About EVO Transportation & Energy Services

EVO Transportation & Energy Services, Inc. and its subsidiaries (EVO) operate as a truckload carrier serving the United States Postal Service (USPS) and other customers. EVO is one of the largest surface transportation companies serving the USPS, with a diversified fleet of tractors, straight trucks and other vehicles that operate on either diesel fuel, gasoline or compressed natural gas (CNG). EVO also operates a brokerage unit that supports the truckload business and services other corporate customers. In select cases, EVO may subcontract the transportation of certain loads to third-party carriers. Service and Product Offering Mail Transportation The company transports freight for the USPS and is one of its largest ground transportation suppliers. It competitively bids on transportation contracts that specify the movement of freight between processing facilities, distribution centers and other postal locations. Customer contracts with the USPS are typically two to four years in term and may be renewed with the incumbent supplier if appropriate service has been performed in accordance with contract requirements, including but not limited to, USPS performance standards, McNamara-O'Hara Service Contract Act (SCA) requirements, Department of Transportation (DOT) regulations (federal and state), and all other applicable local and state regulations and if the supplier continues to meet the requirements of the USPS. As of December 31, 2022, the company held over 200 contracts with the USPS. Of these contracts, 15 were Dynamic Route Optimization (DRO) contracts and EVO is one of the largest service providers of this contract type. Freight and Brokerage Services In addition to the company's USPS mail transportation and delivery services, it provides freight and brokerage services to a variety of corporate customers. Strategy EVO's USPS strategy is anchored around high-performance execution in both of these areas: minimizing omitted trips, and performing with a best-in-class safety record. EVO plans to continue to invest in solutions that allow the company to better compete for additional USPS business provided by other suppliers. The company intends to continue to evaluate additional vehicles powered by alternative energy, including electrically powered vehicles. In addition to serving the USPS, EVO plans to accelerate its customer diversification efforts, both organically and inorganically through M&A activity. Utilizing the company's technology platform, fleet, and network, EVO plans to grow its non-USPS business through new customer acquisition and growth of existing customer accounts. Target Customers The USPS is the company's primary customer, but it also seeks to provide truckload and brokerage services to other non-USPS corporate clients. Principal Customers and Suppliers The USPS is the company's primary customer, and for the year ended December 31, 2022, the USPS accounted for approximately 90% of the company's revenue. As a result, the company's trucking operations are highly dependent on the USPS. Safety and Risk Management Because the company's primary business is transportation on public roadways, it is regulated by the Federal Motor Carrier Safety Administration (FMCSA), a division of the DOT, and the Occupational Safety and Health Administration (OSHA). The company operates its business to exceed the requirements of these agencies, and maintains a Satisfactory rating with the FMCSA. Fuel In 2022, the company used approximately 9.0 million gallons of diesel and approximately 1.0 million gas gallon equivalents (GGEs) of CNG. Operations Fleet The company operates an active fleet of over 900 power units and 1,500 trailers with a mix of owned and leased assets. It also utilizes short-term rental agreements for some of its fleet. The company's vehicles operate on either diesel fuel, gasoline and CNG. It is also pursuing opportunities to introduce other alternative fuel vehicles, including electric vehicles, into its fleet. The company intends to continue to replace its existing fleet with more efficient diesel, CNG, and other alternative fuel vehicles. Operations Centers The company manages regional operations centers with major centers of operations in Oak Creek, Wisconsin, Austin, Texas, Laurel, Maryland, and Newark, New Jersey. Other significant operations centers include Des Moines, Iowa, Columbus, Ohio, St. Louis, Missouri, Madison, Wisconsin, Atlanta, Georgia and Indianapolis, Indiana. Technology The company utilizes a suite of systems for transportation management, electronic logging, customer relationship management, brokerage, maintenance, accounting, recruiting, HR, payroll and camera systems. These systems include Omnitracs, Salesforce, NetSuite, Ten Street, APlus, Lytx and others. Seasonality During the fourth quarter (year ended December 31, 2022), the company typically experiences surges pertaining to online holiday shopping the length of the holiday season (shopping days between Thanksgiving and Christmas) and benefits from holiday surge pricing on USPS contracts. The company's freight trucking operations and, in general, the transportation industry, experience slower seasonal activity in the first quarter. Government Regulation and Environmental Matters The company's operations are regulated and licensed by various federal, state, and local government agencies. The company and its drivers must comply with the safety and fitness regulations of the DOT and the agencies within the states that regulate transportation, including those regulations relating to operating authority, safety, drug- and alcohol-testing, hours-of-service, hazardous materials transportation, financial reporting, testing and specification of equipment and product-handling requirements. The company is subject to regulations relating to fuel emissions, environmental protection, drivers' hours-of-service, driver eligibility requirements, on-board reporting of operations, collective bargaining, ergonomics and other matters affecting safety, insurance, and operating methods. Other agencies, such as the United States Environmental Protection Agency (EPA) and the United States Department of Homeland Security (DHS), also regulate the company's equipment, operations, drivers, and the environment. The DOT, through the FMCSA, imposes safety and fitness regulations on the company and its drivers, including rules that restrict drivers' hours-of-service. The FMCSA has adopted a data-driven Compliance, Safety and Accountability (CSA) program as its safety enforcement and compliance model. All operating authorities granted by the DOT that are operated by the company have a 'satisfactory' FMCSA rating. The company is also subject to various labor laws and regulations. The contracts that the company holds with USPS are subject to the SCA that is administered by the Department of Labor (the DOL). The SCA, among other things, requires that the company pay its drivers a minimum hourly wage as determined by the DOL, as well as provide a bona fide fringe benefit package to its drivers. History The company was incorporated in the state of Delaware in 2010. It was formerly known as Minn Shares Inc. and changed its name to EVO Transportation & Energy Services, Inc. in 2017.