、be zero-emission.While ACT does not apply to those simply operating tractors in California,it could affect the cost and/or supply of traditional diesel tractors and may lead to similar legislation in other states or at the federal level.In order to reduce exhaust emissions,some states and municipali

255、ties have begun to restrict the locations and amount of time where diesel-powered tractors may idle.These restrictions could force us to purchase on-board power units that do not require the engine to idle or to alter its drivers behavior,which could result in increased costs.In addition to the fore

256、going laws and regulations,our operations are subject to other federal,state and local environmental laws and regulations,many of which are implemented by the EPA and similar state agencies.Such laws and regulations generally govern the management and handling of hazardous materials,discharge of pol

257、lutants into the air,surface water and other environmental media,and groundwater preservation and disposal of certain various substances.We do not believe that our compliance with these statutory and regulatory measures has had a material adverse effect on our business,financial condition and result

258、s of operations.Food Safety Regulations In April 2016,the Food and Drug Administration(“FDA”)published a final rule establishing requirements for shippers,loaders,carriers by motor vehicle and rail vehicle and receivers engaged in the transportation of food,to use sanitary transportation practices t

259、o ensure the safety of the food they transport as part of the Food Safety Modernization Act(“FSMA”).This rule sets forth requirements related to(i)the design and maintenance of equipment used to transport food,(ii)the measures taken during food transportation to ensure food safety,(iii)the training

260、of carrier personnel in sanitary food transportation practices and(iv)maintenance and retention of records of written procedures,agreements and training related to the foregoing items.These requirements took effect for larger carriers such as us in April 2017.The FSMA is applicable to us not only as

261、 a carrier,but we are also considered a shipper when acting in the role of broker.We believe we have been in compliance with the FSMA since the compliance date.However,if we are found to be in violation of applicable laws or regulations related to the FSMA or if we transport food or goods that are c

262、ontaminated or are found to cause illness and/or death,we could be subject to substantial fines,lawsuits,penalties and/or criminal and civil liability,any of which could have a material adverse effect on our business,financial condition and results of operations.As the FDA continues its efforts to m

263、odernize food safety,it is likely additional food safety regulations will take effect in the future.In July 2020,the FDA released its“New Era of Smarter Food Safety”blueprint,which creates a ten year roadmap to create a more digital,traceable and safer food system.This blueprint builds on the work d

264、one under the FSMA,and while it is still unclear what,if any,changes to the current governing framework may ultimately take effect,further regulation in this area could negatively affect our business by increasing our compliance obligations and related expenses going forward.Executive and Legislativ

265、e Climate It is still to be determined how President Bidens leadership will impact our industry.That being said,President Biden has indicated his intent to make a green infrastructure package a top priority for his administration.Any measure in furtherance thereof could draw from the Build Back Bett

266、er Act(the“BBB”),which passed the U.S.House of Representatives,but is facing resistance in the U.S.Senate.As currently proposed,the BBB would impact transportation by allocating funds to address various industry related issues such as port congestion and traffic safety enforcement.The bill also prom

267、otes a myriad of low-emission programs,transit services and clean energy projects,as well as funding for climate change research.It is unclear whether these legislative initiatives will be signed into law and what changes they may undergo.However,adoption and implementation could negatively impact o

268、ur business by increasing our compliance obligations and related expenses.President Biden also has indicated an intention to make substantial changes to the current U.S.tax laws during his administration,including changes to the way capital gains are treated.Any changes to U.S.tax laws may have an a

269、dverse impact on our business and profitability.The United States Mexico Canada Agreement(“USMCA”)was entered into effect in July 2020.The USMCA is designed to modernize food and agriculture trade,advance rules of origin for automobiles and trucks,and enhance intellectual property protections,among

270、other matters,according to the Office of the U.S.Trade Representative.It is 15 difficult to predict at this stage what could be the impact of the USMCA on the economy,including the transportation industry.However,given the amount of North American trade that moves by truck,it could have a significan

271、t impact on supply and demand in the transportation industry,and could adversely impact the amount,movement and patterns of freight we transport.The IIJA was signed into law by President Biden in November 2021.The roughly$1.2 trillion bill contains an estimated$550 billion in new spending,which will

272、 impact transportation.In particular,it dedicates more than$100 billion for surface transportation networks and roughly$66 billion for freight and passenger rail operations.Among provisions in the law specific to trucking is the aforementioned apprenticeship program for drivers younger than 21 to ev

273、entually qualify to drive commercial trucks in interstate commerce.It remains unclear how the IIJA will be implemented into and effect our industry.The IIJA may result in increased compliance and implementation related expenses,which could have a negative impact on our operations.Given COVID-19s con

274、siderable effect on our industry,the FMCSA issued and/or extended various temporary responsive measures throughout the year.Although,to date,these measures have largely been enacted in order to assist industry participants in operating under adverse circumstances,any further responsive measures rema

275、in unclear and could have a negative impact on our operations.In November 2021,the U.S.Department of Labors Occupational Safety and Health Administration(“OSHA”)published an emergency temporary standard(the“Emergency Rule”)requiring all employers with at least 100 employees to ensure that their empl

276、oyees are fully vaccinated or require any employees who remain unvaccinated to produce a negative COVID-19 test result on at least a weekly basis before coming to work.The Emergency Rule has been blocked by the Supreme Court.Effective January 2022,the U.S.is prohibiting unvaccinated foreigners from

277、crossing the U.S.-Mexico border and U.S.-Canada border.Furthermore,effective January 2022,Canada is prohibiting unvaccinated foreigners,including U.S.citizens,from crossing their border.These border requirements,as well as any future vaccination,testing or mask mandates that are allowed to go into e

278、ffect,could,among other things,(i)cause our unvaccinated employees to go to smaller employers,if such employers are not subject to future mandates,or leave us or the trucking industry,especially our unvaccinated drivers,(ii)result in logistical issues,increased expenses,and operational issues from a

279、rranging for weekly tests of our unvaccinated employees,especially our unvaccinated drivers,(iii)result in increased costs for recruiting and retention of drivers,as well as the cost of weekly testing,and(iv)result in decreased revenue if we are unable to recruit and retain drivers.Any vaccination,t

280、esting or mask mandates that are interpreted as applying to drivers would significantly reduce the pool of drivers available to us and our industry,which would further impact the extreme shortage of available drivers.Accordingly,any vaccination,testing or mask mandates,if allowed to go into effect,c

281、ould have a material adverse effect on our business,financial condition,and results of operations.For further discussion regarding these laws and regulations,please see the section entitled“Risk Factors.”Seasonality In the trucking industry,revenue has historically decreased as customers reduce ship

282、ments following the winter holiday season and as inclement weather impedes operations.At the same time,operating expenses have generally increased,with fuel efficiency declining because of engine idling and weather,causing more physical damage equipment repairs and insurance claims and costs.For the

283、 reasons stated,first quarter results historically have been lower than results in each of the other three quarters of the year.Over the past several years,we have seen increases in demand at varying times,including surges between Thanksgiving and the year-end holiday season.Available Information Ou

284、r website address is .Our Annual Report on Form 10-K,our quarterly reports on Form 10-Q,our current reports on Form 8-K and all other reports filed with the Securities and Exchange Commission pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,can be obtained free of charge by vi

285、siting our website.Information contained in or available through our website is not incorporated by reference into,and you should not consider such information to be part of,this Annual Report.The SEC maintains an internet site that contains reports,proxy and information statements,and other informa

286、tion regarding issuers that file electronically with the SEC at www.sec.gov.We are a Nevada corporation.We were founded by Max Fuller and Patrick Quinn in 1985 and commenced operations in the transportation business in 1986.16 RISK FACTORS When evaluating the Company,the following discussion of risk

287、 factors,which contains forward-looking statements as discussed in“Cautionary Note Regarding Forward-looking Statements”above,should be considered in conjunction with the other information contained in this Annual Report.If we are unable to mitigate and/or are exposed to any of the following risks i

288、n the future,then there could be a material,adverse effect on our business,financial condition and results of operations.STRATEGIC RISKS Our business is subject to economic,business and regulatory factors affecting the truckload industry that are largely beyond our control,any of which could have a

289、material adverse effect on our results of operations.The truckload industry is highly cyclical,and our business is dependent on a number of factors that may have a negative impact on our results of operations,many of which are beyond our control.We believe that some of the most significant of these

290、factors are economic changes that affect supply and demand in transportation markets that could have a material adverse effect,such as:Economic conditions that decrease shipping demand or increase the supply of available tractors and trailers can exert downward pressure on rates and equipment utiliz

291、ation,thereby decreasing asset productivity.The risks associated with these factors are heightened when the U.S.economy is weakened.Some of the principal risks during such times are as follows:we may experience low overall freight levels,which may impair our asset utilization;certain of our customer

292、s may face credit issues and cash flow problems that may lead to payment delays,increased credit risk,bankruptcies and other financial hardships that could result in even lower freight demand and may require us to increase our allowance for doubtful accounts;freight patterns may change as supply cha

293、ins are redesigned,resulting in an imbalance between our capacity and our customers freight demand;customers may solicit bids for freight from multiple trucking companies or select competitors that offer lower rates from among existing choices in an attempt to lower their costs,and we might be force

294、d to lower our rates or lose freight;and we may be forced to accept more loads from freight brokers,where freight rates are typically lower,or may be forced to incur more non-revenue miles to obtain loads.We are also subject to cost increases outside our control that could materially reduce our prof

295、itability if we are unable to increase our rates sufficiently.Such cost increases include,but are not limited to,increases in fuel prices,driver and office employee wages,purchased transportation costs,interest rates,taxes,tolls,license and registration fees,insurance,revenue equipment and related m

296、aintenance,tires and other components and healthcare and other benefits for our employees.Further,we may not be able to appropriately adjust our costs to changing market demands.In order to maintain high variability in our business model,it is necessary to adjust staffing levels to changing market d

297、emands.In periods of rapid change,it is more difficult to match our staffing level to our business needs.Further,we may not be able to appropriately adjust our costs to changing market demands.In addition,events outside our control,such as deterioration of U.S.transportation infrastructure and reduc

298、ed investment in such infrastructure,strikes or other work stoppages at our facilities or at customer,port,border or other shipping locations,armed conflicts or terrorist attacks,efforts to combat terrorism,military action against a foreign state or group located in a foreign state or heightened sec

299、urity requirements could lead to wear,tear and damage to our equipment,driver dissatisfaction,reduced economic demand and freight volumes,reduced availability of credit,increased prices for fuel or temporary closing of the shipping locations or U.S.borders.Such events or enhanced security measures i

300、n connection with such events could impair our operating efficiency and productivity and result in higher operating costs.We may not be successful in achieving our business strategies.Many of our business strategies require time,significant management and financial resources and successful implement

301、ation.Consequently,we may be unable to effectively and successfully implement our business strategies.17 We also cannot ensure that our operating results,including our operating margins,will not be materially adversely affected by future changes in and expansion of our business,including our continu

302、ed focus on expanding Variant,while finding the proper balance of domain expertise and focusing on execution and scale,or by changes in economic conditions.Further,many of our strategic initiatives are focused on the development and deployment of technology.These new technology-driven initiatives ha

303、ve a high degree of risk,as they involve unproven business strategies and technologies with which we have limited or no prior experience.Because such offerings and technologies are new,they may involve unforeseen expenses and regulatory and other risks.There can be no assurance that these initiative

304、s will generate sufficient revenue to offset any new expenses or liabilities associated with these new investments.It is also possible that technology developed or deployed by others will render our technology noncompetitive or obsolete.Further,our development and deployment efforts with respect to

305、new technologies could distract management from current operations,and will divert capital and other resources from our historical operations.Despite the implementation of our operational and tactical strategies and initiatives,we may be unsuccessful in achieving cost reductions and revenue expansio

306、n in the time frames we expect or at all.Further,our results of operations may be materially adversely affected by a failure to transition our legacy OTR fleet to Variant,further penetrate our existing customer base,cross-sell our services,secure new customer opportunities and manage the operations

307、and expenses of new or growing services,including Variant.There is no assurance that we will be successful in achieving any of our business strategies.Even if we are successful in executing our business strategies,we still may not achieve our goals.We have invested significant resources to develop a

308、nd grow our Variant fleet and we had 1,555 tractors in this fleet at December 31,2021.Variants operations are performing below our expectations.Additionally,in December 2021,we announced a leadership change at Variant.If we are unable to improve the performance of Variant,we could be forced to re-in

309、tegrate Variants operations into our OTR and Dedicated operations,which would be disruptive,could result in further write-offs of intangibles and loss of drivers,and could have a material adverse effect on our results of operations.We operate in a highly competitive and fragmented industry,and numer

310、ous competitive factors could impair our ability to improve our profitability and materially adversely affect our results of operations.Numerous competitive factors could impair our ability to improve our profitability and materially adversely affect our results of operations,including:we compete wi

311、th many other truckload carriers of varying sizes and service offerings(including intermodal)and,to a lesser extent,with(i)less-than-truckload carriers,(ii)railroads and(iii)other transportation and brokerage companies,several of which have access to more equipment and greater capital resources than

312、 we do;many of our competitors periodically reduce their freight rates to gain business,especially during times of reduced growth in the economy,which may limit our ability to maintain or increase freight rates or to maintain or expand our business or may require us to reduce our freight rates in or

313、der to maintain business and keep our equipment productive;we may increase the size of our fleet during periods of high freight demand during which our competitors also increase their capacity,and we may experience losses in greater amounts than such competitors during subsequent cycles of softened

314、freight demand if we are required to dispose of assets at a loss to match reduced freight demand;we may have difficulty recruiting and retaining drivers because upgrades of our tractor fleet to match or exceed those of our competitors may not increase our cost savings or profitability;some of our la

315、rger customers are other transportation companies and/or also operate their own private trucking fleets,and they may decide to transport more of their own freight;some shippers have reduced or may reduce the number of carriers they use by selecting preferred carriers as approved service providers or

316、 by engaging dedicated providers,and we may not be selected;consolidation in the trucking industry may create other large carriers with greater financial resources and other competitive advantages,and we may have difficulty competing with them;our competitors may have better safety records than us o

317、r a perception of better safety records;18 competition from freight brokerage companies may materially adversely affect our customer relationships and freight rates;new digital entrants with cheaper sources of capital could inhibit our ability to compete;our competitors may have better technology th

318、at may lead to increased operating efficiencies,reduced costs,a better ability to recruit drivers and more demand for their services,and economies of scale that procurement aggregation providers may pass on to smaller carriers may improve such carriers ability to compete with us.We may not make acqu

319、isitions in the future,which could impede growth,or if we do,we may not be successful in integrating any acquired businesses,either of which could have a material adverse effect on our business.Historically,a key component of our growth strategy has been to pursue acquisitions of complementary busin

320、esses.We currently do not expect to make any material acquisitions over the next few years,which could impede growth.If we do make acquisitions,we cannot assure that we will be successful in negotiating,consummating or integrating the acquisitions.If we succeed in consummating future acquisitions,ou

321、r business,financial condition and results of operations,may be materially adversely affected because:some of the acquired businesses may not achieve anticipated revenue,earnings or cash flows;we may assume liabilities that were not disclosed to us or otherwise exceed our estimates;we may be unable

322、to integrate acquired businesses successfully,or at all,and realize anticipated economic,operational and other benefits in a timely manner,which could result in substantial costs and delays or other operational,technical or financial problems;acquisitions could disrupt our ongoing business,distract

323、our management and divert our resources;we may experience difficulties operating in markets in which we have had no or only limited direct experience;we may incur transactions costs and acquisition-related integration costs;we could lose customers,employees and drivers of any acquired company;we may

324、 incur additional indebtedness;and we may issue additional shares of our Class A common stock,which would dilute the ownership of our then-existing stockholders.OPERATIONAL RISKS Increases in driver compensation or difficulties attracting and retaining qualified drivers could materially adversely af

325、fect our profitability and ability to maintain or grow our fleet.Like many truckload carriers,we experience substantial difficulty in attracting and retaining sufficient numbers of qualified drivers,which includes the engagement of independent contractors.Our industry is subject to a shortage of qua

326、lified drivers.Such shortage is exacerbated during periods of economic expansion,in which alternative employment opportunities,including in the construction and manufacturing industries,which may offer better compensation and/or more time at home,are more plentiful and freight demand increases,or du

327、ring periods of economic downturns,in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment,or the scarcity or growth of loans for students who seek financial aid for driving school.Furthermore,capacity at driving schools ma

328、y be limited by COVID-19 related social distancing requirements.Regulatory requirements,including those related to safety ratings,ELDs,hours-of-service changes COVID-19 mitigation measures,such as vaccination,testing,and mask mandates,and an improved economy could further reduce the pool of eligible

329、 drivers or force us to increase driver compensation to attract and retain drivers.We have seen evidence that stricter hours-of-service regulations adopted by the DOT in the past have tightened,and,to the extent new regulations are enacted,may continue to tighten,the market for eligible drivers.The

330、lack of adequate tractor parking along some U.S.highways and congestion caused by inadequate highway funding may make it more 19 difficult for drivers to comply with hours-of-service regulations and cause added stress for drivers,further reducing the pool of eligible drivers.We have implemented driv

331、er pay increases to address this shortage and we are implementing initiatives aimed at reducing the daily friction faced by our drivers in hopes of reducing turnover.However,the compensation we offer our drivers and independent contractor expenses are subject to market conditions and our initiatives

332、 to reduce driver turnover may prove unsuccessful,therefore we may find it necessary to further increase driver compensation,change the structure of our driver compensation and/or become subject to increased independent contractor expenses in future periods,which could materially adversely affect ou

333、r growth and profitability.In addition,we suffer from a high turnover rate of drivers and our turnover rate is higher than the industry average and compared to our peers.This high turnover rate requires us to spend significant resources recruiting a substantial number of drivers in order to operate existing revenue equipment and subjects us to a higher degree of risk with respect to driver shortag