This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read together with "Business" in Part I, Item 1 of this
Annual Report, as well as the consolidated financial statements and accompanying
footnotes in Part II, Item 8 of this Annual Report. This discussion contains
forward-looking statements as a result of many factors, including those set
forth under Part I, Item 1A. "Risk Factors" and Part I "Cautionary Note
Regarding Forward-looking Statements" of this Annual Report, and elsewhere in
this report. These statements are based on current expectations and assumptions
that are subject to risks and uncertainties. Actual results could differ
materially from those discussed.

Overview



Total revenue for 2020 increased by $34.7 million to $1.7 billion as compared to
2019. The increase was primarily a result of a 23.1% increase in Brokerage
revenue to $228.8 million, a 1.6% increase in average revenue miles per tractor
per week, a 0.6% increase in average revenue per mile, partially offset by a
0.5% decrease in average tractors and a $46.0 million decrease in fuel surcharge
revenue. Excluding the impact of fuel surcharge revenue, revenue increased $80.7
million to $1.6 billion, an increase of 5.3% as compared to the prior year.

Operating income for 2020 was $43.6 million compared to $26.1 million in 2019.
We delivered a 97.5% operating ratio for the year which is an improvement
relative to the 98.5% operating ratio reported in 2019. Our profitability
increased as a result of increased revenue miles per tractor of 1.6%, a $0.013
increase in revenue per mile combined with lower fuel costs and other expenses
associated with the exit of our OTR student driver program, partially offset by
increased equipment costs and a decrease in our Brokerage segment gross margin
to 8.5% compared to 12.9% in the prior year.

We are continuing to focus on our driver centric initiatives, such as increased
miles and modern equipment, to both retain the professional drivers who have
chosen to partner with us and attract new professional drivers to our team.
During the second quarter of 2020 we launched our digital fleet, Variant, which
is largely recruited, planned, dispatched and managed using artificial
intelligence and digital platforms. Variant is a completely new paradigm for
operating trucks in an OTR environment that is provided to the driver through a
proprietary app-based driver experience. We developed the concept as a
hypothesis in 2018 based in part on the business models of the digital freight
brokerages. As digital brokers began to enter the market utilizing cutting edge
technology and a new operating model, we believed there was an opportunity to
take this approach and apply it to our asset based business in order to drive
improved profitability and growth. During 2019, we began building our technology
leadership and teams to construct the necessary databases, applications, and
processes to launch a pilot fleet with a small number of trucks in the fourth
quarter of 2019.  The test proved successful and we expanded the pilot fleet to
approximately 100 trucks in the first quarter of 2020. Given the positive
results of the first quarter pilot we moved to a full production model, scaling
the business to approximately 700 trucks at the end of 2020. Phase one of our
plan is to convert a total of 900 OTR solo trucks, with the lowest returns, to
our Variant platform by the end of the first quarter of 2021. Phase two of our
plan will be to convert an additional 600 trucks over the balance of the year.
 While the conversion will not be linear, we expect our margins to expand
further. We believe that we can further scale this platform while maintaining
these positive results and continuing to further enhance the capabilities of
this new technology. We will continue to focus on implementing and executing our
initiatives that we expect will continue to drive sustainable improved
performance over time.



While we believe our margins will expand as we continue to convert more of our
trucks to our Variant platform, we also see tremendous growth opportunity given
the highly fragmented nature of the U.S. trucking market. Our Variant business
model directly addresses our drivers' frustrations as our model delivers higher
utilization and pay which has directly contributed to a significant drop in
turnover.



During 2020, we purchased a small business with a technology platform and an
experienced and talented team. Their approach to the brokerage business is to
utilize a digital framework for handling transactions which we expect to be
scalable. Importantly, we believe this platform will enable our team to continue
scaling the business and drive a high level of growth in the years to come. Our
team processed 62.1% of our Brokerage transactions digitally in the fourth
quarter of 2020. As we drive more volume over our digital platform, we believe
our Brokerage segment will become much more scalable and allow us to profitably
drive growth as we look to the years ahead.



Looking to the year ahead, our baseline assumptions for 2021 include an overall
favorable market for carriers as we expect increasing inventory re-stocking,
tight trucking capacity, and relatively benign cost inflation outside of
driver-related and

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insurance premium expenses.  These conditions combined with a continued shortage
of drivers are expected to be supportive of the market and rates. As a result,
we expect contract rates in our OTR division in 2021 to increase on average by
10-15% with the driver shortage likely extending the cycle as we believe there
could be up to 200,000 fewer drivers in the market compared to 2019.



Our Management's Discussion and Analysis of Financial Condition and Results of
Operations included in this document generally discusses 2020 and 2019 items and
year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and
year-to-year comparisons between 2019 and 2018 that are not included in this
document can be found in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in Part II, Item 7 of our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019.



Reportable Segments



Our business is organized into two reportable segments, Truckload and Brokerage.
Our Truckload segment offers truckload services, including OTR trucking and
dedicated contract services. Our OTR service offering transports a full trailer
of freight for a single customer from origin to destination, typically without
intermediate stops or handling pursuant to short-term contracts and spot moves
that include irregular route moves without volume and capacity commitments.
Tractors are operated with a solo driver or, when handling more time-sensitive,
higher-margin freight, a team of two drivers. Our dedicated contract service
offering provides similar freight transportation services, but with
contractually assigned equipment, drivers and on-site personnel to address
customers' needs for committed capacity and service levels pursuant to
multi-year contracts with guaranteed volumes and pricing. Our Brokerage segment
is principally engaged in non-asset-based freight brokerage services, where
loads are contracted to third-party carriers.

Truckload Segment



In our Truckload segment, we generate revenue by transporting freight for our
customers in our OTR and dedicated contract service offerings. Our OTR service
offering provides solo and expedited team services through one-way movements of
freight over routes throughout the United States. While we primarily operate in
the eastern half of the United States, we provide services into and out of
Mexico. In January 2019, we sold our interest in Xpress Internacional. Even
following our sale of Xpress Internacional, we continue to have business to and
from Mexico through a variable cost model using third party carriers. The
revenue from such model is generated in the United States. Our dedicated
contract service offering devotes the use of equipment to specific customers and
provides services through long-term contracts. Our Truckload segment provides
services that are geographically diversified but have similar economic and other
relevant characteristics, as they all provide truckload carrier services of
general commodities and durable goods to similar classes of customers.

We are typically paid a predetermined rate per load or per mile for our
Truckload services. We enhance our revenue by charging for tractor and trailer
detention, loading and unloading activities and other specialized services.
Consistent with industry practice, our typical customer contracts (other than
those contracts in which we have agreed to dedicate certain tractor and trailer
capacity for use by specific customers) do not guarantee load levels or tractor
availability. This gives us and our customers a certain degree of flexibility to
negotiate rates up or down in response to changes in freight demand and trucking
capacity. In our dedicated contract service offering, which comprised
approximately 41.5% of our Truckload operating revenue, and approximately 42.0%
of our Truckload revenue, before fuel surcharge, for 2020, we provide service
under contracts with fixed terms, volumes and rates. Dedicated contracts are
often used by our customers with high-service and high-priority freight,
sometimes to replace private fleets previously operated by them. We expect to
grow our dedicated business as a percentage of our average tractors.

Generally, in our Truckload segment, we receive fuel surcharges on the miles for
which we are compensated by customers. Fuel surcharge revenue mitigates the
effect of price increases over a negotiated base rate per gallon of fuel;
however, these revenues may not fully protect us from all fuel price increases.
Our fuel surcharges to customers may not fully recover all fuel increases due to
engine idle time, out-of-route miles and non-revenue generating miles that are
not generally billable to the customer, as well as to the extent the surcharge
paid by the customer is insufficient. The main factors that affect fuel
surcharge revenue are the price of diesel fuel and the number of revenue miles
we generate. Although our surcharge programs vary by customer, we generally
attempt to negotiate an additional penny per mile charge for every five-cent
increase in the U.S. Department of Energy's (the "DOE") national average diesel
fuel index over an agreed baseline price. Our fuel surcharges are billed on a
lagging basis, meaning we typically bill customers in the current week based on
a

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previous week's applicable index. Therefore, in times of increasing fuel prices,
we do not recover as much as we are currently paying for fuel. In periods of
declining prices, the opposite is true. Based on the current status of our empty
miles percentage and the fuel efficiency of our tractors, we believe that our
fuel surcharge recovery is effective.

The main factors that affect our operating revenue in our Truckload segment are
the average revenue per mile we receive from our customers, the percentage of
miles for which we are compensated and the number of shipments and miles we
generate. Our primary measures of revenue generation for our Truckload segment
are average revenue per loaded mile and average revenue miles per tractor per
period, in each case excluding fuel surcharge revenue.

In our Truckload segment, our most significant operating expenses vary with
miles traveled and include (i) fuel, (ii) driver-related expenses, such as
wages, benefits, training and recruitment and (iii) costs associated with
independent contractors (which are primarily included in the "Purchased
transportation" line item). Expenses that have both fixed and variable
components include maintenance and tire expense and our total cost of insurance
and claims. These expenses generally vary with the miles we travel, but also
have a controllable component based on safety, fleet age, efficiency and other
factors. Our main fixed costs include vehicle rent and depreciation of long-term
assets, such as revenue equipment and service center facilities, the
compensation of non-driver personnel and other general and administrative
expenses.

Our Truckload segment requires substantial capital expenditures for purchase of
new revenue equipment. We use a combination of operating leases and secured
financing to acquire tractors and trailers, which we refer to as revenue
equipment. When we finance revenue equipment acquisitions with operating leases,
we record an operating lease right of use asset and an operating lease liability
on our consolidated balance sheet, and the lease payments in respect of such
equipment are reflected in our consolidated statement of comprehensive income
(loss) in the line item "Vehicle rents." When we finance revenue equipment
acquisitions with secured financing, the asset and liability are recorded on our
consolidated balance sheet, and we record expense under "Depreciation and
amortization" and "Interest expense." Typically, the aggregate monthly payments
are similar under operating lease financing and secured financing. We use a mix
of finance leases and operating leases with individual decisions being based on
competitive bids, tax projections and contractual restrictions. We expect our
vehicle rents, depreciation and amortization and interest expense will be
impacted by changes in the percentage of our revenue equipment acquired through
operating leases versus equipment owned or acquired through finance leases.
Because of the inverse relationship between vehicle rents and depreciation and
amortization, we review both line items together.

Approximately 26% of our total tractor fleet was operated by independent
contractors at December 31, 2020. Independent contractors provide a tractor and
a driver and are responsible for all of the costs of operating their equipment
and drivers, including interest and depreciation, vehicle rents, driver
compensation, fuel and other expenses, in exchange for a fixed payment per mile
or percentage of revenue per invoice plus a fuel surcharge pass-through.
Payments to independent contractors are recorded in the "Purchased
transportation" line item. When independent contractors increase as a percentage
of our total tractor fleet, our "Purchased transportation" line item typically
will increase, with offsetting reductions in employee driver wages and related
expenses, net of fuel (assuming all other factors remain equal). The reverse is
true when the percentage of our total fleet operated by company drivers
increases.

Brokerage Segment



In our Brokerage segment, we retain the customer relationship, including billing
and collection, and we outsource the transportation of the loads to third-party
carriers. For this segment, we rely on brokerage employees to procure
third-party carriers, as well as information systems to match loads and
carriers.

Our Brokerage segment revenue is mainly affected by the rates we obtain from
customers, the freight volumes we ship through our third-party carriers and our
ability to secure third-party carriers to transport customer freight. We
generally do not have contracted long-term rates for the cost of third-party
carriers, and we cannot assure that our results of operations will not be
adversely impacted in the future if our ability to obtain third-party carriers
changes or the rates of such providers increase.

The most significant expense of our Brokerage segment, which is primarily
variable, is the cost of purchased transportation that we pay to third-party
carriers, and is included in the "Purchased transportation" line item. This
expense generally varies depending upon truckload capacity, availability of
third-party carriers, rates charged to customers and current freight demand and
customer shipping needs. Other operating expenses are generally fixed and
primarily include the

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compensation and benefits of non-driver personnel (which are recorded in the "Salaries, wages and benefits" line item) and depreciation and amortization expense.



The key performance indicator in our Brokerage segment is gross
margin percentage (which is calculated as brokerage revenue less purchased
transportation expense expressed as a percentage of total operating revenue).
Gross margin percentage can be impacted by the rates charged to customers and
the costs of securing third-party carriers.

Our Brokerage segment does not require significant capital expenditures and is not asset-intensive like our Truckload segment.





Results of Operations

Revenue

We generate revenue from two primary sources: transporting freight for our
customers (including related fuel surcharge revenue) and arranging for the
transportation of customer freight by third-party carriers. We have two
reportable segments: our Truckload segment and our Brokerage segment. Truckload
revenue, before fuel surcharge and truckload fuel surcharge are primarily
generated through trucking services provided by our two Truckload service
offerings (OTR and dedicated contract). Brokerage revenue is primarily generated
through brokering freight to third-party carriers.

Our total operating revenue is affected by certain factors that relate to, among
other things, the general level of economic activity in the United States,
customer inventory levels, specific customer demand, the level of capacity in
the truckload and brokerage industry, the success of our marketing and sales
efforts and the availability of drivers, independent contractors and third-party
carriers.

A summary of our revenue generated by type for the periods indicated is as
follows:





                                    Year Ended December 31,
                                      2020            2019

                                         (in thousands)
Revenue, before fuel surcharge    $   1,619,199    $ 1,538,450
Fuel surcharge                          122,902        168,911
Total operating revenue           $   1,742,101    $ 1,707,361

The primary factors driving the increases in total operating revenue and revenue, before fuel surcharge, were increased volumes and pricing in our Brokerage segment, increased miles per tractor in our Truckload segment, increased miscellaneous revenues offset by decreased fuel surcharge revenues.



A summary of our revenue generated by segment for the periods indicated is as
follows:





                                              Year Ended December 31,
                                                2020            2019

                                                   (in thousands)

Truckload revenue, before fuel surcharge $ 1,390,374 $ 1,352,583 Fuel surcharge

                                    122,902        168,911
Total Truckload operating revenue               1,513,276      1,521,494
Brokerage operating revenue                       228,825        185,867
Total operating revenue                     $   1,742,101    $ 1,707,361




In January 2019, we sold our interest in Xpress Internacional. Even following
our sale of Xpress Internacional, we continue to have business to and from
Mexico through a variable cost model using third party carriers. The revenue
from such model is generated in the United States.

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The following is a summary of our key Truckload segment performance indicators, before fuel surcharge, for the periods indicated.






                                                  Year Ended
                                                December 31,
                                               2020       2019

Over the road Average revenue per tractor per week $ 3,650 $ 3,558 Average revenue per mile

$ 1.976    $ 1.949

Average revenue miles per tractor per week 1,847 1,825 Average tractors

                                3,675      3,712

Dedicated

Average revenue per tractor per week $ 4,084 $ 4,007 Average revenue per mile

$ 2.363    $ 2.375

Average revenue miles per tractor per week 1,728 1,687 Average tractors

                                2,735      2,727

Consolidated

Average revenue per tractor per week $ 3,835 $ 3,748 Average revenue per mile

$ 2.135    $ 2.122

Average revenue miles per tractor per week 1,796 1,767 Average tractors

                                6,410      6,439




The primary factors driving the changes in Truckload revenue, were a 1.6%
increase in average revenue miles per tractor and a 0.6% increase in revenue per
loaded mile primarily due to a greater than 23.0% increase in spot rates
partially offset by an approximate 3.1% decrease in our contractual rates, and
an increase of $12.6 million in miscellaneous revenue partially offset by a 0.5%
decrease in average available tractors. Fuel surcharge revenue decreased by
$46.0 million, or 27.2%, to $122.9 million, compared with $168.9 million in
2019. The DOE national weekly average fuel price per gallon averaged
approximately $0.50 per gallon lower for 2020 compared to 2019. The decrease in
fuel surcharge revenue primarily relates to decreased fuel prices partially
offset by a 1.5% increase in revenue miles compared to 2019.

The key performance indicator of our Brokerage segment is gross margin
percentage (brokerage revenue less purchased transportation expense expressed as
a percentage of total operating revenue). Gross margin percentage can be
impacted by the rates charged to customers and the costs of securing third-party
carriers. The following table lists the gross margin percentage for our
Brokerage segment for the years ended December 31, 2020 and 2019.




                              Year Ended
                            December 31,
                           2020      2019
Gross margin percentage      8.5 %   12.9 %




The primary factors driving the increase in Brokerage revenue were a 16.2%
increase in load count combined with a 6.0% increase in average revenue per
load. We experienced a decrease in our gross margin to 8.5% in 2020, compared to
12.9% in 2019. The decrease in gross margin was due to the increase in cost per
load of 11.3% exceeding the 6.0% increase in revenue per load as compared to
2019. During the fourth quarter of 2020, our Brokerage revenue grew 41.0%
compared to the prior year fourth quarter as we improved our mix of business
towards the spot market and away from contract pricing in order to achieve a
better balance in our business.

Operating Expenses



For comparison purposes in the discussion below, we use total operating revenue
and revenue, before fuel surcharge when discussing changes as a percentage of
revenue. As it relates to the comparison of expenses to revenue, before fuel
surcharge, we believe that removing fuel surcharge revenue, which is sometimes a
volatile source of revenue affords a more consistent basis for comparing the
results of operations from period-to-period.

Individual expense line items as a percentage of total operating revenue also are affected by fluctuations in the percentage of our revenue generated by independent contractor and brokerage loads.



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Salaries, wages, and related expenses



Salaries, wages and benefits consist primarily of compensation for all
employees. Salaries, wages and benefits are primarily affected by the total
number of miles driven by company drivers, the rate per mile we pay our company
drivers, employee benefits such as health care and workers' compensation, and to
a lesser extent by the number of, and compensation and benefits paid to,
non-driver employees.

The following is a summary of our salaries, wages and benefits for the periods
indicated:





                                         Year Ended December 31,
                                           2020            2019

                                          (dollars in thousands)
Salaries, wages and benefits           $    556,507     $  530,801
% of total operating revenue                   31.9 %         31.1 %
% of revenue, before fuel surcharge            34.4 %         34.5 %




The increase in absolute dollar terms was due primarily to $14.6 million of
higher driver wages due in part to a 2.7% increase in company driver miles,
increased Dedicated driver pay per mile partially offset by decreased OTR driver
pay per mile due to the suspension of our OTR student program during the second
quarter of 2020. Our office wages increased $17.2 million due in part to a 7.4%
increase in headcount as we continue to invest in our ongoing digital
initiatives. During 2020, our group health and workers' compensation expense
decreased approximately 13.3%, due to decreased group health claims expense and
positive trends in our workers' compensation claims compared to 2019. In the
near term, we believe salaries, wages and benefits will increase as a result of
a tight driver market, wage inflation and higher healthcare costs. As
a percentage of revenue, we expect salaries, wages and benefits will fluctuate
based on our ability to generate offsetting increases in average revenue per
total mile and the percentage of revenue generated by independent contractors
and brokerage operations, for which payments are reflected in the "Purchased
transportation" line item.

Fuel and fuel taxes


Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for
our company-owned and leased tractors. The primary factors affecting our fuel
and fuel taxes expense are the cost of diesel fuel, the miles per gallon we
realize with our equipment and the number of miles driven by company drivers.

We believe that the most effective protection against net fuel cost increases in
the near term is to maintain an effective fuel surcharge program and to operate
a fuel-efficient fleet by incorporating fuel efficiency measures, such as
auxiliary heating units, installation of aerodynamic devices on tractors and
trailers and low-rolling resistance tires on our tractors, engine idle
limitations and computer-optimized fuel-efficient routing of our fleet.

The following is a summary of our fuel and fuel taxes for the periods indicated:





                                         Year Ended December 31,
                                           2020            2019

                                           (dollars in thousands)
Fuel and fuel taxes                    $    136,677     $  189,174
% of total operating revenue                    7.8 %         11.1 %
% of revenue, before fuel surcharge             8.4 %         12.3 %




To measure the effectiveness of our fuel surcharge program, we calculate "net
fuel expense" by subtracting fuel surcharge revenue (other than the fuel
surcharge revenue we reimburse to independent contractors, which is included in
purchased transportation) from our fuel expense. Our net fuel expense as a
percentage of revenue, before fuel surcharge, is affected by the cost of diesel
fuel net of surcharge collection, the percentage of miles driven by company

tractors and our percentage

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of non-revenue generating miles, for which we do not receive fuel surcharge
revenues. Net fuel expense as a percentage of revenue, before fuel surcharge, is
shown below:




                                                              Year Ended December 31,
                                                               2020            2019

                                                               (dollars in thousands)

Total fuel surcharge revenue                               $    122,902

$ 168,911 Less: fuel surcharge revenue reimbursed to independent contractors

                                                      31,585     

46,862


Company fuel surcharge revenue                             $     91,317     $  122,049
Total fuel and fuel taxes                                  $    136,677     $  189,174
Less: company fuel surcharge revenue                             91,317    

   122,049
Net fuel expense                                           $     45,360     $   67,125
% of total operating revenue                                        2.6 %          3.9 %

% of revenue, before fuel surcharge                                 2.8 %  

       4.4 %




During 2020, the decrease in net fuel expenses was primarily the result of a
24.4% decrease in the average fuel price per gallon, a 5.4% increase in average
miles per gallon, partially offset by a $30.7 million decrease in company fuel
surcharge revenue as compared to 2019. In the near term, our net fuel expense is
expected to fluctuate as a percentage of total operating revenue and revenue,
before fuel surcharge, based on factors such as diesel fuel prices,
the percentage recovered from fuel surcharge programs, the percentage of
uncompensated miles, the percentage of revenue generated by independent
contractors, and the percentage of revenue generated by team-driven tractors
(which tend to generate higher miles and lower revenue per mile, thus
proportionately more fuel cost as a percentage of revenue).

Vehicle Rents and Depreciation and Amortization



Vehicle rents consist primarily of payments for tractors and trailers financed
with operating leases. The primary factors affecting this expense item include
the size and age of our tractor and trailer fleets, the cost of new equipment
and the relative percentage of owned versus leased equipment.

Depreciation and amortization consists primarily of depreciation for owned
tractors and trailers. The primary factors affecting these expense items include
the size and age of our tractor and trailer fleets, the cost of new equipment
and the relative percentage of owned equipment and equipment acquired through
debt or finance leases versus equipment leased through operating leases. We use
a mix of finance leases and operating leases to finance our revenue equipment
with individual decisions being based on competitive bids and tax projections.
Gains or losses realized on the sale of owned revenue equipment are included in
depreciation and amortization for reporting purposes.

Vehicle rents and depreciation and amortization are closely related because both
line items fluctuate depending on the relative percentage of owned equipment and
equipment acquired through finance leases versus equipment leased through
operating leases. Vehicle rents increase with greater amounts of equipment
acquired through operating leases, while depreciation and amortization increases
with greater amounts of owned equipment and equipment acquired through finance
leases. Because of the inverse relationship between vehicle rents and
depreciation and amortization, we review both line items together.

The following is a summary of our vehicle rents and depreciation and amortization for the periods indicated:







                                                              Year Ended December 31,
                                                               2020            2019

                                                               (dollars in thousands)
Vehicle rents                                              $     86,684

$ 80,064 Depreciation and amortization, net of (gains) losses on sale of property

                                                102,827     

94,337


Vehicle rents and depreciation and amortization of
property and equipment                                     $    189,511     $  174,401
% of total operating revenue                                       10.9 %         10.2 %
% of revenue, before fuel surcharge                                11.7 %  

      11.3 %




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The increase in vehicle rents was primarily due to increased trailers financed
under operating leases compared to 2019. The increase in depreciation and
amortization, net of (gains) losses on sale of property, is primarily due to an
increase in loss on sale of property and equipment of $8.9 million compared to
2019. This increase in our loss was partially the result of a $2.7 million gain
related to the sale of our Laredo terminal and a $1.2 million gain related to a
sale leaseback transaction both of which were recognized in 2019. Looking
forward to 2021, excluding any change in our percentage allocation of owned
versus leased equipment due to available financing terms, we expect to spend
approximately $130.0 to $150.0 million in net capital expenditures which will
keep the average age of our equipment relatively constant. This amount could
expand to fund additional profitable growth opportunities. The balance of our
equipment procurement will be funded through operating leases.

Purchased Transportation

Purchased transportation consists of the payments we make to independent contractors, including fuel surcharge reimbursements paid to independent contractors, in our Truckload segment, and payments to third-party carriers in our Brokerage segment.



The following is a summary of our purchased transportation for the periods
indicated:





                                         Year Ended December 31,
                                           2020            2019

                                          (dollars in thousands)
Purchased transportation               $    516,196     $  481,589
% of total operating revenue                   29.6 %         28.2 %
% of revenue, before fuel surcharge            31.9 %         31.3 %




The increase in purchased transportation reflected a 16.2% increase in our
Brokerage load count, an 11.3% increase in cost per Brokerage load partially
offset by a 32.6% decrease in fuel surcharge paid to independent contractors and
a 1.3% decrease in independent contractor miles as compared to 2019.

Because we reimburse independent contractors for fuel surcharges we receive, we
subtract fuel surcharge revenue reimbursed to them from our purchased
transportation. The result, referred to as purchased transportation, net of fuel
surcharge reimbursements, is evaluated as a percentage of total operating
revenue and as a percentage of revenue, before fuel surcharge, as shown below:





                                                              Year Ended December 31,
                                                               2020            2019

                                                               (dollars in thousands)
Purchased transportation                                   $    516,196

$ 481,589 Less: fuel surcharge revenue reimbursed to independent contractors

                                                      31,585     

46,862


Purchased transportation, net of fuel surcharge
reimbursement                                              $    484,611     $  434,727
% of total operating revenue                                       27.8 %         25.5 %
% of revenue, before fuel surcharge                                29.9 %  

      28.3 %




The increase in purchased transportation reflected a 16.2% increase in our
Brokerage load count, an 11.3% increase in cost per Brokerage load partially
offset by a 1.3% decrease in independent contractor miles as compared to 2019.
This expense category will fluctuate with the number and percentage of loads
hauled by independent contractors and third-party carriers, as well as the
amount of fuel surcharge revenue passed through to independent contractors. If
industry-wide trucking capacity continues to tighten in relation to freight
demand, we may need to increase the amounts we pay to third-party carriers and
independent contractors, which could increase this expense category on an
absolute basis and as a percentage of total operating revenue and revenue,
before fuel surcharge, absent an offsetting increase in revenue. We continue to
actively attempt to expand our Brokerage segment and recruit independent
contractors. Our success in growing our lease-purchase program and independent
contractor drivers have contributed to increased purchased transportation
expense. If we are successful in continuing these efforts, we would expect this
line item to increase as a percentage of total operating revenue and revenue,
before fuel surcharge.

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Operating Expenses and Supplies



Operating expenses and supplies consist primarily of ordinary vehicle repairs
and maintenance costs, driver on-the-road expenses, tolls and driver recruiting
and training costs. Operating expenses and supplies are primarily affected by
the age of our company-owned and leased fleet of tractors and trailers, the
number of miles driven in a period and driver turnover.

The following is a summary of our operating expenses and supplies for the
periods indicated:





                                         Year Ended December 31,
                                           2020            2019

                                          (dollars in thousands)

Operating expenses and supplies $ 133,356 $ 142,248 % of total operating revenue

                    7.7 %          8.3 %
% of revenue, before fuel surcharge             8.2 %          9.2 %




The primary factors driving the decrease in operating expenses and supplies was
decreased trailer maintenance combined with decreased expenses related to the
suspension of our OTR student driver training program during the second quarter
of 2020 partially offset by increased advertising costs for driver recruiting.

Insurance Premiums and Claims

Insurance premiums and claims consists primarily of retained amounts for liability (personal injury and property damage), physical damage and cargo damage, as well as insurance premiums. The primary factors affecting our insurance premiums and claims are the frequency and severity of accidents, trends in the development factors used in our actuarial accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel. With our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums and claims from period-to-period, and any increase in frequency or severity of claims or adverse loss development of prior period claims would adversely affect our financial condition and results of operations.



The following is a summary of our insurance premiums and claims expense for the
periods indicated:





                                          Year Ended December 31,
                                           2020             2019

                                           (dollars in thousands)

Insurance premiums and claims $ 87,053 $ 88,959 % of total operating revenue

                    5.0 %            5.2 %
% of revenue, before fuel surcharge             5.4 %            5.8 %




Insurance premiums and claims decreased primarily due to decreased physical
damage claims primarily as a result of reduced frequency partially offset by
increased auto liability premiums as compared to 2019. We renewed our liability
insurance policies effective September 1, 2020 and as a result of the
challenging insurance market our premiums increased approximately 30% while our
coverage limits decreased to $75.0 million from $300.0 million per occurrence.

We continue to believe we have an opportunity to reduce our claims expense over
time as a result of (1) having completed the installation of event recorders in
2018, (2) the successful launch of our redeveloped driver training facilities,
(3) our decision to implement hair follicle testing for all of our drivers in
the fourth quarter of 2019, and (4) the successful launch of Variant, our
digital fleet, which is currently experiencing fewer preventable accidents per
million miles than our OTR legacy fleet combined with the suspension of our OTR
student program. During the second half of 2020 we experienced approximately 35%
fewer preventable accidents than we did in the comparable prior year period
which we believe contributed greatly to our lower insurance and claims expense
despite higher premiums.  Although a decrease in frequency in claims reduced our
expense during the year, to the extent we have an increase in severity these
savings could be partially or fully offset.

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General and Other Operating Expenses

General and other operating expenses consist primarily of legal and professional services fees, general and administrative expenses and other costs.



The following is a summary of our general and other operating expenses for the
periods indicated:





                                           Year Ended December 31,
                                            2020             2019

                                            (dollars in thousands)

General and other operating expenses $ 55,176 $ 52,173 % of total operating revenue

                     3.2 %            3.1 %
% of revenue, before fuel surcharge              3.4 %            3.4 %




General and other expenses increased primarily due to increased terminal rents related to the sale leaseback transaction executed in the fourth quarter of 2019.

Impairment of Equity Method Investments and Note Receivable



During 2019, we converted $5.0 million of Arnold receivables to a note
receivable and advanced an additional $2.0 million. In the fourth quarter of
2019, we recorded an impairment charge of $6.8 million as the collectability of
the note was remote. During the first quarter of 2020, we sold our interest in
Arnold and recorded a $2.0 million loss on the sale.

Interest

Interest expense consists of cash interest, amortization of original issuance discount and deferred financing fees.



The following is a summary of our interest expense for the periods indicated:





                                                                 Year Ended December 31,
                                                                   2020             2019

                                                                      (in thousands)

Interest expense, excluding non-cash items                     $     17,757     $     21,000
Original issue discount and deferred financing amortization           1,090

             635
Interest expense, net                                          $     18,847     $     21,635




For 2020, interest expense decreased $2.8 million, primarily due to decreased
borrowings and lower average interest rates as compared to 2019. In January
2020, we entered into a new $250.0 million revolving Credit Facility paying off
our higher interest rate existing credit facility.

LIQUIDITY AND CAPITAL RESOURCES

Overview



Our business requires substantial amounts of cash to cover operating expenses as
well as to fund capital expenditures, working capital changes, principal and
interest payments on our obligations, lease payments, letters of credit to
support insurance requirements and tax payments when we generate taxable income.
Recently, we have financed our capital requirements with borrowings under our
Credit Facility, cash flows from operating activities, direct equipment
financing, operating leases and proceeds from equipment sales.

We make substantial net capital expenditures to maintain a modern company
tractor fleet, refresh our trailer fleet and strategically expand our fleet.
During 2021, we currently plan to replace owned tractors with new owned tractors
as they reach approximately 475,000 to 575,000 miles. Additionally, we expect to
replace our tractor lease maturities with a mix of owned and leased replacements
as we convert a portion of our leased tractors to owned. Our mix of owned and
leased equipment may vary over time due to tax treatment, financing options and
flexibility of terms, among other factors.

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We believe we can fund our expected cash needs, including debt repayment, in the
short-term with projected cash flows from operating activities, borrowings under
our Credit Facility and direct debt and lease financing we believe to be
available for at least the next 12 months. Over the long-term, we expect that we
will continue to have significant capital requirements, which may require us to
seek additional borrowings, lease financing or equity capital. We have obtained
a significant portion of our revenue equipment under operating leases, which are
not reflected as net capital expenditures but are recorded as operating lease
liabilities on our balance sheet. The availability of financing and equity
capital will depend upon our financial condition and results of operations as
well as prevailing market conditions.

Sources of Liquidity

Credit Facility



On January 28, 2020, we entered into the Credit Facility and contemporaneously
with the funding of the Credit Facility paid off obligations under our then
existing credit facility and terminated such facility. The Credit Facility is a
$250.0 million revolving credit facility, with an uncommitted accordion feature
that, so long as no event of default exists, allows the Company to request an
increase in the revolving credit facility of up to $75.0 million.

The Credit Facility is a five-year facility scheduled to terminate on January
28, 2025.  Borrowings under the Credit Facility are classified as either "base
rate loans" or "eurodollar rate loans".  Base rate loans accrue interest at a
base rate equal to the highest of (A) the Federal Funds Rate plus 0.50%, (B) the
Agent's prime rate, and (C) LIBOR plus 1.00% plus an applicable margin that was
set at 0.50% through June 30, 2020 and adjusted quarterly thereafter between
0.25% and 0.75% based on the ratio of the daily average availability under the
Credit Facility to the daily average of the lesser of the borrowing base or the
revolving credit facility.  Eurodollar rate loans accrue interest at LIBOR plus
an applicable margin that was set at 1.50% through June 30, 2020 and adjusted
quarterly thereafter between 1.25% and 1.75% based on the ratio of the daily
average availability under the Credit Facility to the daily average of the
lesser of the borrowing base or the revolving credit facility.  The Credit
Facility includes, within its $250.0 million revolving credit facility, a letter
of credit sub-facility in an aggregate amount of $75.0 million and a swingline
sub-facility in an aggregate amount of $25.0 million.  An unused line fee of
0.25% is applied to the average daily amount by which the lenders' aggregate
revolving commitments exceed the outstanding principal amount of revolver loans
and aggregate undrawn amount of all outstanding letters of credit issued under
the Credit Facility.  The Credit Facility is secured by a pledge of
substantially all of the Company's assets, excluding, among other things, any
real estate or revenue equipment financed outside the Credit Facility.

Borrowings under the Credit Facility are subject to a borrowing base limited to
the lesser of (A) $250.0 million; or (B) the sum of (i) 87.5% of eligible billed
accounts receivable, plus (ii) 85.0% of eligible unbilled accounts receivable
(less than 30 days), plus (iii) 85.0% of the net orderly liquidation value
percentage applied to the net book value of eligible revenue equipment, plus
(iv) the lesser of (a) 80.0% the fair market value of eligible real estate or
(b) $25.0 million. The Credit Facility contains a single springing financial
covenant, which requires a consolidated fixed charge coverage ratio of at least
1.0 to 1.0.  The financial covenant is tested only in the event excess
availability under the Credit Facility is less than the greater of (A) 10.0% of
the lesser of the borrowing base or revolving credit facility or (B) $20.0
million. Based on excess availability as of December 31, 2020, there was no
fixed charge coverage ratio requirement.

The Credit Facility includes usual and customary events of default for a
facility of this nature and provides that, upon the occurrence and continuation
of an event of default, payment of all amounts payable under the Credit Facility
may be accelerated, and the lenders' commitments may be terminated.  The Credit
Facility contains certain restrictions and covenants relating to, among other
things, dividends, liens, acquisitions and dispositions, affiliate transactions,
and other indebtedness.

See Notes 9 and 10 to the accompanying consolidated financial statements for additional disclosures regarding our debt and leases, respectively.



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Cash Flows

Our summary statements of cash flows for the periods indicated are set forth in
the table below:





                                               Year Ended December 31,
                                                  2020            2019

                                                    (in thousands)

Net cash provided by operating activities $ 150,889 $ 103,749 Net cash used in investing activities

             (111,603)      (81,630)
Net cash used in financing activities              (39,468)      (38,108)




Operating Activities

For 2020, we generated cash flows from operating activities of $150.9 million,
an increase of $47.1 million compared to 2019. The increase was due primarily to
a $29.9 million increase in net income adjusted for noncash items, combined with
a $30.9 million increase in our operating liabilities partially offset by
increased operating assets. Our operating liabilities increased $30.9 million
during 2020 as compared to 2019, due in part to the deferred payroll taxes in
conjunction with the Coronavirus Aid, Relief and Economic Security Act enacted
March 2020, combined with increased accounts payable and accrued wages and
benefits related to timing of payments offset by decreased claims and insurance
accruals. Our increase in net income adjusted for noncash items was due in part
to increased average revenue miles per tractor, increased revenue per mile,
decreased net fuel expense and decreased interest expense offset by decreases in
our Brokerage gross margin.

Investing Activities

For 2020, net cash flows used in investing activities were $111.6 million, an
increase of $30.0 million compared to 2019. This increase is primarily the
result of decreased proceeds of $31.6 million related to a terminal sale and a
sale leaseback transaction during the fourth quarter of 2019. Our net equipment
purchases as compared to 2019 decreased slightly while our technology capital
expenditures increased as we continue to invest in our digital initiatives. We
expect our net capital expenditures for calendar year 2021 will approximate
$130.0 million to $150.0 million to execute our equipment replacement strategy
and will be financed with cash from operations, borrowings on the Credit
Facility and secured debt financing. If our growth strategy gains momentum, we
may need to increase our capital expenditures to fund additional profitable
growth opportunities.

Financing Activities



For 2020, net cash flows used in financing activities were $39.5 million,
compared to $38.1 in 2019. During 2020, our debt repayments in excess of debt
borrowings were $37.1 million compared to $29.9 million in 2019. During 2019, we
purchased the remaining 10% of Total Transportation for $8.7 million.

Working Capital


As of December 31, 2020, we had a working capital deficit of $92.8 million,
representing a $44.0 million decrease in our working capital from December 31,
2019. When we analyze our working capital, we typically exclude balloon payments
in the current maturities of long-term debt and current portion of operating
lease liabilities as these payments are typically either funded with the
proceeds from equipment sales or addressed by extending the maturity of such
payments. We believe this facilitates a more meaningful analysis of our changes
in working capital from period-to-period. Excluding balloon payments included in
current maturities of long-term debt and current portion of operating lease
liabilities as of December 31, 2020, we had a working capital deficit of $56.5
million, compared with a working capital deficit of $23.6 million at December
31, 2019. The decrease in working capital was primarily the result of increased
accounts payable and accrued wages and benefits combined with decreased assets
held for sale, partially offset by increased customer and other receivables.
Accrued wages and benefits increased primarily due to the current portion of
deferred payroll taxes.

Working capital deficits are common to many trucking companies that operate by
financing revenue equipment purchases through borrowing or finance leases and
who use operating leases. When we finance revenue equipment through borrowing or
finance leases, the principal amortization scheduled for the next twelve months
is categorized as a current liability, although the revenue equipment is
classified as a long-term asset. Consequently, each purchase of revenue
equipment financed with borrowing or finance leases decreases working capital.
Similarly, our operating lease right of use assets are

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classified as long-term, while a portion of the corresponding lease liabilities
are classified as a current liability. We believe a working capital deficit has
little impact on our liquidity. Based on our expected financial condition, net
capital expenditures, results of operations, related net cash flows, installment
notes, and other sources of financing, we believe our working capital and
sources of liquidity will be adequate to meet our current and projected needs
and we do not expect to experience material liquidity constraints in the
foreseeable future.

Contractual Obligations and Commercial Commitments



The table below summarizes our contractual obligations as of December 31, 2020:




                                                                   Payments Due by Period
                                          Less than                                        More than
                                            1 year       1 ­ 3 years      3 ­ 5 years       5 years        Total

                                                                       (in thousands)

Long­term debt obligations(1)             $  112,381    $     165,831    $      74,956    $    35,165    $ 388,333
Finance lease obligations(2)                   4,081            2,846              296              -        7,223
Operating lease obligations(3)                87,842          139,681           49,737         44,196      321,456
Purchase obligations(4)                      121,160                -                -              -      121,160

Total contractual obligations(5) $ 325,464 $ 308,358 $

124,989 $ 79,361 $ 838,172

Including interest obligations on long-term debt, excluding fees. The table (1) assumes long-term debt is held to maturity and does not reflect events

subsequent to December 31, 2020.

(2) Including interest obligations on finance lease obligations.

We lease certain revenue and service equipment and office and service center

facilities under long-term, non-cancelable operating lease agreements

expiring at various dates through December 2034. Revenue equipment lease

terms are generally three to five years for tractors and five to eight years

for trailers. The lease terms and any subsequent extensions generally

represent the estimated usage period of the equipment, which is generally (3) substantially less than the economic lives. Certain revenue equipment leases

provide for guarantees by us of a portion of the specified residual value at

the end of the lease term. The maximum potential amount of future payments

(undiscounted) under these guarantees is approximately $117.3 million at

December 31, 2020. The residual value of a portion of the related leased

revenue equipment is covered by repurchase or trade agreements between us and

the equipment manufacturer.

We had commitments outstanding at December 31, 2020 to acquire revenue and

other equipment. The revenue equipment commitments are cancelable, subject to (4) certain adjustments in the underlying obligations and benefits. These

purchase commitments are expected to be financed by operating leases,

long-term debt, proceeds from sales of existing equipment and cash flows from

operating activities.

(5) Excludes deferred taxes and long or short-term portion of self-insurance

claims accruals.

Off-Balance Sheet Arrangements

The Company has letters of credit of $28.1 million outstanding as of December 31, 2020. The letters of credit are maintained primarily to support the Company's insurance program.

The Company had cancelable commitments outstanding at December 31, 2020 to acquire revenue equipment for approximately $121.2 million in 2021. These purchase commitments are expected to be financed by operating leases, long-term debt, proceeds from sales of existing equipment, and cash flows from operations.

INFLATION



Inflation in the price of revenue equipment, tires, diesel fuel, health care,
operating tolls and taxes and other items has impacted our operating costs over
the past several years. A prolonged or more severe period of inflation in these
or other items would adversely affect our results of operations unless freight
rates correspondingly increase. Historically, the majority of the increase in
fuel costs has been passed on to our customers through a corresponding increase
in fuel

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surcharge revenue, making the impact of the increased fuel costs on our results
of operations less severe. Inflation related to other costs is not directly
covered from our customers through a surcharge mechanism. Because these
potential cost increases would be relatively consistent across the industry, we
would expect corresponding rate increases generally to offset these increased
costs over time. If these and other costs escalate and we are unable to recover
such costs timely with effective fuel surcharges and rate increases, it would
have an adverse effect on our operations and profitability.

CRITICAL ACCOUNTING POLICIES


In the ordinary course of business, we have made a number of estimates and
assumptions relating to the reporting of results of operations and financial
position in the preparation of our financial statements in conformity with GAAP.
Actual results could differ significantly from those estimates under different
assumptions and conditions. We believe that the following discussion addresses
our most critical accounting policies, which are those that are most important
to the portrayal of our financial condition and results of operations and
require management's most difficult, subjective and complex judgments, often as
a result of the need to make estimates about the effect of matters that are
inherently uncertain. See Note 2 of the accompanying consolidated financial
statements for additional information about our critical accounting policies and
estimates.

Income Taxes

Significant management judgment is required in determining our provision for
income taxes and in determining whether deferred tax assets will be realized in
full or in part. Deferred tax assets and liabilities are measured using enacted
tax rates that are expected to apply to taxable income in years in which the
temporary differences are expected to be recovered or settled. When it is more
likely than not that all or some portion of specific deferred tax assets, such
as state tax credit carry-forwards or state net operating loss carry-forwards
will not be realized, a valuation allowance must be established for the amount
of the deferred tax assets that are determined to be not realizable.

The determination of the combined tax rate used to calculate our provision for
income taxes for both current and deferred income taxes also requires
significant judgment by management. We value the net deferred tax asset or
liability by using enacted tax rates that we believe will be in effect when
these temporary differences are recovered or settled. We use the combined tax
rates at the time the financial statements are prepared since more accurate
information is not available. If changes in the federal statutory rate or
significant changes in the statutory state and local tax rates occur prior to or
during the reversal of these items or if our filing obligations were to change
materially, this could change the combined rate and, by extension, our provision
for income taxes. We account for uncertain tax positions in accordance with ASC
740, Income Taxes and record a liability when such uncertainties meet the more
likely than not recognition threshold.

Property and Equipment



Property and equipment are carried at cost. Depreciation of property and
equipment is computed using the straight-line method for financial reporting
purposes and accelerated methods for tax purposes over the estimated useful
lives of the related assets (net of estimated salvage value or trade-in value).
We generally use estimated useful lives of three to five years for tractors and
ten or more years for trailers with estimated salvage values ranging from 25% to
50% of the capitalized cost. The depreciable lives of our revenue equipment
represent the estimated usage period of the equipment, which is generally
substantially less than the economic lives. The residual value of a substantial
portion of our equipment is covered by repurchase or trade agreements between us
and the equipment manufacturer.

Periodically, we evaluate the useful lives and salvage values of our revenue
equipment and other long-lived assets based upon, but not limited to, our
experience with similar assets including gains or losses upon dispositions of
such assets, conditions in the used equipment market and prevailing industry
practices. Changes in useful lives or salvage value estimates, or fluctuations
in market values that are not reflected in our estimates, could have a material
impact on our financial results. Further, if our equipment manufacturer does not
perform under the terms of the agreements for guaranteed trade-in values, such
non-performance could have a materially negative impact on financial results. We
review our property and equipment whenever events or circumstances indicate the
carrying amount of the asset may not be recoverable. An impairment loss equal to
the excess of carrying amount over fair value would be recognized if the
carrying amount of the asset is not recoverable.

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Claims and Insurance Accruals


Claims and insurance accruals consist of estimates of cargo loss, physical
damage, group health, liability (personal injury and property damage) and
workers' compensation claims and associated legal and other expenses within our
established retention levels. Claims in excess of retention levels are generally
covered by insurance in amounts we consider adequate. Claims accruals represent
the uninsured portion of pending claims including estimates of adverse
development of known claims, plus an estimated liability for incurred but not
reported claims and the associated expense. Accruals for cargo loss, physical
damage, group health, liability and workers' compensation claims are estimated
based on our evaluation of the type and severity of individual claims and
historical information, primarily our own claims experience, along with
assumptions about future events combined with the assistance of independent
actuaries in the case of workers' compensation and liability. Changes in
assumptions as well as changes in actual experience could cause these estimates
to change in the near future.

Workers' compensation and liability claims are particularly subject to a
significant degree of uncertainty due to the potential for growth and
development of the claims over time. Claims and insurance reserves related to
workers' compensation and liability are estimated by a third-party actuary and
we refer to these estimates in establishing the reserve. Liability reserves are
estimated based on historical experience and trends, the type and severity of
individual claims and assumptions about future costs. Further, in establishing
the workers' compensation and liability reserves, we must take into account and
estimate various factors, including, but not limited to, assumptions concerning
the nature and severity of the claim, the effect of the jurisdiction on any
award or settlement, the length of time until ultimate resolution, inflation
rates in health care and in general, interest rates, legal expenses and other
factors. Our actual experience may be different than our estimates, sometimes
significantly. Changes in assumptions made in actuarial studies could
potentially have a material effect on the provision for workers' compensation
and liability claims. Additionally, if any claim were to exceed our coverage
limits, we would have to accrue for and pay the excess amount, which could have
a material adverse effect on our financial condition, results of operations and
cash flows.

Recent Accounting Pronouncements

See Note 2 of the accompanying consolidated financial statements for information about recent accounting pronouncements.







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