Company: PAMT
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007273
Chunk: 132

Company: PAMT CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 132
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 that could otherwise affect our operations, could reduce our revenues and harm our profitability.

A substantial number of the employees of our largest customers are members of industrial trade unions and are employed under the terms of collective bargaining agreements. In September 2023, the United Auto Workers initiated a trilateral strike against Ford, General Motors, and Stellantis that lasted several weeks until each of these automotive customers was able to negotiate a new contract with the union. The strike targeted select plants at each of these automotive companies, causing prolonged plant shutdowns for these customers and ripple effects on plants and workers for other customers and automotive suppliers. The effects of the shutdowns adversely impacted our business and financial performance during the third and fourth quarters of 2023 and the first quarter of 2024. Any future labor dispute involving our customers or their suppliers that results in a slowdown or closure of our customers’ plants to which we provide services could have a material adverse effect on our business. 

Ongoing insurance and claims expenses could significantly reduce our earnings.

Our future insurance and claims expenses might exceed historical levels, which could reduce our earnings. The Company is self-insured for a material portion of auto liability claims in excess of two million dollars and for health and workers’ compensation insurance up to certain limits. The actual cost to settle self-insured claims can differ from amounts reserved due to various uncertainties, including the ultimate severity of the claims and potential amounts required to defend and settle claims. If claims costs increase, or if the severity or number of claims increase, and if we are unable to offset the resulting increases in expenses with higher freight rates, our earnings could be materially and adversely affected. Healthcare legislation and inflationary cost increases could also have a negative effect on our results.

We may be subject to litigation claims that could result in significant expenditures.

By the nature of our operations we are exposed to the potential for a variety of litigation, including personal injury claims, vehicular collisions and accidents, alleged violations of federal and state labor and employment laws, such as class-action lawsuits alleging wage and hour violations and improper pay, commercial and contract disputes, cargo loss and property damage claims. While we purchase insurance coverage at levels we deem adequate, future litigation may exceed our insurance coverage or may not be covered by insurance. We accrue a provision for a litigation matter according to applicable accounting standards based on the ongoing assessment of the strengths and weaknesses of the litigation, its likelihood of success, and an evaluation of the possible range of loss. Our inability to defend ourselves against a significant litigation claim could have a