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What changed in FORWARD AIR CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FORWARD AIR CORP's 2023 and 2024 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 2024 report.

+391 added−367 removedSource: 10-K (2025-03-24) vs 10-K (2024-03-15)

Top changes in FORWARD AIR CORP's 2024 10-K

391 paragraphs added · 367 removed · 279 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+24 added−12 removed44 unchanged
Biggest changeIts core offerings include: • Value-Added Warehousing and Distribution ◦ Global warehousing and distribution and e-commerce fulfillment solutions, including inventory management, cross docking, kitting and pick and pack; and ◦ Free Trade zone and bonded warehouse capabilities; ◦ System level testing, tape and reel, ink/laser marking, repair, splitting, baking, kitting, packing, binning and returns management. 8 • International Freight ◦ Primarily focused on Asia to the United States and Intra-Asia air transportation; and ◦ International compliance and customs brokerage ensure stringent compliance requirements are met while expediting delivery times. • Domestic Freight ◦ Partnering with leading carriers to provide a full menu of less-than-truckload (“LTL”), expedited and truckload services based on various time requirements; ◦ Specialized delivery for high-value freight, including white glove and team delivery, installation, unpacking, debris removal, light assembly, repackaging, inspection and crating/uncrating; ◦ Supply chain engineering, appointment scheduling, site survey, track and trace, 24-hour call center and database management; ◦ Air charter, next flight out, hand carry and other expedited services; ◦ Reverse logistics, tradeshows, project logistics, cold chain management, chain of custody and small pack; and ◦ Internal linehaul network provides a competitive advantage in the middle mile through cost and service quality controls.
Biggest changeIts core offerings include: • Domestic Freight ◦ Partnering with leading carriers to provide a full menu of LTL, expedited and truckload services based on various time requirements; ◦ Specialized delivery for high-value freight, including white glove and team delivery, installation, unpacking, debris removal, light assembly, repackaging, inspection and crating/uncrating; ◦ Supply chain engineering, appointment scheduling, site survey, track and trace, 24-hour call center and database management; ◦ Air charter, next flight out, hand carry and other expedited services; ◦ Reverse logistics, trade shows, project logistics, cold chain management, chain of custody and small pack; and • Value-Added Warehousing and Distribution ◦ Global warehousing and distribution and e-commerce fulfillment solutions, including inventory management, cross docking, kitting and pick and pack; ◦ Free Trade zone and bonded warehouse capabilities; ◦ System level testing, tape and reel, ink/laser marking, repair, splitting, baking, kitting, packing, binning and returns management; and • International Freight ◦ Primarily focused on Asia to the United States and Intra-Asia air transportation with expanding service offerings in other markets; ◦ International compliance and customs brokerage ensure stringent compliance requirements are met while expediting delivery times.
Also, because Expedited Freight does not place significant size or weight restrictions on shipments, we generally do not compete directly with integrated air cargo carriers such as United Parcel Service and FedEx Corporation in the overnight delivery of small parcels. 10 The table below summarizes the average weekly volume of freight moving through our LTL network for each year since 2009.
Also, because Expedited Freight does not place significant size or weight restrictions on shipments, we generally do not compete directly with integrated air cargo carriers such as United Parcel Service and FedEx Corporation in the overnight delivery of small parcels. The table below summarizes the average weekly volume of freight moving through our LTL network for each year since 2009.
Environment We are committed to promoting a healthier natural and built environment by striving for continuous environmental improvements in all aspects of our business. Environmental leadership requires not only our own action, but transparency and participation in the industry, including conversations about innovations and advancements that make a difference.
Environment We are committed to promoting a healthier, natural environment by striving for continuous environmental improvements in all aspects of our business. Environmental leadership requires not only our own action, but transparency and participation in the industry, including conversations about innovations and advancements that make a difference.
Below is a summary of our risk retention on vehicle liability insurance coverage maintained by us up to $10,000 (in thousands): Risk Retention Frequency Layer Policy Term Expedited Freight LTL business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2023 to 10/1/2024 Truckload business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2023 to 10/1/2024 LTL, Truckload and Intermodal businesses $ 5,000 Policy Term Aggregate² $5,000 to $10,000 10/1/2023 to 10/1/2024 Intermodal $ 1,000 Occurrence/Accident¹ $0 to $1,000 10/1/2023 to 10/1/2024 ¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident. ² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.
Below is a summary of our risk retention on vehicle liability insurance coverage maintained by us up to $10,000 (in thousands): Risk Retention Frequency Layer Policy Term Expedited Freight LTL business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2024 to 10/1/2025 Truckload business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2024 to 10/1/2025 LTL, Truckload and Intermodal businesses $ 5,000 Policy Term Aggregate² $5,000 to $10,000 10/1/2024 to 10/1/2025 Intermodal $ 1,000 Occurrence/Accident¹ $0 to $1,000 10/1/2024 to 10/1/2025 ¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident. ² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.
Our website address is www.forwardaircorp.com. Our goal is to maintain our website as a portal through which investors can easily find or navigate to pertinent information about us. The information provided on the website is not part of this report, and is therefore not incorporated by reference unless such information is otherwise specifically referenced elsewhere in this report. 18
Our website address is www.forwardair.com. Our goal is to maintain our website as a portal through which investors can easily find or navigate to pertinent information about us. The information provided on the website is not part of this report, and is therefore not incorporated by reference unless such information is otherwise specifically referenced elsewhere in this report. 18
In addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration and Customs and Border Protection (“CBP”) within the United States Department of Homeland Security, and our domestic customs brokerage operations are licensed by CBP. 17 We are also subject to employment laws and regulations, including the changing regulatory landscape, with the potential effects of California Assembly Bill 5 (“California AB5”), which introduced a new test for determining worker classification that is viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships.
In addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration and Customs and Border Protection (“CBP”) within the United States Department of Homeland Security, and our domestic customs brokerage operations are licensed by CBP. 17 We are also subject to employment laws and regulations, including the changing regulatory landscape, with the potential effects of California Assembly Bill 5 ("California AB5"), which introduced a new test for determining worker classification that is viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships.
We believe our information systems have and will assist us in capitalizing on new business opportunities with existing and new customers. Operations The following describes in more detail the operations of each of our reportable segments: Expedited Freight and Intermodal. Expedited Freight Overview Our Expedited Freight segment provides expedited regional, inter-regional and national LTL and truckload services.
We believe our information systems have and will assist us in capitalizing on new business opportunities with existing and new customers. Operations The following describes in more detail the operations of each of our reportable segments: Expedited Freight, Omni Logistics, and Intermodal. Expedited Freight Overview Our Expedited Freight segment provides expedited regional, inter-regional and national LTL and truckload services.
Omni provides business-to-business (“B2B”) solutions to prominent United States-based customers across a variety of attractive end markets, including the technology, retail, media, logistics, life sciences and e-commerce sectors, many of which have had long-term relationships with Omni. Core Offerings Omni focuses on providing customized logistics solutions for high-value, mission-critical freight for some of the industry’s most demanding customers.
Also, Omni provides business-to-business solutions to prominent United States-based customers across a variety of attractive end markets, including the technology, retail, media, logistics, life sciences and e-commerce sectors, many of which have had long-term relationships with Omni. 10 Core Offerings Omni focuses on providing customized logistics solutions for high-value, mission-critical freight for some of the industry’s most demanding customers.
In 2023, none of our employees were covered by a collective bargaining agreement. Roadway Health and Safety We are committed to educating our employees and promoting driver health and wellness through routine communication campaigns and information designed to emphasize the importance of safe operations.
In 2024, none of our employees were covered by a collective bargaining agreement. Roadway Health and Safety We are committed to educating our employees and promoting driver health and wellness through routine communication campaigns and information designed to emphasize the importance of safe operations.
These services benefit our existing customers and increase our ability to attract new customers. Another part of our key growth strategy is to pursue geographic expansion in under penetrated markets to better meet the current and future needs of customers.
These services benefit our existing customers and increase our ability to attract new customers. Another part of our key growth strategy is to pursue geographic expansion into under-penetrated markets to better meet the current and future needs of customers.
We provide a quarterly safety bonus and annual vehicle giveaway to incentivize our Leased Capacity Providers to promote safe driving practices. Both initiatives celebrate drivers of our Leased Capacity Providers who have zero moving violations or accidents on a quarterly basis. Drivers who obtain four quarterly bonuses are eligible to win a new vehicle.
We provide a quarterly safety bonus and annual vehicle giveaway to incentivize our Leased Capacity Providers to promote safe driving practices. Both initiatives celebrate drivers of our Leased C apacity Providers who have zero moving violations or accidents on a quarterly basis. Drivers who obtain four quarterly bonuses are eligible to win a new personal vehicle.
A key part of our growth strategy is to offer new and enhanced services that address our customers’ premium transportation needs. Over the past few years, we added or enhanced LTL pickup and delivery, expedited truckload, temperature-controlled shipments, warehousing, drayage, customs brokerage and shipment consolidation and handling services.
A key part of our growth strategy is to offer new and enhanced services that address our customers’ premium logistics needs. Over the past few years, we added or enhanced our logistics solutions offerings, LTL pickup and delivery, expedited truckload, temperature-controlled shipments, warehousing, drayage, customs brokerage and shipment consolidation and handling services.
Our competition ranges from small operators that operate within a limited geographic area to companies with substantially greater financial and other resources, including greater freight capacity. Our Expedited Freight segment primarily competes with other national and regional truckload carriers. Expedited Freight also competes with LTL carriers, and to a lesser extent, integrated air cargo carriers and passenger and cargo airlines.
To a lesser extent, we also compete with integrated air cargo carriers and passenger airlines. Our competition ranges from small operators that operate within a limited geographic area to companies with substantially greater financial and other resources, including greater freight capacity. 12 Our Expedited Freight segment primarily competes with other national and regional truckload carriers.
Intermodal also offers dedicated contract and CFS warehouse and handling services. Intermodal also provides linehaul and local LTL service in the Midwest, as well as CFS warehousing services (e.g. devanning, unit load device build-up/tear-down, and security screening) for air and ocean import/export freight at five of its Midwest terminals.
Intermodal also offers dedicated contract and CFS warehouse and handling services. Intermodal also provides line haul and local LTL service in the Midwest, as well as CFS warehousing services (e.g. devanning, unit load device build-up/tear-down, and security screening) for air and ocean import/export freight at five of its total network terminals.
Customer and Go-To Market Strategy Omni’s sales force is focused on servicing the global supply chain of United States-based customers with support from a centralized solutions team with cross-functional expertise dedicated to supporting the salespeople in global multi-modal supply chain solutions.
Omni’s sales force is focused on servicing the global supply chain of United States-based customers with support from a centralized solutions team with cross-functional expertise dedicated to supporting the salespeople in global multi-modal supply chain solutions.
For instance, we continue to support our Veterans through our charitable organization, Operation: Forward Freedom, a manifestation of our ongoing commitment to Veteran-related causes. In 2023, we hosted our second annual Drive for Hope Golf tournament where we raised $525,000 for Hope for the Warriors.
For instance, we continue to support our Veterans through our charitable organization, Operation: Forward Freedom, a manifestation of our ongoing commitment to Veteran-related causes. In 2024, we hosted our third annual Drive for Hope Golf tournament where we raised $350,000 for Hope for the Warriors.
Our Intermodal segment primarily competes with national and regional drayage providers. We believe competition in our segments is based primarily on quality of service, price, available capacity, on-time delivery, flexibility, reliability, security, transportation rates, location of facilities, and business relationships, and we believe we compete favorably with other transportation service companies in these areas.
We believe competition in our segments is based primarily on quality of service, price, available capacity, on-time delivery, flexibility, reliability, security, transportation rates, location of facilities, and business relationships, and we believe we compete favorably with other transportation service companies in these areas.
After completing an ESG assessment in 2020 utilizing the Sustainable Accounting Standards Board (SASB) standards and conducting a third-party stakeholder assessment, we identified ten ESG priority areas within these three pillars that we believe are relevant to our business and important to our employees, communities, customers, investors, partners and contractors, and which form the foundation for our sustainability strategy: • Roadway Health & Safety • Measurement & Disclosure • Workplace Health & Safety • Information Security • Independent Contractor Practices • Responsible Supplier Practices • Diversity, Equity, Inclusion, and Belonging (DEI&B) Practices • Green House Gas (GHG) Emissions Reduction Practices • Community Impact & Partnerships • Air Quality Practices Since 2019, we have deployed meaningful resources to manage sustainability risks and to capitalize on related opportunities for the benefit of our stakeholders.
After completing an assessment in 2020 utilizing the Sustainable Accounting Standards Board (SASB) standards and conducting a third-party stakeholder assessment, we identified ten priority areas within these three pillars that we believe are relevant to our business and important to our employees, communities, customers, investors, partners and contractors, and which form the foundation for our sustainability strategy: • Roadway Health & Safety • Measurement & Disclosure • Workplace Health & Safety • Information Security • Independent Contractor Practices • Responsible Supplier Practices • Diversity, Equity, Inclusion, and Belonging (DEI&B) Practices • Green House Gas (GHG) Emissions Reduction Practices • Community Impact & Partnerships • Air Quality Practices We have deployed and continue to develop meaningful resources to manage sustainability risks and to capitalize on related opportunities for the benefit of our stakeholders, including by creating roles designed to maintain oversight of our vision, strategic planning, performance management, and improvement activities.
The foundation of our growth strategy is our commitment to provide our customers with the most reliable and damage-free alternative for their shipments. Commitment to precision execution service is valued by customers and allows us to charge fair compensation for our services and positions us to improve market share. • Pursue Strategic Acquisitions.
The foundation of our growth strategy is our commitment to provide our customers with the most reliable and damage-free alternative for their shipments. Commitment to precision execution service is valued by customers and allows us to charge fair compensation for our services and positions us to improve market share. • Manage LTL Pricing and Freight Characteristics.
In 2023, 175 Leased Capacity Providers as well as Company-employed drivers qualified for the vehicle giveaway. Looking ahead, we will continue to identify and promote programs that focus on the health and wellness for the drivers of our Leased Capacity Providers. Workplace Health and Safety We are committed to the safety of our employees and independent contractors.
In 2024, 146 Leased Ca pacity Providers and Company-employed drivers qualified for the vehicle giveaway. Looking ahead, we will continue to identify and promote programs that focus on the health and wellness for the drivers of our Leased Capacity Providers. Workplace Health and Safety We are committed to the safety of our employees and independent contractors.
Intermodal’s network consists of 30 locations primarily in the Midwest and Southeast, with a smaller operational presence in the Southwest, Mid-Atlantic, and West Coast. Transportation Intermodal utilizes a mix of Company-employed drivers, Leased Capacity Providers and third-party motor carriers.
Intermodal’s network consi sts of 28 locati ons primarily in the Midwest and Southeast, with a smaller operational presence in the Southwest, Mid-Atlantic, and West Coast. Transportation Intermodal utilizes a mix of Company-employed drivers, Leased Capacity Providers and third-party motor carriers.
During 2023, approximately 61% of Intermodal’s direct transportation expenses were provided by Leased Capacity Providers, 35% by Company-employed drivers, and 4% by third-party motor carriers. All of our Intermodal company and independent contractor tractors are equipped with computer tablets, which enable us to communicate with our drivers, plan and monitor shipment progress and monitor our drivers’ hours of service.
During 2024, approximately 62.1% of Intermodal’s direct transportation expenses were provided by Leased Capacity Providers, 33.5% by Company-employed drivers, and 4.4% by third-party m otor carriers. All of our Intermodal company and independent contractor tractors are equipped with computer tablets, which enable us to communicate with our drivers, plan and monitor shipment progress and monitor our drivers’ hours of service.
Our trailer pool includes dry van, refrigerated and roller-bed trailers, and substantially all of our trailers are 53 feet long. We own the majority of the trailers we use, but we supplement at times with leased trailers. As of December 31, 2023, we had 6,184 owned trailers in our fleet with an average age of approximately seven years.
Our trailer pool includes dry van, refrigerated and roller-bed trailers, and substantially all of our trailers are 53 feet long. We own the majority of the trailers we use, but we supplement at times with leased trailers. As of December 31, 2024, there were 5,346 owned trailers in our fleet with an average age of approximately nine years.
Our dependable service and wide-ranging service offerings also make Expedited Freight an attractive option for 3PL providers, which is one of the fastest growing segments in the transportation industry. Integrated air cargo carriers use our network to provide overflow capacity and other services, including shipment of bigger packages and pallet-loaded cargo.
Our dependable service and wide-ranging service offerings also make Expedited Freight an attractive option for 3PL providers . Integrated air cargo carriers use our network to provide overflow capacity and other services, including shipment of bigger packages and pallet-loaded cargo.
As our brands evolve, certain of these marks may go out of use, and others may be developed over time. Our marks are of significant value to our business.
As our brands evolve, certain of these marks may go out of use, and others may be developed over time.
Through ongoing talent development, comprehensive compensation and benefits, and a focus on health, safety and employee well-being, we strive to help our employees in all aspects of their lives so they can do their best at work.
Workforce We recognize that our workforce, including our freight handlers, is our most valuable asset. Through ongoing talent development, comprehensive compensation and benefits, and a focus on health, safety and employee well-being, we strive to help our employees in all aspects of their lives so they can do their best at work.
As part of our Responsible Supplier program, we work to understand the ESG goals of both our suppliers and customers. We are establishing new data tracking infrastructure and exploring opportunities to grow our supplier diversity program and partnerships. We aim to establish supplier diversification goals in the coming years.
As part of our Responsible Supplier program, we work to understand the sustainability goals of both our suppliers and customers. We are establishing new data tracking infrastructure and exploring opportunities to grow our supplier diversity program and partnerships, including by establishing future outreach initiatives designed to identify diverse suppliers. We aim to establish supplier diversification goals in the coming years.
All of our employees are assigned to training courses as part of onboarding and employees may be assigned additional refresher trainings based on corrective action or identified risk. Diversity We believe that our employees’ unique and diverse capabilities positively impact our success. Our commitment to diversity and inclusion starts at the top with a highly skilled and diverse board.
All of our employees are assigned to training courses as part of onboarding and employees may be assigned additional refresher trainings based on corrective action or identified risk. Diversity We believe that our employees’ unique and diverse capabilities positively impact our success.
People and Communities We are committed to maintaining safe facilities for our employees, independent contractors, customers and partners. As part of this pillar, we focus on Roadway Health & Safety, Workplace Health & Safety, Independent Contractor Practices, and DEI&B Practices.
Our CDP report is included on our website in the 2023 ESG report update. People and Communities We are committed to maintaining safe facilities for our employees, independent contractors, customers and partners. As part of this pillar, we focus on Roadway Health & Safety, Workplace Health & Safety, Independent Contractor Practices, and DEI&B Practices.
In 2019, our Board amended the Corporate Governance and Nominating (“CG&N”) Committee Charter to give the CG&N Committee oversight over our ESG-related efforts. At least twice a year, the CG&N Committee is updated on each of these topics and provides feedback and direction that it deems appropriate.
In addition, the charter of the Corporate Governance and Nominating Committee (the “CG&N Committee”) gives the CG&N Committee oversight over our sustainability-related efforts. At least twice a year, the CG&N Committee is updated on each of these topics and provides feedback and direction that it deems appropriate.
Expedited Freight offers truckload services which include expedited truckload brokerage, dedicated fleet services, as well as high security and temperature-controlled logistics services. 11 Other Expedited Freight services allow customers to access the following services from a single source: • customs brokerage; • warehousing, dock and office space; • hotshot or ad hoc ultra-expedited services; and • shipment consolidation and handling, such as shipment build-up and break-down and reconsolidation of air or ocean pallets or containers.
Other Expedited Freight services allow customers to access the following services from a single source: • customs brokerage; • warehousing, dock and office space; • hotshot or ad hoc ultra-expedited services; and • shipment consolidation and handling, such as shipment build-up and break-down and reconsolidation of air or ocean pallets or containers.
(logo), North America’s Most Complete Road Feeder Network, and Keeping Your Business Moving Forward. We also hold an allowed federal trademark application for the Precision Execution logo. We additionally have certain common law service mark rights, including in the tagline When It Matters, Think Forward, that are not currently registered with the United States Patent and Trademark Office.
(logo), FAF, Inc. (logo), North America’s Most Complete Road Feeder Network, and Keeping Your Business Moving Forward. We additionally have certain common law service mark rights, including in the tagline When It Matters, Think Forward, that is not currently registered with the United States Patent and Trademark Office.
Our Expedited Freight network encompasses approximately 92% of all continental United States zip codes, with service in Canada and Mexico. Shipments During 2023, approximately 30% of the freight handled by our LTL network was for overnight delivery, approximately 58% was for delivery within two to three days and the balance was for delivery in four or more days.
Our Expedited Freight network encompasses approximately 96% of all continental United States zip codes, with service in Canada and Mexico. Shipments During 2024, approximately 24.0% of the freight handled by our LTL network was for overnight delivery, approximately 63.6% was for delivery withi n two to three days and the balance was for delivery in four or more days.
Usually, Leased Capacity Providers negotiate schedules for their drivers that are between the same two cities or along a consistent route, improving quality of work life for the drivers of our Leased Capacity Providers and, in turn, increasing the retention rate of drivers and Leased Capacity Providers.
Usually, Leased Capacity Providers negotiate schedules for their drivers that are between the same two cities or along a consistent route, improving quality of work life for the drivers of our Leased Capacity Providers and, in turn, increasing the retention rate of drivers and Leased Capacity Providers. 9 We also purchase transportation capacity supplied by third-party contracted motor carriers and transportation intermediaries.
The recruitment, training and retention of qualified employees is essential to support our continued growth and to meet the service requirements of our customers. As of December 31, 2023, we had 4,014 full-time employees, 924 of whom were freight handlers and an additional 237 part-time employees, the majority of whom were freight handlers.
The recruitment, training and retention of qualified employees is essential to support our continued growth and to meet the service requirements of our customers. As of December 31, 2024, we had 6,319 full-time employees, which includes 1,992 freight handlers and an additional 267 part-time employees, the majority of which were freight handlers.
Strategy Our strategy is to take advantage of our core competencies in precision execution to provide asset-light freight and logistics services to profitably grow in the premium segments of the markets we serve. Principal components of our efforts include: • Expand Service Offerings and Terminal Footprint.
In addition, we strive to take advantage of our core competencies in precision execution to provide asset-light freight transportation services to profitably grow in the premium segments of the markets we serve. 7 • Expand Service Offerings and Service Footprint.
For instance, we employ, maintain, and monitor a robust Health and Safety program for all of our workers which establishes procedures and policies to prevent workplace incidents. As part of our assessment, we have identified improvement activities to develop a comprehensive Emergency Preparedness Plan (“EPP”) for all our facilities.
For instance, we employ, maintain, and monitor a robust Health and Safety program for all of our workers which establishes procedures and policies to prevent workplace incidents. As part of our program, we have implemented a comprehensive Emergency Preparedness Plan (“EPP”) at all our facilities. The EPP is compliant with Occupational Safety and Health Administration standards.
Regulatory requirements, and changes in regulatory requirements, may affect our business or the economics of the industry by requiring changes in operating practices or by influencing the demand for and increasing the costs of providing transportation services.
Additionally, our international business operations are subject to requirements imposed by the laws and regulations of those jurisdictions. Regulatory requirements, and changes in regulatory requirements, may affect our business or the economics of the industry by requiring changes in operating practices or by influencing the demand for and increasing the costs of providing our services.
In 2021, we published our first ESG Report and created our internal ESG Steering Committee, which oversees our company-wide ESG strategy and meets at least quarterly and on an as-needed basis.
At least annually, the Chair of the CG&N Committee will provide a report on these topics to the full Board. In 2021, we published our first ESG Report and created our internal ESG Steering Committee, which oversees our company-wide strategy and meets at least quarterly and on an as-needed basis.
We also purchase transportation capacity supplied by third-party contracted motor carriers and transportation intermediaries. We utilize capacity from both third-party motor carriers and transportation intermediaries to support other Expedited Freight service offerings in response to seasonal demands and volume surges in particular markets, to handle overflow volume.
We utilize capacity from both third-party motor carriers and transportation intermediaries to support other Expedited Freight service offerings in response to seasonal demands and volume surges in particular markets, to handle overflow volume. A small portion of Expedited Freight’s transportation capacity is provided by employee drivers operating company-owned equipment.
Item 1. Business Overview Forward Air Corporation (“Forward”, the “Company”, “we”, “our”, or “us”) is a leading asset-light freight and logistics company. We provide less-than-truckload (“LTL”), truckload and intermodal drayage services across the United States and in Canada and Mexico.
Item 1. Business Overview Forward Air Corporation (“Forward”, the “Company”, “we”, “our”, or “us”) is a leading asset-light provider of transportation services. We provide less-than-truckload (“LTL”), truckload and intermodal drayage services and freight brokerage and supply chain services across North and South America, Europe and Asia.
Our business strategy involves managing both the price we charge for our services and the mix of freight we transport to operate our LTL network efficiently and more profitably.
Our business strategy involves managing both the price we charge for our services and the mix of freight we transport to operate our LTL network efficiently and more profitably. • Enhance Information Systems. We are committed to developing information system enhancements that will provide competitive service advantages and increased productivity.
In addition, Omni delivers international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services, primarily focused on Asia to the United States and Intra-Asia air transportation.
In addition, Omni delivers international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services, primarily focused on Asia to the United States and Intra-Asia air transportation. As an international freight forwarder, Omni is required to follow sanctions and export control regulations of the countries in which it operates and those relevant to the transaction in hand.
Marketing We market all of our services through a sales and marketing team located in major markets of the United States. Senior leadership is also actively involved in sales and marketing to national and local accounts. We participate in trade shows and advertise our services through digital marketing channels, trade publications, and the Internet via www.tlxpedited.com, www.forwardair.com, www.forwardaircorp.com, and www.forward-intermodal.com.
Additionally, we believe our Intermodal segment is one of the leading providers of drayage and related services in North America today. Marketing We market all of our services through a sales and marketing team located in major markets of the United States. Senior leadership is also actively involved in sales and marketing to national and local accounts.
Our websites promote and describe our services in addition to lead generation support. The information on our websites is not part of this filing and is therefore not incorporated by reference unless such information is specifically referenced elsewhere in this report.
The information on our websites is not part of this filing and is therefore not incorporated by reference unless such information is specifically referenced elsewhere in this report. Seasonality Generally, our operating results have been subject to seasonal trends when measured on a quarterly basis.
Expedited Freight markets its services primarily to freight and logistics intermediaries; however, it may at times, provide such services to shippers if the opportunity is consistent with Expedited Freight’s strategy.
Although we impose no significant size or weight restrictions, we focus our marketing and price structure on shipments of 800 p ou nds or more. 8 Expedited Freight markets its services primarily to freight and logistics intermediaries; however, it may at times, provide such services to shippers if the opportunity is consistent with Expedited Freight’s strategy.
Final Mile provided delivery and installation of heavy bulky appliances such as washing machines, dryers, dishwashers and refrigerators throughout the United States.
Discontinued Operations In December 2023, the Board approved a strategy to divest of the Final Mile business (“Final Mile”), and the sale of Final Mile was completed on December 20, 2023. Final Mile provided delivery and installation of heavy bulky appliances such as washing machines, dryers, dishwashers and refrigerators throughout the United States.
We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures. Forward Air was formed as a corporation under the laws of the State of Tennessee on October 23, 1981.
Globally, we provide customized asset-light, high-touch logistics and supply chain management solutions with deep customer relationships in high-growth end markets. We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures.
In addition, as of December 31, 2023, we also had 683 leased tractors and straight trucks in our fleet. 14 Corporate Sustainability We embrace a comprehensive approach to sustainability that addresses Environmental, Social, and Governance (“ESG”) factors. Our integrated framework focuses on three pillars: (i) People and Communities; (ii) Customer; and (iii) Environment.
As of December 31, 2024, we had 325 and 716 owned and leased tractors and straight trucks, respectively, in our fleet, with an average age of approximately six years. 14 Corporate Sustainability We embrace a comprehensive approach to sustainability that addresses Environmental, Social, and Governance (“ESG”) factors.
Seasonality Generally, our operating results have been subject to seasonal trends when measured on a quarterly basis with the first quarter the weakest and the third and fourth quarters have been the strongest. This seasonal pattern has been the result of numerous factors such as economic conditions, customer demand, weather, and national holidays.
Typically, the first quarter is the weakest while the third and fourth quarters are the strongest. This seasonal pattern has been the result of numerous factors such as economic conditions, customer demand, weather, and national holidays. Additionally, a significant portion of our revenue is derived from customers whose business levels are impacted by trends in the economy.
Service Marks Through one of our subsidiaries, we hold the United States federal trademark registrations associated with the following service marks: Forward (logo), circle design (logo), Forward Air, Forward Air (logos), Forward Air Complete, Forward Air Complete (logo), TQI, inc. (logo), FAF, Inc. (logo), Central States Trucking Co.
We aim to prote ct these marks and other intellectual property as they are critical to our marketing strategy. Through our subsidiary Forward Air Royalty, LLC, we hold the United States federal trademark registrations associated with the following service marks: Forward (logo), circle design (logo), Forward Air, Forward Air (logos), Forward Air Complete, Forward Air Complete (logo), TQI, inc.
The EPP is under development and in compliance with Occupational Safety and Health Administration standards. We also remain committed to fostering a more diverse, equitable and inclusive work environment. In 2020, we created a Diversity, Equity, Inclusion, and Belonging (“DEI&B”) Council to promote employee inclusion and engagement.
We also remain committed to fostering a diverse and inclusive work environment. In 2020, we created a DEI&B Council to promote employee inclusion and engagement.
Customers Intermodal’s customer base is primarily comprised of international freight forwarders, passenger and cargo airlines, beneficial cargo owners and steamship lines.
Customers Intermodal’s customer base is primarily comprised of international freight forwarders, passenger and cargo airlines, beneficial cargo owners and steamship lines. In 2024, Intermodal’s ten largest customers account ed for approximately 27% of its operating revenue and had no single customer with revenue greater than 10% of Intermodal revenue for 2024.
In 2022, we streamlined our internal data collection process, completed our Greenhouse Gas (“GHG”) inventory, set measurable targets and goals, and published our second ESG report through the launch of our new ESG website which we will update annually with our progress. The ESG report and new website are accessible through our investor relations site, https://ir.forwardaircorp.com/esg .
In 2022, we streamlined our internal data collection process, completed our Greenhouse Gas (“GHG”) inventory, set measurable targets and goals, and published our second ESG report. In 2023, we completed our GHG inventory, collected additional data, and published our third ESG report.
We believe our Intermodal segment has a competitive advantage over other drayage providers because we deliver more reliable service while offering greater shipment visibility and security. Additionally, we believe our Intermodal segment is one of the leading providers of drayage and related services in North America today.
We emphasize understanding our client’s business priorities and challenges before designing a solution, aiming to be an extension of our client’s business and seamlessly blending with their operations. We believe our Intermodal segment has a competitive advantage over other drayage providers because we deliver more reliable service while offering greater shipment visibility and security.
Average Weekly Volume in Pounds Year (In millions) 2009 28.5 2010 32.6 2011 34.0 2012 34.9 2013 35.4 2014 37.4 2015 47.2 2016 46.5 2017 49.5 2018 50.2 2019 48.6 2020 46.3 2021 55.4 2022 54.8 2023 52.7 Transportation Expedited Freight secures transportation capacity from four sources: • independent contractors that own and lease their equipment (primarily tractors) to the Company (“Leased Capacity Providers”); • third-party contracted motor carriers; • capacity secured by transportation intermediaries, including freight brokers; and • Company-owned equipment operated by employee drivers.
Average Weekly Volume in Pounds Year (In millions) 2009 28.5 2010 32.6 2011 34.0 2012 34.9 2013 35.4 2014 37.4 2015 47.2 2016 46.5 2017 49.5 2018 50.2 2019 48.6 2020 46.3 2021 55.4 2022 54.8 2023 52.7 2024 54.3 Operations Expedited Freight’s primary office is located near Greenville TN, with 59 additional locations spread across North America and Mexico.
Omni deploys global, multi-modal capabilities, which allows the salespeople to partner across customers’ organizations and supply chains by offering a comprehensive suite of global services. Services Provided Our services are classified into two reportable segments: Expedited Freight and Intermodal.
Omni deploys global, multi-modal capabilities, which allows the salespeople to partner across customers’ organizations and supply chains by offering a comprehensive and a unique suite of global services to meet highly complex customer needs, including global logistics services, visibility and execution. 11 Intermodal Overview Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.
In 2023, Intermodal’s ten largest customers account ed for approximately 28% of its operating revenue and had no single customer with revenue greater than 10% of Intermodal revenue for 2023. 12 Competition We compete in the North American transportation and logistics services industry, and the markets in which we operate are highly competitive, very fragmented and historically have few barriers to entry.
Competition We compete in the North American transportation and logistics services industry, and the markets in which we operate are highly competitive, very fragmented and historically have few barriers to entry. We compete with a large number of other asset-light logistics companies, asset-based carriers, integrated logistics companies, and third-party freight brokers.
In addition, as of December 31, 2023, we also had 453 leased trailers in our fleet. As of December 31, 2023, we had 306 owned tractors and straight trucks in our fleet, with an average age of approximately four years.
In addition, as of December 31, 2024, we also had 351 leased trailers in our fleet.
Expedited Freight offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services. We have, and plan to continue to grow our LTL geographic footprint through greenfield start-ups as well as acquisitions. During the year ended December 31, 2023, Expedited Freight accounted for 80.0% of our consolidated revenue. Intermodal.
Expedited Freight offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services. During the year ended December 31, 2024, Expedited Freight accounted for approximately 44% of our consolidated revenue. Omni Logistics. An asset-light, high-touch logistics and supply chain management company with deep customer relationships in high-growth end markets.
The average weekly volume of freight moving through our LTL network was approximately 52.7 million pounds per week and our average shipment weighed approximately 802 pounds in 2023. Although we impose no significant size or weight restrictions, we focus our marketing and price structure on shipments of 200 p ou nds or more.
The average weekly volume of freight moving through our LTL network was approximately 54.3 million pounds per week and our average shipment weighed approximately 840 pounds in 2024.
Since 2017, we added four female directors to our Board, two directors who identify as Hispanic, one director who identifies as African American and one director who identifies as Indian. We are committed to further increase the percentage of diverse representation in our overall employee base as well as to further initiatives for compensation equity, employee engagement, development and inclusion.
Our commitment to diversity and inclusion starts at the top with a highly skilled and board with diverse experience and background. We are committed to fostering a culture of diverse representation in our overall employee base as well as furthering initiatives for compensation equity, employee engagement, development and inclusion.
This acquisition and the related debt are discussed in detail within Note 3, Acquisitions to our Consolidated Financial Statements included in this Form 10-K. Omni, founded in 2000 and headquartered in Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with deep customer relationships in high-growth end markets.
The Omni acquisition and the related debt are discussed in detail within Note 3, Acquisitions to our Consolidated Financial Statements included in this Annual Report on Form 10-K. Services Provided Our services are classified into three reportable segments: Expedited Freight, Omni Logistics , and Intermodal.
We have established a preliminary goal to reduce absolute Scope 1 and Scope 2 GHG emissions (combined) by 2030 from a 2021 base year. As part of this goal, in 2022, we partnered with carbon capture company Remora, reserving ten of its mobile devices for a pilot project expected to launch in the next two years.
We have established a preliminary goal to reduce absolute Scope 1 and Scope 2 GHG emissions (combined) by 2030 from a 2021 base year. We are currently updating our ESG roadmap to align our previously stated carbon reduction goals with our new operations as a joint organization with Omni Logistics.
A small portion of Expedited Freight’s transportation capacity is provided by employee drivers operating company-owned equipment. Other Services Expedited Freight provides additional value-added services that are integrated into the overall operation of its network.
Other Services Expedited Freight provides additional value-added services that are integrated into the overall operation of its network. Expedited Freight offers truckload services which include expedited truckload brokerage, dedicated fleet services, as well as high security and temperature-controlled logistics services.
As a result, we plan to invest in new terminals, in our trailer fleet and technology to enable us to efficiently handle the increased freight in the new markets. 9 • Manage Pricing and Freight Characteristics.
As a result, we plan to invest in new locations, in our asset base, and in technology to enable efficient handling of increased freight in new markets. • Transformation. On January 25, 2024, we completed the Omni Acquisition, which has allowed us to expand our operations both domestically and internationally.
Our common stock is listed on the Nasdaq Global Select Market under the symbol “FWRD”. Discontinued Operations In December 2023, our Board of Directors approved a strategy to divest of the Final Mile business (“Final Mile”), and the sale of Final Mile was completed on December 20, 2023.
Forward was formed as a corporation under the laws of the State of Tennessee on October 23, 1981. Our common stock is listed on the Nasdaq Global Select Market under the symbol “FWRD”.
In 2023, Expedited Freight’s ten largest customers accounted for approximately 33% of its revenue and no single customer had revenue greater than 10% of Expedited Freight revenue for 2023. Intermodal Overview Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.
In 2024, Expedited Freight’s ten largest customers accounted for approximately 27% of its revenue and no single customer had revenue greater than 10% of Expedited Freight revenue. Omni Logistics Overview Omni, founded in 2000 and headquartered near Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets.
Removed
On April 23, 2020, we made a decision to divest of Pool and the sale was completed on February 12, 2021. As a result, the results of Pool were classified to “Loss from discontinued operation, net of tax” in our Consolidated Statements of Comprehensive Income for the year ended December 31, 2021.
Added
Omni provides business-to-business (“B2B”) solutions to prominent United States-based customers across a variety of attractive end markets, including the technology, retail, media, logistics, life sciences and e-commerce sectors, many of which have had long-term relationships with Omni. During the year ended December 31, 2024, Omni accounted for approximately 47% of our consolidated revenue. Intermodal.
Removed
Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and were allocated to continuing operations.
Added
During the year ended December 31, 2024, Intermodal accounted for approximately 9% of our consolidated revenue. Strategy In January 2025, the Board of Directors (the “Board”) announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value.
Removed
We have, and plan to grow Intermodal’s geographic footprint through greenfield start-ups where we do not have an acceptable acquisition target, as well as acquisitions. During the year ended December 31, 2023, Intermodal accounted for 20.0% of our consolidated revenue.
Added
The Board will consider a range of options, including a potential sale, merger or other strategic or financial transaction relative to the long-term value potential of the Company on a standalone basis.
Removed
Over the past several years, we have implemented initiatives to improve the freight characteristics in our LTL network that has allowed us to increase our yield and revenue per shipment. • Continue to Focus on Delivering Best-in-Class Service.
Added
We plan on strategically transforming the combined company through which we go to market, the human capital needs of our larger and more diverse service enterprise, the systems we utilize in order to streamline our joined cost structure, and focusing our teams efforts around our service offerings as opposed to our historical approach. • Delivering Best-in-Class Service.
Removed
We continue to evaluate and pursue acquisitions that help expand geographic reach while gaining the business base of the acquired entity. In 2014 we created the foundation for what is our Intermodal segment by acquiring Central States Trucking Co. (“CST”). Since the acquisition of CST, we have completed fifteen additional intermodal acquisitions.
Added
These locations support our shipping and logistical services to our growing international customer base.
Removed
In May 2021, we acquired J&P Hall Express Delivery to expand the expedited LTL footprint across the Southeast. In January 2023, we acquired Land Air Express to accelerate the expedited LTL footprint expansion in the middle part of the United States.
Added
Transportation Expedited Freight secures transportation capacity from four sources: • independent contractors that own and lease their equipment (primarily tractors) to the Company (“Leased Capacity Providers”); • third-party contracted motor carriers; • capacity secured by transportation intermediaries, including freight brokers; and • Company-owned equipment operated by employee drivers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

107 edited+42 added−28 removed156 unchanged
Biggest changeNo assurance can be given that we will be able to attract or retain key employees of the Company and Omni to the same extent that those companies have been able to attract or retain their own employees in the past. 28 We may not be able to retain customers or suppliers, or customers or suppliers may seek to modify contractual obligations with us, which could have an adverse effect on the combined company’s business and operations.
Biggest changeWe may not be able to retain customers or suppliers, or customers or suppliers may seek to modify contractual obligations with us, which could have an adverse effect on our business and operations. Third parties may terminate or alter existing contracts or relationships with us.
However, we have no assurance that our employees will not unionize in the future, which could increase our operating costs and force us to alter our operating methods. This could have a material adverse effect on our operating results. Our charter and bylaws and provisions of Tennessee law could discourage or prevent a takeover that may be considered favorable.
However, we have no assurance that our employees will not unionize in the future, which could increase our operating costs and force us to alter our operating methods. This could have a material adverse effect on our operating results. 38 Our charter and bylaws and provisions of Tennessee law could discourage or prevent a takeover that may be considered favorable.
Below is a summary of our risk retention on vehicle liability insurance coverage maintained by us up to $10,000 (in thousands): Risk Retention Frequency Layer Policy Term Expedited Freight LTL business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2023 to 10/1/2024 Truckload business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2023 to 10/1/2024 LTL, Truckload and Intermodal businesses $ 5,000 Policy Term Aggregate² $5,000 to $10,000 10/1/2023 to 10/1/2024 Intermodal $ 1,000 Occurrence/Accident¹ $0 to $1,000 10/1/2023 to 10/1/2024 ¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident. ² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute. 35 Also, from time to time, when brokering freight, we may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and we maintain third-party liability insurance coverage with a $100 deductible per occurrence for our brokered services.
Below is a summary of our risk retention on vehicle liability insurance coverage maintained by us up to $10,000 (in thousands): Risk Retention Frequency Layer Policy Term Expedited Freight LTL business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2024 to 10/1/2025 Truckload business $ 5,000 Occurrence/Accident¹ $0 to $5,000 10/1/2024 to 10/1/2025 LTL, Truckload and Intermodal businesses $ 5,000 Policy Term Aggregate² $5,000 to $10,000 10/1/2024 to 10/1/2025 Intermodal $ 1,000 Occurrence/Accident¹ $0 to $1,000 10/1/2024 to 10/1/2025 ¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident. ² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute. 35 Also, from time to time, when brokering freight, we may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and we maintain third-party liability insurance coverage with a $100 deductible per occurrence for our brokered services.
There can be no assurance that our historic operating patterns will continue in future periods as we cannot influence or reliably forecast many of these factors. Our ability to predict and adapt to future seasonality in our business will affect our operations and financial results. 21 Our results of operations may be affected by harsh weather conditions, disasters and pandemics.
There can be no assurance that our historic operating patterns will continue in future periods as we cannot influence or reliably forecast many of these factors. Our ability to predict and adapt to future seasonality in our business will affect our operations and financial results. Our results of operations may be affected by harsh weather conditions, disasters and pandemics.
These competitive pressures may cause a decrease in our volume of freight, require us to lower the prices we charge for our services and adversely affect our results of operations, growth prospects and profitability. Difficulty in forecasting timing or volumes of customer shipments could adversely impact our margins and operating results and lead to difficulties in predicting liquidity.
These competitive pressures may cause a decrease in our volume of freight, require us to lower the prices we charge for our services and adversely affect our results of operations, growth prospects and profitability. 25 Difficulty in forecasting timing or volumes of customer shipments could adversely impact our margins and operating results and lead to difficulties in predicting liquidity.
While we have not incurred material losses with respect to this litigation in the past, we may be subject to material claims in the future. 36 We operate in a regulated industry, and increased costs of compliance with, or liability for violation of, existing or future regulations and enforcement could have a material adverse effect on our business.
While we have not incurred material losses with respect to this litigation in the past, we may be subject to material claims in the future. We operate in a regulated industry, and increased costs of compliance with, or liability for violation of, existing or future regulations and enforcement could have a material adverse effect on our business.
Current and prospective employees of the Company and Omni may experience uncertainty about their future role with the Company and Omni until strategies with regard to these employees are announced or executed, which may impair our ability to attract, retain and motivate key management, sales, marketing, technical and other personnel following the Omni Acquisition.
Current and prospective employees of the Company and Omni may experience uncertainty about their future role with the Company and Omni until strategies with regard to these employees are announced or executed, which may impair our ability to 22 attract, retain and motivate key management, sales, marketing, technical and other personnel following the Omni Acquisition.
If we are unable to increase our prices sufficiently to offset increasing expenses, then inflation could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. 19 Volatility in fuel prices, shortages of fuel or the ineffectiveness of our fuel surcharge program could have a material adverse effect on our results of operations and profitability.
If we are unable to increase our prices sufficiently to offset increasing expenses, then inflation could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. Volatility in fuel prices, shortages of fuel or the ineffectiveness of our fuel surcharge program could have a material adverse effect on our results of operations and profitability.
Further, a loss of a significant customer could have a material adverse effect on our business, results of operations, financial condition and cash flows. 24 Reductions in the available supply or increases in the cost of new equipment may adversely impact our profitability and cash flows.
Further, a loss of a significant customer could have a material adverse effect on our business, results of operations, financial condition and cash flows. Reductions in the available supply or increases in the cost of new equipment may adversely impact our profitability and cash flows.
Business outside of the U.S. is subject to various risks, including: • changes in tariffs, trade restrictions, and trade agreements; • compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international business; • difficulties in managing or overseeing foreign operations and agents; • economic and political instabilities in some countries; • new and different sources of competition and laws and business practices favoring local competitors; • limitations on the repatriation of funds because of foreign exchange controls; • different liability standards; • intellectual property laws of countries that do not protect our rights in our intellectual property, including but not limited to, our proprietary information systems, to the same extent as the laws of the U.S.; • compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, customs, anti-boycott, sanctions and embargoes, antitrust, data transfer, storage and protection, ESG and industry-specific laws and regulations, and our ability to identify and respond timely to compliance issues when they occur; and • the impact of uncertainties regarding the United Kingdom’s exit from the European Union (the “EU”) on regulations, current, taxes and operations, including possible disruptions to the sale of our services or the movement of our people between the United Kingdom, the EU and other locations.
Business outside of the U.S. is subject to various risks, including: • changes in tariffs, trade restrictions, and trade agreements; • compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international business; • difficulties in managing or overseeing foreign operations and agents; • economic and political instabilities in some countries; • new and different sources of competition and laws and business practices favoring local competitors; • limitations on the repatriation of funds because of foreign exchange controls; • different liability standards; • exposure to increased risk of loss from foreign currency fluctuations and exchange controls; • intellectual property laws of countries that do not protect our rights in our intellectual property, including but not limited to, our proprietary information systems, to the same extent as the laws of the U.S.; • compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, customs, anti-boycott, sanctions and embargoes, antitrust, data transfer, storage and protection, ESG and industry-specific laws and regulations, and our ability to identify and respond timely to compliance issues when they occur; and • the impact of uncertainties regarding the United Kingdom’s exit from the European Union (the “EU”) on regulations, current, taxes and operations, including possible disruptions to the sale of our services or the movement of our people between the United Kingdom, the EU and other locations.
Disasters, including severe weather, such as hurricanes or blizzards, and public health issues, such as pandemics, such as the COVID-19 pandemic, occurring in the United States or abroad, could result in the temporary lack of an adequate work force and the temporary disruption in the transport of goods to or from overseas which could prevent, delay or reduce freight volumes and could have an adverse impact on consumer spending and confidence levels, all of which could result in decreased revenues.
Disasters, including severe weather, such as hurricanes or blizzards, and public health issues, such as pandemics, occurring in the United States or abroad, could result in the temporary lack of an adequate work force and the temporary disruption in the transport of goods to or from overseas which could prevent, delay or reduce freight volumes and could have an adverse impact on consumer spending and confidence levels, all of which could result in decreased revenues.
In addition, the loss of key personnel could diminish the anticipated benefits of the Omni Acquisition. If key employees of the Company or Omni depart, the integration of the companies may be more difficult and our business following the Omni Acquisition may be harmed.
In addition, the loss of key personnel could diminish the anticipated benefits of the Omni Acquisition. If key employees depart, the integration of the companies may be more difficult and our business following the Omni Acquisition may be harmed.
Therefore, the timing of the combined company’s revenues will be impacted by factors out of the combined company’s control, such as a sudden change in consumer demand for retail goods, changes in trade tariffs, product launches and/or manufacturing production delays.
Therefore, the timing of our revenues will be impacted by factors out of our control, such as a sudden change in consumer demand for retail goods, changes in trade tariffs, product launches and/or manufacturing production delays.
At times, the Internal Revenue Service, the Department of Labor and state authorities have asserted that independent contractor transportation capacity providers like our Leased Capacity Providers and third-party motor carriers are “employees,” rather than “independent contractors.” For example, the Department of Labor recently adopted a final rule for determining whether a worker is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”), Similarly, the California Assembly Bill 5 (“California AB5”) provides a test for determining worker classification that is broadly viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships.
At times, the Internal Revenue Service, the Department of Labor and state authorities have asserted that independent contractor transportation capacity providers like our Leased Capacity Providers and third-party motor carriers are “employees,” rather than “independent contractors.” For example, the Department of Labor recently adopted a final rule for determining whether a worker is an employee or independent contractor under the Fair Labor Standards Act (“FLSA”), Similarly, California AB5 provides a test for determining worker classification that is broadly viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships.
Each acquisition has numerous risks including: • difficulty in integrating the operations and personnel of the acquired company; • unanticipated costs to support new business lines or separate legal entities; • disruption of our ongoing business, distraction of our management and employees from other opportunities and responsibilities due to integration issues; • additional indebtedness or the issuance of additional equity to finance future acquisitions, which could be dilutive to our shareholders; • inability to access capital markets on acceptable terms or at all; • potential loss of key customers or employees of acquired companies along with the risk of unionization of employees; • pricing pressure resulting from differing customer pricing practices of the acquired company or varying pricing dynamics in the acquired company's market; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • potential impairment of tangible and intangible assets and goodwill acquired as a result of acquisitions; and • potential failure of the due diligence processes to identify significant issues with legal and financial liabilities and contingencies, among other things.
Each acquisition has numerous risks including: • difficulty in integrating the operations and personnel of the acquired company; • unanticipated costs to support new business lines or separate legal entities; • disruption of our ongoing business, distraction of our management and employees from other opportunities and responsibilities due to integration issues; • additional indebtedness or the issuance of additional equity to finance future acquisitions, which could be dilutive to our shareholders; • inability to access capital markets on acceptable terms or at all; • potential loss of key customers or employees of acquired companies along with the risk of unionization of employees; • pricing pressure resulting from differing customer pricing practices of the acquired company or varying pricing dynamics in the acquired company's market; • inability to achieve the financial and strategic goals for the acquired and combined businesses; • potential impairment of tangible and intangible assets and goodwill acquired as a result of acquisitions; and • potential failure of the due diligence processes to identify significant issues with legal and financial liabilities and contingencies, among other things. 28 The timing and number of acquisitions we pursue may also cause volatility in our financial results.
Although the Company expects that the elimination of duplicative costs, strategic benefits, additional income as well as the realization of other efficiencies related to the integration of the businesses may offset incremental transaction, merger - related and integration costs over time, any net benefit may not be achieved in the near term or at all.
Although we expect that the elimination of duplicative costs, strategic benefits, additional income as well as the realization of other efficiencies related to the integration of the businesses may offset incremental transaction, merger-related and integration costs over time, any net benefit may not be achieved in the near term or at all.
If we are unable to retain personnel, including our and Omni’s key management, who are critical to the successful integration and future operations of the companies, the combined company could face operational disruptions, loss of existing customers or loss of sales to existing customers, loss of key information, expertise or know - how, and unanticipated additional recruitment and training costs.
If we are unable to retain personnel, including our and Omni’s key management, who are critical to the successful integration and future operations of the business, we could face operational disruptions, loss of existing customers or loss of sales to existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs.
Violation of laws or regulations may result in increased liabilities including penalties and fines as well as reputational harm. 38 We may be subject to governmental export and import controls that could impair its ability to compete in international markets and subject it to liability if it violates such controls.
Violation of laws or regulations may result in increased liabilities including penalties and fines as well as reputational harm. We may be subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if it violates such controls.
Any decreased use of the combined company’s services or limitation on the combined company’s ability to export its customers’ products would likely adversely affect the combined company’s business, operating results and financial results. If our employees were to unionize, our operating costs would likely increase. None of our employees are currently represented by a collective bargaining agreement.
Any decreased use of our services or limitation on our ability to export our customers’ products would likely adversely affect our business, operating results and financial results. If our employees were to unionize, our operating costs would likely increase. None of our employees are currently represented by a collective bargaining agreement.
If Omni has undisclosed liabilities, we, as a successor owner, will be responsible for such undisclosed liabilities. Such undisclosed liabilities could have an adverse effect on the business, results of operations, financial condition and cash flows of the Company after the closing of the Omni Acquisition.
If Omni has undisclosed liabilities, we, as a successor owner, will be responsible for such undisclosed liabilities and will not be indemnified for any of these liabilities. Such undisclosed liabilities could have an adverse effect on the business, results of operations, financial condition and cash flows of the Company after the closing of the Omni Acquisition.
There are political and trade tensions among a number of the world’s major economies in which the combined company will operate. These tensions have resulted in the implementation of tariff and non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against certain countries, individuals and companies.
There are political and trade tensions among a number of the world’s major economies in which we operate. These tensions have resulted in the implementation of tariff and non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against certain countries, individuals and companies.
A significant portion of the combined company’s revenues will be derived from customers in industries, such as retail and technology, that exhibit shipping patterns that are tied closely to consumer demand and from customers in industries in which shipping patterns are dependent upon just-in-time production schedules.
A significant portion of our revenues will be derived from customers in industries, such as retail and technology, that exhibit shipping patterns that are tied closely to consumer demand and from customers in industries in which shipping patterns are dependent upon just-in-time production schedules.
These customers could choose to divert all or a portion of their business with us to one of our competitors, demand pricing concessions for our services, require us to provide enhanced services that increase our costs, or develop their own shipping and distribution capabilities. Our Expedited Freight and Intermodal segments generally do not have long-term contracts with their customers.
These customers could choose to divert all or a portion of their business with us to one of our competitors, demand pricing concessions for our services, require us to provide enhanced services that increase our costs, or develop their own shipping and distribution capabilities. We generally do not have long-term contracts with their customers.
If any customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then our business and results of operations may be harmed.
If any customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with us then our business and results of operations may be harmed.
The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of customers, interest and currency rate fluctuations, inflation, supply chain disruptions, labor shortages and other economic factors beyond our control.
The transportation and supply chain industries historically have experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of customers, interest and currency rate fluctuations, inflation, supply chain disruptions, labor shortages and other economic factors beyond our control.
The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region. As we continue to expand our business internationally, we expose the combined company to increased risk of loss from foreign currency fluctuations, as well as longer accounts receivable payment cycles.
The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region. As we continue to expand our business internationally, we are exposed to increased risk of loss from foreign currency fluctuations, as well as longer accounts receivable payment cycles.
It is possible that the integration process could result in the loss of key Company or Omni employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated.
It is possible that the integration process could result in the loss of key Company or Omni employees, the loss of customers, the disruption of our ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated.
In addition, the instruments contain customary events of default upon the occurrence of which, after any applicable grace period, the indebtedness could be declared immediately due and payable.
In addition, the instruments contain customary events of default upon the occurrence of which, after any applicable grace period, the indebtedness could be declared immediatel y due and payable.
In addition, any increased direct sales efforts to direct shippers and beneficial cargo owners, as well as the potential acquisition of other businesses that may be perceived as competing more directly with our customers, could adversely affect our expenses, pricing, third-party relationships and revenues, particularly if such actions affect any of these key customers.
In addition, any increased direct sales efforts to direct shippers and beneficial cargo owners, as well as the potential acquisition of other businesses that may be perceived as competing more directly with our customers, could adversely affect our expenses, pricing, third-party relationships and revenues, particularly if such actions affect any of these key customers. 23 Our business is subject to seasonal trends.
Specifically, the following issues, among others, must be addressed in integrating the operations of the company and Omni to realize the anticipated benefits of the Omni Acquisition so the combined company performs as expected and realizes its anticipated cost and revenue synergy opportunities: • combining the companies’ operations and corporate functions; • combining the businesses of the Company and Omni and meeting the capital requirements of the combined company following the merger, in a manner that permits the combined company to achieve cost savings and revenue synergies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all; • integrating the companies’ personnel; • integrating the companies’ technologies; • integrating and unifying the offerings and services available to customers; • identifying and eliminating redundant and underperforming functions and assets; • harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; • maintaining existing agreements with customers, providers and vendors and avoiding delays in entering into new agreements with prospective customers, providers and vendors; • addressing possible differences in business backgrounds, corporate cultures and management philosophies; • consolidating the companies’ administrative and information technology infrastructure; • coordinating distribution and marketing efforts; • managing the movement of certain positions to different locations; • coordinating geographically dispersed organizations; and • effecting actions that may be required in connection with obtaining the requisite regulatory approvals.
Specifically, the following issues, among others, must be addressed as we continue to execute on the Omni integration in order to realize the anticipated benefits of the Omni Acquisition and realize the anticipated cost and revenue synergy opportunities: 20 • combining the companies' operations and corporate functions; • combining the businesses of the Company and Omni and meeting the capital requirements of the combined company following the merger, in a manner that permits the combined company to achieve cost savings and revenue synergies anticipated to results from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all; • integrating the companies' personnel; • integrating the companies' technologies; • integrating and unifying the offerings and services available to customers; • identifying and eliminating redundant and underperforming functions and assets; • harmonizing the companies' operating practices employee development and compensation programs, internal controls and other policies, procedures and processes; • maintaining existing agreements with customers, providers and vendors and avoiding delays in entering into new agreements with prospective customers, providers and vendors; • retaining existing customers and supplies, including those directly competing with Omni; • addressing possible differences in business backgrounds, corporate cultures and management philosophies; • consolidating the companies' administrative and information technology infrastructure; • coordinating distribution and marketing efforts; • managing the movement of certain positions to different locations; • coordinating geographically dispersed organizations; and • effecting actions that may be required in connection with obtaining the requisite regulatory approvals.
In periods of rapid change, it is more difficult to match our staffing levels to our business needs. • If the domestic freight forwarder, Expedited Freight’s primary customer type, is disintermediated, and we are not able to transition effectively into servicing other customers, like third-party logistics companies and beneficial cargo owners, our business and financial results could be materially adversely affected.
In periods of rapid change, it is more difficult to match our staffing levels to our business needs. • If the domestic freight forwarder, Expedited Freight’s primary customer type, is disintermediated, and we are not able to transition effectively into servicing other customers, like third-party logistics companies and beneficial cargo owners, our business and financial results could be materially adversely affected. 19 Inflation may increase our operating expenses and lower profitability.
Risks and requirements related to transacting business in foreign countries may result in increased liabilities, including penalties and fines as well as reputational harm. As a result of the Omni Acquisition, we will be exposed to trade and economic sanctions and other restrictions imposed by the United States or other governments or organizations. The U.S.
Risks and requirements related to transacting business in foreign countries may result in increased liabilities, including penalties and fines as well as reputational harm. We are exposed to trade and economic sanctions and other restrictions imposed by the United States or other governments or organizations. The U.S.
We may be unable to accurately determine the needs of our customers and the trends in the transportation services industry or to design and implement the appropriate features and functionality of our information technology systems in a timely and cost-effective manner, which could put us at a competitive disadvantage and result in a decline in our efficiency, decreased demand for our services and a corresponding decrease in our revenues.
For instance, we have implemented artificial intelligence applications to enhance our operations, but we may be unable to accurately determine the needs of our customers and the trends in the transportation services industry or to design and implement the appropriate features and functionality of our information technology systems in a timely and cost-effective manner, which could put us at a competitive disadvantage and result in a decline in our efficiency, decreased demand for our services and a corresponding decrease in our revenues.
Upon the closing of the Omni Acquisition, Omni and its subsidiaries became subsidiaries of the Company, and now need to comply with the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) and the rules and regulations subsequently implemented by the SEC and other regulatory bodies.
Upon the closing of the Omni Acquisition, Omni and its subsidiaries became subject to Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”) and the rules and regulations subsequently implemented by the SEC and other regulatory bodies.
Any downgrade in our credit rating or the ratings of our indebtedness, or adverse conditions in the debt capital markets, could: • adversely affect the trading price of, or market for, our debt securities; • increase interest expense under our facilities; • Increase the cost of, and adversely affect our ability to refinance, our existing debt; and • adversely affect our ability to raise additional debt.
Any downgrade in our credit rating or the ratings of our indebtedness, or adverse conditions in the debt capital markets, could: • adversely affect the trading price of, or market for, our debt securities; • increase interest expense under our facilities; • Increase the cost of, and adversely affect our ability to refinance, our existing debt; and • adversely affect our ability to raise additional debt. 31 The instruments governing our indebtedness impose certain restrictions on our business.
The transportation industry is subject to legislative and regulatory changes that can affect the economics of our business by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services.
The transportation and supply chain industries are subject to legislative and regulatory changes that can affect 36 the economics of our business by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services.
The restrictions placed on us include maintenance of an interest coverage ratio and limitations on our ability to incur certain secured debt, enter into certain sale and lease‐back transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
The restrictions placed on us include maintenance of a consolidated first lien net leverage ratio and limitations on our ability to incur certain secured debt, enter into certain sale and lease‐back transactions and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
Additionally, customers or third parties upon whom we rely on face similar threats, which could directly or indirectly impact our business and operations. The occurrence of a cyber-incident or attack could have a material adverse effect on our business, financial condition and results of operations. For more information about our cybersecurity oversight, see “Item 1C, Cybersecurity”.
Additionally, customers or third parties upon whom we rely on face similar threats, which could directly or indirectly impact our business and operations. The occurrence of a cyber-incident or attack could have a material adverse effect on our business, financial condition and results of operations.
The success of the Omni Acquisition will depend in part on the retention of personnel critical to the business and operations of the Company following the Omni Acquisition due to, for example, their technical skills or management expertise.
In addition, the successful integration of Omni depends in part on the retention of personnel critical to the business and operations of the Company following the Omni Acquisition due to, for example, their technical skills or management expertise.
We have $134,789 of net definite-lived intangible assets on our consolidated balance sheet at December 31, 2023, which we expect will increase significantly as a result of the Omni Acquisition. Our definite-lived intangible assets primarily represent the value of customer relationships and non-compete agreements that were recorded in conjunction with our various acquisitions.
We have $999,216 of net definite-lived intangible assets on our consolidated balance sheet at December 31, 2024, which significantly increased as a result of the Omni Acquisition. Our definite-lived intangible assets primarily represent the value of customer relationships, non-compete agreements, and trade names that were recorded in conjunction with our various acquisitions.
The combined company will be largely reliant on Leased Capacity Providers that lease their equipment to the combined company and third-party transportation capacity providers to perform its freight transportation and other operations. These providers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses.
We are largely reliant on Leased Capacity Providers that lease their equipment to us and third-party transportation capacity providers to perform its freight transportation and other opera tions. These providers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses.
The segments of the freight transportation industry in which we participate are highly competitive, very fragmented and historically have few barriers to entry. We compete with a large number of other asset-light logistics companies, asset-based carriers, integrated logistics companies, and third-party freight brokers. To a lesser extent, we also compete with integrated air cargo carriers and passenger airlines.
The segments of the freight transportation and supply chain industries in which we participate are highly competitive, very fragmented and historically have few barriers to entry. We compete with a large number of other asset-light logistics companies, asset-based carriers, integrated logistics companies, and third-party freight brokers.
In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future. Our business is subject to cybersecurity risks. Our operations depend on effective and secure information technology systems. Threats to information technology systems, including as a result of cyber-attacks and cyber incidents continue to grow.
In addition, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future. Our business is subject to cybersecurity risks. Our operations depend on effective and secure information technology systems.
Whether internally developed or purchased, it is possible that users of these technologies could be claimed to infringe upon or violate the intellectual property rights of third parties.
We use both internally developed and purchased technologies in conducting our business. Whether internally developed or purchased, it is possible that users of these technologies could be claimed to infringe upon or violate the intellectual property rights of third parties.
We believe these risks are further heightened given the dispute with Omni, which was resolved prior to today, but which may make it more challenging than expected to operate the combined entity in a way that will achieve the previously anticipated benefits and synergies.
We believe these risks are further heightened given the dispute with Omni, which was resolved prior to today, but which may make it more challenging to achieve the previously anticipated benefits and synergies.
The Company will continue to incur integration costs following the Omni Acquisition as there are a large number of processes, policies, procedures, operations, technologies, facilities and systems that must be integrated.
The Company will continue to incur integration costs following the Omni Acquisition as we continue to integrate a large number of processes, policies, procedures, operations, technologies, facilities and systems.
If the carrying value of the reporting unit exceeded the estimated fair value of the reporting unit, we would be required to record a non-cash impairment charge calculated as the amount by which the carrying value exceeds the reporting units estimated fair value.
If the carrying value of the reporting unit exceeded the estimated fair value of the reporting unit, we would be required to record a non-cash impairment charge calculated as the amount by which the carrying value exceeds the reporting units estimated fair value. In 2024, the Omni Logistics segment’s fair value was determined to be less than its carrying value.
These cybersecurity risks could: • Disrupt our operations and damage our information technology systems; • Subject us to various legal claims, penalties and fees by third parties; • Negatively impact our ability to compete; • Enable the theft or misappropriation of funds; • Cause the loss, corruption or misappropriation of proprietary or confidential information, expose us to litigation; and • Result in injury to our reputation, downtime, loss of revenue, and increased costs to prevent, respond to or mitigate cybersecurity events. 33 For example, in December 2020, we detected a ransomware incident (the “Ransomware Incident”) impacting our operational and information technology systems, which caused service delays for our customers.
These cybersecurity risks could: • Disrupt our operations and damage our information technology systems; • Subject us to various legal claims, penalties and fees by third parties; • Negatively impact our ability to compete; • Enable the theft or misappropriation of funds; • Cause the loss, corruption or misappropriation of proprietary or confidential information, expose us to litigation; and • Result in injury to our reputation, downtime, loss of revenue, and increased costs to prevent, respond to or mitigate cybersecurity events.
If such measurement indicates impairment, we would be required to record a non-cash impairment charge to our consolidated statement of comprehensive income in the amount that the carrying value of these assets exceeds the estimated fair value of the assets. 22 We also have $278,706 of goodwill on our consolidated balance sheet at December 31, 2023 and will have significantly more goodwill on our balance sheet as a result of the Omni Acquisition.
If such measurement indicates impairment, we would be required to record a non-cash impairment charge to our consolidated statement of comprehensive income in the amount that the carrying value of these assets exceeds the estimated fair value of the assets. We also have $522,712 of goodwill on our consolidated balance sheet at December 31, 2024.
As a result, our profitability and results of operations could be adversely affected. Because a portion of our network costs are fixed, any factors that result in a decrease in the volume or revenue per pound of freight shipped through our networks will adversely affect our results of operations.
Because a portion of our costs are fixed, any factors that result in a decrease in the volume or revenue per pound of freight shipped through our networks will adversely affect our results of operations. Our operations, particularly our networks of hubs and terminals, represent substantial fixed costs.
While no customer accounted for more than 10% of consolidated revenues for the calendar year ended December 31, 2023, our top ten customers, based on revenue, accounted for approximately 26% of our revenue.
While no customer accounted for more than 10% of consolidated revenues for the calendar year ended December 31, 2024, our top ten customers, based on revenue, accounted for approxim ately 24% of our re venue.
These restrictions may affect our ability to operate our business, to plan for, or react to, changes in the market conditions or our capital needs and may limit our ability to take advantage of potential business opportunities as they arise.
The instruments governing our indebtedness contain certain covenants imposing restrictions on our business. These restrictions may aff ect our ability to operate our business, to plan for, or react to, changes in the market conditions or our capital needs and may limit our ability to take advantage of potential business opportunities as they arise.
Under specific environmental laws and regulations, we could be held responsible for all of the costs relating to any contamination at our past or present terminals and at third-party waste disposal sites. If we fail to comply with applicable environmental laws and regulations, we could be subject to substantial fines or penalties and to civil and criminal liability.
Under specific environmental laws and regulations, we could be held responsible for all of the costs relating to any contamination at our past or present terminals and at third-party waste disposal sites.
We may be unable to realize all of the anticipated benefits of the Omni Acquisition. The success of the Company’s combination with Omni will depend, in part, on our ability to realize the anticipated benefits and synergies from reorganizing our corporate structure and combining the businesses of the Company and Omni following the Omni Acquisition, including cost and revenue synergies.
Our success will depend, in part, on our ability to realize the anticipated benefits and synergies from reorganizing our corporate structure and combining the businesses of the Compan y and Omni following the Omni Acquisition, including cost and revenue synergies.
Our competition ranges from small operators that compete within a limited geographic area to companies with substantially greater financial and other resources, including greater freight capacity.
To a lesser extent, we also compete with integrated air cargo carriers and passenger airlines. Our competition ranges from small operators that compete within a limited geographic area to companies with substantially greater financial and other resources, including greater freight capacity.
In the event that we do not realize the anticipated benefits of an acquisition or if the acquired business is not successfully integrated, there could be a material adverse effect on our financial condition, results of operations, liquidity and cash flows. 26 Risks Relating to Omni Acquisition The Omni Acquisition may not achieve its intended benefits, and certain difficulties, costs or expenses may outweigh such intended benefits.
In the event that we do not realize the anticipated benefits of an acquisition or if the acquired business is not successfully integrated, there could be a material adverse effect on our financial condition, results of operations, liquidity and cash flows.
Changes in U.S. trade policy could lead to “trade wars” impacting the volume of economic activity in the United States, and as a result, trucking freight volumes may be materially reduced. Such a reduction may materially and adversely affect our business.
Changes in U.S. or international trade policy could lead to “trade wars” impacting the volume of economic activity domestically or internationally, and as a result, trucking freight volumes may be materially reduced. Such a reduction may materially and adversely affect our business. The U.S. has recently enacted and proposed to enact significant new tariffs.
In some instances we will have entered into fixed contract freight rates with customers and, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss. As a result of the Omni Acquisition, the combined company’s international operations subject us to operational and financial risks.
In some instances, we will have entered into fixed contract freight rates with customers and, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss.
If this happens, we may incur additional taxe s, as well as higher workers’ compensation and employee benefit costs, and possibly penalties and interest for prior periods. This could have an adverse effect on our results of operations.
In addition, there may be changes in applicable federal or state tax or other laws or interpretations of those laws. If this happens, we may incur additional taxe s, as well as higher workers’ compensation and employee benefit costs, and possibly penalties and interest for prior periods. This could have an adverse effect on our results of operations.
We have grown through acquisitions, and we may pursue opportunities to expand our business by acquiring other companies in the future. Our ability to grow revenues, earnings and cash flow depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices, realize anticipated synergies and business performance from such acquisitions.
Our ability to grow revenues, earnings and cash flow depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices, realize anticipated synergies and business performance from such acquisitions.
These regulations, the limited equipment availability, and other supply chain factors have resulted and could continue to result in higher prices for new equipment, which could have a material adverse effect on our business, financial condition, and results of operations, particularly our mai ntenance expense, mil eage productivity, and driver retention.
These regulations, the limited equipment availability, and other supply chain factors have resulted and could continue to result in higher prices for new equipment, which could have a material adverse effect on our business, financial condition, and results of operations, particularly our mai ntenance expense, mil eage productivity, and driver retention. 27 Because our Intermodal business depends heavily on freight transiting seaports and railheads, our operating results and financial condition are likely to be adversely affected by any reduction or deterioration in service at seaports or railheads.
Any inability to pay tax or other liabilities or to fund our operations could have a material and adverse effect on our business, results of operations, financial condition and prospects. Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Omni Acquisition.
Any inability to pay tax or other liabilities or to fund our operations could have a material and adverse effect on our business, results of operations, financial condition and prospects.
As a private company, Omni’s internal controls were not designed to be in compliance with Sarbanes-Oxley or any other public company requirements. We will need to ensure that Omni establishes and maintains effective disclosure controls as well as internal controls and procedures for financial reporting, and such compliance efforts may be costly and may divert the attention of management.
As a private company, Omni’s internal controls were not designed to be in compliance with Sarbanes-Oxley or any other public company requirements, and establishing and maintaining such controls and procedures for financial reporting may be costly and may divert the attention of management. In the past, Omni identified significant deficiencies in the adequacy of its internal controls.
Consequently, our ability to continue to expand our Intermodal transportation business is dependent upon the seaports and railheads’ capacit y to handle Intermodal freight.
Our Intermodal business provides first- and last-mile high value container drayage services to and from seaports and railheads. Consequently, our ability to continue to expand our Intermodal transportation business is dependent upon the seaports and railheads’ capacit y to handle Intermodal freight.
In addition, we could incur software development costs for technology that is ultimately not deployed, and thus would require us to write-off these costs, which would negatively impact our financial results. Furthermore, as technology improves, our customers may be able to find alternatives to our services for matching shipments with available freight hauling capacity.
In addition, we could incur software development costs for technology that is ultimately not deployed, and thus would require us to write-off these costs, which would negatively impact our financial results.
The Company has incurred a number of non - recurring costs associated with combining the operations of the two Company and Omni, as well as transaction fees and other costs related to the Omni Acquisition.
We will incur significant transaction, merger-related and integration costs in connection with the Omni Acquisition. The Company has incurred a number of non-recurring costs as well as transaction fees and other costs related to the Omni Acquisition.
In addition, a shortage of qualified drivers could increase driver turnover, decrease asset utilization, limit growth and adversely impact our results of operations. 37 We are subject to various environmental laws and regulations, including legislative and regulatory responses to climate change; and costs of compliance with, or liabilities for violations of, existing or future laws and regulations could significantly increase our costs of doing business.
We are subject to various environmental laws and regulations, including legislative and regulatory responses to climate change; and costs of compliance with, or liabilities for violations of, existing or future laws and regulations could significantly increase our costs of doing business.
In addition, the recent volatility in our common stock has increased the risk of shareholder activism. For example, ClearBridge Investments, LLC publicly released a letter sent to our former Chairman and CEO and Lead Independent Director on August 18, 2023, with the purpose of urging the Board to reconsider the merger.
For example, ClearBridge Investments, LLC publicly released a letter sent to our former Chairman and CEO and Lead Independent Director on August 18, 2023, with the purpose of urging the Board to reconsider the merger. Such shareholder activism, like securities litigation, could result in substantial costs and could divert management’s attention and resources.
Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations. We use both internally developed and purchased technologies in conducting our business.
For more information about our cybersecurity oversight, see “Item 1C, Cybersecurity”. 33 Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations.
If our management is unable to effectively manage our growth, our expenses may increase more than expected, our revenue could decline or may grow more slowly than expected, and we may be unable to implement our growth strategy. 25 We may not make future acquisitions or, if we do, we may not realize the anticipated benefits of future acquisitions and integration of these acquisitions may disrupt our business and occupy management.
If our management is unable to effectively manage our growth, our expenses may increase more than expected, our revenue could decline or may grow more slowly than expected, and we may be unable to implement our growth strategy.
Additionally, many customers ship a significant portion of their goods at or near the end of a fiscal quarter and, therefore, we may not learn of decreases in revenues until late in a quarter.
Additionally, many customers ship a significant portion of their goods at or near the end of a fiscal quarter and, therefore, we may not learn of decreases in revenues until late in a quarter. As a result, our liquidity, cash flows and results of operations may be difficult to predict. Our international operations subject us to operational and financial risks.
We may not be able to engage in any of these activities or engage in these activities on desirable terms when needed, which could result in a default on our indebtedness. 32 Risks Relating to Information Technology and Systems If we fail to maintain our information technology systems, or if we fail to successfully implement new technology or enhancements, we may be at a competitive disadvantage and experience a decrease in revenues.
Risks Relating to Information Technology and Systems If we fail to maintain our information technology systems, or if we fail to successfully implement new technology or enhancements, we may be at a competitive disadvantage and experience a decrease in revenues.
If we cannot secure a sufficient number of Leased Capacity Providers and have to purchase transportation from third-party carriers, our operating costs will increase. If our labor and operating costs increase, we may be unable to offset the increased costs by increasing rates without adversely affecting our business.
If our labor and operating costs increase, we may be unable to offset the increased costs by increasing rates without adversely affecting our business. As a result, our profitability and results of operations could be adversely affected. Higher prices by Leased Capacity Providers and other third-party transportation capacity providers could adversely impact our margins and operating results.
The price we charge our customers for the services we provide is based on our calculations of, among other things, the costs of providing those services.
Our profitability could be negatively impacted if our pricing structure proves to be inaccurate or off-market. The price we charge our customers for the services we provide is based on our calculations of, among other things, the costs of providing those services.
If certain of our suppliers were to seek to terminate or modify an arrangement with us, then we may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all. We will incur significant transaction, merger-related and integration costs in connection with the Omni Acquisition.
If certain of our suppliers were to seek to terminate or modify an arrangement with us, then we may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all. 29 Prior to the Omni Acquisition, Omni was privately-held, and the transition to being a part of a public company, along with our combined ability to manage our expanded business, may require significant resources and management attention.
Moreover, this concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with a large shareholder.
Moreover, this concentration of stock ownership may also adversely affect the trading price of our common stock to the extent investors perceive a disadvantage in owning stock of a company with a large shareholder. 30 We will be required to pay Omni Holders for certain tax savings we may realize, and we expect that the payments we will be required to make may be substantial.
Most of our operating expenses are sensitive to increases in inflation, including equipment prices, real property rental costs, fuel costs, insurance costs, employee wages and purchased transportation. Furthermore, inflation may generally increase costs for materials, supplies and services and capital. With increasing costs, we may have to increase our prices to maintain the same level of profitability.
Most of our operating expenses are sensitive to increases in inflation, including equipment prices, real property rental costs, fuel costs, insurance costs, employee wages and purchased transportation.
If another cybersecurity event occurs, such as the Ransomware Incident, it could harm our business and reputation and could result in a loss of customers.
For example, in December 2020, we detected a ransomware incident (the “Ransomware Incident”) impacting our operational and information technology systems, which caused service delays for our customers. If another cybersecurity event occurs, such as the Ransomware Incident, it could harm our business and reputation and could result in a loss of customers.
Our operations, particularly our networks of hubs and terminals, represent substantial fixed costs. As a result, any decline in the volume or revenue per pound of freight we handle will have an adverse effect on our operating margin and our results of operations.
As a result, any decline in the volume or revenue per pound of freight we handle will have an adverse effect on our operating margin and our results of operations. Several factors can result in such declines, including adverse business and economic conditions affecting shippers of freight as discussed above.
This difficulty may also impede our ability to maintain our delivery schedules, which could make our service less competitive and curtailing our planned growth. A capacity deficit may lead to a decline in the volume of freight we receive from customers or a loss of customers.
This difficulty may also impede our ability to maintain our delivery schedules, which could make our service less competitive and curtailing our planned growth.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCasey holds a Bachelor of Science in Information Technology from Penn State University. • Information Security Governance: The Information Security Governance team is comprised of our senior executives and oversees the development and implementation of the cybersecurity strategy. • Cybersecurity Risk Management Team: The Cybersecurity Risk Management Team is responsible for identifying, assessing, and mitigating cybersecurity risks. • Incident Response Team: The Incident Response Team is responsible for responding to and recovering from cyberattacks.
Biggest changeCasey has had a distinguished career holding IT leadership positions since 2015 and has been employed in the cybersecurity field since 2001. • Information Security Governance: The Information Security Governance team is comprised of our senior executives and oversees the development and implementation of the cybersecurity strategy. • Cybersecurity Risk Management Team: The Cybersecurity Risk Management Team is responsible for identifying, assessing, and mitigating cybersecurity risks. • Incident Response Team: The Incident Response Team is responsible for responding to and recovering from cyberattacks.
Key to this approach is to broadly assess the potential impact of cybersecurity incidents on business operations and financial stability as well as any legal and regulatory requirements regarding cybersecurity. • Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion detection and prevention systems, encryption, access controls, secure coding practices and other security controls, which are regularly evaluated and improved through vulnerability assessments and penetration testing designed to identify weaknesses in our systems and networks. • Incident Response and Recovery Planning: We have a dedicated Incident Response Team dedicated to responding to and recovering from cybersecurity incidents. • Third-Party Risk Management: We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including our vendors who handle our data and systems through due diligence and vendor assessments. • Education and Awareness: We provide regular, training for all employees and contractors, which is designed to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.
Key to this approach is to broadly assess the potential impact of cybersecurity incidents on business operations and financial stability as well as any legal and regulatory requirements regarding cybersecurity. • Technical Safeguards: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion detection and prevention systems, encryption, multi-factor authentication, privileged access management least privileged access controls, secure coding practices and other security controls, which are regularly evaluated and improved through vulnerability assessments and penetration testing designed to identify weaknesses in our systems and networks. • Incident Response and Recovery Planning: We have a dedicated Incident Response Team dedicated to responding to and recovering from cybersecurity incidents. • Third-Party Risk Management: We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including our vendors who handle our data and systems through due diligence and vendor assessments. • Education and Awareness: We provide regular, training for all employees and contractors, which is designed to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.
Based on the materiality assessment, we determine the appropriate disclosure to regulatory agencies, stakeholders, and the public, ensuring transparency and minimizing potential harm. Cybersecurity threats, including as a result of any previous cybersecurity incidents have in the past affected our business.
Based on the materiality assessment, we determine the appropriate disclosure to regulatory agencies, stakeholders, and the public, ensuring transparency and minimizing potential harm. 42
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Casey has had a distinguished career holding IT management positions since 2015 and has been employed in the cybersecurity field since 2001.
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On December 15, 2020, we detected a ransomware incident (the “Ransomware Incident”) impacting our operational and information technology systems, which caused service delays for our customers.
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We suffered unexpected costs and impacts from the Ransomware Incident and may in the future incur costs in connection with any future cybersecurity incidents, including infrastructure investments, remediation efforts and legal claims resulting from the above. It is reasonably likely to affect us, including our business strategy, results of operations or financial condition.
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For more information about our cybersecurity risks, see Item 1A, Risk Factors - “Our business is subject to cybersecurity risks.” 42

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal facilities as of December 31, 2023 were as follows: Location Segment Leased (square feet) Owned (square feet) Number of Doors Atlanta, Georgia Expedited Freight 152,000 115 Chicago, Illinois Expedited Freight 125,000 108 Columbus, Ohio Expedited Freight 146,000 175 Columbus, Ohio Corporate 240,000 Dallas, Texas Expedited Freight 223,000 134 Los Angeles, California Expedited Freight 253,000 56 Miami, Florida Expedited Freight 111,000 39 Newark, New Jersey Expedited Freight 133,000 36 Phoenix, Arizona Expedited Freight 103,000 24 San Francisco, California Expedited Freight 136,000 22 In addition to our owned and leased facilities, we partner with independent agents in 30 cities where the agents handle the freight for us on a commission basis.
Biggest changeOur principal facilities as of December 31, 2024 were as follows: Location Segment Approximate Square Feet Number of Dock Doors United States Atlanta, GA Expedited Freight 152,000 118 Chicago, IL Expedited Freight 125,000 111 Columbus, OH Expedited Freight 386,000 210 Dallas, TX Expedited Freight 223,000 134 Euless, TX 1 Omni Logistics 367,000 87 Los Angeles, CA 1 Expedited Freight 300,000 101 Pico Rivera, CA 1 Omni Logistics 203,000 38 South Brunswick, NJ 1 Omni Logistics 294,000 37 International Hong Kong, China 1 Omni Logistics 360,000 14 Taipei, Taiwan 1 Omni Logistics 432,000 40 1 Leased facilities In addition to our owned and leased facilities, we partner with independent agents in 38 cities where the agents handle the freight for us on a commission basis.
We consider each of our facilities to be in good condition and adequate for its present use. We believe in the event that we need additional facilities, we will be able to purchase or lease facilities on terms and costs similar to those of competitors within the transportation industry.
We believe in the event that should we need additional facilities, we will be able to purchase or lease facilities on terms and costs similar to those of competitors within the transportation industry.
Removed
Item 2. Properties Our headquarters are in Greeneville, Tennessee and we have additional general offices in Atlanta, Georgia and Columbus, Ohio. As of December 31, 2023, we owned six facilitates, including the Columbus, Ohio general office and lease 152 facilities, including the general office in Atlanta, Georgia and our corporate headquarters in Greeneville, Tennessee.
Added
Item 2. Properties Our corporate headquarters are in Greenville, TN. We also have administrative offices in Atlanta, GA, Columbus, OH and Dallas, TX. As of December 31, 2024, we owned 6 of our 259 total properties and leased 253. We consider each of our facilities to be in good condition and adequate for its present use.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings On September 26, 2023, Rodney Bell, Michael A. Roberts and Theresa Woods, three shareholders of Forward Air, filed a complaint (the “Shareholder Complaint”) against us and certain of its directors and officers in the Third District Chancery Court sitting in Greeneville, Tennessee.
Biggest changeItem 3. Legal Proceedings On September 26, 2023, Rodney Bell, Michael A. Roberts and Theresa Woods, (collectively, the "Plaintiffs"), three of our shareholders, filed a complaint against the Company and certain of its directors and officers in the Third District Chancery Court sitting in Greeneville, Tennessee (the "Shareholder Complaint").
The Shareholder Complaint alleges, among other things, that our shareholders have the right to vote on certain transactions contemplated by the Merger Agreement and sought an injunction against the consummation of the transaction until a shareholder vote was held.
The Shareholder Complaint alleges, among other things, that the Company’s shareholders had the right to vote on certain transactions contemplated by the Merger Agreement and sought an injunction against the consummation of the transaction until a shareholder vote was held.
The court initially granted a temporary restraining order enjoining the transactions contemplated by the Merger Agreement but later dissolved it on October 25, 2023. Thereafter and as described below, on January 25, 2024, the parties to the Amended Merger Agreement completed the Omni Acquisition. The case remains pending.
The court initially granted a temporary restraining order enjoining the transactions contemplated by the Merger Agreement but later dissolved it on October 25, 2023. Thereafter, the parties to the Amended Merger Agreement completed the Omni Acquisition.
Removed
On October 31, 2023, Omni filed a complaint (the “Omni Complaint”) against us and certain of its direct and indirect subsidiaries in the Court of Chancery in the State of Delaware.
Added
On May 2, 2024, Plaintiff Michael Roberts, together with the Cambria County Employees Retirement System filed a stipulation and proposed order seeking leave of court to file an amended class action complaint seeking damages, among other forms of relief. Upon receiving leave of the court, on May 15, 2024, the Plaintiffs filed the amended complaint (“Second Amended Complaint”).
Removed
The Omni Complaint alleged, among other things, that we breached our obligation to close the transactions contemplated by the Merger Agreement and sought specific performance to compel us to close and related declaratory relief.
Added
Like the earlier complaints, the Second Amended Complaint challenges the directors’ determination not to subject the Omni Acquisition to a shareholder vote and alleges that, in so doing, the Company and certain of its current and former directors violated Tennessee corporate law.
Removed
On January 22, 2024, we, Omni, and certain other parties entered into a Settlement and Release Agreement (the “Settlement Agreement”), settling all litigation claims that were the subject of proceedings pending in the matter of Omni Newco, LLC v Forward Air Corporation, et al, No. 2023-1104 (Del.
Added
The Second Amended Complaint further alleges that certain of the Company’s current and former directors breached their fiduciary duties to shareholders by depriving them of the right to vote on the Omni Acquisition. Thereafter, on June 14, 2024, defendants removed the case to the United States District Court for the Eastern District of Tennessee, Greeneville Division.
Removed
Ch.) (the “Transaction Litigation”) asserted under the Merger Agreement among us, Omni and the other parties thereto, and stipulating to the dismissal of the Transaction Litigation. Pursuant to the Settlement Agreement, the parties agreed to enter into Amendment No. 1. On January 25, 2024, we, Omni, and certain other parties completed the Omni Acquisition.
Added
Plaintiffs have filed a motion to remand the case to the Third District Chancer Court, and the federal court’s determination on plaintiffs’ motion remains pending. Defendants contest the merits of the Second Amended Complaint and are in the process of defending the matter. Item 4. Mine Safety Disclosures Not applicable. 43 Part II
Removed
For more information about the Omni Acquisition, refer to “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations – Omni Acquisition.” 43 From time to time, we are also a party to other litigation incidental to and arising in the normal course of our business, most of which involve claims for personal injury and property damage related to the transportation and handling of freight, or workers’ compensation.
Removed
For more information about our insurance program and legal proceedings, see Item 1A, Risk Factors - “Claims for property damage, personal injuries or workers’ compensation and related expenses could significantly reduce our earnings.” and “We face risks related to self-insurance and third-party insurance that can be volatile to our earnings.”, and “Our failure to comply with various applicable federal and state employment and labor laws and regulations could have a material, adverse impact on our business, financial condition and results of operations.”, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates, and Item 8, Financial Statements and Supplementary Data - Commitments and Contingencies.
Removed
Item 4. Mine Safety Disclosures Not applicable. Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance graph and related information shall not be deemed “soliciting material” or be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing. 2018 2019 2020 2021 2022 2023 Forward Air Corporation $ 100 $ 128 $ 140 $ 221 $ 191 $ 115 Nasdaq Trucking and Transportation Stocks Index 100 120 120 145 116 143 Nasdaq Global Select Stock Market Index 100 141 194 239 161 233 Item 6. [Reserved] 45
Biggest changeThe performance graph and related information shall not be deemed “soliciting material” or be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing. 2019 2020 2021 2022 2023 2024 Forward Air Corporation $ 100 $ 110 $ 173 $ 150 $ 90 $ 46 Nasdaq Trucking and Transportation Stocks Index 100 100 121 97 120 127 Nasdaq Global Select Stock Market Index 100 137 169 114 165 213 Item 6. [Reserved] 45
The graph assumes a base investment of $100 made on December 31, 2018 and the respective returns assume reinvestment of all dividends. The comparisons in this graph are required by the SEC and, therefore, are not intended to forecast or necessarily be indicative of any future return on our Common Stock.
The graph assumes a base investment of $100 made on December 31, 2019 and the respective returns assume reinvestment of all dividends. The comparisons in this graph are required by the SEC and, therefore, are not intended to forecast or necessarily be indicative of any future return on our Common Stock.
Issuer Purchases of Equity Securities The Company did not repurchase any of its equity securities during the three months ended December 31, 2023 . 44 Stock Performance Graph The following graph compares the percentage change in the cumulative shareholder return on our Common Stock with The Nasdaq Trucking and Transportation Stocks Index and The Nasdaq Global Select Stock Market™ Index commencing on the last trading day of December 2018 and ending on the last trading day of December 2023.
Issuer Purchases of Equity Securities The Company did not repurchase any of its equity securities during the three months ended December 31, 2024 . 44 Stock Performance Graph The following graph compares the percentage change in the cumulative shareholder return on our Common Stock with The Nasdaq Trucking and Transportation Stocks Index and The Nasdaq Global Select Stock Market™ Index commencing on the last trading day of December 2019 and ending on the last trading day of December 2024.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our Common Stock trades on The Nasdaq Global Select Stock Market™ under the symbol “FWRD.” There were approximately 968 shareholders of record of our Common Stock as of March 12, 2024. There are no material restrictions on our ability to declare dividends.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Our Common Stock trades on The Nasdaq Global Select Stock Market™ under the symbol “FWRD.” There were approximately 357 shareholders of record of our Common Stock as of March 17, 2025.
Removed
Unregistered Sales of Securities None of our securities were sold during fiscal year 2023 without registration under the Securities Act.
Added
We did not declare or pay any cash dividends on our Common Stock during fiscal year 2024. We do not anticipate declaring or paying any cash dividends on our Common Stock in the foreseeable future.
Added
Our credit facility has certain limitations on paying dividends or making repurchases of our shares, and we are subject to certain covenant ratios, including a leverage ratio under our credit agreement.
Added
Any future determination relating to our dividend policy will be made at the discretion of the Board and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects, and other factors the Board may deem relevant.
Added
Unregistered Sales of Securities Unregistered securities sold by the Company during the period covered by this report have been previously reported in a Current Report on Form 8-K.

Item 7. Management's Discussion & Analysis

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

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Biggest changeWhile these trends have continued through the early months of 2024, industry projections expect a slight improvement in the fundamentals within the freight market in the second half of 2024. 49 Results from Operations Year Ended December 31, 2023 compared to Year Ended December 31, 2022 The following table sets forth our consolidated financial data for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 December 31, 2022 Change Percent Change Operating revenue: Expedited Freight $ 1,096,958 $ 1,260,121 $ (163,163) (12.9) % Intermodal 274,043 419,718 (145,675) (34.7) Eliminations and other operations (266) (205) (61) (29.8) Operating revenue 1,370,735 1,679,634 (308,899) (18.4) Operating expenses: Purchased transportation 586,195 730,412 (144,217) (19.7) Salaries, wages, and employee benefits 287,566 302,759 (15,193) (5.0) Operating leases 87,413 85,290 2,123 2.5 Depreciation and amortization 57,405 42,552 14,853 34.9 Insurance and claims 50,133 47,478 2,655 5.6 Fuel expense 22,004 26,956 (4,952) (18.4) Other operating expenses 191,809 196,596 (4,787) (2.4) Total operating expenses 1,282,525 1,432,043 (149,518) (10.4) Income (loss) from continuing operations: Expedited Freight 116,040 192,583 (76,543) (39.7) Intermodal 25,327 56,874 (31,547) (55.5) Other operations (53,157) (1,866) (51,291) (2,748.7) Income from continuing operations 88,210 247,591 (159,381) (64.4) Other expense: Interest expense, net (31,571) (5,138) (26,433) (514.5) Total other expense (31,571) (5,138) (26,433) 514.5 Income from continuing operations before income taxes 56,639 242,453 (185,814) (76.6) Income tax expense 13,836 63,039 (49,203) (78.1) Net income from continuing operations 42,803 179,414 (136,611) (76.1) Income from discontinued operation, net of tax 124,548 13,777 110,771 804.0 Net income and comprehensive income $ 167,351 $ 193,191 $ (25,840) (13.4) % 50 Operating Revenues Operating revenues decreased $308,899, or 18.4% to $1,370,735 for the year ended December 31, 2023 compared to $1,679,634 for the same period in 2022.
Biggest change(Unaudited and in Thousands) Year Ended December 31, 2024 Percent of Revenue Operating revenue $ 1,196,841 100.0 % Operating expenses: Purchased transportation 701,035 58.6 Salaries, wages and employee benefits 215,518 18.0 Operating leases 96,500 8.1 Depreciation and amortization 83,542 7.0 Insurance and claims 12,297 1.0 Fuel expense 3,149 0.3 Other operating expenses 101,206 8.5 Impairment of goodwill 1,028,397 85.9 Total operating expenses 2,241,644 187.3 Loss from operations (1,044,803) (87.3) % 49 Results from Operations Year Ended December 31, 2024 compared to Year Ended December 31, 2023 The following table sets forth our consolidated financial data for the years ended December 31, 2024 and 2023: Year Ended (Unaudited and in Thousands) December 31, 2024 December 31, 2023 Change Percent Change Operating revenue: Expedited Freight $ 1,115,163 $ 1,096,958 $ 18,205 1.7 % Omni 1,196,841 — 1,196,841 N/A Intermodal 232,832 274,043 (41,211) (15.0) Corporate 164 — 164 N/A Eliminations and other operations (70,738) (266) (70,472) 26,493.2 Operating revenue 2,474,262 1,370,735 1,103,527 80.5 Operating expenses: Purchased transportation 1,250,570 586,195 664,375 113.3 Salaries, wages, and employee benefits 536,406 287,566 248,840 86.5 Operating leases 182,197 87,413 94,784 108.4 Depreciation and amortization 143,978 57,405 86,573 150.8 Insurance and claims 64,682 50,133 14,549 29.0 Fuel expense 21,460 22,004 (544) (2.5) Other operating expenses 309,508 191,809 117,699 61.4 Impairment of goodwill 1,028,397 — 1,028,397 N/A Total operating expenses 3,537,198 1,282,525 2,254,673 175.8 Income (loss) from continuing operations: Expedited Freight 67,951 116,040 (48,089) (70.8) Omni (1,044,803) — (1,044,803) N/A Intermodal 18,925 25,327 (6,402) (33.8) Other operations (105,009) (53,157) (51,852) 97.5 Income (loss) from continuing operations (1,062,936) 88,210 (1,151,146) (1,305.0) Other income and expense: Interest expense, net (189,215) (31,571) (157,644) (499.3) Foreign exchange gain 1,093 — 1,093 N/A Other income (expense), net 1,226 — 1,226 N/A Total other expense (186,896) (31,571) (155,325) 492.0 Income (loss) from continuing operations before income taxes (1,249,832) 56,639 (1,306,471) (2,306.7) Income tax expense (benefit) (124,991) 13,836 (138,827) (1,003.4) Net (loss) income from continuing operations (1,124,841) 42,803 (1,167,644) (2,727.9) Income (loss) from discontinued operation, net of tax (6,387) 124,548 (130,935) (105.1) Net (loss) income (1,131,228) 124,548 (1,255,776) (1,008.3) Net (loss) attributable to noncontrolling interest (314,259) — (314,259) N/A Net (loss) income attributable to Forward Air $ (816,969) $ 167,351 $ (984,320) (588.2) % 50 Operating Revenues Operating revenues increased $1,103,527, or 80.5% to $2,474,262 for the year ended December 31, 2024 compared to $1,370,735 for the same period in 2023.
We believe that borrowings under our Revolving Credit Facility (defined below) and our New Term Loans (defined below), together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future.
We believe that borrowings under our Revolving Credit Facility (defined below) and our New Term Loans (defined below), together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt and service requirements for the foreseeable future.
Omni, headquartered in Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets. Omni delivers domestic and international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services for time-sensitive freight to U.S.-based customers operating both domestically and internationally.
Omni, headquartered near Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets. Omni delivers domestic and international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services for time-sensitive freight to U.S.-based customers operating both domestically and internationally.
We believe our yield management process focused on account level profitability, and ongoing improvements in operating efficiencies, are both key components of our ability to grow profitably. 46 The key operating statistics necessary to understand the operating results of our Expedited Fright reportable segment are described below in more detail: Tonnage - Total weight of shipments in pounds.
We believe our yield management process focused on account level profitability, and ongoing improvements in operating efficiencies, are both key components of our ability to grow profitably. The key operating statistics necessary to understand the operating results of our Expedited Fright reportable segment are described below in more detail: Tonnage - Total weight of shipments in pounds.
While this may present an opportunity to increase economies of scale in our network and enhanced pricing and margins, these benefits may be lessened by increased network congestion and operating inefficiencies. 48 Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past year.
While this may present an opportunity to increase economies of scale in our network and enhanced pricing and margins, these benefits may be lessened by increased network congestion and operating inefficiencies. Like other providers of freight transportation services, our business has been impacted by the macroeconomic conditions of the past year.
Upon the occurrence of a “change of control”, Opco will be required to offer to repurchase all of the outstanding principal amount of the Notes at a purchase price of 101.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. 62 Senior Secured Term Loan Facility In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Loanco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Loan Borrower”), entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender.
Upon the occurrence of a “change of control”, Opco will be required to offer to repurchase all of the outstanding principal amount of the Notes at a purchase price of 101.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. 61 Senior Secured Term Loan Facility In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Loanco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Loan Borrower”), entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender.
Recent global disruptions have impacted the capacity market, and the disruptions are expected to continue, although the timeline to resolution remains unclear. The air freight market has seen an increase in capacity resulting from increased commercial flight activity to support elevated consumer travel.
Recent global disruptions have impacted the capacity market, and the disruptions are expected to continue, although the timeline to resolution remains unclear. The air freight market has seen an increase in capacity resulting from increased commercial flight activity to 48 support elevated consumer travel.
Senior Secured Notes In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Bondco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Issuer”) launched a private offering of $725,000 aggregate principal amount of its 9.5% senior secured notes due 2031 (the “Notes”), in a transaction exempt from registration under the Securities Act.
Senior Secured Notes In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Bondco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Issuer” and consolidated VIE) launched a private offering of $725,000 aggregate principal amount of its 9.5% senior secured notes due 2031 (the “Notes”), in a transaction exempt from registration under the Securities Act.
As of December 31, 2023 GN Loanco, LLC is considered a Variable Interest Entity and is consolidated within our Consolidated Financial Statements. No borrowings under the Revolving Credit Facility were made in connection with the Omni Acquisition. The Revolving Credit Facility will mature on January 25, 2029.
As of December 31, 2024 GN Loanco, LLC is considered a Variable Interest Entity and is consolidated within our Consolidated Financial Statements. No borrowings under the Revolving Credit Facility were made in connection with the Omni Acquisition. The Revolving Credit Facility will mature on January 25, 2029.
As of December 31, 2023, GN Bondco, LLC is considered a Variable Interest Entity and is consolidated within our Consolidated Financial Statements. The Notes are guaranteed on a senior secured basis in an aggregate principal amount in excess of $100,000.
As of December 31, 2024, GN Bondco, LLC is considered a Variable Interest Entity and is consolidated within our Consolidated Financial Statements. The Notes are guaranteed on a senior secured basis in an aggregate principal amount in excess of $100,000.
Through our fuel surcharge programs, we have been able to mitigate the impact of fluctuations in fuel prices. Our fuel surcharge rates are set weekly based on the national average for fuel prices as published by the U.S. Department of Energy and our fuel surcharge table.
Through our fuel surcharge programs, we are able to mitigate the impact of fluctuations in fuel prices. Our fuel surcharge rates are set weekly based on the national average for fuel prices as published by the U.S. Department of Energy and our fuel surcharge table.
Upon the closing of the Omni Acquisition, Opco assumed the Escrow Loan Borrower’s obligations under the Credit Agreement, which were further secured by certain guarantors. Opco’s obligations under the Credit Agreement are guaranteed on a senior secured basis by us and each of Opco’s existing and future domestic subsidiaries (subject to customary exceptions).
Upon the closing of the Omni Acquisition, Opc o assumed the Escrow Loan Borrower’s obligations under the Credit Agreement, which were further secured by certain guarantors. Opco’s obligations under the Credit Agreement are guaranteed on a senior secured basis by us and each of Opco’s existing and future domestic subsidiaries (subject to customary exceptions).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses our results of operations and financial condition for the year ended December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of this Form 10-K generally discusses our results of operations and financial condition for the year ended December 31, 2024.
Expedited Freight purchased transportation was 46.6% of Expedited Freight operating revenue for the year ended December 31, 2023 compared to 49.6% for the same period in 2022. Expedited Freight purchased transportation includes Leased Capacity Providers, third-party motor carriers and transportation intermediaries, while expenses for Company-employed drivers are included in salaries, wages and employee benefits.
Purchased transportation was 49.0% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 46.6% for the same period in 2023. Expedited Freight purchased transportation includes Leased Capacity Providers and third-party motor carriers and transportation intermediaries, while Company-employed drivers are included in salaries, wages and employee benefits.
For a discussion of similar topics for the years ended December 31, 2022 and December 31, 2021, please refer to “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K, filed on March 1, 2023, which is incorporated herein by reference.
For a discussion of similar topics for the years ended December 31, 2023 and December 31, 2022, please refer to “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K, filed on March 15, 2024, which is incorporated herein by reference.
Intermodal volumes, heavily influenced by United States imports, have declined in 2023 due to inflation, customer demand and a shift of spending by consumers from goods to services. For Truckload, the capacity contraction has created a sustained market of depressed spot market truckload rates with modest signs of improvement.
Intermodal volumes, heavily influenced by United States imports, have declined for much of 2024 due to inflation, customer demand and a shift of spending by consumers from goods to services. For Truckload, the capacity contraction has created a sustained market of depressed spot market truckload rates with modest signs of improvement, especially in Q4 of 2024.
Purchased transportation was 27.3% of Intermodal operating revenues for the year ended December 31, 2023 compared to 25.2% for the same period in 2022. Intermodal purchased transportation includes Leased Capacity Providers, third-party motor carriers, while expenses for Company-employed drivers are included in salaries, wages and employee benefits.
Purchased transportation was 31.7% of Intermodal operating revenues for the year ended December 31, 2024 compared to 27.3% for the same period in 2023. Intermodal purchased transportation includes Leased Capacity Providers, third-party motor carriers, while expenses for Company-employed drivers are included in salaries, wages and employee benefits.
Loans made under the Revolving Credit Facility bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.
Lo ans made under the Revolving Credit Facility bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.
The decrease in purchased transportation expense was primarily due to fewer drayage shipments and the change in the mix of freight capacity purchased from Leased Capacity Providers and third-party motor carriers compared to the same period in 2022.
The decrease in purch ased transportation expense was primarily due to fewer drayage shipments and the change in the mix of freight capacity purchased from Leased Capacity Providers and third-party motor carriers compared to the same period in 2023.
Fuel surcharge revenue as a percentage of operating revenues decreased to 18.9% for the year ended December 31, 2023 compared to 19.3% for the year ended December 31, 2022, as a result of changes in fuel prices. Economy Our business is highly susceptible to changes in economic conditions.
Fuel surcharge revenue as a percentage of operating revenues decreased to 17.9% for the year ended December 31, 2024 compared to 18.9% for the year ended December 31, 2023, as a result of changes in fuel prices. Economy Our business is highly susceptible to changes in economic conditions.
Additionally, we recognized a receivable for insurance proceeds and a corresponding claims payable for vehicle liability and workers’ compensation claims in excess of the self-insured retention limit in the amount of $26,712 and $29,087 as of December 31, 2023 and 2022, respectively. 60 Business Combinations and Goodwill Acquisitions are accounted for using the purchase method.
Additionally, we recognized a receivable for insurance proceeds and a corresponding claims payable for vehicle liability and workers’ compensation claims in excess of the self-insured retention limit in the amount of $19,791 and $26,712 as of December 31, 2024 and 2023, respectively. Business Combinations and Goodwill Acquisitions are accounted for using the purchase method.
Fuel expense was 4.1% of Intermodal operating revenue for the year ended December 31, 2023 compared to 3.8% for the same period in 2022.
Fuel expense was 3.7% of Intermodal operating revenue for the year ended December 31, 2024 compared to 4.1% for the same period in 2023.
Consecutive quarters of weak consumer demand have nearly eliminated the challenges from port congestion and transportation equipment shortages as seen in prior years. Despite the weak demand, new vessel deliveries continue to add capacity and new vessel deliveries are expected to continue in the near term.
This period of weak consumer demand has nearly eliminated the challenges from port congestion and transportation equipment shortages as seen in prior years. Despite the weak demand, new vessel deliveries continue to add capacity and new vessel deliveries are expected to continue in the near term.
Pursuant to the Credit Agreement, the Escrow Loan Borrower obtained senior secured term B loans in an aggregate principal amount of $1,125,000 (the “New Term Loans”) and the ability to draw down up to $400,000 under a line of credit (the “Revolving Credit Facility”).
Pursuant to the Credit Agreement, the Escrow Loan Borrower obtained senior secured term B loans in an aggregate principal amount of $1,125,000 (the “New Term Loans”) and the ability to draw down up to $400,000 under the Revolving Credit Facility.
As of December 31, 2023 and 2022, we recorded self-insurance loss reserves of $66,374 and $67,860, respectively, inclusive of reserves in excess of the self-insured retention limit that are expected to be reimbursed from insurance carriers.
As of December 31, 2024 and 2023, we recorded self-insurance loss reserves of $65,112 and $66,374, respectively, inclusive of reserves in excess of the self-insured retention limit that are expected to be reimbursed from insurance carriers.
Capital expenditures for the year ended December 31, 2023 were $30,725, which primarily related to the purchase of technology and operating equipment. Capital expenditures for the year ended December 31, 2022 were $39,254, which primarily related to the investment in the expansion of our national hub in Columbus, Ohio and the purchase of technology and operating equipment.
Capital expenditures for the year ended December 31, 2024 were $37,060, which primarily related to the purchase of technology and operating equipment. Capital expenditures for the year ended December 31, 2023 were $30,725, which primarily related to the investment in the expansion of our national hub in Columbus, Ohio and the purchase of technology and operating equipment.
Year Ended December 31, 2022 compared to Year Ended December 31, 2021 For discussion of our Results of Operations for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021, refer to Part I, Item 7 of our annual report on form 10-K filed with SEC on March 1, 2023. 61 Liquidity and Capital Resources For discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021, refer to Part I, Item 7 of our annual report on form 10-K filed with SEC on March 1, 2023.
Liquidity and Capital Resources For discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 refer to Part I, Item 7 of our annual report on form 10-K filed with SEC on March 15, 2024.
We have historically financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our Credit Facility (as defined below).
We have financed our working capital needs, including capital expenditures, with available cash, cash flows from operations and borrowings under our Revolving Credit Facility.
Net cash provided by financing activities of continuing operations was $1,790,726 for the year ended December 31, 2023 compared to net cash used in financing activities of continuing operations of $138,668 for the year ended December 31, 2022.
Net cash used in financing activities of continuing operations was $163,832 for the year ended December 31, 2024 compared to net cash provided by financing activities of continuing operations of $1,790,726 for the year ended December 31, 2023.
Income Taxes on a Continuing Basis The effective tax rate on a continuing basis for the year ended December 31, 2023 was 24.4%, compared to a rate of 26.0% for the same period in 2022.
Income Taxes on a Continuing Basis The effective tax rate on a continuing basis for the year ended December 31, 2024 was 10.0% , co mpared to a rate of 24.4% for the same period in 2023.
Due to the levels of judgment, complexity and period of time over which many of these items are resolved, actual results could differ from those estimated at the time of preparation of the financial statements. Adjustments to these estimates would impact our financial position and future results of operations.
Due to the levels of judgment, complexity and period of time over which many of these items are resolved, actual results could differ from those estimated at the time of preparation of the financial statements.
For the year ended December 31, 2023, 64.8%, 30.4% and 4.8% of our freight capacity was purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers, respectively for Network and Truckload. This compares to 67.2%, 29.4% and 3.4%, respectively, for the same period in 2022.
For the year ended December 31, 2024, we purchased 63.8%, 33.2% and 4.0% of our freight capacity from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers, respectively. This compares to 64.8%, 30.4% and 4.8%, respectively, for the same period in 2023.
Tax Receivable Agreement In connection with the Omni Acquisition, we, Opco, Omni Holders and certain other parties entered into a tax receivable agreement (the “Tax Receivable Agreement”), which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by us as a result of the Omni Acquisition.
As of the date of this report, we were in compliance with all aforementioned covenants. 62 Tax Receivable Agreement In connection with the Omni Acquisition, we, Opco, Omni Holders and certain other parties entered into the Tax Receivable Agreement, which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by us as a result of the Omni Acquisition.
Payment obligations under the Tax Receivable Agreement rank pari passu with all unsecured obligations but senior to any future tax receivable or similar agreement entered into by us. 63 The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we elect to terminate the Tax Receivable Agreement early (or it is terminated early due to a change of control or insolvency event with respect to us or a material breach by us of a material obligation under the Tax Receivable Agreement).
The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we elect to terminate the Tax Receivable Agreement early (or it is terminated early due to a change of control or insolvency event with respect to us or a material breach by us of a material obligation under the Tax Receivable Agreement).
The results of Land Air have been included in our Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in our Expedited Freight reportable segment.
The results of Land Air have been included in our Consolidated Financial Statements as of and from the date of acquisition. The associated goodwill has been included in our Expedited Freight reportable segment. See Note 3, Acquisitions , to our Consolidated Financial Statements for more information about our acquisitions.
Expedited Freight fuel expense decreased primarily due to the decline in the average price of fuel, partially offset by additional miles driven by Company-employed drivers during the year ended December 31, 2023.
Fuel expense was 0.9% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 1.0% for the same period in 2023. Expedited Freight fuel expense decreased primarily due to the decline in the average price of fuel, partially offset by additional miles driven by Company-employed drivers during the year ended December 31, 2024.
The increase in other operating expenses was primarily due to an increase in contract labor, professional fees, software license and subscription fees, tolls and indirect taxes, partially offset by a decrease in maintenance and repair expense for the year ended December 31, 2023 compared to the same period in 2022.
The increase in other operating expenses was primarily driven by an increase in software license and subscription fees and utilities and communications expenses, partially offset by a decrease in professional fees, maintenance and repair expense and supply parts, for the year ended December 31, 2024 compared to the same period in 2023.
Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling. We plan to grow our LTL geographic footprint through greenfield start-ups as well as through acquisitions. Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.
Our Expedited Freight segment provides expedited regional, inter-regional and national LTL services. Expedited Freight also offers customers local pick-up and delivery and other services including truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling. We plan to grow our LTL geographic footprint through greenfield start-ups as well as through acquisitions.
Intermodal also offers dedicated contract and CFS warehouse and handling services, and in select locations, linehaul and LTL services. We plan to grow our Intermodal geographic footprint through acquisitions as well as through greenfield start-ups where no suitable acquisition is available. Our operations, particularly our network of hubs and terminals, represent substantial fixed costs.
We plan to grow our Intermodal geographic footprint through acquisitions as well as through greenfield start-ups where no suitable acquisition is available. Our operations, particularly our network of hubs and terminals, represent substantial fixed costs.
Operating Leases Expedited Freight operating leases increased $8,389, or 15.7%, to $61,728 for the year ended December 31, 2023 from $53,339 for the same period in 2022. Operating leases were 5.6% of Expedited Freight operating revenue for the year ended December 31, 2023 compared to 4.2% for the same period in 2022.
Operating Leases Expedited Freight operating leases increased $1,670, or 2.7%, to $63,398 for the year ended December 31, 2024 from $61,728 for the same period in 2023. Operating leases were 5.7% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 5.6% for the same period in 2023.
Other Operating Expenses Expedited Freight other operating expenses increased $11,160, or 13.4%, to $94,545 for the year ended December 31, 2023 from $83,385 for the same period in 2022. Other operating expenses were 8.6% of Expedited Freight operating revenue for the year ended December 31, 2023 compared to 6.6% for the same period in 2022.
Other Operating Expenses Expedited Freight other operating expenses increased $5,093, or 5.4%, to $99,638 for the year ended December 31, 2024 from $94,545 for the same period in 2023. Other operating expenses were 8.9% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 8.6% for the same period in 2023.
Depreciation and Amortization Intermodal depreciation and amortization increased $4,598, or 29.9%, to $19,991 for the year ended December 31, 2023, from $15,393 for the same period in 2022. Depreciation and amortization expense as a percentage of Intermodal operating revenue was 7.3% for the year ended December 31, 2023 compared to 3.7% for the same period in 2022.
Depreciation and Amortization Intermodal depreciation and amortization decreased $1,551, or 7.8%, to $18,440 for the year ended December 31, 2024, from $19,991 for the same period in 2023. Depreciation and amortization expense as a percentage of Intermodal operating revenue was 7.9% for the year ended December 31, 2024 compared to 7.3% for the same period in 2023.
Land Air, headquartered in Bowling Green, Kentucky, offers a variety of less-than-truckload services including guaranteed, standard, exclusive, same day, hot shot and pickup and delivery, and operates in over 25 terminals across the United States.
Expedited Freight Acquisitions In January 2023, we acquired certain assets of Land Air Express, Inc. (“Land Air”) for $56,567. Land Air, headquartered in Bowling Green, Kentucky, offers a variety of less-than-truckload services including guaranteed, standard, exclusive, same day, hot shot and pickup and delivery, and operates in over 25 terminals across the United States.
Cash Flows Year Ended December 31, 2023 Cash Flows compared to December 31, 2022 Cash Flows Continuing Operations Net cash provided by operating activities of continuing operations was $199,212 for the year ended December 31, 2023 compared to $250,161 for the year ended December 31, 2022.
Cash Flows Year Ended December 31, 2024 Cash Flows compared to December 31, 2023 Cash Flows Continuing Operations Net cash used in operating activities of continuing operations was $69,015 for the year ended December 31, 2024 compared to cash provided from operations of $199,212 for the year ended December 31, 2023.
Within our Expedited Freight reportable segment, our primary revenue focus is to increase density, which is shipment and tonnage growth within our existing LTL network. Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor and door pounds handled per hour.
Increases in density allow us to maximize our asset utilization and labor productivity, which we measure over many different functional areas of our operations including linehaul load factor and door pounds handled per hour.
The decrease in operating revenues was primarily attributable to a 20.8% decrease in drayage shipments and an 18.3% decrease in drayage revenue per shipment over the same period in 2022.
The decrease in operating revenues was primarily attributable to a 7.6% decrease in drayage shipments and an 9.1% decrease in drayage revenue per shipment over the same period in 2023.
Salaries, Wages, and Employee Benefits Intermodal salaries, wages and employee benefits decreased $6,481, or 8.8%, to $66,925 for the year ended December 31, 2023 from $73,406 for the same period in 2022. Salaries, wages and employee benefits were 24.4% of Intermodal operating revenue for the year ended December 31, 2023 compared to 17.5% for the same period in 2022.
Salaries, Wages, and Employee Benefits Intermodal salaries, wages and employee benefits decreased $8,211, or 12.3%, to $58,714 for the year ended December 31, 2024 from $66,925 for the same period in 2023. Salaries, wages and employee benefits were 25.2% of Intermodal operating revenue for the year ended December 31, 2024 compared to 24.4% for the same period in 2023.
Insurance and claims as a percentage of Expedited Freight operating revenue was 3.5% for the year ended December 31, 2023 compared to 2.7% for the same period in 2022.
Insurance and Claims Expedited Freight insurance and claims expense increased $5,422, or 14.2%, to $43,716 for the year ended December 31, 2024 from $38,294 for the same period in 2023. Insurance and claims as a percentage of Expedited Freight operating revenue was 3.9% for the year ended December 31, 2024 compared to 3.5% for the same period in 2023.
Salaries, Wages, and Employee Benefits Expedited Freight salaries, wages and employee benefits decreased by $7,348, or 3.1%, to $226,528 for the year ended December 31, 2023 from $233,876 for the same period in 2022.
Salaries, Wages, and Employee Benefits Expedited Freight salaries, wages and employee benefits increased by $15,883, or 7.0%, to $242,411 for the year ended December 31, 2024 from $226,528 for the same period in 2023.
The decrease was driven by decreased Network and Truckload revenue. Network revenue decreased due to a 3.8% decrease in pounds per day and a 5.8% decrease in revenue per hundredweight excluding fuel as compared to the same period in 2022. The decrease in tonnage reflects an increase in weight per shipment of 5.0% on 8.4% fewer shipments per day.
The increase was driven by higher Network and Truckload revenue. Network revenue increased from 3.9% higher tonnage with a slight offset from 3.4% decrease in revenue per hundredweight ex fuel, as compared to the same period in the prior year. The increase in tonnage reflects an increase in weight per shipment of 4.8% on 0.8% less shipments.
Income from Operations Expedited Freight income from operations decreased by $76,543, or 39.7%, to $116,040 for the year ended December 31, 2023 compared to $192,583 for the same period in 2022. Expedited Freight income from operations was 10.6% of operating revenue for the year ended December 31, 2023, compared to 15.3% for the same period in 2022.
Income from Operations Expedited Freight income from operations decreased by $48,089, or 41.4%, to $67,951 for the year ended December 31, 2024 compared to $116,040 for the same period in 2023. Expedited Freight income from operations was 6.1% of operating revenue for the year ended December 31, 2024, compared to 10.6% for the same period in 2023.
The decrease in drayage shipments and corresponding lower accessorial revenue to support customer needs was primarily due to the challenged market conditions that led to decreased customer demand for our services for the year ended December 31, 2023 compared to the same period in 2022.
The decrease in drayage shipments and lower accessorial revenue to support customers was primarily due to challenged market demand for our services driven by an extended weak freight environment for the year ended December 31, 2024 compared to the same period in 2023.
The decrease in operating leases expense was primarily due to lower equipment expense incurred to support the decreased accessorial revenues for the year ended December 31, 2023 compared to the same period in 2022.
Operating leases were 9.3% of Intermodal operating revenue for the year ended December 31, 2024 compared to 9.4% in the same period in 2023. The decrease in operating leases expense was primarily due to reduced equipment rental expense incurred to support lower demand for the year ended December 31, 2024 compared to the same period in 2023.
These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight and Intermodal reportable segments. Our key operating statistics should not be interpreted as better measurements of our results than income from operations as determined under GAAP.
These key operating statistics are defined below and are referred to throughout the discussion of the financial results of our Expedited Freight, Omni and Intermodal reportable segments.
In addition, fuel surcharge revenue decreased $17,876 or 33.4% over the same period, as a result of the decline in the average price of fuel. Purchased Transportation Intermodal purchased transportation decreased $30,715, or 29.1%, to $74,941 for the year ended December 31, 2023 from $105,656 for the same period in 2022.
In addition, fuel surcharge revenue decreased $ 5,600 or 15.7% over the same period, as a result of the decline in the average price of fuel and a decrease in shipment volume. Purchased Transportation Intermodal purchased transportation decreased $1,127, or 1.5%, to $73,814 for the year ended December 31, 2024 from $74,941 for the same period in 2023.
Intermodal fuel expense decreased due to fewer miles driven by Company-employed drivers and the decrease in the average price of fuel during the year ended December 31, 2023 compared to the same period in 2022. 58 Other Operating Expenses Intermodal other operating expenses decreased $71,626, or 64.3%, to $39,733 for the year ended December 31, 2023 from $111,359 for the same period in 2022.
Intermodal fuel expense decreased due to less shipments, fewer miles driven by Company-employed drivers and a decrease in the average price of fuel during the year ended December 31, 2024 compared to the same period in 2023.
These trends drove a decline in the volume of freight shipped by our customers and placed pressure on rates in a soft freight environment.
These trends drove a decline in the volume of freight shipped by our customers and placed pressure on rates in a soft freight environment. While these trends may continue through the early months of 2025, industry projections expect a slight improvement in the fundamentals within the freight market in 2025.
The Revolving Credit Facility’s terms also include a financial covenant which requires us to maintain a specific leverage ratio. As of the date of this report, we were in compliance with all aforementioned covenants.
The Revolving Credit Facility’s terms also include a financial covenant which requires us to maintain a specific leverage ratio.
Net Income As a result of the foregoing factors, net income decreased $25,840, or 13.4%, to $167,351 for the year ended December 31, 2023 compared to $193,191 for the same period in 2022. 51 Expedited Freight - Year Ended December 31, 2023 compared to Year Ended December 31, 2022 The following table sets forth our financial data of the Expedited Freight segment for the years ended December 31, 2023 and 2022 (unaudited and in thousands): Year Ended December 31, 2023 Percent of Revenue December 31, 2022 Percent of Revenue Change Percent Change Operating revenue: Network 1 $ 845,949 77.1 % $ 947,817 75.2 % $ (101,868) (10.7) % Truckload 159,513 14.6 221,979 17.6 (62,466) (28.1) Other 91,496 8.3 90,325 7.2 1,171 1.3 Total operating revenue 1,096,958 100.0 1,260,121 100.0 (163,163) (12.9) Operating expenses: Purchased transportation 511,525 46.6 624,994 49.6 (113,469) (18.2) Salaries, wages and employee benefits 226,528 20.7 233,876 18.6 (7,348) (3.1) Operating leases 61,728 5.6 53,339 4.2 8,389 15.7 Depreciation and amortization 37,414 3.4 27,058 2.1 10,356 38.3 Insurance and claims 38,294 3.5 33,924 2.7 4,370 12.9 Fuel expense 10,884 1.0 10,962 0.9 (78) (0.7) Other operating expenses 94,545 8.6 83,385 6.6 11,160 13.4 Total operating expenses 980,918 89.4 1,067,538 84.7 (86,620) (8.1) Income from operations $ 116,040 10.6 % $ 192,583 15.3 % $ (76,543) (39.7) % 1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue. 52 Expedited Freight Operating Statistics Year Ended December 31, 2023 December 31, 2022 Percent Change Business days 254 255 (0.4) % Tonnage 1,2 Total pounds 2,678,334 2,793,756 (4.1) Pounds per day 10,545 10,956 (3.8) Shipments 1,2 Total shipments 3,340 3,654 (8.6) Shipments per day 13.1 14.3 (8.4) Weight per shipment 802 764 5.0 Revenue per hundredweight 3 $ 31.80 $ 34.23 (7.1) Revenue per hundredweight, ex fuel 3 $ 24.48 $ 25.98 (5.8) Revenue per shipment 3 $ 255.06 $ 261.68 (2.5) Revenue per shipment, ex fuel 3 $ 196.32 $ 198.62 (1.2) 1 In thousands 2 Excludes accessorial and Truckload products 3 Includes intercompany revenue between the Network and Truckload revenue streams 53 Operating Revenues Expedited Freight operating revenue decreased $163,163, or 12.9%, to $1,096,958 for the year ended December 31, 2023 from $1,260,121 for the same period in 2022.
Net Loss As a result of the foregoing factors, net income decreased $984,320, or 588.2%, to a net loss of $816,969 for the year ended December 31, 2024 compared to net income of $167,351 for the same period in 2023. 51 Expedited Freight - Year Ended December 31, 2024 compared to Year Ended December 31, 2023 The following table sets forth our financial data of the Expedited Freight segment for the years ended December 31, 2024 and 2023: Year Ended (Unaudited and in Thousands) December 31, 2024 Percent of Revenue December 31, 2023 Percent of Revenue Change Percent Change Operating revenue: Network 1 $ 854,138 76.6 % $ 845,949 77.1 % $ 8,189 1.0 % Truckload 170,455 15.3 159,513 14.5 10,942 6.9 Other 90,570 8.1 91,496 8.3 (926) (1.0) Total operating revenue 1,115,163 100.0 1,096,958 100.0 18,205 1.7 Operating expenses: Purchased transportation 546,458 49.0 511,525 46.6 34,933 6.8 Salaries, wages and employee benefits 242,411 21.7 226,528 20.7 15,883 7.0 Operating leases 63,398 5.7 61,728 5.6 1,670 2.7 Depreciation and amortization 41,858 3.8 37,414 3.4 4,444 11.9 Insurance and claims 43,716 3.9 38,294 3.5 5,422 14.2 Fuel expense 9,733 0.9 10,884 1.0 (1,151) (10.6) Other operating expenses 99,638 8.9 94,545 8.6 5,093 5.4 Total operating expenses 1,047,212 93.9 980,918 89.4 66,294 6.8 Income from operations $ 67,951 6.1 % $ 116,040 10.6 % $ (48,089) (41.4) % 1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial and Truckload revenue. 52 Expedited Freight Operating Statistics Year Ended December 31, 2024 December 31, 2023 Percent Change Business days 256 254 0.8 % Tonnage 1,2 Total pounds 2,782,294 2,678,334 3.9 Pounds per day 10,868 10,545 3.1 Shipments 1,2 Total shipments 3,312 3,340 (0.8) Shipments per day 12.9 13.1 (1.5) Weight per shipment 840 802 4.8 Revenue per hundredweight 3 $ 30.71 $ 31.80 (3.4) Revenue per hundredweight, ex fuel 3 $ 24.09 $ 24.48 (1.6) Revenue per shipment 3 $ 257.99 $ 255.06 1.1 Revenue per shipment, ex fuel 3 $ 202.42 $ 196.32 3.1 1 In thousands 2 Excludes accessorial and Truckload products 3 Includes intercompany revenue between the Network and Truckload revenue streams 53 Operating Revenues Expedited Freight operating reven ue increased $18,205, or 1.7%, to $1,115,163 for t he year ended December 31, 2024 from $1,096,958 for the same period in 2023.
Salaries, wages and employee benefits were 20.7% of Expedited Freight operating revenue for the year ended December 31, 2023 compared to 18.6% for the same period in 2022.
Salaries, wages and employee benefits were 21.7% of Expedited Freight operating revenue for the year ended December 31, 2024 compared to 20.7% for the same period in 2023. The increase in s alaries, wages and employee benefits expense was primarily due to elevated Company-employed driver count and wage rates compared to the same period in 2023.
The increase in insurance and claims expense was primarily due to an increase in vehicle liability and equipment repair claims for the year ended December 31, 2023 compared to the same period in 2022.
The increase in insurance and claims expense was primarily due to an increase in equipment repair claims, vehicle liability and cargo claims, and insurance premiums, for the year ended December 31, 2024 as compared to the same period in 2023. 54 Fuel Expense Expedited Freight fuel expense decreased $1,151, or 10.6%, to $9,733 for the year ended December 31, 2024 from $10,884 for the same period in 2023.
All shares received were retired upon receipt, and the excess of the purchase price over par value per share was recorded to “Retained Earnings” in our Consolidated Balance Sheets. 65
For the year ended December 31, 2023, a total of 883 shares of our common stock were repurchased for an approximate total of $93,811, through open market transactions. All shares received were retired upon receipt, and the excess of the purchase price over par value per share was recorded to “Retained Earnings” in our Consolidated Balance Sheets. 63
The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation for the year ended December 31, 2023 compared to the same period in 2022 as a result of purchasing and placing in service new equipment in 2023. 54 Insurance and Claims Expedited Freight insurance and claims expense increased $4,370, or 12.9%, to $38,294 for the year ended December 31, 2023 from $33,924 for the same period in 2022.
Depreciation and amortization expense as a percentage of Expedited Freight operating revenue was 3.8% for the year ended December 31, 2024 compared to 3.4% for the same period in 2023. The increase in depreciation and amortization expense was primarily the result of purchasing and placing in service new equipment in the second half of 2023 and first half of 2024.
Self-Insurance Loss Reserves We provide for the estimated costs of self-insurance loss reserves, which includes vehicle liability, and workers’ compensation claims; for both reported and for claims incurred but not reported.
Adjustments to these estimates would impact our financial position and future results of operations. 58 Self-Insurance Loss Reserves We provide for the estimated costs of self-insurance loss reserves, which includes both reported and unreported vehicle liability, and workers’ compensation claims.
Industry freight volumes, as measured by the Cass Freight Index, decreased in 2023 compared to 2022. Transportation rates continued to decline throughout 2023 as carrier capacity exceeded shipper demand in the United States. While recently elevated inventory levels have largely stabilized, shippers continue to closely monitor consumer spending and carefully manage inventory restocking activities.
Industry freight volumes, as measured by the Cass Freight Index, decreased in 2024 compared to 2023, which was down as compared to 2022. Transportation rates continued to decline throughout 2024 as carrier capacity exceeded shipper demand in the United States.
Investing activities of continuing operations for the year ended December 31, 2023 included the acquisition of Land Air for a purchase price of $56,567, while investing activities for the year ended December 31, 2022 included the acquisition of Edgmon for a purchase price of $40,433 and Chickasaw Container Services, Inc. for a purchase price of $25,733.
Investing activities of continuing operations for the year ended December 31, 2024 included the acquisition of Omni for a purchase price of $ 1,576,219, while investing activities for the year ended December 31, 2023 included the acquisition of Land Air for a purchase price of $ 56,703.
The decrease in tonnage is due to softer market demand for our services driven by the weak freight environment while the increase in weight per shipment was the result of more dense freight in our network driven by a change in the mix of services provided to customers.
The increase in weight per shipment was the result of more dense freight in our network driven by a change in the mix of services provided to customers. The decrease in ship ments resulted from lower demand for our premium services as a result of conservative spending due to inflationary pressures, higher interest rates, and economic uncertainty.
A failure to appropriately assign a fair value to acquired assets and assumed liabilities could significantly impact the amount and timing of future depreciation and amortization expense, as well as significantly overstate or understate assets or liabilities. Goodwill is recorded at cost based on the excess of purchase price over the estimated fair value of net assets acquired.
A failure to appropriately assign a fair value to acquired assets and assumed liabilities could significantly impact the amount and timing of future depreciation and amortization expense, as well as significantly overstate or understate assets or liabilities. 59 The annual test of goodwill was performed for each of the reporting units with goodwill balances as of June 30, 2024.
The revenue decrease was primarily driven by lower revenue from our Expedited Freight segment of $163,163 due to decreased Network and Truckload revenue, and from our Intermodal segment of $145,675. The results for our two reportable segments are discussed in detail in the following sections.
The increase was primarily due to the inclusion of $1,196,841 from the Omni Logistics segment and an increase in our Expedited Freight segment of $18,205 due to increased Truckload and Network revenue, offset by a decrease from our Intermodal segment of $41,211. The results for our reportable segments are d iscussed in detail in the following sections.
Income from Discontinued Operation, net of tax Income from discontinued operation, net of tax increased $110,771, or 804.0%, to $124,548 for the year ended December 31, 2023 compared to $13,777 for the same period in 2022.
Income (loss) from Discontinued Operation, net of tax Loss from discontinued operations of $6,387, net of tax, resulted in an unfavorable change of $130,935, or 105.1% for the year ended December 31, 2024 compared to income of $124,548 for the same period in 2023.
The decrease in net cash provided by operating activities of continuing operations was primarily due to the decrease in net income from continuing operations after consideration of non-cash items, partially offset by the change in accounts receivable and other current and noncurrent assets. The accounts receivable balance changed due to the decrease in operating revenue in 2023.
The decrease in net cash provided by operating activities of continuing operations was primarily due to the decrease in net income from continuing operations after consideration of non-cash items, additionally changes in net working capital in 2024 were unfavorable to similar changes during 2023.
We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures. Our services are classified into two reportable segments: Expedited Freight and Intermodal. Our Expedited Freight segment provides expedited regional, inter-regional and national LTL services.
We utilize an asset-light strategy to minimize our investments in equipment and facilities and to reduce our capital expenditures. Globally, we provide customized asset-light, high-touch logistics and supply chain management solutions with deep customer relationships in high-growth end markets. Our services are classified into three reportable segments: Expedited Freight, Omni Logistics and Intermodal.
Income from Continuing Operations and Segment Operations Income from continuing operations decreased $159,381, or 64.4%, to $88,210 for the year ended December 31, 2023, compared to $247,591 for the same period in 2022.
Income (loss) from Continuing Operations and Segment Operations Income from continuing operations changed by $1,151,146, or 1,305.0%, to a loss of $1,062,936 for the year ended December 31, 2024, compared to $88,210 of income for the same period in 2023.
The decrease in income from operations as a percentage of operating revenue was driven by decreased tonnage and revenue per hundredweight excluding fuel combined with lower fuel surcharge revenue, partially offset by the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers for Network and Truckload for the year ended December 31, 2023 compared to the same period in 2022. 55 Intermodal - Year Ended December 31, 2023 compared to Year Ended December 31, 2022 The following table sets forth our financial data of the Intermodal segment for the years ended December 31, 2023 and 2022 (unaudited and in thousands): Year Ended December 31, 2023 Percent of Revenue December 31, 2022 Percent of Revenue Change Percent Change Operating revenue $ 274,043 100.0 % $ 419,718 100.0 % $ (145,675) (34.7) % Operating expenses: Purchased transportation 74,941 27.3 105,656 25.2 (30,715) (29.1) Salaries, wages and employee benefits 66,925 24.4 73,406 17.5 (6,481) (8.8) Operating leases 25,685 9.4 31,950 7.6 (6,265) (19.6) Depreciation and amortization 19,991 7.3 15,393 3.7 4,598 29.9 Insurance and claims 10,320 3.8 9,087 2.2 1,233 13.6 Fuel expense 11,121 4.1 15,993 3.8 (4,872) (30.5) Other operating expenses 39,733 14.5 111,359 26.5 (71,626) (64.3) Total operating expenses 248,716 90.8 362,844 86.4 (114,128) (31.5) Income from operations $ 25,327 9.2 % $ 56,874 13.6 % $ (31,547) (55.5) % Intermodal Operating Statistics Year Ended December 31, 2023 December 31, 2022 Percent Change Drayage shipments 274,997 347,066 (20.8) % Drayage revenue per shipment $ 913 $ 1,118 (18.3) % 56 Operating Revenues Intermodal operating revenue decreased $145,675, or 34.7%, to $274,043 for the year ended December 31, 2023, from $419,718 for the same period in 2022.
The decrease in income was primarily a result of 6.8% higher operating expenses without sufficient increase in total operating revenue, which grew by 1.7%. 55 Intermodal - Year Ended December 31, 2024 compared to Year Ended December 31, 2023 The following table sets forth our financial data of the Intermodal segment for the years ended December 31, 2024 and 2023: Year Ended (Unaudited and in Thousands) December 31, 2024 Percent of Revenue December 31, 2023 Percent of Revenue Change Percent Change Operating revenue $ 232,832 100.0 % $ 274,043 100.0 % $ (41,211) (15.0) % Operating expenses: Purchased transportation 73,814 31.7 74,941 27.3 (1,127) (1.5) Salaries, wages and employee benefits 58,714 25.2 66,925 24.4 (8,211) (12.3) Operating leases 21,599 9.3 25,685 9.4 (4,086) (15.9) Depreciation and amortization 18,440 7.9 19,991 7.3 (1,551) (7.8) Insurance and claims 10,251 4.4 10,320 3.8 (69) (0.7) Fuel expense 8,578 3.7 11,121 4.1 (2,543) (22.9) Other operating expenses 22,511 9.7 39,733 14.5 (17,222) (43.3) Total operating expenses 213,907 91.9 248,716 90.8 (34,809) (14.0) Income from operations $ 18,925 8.1 % $ 25,327 9.2 % $ (6,402) (25.3) % Intermodal Operating Statistics Year Ended December 31, 2024 December 31, 2023 Percent Change Drayage shipments 254,072 274,997 (7.6) % Drayage revenue per shipment $ 830 $ 913 (9.1) % 56 Operating Revenues Intermodal operating revenue decreased $41,211, or 15.0%, to $232,832 for the year ended December 31, 2024, from $274,043 for th e same period in 2023.
Omni Acquisition In January 2024, we acquired Omni for a combination of (a) $20 million in cash and (b) (i) common equity consideration representing 5,135 shares of our common stock on an as-converted and as-exchanged basis and (ii) non-voting, convertible perpetual preferred equity consideration representing, if our shareholders approve, an additional 8,880 shares of our common stock on an as-exchanged basis.
Fuel surcharges and accessorial charges are included in this measurement. 47 Trends and Developments Omni Acquisition In January 2024, we acquired Omni for a combination of (a) $100,499 million in cash and (b) (i) common equity consideration representing 14,015 shares of our common stock on an as-converted and as-exchanged basis.
Income from Operations Intermodal income from operations decreased by $31,547, or 55.5%, to $25,327 for the year ended December 31, 2023 compared to $56,874 for the same period in 2022. Income from operations as a percentage of Intermodal operating revenue was 9.2% for the year ended December 31, 2023 compared to 13.6% in the same period in 2022.
Income from operations as a percentage of Intermodal operating revenue was 8.1% for the year ended December 31, 2024 compared to 9.2% in the same period in 2023. The 15.0% decrease in income from operations as a percentage of operating revenues was driven by 7.6% fewer drayage shipments and 1.1% highe r overall operating expenses as a percentage of revenue.
The decrease in purchased transportation expense was primarily due to lower volumes in Network and Truckload and the change in the mix of freight capacity purchased from Leased Capacity Providers, third-party motor carriers, and transportation intermediaries for Network and Truckload services.
The increase in purchased transportation was primarily due to higher freight capacity purchased from Leased Capacity Providers, third-party motor carriers and transportation intermediaries and Company-employed drivers for Network and Truckload services. Also, third-party providers miles driven was higher during the year and reflect a pay-per-mile cost model.
Depreciation and Amortization Expedited Freight depreciation and amortization increased $10,356, or 38.3%, to $37,414 for the year ended December 31, 2023 from $27,058 for the same period in 2022. Depreciation and amortization expense as a percentage of Expedited Freight operating revenue was 3.4% for the year ended December 31, 2023 compared to 2.1% for the same period in 2022.
The increase in operating lease expense was primarily due to leased truck excess mileage expense for the year ended December 31, 2024 compared to the same period in 2023. Depreciation and Amortization Expedited Freight depreciation and amortization increased $4,444, or 11.9%, to $41,858 for the year ended December 31, 2024 from $37,414 for the same period in 2023.
Net cash provided by discontinued investing activities was $258,525 for the year ended December 31, 2023 compared to net cash used in discontinued investing activities was $1,475 during the year ended December 31, 2022. The change in net cash provided by discontinued investing activities was due to the proceeds received from the sale of the Final Mile business in 2023.
Net cash used in investing activities of continuing operations was $1,608,586 for the year ended December 31, 2024 compared to cash provided of $83,687 during the year ended December 31, 2023.
Operating Expenses Operating expenses decreased $149,518, or 10.4%, to $1,282,525 for the year ended December 31, 2023 compared to $1,432,043 for the same period in 2022.
Operating Expenses Operating exp enses increased $2,254,673, or 175.8%, to $3,537,198 for the year ended December 31, 2024 compared to $1,282,525 for the same period in 2023.

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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 changeA hypothetical increase in our Credit Facility borrowing rate of 150 basis points would have increased our annual interest expense by approximately $1,969 and would have decreased our annual cash flow from operations by approximately $1,969. Our finance lease obligations were $39,381 as of December 31, 2023. These finance lease obligations bear interest at a fixed rate.
Biggest changeLand is not depreciated and construction in progress is not depreciated until ready for service. A hypothetical increase in our Revolving Credit Facility borrowing rate of 150 basis points would have increased our annual interest expense by approximately $1,627 and would have decreased our annual cash flow from operations by approximately $1,627.
Financial Statements and Supplementary Data The response to this item is submitted as a separate section of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 66
Financial Statements and Supplementary Data The response to this item is submitted as a separate section of this report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Our exposure to market risk relates principally to changes in interest rates and fuel prices. Our interest expense is, in part, sensitive to the general level of interest rates. No borrowings were outstanding under our Credit Facility as of December 31, 2023.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Our exposure to market risk relates principally to changes in interest rates and fuel prices. Our interest expense is, in part, sensitive to the general level of interest rates.
Accordingly, there is no exposure to market risk related to these obligations.
Our finance lease obligations we re $47,788 as of December 31, 2024. These finance lease obligations bear interest at a fixed rate. Accordingly, there is no exposure to market risk related to these obligations.
Added
The outstanding balance under our Revolving Credit Facility as of December 31, 2024 wa s $ 75,000 on a straight-line basis over the estimated useful lives of 30 to 40 years for building and improvements, three to ten years for equipment, the lesser of the estimated useful life or the initial lease term for leasehold improvements and five years for computer software.

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