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What changed in Schneider National, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Schneider National, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+336 added−277 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-17)

Top changes in Schneider National, Inc.'s 2023 10-K

336 paragraphs added · 277 removed · 207 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

50 edited+36 added−20 removed23 unchanged
Biggest changeWe are subject to various environmental laws and regulations dealing with, among other aspects of our operations, the handling of hazardous materials, underground fuel storage tanks at our terminals, emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.
Biggest changeIn addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration and Customs and Border Protection within the DHS, and our cross-border operations in Canada and Mexico are subject to regulation by each of those countries. 5 Table of Contents We are also subject to various environmental laws and regulations dealing with, among other aspects of our operations, the handling of hazardous materials, underground fuel storage tanks at our terminals, emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.
Operating expenses tend to be higher in the winter months, primarily due to colder weather, which causes higher maintenance expense and higher fuel consumption from increased idle time. For more information on our reportable segments, see Note 14, Segment Reporting.
Operating expenses tend to be higher in the winter months, primarily due to colder weather, which causes higher maintenance expense and fuel consumption from increased idle time. For more information on our reportable segments, see Note 14, Segment Reporting.
This comprehensive platform includes message capabilities, applications that scan and automate paperwork, and customer and location specific step-by-step work assignments. Our telematics platform is fully integrated with our back-office planning and execution systems and delivers real-time data in our business. Trailer and container fleets are equipped with monitoring devices which function both when tethered to a tractor or standing alone.
This comprehensive platform includes messaging capabilities, applications that scan and automate paperwork, and customer and location specific step-by-step work assignments. Our telematics platform is fully integrated with our back-office planning and execution systems and delivers real-time data in our business. Trailer and container fleets are equipped with monitoring devices which function both when tethered to a tractor or standing alone.
We offer a multimodal portfolio of services and an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products. The Company offers truckload, intermodal, and logistics services to a diverse customer base throughout the continental U.S., Canada, and Mexico.
We offer a scaled portfolio of services and an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products. The Company offers truckload, intermodal, and logistics services to a diverse customer base throughout the continental U.S., Canada, and Mexico.
We also provide customized freight movement, transportation equipment, labor, systems, and delivery services tailored to meet individual customer requirements, which typically involve long-term contracts. These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local deliveries, freight handling, specialized equipment, and freight network design.
We also provide customized freight movement, transportation equipment, labor, systems, and delivery services tailored to meet individual customer requirements, which typically involve long-term contracts. These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local deliveries, freight handling, specialized equipment, and freight network optimization.
In recent years, we invested in our existing diesel fleet to improve truck aerodynamics, reduce trailer drag, and implement electric-powered heating, ventilation, and air conditioning systems, which translates to emissions reductions and fuel savings.
In recent years, we invested in our existing diesel fleet to improve truck aerodynamics, reduce trailer drag, and implement electric-powered heating, ventilating, and air conditioning systems, which translates to emissions reductions and fuel savings.
Decision support tools improve our ability to, among other things, situationally coach drivers, minimize fuel costs, and maintain the fleet in the most cost-effective manner to maximize shareholder value. Schneider FreightPower® digitally connects the benefits of our integrated technology platform with the strength of our trailer network and carrier relationships to service our customers.
Decision support tools improve our ability to, among other things, situationally coach drivers, minimize fuel costs, and maintain the fleet in the most cost-effective manner to maximize shareholder value. Schneider FreightPower® for carriers and shippers digitally connects the benefits of our integrated technology platform with the strength of our trailer network and carrier relationships to service our customers.
Those measures include offering drivers competitive salaries and benefits, establishing driver pay scales which provide for increasing pay by experience level and performance, offering both live and remote driver training by experienced driving instructors, and maintaining a modern truck fleet with the latest safety technology, all of which focus on improving the overall driver experience. • Non-driver Company associates - Our mechanics, warehouse personnel, managers, and other corporate office associates help to facilitate and coordinate service to customers, ensure equipment is operational and well-maintained, and generally support our operations.
We employ measures to improve retention which include offering drivers competitive salaries and benefits, establishing driver pay scales which provide for increasing pay by experience level and performance, offering both live and remote driver training by experienced driving instructors, and maintaining a modern truck fleet with the latest safety technology, all of which focus on improving the overall driver experience. • Non-driver Company associates - Our mechanics, warehouse personnel, managers, and other corporate office associates help to facilitate and coordinate service to customers, ensure equipment is operational and well-maintained, and generally support our operations.
Approximately 16% of our associates are based at our headquarters in Green Bay, Wisconsin. We have not experienced any work stoppages and consider our associate relations to be good.
Approximately 15% of our associates are based at our headquarters in Green Bay, Wisconsin. We have not experienced any work stoppages and consider our associate relations to be good.
Industry and Competition Truckload The trucking industry plays a vital role in providing both growth and stability in the U.S. economy and moves the vast majority of freight volume in the U.S. It is a highly competitive and fragmented industry, characterized by numerous small carriers.
Industry and Competition Truckload The trucking industry plays a vital role in providing both growth and stability in the U.S. economy and moves the vast majority of freight volume in the U.S. It is a highly competitive and fragmented industry, characterized by numerous small to mid-sized carriers.
ITEM 1. BUSINESS References to “notes” are to the notes to consolidated financial statements included in this Annual Report on Form 10-K. Company Overview Schneider National, Inc. and its subsidiaries (together “Schneider,” the “Company,” “we,” “us,” or “our”) are among the largest providers of surface transportation and logistics solutions in North America.
References to “Notes” are to the notes to consolidated financial statements included in this Annual Report on Form 10-K. Company Overview Schneider National, Inc. and its subsidiaries (together “Schneider,” the “Company,” “we,” “us,” or “our”) are among the largest providers of multimodal surface transportation and logistics solutions in North America.
Our Logistics segment competes with other logistics companies, brokerage businesses, and truckload carriers. Customers During the year ended December 31, 2022, we offered our services to approximately 8,300 customers across our portfolio, including nearly 150 Fortune 500 companies, and all of our top 25 customers used services from all three of our reportable segments.
Our Logistics segment competes with other logistics companies, brokerage businesses, and truckload carriers. Customers During the year ended December 31, 2023, we offered our services to approximately 8,400 customers across our portfolio, including nearly 150 Fortune 500 companies, and 24 of our top 25 customers used services from all three of our reportable segments.
These regulatory authorities have broad powers over matters relating to authorized motor carrier operations, as well as motor carrier registration, safety and fitness of transportation equipment and drivers, transportation of hazardous materials, certain mergers and acquisitions, and periodic financial reporting.
DHS, NHTSA, EPA, and OSHA. These regulatory authorities have broad powers over matters relating to authorized motor carrier operations, as well as motor carrier registration, safety and fitness of transportation equipment and drivers, transportation of hazardous materials, certain mergers and acquisitions, and periodic financial reporting.
Succession planning is regularly performed to help identify and develop a pipeline of talent in critical roles within our organization. Additionally, we routinely conduct market analyses to ensure wages and benefits remain competitive, and we offer associates classroom, virtual, and web-based training options through our comprehensive learning program. Associate Engagement We promote associate engagement throughout our organization.
Succession planning is regularly performed to help identify and develop a pipeline of talent in critical roles within our organization. Additionally, we routinely conduct market analyses to evaluate the competitiveness of our wages and benefits, and we offer associates classroom, virtual, and web-based training options through our comprehensive learning program. Associate Engagement We promote associate engagement throughout our organization.
As a result of our performance, integrity, and collaborative culture, we have a highly engaged workforce deployed over a diverse set of positions across our segments, geographies, and businesses. Where consistent with our operational needs, we offer a variety of flexible working arrangements to associates, including remote and blended work configurations.
We have a highly engaged workforce deployed over a diverse set of positions across our segments, geographies, and businesses. Where consistent with our operational needs, we offer a variety of flexible working arrangements to associates, including remote and blended work configurations.
Safety “Safety first and always” is a Schneider core value. We believe we have a responsibility to our associates, customers, and the community to operate safely. Our safety culture is built on five key components: • Driver hiring and drug testing . We hire both experienced drivers and drivers new to the industry through a comprehensive hiring process.
We believe we have a responsibility to our associates, customers, and the community to operate safely. Our safety culture is built on five key components: • Driver hiring and drug testing . We hire both experienced drivers and drivers new to the industry through a comprehensive hiring process.
We seek to find ways to reduce our carbon dioxide emissions including increasing the fuel efficiency of our current fleet, exploring alternative fuel vehicles, and deploying BEVs.
We seek to find ways to reduce our CO 2 emissions including increasing the fuel efficiency of our current fleet, exploring alternative fuel vehicles, and deploying BEVs.
Our Logistics segment manages over 64,000 qualified carrier relationships and managed approximately $3.0 billion of third-party freight in 2022. Our revenue is derived from a diverse customer base. We maintain a broad end-market footprint, encompassing numerous industries including consumer products, retail, chemicals, electronics and appliances, e-commerce, auto, home improvement, and food and beverage.
Our Logistics segment manages over 50,000 qualified carrier relationships and managed approximately $2.4 billion of third-party freight in 2023. Our revenue is derived from a diverse customer base across a broad end-market footprint, encompassing numerous industries including consumer products, retail, auto, chemicals, electronics and appliances, e-commerce, home improvement, and food and beverage.
During 2022, we successfully transitioned our Power Only business to MLSI’s TMS and are in the process of converting the remainder of our Logistics business. Our in-cab telematics platform delivers on-board technology through our private application store to enable communication, regulatory compliance, and driver productivity.
Our Power Only business was successfully transitioned to MLSI’s TMS in 2022, and we will begin transitioning the remainder of our Logistics business in the near future. Our in-cab telematics platform delivers on-board technology through our private application store to enable communication, regulatory compliance, and driver productivity.
As part of that process, we voluntarily choose to use hair testing in addition to mandated urine-based drug testing. While costing more per driver, hair testing is generally more accurate than urine-based testing. • Military drivers . We have a strong relationship with the U.S. military and employ many drivers with military experience.
As part of that process, we voluntarily choose to use hair testing in addition to mandated urine-based drug testing. While costing more per driver, hair testing is generally more accurate than urine-based testing. • Military drivers . We support service members and veterans and employ many drivers with military experience.
Owner-operators tend to be experienced drivers and represented approximately 16% of driver capacity as of December 31, 2022. Environmental, Social, and Governance We prioritize doing business responsibly and embrace that we have a role to play in the betterment of society.
Owner-operators tend to be experienced drivers and represented approximately 15% of driver capacity as of December 31, 2023. 4 Table of Contents Environmental, Social, and Governance We seek to do business responsibly and embrace that we have a role to play in the betterment of society.
While we compete with many smaller carriers on a regional basis, only a limited number of carriers represent competition in all markets across North America. Intermodal The domestic intermodal segment is highly consolidated amongst three of the largest intermodal providers, including our Intermodal segment, and operates a significant portion of the U.S. domestic container fleet.
While we compete with many smaller carriers on a regional basis, only a limited number of carriers represent competition in all markets across North America. Intermodal The domestic intermodal market is highly consolidated amongst three of the largest intermodal providers, including our Intermodal segment. Our Intermodal segment competes with intermodal providers and other transportation service companies, including truckload carriers.
Available Information We make a number of reports and other information available free of charge on our website, www.schneider.com, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
We are constantly reevaluating our existing technology to find efficiencies and drive innovation, with some of our current efforts focused on exploring autonomous trucking and additional safety technologies. 7 Table of Contents Available Information We make a number of reports and other information available free of charge on our website, www.schneider.com, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
We recognize the advantage of hiring and retaining associates who help us create value for our shareholders. Associates and Workforce As of December 31, 2022, we employed approximately 17,050 associates, 67% of whom are drivers with the remaining 33% consisting of mechanics and warehouse personnel, managers, and other corporate office associates.
We recognize the advantage of hiring and retaining associates who contribute to the creation of value for our shareholders. Associates and Workforce As of December 31, 2023, we employed approximately 17,300 associates, 68% of whom are drivers with the remaining 32% consisting of mechanics and warehouse personnel, managers, and other corporate office associates.
We are also subject to a variety of laws and regulations which are targeted at reducing GHG emissions and improving air quality and fuel efficiency at a national level.
Additionally, we are subject to a variety of laws and regulations which are targeted at reducing GHG emissions, improving air quality and fuel efficiency at a national level, and accelerating a large-scale transition to medium and heavy-duty ZEVs.
We store fuel in underground storage tanks at five locations and in above-ground storage tanks at two locations. We believe that we are in substantive compliance with applicable environmental laws relating to the storage of fuel. In response to fluctuations in fuel prices, we use surcharge programs to adjust fuel costs charged to our customers.
We believe that we are in material compliance with applicable environmental laws relating to the storage of fuel. In response to fluctuations in fuel prices, we use surcharge programs to adjust fuel costs charged to our customers.
Prominent among those regulations are certain environmental regulations in effect in the State of California, including the Heavy-Duty Vehicle GHG Emission Reduction Regulation which was issued to reduce GHG emissions from certain long-haul tractor-trailers that operate in California by requiring owners of such vehicles or equipment to retrofit their vehicles with aerodynamic elements and accessories and implement technologies that improve fuel efficiency (regardless of where the vehicle is registered), and the ACT regulation, which requires original equipment manufacturers to begin shifting towards greater production of zero-emission heavy duty tractors beginning in 2024.
Prominent among those regulations are certain environmental regulations in effect in the State of California which have been adopted by CARB, including: • The Heavy-Duty Vehicle GHG Emission Reduction Regulation which was issued to reduce GHG emissions from certain long-haul tractor-trailers that operate in California by requiring owners of such vehicles or equipment to retrofit their vehicles with aerodynamic elements and accessories and implement technologies that improve fuel efficiency (regardless of where the vehicle is registered); • CARB’s ACT regulation, as enacted, is intended to accelerate a large-scale transition to medium and heavy-duty ZEVs.
Our stock is publicly traded on the NYSE under the ticker symbol “SNDR.” Our diversified portfolio of complementary service offerings enables us to serve the varied needs of our customers and to allocate capital in a manner that seeks to maximize returns across all market cycles and economic conditions.
Our portfolio of complementary service offerings enables us to serve the diverse needs of our customers and to allocate capital in a manner that seeks to maximize returns across all market cycles and economic conditions.
The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC. 6 Table of Contents
The “Investors” section of our website contains corporate governance guidelines, our code of ethics, Board committee charters, and other corporate policies. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.
In addition, we provide comprehensive logistics services with a network of over 64,000 qualified third-party carriers. We categorize our operations into the following reportable segments: • Truckload – Over the road freight transportation via dry van, bulk, temperature-controlled, and flat-bed trailers across either network or dedicated configurations.
We categorize our operations into the following reportable segments: • Truckload – Over-the-road freight transportation via dry van, bulk, temperature-controlled, and flat-bed trailers across either network or dedicated configurations.
We continually analyze opportunities for capital investment and effective capital deployment to provide additional value for our customers and increase returns for our shareholders. 1 Table of Contents Business Developments Acquisitions On December 31, 2021, the Company completed the acquisition of MLS, a privately held truckload carrier based in Celina, OH.
We continually analyze opportunities for capital investment and effective capital deployment to provide additional value for our customers and increase returns for our shareholders. 1 Table of Contents Business Developments Acquisitions On August 1, 2023, the Company completed the acquisition of M&M, a privately held truckload carrier based in West Bridgewater, Massachusetts that primarily provides specialty solutions for retail and manufacturing customers.
We are in the process of adding nearly 100 Class 8 battery-electric zero emission trucks to our California fleet to contribute toward the Company’s goal of cutting its carbon dioxide emissions by 7.5% per mile by 2025 and 60% per mile by 2035, and we continue to look for opportunities to expand our battery-electric fleet.
During 2023, we added nearly 100 Class 8 BEVs to our Intermodal fleet based out of California to contribute toward the Company’s goal of cutting its CO 2 emissions by 7.5% per mile by 2025 and 60% per mile by 2035, and we continue to look for opportunities to expand our battery-electric fleet.
Our driver associates and owner-operators must also comply with carrier qualifications and enacted governmental regulations regarding safety, equipment, and operating methods. Examples include the DOT regulation of equipment weight, equipment dimensions, driver HOS, drug and alcohol testing of our current and prospective driver associates, as well as other driver eligibility requirements, on-board reporting of operations, and ergonomics.
Our driver associates and owner-operators must also comply with carrier qualifications and enacted governmental regulations regarding safety, equipment, and operating methods, including DOT regulation of equipment weight and drug and alcohol testing of our current and prospective driver associates and FMCSA regulation of driver HOS.
We believe the most cost-effective protection against variability in fuel costs is to continue the fuel surcharge programs and invest in a fuel-efficient fleet. However, fuel surcharges may not adequately cover potential future increases in fuel prices.
We believe the most cost-effective protection against variability in fuel costs is to continue the fuel surcharge programs and invest in a fuel-efficient fleet; however, fuel surcharges historically have not protected us against the full effect of increases in diesel fuel prices and are not expected to do so in the future.
We continue to expand our business capabilities by extending our foundational integrated technology platform, making advancements to our in-cab technology, and leveraging mobile applications to better connect with company drivers and customers. One example is a mobile application that prompts our company drivers to rate the shipping, receiving, and driver support locations they visit.
We continue to expand our business capabilities by extending our foundational integrated technology platform, making advancements to our in-cab technology, and leveraging mobile applications to better connect with company drivers and customers. One example is the rollout of our new global navigation system.
We were founded in 1935 and have been a publicly held holding company since our IPO in 2017.
We were founded in 1935 and have been a publicly held holding company since our IPO in 2017. Our stock is publicly traded on the NYSE under the ticker symbol “SNDR”.
Our diversified revenue mix and customer base allow for revenue and yield management stability throughout the year, despite the fact that many of our customers are also affected by seasonal fluctuations. 2 Table of Contents Transportation Equipment Our company-owned transportation equipment fleet was comprised of the following at December 31, 2022: Transportation Equipment Type Approximate Number of Units Over-the-road sleeper cab tractors 7,300 Day cab tractors 2,600 Other tractors (yard tractors, straight trucks, and training tractors) 300 Trailers 44,000 Containers 28,500 Chassis 21,000 Human Capital Management Schneider is committed to promoting a diverse and inclusive culture that values and respects the varied talents and perspectives of our associates.
Transportation Equipment Our company-owned transportation equipment fleet was comprised of the following at December 31, 2023: Transportation Equipment Type Approximate Number of Units Over-the-road sleeper cab tractors 7,200 Day cab tractors 3,100 Other tractors (yard tractors, straight trucks, and training tractors) 300 Trailers 47,300 Containers 27,400 Chassis 23,800 2 Table of Contents Human Capital Management Schneider is committed to promoting a diverse and inclusive culture that values and respects the varied talents and perspectives of our associates.
Our logistics business provides value-added services using both our assets and third-party capacity, augmented by our trailing assets, to manage and move customers’ freight. Consistent with the transportation industry, our business can be seasonal across each of our segments, which generally translates to our reported revenues being the lowest in the first quarter and highest in the fourth quarter.
Consistent with the transportation industry, our business can be seasonal across each of our segments, which generally translates to our reported revenues and operating expenses being the lowest in the first quarter and highest in the fourth quarter.
In addition to efforts to make our fleet more efficient and reduce emissions, we are focused on improving sustainability at our operating facilities including upgrading to high-efficiency lighting, enhancing existing programs for recycling motor oil, tires, and batteries, and building a new innovation center that will leverage geothermal energy and solar energy to maximize resource efficiency.
This milestone has kept approximately 3.3 million pounds of CO 2 emissions out of the environment. In addition to efforts to make our fleet more efficient and reduce emissions, we are focused on improving sustainability at our operating facilities including upgrading to high-efficiency lighting and enhancing existing programs for recycling motor oil, tires, and batteries.
Recognizing the essential role that our drivers play in the ability to serve our customers, we remain focused on making our driver experience the best in the industry. We employ measures to improve retention, and our turnover rate is generally consistent with the industry standard.
Associate Recruitment, Development, and Retention • Company drivers - Our drivers play an essential role in the ability to serve our customers, and we remain focused on making our driver experience the best in the industry.
Additionally, we continue to monitor and evaluate the proposed rule makings of the DOT, FMCSA, NHTSA, EPA, State of California, and other federal and state regulatory agencies to determine the expected impact on our operations. Technology Our business is executed through an integrated technology platform that encompasses an end-to-end process design which focuses on information accessibility across our value chain.
We continue to monitor and evaluate the proposed rule makings of the SEC, DOT, FMCSA, NHTSA, EPA, State of California, and other federal and state regulatory agencies to determine the expected impact on our operations.
We embrace and seek diversity that is inclusive of thought, race, ethnicity, gender, age, religion, sexual orientation, experience, and background. Furthering our Company’s diversity goals and objectives has been incorporated into the selection of and performance management process for our leaders and associates.
We embrace and seek diversity that is inclusive of thought, race, ethnicity, gender, age, religion, sexual orientation, experience, and background.
Regulation Our operations as a for-hire motor carrier are regulated and licensed by various federal, state, and local government agencies in North America, including the U.S. DOT, FMCSA, U.S. DHS, NHTSA, EPA, and OSHA.
We are currently exploring alternative fuel vehicles, including hydrogen vehicles, and have added nearly 100 BEVs to our fleet which replaced existing diesel trucks and helped reduce our diesel fuel usage. Regulation Our operations as a for-hire motor carrier are regulated and licensed by various federal, state, and local government agencies in North America, including the U.S. DOT, FMCSA, U.S.
Our Intermodal segment competes with intermodal providers and other transportation service companies, including truckload carriers. Logistics The logistics industry is a large, fast-growing, and fragmented market that represents an integral part of the global economy. Logistics plans, implements, and controls the movement and storage of goods, generally using the assets of others.
We have exclusive agreements with three precision-scheduled Class I railroad providers, which augments our differentiation in the market and allows for increased freight reliability. Logistics The logistics industry is a large, fast-growing, and fragmented market that represents an integral part of the economy. Logistics plans, implements, and controls the movement and storage of goods, generally using the assets of others.
Associate Recruitment, Development, and Retention • Company drivers - As a result of retirements, high turnover rates, and the challenges of attracting new drivers, the industry and the long-haul truckload sector, in particular, have been characterized by persistent shortages of truck drivers.
Our non-driver pay varies by job, is market competitive, and includes short and long-term incentive programs that motivate associates and reward high performance. 3 Table of Contents Driver Turnover Rate As a result of retirements, high turnover rates for new entrants to the driver market, and the challenges of attracting drivers, the industry and the long-haul truckload sector, in particular, have been characterized by persistent shortages of truck drivers.
As always, we continue to ingrain safety into our corporate culture and strive to conduct all of our operations as safely as possible. 4 Table of Contents Fuel We actively manage our fuel purchasing network in an effort to maintain adequate fuel supplies . In 2022, we made 99% of our fuel purchases through negotiated volume purchase discounts.
Fuel We actively manage our fuel purchasing network in an effort to maintain adequate fuel supplies . In 2023, we made 99% of our fuel purchases through negotiated volume purchase discounts. We store fuel in underground storage tanks at five locations and in above-ground storage tanks at eight locations.
Survey results are used to implement programs that will enhance associate connectivity with the Company which is believed to lead to increased innovation, productivity, and profitability. 3 Table of Contents Diversity and Inclusion We believe diversity fuels innovation, improves strategic thinking, and cultivates leadership. ‘Respect for All’ is one of our four core values.
We conduct biennial associate surveys to measure associate satisfaction and garner ideas to improve workforce engagement. Survey results are used to implement programs that will enhance associate connectivity with the Company which is believed to lead to increased innovation, productivity, and profitability.
MLS is a dedicated carrier that primarily serves the central U.S. and complements our growing dedicated operations. In 2022, MLS financial results are reported in dedicated operations as part of our Truckload segment.
M&M is a dedicated carrier that complements our growing dedicated operations. The operating results of M&M are reported in dedicated operations as part of our Truckload segment beginning in the third quarter of 2023. Refer to Note 2, Acquisitions, for additional details on our acquisition of M&M and other recent acquisitions.
These laws and regulations have the potential to increase costs, risks, and liabilities associated with our applicable operations. Additionally, we may be impacted by potential future legislation and regulations related to climate change.
These laws and regulations historically have resulted in increased costs, decreased equipment productivity, risks, and/or liabilities associated with our operations, and have the potential to further increase such costs, risks, and/or liabilities, particularly if costs are not offset by potential fuel savings. We cannot predict the extent to which our operations and productivity will be impacted.
Under the ACT, every new tractor sold in California will need to be zero-emission by 2045. While the ACT does not apply to those simply operating tractors in California, it could impact the cost and/or supply of traditional diesel tractors and lead to similar legislation in other states or at the federal level.
The ACT requires OEMs to begin shifting towards greater production of zero-emission heavy-duty tractors beginning in 2024. Under the ACT, every new tractor sold in California will need to be zero-emission by 2045.
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On June 7, 2022, the Company completed the acquisition of deBoer, which provided us the opportunity to expand our tractor and trailer fleet primarily within our dedicated Truckload operations, as well as our company driver capacity.
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ITEM 1. BUSINESS Certain acronyms and terms used throughout this Annual Report are specific to our Company, commonly used in our industry, or are otherwise frequently used throughout our document. Definitions for these acronyms and terms are provided in the “Glossary of Terms” available at the front of this document.
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During the second half of 2022, the Company successfully transitioned equipment and employees from deBoer to Schneider, deBoer operations ceased, and drivers and equipment were deployed primarily within Truckload. Refer to Note 2, Acquisitions, for additional details on our recent acquisitions.
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In addition, we provide comprehensive logistics services with a network of over 50,000 qualified third-party carriers. We are able to expand capacity through our Power Only offering by leveraging our nationwide trailer pool to match customer demand with third-party carriers.
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Foreign Operations During the first quarter of 2022, the Company announced a change in approach to servicing Canada and the sale of its Guelph, Ontario facility, which resulted in the recognition of a net gain of $50.9 million in operating supplies and expenses—net in the consolidated statements of comprehensive income.
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Our logistics business provides value-added services using both our assets and third-party capacity, augmented by our trailing assets, to manage and move customers’ freight.
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The Company still engages in the movement of cross-border Canadian freight, but no longer has Canadian-based operations. On November 30, 2022, the Company sold 100% of its China-based logistics operations to certain members of the Company’s local management team in China as those operations were no longer profitable or strategic.
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Our diversified revenue mix and customer base allow for revenue and yield management stability throughout the year, despite the fact that many of our customers are also affected by seasonal fluctuations.
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The sale resulted in the recognition of a $5.0 million loss, which was recorded within operating supplies and expenses—net in the consolidated statements of comprehensive income. This sale is not expected to have a material effect on our results of operations or consolidated financial statements.
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In 2023, we opened The Grove, a state-of-the-art innovation center located on the campus of our headquarters which is a curated, collaborative workspace for associates and customers aimed at driving innovation in transportation and logistics with a focus on technology.
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We conduct biennial associate surveys to measure associate satisfaction and garner ideas to improve workforce engagement.
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Compensation Structure and Benchmarking Our comprehensive compensation and benefits package is designed to enable us to attract and retain high quality talent across the wide variety of roles in the Company.
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We have also established Cultural Connections, an internal group committed to educating ourselves and coworkers on ongoing social issues and fostering interpersonal relationships across cultures both at Schneider and in the community, and in 2022, we were named a “Best Employer for Women” and a “Best Employer for Diversity” by Forbes.
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We routinely benchmark pay and benefits against peers and companies in jurisdictions where we operate to evaluate whether our total package is fair, competitive, and meets the needs of our associates.
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We are currently exploring alternative fuel vehicles, including hydrogen vehicles, and are in the process of adding nearly 100 BEVs to our fleet which will replace existing diesel trucks and reduce our diesel fuel usage.
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Our comprehensive package includes competitive pay, tuition reimbursement, medical, dental, vision, wellness programs, mental health support, 401(k) savings and retirement, work schedule flexibility, paid time off, disability and a wide variety of other voluntary insurance options, recognition programs, and development and career growth opportunities.
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The FMCSA Clearinghouse rule requires employers to report information related to violations of the drug and alcohol regulation for current and prospective driver employees and to query the Clearinghouse for such driver employees before allowing them to operate a commercial motor vehicle on public roads, as well as at least annually for current drivers.
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Some of our driver pay packages include minimum guarantees while providing increasing pay by experience level and incentivizing for performance.
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In addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration and Customs and Border Protection within the DHS, and our cross-border operations in Canada and Mexico are subject to regulation by each of those countries.
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In response to the driver shortage and high driver turnover rate in our industry, we recruit recent driver training school graduates as a source of new drivers or hire driver candidates to participate in our own nationwide network of 19 training academies. These drivers have completed a training program at a private driver training school and hold a CDL.
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The EPA and the NHTSA have also begun taking coordinated steps in support of a new generation of clean vehicles and engines to reduce GHG emissions.
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For areas of the country where truck driver jobs are in demand and demographics don’t support many qualified drivers, we have established CAT for candidates with no previous truck driving experience.
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Complying with these and any future GHG regulations enacted by the CARB, EPA, NHTSA, and/or any other state or federal governing body has increased and will likely continue to increase the cost of our new tractors, may increase the cost of new trailers, may require us to retrofit certain of our trailers, may increase our maintenance costs, and could impair equipment productivity and increase our operating costs, particularly if such costs are not offset by potential fuel savings.
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Our CAT Program enables these candidates to earn their CDL in their first few weeks of training then continue training under the supervision of experienced driver trainers to strengthen and hone their driving skills. Diversity and Inclusion We believe diversity fuels innovation, improves strategic thinking, and cultivates leadership. ‘Respect for All’ is one of our four core values.
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These adverse effects, combined with the uncertainty as to the reliability of the newly designed diesel engines and the residual values of our equipment, could materially increase our costs or otherwise adversely affect our business or operations. However, we cannot predict the extent to which our operations and productivity will be impacted.
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Furthering our Company’s diversity and inclusion goals and objectives is incorporated into our hiring, training and development programs, performance management, and community giving programs so that we nurture an environment where associates feel safe, supported, and empowered to share their creativity, experiences, and ideas. Creating communities rooted in a culture of belonging is the ultimate goal of Schneider’s BRGs.
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We will continue monitoring our compliance with federal and state GHG regulations. 5 Table of Contents Federal and state lawmakers are considering a variety of other climate-change proposals related to carbon and GHG emissions. The proposals could potentially limit carbon emissions within certain states and municipalities, which would restrict the location and amount of time that diesel-powered tractors may idle.
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We have six BRGs for associates who share identity, life experience or common purpose, and who come together to fulfill both individual and group goals that tie to business strategies and objectives. Finally, we are proud supporters of military veterans and have been recognized as a top military-friendly employer. Safety “Safety first and always” is a Schneider core value.
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Such proposals could result in decreased productivity or increased driver turnover. Regulatory requirements and changes in regulatory requirements may affect our business or the economics of the industry by requiring changes in operating practices that could influence the demand for and increase the costs of providing transportation services.
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As of mid-2023, we were already more than halfway to our goal of reducing CO 2 emissions by 7.5% per mile by 2025, as compared to our baseline established in 2020, and expect to fully achieve this goal in 2025. Additionally, in 2023 we delivered over 1 million emission free miles via our BEVs operating in California.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRecently, the amount and timing of capital expenditures also has been affected by delayed truck deliveries by original equipment manufacturers due to semiconductor and other component shortages. If anticipated freight volume differs materially from our forecasts or customer demand, our truckload operations may have too many or too few assets.
Biggest changeIf anticipated freight volume differs materially from our forecasts or customer demand, our truckload operations may have too many or too few assets. During periods of decreased customer demand, our asset utilization is challenged, and we may be forced to sell equipment on the open market in order to right-size our fleet.
We depend on third-party capacity providers, and issues of performance, availability, or pricing with these transportation providers could increase our operating costs, reduce our ability to offer intermodal and brokerage services, and limit growth in our brokerage and logistics operations, which could adversely affect our revenue, results of operations, and customer relationships.
We depend on third-party capacity providers, and issues of performance, availability, or pricing with these transportation providers could increase our operating costs, reduce our ability to offer intermodal and logistics services, and limit growth in our brokerage and logistics operations, which could adversely affect our revenue, results of operations, and customer relationships.
Our long-term sustainability and GHG reduction goals are predicated on large scale customer adoption of intermodal, the operational feasibility and reliability of heavy-duty ZEVs, and the corresponding build out of a national support infrastructure to reasonably and efficiently manufacture, distribute, or store electricity or alternative fuels for ZEVs, none of which can be assured.
Our long-term sustainability and GHG reduction goals are predicated on large scale customer adoption of intermodal services, the operational feasibility and reliability of heavy-duty ZEVs, and the corresponding build out of a national support infrastructure to reasonably and efficiently manufacture, distribute, or store electricity or alternative fuels for ZEVs, none of which can be assured.
In addition, our intermodal business may be adversely affected by declines in service and volume levels provided by the railroads. All of the Class I railroads in the U.S., including our current rail partners, are unionized and have a history of disruption due to labor disputes and collective action, including strikes.
In addition, our intermodal business may be adversely affected by declines in service and volume levels provided by the railroads. All of the Class I railroads in the U.S., including our current rail partners, are unionized and have a recent history of disruption due to labor disputes and collective action, including strikes.
Our ability to provide intermodal services in certain traffic lanes is, therefore, likely to be adversely affected if any of the Class I railroads were to discontinue service in certain lanes, or if either of our rail partners experience service interruptions, or if the overall quality of their rail service were to deteriorate.
Our ability to provide intermodal services in certain traffic lanes is, therefore, likely to be adversely affected if any of the Class I railroads were to discontinue service in certain lanes, or if any of our rail partners experience service interruptions, or if the overall quality of their rail service were to deteriorate.
Some of our customers have, and others may in the future, used or expanded their own private fleets rather than outsourcing loads to us. Further, our industry has experienced market entrance by well-resourced, non-traditional firms or startups who, in some cases, have undercut market prices to capture market share.
Some of our customers have, and others may in the future, used or expanded their own private fleets rather than outsource loads to us. Further, our industry has experienced market entrance by well-resourced, non-traditional firms or startups who, in some cases, have undercut market prices to capture market share.
We are making strategic investments in new offerings and technologies and expect to continue to make such investments in the future. These ventures are inherently risky, and we may never realize any expected benefits from them which could have a material adverse effect on our business and financial results.
We are making strategic investments in new offerings and technologies and expect to continue to make such investments in the future. These ventures are inherently risky and subject to volatility, and we may never realize any expected benefits from them which could have a material adverse effect on our business and financial results.
Our operating segments compete with many other truckload carriers, logistics, brokerage, and transportation service providers of varying sizes, and to a lesser extent, LTL carriers, railroads, and other transportation or logistics companies, some of which have a larger fleet, greater access to equipment, preferential customer contracts, greater capital resources, or other competitive advantages.
Our operating segments compete with many other truckload carriers, logistics, brokerage, and transportation service providers of varying sizes, and to a lesser extent, LTL carriers, railroads, and other transportation or logistics companies, some of which have larger fleets, greater access to equipment, preferential customer contracts, greater capital resources, or other competitive advantages.
While we purchase insurance coverage at levels we deem adequate, future litigation may exceed our insurance coverage or may not be covered by insurance. In addition, adverse publicity surrounding an allegation or claim that results in litigation may cause significant reputational harm that could have a significant adverse effect on our financial condition or results.
While we purchase insurance coverage at levels we deem adequate, future litigation may exceed our insurance coverage or may not be covered by insurance. In addition, adverse publicity surrounding an allegation or claim that results in litigation may cause significant reputational harm that could have a significant adverse effect on our financial condition or results of operations.
Volatility in our stock price can be driven by many factors including divergence between our actual or anticipated financial results and published expectations of analysts or the expectations of the market, the gain or loss of customers, announcements that we, our 12 Table of Contents competitors, our customers, or our vendors or other key partners may make regarding their operating results and other factors which are beyond our control such as market conditions in our industry, new market entrants, technological innovations, and economic and political conditions or events.
Volatility in our stock price can be driven by many factors including divergence between our actual or anticipated financial results and published expectations of analysts or the expectations of the market, the gain or loss of customers, announcements that we, our competitors, our customers, or our vendors or other key partners may make regarding their operating results and other factors which are beyond our control such as market conditions in our industry, new market entrants, technological innovations, and economic and political conditions or events.
Increases in diesel fuel prices, or a shortage or rationing of diesel fuel, could also materially and adversely affect our results of operations. As of December 31, 2022, we did not have any derivative financial instruments to reduce our exposure to fuel price fluctuations.
Increases in diesel fuel prices, or a shortage or rationing of diesel fuel, could also materially and adversely affect our results of operations. As of December 31, 2023, we did not have any derivative financial instruments to reduce our exposure to fuel price fluctuations.
Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, other intangible assets, internal use software, and long-lived assets may not be recoverable include, but are not limited to, a sustained decline in stock price and market capitalization, significant negative variances between actual and expected financial results, reduced future cash flow estimates, adverse changes in applicable laws or regulations or legal proceedings, failure to realize anticipated synergies from acquisitions, and slower growth rates in our industry.
Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, other intangible assets, internal use software, and long-lived assets may not be recoverable include, but are not limited to, a sustained decline in stock price and market capitalization, an increase in interest rates, significant negative variances between actual and expected financial results, reduced future cash flow estimates, adverse changes in applicable laws or regulations or legal proceedings, changes to technology, failure to realize anticipated synergies from acquisitions, and slower growth rates in our industry.
As a result, we may not pay dividends at any rate or at all. Risks Related to Legal Compliance If the independent contractors with whom we engage under our alternative owner-operator business model are deemed by law to be employees, our business, financial condition, and results of operations could be adversely affected.
As a result, we may not pay dividends at any rate or at all. 15 Table of Contents Risks Related to Legal Compliance If the independent contractors with whom we engage under our alternative owner-operator business model are deemed by law to be employees, our business, financial condition, and results of operations could be adversely affected.
The Schneider family, including trusts established for the benefit of certain members of the Schneider family, collectively beneficially own 100% of our outstanding Class A common stock and approximately 41% of our outstanding Class B common stock, representing approximately 94% of the total voting power of all of our outstanding common stock and approximately 68% of our total outstanding common stock.
The Schneider family, including trusts established for the benefit of certain members of the Schneider family, collectively beneficially own 100% of our outstanding Class A common stock and approximately 40% of our outstanding Class B common stock, representing approximately 94% of the total voting power of all of our outstanding common stock and approximately 68% of our total outstanding common stock.
Our truckload operations are largely dependent on diesel fuel, and accordingly, significant increases in diesel fuel costs could materially and adversely affect our truckload operations, and if we are unable to pass increased costs on to customers through rate increases or fuel surcharges or if shippers opt for intermodal rail over trucking their freight, our results of operations and financial condition could be adversely affected.
Our truckload operations are largely dependent on diesel fuel, and accordingly, significant increases in diesel fuel costs could materially and adversely affect our truckload operations, and if we are unable to pass increased costs on to customers through rate increases or fuel surcharges or if shippers opt for intermodal rail over trucking their freight, our results of operations and 10 Table of Contents financial condition could be adversely affected.
These provisions are not intended to make us immune from takeovers or prevent the removal of incumbent directors. However, these provisions could delay or prevent an acquisition that our Board determines is not in the best interests of the Company and all of our stockholders. 13 Table of Contents We may change our dividend policy at any time.
These provisions are not intended to make us immune from takeovers or prevent the removal of incumbent directors. However, these provisions could delay or prevent an acquisition that our Board determines is not in the best interests of the Company and all of our stockholders. We may change our dividend policy at any time.
The words “believe,” “expect,” “anticipate,” “project,” “estimate,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made.
The words “believe,” “expect,” “anticipate,” “project,” “estimate,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” among others, generally identify forward-looking statements, which speak only as of the date the statements were made.
Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity, and to some degree, on freight rates alone. Our competitors periodically reduce their freight rates to gain business, especially when economic conditions are present which negatively impact customer shipping volumes, truck capacities, or operating costs.
Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity, and to some degree, on freight rates alone. Our competitors periodically reduce their freight rates to gain business, especially when economic conditions negatively impact customer shipping volumes, truck capacities, or operating costs.
Accordingly, our actual losses associated with insured claims may differ materially from our estimates and adversely affect our financial condition and results of operations in material amounts. 11 Table of Contents As a supplement to our self-insurance program, we maintain insurance with excess insurance carriers for potential losses, which exceed the amounts we self-insure.
Accordingly, our actual losses associated with insured claims may differ materially from our estimates and adversely affect our financial condition and results of operations in material amounts. As a supplement to our self-insurance program, we maintain insurance with excess insurance carriers for potential losses, which exceed the amounts we self-insure.
We are a “controlled company” within the meaning of the rules of the NYSE and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements relating to our Corporate Governance Committee. Our shareholders will not have the same protections afforded to shareholders of other companies that are subject to such requirements.
We are a “controlled company” within the meaning of the rules of the NYSE and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements relating to our Compensation and Corporate Governance Committees. Our shareholders will not have the same protections afforded to shareholders of other companies that are subject to such requirements.
In general, significant decreases in shipping volumes within the industry or increases in available truck capacity result in more aggressive freight pricing as carriers compete for loads and to maintain truck productivity.
In general, significant decreases in shipping volumes within the industry or increases in available truck capacity result in more aggressive freight pricing as carriers compete for loads and truck productivity.
Our challenge with attracting and retaining qualified drivers is driven by several factors including intense market competition for a limited pool of qualified drivers, inconsistent driver pay, the preference among drivers to work closer to home and be home most nights, and our highly selective hiring standards.
The challenge with attracting and retaining qualified drivers is driven by several factors including intense market competition for a limited pool of qualified drivers, driver compensation, the preference among drivers to work closer to home and be home most nights, and our highly selective hiring standards.
Should any of those things fail to occur, we may fail to meet our published sustainability goals, which could result in losing the support of our investors, customers, and other stakeholders; become subject to regulatory enforcement actions; or suffer reputational harm which, in any case, may increase the cost of providing transportation services or adversely affect our financial condition, results of operations, and liquidity.
Should any of those things fail to occur, we may fail to meet our published sustainability goals, which could result in losing the support of our investors, customers, and other stakeholders; our becoming subject to regulatory enforcement actions; or suffering reputational harm which, in any case, may increase the cost of providing transportation services or adversely affect our financial condition, results of operations, and liquidity.
The trucking industry continues to experience difficulty in attracting and retaining sufficient numbers of qualified drivers, both new and experienced, including owner-operators, and such shortages have and could continue to require us to significantly increase driver compensation, rely more on higher-cost third-party carriers, idle transportation equipment, or dispose of the equipment altogether, any of which could adversely affect our growth and profitability.
The trucking industry historically has and may continue to experience difficulty attracting and retaining sufficient numbers of qualified drivers, both new and experienced, including owner-operators, and such shortages have and could continue to require us to significantly increase driver compensation, rely more on higher-cost third-party carriers, idle transportation equipment, or dispose of the equipment altogether, any of which could adversely affect our growth and profitability.
Our turnover rate requires us to continually recruit a substantial number of company and owner-operator drivers in order to meet customer demand. Owner-operator availability is generally affected by operating cost increases (which the owner-operator is responsible for) and generally favorable economic conditions, which drive overall increases in customer demand and heightened competition for owner-operators from other carriers.
Our turnover rate requires us to continually recruit a substantial number of company and owner-operator drivers to support our operations. Owner-operator availability is generally affected by operating cost increases (which the owner-operator is responsible for) and economic conditions, which drive overall increases in customer demand, and heightened competition for owner-operators from other carriers.
As a controlled company, certain exemptions under the NYSE listing standards exempt us from the obligation to comply with certain NYSE corporate governance requirements, including the requirement that we have a Corporate Governance Committee that is composed entirely of independent directors.
As a controlled company, certain exemptions under the NYSE listing standards exempt us from the obligation to comply with certain NYSE corporate governance requirements, including the requirement that we have a Compensation Committee and a Corporate Governance Committee that are composed entirely of independent directors.
A critical component of our multi-pronged plan to reduce our carbon emissions and comply with California’s and other states’ emissions requirements is the deployment of ZEVs in significant numbers in these states together with leveraging our intermodal capability.
A critical component of our multi-pronged plan to reduce our carbon emissions and comply with California’s and other states’ zero or reduced emission requirements is the deployment of ZEVs in significant numbers in these states together with leveraging our intermodal capability.
The market valuation of our strategic investments in various public and private companies may experience substantial price volatility which, when accounted for under GAAP, could have a material adverse effect on the Company’s financial condition and results of operations. Refer to Note 5, Investments , to our consolidated financial statements for information on our strategic investments.
The market valuation of our strategic investments may experience substantial price volatility which, when accounted for under GAAP, could have a material adverse effect on the Company’s financial condition and results of operations. Refer to Note 5, Investments , to our consolidated financial statements for information on our strategic investments.
Economic conditions that decrease shipping demand, including but not limited to public health crises, outbreaks of infectious diseases, or increases in truck capacity in the North American transportation and logistics industry, can exert downward pressure on rates and equipment utilization.
Economic conditions that decrease shipping demand, including but not limited to public health crises, outbreaks of infectious diseases, or excess capacity in the North American transportation and logistics industry, can exert 8 Table of Contents downward pressure on rates and equipment utilization.
Although, as of the date of this Annual Report on Form 10-K, there have been no reports or signs of work stoppages or strikes, there can be no guarantee that work stoppages or other disruptions at any of the west coast ports will not occur.
Although, as of the date of this Annual Report on Form 10-K, there have been no reports or signs of labor strife at the ports on either coast, there can be no guarantee that work stoppages or other disruptions at the west or east coast ports will not occur.
Aside from our dedicated operations and supply chain management, we generally do not have long-term contractual relationships, rate agreements, or minimum volume guarantees with our customers. Furthermore, certain of the long-term contracts in our dedicated operations are subject to cancellation.
Aside from our dedicated operations and customer relationships where we manage such customers’ supply chains, we generally do not have long-term contractual relationships, rate agreements, or minimum volume guarantees with our customers. Furthermore, certain of the long-term contracts in our dedicated operations are subject to cancellation.
However, a significant disruption or failure in our computer networks or applications could have a material adverse effect on our business, including operational disruptions, loss of confidential information, external reporting delays or errors, legal claims, or damage to our business reputation.
However, despite our ability to potentially utilize manual processes, a significant disruption or failure in our computer networks or applications, of any duration, could have a material adverse effect on our business, including operational disruptions, loss of confidential information, external reporting delays or errors, legal claims, or damage to our business reputation.
Press coverage, lawsuits, regulatory investigations, or other adverse publicity that assert some form of wrongdoing or that depict the Company or any of our executives, associates, contractors, or agents in a negative light, regardless of the factual basis of the assertions being made, could tarnish our reputation and result in a loss of brand equity.
Press coverage, lawsuits, regulatory investigations, or other adverse publicity that assert some form of wrongdoing or that depict the Company or any of our executives, associates, contractors, or agents in a negative light, regardless of the factual basis of the assertions being made, could negatively impact public or customer perceptions of the Company resulting in a loss of brand equity.
We engage in strategic transactions and make strategic investments including investments in autonomous vehicle technology, cloud-based TMS software platforms, telematics, and mobile software applications which are focused on establishing a competitive advantage in the transportation and logistics services offered by the Company or exploiting new market opportunities.
We engage in strategic transactions and continue to make strategic investments including investments in new technologies and potentially disruptive startup companies which are focused on establishing a competitive advantage in the transportation and logistics services offered by the Company or exploiting new market opportunities including autonomous vehicle technologies, TMS software platforms, telematics, and mobile software applications.
Further, securities class action litigation is often brought against a public company following periods of volatility in the market price of its securities. Due to changes in our stock price, we may be the target of securities litigation in the future. Securities litigation could result in substantial uninsured costs and divert management’s attention and our resources.
Further, securities class action litigation is often brought against a public company following periods of volatility in the market price of its securities. Due to changes in our stock price, we may be the target of securities litigation in the future.
These and other factors may cause the market price and demand for our Class B common stock to fluctuate substantially. During 2022, the closing stock price of our Class B common stock ranged from a low of $20.30 per share to a high of $27.28 per share.
These and other factors may cause the market price and demand for our Class B common stock to fluctuate substantially. During 2023, the closing stock price of our Class B common stock ranged from a low of $21.48 per share to a high of $31.47 per share.
Our failure to comply with any applicable laws, rules, or regulations to which we are subject, whether actual or alleged, could expose us to fines, penalties, or potential litigation liabilities, including costs, settlements, and judgments.
Our failure to comply with any applicable laws, rules, or regulations to which we are subject, whether actual or alleged, could expose us to fines, penalties, or potential litigation liabilities, including costs, settlements, and judgments. Further, these agencies or governments could institute new laws, rules or regulations, or issue interpretation changes to existing regulations at any time.
Such cost increases include, but are not limited to, driver wages, third-party carrier costs, fuel and energy prices, taxes and interest rates, tolls, license and registration fees, insurance premiums, regulations, transportation equipment and related maintenance costs, and healthcare and other employee benefit costs. We cannot predict whether, or in what form, any such cost increases could occur.
Such cost increases include, but are not limited to, driver wages, third-party carrier costs, fuel and energy prices, taxes and interest rates, tolls, license and registration fees, insurance premiums, regulatory compliance costs, transportation equipment and related maintenance costs, and healthcare and other employee benefit costs.
In appropriate cases, we have taken and will seek subrogation from third parties who are responsible for losses or damages that we may become legally obligated to pay to claimants. 15 Table of Contents In particular, the defense of trucking accidents is challenging for a variety of reasons, one of which is the recent rise in “nuclear verdicts” - excessive jury awards that surpass what would generally be regarded as reasonable or rational compensation for the injuries or damages suffered, social inflation, societal perceptions of the trucking industry, and ultimately, litigation financing, where third parties are financing litigation in return for a share of settlement proceeds or awarded damages.
In particular, the defense of trucking accidents is challenging for a variety of reasons, one of which is the recent rise in “nuclear verdicts” - excessive jury awards that surpass what would generally be regarded as reasonable or rational compensation for the injuries or damages suffered, social inflation, societal perceptions of the trucking industry, and ultimately, litigation financing, where third parties are financing litigation in return for a share of settlement proceeds or awarded damages.
We rely on information technology throughout all areas of our business and operations to receive, track, accept, and complete customer orders; process financial and non-financial data; compile results of operations for internal and external reporting; and achieve operating efficiencies and growth.
We rely on information technology throughout all areas of our business and operations to receive, track, accept, and complete customer orders; process financial and non-financial data; compile results of operations for internal and external reporting; and achieve operating efficiencies and growth. Such data and information remain vulnerable to cyber-attacks, cybersecurity breaches, ransomware attacks, hackers, theft, or other unauthorized disclosure.
Such data and information remain vulnerable to cyber-attacks, cybersecurity breaches, ransomware attacks, hackers, theft, or other unauthorized disclosure which, if successful, could result in the disclosure of confidential customer or commercial data, loss of valuable intellectual property, or system disruptions and subject us to civil liability and fines or penalties, damage our brand and reputation, or otherwise harm our business, any of which could be material.
If a cyberattack, cybersecurity breach, ransomware, or other similar attack on us is successful, this could result in the disclosure of confidential customer or commercial data, loss of valuable intellectual property, or system disruptions, and subject us to civil liability and fines or penalties, damage our brand and reputation, or otherwise harm our business, any of which could be material.
Certain provisions in our certificate of incorporation, by-laws, and Wisconsin law may prevent or delay an acquisition of the Company, which could decrease the trading price of our Class B common stock.
Securities litigation could result in substantial uninsured costs and divert management’s attention and our resources. 14 Table of Contents Certain provisions in our certificate of incorporation, by-laws, and Wisconsin law may prevent or delay an acquisition of the Company, which could decrease the trading price of our Class B common stock.
Any such cost increase or event could adversely affect our results of operations or cash flows. 7 Table of Contents We operate in a highly competitive and fragmented industry that is characterized by intense price competition which could have a materially adverse effect on our results of operations.
We operate in a highly competitive and fragmented industry that is characterized by intense price competition which could have a materially adverse effect on our results of operations.
A subset of our employee population works remotely which may exacerbate the cybersecurity risks to our business, including an increased demand for information technology resources, increased risk of phishing, and other cybersecurity attacks.
Moreover, any labor disputes or work stoppages, whether or not our other associates unionize, could disrupt our operations and reduce our revenues. A subset of our employee population works remotely which may exacerbate the cybersecurity risks to our business, including an increased demand for information technology resources, increased risk of phishing, and other cybersecurity attacks.
Our results of operations and financial condition could be materially and adversely affected if (1) our costs or losses significantly exceed our aggregate coverage limits, (2) we are unable to obtain insurance coverage in amounts we deem sufficient, (3) our insurance carriers fail to pay on our insurance claims, or (4) we experience a claim for which coverage is not provided.
Our results of operations and financial condition could be materially and adversely affected if (1) our costs or losses significantly exceed our aggregate coverage limits, (2) we are unable to obtain insurance coverage in amounts we deem sufficient, (3) our insurance carriers fail to pay on our insurance claims, or (4) we experience a claim for which coverage is not provided. 13 Table of Contents Risks Relating to Our Governance Structure Voting control of the Company is concentrated with a Voting Trust that was established for certain members of the Schneider family, which limits the ability of our other shareholders to influence major corporate transactions.
In addition, a portion of the freight we deliver through both our Intermodal and Truckload segments is imported to the U.S. through ports of call where workers are represented by the ILWU, a labor union which primarily represents dock workers on the west coast of the U.S., or the International Longshoremen’s Association, a labor union representing longshore workers along the east coast of the U.S.
In addition, a portion of the freight we deliver through both our Intermodal and Truckload segments is imported to the U.S. through ports of call where workers are represented by the ILWU, a labor union which primarily represents a significant number of longshore workers at 29 ports across the West Coast, or the International Longshoremen’s Association, the largest union of maritime workers in North America, which represents a larger number of longshoremen on the Atlantic and Gulf Coasts, Great Lakes, major U.S. rivers, Puerto Rico, and Eastern Canada.
These events may disrupt freight shipments or routes, affect regional economies, destroy our assets, disrupt fuel supplies, increase fuel costs, cause lost revenue and productivity, increase our maintenance costs, or adversely affect the business or financial condition of our customers, any of which could harm our results of operations or make our results of operations more volatile. 10 Table of Contents Risks Relating to Our Financial Condition, Taxation, and Capital Requirements Our goodwill, other intangible assets, internal use software, or long-lived assets may become impaired, which could result in a significant charge to earnings.
These events may disrupt freight shipments or routes, affect regional economies, destroy our assets, disrupt fuel supplies, increase fuel costs, cause lost revenue and productivity, increase our maintenance costs, or adversely affect the business or financial condition of our customers, any of which could harm our results of operations or make our results of operations more volatile.
Prices and availability of petroleum products are subject to political, economic, geographic, weather-related, and market factors that are generally outside our control and each of which may lead to fluctuations in the cost of fuel.
Likewise, if diesel fuel prices decrease significantly, the results of our intermodal operations could be adversely affected as shippers shift intermodal freight to over-the-road trucking. Prices and availability of petroleum products are subject to political, economic, geographic, weather-related, and market factors that are generally outside our control and each of which may lead to fluctuations in the cost of fuel.
Any federal legislation or regulation which significantly limits our ability to classify owner-operators as independent contractors could result in driver shortages or adversely impact our freight capacity which, in turn, could adversely impact our results of operations.
Any legislation or regulation, however, which limits our ability to classify owner-operators as independent contractors could result in driver shortages or adversely impact our freight capacity which, in turn, could adversely impact our results of operations. Additionally, courts in certain jurisdictions have issued decisions that could result in a greater likelihood that independent contractors will be judicially classified as employees.
If a significant number of our associates opt to be represented by a labor union, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition, and liquidity. 8 Table of Contents Additionally, our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results.
Overall, we believe our relations with our associates are good; however, should a significant number of our associates opt to be represented by a labor union, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition, and liquidity.
For example, we may not be able to derive value from strategic investments or we may incur higher than expected costs in realizing a return on such investments or overestimate the benefits that we receive or realize from such investments. Therefore, we cannot provide assurance that any of our strategic investments will generate anticipated financial returns.
Such strategic investments naturally entail risks and uncertainties, some of which are beyond our control. For example, we may not be able to derive value from strategic 11 Table of Contents investments, or we may incur higher than expected costs in realizing a return on such investments or overestimate the benefits that we receive or realize from such investments.
During periods of decreased customer demand, our asset utilization is challenged, and we may be forced to sell equipment on the open market in order to rightsize our fleet. This could cause us to incur losses on such sales, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on our profitability.
This could cause us to incur losses on such sales, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on our profitability.
We hold significant amounts of goodwill and long-lived assets, and the balances of these assets could increase in the future if we acquire other businesses. At December 31, 2022, the balance of our goodwill, other intangible assets, internal use software, and long-lived assets was $2.6 billion, and the total market value of the Company’s outstanding shares was $4.2 billion.
At December 31, 2023, the balance of our goodwill, other intangible assets, internal use software, and long-lived assets was $3.1 billion, and the total market value of the Company’s outstanding shares was $4.5 billion.
While we have had agreements with all of the Class I railroads, our primary contracts for railroad transportation in support of our intermodal operations are currently with CSX Transportation and the Union Pacific Railroad Company. 9 Table of Contents In certain areas of the U.S., rail service is limited to a few railroads, or even a single railroad due to the lack of competition.
While we have had agreements with all of the Class I railroads, our primary contracts for railroad transportation in support of our intermodal operations are currently with CSX Transportation, the Union Pacific Railroad Company, and the Canadian Pacific Kansas City Railroad.
We have significant ongoing capital requirements that could affect our profitability if we either fail or are unable to match the timing of our capital investments with customer demand, or we are otherwise unable to generate sufficient returns on our invested capital.
In this case, we would be required under GAAP to record a noncash charge to our earnings which could have a material adverse effect on our business, results of operations, and financial condition. 12 Table of Contents We have significant ongoing capital requirements that could affect our profitability if we either fail or are unable to match the timing of our capital investments with customer demand, or we are otherwise unable to generate sufficient returns on our invested capital.
Some state and federal authorities have enacted, or are considering, new laws to make it harder to classify workers as independent contractors and easier for tax and other authorities to reclassify independent contractors as employees. Most recently, in October 2022, the U.S.
Some state and federal authorities have enacted, or are considering, new laws to make it harder to classify workers as independent contractors and easier for tax and other authorities to reclassify independent contractors as employees. On January 9, 2024, the DOL released its final rule addressing when employers can classify workers as independent contractors under federal labor law.
When shortages of owner-operators occur, we may be forced to increase the settlement rates paid to them and increase company driver pay rates to attract and retain a sufficient number of drivers. These increases could negatively affect our results of operations to the extent that we would be unable to obtain corresponding freight rate increases.
When shortages of owner-operators occur, we may have to increase settlement rates paid to them and increase company driver pay rates to attract and retain a sufficient number of drivers.
General Risk Factors We rely significantly on our information technology systems, a disruption, failure, or security breach of which could have a material adverse effect on our business.
Refer to Item 1. Business , for additional details on the ACT and ACF Regulations, the SEC Climate Disclosure Rule, California SB 253 and SB 261, and the VCMDA. General Risk Factors We rely significantly on our information technology systems, a disruption, failure, or security breach of which could have a material adverse effect on our business.
Because the services that we market and sell under the Schneider brand generate essentially all of the Company’s revenues, the Schneider brand name is our most valuable sales and marketing tool.
Because the transportation and logistics services we offer are primarily marketed under the Schneider brand, the Schneider brand name is our most valuable sales and marketing tool.
We face risks associated with unionization. Although we believe that our relations with our associates are good and the number of our associates who are currently represented by a labor union is not significant, we face risks associated with the potential unionization of certain of our associates.
Although the number of our associates who are currently represented by a labor union is not significant, we face ongoing risks associated with the potential unionization of certain of our associates. Over the last several years we have been the subject of isolated unionization efforts involving a relatively small number of associates, which efforts were, in each case, unsuccessful.
Such litigation may include claims by current or former employees or third parties, and certain proceedings may be certified or purport to be class actions.
Such litigation may include claims by current or former employees or third parties, and certain proceedings may be certified or purport to be class actions. In appropriate cases, we have taken and will seek subrogation from third parties who are responsible for losses or damages that we may become legally obligated to pay to claimants.
If our strategic investments fail to meet our expectations, our business and results of operations may be adversely impacted. The valuation of the Company’s investments is subject to volatility.
Therefore, we cannot provide assurance that any of our strategic investments will generate anticipated financial returns. If our strategic investments fail to meet our expectations, our business and results of operations may be adversely impacted.
Regarding our operating costs, inflationary pressures persist but are generally expected to decline in the U.S. in the near-term due to easing of supply chain constraints. We cannot predict future economic conditions, fuel price fluctuations, transportation equipment resale values, or how consumer confidence could be affected by such conditions.
We cannot predict future economic conditions, fuel price fluctuations, transportation equipment resale values, or how consumer confidence could be affected by such conditions.
Further, these agencies or 14 Table of Contents governments could institute new laws, rules or regulations, or issue interpretation changes to existing regulations at any time. The short and long-term impacts of changes in legislation or regulations are difficult to predict and could materially and adversely affect our earnings and results of operations.
The short and long-term impacts of changes in legislation or regulations are difficult to predict and could materially and adversely affect our earnings and results of operations. The EPA and the NHTSA have begun taking coordinated steps in support of a new generation of clean vehicles and engines to reduce GHG emissions.
While the final rule may differ from the current proposal, we believe that if the DOL’s current proposal is adopted, it could dramatically limit the circumstances under which we may classify our current independent contractor “owner-operators” as independent contractors under FLSA.
We believe that the final rule, as compared with its Trump Administration predecessor, is a less predictable framework that increases the likelihood of an employee determination and could dramatically limit the circumstances under which we may classify our current independent contractor owner-operators as independent contractors under FLSA.
These responses could also expose us to legal risk or reputational harm and cause us to incur costs to defend legal and regulatory actions. Moreover, any labor disputes or work stoppages, whether or not our other associates unionize, could disrupt our operations and reduce our revenues.
Additionally, our responses to any union organizing efforts could negatively impact how our brand is perceived and have adverse effects on our business, including on our financial results. These responses could also expose us to legal risk or reputational harm and cause us to incur costs to defend legal and regulatory actions.
There can be no guarantee that rail workers who disagree with the proposed settlement will not take actions that disrupt rail service on a wide scale. As a result, we cannot predict whether or when a rail strike or labor dispute involving our rail partners could occur.
As a result, we cannot predict whether or when a labor dispute involving our rail partners could occur, the duration of such dispute, and the impact, if any, on our results of operations.
Removed
We have recently been the subject of isolated unionization efforts involving a relatively small number of associates, which efforts were defeated.
Added
Regarding our operating costs, inflationary pressures persist but are generally expected to decline or stabilize in the U.S. in the near-term due to the stabilization of the recent imbalance between supply and demand for goods and services in the economy.
Removed
Likewise, if diesel fuel prices decrease significantly, the results of our intermodal operations could be adversely affected as shippers shift intermodal freight to over the road trucking.
Added
We cannot predict whether, or in what form, or at what rate any such cost increases could occur. Any such cost increase or event could adversely affect our results of operations or cash flows.
Removed
For example, a national rail strike that could have paralyzed much of the U.S. economy appears to have been averted in December 2022 after the U.S. Congress intervened to bind the railroads and rail workers to a proposed settlement that was reached earlier in the year between the railroads and union leaders.
Added
These increases could negatively affect our results of operations to the extent that we would be unable to obtain corresponding freight rate increases. 9 Table of Contents We recently completed the deployment of a new ERP system, and challenges with the system may adversely impact our business and operations.
Removed
The ILWU’s current coast wide contract with west coast port owners expired on July 1, 2022. As of the date of this Annual Report on Form 10-K, the ILWU and Pacific Maritime Assocation, which represents west coast port owners, had not entered into a new contract.
Added
In May 2023, we began the implementation of a new ERP system, which was completed in December, to support and streamline our core financial systems. This implementation required the integration of the new system with multiple new and existing information systems and business processes.
Removed
In the previous four contract negotiations between the ILWU and port owners dating back to the late 1990s, negotiations went past the expiration of the contract and work slowdowns or employer lockouts ensued.
Added
The new ERP system is designed to increase the efficiency and accuracy of data by streamlining data sources, simplifying complex processes, and reducing manual processes.
Removed
Refer to Note 5 , Investments, to our consolidated financial statements for information on our strategic investments. Such strategic investments naturally entail risks and uncertainties, some of which are beyond our control.
Added
Any remaining open disruptions, deficiencies, or other problems associated with the implementation of our ERP system, such as quality issues, programming errors, or any cost increases could adversely affect our ability to operate our business, produce timely and accurate financial statements, or comply with applicable regulations.
Removed
In this case, we would be required under GAAP to record a noncash charge to our earnings which could have a material adverse effect on our business, results of operations, and financial condition.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFacility Capabilities Location Owned or Leased Segment Customer Service Operations Fuel Maintenance Alexander, AR Owned Truckload X X X Atlanta, GA Owned Truckload X X X Boaz, AL Owned Truckload X X X Carlisle/Harrisburg, PA Leased Truckload X X X X Celina, OH Leased Truckload X X Charlotte, NC Owned Truckload X X X X Chicago, IL Leased Logistics X X Chicago, IL (three locations) Leased Intermodal X Dallas/Wilmer, TX Owned Truckload X X X Dallas, TX Leased Logistics X X Des Moines, IA Leased Truckload X Edwardsville, IL Owned Truckload X X X X Gary, IN Owned Truckload X X X X Green Bay, WI Owned Truckload X Green Bay, WI (two facilities) Owned Other X X Houston, TX Leased Truckload X X X Houston, TX Leased Truckload X X Indianapolis, IN Owned Truckload X X X Laredo, TX Leased Truckload X X X X Lima, OH Leased Truckload X X X Lincoln, AL Owned Truckload X X X London, KY Owned Truckload X X X Marysville, OH Owned Truckload X X X X Mexico City, Mexico Leased Multiple X X New Castle, IN Owned Truckload X X X Obetz, OH Leased Truckload X X X Phoenix, AZ Owned Truckload X X X Portland, OR Owned Truckload X X X Rainbow City, AL Owned Truckload X X X Reserve, LA Leased Truckload X X Romulus, MI Leased Truckload X X Salt Lake City, UT Leased Truckload X X X San Antonio, TX Leased Truckload X X San Bernardino, CA Leased Intermodal X Shrewsbury, MA Leased Truckload X X Upton, KY Owned Truckload X X X West Memphis, AR Owned Truckload X X X X 17 Table of Contents
Biggest changeFacility Capabilities Location Owned or Leased Segment Customer Service Operations Fuel Maintenance Alexander, AR Owned Truckload X X X Atlanta, GA Owned Truckload X X X Boaz, AL Owned Truckload X X X Carlisle/Harrisburg, PA Leased Truckload X X X X Celina, OH Leased Truckload X X Charlotte, NC Owned Truckload X X X X Chicago, IL Leased Logistics X X Chicago, IL (four locations) Leased Intermodal X X Dallas/Wilmer, TX Owned Truckload X X X Dallas, TX Leased Logistics X X Des Moines, IA Leased Truckload X Edwardsville, IL Owned Truckload X X X X Gary, IN Owned Truckload X X X X Green Bay, WI Owned Truckload X Green Bay, WI (two facilities) Owned Other X X Houston, TX Leased Truckload X X X Houston, TX Leased Truckload X X Indianapolis, IN Owned Truckload X X X Joliet, IL Leased Intermodal X Laredo, TX Leased Truckload X X X X Lima, OH Leased Truckload X X X Lincoln, AL Owned Truckload X X X London, KY Owned Truckload X X X Marysville, OH Owned Truckload X X X X Mexico City, Mexico Leased Multiple X X New Castle, IN Owned Truckload X X X Obetz, OH Leased Truckload X X X Phoenix, AZ Owned Truckload X X X Portland, OR Owned Truckload X X X Putnam, CT (two locations) Leased Truckload X X X X Rainbow City, AL Owned Truckload X X X Reserve, LA Leased Truckload X X Salt Lake City, UT Leased Truckload X X X San Antonio, TX Leased Truckload X X X San Bernardino, CA Leased Intermodal X Shrewsbury, MA Leased Truckload X X X Upton, KY Owned Truckload X X X West Memphis, AR Owned Truckload X X X X Woodhaven, MI Leased Truckload X X X 22 Table of Contents
The following table provides a list of 40 properties that are central to our transportation network and indicates the functional capability at each site as of December 31, 2022. Approximately half of the properties are owned and the remainder are leased.
The following table provides a list of 44 properties that are central to our transportation network and indicates the functional capability at each site as of December 31, 2023. Approximately half of the properties are owned and the remainder are leased.
ITEM 2. PROPERTIES As of December 31, 2022, we owned or leased approximately 250 properties across 36 states and Mexico. Our expansive network includes approximately 48 operating centers, 6 distribution warehouses, 11 offices, and over 150 drop yards. In addition, we physically operate at several customer locations.
ITEM 2. PROPERTIES As of December 31, 2023, we owned or leased approximately 240 properties across 40 states and Mexico. Our expansive network includes approximately 56 operating centers, 7 distribution warehouses, 14 offices, and over 150 drop yards. In addition, we physically operate at several customer locations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+2 added−1 removed5 unchanged
Biggest changeStock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates such information by reference into such filing.
Biggest changeEquity Compensation Plan Disclosure The remaining information required by Item 5 is incorporated herein by reference to the information set forth under the caption “Equity Compensation Plan Information” under Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . 24 Table of Contents Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or securities Exchange Act of 1934, each as amended, except to the extent the Company specifically incorporates such information by reference into such filing.
The comparison assumes $100 was invested on December 31, 2017 in our Class B common stock and in each of the foregoing indices and peer group and assumes reinvestment of dividends.
The comparison assumes $100 was invested on December 31, 2018 in our Class B common stock and in each of the foregoing indices and peer group and assumes reinvestment of dividends.
Robinson Worldwide, Landstar System, Inc., Werner Enterprises, Inc., Expeditors International of Washington, Inc., Old Dominion Freight Line, Inc., XPO Logistics, Hub Group, Inc., Kirby Corporation, and Saia. There were no changes to the 2021 peer group used to make 2022 compensation decisions.
Robinson Worldwide, Landstar System, Inc., Werner Enterprises, Inc., Expeditors International of Washington, Inc., Old Dominion Freight Line, Inc., XPO Logistics, Hub Group, Inc., Kirby Corporation, and Saia. There were no changes to the peer group used to make 2022 or 2023 compensation decisions.
The following graph compares the cumulative total shareholder return on our Class B common stock to the cumulative total return of the Standard and Poor’s 500 Stock Index, the Dow Jones Transportation Index, and a customized peer group for the period from December 31, 2017 through December 31, 2022.
The following graph compares the cumulative total shareholder return on our Class B common stock to the cumulative total return of the Standard and Poor’s 500 Stock Index, the Dow Jones Transportation Index, and a customized peer group for the period from December 31, 2018 through December 31, 2023.
There is no public trading market for our Class A common stock. Holders of Record As of February 14, 2023, there was one holder of record of our Class A common stock, the Voting Trust, and 50 holders of record of our Class B common stock.
There is no public trading market for our Class A common stock. Holders of Record As of February 20, 2024, there was one holder of record of our Class A common stock, the Voting Trust, and 28 holders of record of our Class B common stock.
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. 19 Table of Contents 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Schneider National, Inc. $ 100.00 $ 65.99 $ 77.99 $ 82.03 $ 107.89 $ 95.07 S&P 500 - Total Returns 100.00 95.62 125.72 148.85 191.58 156.88 Dow Jones Transportation 100.00 87.67 105.94 123.44 164.44 135.56 2021 Peer Group 100.00 82.78 104.69 132.86 208.63 170.46 ITEM 6. [RESERVED] 20 Table of Contents
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Schneider National, Inc. $ 100.00 $ 118.19 $ 124.31 $ 163.50 $ 144.07 $ 158.80 S&P 500 - Total Returns 100.00 131.49 155.68 200.37 164.08 207.21 Dow Jones Transportation 100.00 120.83 140.80 187.56 154.62 186.46 Peer Group 100.00 126.47 160.50 252.04 205.92 273.29
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The Company did not have a share repurchase program or repurchase any equity securities during the year and three months ended December 31, 2022, respectively.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information regarding the purchases of our equity securities made by or on behalf of us or any affiliated purchaser (as defined in Exchange Act Rule 10b-18) during the three months ended December 31, 2023.
Removed
Equity Compensation Plan Disclosure The remaining information required by Item 5 is incorporated herein by reference to the information set forth under the caption “Equity Compensation Plan Information” under Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
Added
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) (in millions) October 1, 2023 - October 31, 2023 225,821 $ 26.82 225,821 $ 93.4 November 1, 2023 - November 30, 2023 242,230 22.83 242,230 87.8 December 1, 2023 - December 31, 2023 167,742 24.26 167,742 83.8 Total 635,793 635,793 (1) On February 1, 2023, the Company announced that the Board approved a share repurchase program under which the Company is authorized to repurchase up to $150.0 million of its Class A and/or Class B common shares over the next three years.
Added
The program does not obligate the Company to repurchase a minimum number of shares and is intended to help offset the dilutive effect of equity grants to employees over time. Under this program, the Company may repurchase shares in privately negotiated and/or open market transactions. As of December 31, 2023, the Company had $83.8 million remaining available for repurchase.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+27 added−34 removed47 unchanged
Biggest changeFactors contributing to the increase were as follows: • a $417.7 million increase in fuel surcharge revenues resulting from increased fuel prices in 2022 compared to 2021, as well as fuel surcharge revenues from the acquisition of MLS; • a $301.7 million increase in Truckload segment revenues (excluding fuel surcharge) driven by the addition of revenues (excluding fuel surcharge) from the acquisition of MLS, improved revenue per truck per week, and increased dedicated volumes, partially offset by lower network volumes due to driver capacity constraints, reduced network productivity, and moderating market demand; • a $147.5 million increase in Logistics segment revenues (excluding fuel surcharge) resulting from volume growth within our brokerage business (including our Power Only offering) and incremental port dray revenues from port congestion and supply chain constraints, partially offset by decreased revenue per order within our brokerage business; and • a $144.3 million increase in Intermodal segment revenues (excluding fuel surcharge) due to an increase in revenue per order.
Biggest changeFactors contributing to the decrease were as follows: • a $562.5 million decrease in Logistics segment revenues (excluding fuel surcharge) driven by decreased revenue per order due to a softer demand environment, a decline in brokerage volumes, and a reduction in port dray revenues; • a $236.7 million decrease in Intermodal segment revenues (excluding fuel surcharge) due to a decrease in revenue per order and orders; • a $178.2 million decrease in fuel surcharge revenues resulting from decreased fuel prices in 2023 compared to 2022; and • an $80.9 million decrease in Truckload segment revenues (excluding fuel surcharge) driven by a decline in revenue per truck per week within our network business, partially offset by an increase in dedicated volumes due to organic growth and the M&M acquisition and revenue per truck per week.
The exclusion of unusual or infrequent items or other adjustments reflected in the non-GAAP measures should not be construed as an inference that our future results will not be affected by unusual or infrequent items or by other items similar to such adjustments.
The exclusion of unusual or infrequent items or other adjustments reflected in the non-GAAP measures should not be construed as an inference that our future results will not be affected by unusual or infrequent items or other items similar to such adjustments.
The increase was a result of an increase in net income adjusted for various noncash charges and a decrease in cash used for working capital.
The decrease was a result of a decrease in net income adjusted for various noncash charges and an increase in cash used for working capital.
Included below is a reconciliation of operating ratio, which is the most directly comparable GAAP measure, to adjusted operating ratio. Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” (4) We define “adjusted net income” as net income, adjusted to exclude material items that do not reflect our core operating performance.
Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” (4) We define “adjusted net income” as net income, adjusted to exclude material items that do not reflect our core operating performance. Included below is a reconciliation of net income, which is the most directly comparable GAAP measure, to adjusted net income.
While we anticipate that our ongoing effective tax rate will be 24.5% - 25.0%, our provision for income taxes may fluctuate in future periods to the extent there are changes to tax laws and regulations. Revenues and Income (Loss) from Operations by Segment The following tables summarize revenues and income (loss) from operations by segment.
While we anticipate that our ongoing effective tax rate will be 24.0% - 25.0%, our provision for income taxes may fluctuate in future periods to the extent there are changes to tax laws and regulations. Revenues and Income (Loss) from Operations by Segment The following tables summarize revenues and income (loss) from operations by segment.
CRITICAL ACCOUNTING ESTIMATES The preparation of our consolidated financial statements in accordance with GAAP requires that management make estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes. Therefore, these estimates and assumptions affect reported amounts of assets, liabilities, revenue, expenses, and associated disclosures of contingent liabilities.
CRITICAL ACCOUNTING ESTIMATES The preparation of our consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes. Therefore, these estimates and assumptions affect reported amounts of assets, liabilities, revenue, expenses, and associated disclosures of contingent liabilities.
We believe our integrated technology platform will enable us to experience certain benefits of complete end-to-end control, including increased pick-up and delivery predictability, better visibility, and the ability to source and retain capacity. Freight brokerage, which is a significant part of our Logistics segment, is a business that is expected to be a driver of future growth.
We believe our integrated technology platform will enable us to experience certain benefits of complete end-to-end control, including increased pick-up and delivery predictability, better visibility, and the ability to source and retain capacity. Freight brokerage, which is a significant part of our Logistics segment, is a business that is expected to be a driver of continued growth.
See Note 6, Goodwill and Other Intangible Assets, for more information. Business Combinations We record assets acquired and liabilities assumed in a business combination under the purchase method of accounting where consideration is first assigned to identifiable assets and liabilities based on estimated fair values, with any excess recorded as goodwill.
See Note 6, Goodwill and Other Intangible Assets, for more information. Business Combinations We record assets acquired and liabilities assumed in a business combination under the acquisition method of accounting where consideration is first assigned to identifiable assets and liabilities based on estimated fair values, with any excess recorded as goodwill.
(2) Includes company and owner-operator trucks. (3) Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe. 28 Table of Contents (4) Calculated excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes, using weighted workdays.
(2) Includes company and owner-operator trucks. (3) Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe. (4) Calculated excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes, using weighted workdays.
When performing a qualitative test, we assess numerous factors to determine whether it is more likely than not that the fair value of our reporting units is less than their respective carrying values.
When performing a qualitative test, we assess numerous factors to determine whether it is more likely than not that the fair values of our reporting units are less than their respective carrying values.
A discussion regarding our financial condition and results of operations for fiscal 2021 compared to fiscal 2020 can be found under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 18, 2022 and is available on the SEC’s website at www.sec.gov, as well as the “Investors” section of our website at www.schneider.com.
A discussion regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 can be found under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 17, 2023 and is available on the SEC’s website, www.sec.gov, as well as the “Investors” section of our website at www.schneider.com.
We believe our competitive strengths position us to pursue our strategy as follows: Leverage core strengths to drive organic growth and advance our market position We intend to drive organic growth through leveraging our existing customer relationships, as well as expanding our customer base.
We believe our competitive strengths position us to pursue our strategy as follows: Leverage core strengths to drive organic growth and advance our market position We intend to drive organic growth by leveraging our existing customer relationships, as well as expanding our customer base.
If future operating performance of our VTL/Dedicated Services, MLS, or Import/Export reporting units is below our expectations, or there are changes to forecasted growth rates or our cost of capital, a decline in the fair value of the reporting units could result, and we may be required to record a goodwill impairment charge.
If future operating performance of our Dedicated or Import/Export reporting units is below our expectations, or there are changes to forecasted growth rates or our cost of capital, a decline in the fair value of the reporting units could result, and we may be required to record a goodwill impairment charge.
If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded equal to that excess. Significant judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows.
If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded equal to that excess. 37 Table of Contents Significant judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows.
We strive for a high-performance culture that seeks individuals who are passionate about our business and fit our culture, and that promotes diversity, equality, and inclusion through a collaborative environment. We value the direct relationship we have with our associates, and we intend to continue working together to provide professional growth and a quality work environment without third-party representation.
We strive for a high-performance culture that seeks individuals who are passionate about our business and fit our culture, and that promotes diversity, equality, and inclusion through a collaborative environment. We value the direct relationship we have with our associates, and we intend to continue working together to provide professional growth and a quality work environment.
As an industry leader with a respected “safety first and always” culture and underlying core value, we believe that we will continue to be the employer of choice for both driving and non-driving associates. RESULTS OF OPERATIONS A discussion regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 is presented below.
As an industry leader with both a respected “safety first and always” culture and underlying core value, we believe that we will continue to be the employer of choice for both driving and non-driving associates. 27 Table of Contents RESULTS OF OPERATIONS A discussion regarding our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 is presented below.
We believe that investing in the health of our associates helps maintain a high-quality driver base. 22 Table of Contents Our technology platform facilitates the application, screening, and onboarding of top talent.
We believe that investing in the health of our associates helps maintain a high-quality driver base. Our technology platform facilitates the application, screening, and onboarding of top talent.
Refer to Note 13, Commitments and Contingencies , for more information. (2) Includes $5.2 million in charges related to an adverse audit assessment for prior period state sales tax on rolling stock equipment used within that state, for the year ended December 31, 2022.
Refer to Note 13, Commitments and Contingencies , for more information. (2) Includes $2.9 million and $5.2 million in charges related to an adverse audit assessment for prior period state sales tax on rolling stock equipment used within that state for the years ended December 31, 2023 and December 31, 2022, respectively.
The change was primarily due to a $57.0 million adverse settlement related to a lawsuit with former owners of WSL, a $5.2 million expense related to an adverse audit assessment over the applicability of state sales tax, and a $5.0 million loss related to the sale of the Asia business in 2022.
The change was primarily due to a $57.0 million adverse settlement related to a lawsuit with former owners of WSL in 2022, a decrease in performance-based incentive compensation expense, $5.2 million of expense related to an adverse audit assessment over the applicability of state sales tax in 2022, and a $5.0 million loss related to the sale of the Asia business in 2022.
The following table presents our cash and cash equivalents, marketable securities, and outstanding debt as of the dates shown.
The following table presents our cash and cash equivalents, marketable securities, and outstanding debt and finance lease obligations as of the dates shown.
Goodwill is not amortized but is assessed for impairment at least annually and more frequently if a triggering event indicates that impairment may exist. Our goodwill balance at December 31, 2022 and 2021 was $228.2 million and $240.5 million, respectively.
Goodwill is not amortized but is assessed for impairment at least annually and more frequently if a triggering event indicates that impairment may exist. Our goodwill balance at December 31, 2023 and 2022 was $331.7 million and $228.2 million, respectively.
Other Considerations That Could Affect Our Results, Liquidity, and Capital Resources Off-Balance Sheet Arrangements As of December 31, 2022, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Off-Balance Sheet Arrangements As of December 31, 2023, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.
At December 31, 2022 and 2021, we had an accrual of $164.9 million and $158.3 million, respectively, for estimated claims net of reinsurance receivables. We have significant exposure to fluctuations in the number and severity of claims.
At December 31, 2023 and 2022, we had an accrual of $178.4 million and $164.9 million, respectively, for estimated claims net of reinsurance receivables. We have significant exposure to fluctuations in the number and severity of claims.
Expand capabilities in the specialty and dedicated freight markets and continue growing our asset-light and non-asset businesses We believe that our capabilities position us to grow in the specialty and dedicated freight markets, which have higher barriers to entry, potentially higher margins, and lasting customer relationships.
Expand capabilities in the specialty and dedicated freight markets and continue growing our asset-light and non-asset businesses We believe that our capabilities position us to grow in the specialty and dedicated freight markets, which have higher barriers to entry, greater stability through freight/market cycles, potentially more resilient margins, and lasting customer relationships.
See Note 1, Summary of Significant Accounting Policies, for additional details. 24 Table of Contents Adjusted operating ratio Year Ended December 31, (in millions, except ratios) 2022 2021 Total operating expenses $ 6,004.0 $ 5,075.0 Divide by: Operating revenues 6,604.4 5,608.7 Operating ratio 90.9 % 90.5 % Total operating expenses $ 6,004.0 $ 5,075.0 Adjusted for: Fuel surcharge revenues (862.5) (444.8) Litigation and audit assessments (62.2) 13.5 Acquisition-related costs (0.3) (1.9) Goodwill impairment — (10.6) Property gain—net 50.9 — Sale of business (5.0) — Adjusted total operating expenses $ 5,124.9 $ 4,631.2 Operating revenues $ 6,604.4 $ 5,608.7 Less: Fuel surcharge revenues 862.5 444.8 Revenues (excluding fuel surcharge) $ 5,741.9 $ 5,163.9 Adjusted operating ratio 89.3 % 89.7 % Adjusted net income Year Ended December 31, (in millions) 2022 2021 Net income $ 457.8 $ 405.4 Litigation and audit assessments 62.2 (13.5) Acquisition-related costs 0.3 1.9 Goodwill impairment — 10.6 Property gain—net (50.9) — Sale of business 5.0 — Income tax effect of non-GAAP adjustments (1) (2.9) 2.8 Adjusted net income $ 471.5 $ 407.2 (1) Our estimated tax rate on non-GAAP items is determined annually using the applicable consolidated federal and state effective tax rate, modified to remove the impact of tax credits and adjustments that are not applicable to the specific items.
See Note 1, Summary of Significant Accounting Policies, for additional details. 29 Table of Contents Adjusted operating ratio Year Ended December 31, (in millions, except ratios) 2023 2022 Total operating expenses $ 5,202.5 $ 6,004.0 Divide by: Operating revenues 5,498.9 6,604.4 Operating ratio 94.6 % 90.9 % Total operating expenses $ 5,202.5 $ 6,004.0 Adjusted for: Fuel surcharge revenues (684.3) (862.5) Litigation and audit assessments (2.9) (62.2) Acquisition-related costs (0.9) (0.3) Property gain—net — 50.9 Amortization of intangible assets (2.7) — Sale of business — (5.0) Adjusted total operating expenses $ 4,511.7 $ 5,124.9 Operating revenues $ 5,498.9 $ 6,604.4 Less: Fuel surcharge revenues 684.3 862.5 Revenues (excluding fuel surcharge) $ 4,814.6 $ 5,741.9 Adjusted operating ratio 93.7 % 89.3 % Adjusted net income Year Ended December 31, (in millions) 2023 2022 Net income $ 238.5 $ 457.8 Litigation and audit assessments 2.9 62.2 Acquisition-related costs 0.9 0.3 Property gain—net — (50.9) Amortization of intangible assets 2.7 — Sale of business — 5.0 Income tax effect of non-GAAP adjustments (1) (1.6) (2.9) Adjusted net income $ 243.4 $ 471.5 (1) Our estimated tax rate on non-GAAP items is determined annually using the applicable consolidated federal and state effective tax rate, modified to remove the impact of tax credits and adjustments that are not applicable to the specific items.
(2) Includes company and owner-operator trucks at the end of the period. (3) Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes. (4) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
(3) Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes. (4) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
There were no income tax effects related to the sale of business in 2022 or the goodwill impairment in 2021.
There were no income tax effects related to the sale of business in 2022.
Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” Revenues (excluding fuel surcharge) Year Ended December 31, (in millions) 2022 2021 Operating revenues $ 6,604.4 $ 5,608.7 Less: Fuel surcharge revenues 862.5 444.8 Revenues (excluding fuel surcharge) $ 5,741.9 $ 5,163.9 Adjusted income from operations Year Ended December 31, (in millions) 2022 2021 Income from operations $ 600.4 $ 533.7 Litigation and audit assessments (1) (2) (3) 62.2 (13.5) Acquisition-related costs (4) 0.3 1.9 Goodwill impairment (5) — 10.6 Property gain—net (6) (50.9) — Sale of business (7) 5.0 — Adjusted income from operations $ 617.0 $ 532.7 (1) Includes a $57.0 million charge for an adverse settlement related to a lawsuit with former owners of WSL, inclusive of prejudgment interest and the former owners’ attorneys’ fees, for the year ended December 31, 2022.
Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” 28 Table of Contents Revenues (excluding fuel surcharge) Year Ended December 31, (in millions) 2023 2022 Operating revenues $ 5,498.9 $ 6,604.4 Less: Fuel surcharge revenues 684.3 862.5 Revenues (excluding fuel surcharge) $ 4,814.6 $ 5,741.9 Adjusted income from operations Year Ended December 31, (in millions) 2023 2022 Income from operations $ 296.4 $ 600.4 Litigation and audit assessments (1) (2) 2.9 62.2 Acquisition-related costs (3) 0.9 0.3 Property gain—net (4) — (50.9) Amortization of intangible assets (5) 2.7 — Sale of business (6) — 5.0 Adjusted income from operations $ 302.9 $ 617.0 (1) Includes a $57.0 million charge for an adverse settlement related to a lawsuit with former owners of WSL, inclusive of prejudgment interest and the former owners’ attorneys’ fees, for the year ended December 31, 2022.
Year Ended December 31, (in millions, except ratios) 2022 2021 Operating revenues $ 6,604.4 $ 5,608.7 Revenues (excluding fuel surcharge) (1) 5,741.9 5,163.9 Income from operations 600.4 533.7 Adjusted income from operations (2) 617.0 532.7 Operating ratio 90.9 % 90.5 % Adjusted operating ratio (3) 89.3 % 89.7 % Net income $ 457.8 $ 405.4 Adjusted net income (4) 471.5 407.2 (1) We define “revenues (excluding fuel surcharge)” as operating revenues less fuel surcharge revenues, which are excluded from revenues at the segment level.
Year Ended December 31, (in millions, except ratios) 2023 2022 Operating revenues $ 5,498.9 $ 6,604.4 Revenues (excluding fuel surcharge) (1) 4,814.6 5,741.9 Income from operations 296.4 600.4 Adjusted income from operations (2) 302.9 617.0 Operating ratio 94.6 % 90.9 % Adjusted operating ratio (3) 93.7 % 89.3 % Net income $ 238.5 $ 457.8 Adjusted net income (4) 243.4 471.5 (1) We define “revenues (excluding fuel surcharge)” as operating revenues less fuel surcharge revenues, which are excluded from revenues at the segment level.
Goodwill is evaluated for impairment annually at the reporting unit level, or more frequently if events or circumstances indicate the carrying value is not recoverable. A reporting unit can be a segment or business within a segment.
Goodwill is evaluated for impairment annually at the reporting unit level, or more frequently if events or circumstances indicate the carrying value is not recoverable. A reporting unit can be a segment or business within a segment, and reporting units can be aggregated to the extent they share similar economic characteristics.
Year Ended December 31, 2022 2021 Operating ratio (1) 92.8 % 94.9 % (1) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level. 29 Table of Contents Logistics revenues (excluding fuel surcharge) increased $147.5 million, approximately 8%, in the year ended December 31, 2022 compared to 2021.
Year Ended December 31, 2023 2022 Operating ratio (1) 96.7 % 92.8 % (1) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level. Logistics revenues (excluding fuel surcharge) decreased $562.5 million, approximately 29%, in the year ended December 31, 2023 compared to 2022.
Year Ended December 31, (in millions) 2022 2021 Purchases of transportation equipment $ 535.1 $ 399.4 Purchases of other property and equipment 52.9 49.5 Proceeds from sale of property and equipment (126.3) (177.8) Net capital expenditures $ 461.7 $ 271.1 Net capital expenditures increased $190.6 million in 2022 compared to 2021.
Year Ended December 31, (in millions) 2023 2022 Purchases of transportation equipment $ 660.1 $ 535.1 Purchases of other property and equipment 42.3 52.9 Proceeds from sale of property and equipment (128.6) (126.3) Net capital expenditures $ 573.8 $ 461.7 Net capital expenditures increased $112.1 million in 2023 compared to 2022.
Contractual Obligations As of December 31, 2022, we had contractual obligations related to our long-term debt of $205.0 million and $14.2 million for principal borrowings and interest, respectively, which become due through 2025. See Note 7, Debt and Credit Facilities , for additional information regarding our debt obligations.
Contractual Obligations As of December 31, 2023, we had contractual obligations related to our long-term debt, inclusive of our credit and receivables purchase agreement, of $290.0 million and $20.8 million for principal borrowings and interest, respectively, which become due through 2027. See Note 7, Debt and Credit Facilities , for additional information regarding our debt obligations.
Year Ended December 31, Revenues by Segment (in millions) 2022 2021 Truckload $ 2,236.6 $ 1,934.9 Intermodal 1,287.4 1,143.1 Logistics 1,956.2 1,808.7 Other 364.0 365.3 Fuel surcharge 862.5 444.8 Inter-segment eliminations (102.3) (88.1) Operating revenues $ 6,604.4 $ 5,608.7 27 Table of Contents Year Ended December 31, Income (Loss) from Operations by Segment (in millions) 2022 2021 Truckload $ 352.2 $ 284.7 Intermodal 165.1 155.2 Logistics 141.2 92.4 Other (58.1) 1.4 Income from operations 600.4 533.7 Adjustments: Litigation and audit assessments 62.2 (13.5) Acquisition-related costs 0.3 1.9 Goodwill impairment — 10.6 Property gain—net (50.9) — Sale of business 5.0 — Adjusted income from operations $ 617.0 $ 532.7 We monitor and analyze a number of KPIs in order to manage our business and evaluate our financial and operating performance.
Year Ended December 31, Revenues by Segment (in millions) 2023 2022 Truckload $ 2,155.7 $ 2,236.6 Intermodal 1,050.7 1,287.4 Logistics 1,393.7 1,956.2 Other 333.4 364.0 Fuel surcharge 684.3 862.5 Inter-segment eliminations (118.9) (102.3) Operating revenues $ 5,498.9 $ 6,604.4 Year Ended December 31, Income (Loss) from Operations by Segment (in millions) 2023 2022 Truckload $ 170.7 $ 352.2 Intermodal 71.0 165.1 Logistics 45.9 141.2 Other 8.8 (58.1) Income from operations 296.4 600.4 Adjustments: Litigation and audit assessments 2.9 62.2 Acquisition-related costs 0.9 0.3 Property gain—net — (50.9) Amortization of intangible assets 2.7 — Sale of business — 5.0 Adjusted income from operations $ 302.9 $ 617.0 32 Table of Contents We monitor and analyze a number of KPIs in order to manage our business and evaluate our financial and operating performance.
As a result of this trend, we may experience increases in our insurance and claims expense. Our reserves represent accruals for the estimated self-insured and reinsured portions of pending claims, including adverse development of known claims, as well as incurred but not reported claims.
Our reserves represent accruals for the estimated self-insured and reinsured portions of pending claims, including adverse development of known claims, as well as incurred but not reported claims.
The estimates discussed below include the financial statement elements that are either the most judgmental or involve the selection or application of alternative accounting policies and are material to our consolidated financial statements. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board and with our independent registered public accounting firm.
The estimates discussed below include the financial statement elements that are either the most judgmental or involve the selection or application of alternative accounting policies and are material to our consolidated financial statements.
As shippers increasingly consolidate their business with fewer freight brokers, we continue to be well-positioned due to our customer service, Schneider FreightPower® digital marketplace, an established, dense network of qualified third-party carriers, and access to our sizable trailer network. We believe shippers see the value of working with providers like us that have scale, capacity, and lane density.
As shippers increasingly consolidate their business with fewer freight brokers, we continue to be well-positioned due to our customer service, Schneider FreightPower® digital marketplace, an established, dense network of qualified third-party carriers, and access to our sizable trailer network via our Power Only offering.
Our diversified portfolio of complementary service offerings combines truckload services with intermodal and logistics offerings, enabling us to serve our customers’ varied transportation needs. Recent Developments Acquisitions On December 31, 2021, the Company completed the acquisition of MLS, a privately held truckload carrier based in Celina, OH.
Our diversified portfolio of complementary service offerings combines truckload services with intermodal and logistics offerings, enabling us to serve our customers’ varied transportation needs. Recent Developments Acquisitions On August 1, 2023, the Company completed the acquisition of M&M, a privately held truckload carrier based in West Bridgewater, Massachusetts. M&M is a dedicated carrier that complements our growing dedicated operations.
Additionally, we may use cash for acquisitions and other investing and financing activities. Working capital is required principally to ensure we are able to run the business and have sufficient funds to satisfy maturing short-term debt and operational expenses. Our capital expenditures consist primarily of transportation equipment and information technology.
Working capital is required principally to ensure we are able to run the business and have sufficient funds to satisfy maturing short-term debt and operational expenses. Our capital expenditures consist primarily of transportation equipment and information technology. Historically, our primary source of liquidity has been cash flow from operations.
Year Ended December 31, 2022 2021 Dedicated Revenues (excluding fuel surcharge) (1) $ 1,190.4 $ 818.3 Average trucks (2) (3) 5,915 4,265 Revenue per truck per week (4) $ 3,948 $ 3,756 Network Revenues (excluding fuel surcharge) (1) $ 1,045.1 $ 1,115.0 Average trucks (2) (3) 4,534 5,059 Revenue per truck per week (4) $ 4,522 $ 4,315 Total Truckload Revenues (excluding fuel surcharge) (5) $ 2,236.6 $ 1,934.9 Average trucks (2) (3) 10,449 9,324 Revenue per truck per week (4) $ 4,197 $ 4,059 Average company trucks (3) 8,438 6,987 Average owner-operator trucks (3) 2,011 2,337 Trailers (6) 43,950 36,601 Operating ratio (7) 84.3 % 85.3 % (1) Revenues (excluding fuel surcharge), in millions, exclude revenue in transit.
Year Ended December 31, 2023 2022 Dedicated Revenues (excluding fuel surcharge) (1) $ 1,272.0 $ 1,190.4 Average trucks (2) (3) 6,233 5,915 Revenue per truck per week (4) $ 4,011 $ 3,948 Network Revenues (excluding fuel surcharge) (1) $ 884.5 $ 1,045.1 Average trucks (2) (3) 4,374 4,534 Revenue per truck per week (4) $ 3,974 $ 4,522 Total Truckload Revenues (excluding fuel surcharge) (5) $ 2,155.7 $ 2,236.6 Average trucks (2) (3) 10,607 10,449 Revenue per truck per week (4) $ 3,996 $ 4,197 Average company trucks (3) 8,695 8,438 Average owner-operator trucks (3) 1,912 2,011 Trailers (6) 47,460 43,950 Operating ratio (7) 92.1 % 84.3 % (1) Revenues (excluding fuel surcharge), in millions, exclude revenue in transit.
(in millions) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 385.7 $ 244.8 Marketable securities 45.9 49.3 Total cash, cash equivalents, and marketable securities $ 431.6 $ 294.1 Debt: Senior notes $ 205.0 $ 265.0 Finance leases 10.1 5.3 Total debt $ 215.1 $ 270.3 Debt At December 31, 2022, we were in compliance with all financial covenants under our credit agreements and the agreements governing our senior notes.
(in millions) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 102.4 $ 385.7 Marketable securities 57.2 45.9 Total cash, cash equivalents, and marketable securities $ 159.6 $ 431.6 Debt: Senior notes $ 185.0 $ 205.0 Receivables purchase agreement 60.0 — Credit agreement 45.0 — Finance leases 12.1 10.1 Total debt and finance lease obligations $ 302.1 $ 215.1 Debt At December 31, 2023, we were in compliance with all financial covenants under our credit agreements and the agreements governing our senior notes.
Included below is a reconciliation of income from operations, which is the most directly comparable GAAP measure, to adjusted income from operations.
Included below is a reconciliation of income from operations, which is the most directly comparable GAAP measure, to adjusted income from operations. Excluded items for the periods shown are explained in the table and notes below.
Assumptions used in impairment evaluations, such as forecasted growth rates and our cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans.
Assumptions used in impairment evaluations, such as forecasted growth rates and our cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. These assumptions could be adversely impacted by certain risks discussed earlier in this document. The Company acquired M&M in 2023 and deBoer in 2022.
Year Ended December 31, (in millions) 2022 2021 Net cash provided by operating activities $ 856.4 $ 566.1 Net cash used in investing activities (598.8) (626.4) Net cash used in financing activities (116.7) (90.4) Operating Activities Net cash provided by operating activities increased $290.3 million, approximately 51%, during 2022 compared to 2021.
Year Ended December 31, (in millions) 2023 2022 Net cash provided by operating activities $ 680.0 $ 856.4 Net cash used in investing activities (907.6) (598.8) Net cash used in financing activities (55.7) (116.7) Operating Activities Net cash provided by operating activities decreased $176.4 million, approximately 21%, during 2023 compared to 2022.
We anticipate that cash generated from operations, together with amounts available under our credit facilities, will be sufficient to meet our requirements for the foreseeable future.
We had maximum borrowings under the facilities of $141.0 million during the year ended December 31, 2023. We anticipate that cash generated from operations, together with amounts available under our credit and receivables purchase agreement, will be sufficient to meet our requirements for the foreseeable future.
Adjusted income from operations increased $84.3 million, approximately 16%. Enterprise operating ratio (operating expenses as a percentage of operating revenues) increased on a GAAP basis but improved on an adjusted basis when compared to the same period in 2021.
Enterprise operating ratio (operating expenses as a percentage of operating revenues) increased on both a GAAP and adjusted basis when compared to the same period in 2022.
Significant estimates and assumptions, including recent sales prices of similar equipment, asset condition, and current and anticipated market trends, were used in determining the fair values of these assets. 34 Table of Contents
The transportation equipment; land, buildings, and improvements; and other property and equipment appraisals used one, or a combination, of the market, income (direct capitalization), or sales comparison approaches. Significant estimates and assumptions, including recent sales prices of similar equipment, asset condition, and current and anticipated market trends, were used in determining the fair values of these assets.
We also maintain insurance to cover liabilities in excess of the self-insurance amounts to limit our exposure to catastrophic claim costs or damages. We are substantially self-insured for loss of and damage to our owned and leased equipment. The current claims settlement environment within the industry has resulted in excess insurance carriers decreasing coverage and increasing premiums.
The amounts of self-insurance change from time to time based on measurement dates, policy expiration dates, policy exhaustion, and claim type. We also maintain insurance to cover liabilities in excess of the self-insurance amounts to limit our exposure to catastrophic claim costs or damages. We are substantially self-insured for loss of and damage to our owned and leased equipment.
Claims Accruals Reserves are established based on estimated or expected losses for claims. The primary claims arising for the Company consist of accident-related claims for personal injury, collision, and comprehensive compensation, in addition to workers’ compensation, property damage, cargo, and wage and benefit claims.
The primary claims arising for the Company consist of accident-related claims for personal injury, collision, and comprehensive compensation, in addition to workers’ compensation, property damage, cargo, and wage and benefit claims. We maintain self-insurance levels for these various areas of risk and have established reserves to cover self-insured liabilities.
Excluded items for the periods shown are explained in the table and notes below. 23 Table of Contents (3) We define “adjusted operating ratio” as operating expenses, adjusted to exclude material items that do not reflect our core operating performance, divided by revenues (excluding fuel surcharge).
(3) We define “adjusted operating ratio” as operating expenses, adjusted to exclude material items that do not reflect our core operating performance, divided by revenues (excluding fuel surcharge). Included below is a reconciliation of operating ratio, which is the most directly comparable GAAP measure, to adjusted operating ratio.
In addition, net income in 2022 and 2021 included pre-tax equity investment net gains of $13.7 million and $21.6 million, respectively. Adjusted net income increased $64.3 million, approximately 16%. 25 Table of Contents Components of Enterprise Net Income Enterprise Revenues Enterprise operating revenues increased $995.7 million, approximately 18%, in the year ended December 31, 2022 compared to 2021.
Pre-tax equity investment net gains were $19.7 million and $13.7 million for 2023 and 2022, respectively. Adjusted net income decreased $228.1 million, approximately 48%. 30 Table of Contents Components of Enterprise Net Income Enterprise Revenues Enterprise operating revenues decreased $1,105.5 million, approximately 17%, in the year ended December 31, 2023 compared to 2022.
(7) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.
(7) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level. T ruckload revenues (excluding fuel surcharge) decreased $80.9 million , approximately 4%, for the year ended December 31, 2023 compared to 2022.
Continue to improve our operations and margins by leveraging benefits from investments in technology and business transformation We continue to benefit from our technology and business transformation by improving the effectiveness with which we use data to increase revenue and lower costs.
Brokerage serves as an asset-light innovation hub for Schneider, particularly in the areas of predictive analytics, process automation, and new customer relationship generation. 26 Table of Contents Improve our operations and margins by leveraging benefits from investments in technology and business transformation We continue to benefit from our technology and business transformation by improving the effectiveness with which we use data to increase revenue and lower costs.
We believe that opportunities identified within our intermodal product offering allow us to profitably grow our services and compete in the intermodal marketplace. As an asset-based provider, we have more control over our equipment, perform most of our own drays, and retain strong contractual and differentiated rail relationships.
As an asset-based intermodal provider, we have more control over our equipment, perform most of our own drays, and retain strong contractual and differentiated rail relationships across the western, eastern, and southern/Mexico-based portions of our network.
Enterprise Income from Operations and Operating Ratio Enterprise income from operations increased $66.7 million, approximately 12%, in the year ended December 31, 2022 compared to 2021, primarily due to an increase in revenue per order in Intermodal, revenue per truck per week in Truckload, and net revenue per order in Logistics driven by strong freight market conditions in the first half of 2022, in addition to effective network and revenue management.
Enterprise Income from Operations and Operating Ratio Enterprise income from operations decreased $304.0 million, approximately 51%, in the year ended December 31, 2023 compared to 2022, primarily due to a decrease in net revenue per order in Logistics, revenue per order in Intermodal, and revenue per truck per week in our Truckload network business.
See Note 5, Investments , for more information on our equity investments. Income Tax Expense Our provision for income taxes increased $9.6 million, approximately 7%, in the year ended December 31, 2022 compared to 2021 due to higher taxable income. Our effective income tax rate was 24.2% for the year ended December 31, 2022 and 25.2% in 2021.
Income Tax Expense Our provision for income taxes decreased $78.6 million, approximately 54%, in the year ended December 31, 2023 compared to 2022 due to lower taxable income and a lower effective income tax rate.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Enterprise Results Summary Enterprise net income increased $52.4 million, approximately 13%, in the year ended December 31, 2022 compared to 2021, primarily due to a $66.7 million increase in income from operations, partially offset by the corresponding increase in the provision for income taxes.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Enterprise Results Summary Enterprise net income decreased $219.3 million, approximately 48%, in the year ended December 31, 2023 compared to 2022, primarily due to a $304.0 million decrease in income from operations, partially offset by the corresponding decrease in the provision for income taxes, and a $6.1 million favorable change in total other income—net primarily related to our equity investments.
The increase was driven by a $135.7 million increase in purchases of transportation equipment mainly due to growth capital and higher costs for new equipment and a $51.5 million decrease in proceeds from the sale of property and equipment.
The increase was driven by a $125.0 million increase in purchases of transportation equipment driven by replacement equipment reducing tractor age of fleet, growth capital, and higher costs for new equipment.
Total Other Expenses (Income) Total other income decreased $4.7 million in the year ended December 31, 2022 compared to 2021, primarily due to a $7.9 million decrease in pre-tax equity investment net gains as we recorded $13.7 million in pre-tax net gains in 2022 compared to $21.6 million in 2021.
Total Other Expenses (Income) Total other income increased $6.1 million in the year ended December 31, 2023 compared to 2022, driven primarily by pre-tax net gains on our equity investments of $19.7 million in 2023 compared to $13.7 million in 2022 and an increase in interest income of $4.1 million due to higher interest rates.
The decrease in cash used relates primarily to a $239.6 million decrease in amounts used for acquisitions and sale of business, net of cash, partially offset by an increase in net capital expenditures and additional investments in equity securities in 2022. 31 Table of Contents Net Capital Expenditures The following table sets forth our net capital expenditures for the periods indicated.
The increase was primarily driven by an increase in cash used for acquisitions related to the 2023 acquisition of M&M and an increase in net capital expenditures. Net Capital Expenditures The following table sets forth our net capital expenditures for the periods indicated.
Intermodal revenues (excluding fuel surcharge) increased $144.3 million, approximately 13%, in the year ended December 31, 2022 compared to 2021. Revenue per order increased $319, or 13%, and orders increased 1% driven primarily by strong but moderating market conditions during 2022.
Intermodal revenues (excluding fuel surcharge) decreased $236.7 million, approximately 18%, in the year ended December 31, 2023 compared to 2022. This was driven by a decrease in revenue per order of $315, or 11%, primarily due to a decrease in price and a change in mix. Additionally, orders decreased 8% driven by market conditions.
The transportation of specialty freight requires specially trained drivers with appropriate licenses and special hauling permits, as well as equipment that can handle items with unique requirements in terms of temperature, freight treatment, size, and shape. 21 Table of Contents As such, there are few carriers that have comparable scale and capabilities in the specialty and dedicated markets, which we believe will allow us to grow profitably.
As such, there are few carriers that have comparable scale and capabilities in the specialty and dedicated markets, which we believe will allow us to grow profitably.
A net gain on sale of $50.9 million in connection with the sale of our Canadian facility due to a change in approach to servicing Canada also contributed to the increase.
A net gain on sale of $50.9 million in 2022 in connection with the sale of our Canadian facility, the revenue impacts of volume declines within our brokerage business and Intermodal, and incremental equipment depreciation costs also contributed to the decrease.
Enterprise revenues (excluding fuel surcharge) increased $578.0 million, approximately 11%.
Enterprise revenues (excluding fuel surcharge) decreased $927.3 million, approximately 16%.
Logistics income from operations increased $48.8 million, approximately 53%, in the year ended December 31, 2022 compared to 2021, primarily due to net revenue per order improvements within our brokerage business and volume growth, as cited above.
This was mainly the result of a decrease in revenue per order and volume within our brokerage business. Port dray revenues decreased as well due to reduced freight volume and improved port fluidity in 2023. Logistics income from operations decreased $95.3 million, approximately 67%, in the year ended December 31, 2023 compared to 2022.
Intermodal income from operations increased $9.9 million, approximately 6%, in the year ended December 31, 2022 compared to 2021 mainly due to factors impacting revenues discussed above, partially offset by higher rail-related costs largely related to the impact of network fluidity issues, increased fuel expenses, and increased driver-related costs to attract and retain drivers.
Intermodal income from operations decreased $94.1 million, approximately 57%, in the year ended December 31, 2023 compared to 2022 mainly due to factors impacting revenues discussed above, partially offset by lower rail-related costs and dray execution costs resulting from the mix of company driver drays. Logistics The following table presents the KPI for our Logistics segment for the periods indicated.
Intermodal The following table presents the KPIs for our Intermodal segment for the periods indicated. Year Ended December 31, 2022 2021 Orders (1) 453,218 448,568 Containers 28,035 25,187 Trucks (2) 1,588 1,602 Revenue per order (3) $ 2,845 $ 2,526 Operating ratio (4) 87.2 % 86.4 % (1) Based on delivered rail orders.
Year Ended December 31, 2023 2022 Orders (1) 415,095 453,218 Containers 26,991 28,035 Trucks (2) 1,485 1,588 Revenue per order (3) $ 2,530 $ 2,845 Operating ratio (4) 93.2 % 87.2 % (1) Based on delivered rail orders. (2) Includes company and owner-operator trucks at the end of the period.
Other Included in Other was a loss from operations of $58.1 million in the year ended December 31, 2022 compared to income of $1.4 million in 2021.
Net revenue per order decreased primarily due to the factors related to revenue discussed above, partially offset by a decrease in third-party transportation costs as both volume and per order costs decreased. Other Included in Other was income from operations of $8.8 million in the year ended December 31, 2023 compared to a loss of $58.1 million in 2022.
(5) Goodwill impairment charge recorded for our Asia reporting unit during the year ended December 31, 2021. Refer to Note 6, Goodwill and Other Intangible Assets, for more information. (6) Net gain on the sale of our Canadian facility due to a change in approach to servicing Canada. (7) Loss from sale of our China-based logistics operations.
(3) Advisory, legal, and accounting costs related to the Company’s acquisitions. Refer to Note 2, Acquisitions , for additional details. (4) Net gain on the sale of our Canadian facility due to a change in approach to servicing Canada for the year ended December 31, 2022. (5) Amortization expense related to intangible assets acquired through recent business acquisitions.
The complexity and time-sensitivity of the loads often require increased collaboration with, and greater understanding of, our customers’ business needs and processes.
The complexity and time-sensitivity of the loads often require increased collaboration with, and greater understanding of, our customers’ business needs and processes. The transportation of specialty freight requires specially trained drivers with appropriate licenses and certain hauling permits, as well as equipment that can handle items with unique requirements in terms of temperature, freight treatment, size, and shape.
Securing a significant new customer in early 2023 resulted in forecasted revenue growth of 17% for 2023. (3) The EBITDA valuation multiples were selected considering the size, profitability, and growth of comparative public companies. There were no triggering events identified from the date of our assessment through December 31, 2022 that would require an update to our annual impairment test.
Going forward, our goodwill impairment test will be performed at the Dedicated operating segment level. There were no triggering events identified from the date of our assessment through December 31, 2023 that would require an update to our annual impairment test.
Enterprise Operating Expenses Key operating expense fluctuations are described below. • Purchased transportation increased $245.2 million, or 9%, year over year, mainly related to higher rail purchased transportation resulting from an increase in rail costs in Intermodal.
Enterprise Operating Expenses Key operating expense fluctuations are described below. • Purchased transportation decreased $718.4 million, or 25%, year over year, primarily resulting from decreased third-party carrier costs within Logistics due to lower purchased transportation costs per order and brokerage volumes, as well as lower rail purchased transportation resulting from a decrease in both rail cost per mile and orders in Intermodal.
We completed the required annual goodwill impairment assessment for our three reporting units with goodwill as of October 31, 2022 using quantitative assessments. The fair values of our VTL/Dedicated Services and Import/Export reporting units were substantially in excess of their respective carrying value. The fair value of our MLS reporting unit exceeded its carrying value by less than 5%.
Quantitative goodwill impairment tests were performed for all three reporting units as of October 31, 2023, and their fair values were substantially in excess of their respective carrying values. With the expansion of our dedicated business through recent acquisition, we reorganized the operating segments within Truckload into Dedicated; Van Network; and Bulk during the fourth quarter of 2023.
Historically, our primary source of liquidity has been cash flow from operations. In addition, we have a $250.0 million revolving credit facility and a $150.0 million accounts receivable facility, for which our combined available capacity as of December 31, 2022 was $322.8 million.
In addition, we have a $250.0 million revolving credit facility maturing in November 2027 and a $150.0 million receivables purchase agreement maturing in July 2024, for which our combined available capacity as of December 31, 2023 was $213.2 million. Our revolving credit facility also allows us to request an additional increase in total commitment by up to $150.0 million.
Truckload income from operations increased $67.5 million, approximately 24%, in the year ended December 31, 2022 compared to 2021. Factors contributing to the increase in income from operations include favorable pricing conditions, a $50.9 million net gain related to the sale of the Company’s Canadian facility, and additional dedicated volumes inclusive of the MLS acquisition.
Factors contributing to the decrease in income from operations included a $50.9 million net gain related to the sale of the Company’s Canadian facility in 2022, higher driver pay due to additional drivers in dedicated as a result of new business growth and the M&M acquisition, and incremental depreciation due to business growth, inflationary cost pressures on equipment, and M&M.
MLS and deBoer impacts are included within dedicated operations beginning in the first and third quarters of 2022, respectively. The Truckload KPIs for the year ended December 31, 2021, do not contemplate the impacts of our acquisition of MLS on December 31, 2021. As of December 31, 2021, MLS operated approximately 900 tractors and 3,600 trailers.
M&M and deBoer impacts are included within dedicated operations beginning in the third quarters of 2023 and 2022, respectively.
These factors were partially offset by the gain relating to the sale of the Company’s Canadian facility in the first quarter of 2022 and lower cost of goods sold in our leasing business due to a reduction in lease activity. • Insurance and related expenses increased $20.6 million, or 25%, year over year, primarily due to increases in auto liability insurance costs relating to favorable claims frequency and severity in 2021 compared to 2022, as well as the additional insurance premium costs for MLS in 2022. • Other general expenses increased $82.3 million, or 61%, year over year, primarily due to a $57.0 million adverse settlement related to a lawsuit with former owners of WSL.
These factors were partially offset by a decrease in equipment rental expense as a result of improved port fluidity, lower port dray volumes, and an increase in the percentage of dray moves performed by company drivers in 2023; lower rail storage expense due to improved yard fluidity; and an increase in gains on sales of equipment due to a higher quantity of units sold. 31 Table of Contents • Insurance and related expenses increased $11.3 million, or 11%, year over year, primarily due to an increase in auto liability insurance costs relating to unfavorable claims severity largely related to two recent claims, as well as higher cargo and collision losses in 2023 compared to 2022. • Other general expenses decreased $68.4 million, or 32%, year over year, primarily due to a $57.0 million adverse settlement related to a lawsuit with former owners of WSL in 2022, lower professional service fees, and a decrease in driver onboarding costs due to lower cost per hire and fewer driver hires due to market conditions.
Removed
MLS is a dedicated carrier that primarily serves the central U.S. and complements our growing dedicated operations. In 2022, MLS financial results are reported in dedicated operations as part of our Truckload segment.
Added
The results of M&M are reported in dedicated operations as part of our Truckload segment beginning in the third quarter of 2023. Refer to Note 2, Acquisitions, for additional details on our recent acquisitions.
Removed
On June 7, 2022, the Company completed the acquisition of deBoer, which provided us the opportunity to expand our company driver capacity, as well as our tractor and trailer fleet primarily within our dedicated Truckload operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring 2022, the U.S. experienced rising inflation, with levels reaching a 40-year high, and as a result, we have experienced increases in our fuel, transportation equipment, labor and third-party capacity, tire, and maintenance costs.
Biggest changeWhile inflation has stabilized during 2023, the prior two years have seen considerable price inflation where we experienced increases in our fuel, transportation equipment, labor and third-party capacity, tire, and maintenance costs. A resumption of an upward inflationary environment could harm our business, financial condition, and results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in certain commodity prices, equity prices, and inflation. All of these market risks arise in the normal course of business, as we do not engage in speculative trading activities.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in certain commodity prices, inflation, and interest rates. All of these market risks arise in the normal course of business, as we do not engage in speculative trading activities.
Historically, we have been able to recover a majority of fuel price increases from our customers in the form of fuel surcharges. The average diesel price per gallon in the U.S., as reported by the Department of Energy, increased from $3.26 per gallon for fiscal year 2021 to $4.96 per gallon for fiscal year 2022.
Historically, we have been able to recover a majority of fuel price increases from our customers in the form of fuel surcharges. The average diesel price per gallon in the U.S., as reported by the Department of Energy, decreased from $4.96 per gallon for fiscal year 2022 to $4.23 per gallon for fiscal year 2023.
Removed
To date, we have been able to recover the majority of those price increases from our customers; however, we may not be able to continue to recover higher costs if inflationary pressures persist. Our inability or failure to do so could harm our business, financial condition, and results of operations. 35 Table of Contents
Added
Interest Rate Risk We have exposure from variable interest rates primarily related to borrowings under our accounts receivable securitization facility and our revolving credit facility which bear interest based on the one-month Term SOFR. See Note 7, Debt and Credit Facilities . We manage interest rate exposure through a mix of variable and fixed rate debt and lease financing.
Added
As of December 31, 2023, our weighted average interest rate for our variable rate debt instruments was 6.36%. Based on our level of borrowings as of December 31, 2023, our annual interest expense would increase by $1.1 million assuming a one percentage point increase in interest rates. 39 Table of Contents

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