Marten Transport Q3 Costs Rise Despite Firmer Freight Market

Marten Transport reported a difficult third quarter as higher fuel, payroll and health-insurance costs outweighed signs of a tightening freight market. FreightWaves reported October 23 that the refrigerated carrier earned $2.9 million, or 4 cents per share. Earnings were one cent above the year-ago quarter but two cents below the consensus estimate, and the company's shares fell 7% in midday trading after the report.

Consolidated revenue increased 1% year over year to $223 million. Higher fuel and payroll costs, including driver-pay increases, were only partly offset by improved gains on equipment sales. Marten estimated those items reduced net income by $3.7 million, equal to about 4.5 cents per share. The prior sale of its intermodal operation also created a $9.9 million revenue headwind.

One-way truckload revenue rose 12% to $117 million. Excluding fuel surcharges, revenue increased 4% as revenue per tractor per week gained 15% on a fleet that was 9% smaller. Revenue per loaded mile increased 14% to $3.02, while deadhead improved to 10.7%. Even so, the truckload unit posted a 100.2% operating ratio excluding fuel, meaning operating expense slightly exceeded revenue.

The results show why firmer rates do not automatically produce stronger margins. Dedicated revenue excluding fuel fell 9%, while brokerage revenue was flat as fewer shipments were offset by higher revenue per load. Marten remained debt-free and generated $83 million in operating cash flow during the first nine months. Fleets should compare pricing gains with fuel, insurance, wages, utilization and empty miles before treating a tighter market as a recovery. Drivers and owner-operators should likewise evaluate total operating cost and loaded utilization, not revenue per mile alone, when deciding whether a lane is profitable.