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FORWARD AIR CORP

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Business Summary

Forward Air Corporation is a leading asset-light provider of transportation services, operating across North and South America, Europe and Asia. The company provides ground transportation, air and ocean forwarding, intermodal drayage services and contract logistics, and offers premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling. Forward Air utilizes an asset-light strategy to minimize its investments in equipment and facilities and to reduce its capital expenditures.

The company competes in the highly competitive and fragmented North American transportation and logistics services industry. Primary competitors include other national and regional truckload carriers, LTL carriers, integrated air cargo carriers, passenger and cargo airlines, national and regional drayage providers, and other global freight forwarding and logistics solution providers. Forward Air believes its Expedited Freight segment has an advantage over other LTL carriers because it delivers faster, more reliable services between cities at rates generally significantly below the price to transport the same shipments by air. The company believes its Omni Logistics segment has a competitive advantage due to its people, network, and technology, including a dedicated account management team for each customer. Forward Air believes its Intermodal segment is one of the leading providers of drayage and related services in North America today.

Forward Air generates revenue by providing ground transportation, air and ocean forwarding, intermodal drayage services and contract logistics. Revenue is recognized when the company satisfies the performance obligation by the delivery of a shipment in accordance with contractual agreements, bills of lading and general tariff provisions. Revenue for the delivery of a shipment is recorded over time to coincide with when customers simultaneously receive and consume the benefits of the delivery services. The company's services are classified into three reportable segments: Expedited Freight, Omni Logistics, and Intermodal.

The Expedited Freight segment provides expedited regional, inter-regional and national LTL and truckload services, and offers customers local pick-up and delivery and other services including shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services. During the year ended December 31, 2025, Expedited Freight accounted for approximately 40% of consolidated revenue. The Expedited Freight network encompasses approximately 96% of all continental United States zip codes, with service in Canada and Mexico. During 2025, approximately 24% of the freight handled by its LTL network was for overnight delivery, approximately 64% was for delivery within two to three days and the balance was for delivery in four or more days. The average weekly volume of freight moving through its LTL network was approximately 46.4 million pounds per week and the average shipment weighed approximately 842 pounds in 2025. Expedited Freight markets its services primarily to freight and logistics intermediaries, and its primary office is located in Dallas, TX, with 76 additional locations spread across North America and Mexico.

The Omni Logistics segment provides a full suite of global logistics services including air and ocean freight consolidation and forwarding, customs brokerage, time-definite transportation services, contract logistics which includes warehousing and value-added services, as well as other supply chain solutions. During the year ended December 31, 2025, Omni accounted for approximately 50% of consolidated revenue. Omni has 125 service centers, primarily located in the United States and the Asia-Pacific region. The Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads in the United States, and also offers dedicated contract and Container Freight Station warehouse and handling services. During the year ended December 31, 2025, Intermodal accounted for approximately 10% of consolidated revenue. Intermodal's network consists of 26 locations primarily in the Midwest and Southeast, with a smaller operational presence in the Southwest, Mid-Atlantic, and West Coast. During 2025, approximately 64% of Intermodal's direct transportation expenses were provided by Leased Capacity Providers, 30% by Company-employed drivers, and 6% by third-party motor carriers.

On January 25, 2024, the company completed the acquisition of Omni Newco LLC. In January 2025, the Board of Directors announced that it had initiated a comprehensive review of strategic alternatives to maximize shareholder value. As of December 31, 2025, the company had 6,062 full-time employees, which includes 1,994 freight handlers and an additional 294 part-time employees. As of December 31, 2025, there were 4,730 owned trailers in the fleet with an average age of approximately eight years, and 133 leased trailers. As of December 31, 2025, the company had 297 and 450 owned and leased tractors and straight trucks, respectively, with an average age of approximately seven years. In 2025, 211 Leased Capacity Providers and Company-employed drivers qualified for the vehicle giveaway.

Operating revenues increased $20,856 , or 0.8% , to $2,495,118 for the year ended December 31, 2025 compared to $2,474,262 for the same period in 2024. Operating expenses decreased $1,078,504 , or 30.5% , to $2,458,694 for the year ended December 31, 2025 compared to $3,537,198 for the same period in 2024. Income from operations increased by $1,099,360 , or 103.4% , to income of $36,424 for the year ended December 31, 2025, compared to a $1,062,936 loss for the same period in 2024. Net loss decreased $989,503 , or 87.5% , to a net loss of $141,725 for the year ended December 31, 2025 compared to the net loss of $1,131,228 for the same period in 2024. Net loss attributable to Forward Air was $107,796 for the year ended December 31, 2025 compared to $816,969 for the same period in 2024.

Business Outlook

A key growth vector is the continued integration of Omni Logistics, which the company plans to strategically transform through how it goes to market, the human capital needs of its larger and more diverse service enterprise, the systems it utilizes to streamline its joined cost structure, and focusing team efforts around service offerings. Another growth vector is product expansion, as with the combination of Forward Air and Omni Logistics the company can now offer air/ocean forwarding or contract logistics to customers that have purchased ground and intermodal products in the past. The company also plans to pursue geographic expansion into under-penetrated markets to better meet customer needs, including investment in new locations like its expansion in Latin America.

The company has made significant progress on its integration plans and exceeded its initial expectations regarding cost synergies. In the fourth quarter of 2025, the company recorded a $19,765 charge to Other operating expenses for the impairment of abandoned software projects, which included $16,199 of cloud computing implementation costs and $3,566 of capitalized internal-use software.

The company is continuing to integrate operational and administrative technology platforms and systems which are critical to its operational processes and administrative functions, as well as customer service and experience. The company is also implementing a transformation of the combined business which includes evaluating and integrating the solutions and service offerings available to customers in order to maximize revenues and efficiencies. The company continues to execute on strategies to retain existing customers and vendors as it finalizes its transformation.

Capital expenditures for the year ended December 31, 2025 were $29,116 , which primarily related to the purchase of technology and operating equipment. The company did not repurchase any shares during the years ended December 31, 2025 and 2024. The company did not declare or pay any cash dividends on its common stock during fiscal year 2025 and does not anticipate declaring or paying any cash dividends in the foreseeable future.

The company faces headwinds from macroeconomic conditions, as industry freight volumes, as measured by the Cass Freight Index, decreased throughout 2025 as compared to 2024. Recent global disruptions, including proposed changes and implemented changes to tariff rates, have had an impact on freight demand, which has led to an overall continued decrease in total number of shipments. The U.S. government has recently proposed and imposed significant widespread baseline and country-specific tariffs on imported goods from China, Canada, and other countries, and while the implementation of certain country-specific tariffs with most countries has been delayed as negotiations progress, the extent of the risk of tariffs remains uncertain. Intermodal volumes, heavily influenced by United States imports, have decreased due to a number of factors that impact import levels.

The company faces constraints related to its substantial indebtedness. As of December 31, 2025, the company's debt consists of $725,000 pursuant to senior secured notes, $1,045,000 in senior secured term loans and a revolving credit facility with no borrowings outstanding. The Credit Agreement requires the company to maintain a leverage ratio, which is tested quarterly and currently must not be greater than 6.50 to 1.00 . As of the year ended December 31, 2025, the company's leverage ratio is 5.50 to 1.00 . The required leverage ratio will incrementally decrease by 25 basis points at the end of each quarter in 2026, to 5.50 to 1.00 at December 31, 2026.

Risk Factors

Overall economic conditions that reduce freight volumes could materially adversely impact operating results and the ability to achieve growth, as the transportation industry has historically experienced cyclical fluctuations due to economic recession, downturns in customer business cycles, and changes in U.S. or international trade policy including the imposition of tariffs. The company's substantial indebtedness, consisting of $725,000 in senior secured notes and $1,045,000 in senior secured term loans as of December 31, 2025, could adversely affect financial health and the ability to execute business strategy, and the company must maintain a leverage ratio that will decrease to 5.50 to 1.00 by December 31, 2026. The company may not achieve the anticipated long-term benefits of the Omni Acquisition or its ongoing business transformation, and related challenges, costs or inefficiencies could outweigh anticipated long-term benefits. A determination by regulators that Leased Capacity Providers or third-party motor carriers are employees rather than independent contractors could expose the company to various liabilities and additional ongoing expenses, and related litigation could subject the company to substantial costs. The company has recorded impairment charges in current and past periods and may record additional impairment charges in future periods, as the Omni reporting unit fair value was estimated to be approximately 10% higher than its carrying value as of June 30, 2025.

Management Priorities

Management's message emphasizes the company's position as a leading asset-light freight provider of transportation services and its focus on creating synergies across its services, particularly with services offered in the Expedited Freight reportable segment. Management highlights that the company continues to focus on creating synergies across its services, particularly with services offered in its Expedited Freight reportable segment, including the ability to share resources, in particular its fleet resources. The strategic priorities emphasized for the period ahead include the continued integration of Omni, the ongoing business transformation, and the comprehensive review of strategic alternatives to maximize shareholder value initiated by the Board in January 2025.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Services Provided
  2. [2] Item 1, Business — Expedited Freight Overview
  3. [3] Item 1, Business — Expedited Freight Overview
  4. [4] Item 1, Business — Expedited Freight Overview
  5. [5] Item 1, Business — Expedited Freight Overview
  6. [6] Item 1, Business — Expedited Freight Overview
  7. [7] Item 1, Business — Expedited Freight Operations
  8. [8] Item 1, Business — Services Provided
  9. [9] Item 1, Business — Omni Logistics Operations
  10. [10] Item 1, Business — Services Provided
  11. [11] Item 1, Business — Intermodal Operations
  12. [12] Item 1, Business — Intermodal Transportation
  13. [13] Item 1, Business — Intermodal Transportation
  14. [14] Item 1, Business — Intermodal Transportation
  15. [15] Item 1, Business — Workforce
  16. [16] Item 1, Business — Workforce
  17. [17] Item 1, Business — Workforce
  18. [18] Item 1, Business — Equipment
  19. [19] Item 1, Business — Equipment
  20. [20] Item 1, Business — Equipment
  21. [21] Item 1, Business — Equipment
  22. [22] Item 1, Business — Roadway Health and Safety
  23. [23] Item 7, MD&A — Results from Operations
  24. [24] Item 7, MD&A — Results from Operations
  25. [25] Item 7, MD&A — Results from Operations
  26. [26] Item 7, MD&A — Results from Operations
  27. [27] Item 7, MD&A — Results from Operations
  28. [28] Item 7, MD&A — Results from Operations
  29. [29] Item 7, MD&A — Results from Operations
  30. [30] Item 7, MD&A — Results from Operations
  31. [31] Item 7, MD&A — Results from Operations
  32. [32] Item 7, MD&A — Results from Operations
  33. [33] Item 7, MD&A — Results from Operations
  34. [34] Item 7, MD&A — Results from Operations
  35. [35] Item 7, MD&A — Results from Operations
  36. [36] Item 7, MD&A — Results from Operations
  37. [37] Item 7, MD&A — Results from Operations
  38. [38] Item 7, MD&A — Results from Operations
  39. [39] Item 7, MD&A — Results from Operations
  40. [40] Item 7, MD&A — Results from Operations
  41. [41] Item 7, MD&A — Results from Operations
  42. [42] Item 7, MD&A — Results from Operations
  43. [43] Item 7, MD&A — Results from Operations
  44. [44] Item 7, MD&A — Cash Flows
  45. [45] Item 7, MD&A — Senior Secured Notes
  46. [46] Item 7, MD&A — Credit Agreement
  47. [47] Item 7, MD&A — Liquidity and Capital Resources
  48. [48] Item 7, MD&A — Liquidity and Capital Resources
  49. [49] Item 7, MD&A — Liquidity and Capital Resources
  50. [50] Item 1A, Risk Factors — Risks Relating to our Indebtedness
  51. [51] Item 1A, Risk Factors — Risks Relating to our Indebtedness
  52. [52] Item 7, MD&A — Liquidity and Capital Resources
  53. [53] Item 7, MD&A — Critical Accounting Policies and Estimates
  54. [54] Item 8, Note 12 — Segment Reporting
  55. [55] Item 8, Note 12 — Segment Reporting
  56. [56] Item 8, Consolidated Statements of Operations
  57. [57] Item 8, Consolidated Statements of Operations
  58. [58] Item 8, Note 1 — Net Income (Loss) Per Common Share
  59. [59] Item 8, Note 1 — Net Income (Loss) Per Common Share
  60. [60] Item 8, Consolidated Statements of Operations
  61. [61] Item 8, Consolidated Statements of Operations
  62. [62] Item 8, Note 1 — Goodwill, Intangible Assets and Other Long-Lived Assets
  63. [63] Item 8, Consolidated Statements of Cash Flows
  64. [64] Item 8, Consolidated Statements of Cash Flows
  65. [65] Item 8, Consolidated Balance Sheets
  66. [66] Item 8, Consolidated Balance Sheets
  67. [67] Item 7, MD&A — Expedited Freight
  68. [68] Item 7, MD&A — Expedited Freight
  69. [69] Item 7, MD&A — Omni Logistics
  70. [70] Item 7, MD&A — Omni Logistics
  71. [71] Item 7, MD&A — Intermodal
  72. [72] Item 7, MD&A — Intermodal

Analysis on 6/21/2026