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

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Paragraph-level year-over-year comparison of PAMT 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.

+223 added−184 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-13)

Top changes in PAMT CORP's 2024 10-K

223 paragraphs added · 184 removed · 153 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+11 added−5 removed38 unchanged
Biggest changeWe anticipate enforcement of the Clearinghouse will remove certain drivers from the pool of drivers available to the industry and increase competition and related costs to attract and retain the remaining qualified drivers. - 6 - Table of Contents Our motor carrier operations are subject to additional environmental laws and regulations, including laws and regulations dealing with the transportation of hazardous materials and other environmental matters, and our operations involve certain inherent environmental risks.
Biggest changeOur motor carrier operations are subject to additional environmental laws and regulations, including laws and regulations dealing with the transportation of hazardous materials and other environmental matters, and our operations involve certain inherent environmental risks. These laws and regulations have the effect of increasing the costs, risks and liabilities associated with our applicable operations.
In December of 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above.
In December 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above.
Compliance with these federal and state requirements has increased the cost of our equipment and may further increase the cost of replacement equipment in the future. The FMCSA Commercial Driver’s License (“CDL”) Drug and Alcohol Clearinghouse (“Clearinghouse”) became effective January 6, 2020. This database contains information pertaining to violations of the U.S.
Compliance with these federal and state requirements has increased the cost of our equipment and may further increase the cost of replacement equipment in the future. - 6 - Table of Contents The FMCSA Commercial Driver’s License (“CDL”) Drug and Alcohol Clearinghouse (“Clearinghouse”) became effective in January 2020. This database contains information pertaining to violations of the U.S.
Our marketing efforts are diversified and designed to gain access to dedicated, expedited, regional, automotive, and long-haul opportunities (including those in Mexico and Canada) and to expand brokerage and logistics offerings. Our sales efforts are conducted by a staff of eleven employees who are located in our major markets and supervised from our headquarters.
Our marketing efforts are diversified and designed to gain access to dedicated, expedited, regional, automotive, and long-haul opportunities (including those in Mexico and Canada) and to expand brokerage and logistics offerings. Our sales efforts are conducted by a staff of thirteen employees who are located in our major markets and supervised from our headquarters.
Seasonality Generally, our revenues do not exhibit a significant seasonal pattern; however, revenue is affected by adverse weather conditions, holidays and the number of business days that occur during a given period because revenue is directly related to the available work days of shippers.
Seasonality Generally, our revenues do not exhibit a significant seasonal pattern; however, revenue is affected by adverse weather conditions, holidays and the number of business days that occur during a given period because revenue is directly related to the available workdays of shippers.
Transport, Inc., Met Express, Inc., Costar Real Estate Holding, Inc., Costar Equipment, Inc., Costar Management, Inc., Select CDL Driving School, Inc., Unmoored Realty, LLC, T.T.X., LLC, P.A.M. Cartage Carriers, LLC, Overdrive Leasing, LLC, Choctaw Express, LLC, Choctaw Brokerage, Inc., Transcend Logistics, Inc., Decker Transport Co., LLC, East Coast Transport and Logistics, LLC, S & L Logistics, Inc., P.A.M.
Transport, Inc., Met Express, Inc., Costar Real Estate Holdings, Inc., Costar Equipment, Inc., Costar Management, Inc., Select CDL Driving School, Inc., Unmoored Realty, LLC, T.T.X., LLC, P.A.M. Cartage Carriers, LLC, Overdrive Leasing, LLC, Choctaw Express, LLC, Choctaw Brokerage, Inc., Transcend Logistics, Inc., Decker Transport Co., LLC, East Coast Transport and Logistics, LLC, S & L Logistics, Inc., P.A.M.
Both our truckload operations and our brokerage and logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. Truckload services operating revenues, before fuel surcharges, represented 65.3%, 66.1% and 67.0% of total operating revenues for the years ended December 31, 2023, 2022 and 2021, respectively.
Both our truckload operations and our brokerage and logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. Truckload services operating revenues, before fuel surcharges, represented 67.1%, 65.3% and 66.1% of total operating revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
The standard adopted for heavy duty trucks was intended to achieve a reduction in CO 2 and fuel consumption ranging from 7% to 20% by model year 2017. In August 2016, the EPA and NHTSA finalized the second phase of these standards which further reduces greenhouse gas emissions and fuel consumption for heavy duty trucks through model year 2027.
The standard adopted for heavy duty trucks was intended to achieve a reduction in CO2 and fuel consumption ranging from 7% to 20% by model year 2017. In August 2016, the EPA and NHTSA finalized the second phase of these standards which further reduces greenhouse gas emissions and fuel consumption for heavy duty trucks through model year 2027.
Department of Transportation controlled substances and alcohol testing program for holders of CDL’s. The Clearinghouse rules requires FMCSA regulated employers, among others, to report to the Clearinghouse information related to violations of the drug and alcohol regulations.
Department of Transportation controlled substances and alcohol testing program for holders of CDL’s. The Clearinghouse rules require FMCSA regulated employers, among others, to report to the Clearinghouse information related to violations of the drug and alcohol regulations.
Instruction in defensive driving and safety techniques continues after hiring, with seminars at several of our terminals. At December 31, 2023, we employed 85 persons on a full-time basis in our driver recruiting, training and safety instruction programs. Talent Acquisition, Retention and Development. We continually strive to hire, develop and retain the top talent in our industry.
Instruction in defensive driving and safety techniques continues after hiring, with seminars at several of our terminals. At December 31, 2024, we employed 96 persons on a full-time basis in our driver recruiting, training and safety instruction programs. Talent Acquisition, Retention and Development. We continually strive to hire, develop and retain the top talent in our industry.
Our commitment to diversity and inclusion means that we will continue to strive to establish and improve an inclusive workplace environment where employees from all backgrounds can succeed and be heard. - 4 - Table of Contents Employee Health and Safety. We are committed to being an industry leader in health and safety standards.
Our commitment to diversity and inclusion means that we will continue to strive to establish and improve an inclusive workplace environment where employees from all backgrounds can succeed and be heard. Employee Health and Safety. We are committed to being an industry leader in health and safety standards.
The average age of our trucks and trailers as of December 31, 2023 was 2.9 years and 6.5 years, respectively. We evaluate our equipment purchasing decisions based on factors such as initial cost, useful life, warranty terms, expected maintenance costs, fuel economy, driver comfort, customer needs, manufacturer support, and resale value.
The average age of our trucks and trailers as of December 31, 2024 was 2.6 years and 6.3 years, respectively. We evaluate our equipment purchasing decisions based on factors such as initial cost, useful life, warranty terms, expected maintenance costs, fuel economy, driver comfort, customer needs, manufacturer support, and resale value.
The Company was an early adopter of ELD capable devices, requiring the devices to be installed on its entire fleet and requiring its drivers to use AOBRD’s since 2010. These rulings affect the majority of carriers, including us, and the Company’s ELD devices were in compliance with FMCSA requirements prior to the December 16, 2019 deadline.
These rulings affect the majority of carriers, including us, and the Company’s ELD devices were in compliance with FMCSA requirements prior to the December 2019 implementation deadline, as the company was an early adopter of ELD capable devices, requiring the devices to be installed on its entire fleet and requiring its drivers to use such devices since 2010.
Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately 34%, 39% and 33% of our total revenues in 2023, 2022 and 2021, respectively. General Motors Company accounted for approximately 12%, 13% and 11% of our revenues in 2023, 2022 and 2021, respectively.
Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately 39%, 34% and 39% of our total revenues in 2024, 2023 and 2022, respectively. General Motors Company accounted for approximately 12%, 12% and 13% of our revenues in 2024, 2023 and 2022, respectively.
We believe we are currently in material compliance with applicable laws and regulations and that the cost of compliance has not materially affected results of operations to date.
We believe we are currently in material compliance with applicable laws and regulations and that the cost of compliance has not materially affected results of operations to date. - 7 - Table of Contents
At December 31, 2023, our lease-purchase program had 333 trucks available for use, with approximately 280 drivers participating in the program. Diversity and Inclusion. We believe diversity, equity, and inclusion are critical to our ability to win in the marketplace and enable our workforce and communities to succeed.
At December 31, 2024, our lease-purchase program had 395 trucks available for use, with approximately 395 drivers participating in the program. Diversity and Inclusion. We believe diversity, equity, and inclusion are critical to our ability to win in the marketplace and enable our workforce and communities to succeed.
Approximately 30%, 31% and 27% of our revenues were derived from transportation services provided to the automobile industry during 2023, 2022 and 2021, respectively. Revenue Equipment At December 31, 2023, we operated a fleet of 2,200 trucks, which included 300 independent contractor trucks. At December 31, 2023, our trailer fleet consisted of 8,567 trailers.
Approximately 32%, 30% and 31% of our revenues were derived from transportation services provided to the automobile industry during 2024, 2023 and 2022, respectively. Revenue Equipment At December 31, 2024, we operated a fleet of 2,222 trucks, which included 519 independent contractor trucks. At December 31, 2024, our trailer fleet consisted of 8,703 trailers.
They must meet and operate within our guidelines with respect to safety. We have a lease-purchase program whereby we offer independent contractors the opportunity to lease a truck, with the option to purchase the truck at the end of the lease term. We believe our lease-purchase program has contributed to our ability to attract and retain independent contractors.
We have a lease-purchase program whereby we offer independent contractors the opportunity to lease a truck, with the option to purchase the truck at the end of the lease term. We believe our lease-purchase program has contributed to our ability to attract and retain independent contractors.
Item 1. Business. Unless the context otherwise requires, all references in this Annual Report on Form 10-K to “P.A.M.,” the “Company,” “we,” “our,” or “us” mean P.A.M. Transportation Services, Inc. and its subsidiaries.
Item 1. Business. Unless the context otherwise requires, all references in this Annual Report on Form 10-K to the “Company,” “we,” “our,” or “us” mean PAMT CORP and its subsidiaries.
We contract with independent contractors to provide greater flexibility in responding to fluctuations in consumer demand. Independent contractors provide their own trucks and are contractually responsible for all associated expenses, including financing costs, fuel, maintenance, insurance, and taxes, among other things.
We contract with independent contractors to provide greater flexibility in responding to fluctuations in consumer demand. Independent contractors provide their own trucks and are contractually responsible for all associated expenses, including financing costs, fuel, maintenance, insurance, and taxes, among other things. They are also responsible for maintaining compliance with the Federal Motor Carrier Safety Administration regulations.
In December 2015, the FMCSA amended the Federal Motor Carrier Safety Regulations to establish minimum performance and design standards for HOS electronic logging devices (“ELDs”), requirements for the mandatory use of these devices by drivers currently required to prepare HOS records of duty status, requirements concerning HOS supporting documents, and measures to address concerns about harassment resulting from the mandatory use of ELDs.
In addition, pursuant to federal legislation, the FMCSA has established minimum performance and design standards for HOS electronic logging devices (“ELDs”), requirements for the mandatory use of these devices by drivers currently required to prepare HOS records of duty status, requirements concerning HOS supporting documents, and measures to address concerns about harassment resulting from the mandatory use of ELDs.
The current operating environment is characterized by the following: · competition for drivers; · competition for freight; - 2 - Table of Contents · price increases by truck and trailer equipment manufacturers; · volatile fuel costs; · increasing insurance costs; and · pressure on less profitable or undercapitalized carriers to consolidate or exit the industry.
The current operating environment is characterized by the following: · competition for freight; · competition for drivers; · price increases by truck and trailer equipment manufacturers; · oversupplied used revenue equipment market; · increasing insurance premium costs; and · pressure on less profitable or undercapitalized carriers to consolidate or exit the industry.
Our area of service includes the continental United States, Mexico and, to a lesser degree, Canada. Developing Customer Relationships within High Density Traffic Lanes. We strive to maximize utilization and increase revenue per truck while minimizing our time and empty miles between loads.
Our brokerage and logistics solutions offer similar services but utilize third-party equipment to expand available capacity. Our area of service includes the continental United States, Mexico and, to a lesser degree, Canada. Developing Customer Relationships within High Density Traffic Lanes. We strive to maximize utilization and increase revenue per truck while minimizing our time and empty miles between loads.
This increased focus on sustainability may result in new legislation or regulations, as well as customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.
Any of these efforts could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.
Fiat Chrysler Automobiles accounted for approximately 7%, 6% and 5% of our revenues in 2023, 2022 and 2021, respectively. Walmart Inc. accounted for approximately 6%, 9% and 9% of our revenues in 2023, 2022 and 2021, respectively. We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers.
Ford Motor Company accounted for approximately 9%, 5% and 5% of our revenues in 2024, 2023 and 2022, respectively. Walmart Inc. accounted for approximately 8%, 6% and 9% of our revenues in 2024, 2023 and 2022, respectively. - 3 - Table of Contents We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers.
To the extent that we conduct operations outside the United States, we are subject to the Foreign Corrupt Practices Act, which generally prohibits U.S. companies and their intermediaries from offering bribes to foreign officials for the purpose of obtaining or retaining favorable treatment. - 5 - Table of Contents In December 2011, the FMCSA released new rules regulating HOS that became effective in July 2013.
Department of Homeland Security. To the extent that we conduct operations outside the United States, we are subject to the Foreign Corrupt Practices Act, which generally prohibits U.S. companies and their intermediaries from offering bribes to foreign officials for the purpose of obtaining or retaining favorable treatment.
Inspections and various levels of preventive maintenance are performed at set intervals on both trucks and trailers. A maintenance and safety inspection is performed on all vehicles each time they return to a terminal. Our trucks typically carry full warranty coverage for at least three years or 375,000 miles.
Inspections and various levels of preventive maintenance are performed at set intervals on both trucks and trailers. A maintenance and safety inspection is performed on all vehicles each time they return to a terminal. We purchase our trucks with standard manufacturer’s warranty coverage for equipment and components.
Drivers provide location, status, and informational updates directly to our computer system which increases productivity, convenience, and customer visibility. This system provides information that allows us to calculate accurate estimated time of arrival information, which helps to optimize planning and customer service levels.
This system provides information that allows us to calculate accurate estimated time of arrival information, which helps to optimize planning and customer service levels.
These laws and regulations have the effect of increasing the costs, risks and liabilities associated with our applicable operations. If current regulatory requirements become more stringent or new environmental laws and regulations are introduced, we could be required to make significant expenditures or abandon certain activities.
If current regulatory requirements become more stringent or new environmental laws and regulations are introduced, we could be required to make significant expenditures or abandon certain activities. Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others.
Drivers can earn bonuses by recruiting other qualified drivers who become employed by us, and both cash and non-cash prizes are awarded for achieving certain safety, productivity and fuel efficiency goals.
Drivers can earn bonuses by recruiting other qualified drivers who become employed by us, and both cash and non-cash prizes are awarded for achieving certain safety, productivity and fuel efficiency goals. With many dedicated and over-the-road assignments, we allow our drivers to select routes that fit their lifestyles.
Expenses are intensely scrutinized for opportunities for elimination, reduction or to further leverage our purchasing power to achieve more favorable pricing. Industry According to the American Trucking Association’s “American Trucking Trends 2023” report, the trucking industry generated over $940 billion in revenue during 2022 which represented approximately 81% of the total amount spent on U.S. freight.
Expenses are intensely scrutinized for opportunities for elimination, reduction or to further leverage our purchasing power to achieve more favorable pricing. - 2 - Table of Contents Industry According to the American Trucking Association’s “American Trucking Trends 2024” report, the trucking industry generated over $987 billion in revenue during 2023 while moving over 11.8 billion tons of freight.
At December 31, 2023, we employed 2,530 persons, of whom 1,739 were drivers, 274 were employed in maintenance, 260 were employed in operations, 69 were employed in marketing, 116 were employed in safety and personnel, and 72 were employed in general administration and accounting.
At December 31, 2024, we employed 2,304 persons, of whom 1,520 were drivers, 292 were employed in maintenance, 236 were employed in operations, 68 were employed in marketing, 118 were employed in safety and personnel, and 70 were employed in general administration and accounting.
A total of 2,512 of our employees were employed on a full-time basis as of December 31, 2023. None of our employees are represented by a collective bargaining unit, and we believe that our employee relations are good. At December 31, 2023, we also had 390 independent contractor drivers under contract who were compensated on a per mile basis.
A total of 2,286 of our employees were employed on a full-time basis as of December 31, 2024. None of our employees are represented by a collective bargaining unit, and we believe that our employee relations are good. We contract with independent contractors to supply one or more trucks and drivers for our use.
Available Information The Company maintains a website where additional information concerning its business can be found. The website address is www.pamtransport.com .
Therefore, we place a high priority on the recruitment and retention of an adequate supply of qualified drivers. Available Information The Company maintains a website where additional information concerning its business can be found. The website address is www.pamtransport.com .
Our freight consists primarily of automotive parts, expedited goods, consumer goods, such as general retail store merchandise, and manufactured goods, such as heating and air conditioning units. P.A.M. Transportation Services, Inc. is a holding company incorporated under the laws of the State of Delaware in June 1986. We conduct operations and hold assets principally through the following wholly-owned subsidiaries: P.A.M.
Transportation Services, Inc.) is a holding company incorporated under the laws of the State of Nevada in November 2024 and previously incorporated under the laws of the State of Delaware in June 1986. We conduct operations and hold assets principally through the following wholly-owned subsidiaries: P.A.M.
Our objective is to provide our customers with a comprehensive solution to their truckload transportation needs. Our array of asset-based service offerings consists of dedicated, expedited, automotive, local, regional, and long-haul truckload services. Our brokerage and logistics solutions offer similar services but utilize third-party equipment to expand available capacity.
Business and Growth Strategy Our strategy focuses on the following elements: Providing a Full Suite of Complementary Truckload Transportation Solutions. Our objective is to provide our customers with a comprehensive solution to their truckload transportation needs. Our array of asset-based service offerings consists of dedicated, expedited, automotive, local, regional, and long-haul truckload services.
The remaining operating revenues, before fuel surcharge, for the same periods were generated by brokerage and logistics services, representing 34.7%, 33.9% and 33.0%, respectively.
The remaining operating revenues, before fuel surcharge, for the same periods were generated by brokerage and logistics services, representing 32.9%, 34.7% and 33.9%, respectively. Approximately 62% of the Company's revenues are derived from domestic shipments while approximately 38% of the Company’s revenues are derived from freight originating from or destined to locations in Mexico or Canada.
Segment Financial Information The operations of the Company’s subsidiaries are all in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under Generally Accepted Accounting Principles (“GAAP”). Operations Our subsidiaries’ operations can generally be classified into truckload services or brokerage and logistics services.
Segment Financial Information The operations of the Company and its subsidiaries are all in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under Generally Accepted Accounting Principles (“GAAP”). The Company has carefully considered the segment reporting requirements under Accounting Standards Codification (“ASC”) 280 for the year-ended December 31, 2024.
Extended truck warranties are often negotiated with the truck manufacturers and manufacturers of major components, such as engine, transmission, and differential manufacturers, for up to five years or 625,000 miles. Our trailers carry full warranties by the manufacturer for up to seven years with certain components covered for up to ten years. Human Capital Resources Overview .
Our trailers carry full warranties by the manufacturer for up to seven years with certain components covered for up to ten years. The Company evaluates the cost-benefit of purchasing such extended warranties on new or replacement equipment. - 4 - Table of Contents Human Capital Resources Overview .
As part of our safety and risk management program, we periodically perform internal environmental reviews so that we can achieve environmental compliance and avoid environmental risk. We transport a minimal amount of environmentally hazardous substances and, to date, have experienced no significant claims for hazardous materials shipments.
We have instituted programs to monitor and control environmental risks and assure compliance with applicable environmental laws. As part of our safety and risk management program, we periodically perform internal environmental reviews so that we can achieve environmental compliance and avoid environmental risk.
Operating expenses are typically higher in the winter months primarily due to decreased fuel efficiency and increased maintenance costs associated with inclement weather. In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, and the volume of automotive freight we ship is reduced during such scheduled plant shutdowns.
Operating expenses are typically higher in the winter months primarily due to decreased fuel efficiency and increased maintenance costs associated with inclement weather.
They are also responsible for maintaining compliance with the Federal Motor Carrier Safety Administration regulations. - 3 - Table of Contents Technology Our trucks and trailers are equipped with cellular-based global positioning and communications systems that allow fleet managers to communicate directly with drivers.
Technology Our trucks and trailers are equipped with cellular-based global positioning and communications systems that allow fleet managers to communicate directly with drivers. Drivers provide location, status, and informational updates directly to our computer system which increases productivity, convenience, and customer visibility.
Regulation We are a common and contract motor carrier regulated by various United States federal and state, Canadian provincial, and Mexican federal agencies.
In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, and the volume of automotive freight we ship is reduced during such scheduled plant shutdowns. - 5 - Table of Contents Regulation We are a common and contract motor carrier regulated by various United States federal and state, Canadian provincial, and Mexican federal agencies.
If we should fail to comply with applicable regulations, we could be subject to substantial fines or penalties and to civil and criminal liability. As issues related to climate change become more prevalent, federal, state and local governments, as well as some of our customers, have made efforts to respond to these issues.
We transport a minimal amount of environmentally hazardous substances and, to date, have experienced no significant claims for hazardous materials shipments. If we should fail to comply with applicable regulations, we could be subject to substantial fines or penalties and to civil and criminal liability.
These rules required that a driver take a mandatory thirty-minute break during each consecutive eight hour driving period. In July 2012, Congress passed legislation renewing the mandate for electronic logging devices and designated authority to the FMCSA to propose a new rule.
Under current FMCSA rules regulating HOS adopted in December 2011, drivers are required to take a mandatory thirty-minute break during each consecutive eight hour driving period.
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Approximately 63% of the Company's revenues are derived from domestic shipments while approximately 37% of the Company’s revenues are derived from freight originating from or destined to locations in Mexico or Canada. - 1 - Table of Contents Business and Growth Strategy Our strategy focuses on the following elements: Providing a Full Suite of Complementary Truckload Transportation Solutions.
Added
Our freight consists primarily of automotive parts, expedited goods, consumer goods, such as general retail store merchandise, and manufactured goods, such as heating and air conditioning units. PAMT CORP (formerly P.A.M.
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Drivers are paid for an array of services, including calculated miles driven, loading and unloading, additional stops, detention and layovers, among other things. We contract with independent contractors to supply one or more trucks and drivers for our use. Independent contractors must pay their own truck expenses, fuel, maintenance, insurance, and driver costs.
Added
Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report.
Removed
Therefore, we place a high priority on the recruitment and retention of an adequate supply of qualified drivers. Our truck fleet averages 2.9 years old, keeping our drivers safe, comfortable, and on the road. With many dedicated and over-the-road assignments, we allow our drivers to select routes that fit their lifestyles.
Added
Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC 280-10-50-11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company are aggregated into a single motor carrier segment.
Removed
In May 2018 the FMCSA released a notice that they would allow a motor carrier that installed and required its drivers to use an Automatic on Board Recording Device (“AOBRD”) before December 18, 2017 and who uses registered ELD capable devices that run compliant AOBRD software to continue to do so until December 16, 2019.
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The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies. The accounting policies of the motor carrier segment are the same as those described in the summary of accounting policies found in this report.
Removed
Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. We have instituted programs to monitor and control environmental risks and assure compliance with applicable environmental laws.
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For purposes of this report, net income reflects the profitability of our operations by calculating the total earnings after deducting operating expenses, interest expense, income taxes and any other applicable costs from total revenue. The measure of net income is reported on the consolidated statement of operations as consolidated net (loss) income.
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Operating ratio is the measure of our efficiency in managing operating expenses relative to revenue generation. It is calculated as total operating expenses as a percentage of total operating revenue.
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The measure of operating ratio is reported in the Company’s Results of Operations found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Report, for each of the Company’s two operating segments of Truckload Services and Brokerage and Logistics Services. - 1 - Table of Contents Operations Our subsidiaries’ operations can generally be classified into truckload services or brokerage and logistics services.
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These warranties range from one year or 100,000 miles for the chassis up to five years or 750,000 miles for other key components. Occasionally, extended truck warranties are negotiated with truck manufacturers and manufacturers of major components, such as engine, transmission, and differential manufacturers.
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At December 31, 2024, we had 447 independent contractor drivers under contract who were compensated on a per mile basis. Independent contractors must pay their own truck expenses, fuel, maintenance, insurance, and driver costs. They must meet and operate within our guidelines with respect to safety.
Added
Since its adoption in 2020, the enforcement of the Clearinghouse has removed certain drivers from the pool of drivers available to the industry and has contributed to increased competition and related costs to attract and retain qualified drivers.
Added
As issues related to climate change become more prevalent, federal, state and local governments, as well as some of our customers, have made efforts to respond to these issues This increased focus on sustainability has prompted new legislation and regulation in California and in Europe, new regulations by the Securities and Exchange Commission that are currently under a stay pending legal challenges, and similar proposed legislation or regulations in other states, as well as various customer-imposed requirements.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+14 added−7 removed78 unchanged
Biggest changeOur substantial debt levels could have important consequences such as the following: · impair our ability to obtain additional future financing for working capital, capital expenditures, acquisitions or general corporate expenses; · limit our ability to use operating cash flow in other areas of our business due to the necessity of dedicating a substantial portion of these funds for payments on our indebtedness; · limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; · make it more difficult for us to satisfy our obligations; · increase our vulnerability to general adverse economic and industry conditions; and · place us at a competitive disadvantage compared to our competitors. - 11 - Table of Contents Our ability to make scheduled payments on, or to refinance, our debt and other obligations will depend on our financial and operating performance, which, in turn, is subject to our ability to implement our strategic initiatives, prevailing economic conditions and certain financial, business and other factors beyond our control.
Biggest changeOur substantial debt levels could have important consequences such as the following: · impair our ability to obtain additional future financing for working capital, capital expenditures, acquisitions or general corporate expenses; · limit our ability to use operating cash flow in other areas of our business due to the necessity of dedicating a substantial portion of these funds for payments on our indebtedness; · limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; · make it more difficult for us to satisfy our obligations; · increase our vulnerability to general adverse economic and industry conditions; and · place us at a competitive disadvantage compared to our competitors.
In December of 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above.
In December 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above.
Department of Labor, which is effective March 11, 2024, and the laws of several states, including California, apply stricter tests for determining whether an independent contractor should be classified as an employee. We believe we are in compliance with all applicable independent contractor classification requirements.
Department of Labor, effective March 11, 2024, and the laws of several states, including California, apply stricter tests for determining whether an independent contractor should be classified as an employee. We believe we are in compliance with all applicable independent contractor classification requirements.
Because we have a significant concentration of customers within the automotive industry, our freight volumes and revenues were significantly affected by the temporary closure of North American automotive manufacturing facilities during the spring of 2020 as a result of the pandemic.
Because we have a significant concentration of customers within the automotive industry, our freight volumes and revenues were significantly affected by the temporary closure of North American automotive manufacturing facilities during the spring of 2020 as a result of the COVID-19 pandemic.
Further, negative financial results, an economic downturn or uncertainty, or a tightening of credit markets caused by a public health crisis could have a material adverse effect on our liquidity and our ability to effectively meet our short- and long-term financial obligations. - 14 - Table of Contents Risks Related to Our Common Stock Our public shareholders may have limited influence over our significant corporate actions.
Further, negative financial results, an economic downturn or uncertainty, or a tightening of credit markets caused by a public health crisis could have a material adverse effect on our liquidity and our ability to effectively meet our short- and long-term financial obligations. Risks Related to Our Common Stock Our public shareholders may have limited influence over our significant corporate actions.
In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, which reduces the volume of automotive freight we ship during these plant shutdowns. - 12 - Table of Contents Our business may be disrupted by natural disasters and severe weather conditions causing supply chain disruptions.
In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, which reduces the volume of automotive freight we ship during these plant shutdowns. Our business may be disrupted by natural disasters and severe weather conditions causing supply chain disruptions.
We may become subject to new or more restrictive regulations imposed by these authorities, which could significantly impair equipment and driver productivity and increase operating expenses. - 8 - Table of Contents The FMCSA administers carrier safety compliance and enforcement through its CSA program, which places carriers in peer groups and assigns each carrier a relative ranking compared to their peers in various categories.
We may become subject to new or more restrictive regulations imposed by these authorities, which could significantly impair equipment and driver productivity and increase operating expenses. The FMCSA administers carrier safety compliance and enforcement through its CSA program, which places carriers in peer groups and assigns each carrier a relative ranking compared to their peers in various categories.
The strike targeted select plants at each of these automotive companies, causing prolonged plant shutdowns for these customers and ripple effects on plants and workers for other customers and automotive suppliers. The effects of these shutdowns adversely impacted our business and financial performance during the third and fourth quarters of 2023 and have continued into the first quarter of 2024.
The strike targeted select plants at each of these automotive companies, causing prolonged plant shutdowns for these customers and ripple effects on plants and workers for other customers and automotive suppliers. The effects of the shutdowns adversely impacted our business and financial performance during the third and fourth quarters of 2023 and the first quarter of 2024.
These factors include, but are not limited to, the following: · we compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers and railroads, some of which have more equipment and greater capital resources than we do; · some of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates, maintain our margins or maintain significant growth in our business; · many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers, and in some instances we may not be selected; · many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of our business to competitors; · the trend toward consolidation in the trucking industry may create other large carriers with greater financial resources and other competitive advantages relating to their size and with whom we may have difficulty competing; · advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments; · competition from Internet-based and other logistics and freight brokerage companies may adversely affect our customer relationships and freight rates; and · economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve their ability to compete with us.
These factors include, but are not limited to, the following: · we compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers and railroads, some of which have more equipment and greater capital resources than we do; · some of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates, maintain our margins or maintain significant growth in our business; · many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers, and in some instances we may not be selected; · many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of our business to competitors; · the trend toward consolidation in the trucking industry may create other large carriers with greater financial resources and other competitive advantages relating to their size and with whom we may have difficulty competing; · advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments; · competition from Internet-based and other logistics and freight brokerage companies may adversely affect our customer relationships and freight rates; and · economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve their ability to compete with us. - 10 - Table of Contents We are highly dependent on our major customers, the loss of one or more of which could have a material adverse effect on our business.
Any such decisions that may be made in the future by our controlling shareholders will be in their absolute discretion, subject to applicable laws and fiduciary duties. Because we are a “ controlled company ” under NASDAQ rules, we are not subject to certain corporate governance standards that apply to other publicly traded companies.
Any such decisions that may be made in the future by our controlling shareholders will be in their absolute discretion, subject to applicable laws and fiduciary duties. - 15 - Table of Contents Because we are a “ controlled company ” under NASDAQ rules, we are not subject to certain corporate governance standards that apply to other publicly traded companies.
Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged, which could adversely affect our growth and profitability. We are subject to certain risks arising from doing business in Mexico.
Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged, which could adversely affect our growth and profitability. - 12 - Table of Contents We are subject to certain risks arising from doing business in Mexico.
As we continue to grow our business in Mexico, we are subject to greater risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of Mexico, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and U.S. export and import laws, and social, political, and economic instability.
As we continue to grow our business in Mexico, we are subject to greater risks of doing business internationally, including changes in U.S. and Mexican trade policies and relations, immigration policies, fluctuations in foreign currencies, changes in the economic strength of Mexico, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and U.S. export and import laws, and social, political, and economic instability.
If we should fail to comply with applicable environmental regulations, we could be subject to substantial fines or penalties and to civil and criminal liability. Our information technology systems are subject to certain cyber security and disaster risks that are beyond our control.
If we should fail to comply with applicable environmental regulations, we could be subject to substantial fines or penalties and to civil and criminal liability. - 13 - Table of Contents Our information technology systems are subject to certain cyber security and disaster risks that are beyond our control.
If we are unable to generate sufficient cash from operations in the future, we may have to limit our growth, enter into unfavorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a material adverse effect on our profitability.
The trucking industry is capital intensive. If we are unable to generate sufficient cash from operations in the future, we may have to limit our growth, enter into unfavorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a material adverse effect on our profitability.
Legislation or regulations that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks, could adversely affect our operations and financial results.
Current or future legislation or regulations that potentially impose restrictions, caps, taxes, new disclosure requirements or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks, could adversely affect our operations and financial results.
A labor dispute involving another supplier to our customers that results in a slowdown or closure of our customers’ plants to which we provide services could also have a material adverse effect on our business. Ongoing insurance and claims expenses could significantly reduce our earnings. Our future insurance and claims expenses might exceed historical levels, which could reduce our earnings.
Any future labor dispute involving our customers or their suppliers that results in a slowdown or closure of our customers’ plants to which we provide services could have a material adverse effect on our business. Ongoing insurance and claims expenses could significantly reduce our earnings. Our future insurance and claims expenses might exceed historical levels, which could reduce our earnings.
This increased focus on sustainability may result in new legislation or regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.
This increased focus on sustainability has prompted newly enacted and proposed legislation and regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.
Therefore, stockholders should not rely on future dividend income from shares of our common stock.
Therefore, stockholders should not rely on future dividend income from shares of our common stock. - 16 - Table of Contents
A determination that independent contractors are employees could expose us to various liabilities and additional costs. Federal and state legislation as well as tax and other regulatory authorities often seek to assert that independent contractors in the transportation service industry are employees rather than independent contractors. Recently issued rulemaking by the U.S.
Federal and state legislation as well as tax and other regulatory authorities often seek to assert that independent contractors in the transportation service industry are employees rather than independent contractors. Recently issued rulemaking by the U.S.
Deterioration in the United States and/or world economies could exacerbate any difficulties experienced by our customers and suppliers in obtaining financing, which, in turn, could materially and adversely impact our business, financial condition, results of operations and cash flows. - 7 - Table of Contents We may be adversely impacted by fluctuations in the price and availability of diesel fuel.
Deterioration in the United States and/or world economies could exacerbate any difficulties experienced by our customers and suppliers in obtaining financing, which, in turn, could materially and adversely impact our business, financial condition, results of operations and cash flows.
Diesel fuel represents a significant operating expense for the Company and we do not currently hedge against the risk of diesel fuel price increases.
We may be adversely impacted by fluctuations in the price and availability of diesel fuel. Diesel fuel represents a significant operating expense for the Company, and we do not currently hedge against the risk of diesel fuel price increases.
Given the daily average trading volume of our common stock, significant sales of the common stock in a brief period of time, or the expectation of these sales, could cause a decline in the price of our common stock.
Given the daily average trading volume of our common stock, significant sales of the common stock in a brief period of time, or the expectation of these sales, could cause a decline in the price of our common stock. Additionally, low trading volumes may limit a stockholder’s ability to sell shares of our common stock.
Further, a terrorist attack, war, or risk of such an event, also may have an adverse effect on the economy. A decline in economic activity could adversely affect our revenue or restrict our future growth. Instability in the financial markets as a result of a health pandemic, terrorism or war also could affect our ability to raise capital.
A decline in economic activity could adversely affect our revenue or restrict our future growth. Instability in the financial markets as a result of a health pandemic, terrorism or war also could affect our ability to raise capital.
Any of these factors could impair our operating efficiency and productivity and result in higher operating costs. In addition, revenues could decrease if we are unable to meet regulatory or customer sustainability requirements.
Any of these factors could impair our operating efficiency and productivity and result in higher operating costs. In addition, revenues could decrease if we are unable to meet regulatory or customer sustainability requirements. These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition and results of operations.
We accrue a provision for a litigation matter according to applicable accounting standards based on the ongoing assessment of the strengths and weaknesses of the litigation, its likelihood of success, and an evaluation of the possible range of loss. Our inability to defend ourselves against a significant litigation claim could have a material adverse effect on our financial results.
We accrue a provision for a litigation matter according to applicable accounting standards based on the ongoing assessment of the strengths and weaknesses of the litigation, its likelihood of success, and an evaluation of the possible range of loss.
Some of our software systems are utilized by third parties who provide outsourced processing services which may increase the risk of a cyber-security incident. - 13 - Table of Contents A successful cyber-attack or catastrophic natural disaster could significantly affect our operating and financial systems and could temporarily disrupt our ability to provide required services to our customers and impact our ability to manage our operations and perform vital financial processes, any of which could have a materially adverse effect on our business.
A successful cyber-attack or catastrophic natural disaster could significantly affect our operating and financial systems and could temporarily disrupt our ability to provide required services to our customers and impact our ability to manage our operations and perform vital financial processes, any of which could have a materially adverse effect on our business.
Although we have processes, policies and procedures in place and our information systems are protected through physical and software security as well as redundant backup systems, they remain susceptible to cyber-security risks.
Although we have processes, policies and procedures in place and our information systems are protected through physical and software security as well as redundant backup systems, they remain susceptible to cyber-security risks. Some of our software systems are utilized by third parties who provide outsourced processing services which may increase the risk of a cyber-security incident.
If we are unable to offset any such increase in expenses with freight rate increases, our cash flows and results of operations could be adversely affected. If the market price for used revenue equipment declines, we could incur substantial losses upon disposition of our revenue equipment which could adversely affect our results of operations and financial condition.
If we are unable to offset any such increase in expenses with freight rate increases, our cash flows and results of operations could be adversely affected.
We have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health.
Our inability to defend ourselves against a significant litigation claim could have a material adverse effect on our financial results. - 11 - Table of Contents We have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health.
Any future shutdowns or disruptions of Mexico border-crossings, particularly at the Laredo, Texas border, could materially and adversely impact our operations, cash flows and profitability.
In past years, we have experienced delays in Mexico border-crossings due to weather events, immigration-related issues and the reallocation of border agents to other border areas. Any future shutdowns or disruptions of Mexico border-crossings, particularly at the Laredo, Texas border, could materially and adversely impact our operations, cash flows and profitability.
The resulting impact on domestic and global supply chains caused slowdowns and reduced freight demand for transportation companies such as ours.
Measures and the public health concerns resulting from the outbreak of a future public health crisis may severely disrupt economic and commercial activity. The resulting impact on domestic and global supply chains caused slowdowns and reduced freight demand for transportation companies such as ours.
If our employees were to unionize, our operating costs would increase and our profitability could be adversely affected. Our business may be harmed by terrorist attacks, future war or anti-terrorism measures. In order to prevent terrorist attacks, federal, state and municipal authorities have implemented and continue to follow various security measures, including checkpoints and travel restrictions on large trucks.
If our employees were to unionize, our operating costs would increase and our profitability could be adversely affected. - 14 - Table of Contents Our business may be harmed by terrorist attacks, future war or anti-terrorism measures.
We have significant ongoing capital requirements that could affect our liquidity and profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms. The trucking industry is capital intensive.
If the market price for used revenue equipment declines, we could incur substantial losses upon disposition of our revenue equipment which could adversely affect our results of operations and financial condition. - 8 - Table of Contents We have significant ongoing capital requirements that could affect our liquidity and profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms.
Our largest customer, General Motors Company, accounted for approximately 12% of our revenue. We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers. As a result, the concentration of our business within the automobile industry is greater than the concentration in a single customer.
A significant portion of our revenue is generated from our major customers. For 2024, our top five customers, based on revenue, accounted for approximately 39% of our revenue. Our largest customer, General Motors Company, accounted for approximately 12% of our revenue. We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers.
A substantial number of the employees of our largest customers are members of industrial trade unions and are employed under the terms of collective bargaining agreements.
The impact of any future significant labor dispute involving one or more of our customers, or that could otherwise affect our operations, could reduce our revenues and harm our profitability. A substantial number of the employees of our largest customers are members of industrial trade unions and are employed under the terms of collective bargaining agreements.
Additionally, low trading volumes may limit a stockholder’s ability to sell shares of our common stock. - 15 - Table of Contents We currently do not intend to pay future dividends on our common stock. We currently do not anticipate paying future cash dividends on our common stock.
We currently do not intend to pay future dividends on our common stock. We currently do not anticipate paying future cash dividends on our common stock.
We also face additional risks associated with our Mexico business, including potential restrictive trade policies and imposition of any import or export taxes, duties, fees, etc. If we are unable to address business concerns related to our international operations in a timely and cost efficient manner, our financial position, results of operations or cash flows could be adversely affected.
If we are unable to address business concerns related to our international operations in a timely and cost efficient manner, our financial position, results of operations or cash flows could be adversely affected. Additionally, approximately 38% of the freight we haul crosses the border between the United States and Mexico.
Compliance with these federal and state requirements has increased the cost of our equipment and may further increase the cost of replacement equipment in the future. The Regulation section in Item 1 of Part I of this Annual Report on Form 10-K discusses several proposed and final regulations that could materially impact our business and operations.
The Regulation section in Item 1 of Part I of this Annual Report on Form 10-K discusses several proposed and final regulations that could materially impact our business and operations. - 9 - Table of Contents A determination that independent contractors are employees could expose us to various liabilities and additional costs.
Approximately 30% of our revenues for 2023 were derived from transportation services provided to the automobile industry. Generally, we do not have long-term contractual relationships with our major customers, and we cannot assure that our customer relationships will continue as presently in effect.
Generally, we do not have long-term contractual relationships with our major customers, and we cannot assure that our customer relationships will continue as presently in effect. Any sustained or future reduction in or termination of our services by our major customers could have a further material adverse effect on our business and operating results.
Our international operations in Canada and Mexico may be affected significantly if there are any disruptions or closures of border traffic due to security measures. Such measures may have costs associated with them, which, in connection with the transportation services we provide, we or our independent contractors could be forced to bear.
Such measures may have costs associated with them, which, in connection with the transportation services we provide, we or our independent contractors could be forced to bear. Further, a terrorist attack, war, or risk of such an event, also may have an adverse effect on the economy.
These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition and results of operations. - 9 - Table of Contents Risks Related to Our Business Numerous competitive factors could impair our ability to operate at an acceptable profit.
Risks Related to Our Business Numerous competitive factors could impair our ability to operate at an acceptable profit.
Removed
We are highly dependent on our major customers, the loss of one or more of which could have a material adverse effect on our business. A significant portion of our revenue is generated from our major customers. For 2023, our top five customers, based on revenue, accounted for approximately 34% of our revenue.
Added
The imposition of new tariffs on Mexico and Canada, and any retaliatory actions by such countries, may have a negative impact on our operations and profitability. The United States has recently initiated implementation of significant new tariffs on imports from Canada, Mexico and China, including 25% tariffs on goods imported from Mexico and Canada.
Removed
Any sustained or future reduction in or termination of our services by our major customers could have a further material adverse effect on our business and operating results. - 10 - Table of Contents Ongoing effects from recent labor disputes involving several of our customers or the impact of any future significant labor dispute involving one or more of our customers, or that could otherwise affect our operations, could reduce our revenues and harm our profitability.
Added
While the tariffs on Mexico and Canada have been suspended on more than one occasion, the outlook remains uncertain as to whether such tariffs, and any resulting retaliatory tariffs on U.S. exports by those countries, will ultimately be implemented and how long they may be in effect.
Removed
While operations at the affected customer and supplier plants have resumed, some of these customer facilities have yet to return to fully operational status, and we continue to experience reduced freight volumes as a result of the recent labor disruptions.
Added
The imposition and enforcement of new tariffs on goods imported from Mexico or Canada, or vice versa, could adversely affect our business operations and financial results. A significant portion of our business is dependent on the automotive manufacturing industry and its suppliers, which have substantial operations in Mexico.
Removed
Any sustained slowdown in operations for these customers and any future labor disputes involving our customers could further affect our operations.
Added
Any increase in tariffs could lead to higher costs and reduced consumer demand for automotive products sold by our customers that are imported or exported to or from the United States.
Removed
If our automotive customers and their suppliers are unable to return to full operations in the near future or if these customers are unable to negotiate new contracts in the future and our customers’ plants experience slowdowns or closures as a result, our revenue and profitability could be negatively impacted.
Added
This, in turn, may result in reduced demand for our transportation services, particularly our cross-border and Mexico freight business, as customers seek to mitigate increased expenses by reducing production, sourcing components from alternative locations, or modifying their supply chain strategies. This could reduce the volume of goods transported by us, thereby affecting our operational efficiency and financial performance.
Removed
Additionally, approximately 37% of the freight we haul crosses the border between the United States and Mexico. In past years, we have experienced delays in Mexico border-crossings due to weather events, immigration-related issues and the reallocation of border agents to other border areas.
Added
In addition to the direct impact on our customers, the broader economic implications of tariffs could lead to further fluctuations in cross-border or general freight volumes and affect our operations and our ability to maintain consistent service levels. Any such disruptions could necessitate adjustments in our operational strategies, increase our costs and negatively impact our revenue and profitability.
Removed
The rapid spread of the COVID-19 pandemic during 2020 resulted in governmental authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, increased border and port controls and closures, and shutdowns. These measures and the public health concerns resulting from the outbreak severely disrupted economic and commercial activity.
Added
In March 2024, the EPA finalized the third phase of standards, which aim to reduce greenhouse gas emissions from heavy duty vehicles with model years 2028 to 2032, including tractor-trailers. Compliance with these federal and state requirements has increased the cost of our equipment and may further increase the cost of replacement equipment in the future.
Added
As a result, the concentration of our business within the automobile industry is greater than the concentration in a single customer. Approximately 32% of our revenues for 2024 were derived from transportation services provided to the automobile industry.
Added
Our ability to make scheduled payments on, or to refinance, our debt and other obligations will depend on our financial and operating performance, which, in turn, is subject to our ability to implement our strategic initiatives, prevailing economic conditions and certain financial, business and other factors beyond our control.
Added
With the rapid advancement in artificial intelligence (“AI”) technology, cyber-attacks have become increasingly sophisticated.
Added
While we have modified our security policy both to educate and to place appropriate guardrails around our users’ ability to use such technology in order to safeguard our system, we cannot guarantee that these efforts will be successful in preventing a successful cyber-attack or the exposure of our proprietary information.
Added
In addition, we rely on our third-party business partners who provide security services to continually enhance their detection and mitigation capabilities to better support our operation, and we conduct analysis regarding third party systems and their use of AI technology to limit potential exposures to security risks.
Added
However, we cannot guarantee that our third-party business partners will not experience security issues due to AI that could have an impact on our operations. A breach in our security systems, whether due to the use of AI technology or not, could harm our reputation and adversely impact our business, results of operations and financial condition.
Added
In order to prevent terrorist attacks, federal, state and municipal authorities have implemented and continue to follow various security measures, including checkpoints and travel restrictions on large trucks. Our international operations in Canada and Mexico may be affected significantly if there are any disruptions or closures of border traffic due to security measures.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur terminal facilities in North Little Rock, Arkansas; North Jackson, Ohio; Willard, Ohio; Bloomsburg, Pennsylvania; Bolingbrook, Illinois; and Irving and Laredo, Texas are owned. The leased facilities are leased primarily on contractual terms typically ranging from one to five years and have provisions for early cancellation if we so choose.
Biggest changeThe leased facilities are leased primarily on contractual terms typically ranging from one to five years and have provisions for early cancellation if we so choose.
As of December 31, 2023, the following table provides a summary of the ownership and types of activities conducted at each location: Location Own/ Lease Dispatch Office Maintenance Facility Safety Training Tontitown, Arkansas Own Yes Yes Yes Bloomsburg, Pennsylvania Own Yes Yes Yes Bolingbrook, Illinois Own Yes No No North Little Rock, Arkansas Own Yes Yes Yes Indianapolis, Indiana Lease No Yes No Romulus, Michigan Lease No Yes No North Jackson, Ohio Own Yes Yes Yes Willard, Ohio Own Yes Yes No Irving, Texas Own Yes Yes Yes Laredo, Texas Own Yes Yes Yes Monterrey, Mexico Lease Yes No No Fort Wayne, Indiana Lease Yes Yes No Charlotte, North Carolina Lease No Yes No We also have access to trailer drop and relay stations in various other locations across the country.
As of December 31, 2024, the following table provides a summary of the ownership and types of activities conducted at each location: Location Own/ Lease Dispatch Office Maintenance Facility Safety Training Tontitown, Arkansas Own Yes Yes Yes Bloomsburg, Pennsylvania Own Yes Yes Yes Bolingbrook, Illinois Own Yes No No North Little Rock, Arkansas Own Yes Yes Yes Indianapolis, Indiana Lease No Yes No Romulus, Michigan Lease No Yes No North Jackson, Ohio Own Yes Yes Yes Willard, Ohio Own Yes Yes No El Paso, Texas Own Yes Yes Yes Irving, Texas Own Yes Yes Yes Laredo, Texas Own Yes Yes Yes Monterrey, Mexico Lease Yes No No Nuevo Laredo, Mexico Own No No No Fort Wayne, Indiana Lease Yes Yes No Charlotte, North Carolina Lease No Yes No Saddle Brook, New Jersey Lease Yes No No We also have access to trailer drop and relay stations in various other locations across the country.
Item 2. Properties. Our executive offices and primary terminal facilities, which we own, are located in Tontitown, Arkansas. These facilities are located on approximately 54.9 acres and consist of 113,249 square feet of office space and maintenance and storage facilities. Our subsidiaries lease facilities in Fort Wayne and Indianapolis, Indiana; Romulus, Michigan; Charlotte, North Carolina; and Monterrey, Mexico.
Item 2. Properties. Our executive offices and primary terminal facilities, which we own, are located in Tontitown, Arkansas. These facilities are located on approximately 57.82 acres and consist of 110,147 square feet of office space and maintenance and storage facilities.
Added
Our subsidiaries lease facilities in Fort Wayne and Indianapolis, Indiana; Romulus, Michigan; Saddle Brook, New Jersey; Charlotte, North Carolina; and Monterrey, Mexico. Our terminal facilities in North Little Rock, Arkansas; North Jackson, Ohio; Willard, Ohio; Bloomsburg, Pennsylvania; Bolingbrook, Illinois; El Paso, Irving and Laredo, Texas; and Nuevo Laredo, Mexico are owned.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. On September 1, 2020, we elected to become self-insured for certain layers of auto liability claims in excess of $2.0 million.
Biggest changeItem 3. Legal Proceedings We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. We currently self-insure for certain layers of auto liability claims in excess of $2.0 million.
We currently specifically reserve for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims.
Specifically, we reserve for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims.
Removed
We were named a defendant in a putative class action lawsuit filed on August 6, 2021, in the United States District Court for the Western District of Arkansas.
Removed
The complaint alleged failure to pay over-the-road drivers minimum wage under the Fair Labor Standards Act and the Arkansas Minimum Wage Act, violations of the Electronic Funds Transfer Act (EFTA), violations of the Arkansas Wage Payment Law (discharge pay and unlawful, usurious advance fees), violations of the Arkansas Common Law, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).
Removed
We denied liability on all claims. On August 5, 2022, the parties filed a Joint Motion for Preliminary Approval of a Collective and Class Action Settlement.
Removed
On October 7, 2022, the parties submitted to the court an executed Settlement Agreement and Release, to resolve and release all claims asserted in the litigation from January 1, 2020, through July 31, 2022, for $4,750,000. We did not admit liability for any claim.
Removed
The District Court granted preliminary approval of the settlement on November 14, 2022, and notice of the settlement was sent to class and collective action members. A final settlement approval hearing was held, and the settlement was approved, on October 11, 2023. - 17 - Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the NASDAQ Global Market under the symbol PTSI. As of February 7, 2024, there were approximately 63 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is traded on the NASDAQ Global Market under the symbol PAMT. As of February 19, 2025, there were approximately 57 holders of record of our common stock.
Repurchases of Equity Securities by the Issuer The Company’s stock repurchase program has been extended and expanded several times, most recently in July 2023, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization. No shares were repurchased under the Company’s stock repurchase program during the fourth quarter of 2023.
Repurchases of Equity Securities by the Issuer The Company’s stock repurchase program has been extended and expanded several times, most recently in July 2023, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization. No shares were repurchased under the Company’s stock repurchase program during the fourth quarter of 2024.
The graph assumes that the value of the investment in our common stock and in each index was $100 on December 31, 2018 and that all dividends were reinvested. COMPARISON OF CUMULATIVE TOTAL RETURN AMONG OUR COMMON STOCK, THE NASDAQ OMX INDEX FOR THE NASDAQ STOCK MARKET (U.S.
The graph assumes that the value of the investment in our common stock and in each index was $100 on December 31, 2019 and that all dividends were reinvested. COMPARISON OF CUMULATIVE TOTAL RETURN AMONG OUR COMMON STOCK, THE NASDAQ OMX INDEX FOR THE NASDAQ STOCK MARKET (U.S.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report for a presentation of compensation plans under which equity securities of the Company are authorized for issuance. - 18 - Table of Contents Performance Graph Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock against the cumulative total return of the NASDAQ OMX Index for the NASDAQ Stock Market (U.S. companies) and the NASDAQ OMX Index for the NASDAQ Trucking and Transportation Stocks for the period of five years commencing December 31, 2018 and ending December 31, 2023.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report for a presentation of compensation plans under which equity securities of the Company are authorized for issuance. - 19 - Table of Contents Performance Graph Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock against the cumulative total return of the NASDAQ OMX Index for the NASDAQ Stock Market (U.S. companies) and the NASDAQ OMX Index for the NASDAQ Trucking and Transportation Stocks for the period of five years commencing December 31, 2019 and ending December 31, 2024.
COMPANIES) AND THE NASDAQ TRUCKING AND TRANSPORTATION STOCKS INDEX THROUGH DECEMBER 31, 2023 - 19 - Table of Contents
COMPANIES) AND THE NASDAQ TRUCKING AND TRANSPORTATION STOCKS INDEX THROUGH DECEMBER 31, 2024 - 20 - Table of Contents
Added
As of December 31, 2024, 474,016 shares remained available for repurchase under the stock repurchase program.

Item 7. Management's Discussion & Analysis

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

50 edited+43 added−14 removed37 unchanged
Biggest changeThe logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, improved to 87.2% for 2022 from 88.7% for 2021. - 23 - Table of Contents Results of Operations - Combined Services 2023 Compared to 2022 Income tax expense was approximately $10.2 million in 2023, resulting in an effective rate of 35.6%, as compared to approximately $28.3 million, or an effective tax rate of 23.8% in 2022.
Biggest changeResults of Operations - Combined Services 2024 Compared to 2023 Income tax benefit was approximately $9.8 million in 2024, resulting in an effective rate of 23.5%, as compared to income tax expense of approximately $10.2 million, or an effective tax rate of 35.6% in 2023. The effective tax rate is impacted by the effect of state taxes and other factors.
The decrease in rate per loaded mile reflects the challenging freight rate environment across our industry during 2023, while the slight reduction in loaded miles was largely due to the impacts of the automotive plant shutdowns during the UAW strikes in September and October 2023, partially offset by an increase in our average truck count during the current year attributable to the acquisition of Metropolitan Trucking assets in June 2022.
The decrease in rate per loaded mile reflects the challenging freight rate environment across our industry during 2023, while the slight reduction in loaded miles was largely due to the impacts of the automotive plant shutdowns during the UAW strikes in September and October 2023, partially offset by an increase in our average truck count during 2023 attributable to the acquisition of Metropolitan Trucking assets in June 2022.
We do this because we believe the high variable cost nature of certain expenses makes a comparison of changes in expenses as a percentage of revenue more meaningful than absolute dollar changes. - 20 - Table of Contents Results of Operations - Truckload Services The following table sets forth, for truckload services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated.
We do this because we believe the high variable cost nature of certain expenses makes a comparison of changes in expenses as a percentage of revenue more meaningful than absolute dollar changes. - 21 - Table of Contents Results of Operations - Truckload Services The following table sets forth, for truckload services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated.
Truckload services revenues, excluding fuel surcharges, represented 65.3%, 66.1% and 67.0% of total revenues, excluding fuel surcharges for the twelve months ended December 31, 2023, 2022 and 2021, respectively. The main factors that impact our profitability on the expense side are costs incurred in transporting freight for our customers.
Truckload services revenues, excluding fuel surcharges, represented 67.1%, 65.3% and 66.1% of total revenues, excluding fuel surcharges for the twelve months ended December 31, 2024, 2023 and 2022, respectively. The main factors that impact our profitability on the expense side are costs incurred in transporting freight for our customers.
The increase relates primarily to an increase in cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense. - 21 - Table of Contents Insurance and claims increased from 6.0% of revenues, before fuel surcharges, during 2022 to 6.7% of revenues, before fuel surcharges, during 2023.
The increase relates primarily to an increase in cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense. Insurance and claims increased from 6.0% of revenues, before fuel surcharges, during 2022 to 6.7% of revenues, before fuel surcharges, during 2023.
At December 31, 2023, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $261.7 million. These installment notes are payable in monthly installments, ranging from 36 monthly installments to 84 monthly installments, at a weighted average interest rate of 4.20%.
At December 31, 2023, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $261.7 million. These installment notes were payable in monthly installments, ranging from 36 to 84 months at a weighted average interest rate of 4.20%.
Management considers our critical accounting estimates to be those that require more significant judgments and estimates when we prepare our consolidated financial statements. - 26 - Table of Contents Note 1 in Part II, Item 8 of this Annual Report describes the Company's accounting policies.
Management considers our critical accounting estimates to be those that require more significant judgments and estimates when we prepare our consolidated financial statements. Note 1 in Part II, Item 8 of this Annual Report describes the Company's accounting policies.
The effective tax rate is impacted by the effect of state taxes and other factors. In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of Accounting Standards Codification (“ASC”) 740-10-30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary.
The effective tax rate is impacted by the effect of state taxes and other factors. In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC 740-10-30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary.
Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, borrowings under our lines of credit, installment notes and investment margin account, and issuances of equity securities. During 2023, we generated $114.6 million in cash from operating activities compared to $168.8 million and $101.7 million in 2022 and 2021, respectively.
Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, borrowings under our lines of credit, installment notes, investment margin account, and issuances of equity securities. During 2024, we generated $59.0 million in cash from operating activities compared to $114.6 million and $168.8 million in 2023 and 2022, respectively.
During 2023, 2022 and 2021, approximately $104.7 million, $128.1 million and $65.9 million, respectively, of the Company's total revenue was generated from fuel surcharges. We also discuss certain changes in our expenses as a percentage of revenue, before fuel surcharge, rather than absolute dollar changes.
During 2024, 2023 and 2022, approximately $85.6 million, $104.7 million, and $128.1 million, respectively, of the Company's total revenue was generated from fuel surcharges. We also discuss certain changes in our expenses as a percentage of revenue, before fuel surcharge, rather than absolute dollar changes.
Based upon our 2023 health and workers' compensation expenses, a 10% increase in both claims incurred and IBNR claims would increase our annual health and workers' compensation expenses by approximately $0.7 million. On September 1, 2020, the Company elected to become self-insured for certain layers of auto liability claims in excess of $2.0 million.
Based upon our 2024 health and workers' compensation expenses, a 10% increase in both claims incurred and IBNR claims would increase our annual health and workers' compensation expenses by approximately $0.9 million. - 29 - Table of Contents On September 1, 2020, the Company elected to become self-insured for certain layers of auto liability claims in excess of $2.0 million.
Years Ended December 31, 2023 2022 2021 Operating revenues, before fuel surcharge 100.0 % 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 4.9 4.6 4.6 Rent and purchased transportation 84.6 80.8 82.5 Other 2.4 1.8 1.6 Total operating expenses 91.9 87.2 88.7 Operating income 8.1 12.8 11.3 Non-operating income 0.8 0.2 1.0 Interest expense (0.7 ) (0.5 ) (0.8 ) Income before income taxes 8.2 % 12.5 % 11.5 % 2023 Compared to 2022 For the year ended December 31, 2023, logistics and brokerage services revenues, before fuel surcharges, decreased 11.7% to $245.2 million as compared to $277.8 million for the year ended December 31, 2022.
Years Ended December 31, 2024 2023 2022 Operating revenues, before fuel surcharge 100.0 % 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 5.1 4.9 4.6 Rent and purchased transportation 86.6 84.6 80.8 Other 3.2 2.4 1.8 Total operating expenses 94.9 91.9 87.2 Operating income 5.1 8.1 12.8 Non-operating income 0.2 0.8 0.2 Interest expense (0.4 ) (0.7 ) (0.5 ) Income before income taxes 4.8 % 8.2 % 12.5 % 2024 Compared to 2023 For the year ended December 31, 2024, logistics and brokerage services revenues, before fuel surcharges, decreased 15.6% to $207.0 million as compared to $245.2 million for the year ended December 31, 2023.
Years Ended December 31, 2023 2022 2021 Operating revenues, before fuel surcharge 100.0 % 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 37.8 31.3 30.6 Operating supplies and expenses, net of fuel surcharge 11.8 6.8 8.3 Rent and purchased transportation 23.5 26.0 24.3 Depreciation 13.8 11.3 12.5 Insurance and claims 6.7 6.0 4.4 Other 4.4 2.9 2.5 (Gain) on sale or disposal of property (0.3 ) (0.6 ) (0.3 ) Total operating expenses 97.7 83.7 82.3 Operating income 2.3 16.3 17.7 Non-operating income 1.2 0.5 1.9 Interest expense (1.6 ) (1.2 ) (1.4 ) Income before income taxes 1.9 % 15.6 % 18.2 % 2023 Compared to 2022 For the year ended December 31, 2023, truckload services revenue, before fuel surcharges, decreased 14.8% to $460.9 million as compared to $540.9 million for the year ended December 31, 2022.
Years Ended December 31, 2024 2023 2022 Operating revenues, before fuel surcharge 100.0 % 100.0 % 100.0 % Operating expenses: Salaries, wages and benefits 38.9 37.8 31.3 Operating supplies and expenses, net of fuel surcharge 11.8 11.8 6.8 Rent and purchased transportation 26.1 23.5 26.0 Depreciation 23.3 13.8 11.3 Impairment Loss 1.5 - - Insurance and claims 4.6 6.7 6.0 Other 4.8 4.4 2.9 Loss(gain) on sale or disposal of property 0.2 (0.3 ) (0.6 ) Total operating expenses 111.2 97.7 83.7 Operating (loss)income (11.2 ) 2.3 16.3 Non-operating income 1.9 1.2 0.5 Interest expense (2.9 ) (1.6 ) (1.2 ) Income before income taxes (12.2% ) 1.9 % 15.6 % 2024 Compared to 2023 For the year ended December 31, 2024, truckload services revenue, before fuel surcharges, decreased 8.4% to $422.0 million as compared to $460.9 million for the year ended December 31, 2023.
At December 31, 2023, the remaining marketable equity securities have a combined cost basis of approximately $30.3 million and a combined fair market value of approximately $43.2 million. The Company has developed a strategy to invest in securities from which it expects to receive dividends that qualify for favorable tax treatment, as well as appreciate in value.
At December 31, 2024, the remaining marketable equity securities have a combined cost basis of approximately $27.1 million and a combined fair market value of approximately $42.6 million. The Company has developed a strategy to invest in securities from which it expects to receive dividends that qualify for favorable tax treatment, as well as appreciate in value.
Accounts payable accruals can vary significantly at the end of each reporting period depending on the timing of the actual date of payment in relation to the last day of the reporting period. Accrued expenses and other liabilities decreased from $34.2 million at December 31, 2022 to $16.8 million at December 31, 2023.
Accounts payable accruals can vary significantly at the end of each reporting period depending on the timing of the actual date of payment in relation to the last day of the reporting period. - 27 - Table of Contents Accrued expenses and other liabilities decreased from $16.8 million at December 31, 2023 to $14.6 million at December 31, 2024.
Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. All of the Company's operations are in the motor carrier segment.
Both our truckload operations and our brokerage and logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report.
Investing activities used $11.3 million in cash during 2023 compared to using $113.5 million and generating $9.3 million in 2022 and 2021, respectively. Financing activities used $76.8 million in cash during 2023 compared to generating $0.3 million during 2022 and using $92.8 million during 2021. See the Consolidated Statements of Cash Flows in Item 8 of this Report.
Investing activities used $100.2 million in cash during 2024 compared to using $11.3 million and $113.5 million in 2023 and 2022, respectively. Financing activities generated $8.6 million in cash during 2024 compared to using $76.8 million during 2023 and generating $0.3 million during 2022. See the Consolidated Statements of Cash Flows in Item 8 of this Report.
Marketable equity securities at December 31, 2023 increased approximately $1.5 million as compared to December 31, 2022. The increase resulted from an increase in the market value of the portfolio by approximately $1.6 million offset by sales of marketable equity securities approximating $0.1 million.
Marketable equity securities at December 31, 2024 decreased approximately $0.6 million as compared to December 31, 2023. The decrease resulted from the sales of marketable equity securities approximating $3.7 million offset by an increase in the market value of the portfolio by approximately $3.1 million.
Management also determined that no adjustment to the Company’s consolidated financial statements for uncertain tax positions was required as of December 31, 2022 as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws.
As of December 31, 2024, an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws.
Diluted earnings per share decreased to $0.83 for the year ended December 31, 2023 from $4.04 for the year ended December 31, 2022. 2022 Compared to 2021 Income tax expense was approximately $28.3 million in 2022, resulting in an effective rate of 23.8%, as compared to approximately $26.0 million, or an effective tax rate of 25.4% in 2021.
Diluted (loss) earnings per share decreased to ($1.45) for the year ended December 31, 2024 from $0.83 for the year ended December 31, 2023. 2023 Compared to 2022 Income tax expense was approximately $10.2 million in 2023, resulting in an effective rate of 35.6%, as compared to approximately $28.3 million, or an effective tax rate of 23.8% in 2022.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 97.7% for 2023 from 83.7% for 2022. 2022 Compared to 2021 For the year ended December 31, 2022, truckload services revenue, before fuel surcharges, increased 25.9% to $540.9 million as compared to $429.6 million for the year ended December 31, 2021.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 111.2% for 2024 from 97.7% for 2023. 2023 Compared to 2022 For the year ended December 31, 2023, truckload services revenue, before fuel surcharges, decreased 14.8% to $460.9 million as compared to $540.9 million for the year ended December 31, 2022.
The effective tax rate is impacted by the effect of state taxes and other factors. As of December 31, 2022, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.
As of December 31, 2024, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.
Diluted earnings per share increased to $4.04 for the year ended December 31, 2022 from $3.35 for the year ended December 31, 2021. - 24 - Table of Contents Liquidity and Capital Resources Our business has required, and will continue to require, a significant investment in new revenue equipment.
Diluted earnings per share decreased to $0.83 for the year ended December 31, 2023 from $4.04 for the year ended December 31, 2022. Liquidity and Capital Resources Our business has required, and will continue to require, a significant investment in new revenue equipment.
During 2023 and 2022, we utilized cash on hand, installment notes, and our lines of credit to finance revenue equipment purchases of approximately $113.5 million and $82.6 million, respectively. We often finance the acquisition of revenue equipment through installment notes with fixed interest rates and terms ranging from 36 to 84 months.
During 2024 and 2023, we utilized cash on hand, installment notes, and our lines of credit to finance revenue equipment purchases of approximately $143.5 million and $113.5 million, respectively. - 26 - Table of Contents We often finance the acquisition of revenue equipment through installment notes with fixed interest rates.
The increase also relates to an increase in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to decreased fuel surcharge collections from customers for the year ended December 31, 2023 compared to December 31, 2022.
The increase also relates to an increase in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to decreased fuel surcharge collections from customers for the year ended December 31, 2023 compared to December 31, 2022. - 23 - Table of Contents Rent and purchased transportation decreased from 26.0% of revenues, before fuel surcharges, during 2022 to 23.5% of revenues, before fuel surcharges, during 2023.
At December 31, 2022, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $264.3 million. These installment notes were payable in monthly installments, ranging from 36 to 84 months at a weighted average interest rate of 3.16%.
At December 31, 2024, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $325.6 million. These installment notes are payable in monthly installments, ranging from 60 monthly installments to 84 monthly installments, at a weighted average interest rate of 5.00%.
The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 91.9% for 2023 from 87.2% for 2022. 2022 Compared to 2021 For the year ended December 31, 2022, logistics and brokerage services revenues, before fuel surcharges, increased 31.3% to $277.8 million as compared to $211.7 million for the year ended December 31, 2021.
The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 91.9% for 2023 from 87.2% for 2022.
Operating supplies and expenses increased from 6.8% of revenues, before fuel surcharges, during 2022 to 11.8% of revenues, before fuel surcharges, during 2023. The increase relates primarily to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses with a decrease in revenue.
The increase relates primarily to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses with a decrease in revenue.
Rent and purchased transportation decreased from 26.0% of revenues, before fuel surcharges, during 2022 to 23.5% of revenues, before fuel surcharges, during 2023. The decrease was primarily due to a decrease in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers for the year-ended December 31, 2023 compared to December 31, 2022.
The decrease was primarily due to a decrease in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers for the year-ended December 31, 2023 compared to December 31, 2022.
The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.
Rent and purchased transportation increased from 80.8% of revenues, before fuel surcharges, in 2022 to 84.6% of revenues, before fuel surcharges, in 2023. The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.
The depreciation of trucks and trailers over their estimated useful lives and the determination of any salvage value also require management to make judgments about future events. Therefore, the Company’s management periodically evaluates whether changes to estimated useful lives or salvage values are necessary to ensure these estimates accurately reflect the economic reality of the assets.
Therefore, the Company’s management periodically evaluates whether changes to estimated useful lives or salvage values are necessary to ensure these estimates accurately reflect the economic reality of the assets.
Future changes in our estimated useful life or salvage value estimates, or fluctuations in market value that are not reflected in current estimates, could have a material effect on the Company’s consolidated financial statements. Claims accruals . The Company is self-insured for health and workers' compensation benefits up to certain stop-loss limits.
Future changes in our estimated useful life or salvage value estimates, or fluctuations in market value that are not reflected in current estimates, could have a material effect on the Company’s consolidated financial statements.
For 2024, we expect to purchase 688 new trucks and 1,548 trailers while continuing to sell or trade equipment that has reached the end of its life cycle, which we expect to result in net capital expenditures of approximately $113.1 million.
For 2025, we expect to purchase 293 new trucks and 300 trailers while continuing to sell or trade equipment that has reached the end of its life cycle.
The increase relates primarily to the purchase of replacement trucks and trailers. Accounts payable increased from $48.9 million at December 31, 2022 to $62.7 million at December 31, 2023. This increase was primarily attributable to new revenue equipment that was invoiced, or delivered, but not yet paid as of December 31, 2023.
Accounts payable decreased from $62.7 million at December 31, 2023 to $31.2 million at December 31, 2024. This decrease was primarily attributable to payments made during 2024 for new revenue equipment that was invoiced or delivered, but not yet paid as of December 31, 2023.
In some cases, the Company has agreements in place with certain manufacturers whereby salvage values are guaranteed by the manufacturer. In other cases, where salvage values are not guaranteed, estimates of salvage value are based on the expected market values of equipment at the time of disposal.
In some cases, the Company has agreements in place with certain manufacturers whereby salvage values are guaranteed by the manufacturer.
The percentage-based increase relates primarily to an increase in the percentage of miles driven by company-employed drivers, as opposed to third-party owner-operators for the year-ended December 31, 2023 compared to December 31, 2022. The increase also relates to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital.
Salaries, wages and benefits increased from 31.3% of revenues, before fuel surcharges, during 2022 to 37.8% of revenues, before fuel surcharges, during 2023. The percentage-based increase relates primarily to an increase in the percentage of miles driven by company-employed drivers, as opposed to third-party owner-operators for the year-ended December 31, 2023 compared to December 31, 2022.
The decrease relates primarily to the interaction of an increase in operating revenues with the fixed-cost nature of depreciation expense. Insurance and claims increased from 4.4% of revenues, before fuel surcharges, during 2021 to 6.0% of revenues, before fuel surcharges, during 2022.
The increase also relates to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital. Operating supplies and expenses increased from 6.8% of revenues, before fuel surcharges, during 2022 to 11.8% of revenues, before fuel surcharges, during 2023.
Brokerage operations occur specifically in certain divisions; however, brokerage operations occur throughout the Company in similar operations having substantially similar economic characteristics. Rent and purchased transportation, which includes costs paid to third-party carriers, are shown net of fuel surcharges.
Rent and purchased transportation, which includes costs paid to third-party carriers, are shown net of fuel surcharges.
During 2023, we maintained a revolving line of credit with a borrowing limit of $60.0 million. Under this credit facility, amounts outstanding under the line bear interest at Term SOFR plus 1.35% (6.66% at December 31, 2023), are secured by our trade accounts receivable and mature on July 1, 2026.
Under this credit facility, amounts outstanding under the line bear interest at Term SOFR plus 1.85% (6.42% at December 31, 2024), are secured by our trade accounts receivable and mature on July 1, 2027. The credit facility also establishes an “unused fee” of 0.25% if average borrowings are less than $18.0 million.
This decrease resulted primarily from a smaller increase in the market value of our marketable equity securities portfolio at December 31, 2022 as compared to December 31, 2021.
This increase resulted primarily from an increase in the market value of our marketable equity securities portfolio and an increase in the Company’s net realized gains from the sale of certain marketable equity securities during the year-ended December 31, 2024 as compared to the year ended December 31, 2023.
The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2020 and forward remain open to examination in those jurisdictions.
The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2021 and forward remain open to examination in those jurisdictions. - 25 - Table of Contents The combined net loss for all divisions was $31.8 million, or 5.1% of revenues, before fuel surcharge, for 2024 as compared to the combined net income for all divisions of $18.4 million or 2.6% of revenues, before fuel surcharge, for 2023.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 83.7% for 2022 from 82.3% for 2021. - 22 - Table of Contents Results of Operations - Logistics and Brokerage Services The following table sets forth, for logistics and brokerage services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 97.7% for 2023 from 83.7% for 2022.
Additionally, during 2022 and 2021, the Company did not recognize or accrue any interest or penalties related to uncertain income tax positions.
The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During 2024 and 2023, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.
The increase relates primarily to a 13.5% increase in our rate per loaded mile, from $2.58 for the year ended December 31, 2021 to $2.92 for the year ended December 31, 2022 and to a 10.9% increase in loaded miles from 166.8 million for the year ended December 31, 2021 to 185.0 million for the year ended December 31, 2022.
The decrease relates primarily to a 5.7% decrease in total miles travelled from 189.5 million during the year ended December 31, 2023 to 178.6 million for the year ended December 31, 2024 and to a 3.2% decrease in our rate per mile, from $2.17 for the year ended December 31, 2023 to $2.10 for the year ended December 31, 2024.
The holding term of these securities depends largely on the general economic environment, the equity markets, borrowing rates, and the Company's cash requirements. - 25 - Table of Contents Revenue equipment at December 31, 2023, which generally consists of trucks, trailers, and revenue equipment accessories such as satellite tracking units and auxiliary power units, increased approximately $51.7 million as compared to December 31, 2022.
During 2024, the Company received dividends of approximately $1.5 million. The holding term of these securities depends largely on the general economic environment, the equity markets, borrowing rates, and the Company's cash requirements. Property and equipment increased by approximately $65.4 million from $771.1 as of December 31, 2023 to $836.5 million as of December 31,2024.
This increase was offset by other factors including a decrease in the percentage of miles driven by third-party owner-operators, as opposed to company-employed drivers, a reduction in the bonus accrual and a decrease in amounts accrued for parts at the end of 2023.
The increase was primarily due to a year-over-year increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers and to a lesser extent increased rates paid to third-party carriers for the year ended December 31, 2024 compared to the year ended December 31, 2023.
In order to maintain our truck and trailer fleet count, it is often necessary to purchase replacement units and place them in service before trade units are removed from service. The timing of this process often requires the Company to pay for new units without any reduction in price for trade units.
The timing of this process often requires the Company to pay for new equipment before receiving any proceeds from retired equipment, or without any reduction in price for trade units. In this situation, the Company later receives payment for the equipment scheduled for replacement once they are delivered to the buyer and have passed inspection.
The decrease also relates to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses. Rent and purchased transportation increased from 24.3% of revenues, before fuel surcharges, during 2021 to 26.0% of revenues, before fuel surcharges, during 2022.
The percentage-based increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital. Rent and purchased transportation increased from 23.5% of revenues, before fuel surcharges, during 2023 to 26.1% of revenues, before fuel surcharges, during 2024.
The decrease was primarily related to payments during 2023 of amounts accrued for liability and legal claims at December 31, 2022.
The decrease is primarily attributable to a decrease in auto liability claims accrued during the year ended December 31, 2024 compared to auto liability claims accrued for the year ended December 31, 2023.
We expect freight rates to generally remain under pressure from customers during 2024 with freight demand continuing to be somewhat impacted by the recent automotive shutdowns and general economic uncertainties. Rent and purchased transportation increased from 80.8% of revenues, before fuel surcharges, in 2022 to 84.6% of revenues, before fuel surcharges, in 2023.
Rent and purchased transportation increased from 84.6% of revenues, before fuel surcharges, in 2023 to 86.6% of revenues, before fuel surcharges, in 2024.
Removed
We expect freight rates to generally remain under pressure from customers during 2024 with freight demand continuing to be somewhat impacted by the recent automotive shutdowns and general economic uncertainties. Salaries, wages and benefits increased from 31.3% of revenues, before fuel surcharges, during 2022 to 37.8% of revenues, before fuel surcharges, during 2023.
Added
Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC 280-10-50-11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company are aggregated into a single motor carrier segment.
Removed
Salaries, wages and benefits increased from 30.6% of revenues, before fuel surcharges, during 2021 to 31.3% of revenues, before fuel surcharges, during 2022. The percentage-based increase relates primarily to the increase in employees combined with a decrease in independent contractors.
Added
The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies. The accounting policies of the motor carrier segment are the same as those described in the summary of accounting policies found in this report.
Removed
Operating supplies and expenses decreased from 8.3% of revenues, before fuel surcharges, during 2021 to 6.8% of revenues, before fuel surcharges, during 2022.
Added
For purposes of this report, net income reflects the profitability of our operations by calculating the total earnings after deducting operating expenses, interest expense, income taxes and any other applicable costs from total revenue. The measure of net income is reported on the consolidated statement of operations as consolidated net (loss) income.
Removed
The decrease relates primarily to a decrease in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to increased fuel surcharge collections from customers for the year ended December 31, 2022 compared to December 31, 2021.
Added
Operating ratio is the measure of our efficiency in managing operating expenses relative to revenue generation and is calculated as total operating expenses as a percentage of total operating revenue.
Removed
The increase was primarily due to an increase in the rates paid to third-party owner-operators for the year ended December 31, 2022 compared to the year ended December 31, 2021. Depreciation decreased from 12.5% of revenues, before fuel surcharges, during 2021 to 11.3% of revenues, before fuel surcharges, during 2022.
Added
The reduction in total miles was primarily driven by a 3.1% reduction in the average number of trucks operated combined with a 3.5% reduction in average miles driven by each truck during the year ended December 31, 2024 compared to the year ended December 31, 2023.
Removed
This increase relates primarily to an increase in accident and legal reserves, recognized in 2022 as compared to 2021 and to an increase in the premiums paid for auto liability and cargo insurance. Non-operating income decreased from 1.9% of revenues, before fuel surcharges, during 2021 to 0.5% of revenues, before fuel surcharges, during 2022.
Added
The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight. Salaries, wages and benefits increased from 37.8% of revenues, before fuel surcharges, during 2023 to 38.9% of revenues, before fuel surcharges, during 2024.
Removed
The increase was primarily related to a 20.9% increase in the number of loads carried for customers during 2022 as compared to 2021, partially offset by a 3.5% decrease in revenue per load. Rent and purchased transportation decreased from 82.5% of revenues, before fuel surcharges, in 2021 to 80.8% of revenues, before fuel surcharges, in 2022.
Added
Depreciation increased from 13.8% of revenues, before fuel surcharges, during 2023 to 23.3% of revenues, before fuel surcharges, during 2024. The increase is primarily attributed to management’s change in accounting estimates related to the salvage values and useful lives of revenue equipment during the year ended December 31, 2024.
Removed
The decrease results from paying third-party carriers a smaller percentage of customer revenue.
Added
During 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment.
Removed
The combined net income for all divisions was $90.7 million, or 11.1% of revenues, before fuel surcharge, for 2022 as compared to the combined net income for all divisions of $76.5 million or 11.9% of revenues, before fuel surcharge, for 2021.
Added
As a result, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods.
Removed
In this situation, the Company later receives payment for the trade units as they are delivered to the equipment vendor and have passed vendor inspection. During the twelve months ended December 31, 2023 and 2022, the Company received approximately $15.7 million and $0.0 million, respectively, for units delivered for trade.
Added
This change in accounting estimates increased depreciation expense by approximately $24.7 million and increased basic and diluted loss per share by $0.86, net of tax, for the year ended December 31, 2024.
Removed
The credit facility also establishes an “unused fee” of 0.25% if average borrowings are less than $18.0 million. At December 31, 2023, outstanding advances on the line of credit were approximately $0.1 million, including approximately $0.1 million in letters of credit, with availability to borrow $59.9 million.
Added
In addition to the Company’s change in accounting estimate, the year-over-year increase can also be attributed to an increase in the cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense. - 22 - Table of Contents Impairment loss accounted for 1.5% of revenues, before fuel surcharges, during 2024.
Removed
Trade accounts receivable decreased from $134.7 million at December 31, 2022 to $80.6 million at December 31, 2023.
Added
The Company has not previously recognized an impairment loss on long-lived assets. Management determined that market conditions for used revenue equipment had deteriorated since its peak in 2022. This decline in market conditions prompted the requirement for a recoverability test and subsequent impairment charge against certain asset groups of used trucks and trailers.
Removed
The decrease relates to a general decrease in freight revenue and fuel surcharge revenue, which flows through the accounts receivable account, during the fourth quarter of 2023 as compared to the freight revenue and fuel surcharge revenue generated during the fourth quarter of 2022.
Added
Management tested all applicable asset groups and determined specific asset groups of trucks and trailers to be impaired beyond their carrying value. The impairment of these asset groups resulted in an impairment loss of approximately $6.4 million, or $0.22 loss per share, net of tax, during the year ended December 31, 2024.
Removed
During 2023, the Company received dividends of approximately $1.5 million.
Added
No impairment loss was incurred during the year ended December 31, 2023. Insurance and claims decreased from 6.7% of revenues, before fuel surcharges, during 2023 to 4.6% of revenues, before fuel surcharges, during 2024.
Added
The decrease is primarily attributable to a decrease in auto liability claims incurred during the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease was slightly offset by an increase in the rate per mile paid for auto liability insurance during 2024 compared to 2023.
Added
Non-operating income increased from 1.2% of revenues, before fuel surcharges, during 2023 to 1.9% of revenues, before fuel surcharges, during 2024.

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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 changeThe increase resulted from an increase in market value of the portfolio by approximately $1.6 million and offset by net sales of marketable equity securities of approximately $0.1 million. A 10% decrease in the market price of our marketable equity securities would cause a corresponding 10% decrease in the carrying amounts of these securities, or approximately $4.3 million.
Biggest changeThe decrease resulted from the sales of marketable equity securities approximating $3.7 million offset by an increase in the market value of the portfolio by approximately $3.1 million. A 10% decrease in the market price of our marketable equity securities would cause a corresponding 10% decrease in the carrying amounts of these securities, or approximately $4.3 million.
However, certain operating expenditures and capital purchases related to our Mexico branch office are incurred within or exposed to fluctuations in the exchange rate between the U.S. dollar and the Mexican peso. Based on 2023 expenditures denominated in pesos, a 10% decrease in the exchange rate would increase our annual operating expenses by approximately $0.9 million.
However, certain operating expenditures and capital purchases related to our Mexico branch office are incurred within or exposed to fluctuations in the exchange rate between the U.S. dollar and the Mexican peso. Based on 2024 expenditures denominated in pesos, a 10% decrease in the exchange rate would increase our annual operating expenses by approximately $0.9 million.
For additional information with respect to the marketable equity securities, see “Item 8. Financial Statements and Supplementary Data, Note 4 to the Consolidated Financial Statements – Marketable Equity Securities.” - 27 - Table of Contents Interest Rate Risk Our line of credit bears interest at a floating rate equal to Term SOFR plus a fixed percentage.
For additional information with respect to the marketable equity securities, see “Item 8. Financial Statements and Supplementary Data, Note 4 to the Consolidated Financial Statements – Marketable Equity Securities.” Interest Rate Risk Our line of credit bears interest at a floating rate equal to Term SOFR plus a fixed percentage.
Assuming $18.0 million of variable rate debt was outstanding under our line of credit for a full fiscal year, a hypothetical 100 basis point increase in Term SOFR would result in approximately $180,000 of additional interest expense.
Assuming $12.0 million of variable rate debt was outstanding under our line of credit for a full fiscal year, a hypothetical 100 basis point increase in Term SOFR would result in approximately $120,000 of additional interest expense.
Because our operations are dependent upon diesel fuel, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition. Based upon our 2023 fuel consumption, a 10% increase in the average annual price per gallon of diesel fuel would increase our annual fuel expenses by approximately $8.2 million.
Because our operations are dependent upon diesel fuel, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition. Based upon our 2024 fuel consumption, a 10% increase in the average annual price per gallon of diesel fuel would increase our annual fuel expenses by approximately $6.4 million.
Foreign currency exchange rates did not have a material impact to our financial condition, results of operations or cash flows for the years ended December 31, 2023 or 2022.
Foreign currency exchange rates did not have a material impact to our financial condition, results of operations or cash flows for the years ended December 31, 2024 or 2023. - 30 - Table of Contents
Equity Price Risk We hold certain actively traded marketable equity securities, which subjects the Company to fluctuations in the fair market value of its investment portfolio based on current market price. The recorded value of marketable equity securities increased to $43.2 million at December 31, 2023 from $41.7 million at December 31, 2022.
Equity Price Risk We hold certain actively traded marketable equity securities, which subjects the Company to fluctuations in the fair market value of its investment portfolio based on current market price. The recorded value of marketable equity securities decreased from $43.2 million at December 31, 2023 to $42.6 million at December 31, 2024.

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