Freight Recession Still Squeezing Marten’s Profits, Margins
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Profits and margins at Marten Transport continued to weaken in the second quarter of 2024, dented by the ongoing industrywide supply-demand imbalance, higher costs and softer freight rates.
Mondovi, Wis.-based Marten posted Q2 net income of $7.9 million, or 10 cents per diluted share, compared with a profit of $21.9 million, 27 cents, a year earlier.
Marten ranks No. 38 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, No. 5 among refrigerated carriers, No. 23 on the list of the largest truckload carriers and No. 16 among intermodal/drayage haulers. It also ranks No. 87 on the TT Top 100 logistics list.
“Our earnings were heavily pressured by the freight market recession’s oversupply and weak demand, inflationary operating costs, and cumulative impact of freight rate reductions leading to freight network disruptions,” Executive Chairman Randolph Marten said.
Marten’s largest concentration of business is in the truckload refrigerated and dry van sectors. June reefer spot rates fell 1.9% year on year, according to the latest DAT Freight & Analytics data. Dry van spot rates fell 1.1% over the same period. Marten has not accepted rate reductions since August 2023.
The company’s revenue totaled $246.2 million in Q2, down 13.8% compared with $285.7 million. Its operating revenue totaled $495.9 million in the first six months of 2024, compared with $583.7 million.
Marten’s operating expenses as a percentage of operating revenue, or the operating ratio, were 95.9 in the most recent quarter and 90.1 a year earlier.
In the first six months of 2024, the OR was 95.5, compared with 90.2% in the first six months of 2023.
Operating ratio provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
The company’s truckload division posted an operating ratio of 99 in Q2, compared with 91.8% a year earlier.
Marten Transport Q2 2024 earnings
Marten’s dedicated segment saw an OR of 91.8 in the most recent three-month period, compared with 86.5. The company’s intermodal operations reported an OR of 104.5 in Q2, compared with 100.7.
The truckload division posted average weekly revenue per tractor of $4,093 in Q2, down 8.5% from $4,472. The segment was operating 1,805 tractors on average in Q2, compared with 1,742.
Marten’s dedicated division reported an average weekly revenue per tractor of $3,754, down 5.8% from $3,986. The unit was operating 1,382 tractors on average in Q2, compared with 1,687.
As of June 30, Marten had 3,126 tractors and 5,539 trailers, compared with 3,516 tractors and 5,786 trailers a year earlier.
In the six-month period ending June 30, Marten posted a $17.5 million profit, 22 cents, compared with $44.4 million, 55 cents, a year earlier.
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