MARTEN TRANSPORT LTD Segments Disclosure

14. Revenue and Business Segments

 

We account for our revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers. We combine our five current operating segments, along with our Intermodal operating segment which was sold effective September 30, 2025, into four reporting segments (Truckload, Dedicated, Brokerage and Intermodal) for financial reporting purposes. These four reporting segments are also the appropriate categories for the disaggregation of our revenue under FASB ASC 606.

 

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 each individual customer’s 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 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 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 13, our Intermodal operations were sold effective September 30, 2025.

 

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 $1.4 million and $1.6 million as of December 31, 2025 and December 31, 2024, respectively. We had no impairment losses on contract assets in 2025 or 2024. 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)		2025				2024				2023
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	363,929			$	377,452			$	395,565
Truckload fuel surcharge revenue			57,800				62,340				69,910
Total Truckload revenue			421,729				439,792				465,475
Dedicated revenue, net of fuel surcharge revenue			236,504				267,077				334,962
Dedicated fuel surcharge revenue			41,922				52,058				73,310
Total Dedicated revenue			278,426				319,135				408,272
Intermodal revenue, net of fuel surcharge revenue			28,730				49,468				75,887
Intermodal fuel surcharge revenue			4,941				9,286				16,191
Total Intermodal revenue			33,671				58,754				92,078
Brokerage revenue			149,826				146,027				165,630
Total operating revenue		$	883,652			$	963,708			$	1,131,455
Operating income/(loss):
Truckload		$	825			$	3,283			$	24,835
Dedicated			16,734				23,037				48,377
Intermodal			(1,883	)			(3,922	)			(156	)
Brokerage			7,237				10,822				17,054
Total operating income		$	22,913			$	33,220			$	90,110

 

The following segment operating results for the years 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.

 

2025 Segment Operating Results
(In thousands)		Truckload				Dedicated				Intermodal				Brokerage				Total
Operating revenue		$	421,729			$	278,426			$	33,671			$	149,826			$	883,652
Operating expense (income):
Salaries, wages and benefits			176,475				121,597				5,819				8,179				312,070
Purchased transportation			3,537				9,454				18,802				127,320				159,113
Fuel and fuel taxes			83,756				43,119				3,124				-				129,999
Supplies and maintenance			41,744				17,628				1,832				4				61,208
Depreciation			64,640				35,948				2,881				1,923				105,392
Operating taxes and licenses			5,718				3,779				156				84				9,737
Insurance and claims			30,950				21,609				738				2,348				55,645
Communications and utilities			4,953				2,747				142				911				8,753
Gain on disposition of revenue equipment			(7,367	)			(4,522	)			(178	)			-				(12,067	)
Other			16,498				10,333				2,238				1,820				30,889
Total operating expenses			420,904				261,692				35,554				142,589				860,739
Operating income		$	825			$	16,734			$	(1,883	)		$	7,237			$	22,913
Operating ratio			99.8	%			94.0	%			105.6	%			95.2	%			97.4	%
Operating ratio, net of fuel surcharges			99.8	%			92.9	%			106.6	%			95.2	%			97.1	%

 

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	%