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Note 10 - Revenue and Business Segments
 3 Months Ended
Mar. 31, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(10) 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 condensed balance sheets were $2.2 million and $1.6 million as of March 31, 2025 and December 31, 2024, respectively. We had no impairment losses on contract assets in the first three months of 2025 or 2024. We bill our customers for loads after delivery is complete with standard payment terms of 30 days.

 

We account for revenue of our Intermodal and Brokerage segments and revenue on freight transported by independent contractors within our Truckload and Dedicated segments on a gross basis because we are the principal service provider controlling the promised service before it is transferred to each customer. We are primarily responsible for fulfilling the promise to provide each specified service to each customer. We bear the primary risk of loss in the event of cargo claims by our customers. We also have complete control and discretion in establishing the price for each specified service. Accordingly, all such revenue billed to customers is classified as operating revenue and all corresponding payments to carriers for transportation services we arrange in connection with brokerage and intermodal activities and to independent contractor providers of revenue equipment are classified as purchased transportation expense within our consolidated condensed statements of operations.

 

 

The following table sets forth for the periods indicated our operating revenue and operating income by segment. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment.

 

   

Three Months

  
   

Ended March 31,

  

(In thousands)

  

2025

    

2024

  

Operating revenue:

                

Truckload revenue, net of fuel surcharge revenue

   $ 90,106     $ 95,022  

Truckload fuel surcharge revenue

     14,285       16,529  

Total Truckload revenue

     104,391       111,551  
                 

Dedicated revenue, net of fuel surcharge revenue

     62,405       71,738  

Dedicated fuel surcharge revenue

     11,220       14,722  

Total Dedicated revenue

     73,625       86,460  
                 

Intermodal revenue, net of fuel surcharge revenue

     10,268       13,281  

Intermodal fuel surcharge revenue

     1,849       2,691  

Total Intermodal revenue

     12,117       15,972  
                 

Brokerage revenue

     33,019       35,689  

Total operating revenue

   $ 223,152     $ 249,672  
                 

Operating income/(loss):

                

Truckload

   $ (300 )   $ 489  

Dedicated

     4,854       9,258  

Intermodal

     (855

)

     (194 )

Brokerage

     2,160       2,697  

Total operating income

   $ 5,859     $ 12,250  

 

 

The following segment operating results for the periods 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.

 

Three Months Ended March 31, 2025 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 104,391     $ 73,625     $ 12,117     $ 33,019     $ 223,152  

Operating expense (income):

                                        

Salaries, wages and benefits

     43,430       31,434       2,148       1,788       78,800  

Purchased transportation

     1,055       2,344       6,552       27,705       37,656  

Fuel and fuel taxes

     20,453       11,747       917       -       33,117  

Supplies and maintenance

     10,249       4,532       730       2       15,513  

Depreciation

     16,054       9,551       1,359       506       27,470  

Operating taxes and licenses

     1,367       967       62       21       2,417  

Insurance and claims

     7,486       5,345       351       195       13,377  

Communications and utilities

     1,265       746       55       213       2,279  

Gain on disposition of revenue equipment

     (915 )     (708 )     (42 )     -       (1,665 )

Other

     4,247       2,813       840       429       8,329  

Total operating expenses

     104,691       68,771       12,972       30,859       217,293  

Operating income/(loss)

   $ (300 )   $ 4,854     $ (855 )   $ 2,160     $ 5,859  
                                         

Operating ratio

     100.3 %     93.4 %     107.1 %     93.5 %     97.4 %

Operating ratio, net of fuel surcharges

     100.3 %     92.2 %     108.3 %     93.5 %     97.0 %

 

Three Months Ended March 31, 2024 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 111,551     $ 86,460     $ 15,972     $ 35,689     $ 249,672  

Operating expense (income):

                                        

Salaries, wages and benefits

     48,080       35,746       3,069       1,867       88,762  

Purchased transportation

     1,176       2,745       8,082       29,811       41,814  

Fuel and fuel taxes

     23,322       15,000       1,239       -       39,561  

Supplies and maintenance

     10,221       5,007       847       (5 )     16,070  

Depreciation

     16,104       10,326       1,576       521       28,527  

Operating taxes and licenses

     1,362       1,044       89       80       2,575  

Insurance and claims

     6,369       4,791       376       121       11,657  

Communications and utilities

     1,295       796       68       212       2,371  

Gain on disposition of revenue equipment

     (628 )     (500 )     (43 )     -       (1,171 )

Other

     3,761       2,247       863       385       7,256  

Total operating expenses

     111,062       77,202       16,166       32,992       237,422  

Operating income/(loss)

   $ 489     $ 9,258     $ (194 )   $ 2,697     $ 12,250  
                                         

Operating ratio

     99.6 %     89.3 %     101.2 %     92.4 %     95.1 %

Operating ratio, net of fuel surcharges

     99.5 %     87.1 %     101.5 %     92.4 %     94.3 %