Forward Air (FWRD) risk factors, FY2025 10-K

Risks Relating to Our Business and Operations

1. 01Overall economic conditions that reduce freight volumes could have a material adverse impact on our operating results and ability to achieve growth46% rewritten
2. 02Inflation may increase our operating expenses and lower profitability55% rewritten
3. 03If we have difficulty attracting and retaining Leased Capacity Providers, other third-party transportation capacity providers, or freight handlers, our profitability and results of operations could be adversely affected28% rewritten
4. 04Because a portion of our costs are fixed, any factors that result in a decrease in the volume or revenue per pound of freight shipped through our networks will adversely affect our results of operations
5. 05We experience customer concentration which could adversely impact our financial condition and results of operationsNew
6. 06The ineffectiveness of our fuel surcharge program could have a material adverse effect on our results of operations and profitability33% rewritten
7. 07Changes to our senior management team and other key personnel could have an adverse effect on our business, operating results and financial condition58% rewritten
8. 08In addition, the successful integration of Omni depends in part on the retention of personnel critical to the business and operations of the Company following the Omni Acquisition due to, for example, their technical skills or management expertiseNew
9. 09We cannot assure you that our evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our stockholders
10. 10We may not achieve the anticipated long-term benefits of the Omni Acquisition or our ongoing business transformation, and related challenges, costs or inefficiencies could outweigh anticipated long-term benefitsNew
11. 11Our Up-C structure places significant limitations on our cash flow because our principal asset is our interest in Opco, and, accordingly, we depend on distributions from Opco to pay our taxes and expenses, including payments under the Tax Receivable Agreement
12. 12We will be required to pay Omni Holders for certain tax savings we may realize, and we expect that the payments we will be required to make may be substantial28% rewritten
13. 13We may not be able to retain customers or suppliers, or customers or suppliers may seek to modify contractual obligations with us, which could have an adverse effect on our business and operations. Third parties may terminate or alter existing contracts or relationships with us
14. 14Concentration of ownership may limit your ability to influence corporate mattersNew
15. 15If we identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business and stock priceNew
16. 16Delays, costs, and disruptions that result from upgrading and maintaining the security of our information and technology networks and systems could materially and adversely affect usNew
17. 17Our profitability could be negatively impacted if our pricing structure proves to be inaccurate or off-market
18. 18We derive a significant portion of our revenue from a few major customers, the loss of one or more of which could have a material adverse effect on our business
19. 19Our business is subject to seasonal trends
20. 20Our results of operations may be affected by harsh weather conditions, disasters and pandemics
21. 21Labor shortages and increased turnover or increases in employee and employee-related costs could adversely affect our ability to attract and retain qualified employees
22. 22We have recorded impairment charges in current and past periods and may record additional impairment charges in future periods41% rewritten
23. 23We operate in highly competitive and fragmented markets of our industry, and our business will suffer if we are unable to adequately address downward pricing pressures and other factors that may adversely affect our results of operations, growth prospects and profitability
24. 24Our international operations subject us to operational and financial risks24% rewritten
25. 25The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region
26. 26Our business and operations could be negatively affected by securities litigation or shareholder activism, which could impact the trading price and volatility of our common stock33% rewritten
27. 27Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations
28. 28Our increased direct sales efforts through our sales force to direct shippers and beneficial cargo owners could be viewed as a competitive threat by our current domestic forwarder customers
29. 29Reductions in the available supply or increases in the cost of new equipment may adversely impact our profitability and cash flows
30. 30Difficulty in forecasting timing or volumes of customer shipments could adversely impact our margins and operating results
31. 31Because our Intermodal business depends heavily on freight transiting seaports and railheads, our operating results and financial condition are likely to be adversely affected by any reduction or deterioration in freight capacity at seaports or railheads
32. 32We may have difficulty effectively managing our growth, which could adversely affect our business, results of operations and financial condition
33. 33We may not make future acquisitions or, if we do, we may not realize the anticipated benefits of future acquisitions and integration of these acquisitions may disrupt our business and occupy management

Risks Relating to our Indebtedness

1. 34As of December 31, 2025, our debt consists of $725 million pursuant to senior secured notes, $1,045 million in senior secured term loans and a revolving credit facility with no borrowings outstanding
2. 35The instruments governing our indebtedness impose certain restrictions on our business
3. 36If we do not comply with the terms of our debt instruments, they could be terminated and amounts thereunder could become due and payable
4. 37Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt when it matures

Risks Relating to Information Technology and Systems

1. 38If we fail to maintain our information technology systems, or if we fail to successfully implement new technology or enhancements, we may be at a competitive disadvantage and experience a decrease in revenues
2. 39Our business is subject to cybersecurity risks54% rewritten
3. 40Furthermore, any failure to comply with data privacy, security or other laws and regulations or failures to detect and disclosure the occurrence of a cybersecurity event could result in a loss of customers, claims, legal or regulatory proceedings, inquires or investigationsNew

Risks Relating to Regulatory Environment

1. 41Claims for property damage, personal injuries or workers’ compensation and related expenses could significantly reduce our earnings
2. 42Under DOT regulations, we are liable for bodily injury and property damage caused by Leased Capacity Providers and employee drivers while they are operating equipment under our various motor carrier authorities. The potential liability associated with any accident can be severe and occurrences are unpredictable55% rewritten
3. 43² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute
4. 44We face risks related to self-insurance and third-party insurance that can be volatile to our earnings
5. 45Our failure to comply with various applicable federal and state employment and labor laws and regulations could have a material, adverse impact on our business, financial condition and results of operations
6. 46The FMCSA’s CSA and SMS initiatives could adversely impact our ability to hire qualified drivers or contract with qualified Leased Capacity Providers or third-party motor carriers, meet our growth projections and maintain our customer relationships, each of which could adversely impact our results of operations
7. 47We operate in a regulated industry, and increased costs of compliance with, or liability for violation of, existing or future regulations and enforcement could have a material adverse effect on our business71% rewritten
8. 48We are subject to various environmental laws and regulations, including legislative and regulatory responses to climate change; and costs of compliance with, or liabilities for violations of, existing or future laws and regulations could significantly increase our costs of doing business
9. 49Risks and requirements related to transacting business in foreign countries may result in increased liabilities, including penalties and fines as well as reputational harm
10. 50We may be subject to governmental export and import controls that could impair our ability to compete in international markets and subject us to liability if we violate such controls
11. 51If our employees were to unionize, our operating costs would likely increase
12. 52Our charter and bylaws and provisions of Delaware law could discourage or prevent a takeover that may be considered favorable56% rewritten