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Note 11 - Revenue and Business Segments
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(11) 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. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025.

 

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 transported 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 affected our Intermodal revenue were the rate per mile and other charges we received from our customers. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025.

 

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 $1.9 million and $1.6 million as of September 30, 2025 and December 31, 2024, respectively. We had no impairment losses on contract assets in the first nine 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

    

Nine Months

  
   

Ended September 30,

    

Ended September 30,

  

(In thousands)

  

2025

    

2024

    

2025

    

2024

  

Operating revenue:

                                

Truckload revenue, net of fuel surcharge revenue

   $ 90,138     $ 93,278     $ 272,728     $ 284,346  

Truckload fuel surcharge revenue

     14,691       15,146       42,978       48,152  

Total Truckload revenue

     104,829       108,424       315,706       332,498  
                                 

Dedicated revenue, net of fuel surcharge revenue

     56,675       62,898       180,418       202,080  

Dedicated fuel surcharge revenue

     10,335       12,123       32,091       40,667  

Total Dedicated revenue

     67,010       75,021       212,509       242,747  
                                 

Intermodal revenue, net of fuel surcharge revenue

     8,369       12,289       28,730       38,230  

Intermodal fuel surcharge revenue

     1,482       2,220       4,941       7,315  

Total Intermodal revenue

     9,851       14,509       33,671       45,545  
                                 

Brokerage revenue

     38,780       39,412       111,658       112,486  

Total operating revenue

   $ 220,470     $ 237,366     $ 673,544     $ 733,276  
                                 

Operating income/(loss):

                                

Truckload

   $ (2,002 )   $ (142 )   $ 42     $ 1,462  

Dedicated

     3,426       3,056       13,709       18,964  

Intermodal

     (293

)

     (1,542 )     (1,883 )     (2,420 )

Brokerage

     1,607       2,897       6,463       8,487  

Total operating income

   $ 2,738     $ 4,269     $ 18,331     $ 26,493  

 

 

The following segment operating results for the periods indicated are provided monthly to our chief operating decision maker, our Chairman of the Board and 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 September 30, 2025 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 104,829     $ 67,010     $ 9,851     $ 38,780     $ 220,470  

Operating expense (income):

                                        

Salaries, wages and benefits

     45,122       30,107       1,593       2,150       78,972  

Purchased transportation

     734       2,408       5,891       33,251       42,284  

Fuel and fuel taxes

     21,878       10,484       1,164       -       33,526  

Supplies and maintenance

     10,679       4,429       477       -       15,585  

Depreciation

     16,073       8,609       305       460       25,447  

Operating taxes and licenses

     1,445       927       34       17       2,423  

Insurance and claims

     6,521       4,185       34       642       11,382  

Communications and utilities

     1,185       643       32       233       2,093  

Gain on disposition of revenue equipment

     (1,103 )     (791 )     (9 )     -       (1,903 )

Other

     4,297       2,583       623       420       7,923  

Total operating expenses

     106,831       63,584       10,144       37,173       217,732  

Operating income/(loss)

   $ (2,002 )   $ 3,426     $ (293 )   $ 1,607     $ 2,738  
                                         

Operating ratio

     101.9 %     94.9 %     103.0 %     95.9 %     98.8 %

Operating ratio, net of fuel surcharges

     102.2 %     94.0 %     103.5 %     95.9 %     98.6 %

 

Nine Months Ended September 30, 2025 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 315,706     $ 212,509     $ 33,671     $ 111,658     $ 673,544  

Operating expense (income):

                                        

Salaries, wages and benefits

     132,278       92,326       5,819       5,919       236,342  

Purchased transportation

     2,653       7,123       18,802       94,485       123,063  

Fuel and fuel taxes

     63,124       32,986       3,124       -       99,234  

Supplies and maintenance

     31,338       13,527       1,832       7       46,704  

Depreciation

     48,346       27,538       2,881       1,459       80,224  

Operating taxes and licenses

     4,230       2,841       156       64       7,291  

Insurance and claims

     23,004       15,630       738       1,239       40,611  

Communications and utilities

     3,645       2,078       142       671       6,536  

Gain on disposition of revenue equipment

     (5,412 )     (3,160 )     (178 )     -       (8,750 )

Other

     12,458       7,911       2,238       1,351       23,958  

Total operating expenses

     315,664       198,800       35,554       105,195       655,213  

Operating income/(loss)

   $ 42     $ 13,709     $ (1,883 )   $ 6,463     $ 18,331  
                                         

Operating ratio

     100.0 %     93.5 %     105.6 %     94.2 %     97.3 %

Operating ratio, net of fuel surcharges

     100.0 %     92.4 %     106.6 %     94.2 %     96.9 %

 

 

Three Months Ended September 30, 2024 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 108,424     $ 75,021     $ 14,509     $ 39,412     $ 237,366  

Operating expense (income):

                                        

Salaries, wages and benefits

     45,513       33,440       2,647       1,842       83,442  

Purchased transportation

     1,162       2,463       7,975       33,262       44,862  

Fuel and fuel taxes

     21,909       12,323       1,549       -       35,781  

Supplies and maintenance

     10,347       5,172       949       (4 )     16,464  

Depreciation

     15,803       9,549       1,513       527       27,392  

Operating taxes and licenses

     1,377       984       80       64       2,505  

Insurance and claims

     7,810       5,335       411       203       13,759  

Communications and utilities

     1,233       663       52       218       2,166  

Gain on disposition of revenue equipment

     (483 )     (369 )     (29 )     -       (881 )

Other

     3,895       2,405       904       403       7,607  

Total operating expenses

     108,566       71,965       16,051       36,515       233,097  

Operating income/(loss)

   $ (142 )   $ 3,056     $ (1,542 )   $ 2,897     $ 4,269  
                                         

Operating ratio

     100.1 %     95.9 %     110.6 %     92.6 %     98.2 %

Operating ratio, net of fuel surcharges

     100.2 %     95.1 %     112.5 %     92.6 %     97.9 %

 

Nine Months Ended September 30, 2024 Segment Operating Results

  
                                         

(In thousands)

  

Truckload

    

Dedicated

    

Intermodal

    

Brokerage

    

Total

  

Operating revenue

   $ 332,498     $ 242,747     $ 45,545     $ 112,486     $ 733,276  

Operating expense (income):

                                        

Salaries, wages and benefits

     140,966       103,413       8,563       5,781       258,723  

Purchased transportation

     3,557       7,998       23,990       94,366       129,911  

Fuel and fuel taxes

     68,649       41,237       4,265       -       114,151  

Supplies and maintenance

     30,949       15,542       2,517       (2 )     49,006  

Depreciation

     48,119       29,804       4,645       1,557       84,125  

Operating taxes and licenses

     4,087       3,006       255       271       7,619  

Insurance and claims

     21,249       15,059       1,168       499       37,975  

Communications and utilities

     3,831       2,195       181       627       6,834  

Gain on disposition of revenue equipment

     (2,470 )     (1,948 )     (166 )     -       (4,584 )

Other

     12,099       7,477       2,547       900       23,023  

Total operating expenses

     331,036       223,783       47,965       103,999       706,783  

Operating income/(loss)

   $ 1,462     $ 18,964     $ (2,420 )   $ 8,487     $ 26,493  
                                         

Operating ratio

     99.6 %     92.2 %     105.3 %     92.5 %     96.4 %

Operating ratio, net of fuel surcharges

     99.5 %     90.6 %     106.3 %     92.5 %     95.8 %