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Note 14 - Revenue and Business Segments
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

14. Revenue and Business Segments

 

We account for our revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers. We combine our six current operating segments into four reporting segments (Truckload, Dedicated, Intermodal and Brokerage) for financial reporting purposes. These four reporting segments are also the appropriate categories for the disaggregation of our revenue under FASB ASC 606.

 

We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our six distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico.

 

Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year.

 

Our Dedicated segment provides customized transportation solutions tailored to meet individual customers’ requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from three to five years and are subject to annual rate reviews.

 

Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other accessorial services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue.

 

Our Intermodal segment transports our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affect our Intermodal revenue are the rate per mile and other charges we receive from our customers.

 

Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation, or DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers.

 

Operating results of our MRTN de Mexico business which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers is reported within our Truckload and Brokerage segments.

 

Our customer agreements are typically for one-year terms except for our Dedicated agreements which range from three to five years with annual rate reviews. Under FASB ASC 606, the contract date for each individual load within each of our four reporting segments is generally the date that each load is tendered to and accepted by us. For each load transported within each of our four reporting segments, the entire amount of revenue to be recognized is a single performance obligation and our agreements with our customers detail the per-mile charges for line haul and fuel surcharges, along with the rates for loading and unloading, stop offs and drops, equipment detention and other accessorial services, which is the transaction price. There are no discounts that would be a material right or consideration payable to a customer. We are required to recognize revenue and related expenses over time, from load pickup to delivery, for each load within each of our four reporting segments. We base our calculation of the amount of revenue to record in each period for individual loads picking up in one period and delivering in the following period using the number of hours estimated to be incurred within each period applied to each estimated transaction price. Contract assets for this estimated revenue which are classified within prepaid expenses and other within our consolidated balance sheets were $1.6 million and $2.1 million as of December 31, 2024 and December 31, 2023, respectively. We had no impairment losses on contract assets in 2024 or 2023. We bill our customers for loads after delivery is complete with standard payment terms of 30 days.

 

The following table sets forth for the years indicated our operating revenue and operating income by segment.

 

(In thousands)

  

2024

    

2023

    

2022

  

Operating revenue:

                        

Truckload revenue, net of fuel surcharge revenue

   $ 377,452     $ 395,565     $ 411,448  

Truckload fuel surcharge revenue

     62,340       69,910       89,014  

Total Truckload revenue

     439,792       465,475       500,462  
                         

Dedicated revenue, net of fuel surcharge revenue

     267,077       334,962       336,973  

Dedicated fuel surcharge revenue

     52,058       73,310       92,119  

Total Dedicated revenue

     319,135       408,272       429,092  
                         

Intermodal revenue, net of fuel surcharge revenue

     49,468       75,887       100,452  

Intermodal fuel surcharge revenue

     9,286       16,191       29,313  

Total Intermodal revenue

     58,754       92,078       129,765  
                         

Brokerage revenue

     146,027       165,630       204,559  
                         

Total operating revenue

   $ 963,708     $ 1,131,455     $ 1,263,878  
                         

Operating income/(loss):

                        

Truckload

   $ 3,283     $ 24,835     $ 59,392  

Dedicated

     23,037       48,377       50,566  

Intermodal

     (3,922 )     (156 )     10,639  

Brokerage

     10,822       17,054       22,747  

Total operating income

   $ 33,220     $ 90,110     $ 143,344  

 

The following segment operating results for the years indicated are provided monthly to our chief operating decision maker, our chief executive officer, and used in assessing segment performance and allocating resources, primarily based upon each segment’s variances in operating revenue, operating income and operating ratio. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment.

 

2024 Segment Operating Results

 

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 439,792     $ 319,135     $ 58,754     $ 146,027     $ 963,708  

Operating expense (income):

                                        

Salaries, wages and benefits

     185,871       137,340       11,028       7,493       341,732  

Purchased transportation

     4,520       10,568       31,612       122,442       169,142  

Fuel and fuel taxes

     88,868       52,925       5,350       -       147,143  

Supplies and maintenance

     39,925       20,141       3,285       (14 )     63,337  

Depreciation

     64,074       39,452       6,076       2,051       111,653  

Operating taxes and licenses

     5,577       4,066       330       329       10,302  

Insurance and claims

     29,693       21,025       1,617       774       53,109  

Communications and utilities

     5,121       2,861       223       824       9,029  

Gain on disposition of revenue equipment

     (2,683 )     (2,111 )     (177 )     -       (4,971 )

Other

     15,543       9,831       3,332       1,306       30,012  

Total operating expenses

     436,509       296,098       62,676       135,205       930,488  

Operating income/(loss)

   $ 3,283     $ 23,037     $ (3,922 )   $ 10,822     $ 33,220  
                                         

Operating ratio

     99.3 %     92.8 %     106.7 %     92.6 %     96.6 %

Operating ratio, net of fuel surcharges

     99.1 %     91.4 %     107.9 %     92.6 %     96.0 %

 

2023 Segment Operating Results

 

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 465,475     $ 408,272     $ 92,078     $ 165,630     $ 1,131,455  

Operating expense (income):

                                        

Salaries, wages and benefits

     189,010       165,257       17,666       6,885       378,818  

Purchased transportation

     4,958       10,778       47,531       136,067       199,334  

Fuel and fuel taxes

     98,852       73,083       8,502       -       180,437  

Supplies and maintenance

     37,495       26,061       3,826       29       67,411  

Depreciation

     61,644       46,151       7,071       1,856       116,722  

Operating taxes and licenses

     5,483       4,881       470       219       11,053  

Insurance and claims

     28,460       24,503       2,341       710       56,014  

Communications and utilities

     5,064       3,727       359       999       10,149  

Gain on disposition of revenue equipment

     (6,694 )     (6,304 )     (614 )     -       (13,612 )

Other

     16,368       11,758       5,082       1,811       35,019  

Total operating expenses

     440,640       359,895       92,234       148,576       1,041,345  

Operating income/(loss)

   $ 24,835     $ 48,377     $ (156 )   $ 17,054     $ 90,110  
                                         

Operating ratio

     94.7 %     88.2 %     100.2 %     89.7 %     92.0 %

Operating ratio, net of fuel surcharges

     93.7 %     85.6 %     100.2 %     89.7 %     90.7 %

 

2022 Segment Operating Results

 

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 500,462     $ 429,092     $ 129,765     $ 204,559     $ 1,263,878  

Operating expense (income):

                                        

Salaries, wages and benefits

     188,131       172,179       21,602       8,392       390,304  

Purchased transportation

     4,835       9,559       65,271       170,127       249,792  

Fuel and fuel taxes

     114,306       91,091       13,174       -       218,571  

Supplies and maintenance

     30,495       21,268       4,028       (91 )     55,700  

Depreciation

     56,365       45,630       7,493       1,526       111,014  

Operating taxes and licenses

     5,037       4,855       516       355       10,763  

Insurance and claims

     25,848       21,723       2,268       674       50,513  

Communications and utilities

     4,548       3,471       412       746       9,177  

Gain on disposition of revenue equipment

     (6,308 )     (6,386 )     (685 )     -       (13,379 )

Other

     17,813       15,136       5,047       83       38,079  

Total operating expenses

     441,070       378,526       119,126       181,812       1,120,534  

Operating income

   $ 59,392     $ 50,566     $ 10,639     $ 22,747     $ 143,344  
                                         

Operating ratio

     88.1 %     88.2 %     91.8 %     88.9 %     88.7 %

Operating ratio, net of fuel surcharges

     85.6 %     85.0 %     89.4 %     88.9 %     86.4 %