10q10k10q10k.net

What changed in MARTEN TRANSPORT LTD's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of MARTEN TRANSPORT LTD's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+135 added−138 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-28)

Top changes in MARTEN TRANSPORT LTD's 2024 10-K

135 paragraphs added · 138 removed · 118 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

27 edited+2 added−0 removed43 unchanged
Biggest changeThis total consists of 3,256 drivers, 303 mechanics and maintenance personnel, and 654 support personnel, which includes management and administration. As of that date, we also contracted with 94 independent contractors. None of our employees are represented by a collective bargaining unit. We consider relations with our employees to be good.
Biggest changeAs of that date, we also contracted with 88 independent contractors. None of our employees are represented by a collective bargaining unit. We consider relations with our employees to be good. We believe our employees are a critical part to the continued success of our operations.
We also compensate drivers for all detention time, for inclement weather and for road service delays. Total weekly compensation is also subject to a guaranteed minimum amount. We pay independent contractors a fixed rate per mile. Independent contractors pay for their own fuel, insurance, maintenance and repairs. The health and well-being of our employees is paramount to our success.
We also compensate drivers for all detention time, for inclement weather and for road service delays. Total weekly compensation is also subject to a guaranteed minimum amount. We pay independent contractors a fixed rate per mile. Independent contractors pay for their own fuel, insurance, maintenance and repairs. 3 The health and well-being of our employees is paramount to our success.
All new drivers also must pass DOT required tests prior to assignment to a vehicle. 3 Revenue Equipment Our revenue equipment programs are an important part of our overall goal of profitable growth.
All new drivers also must pass DOT required tests prior to assignment to a vehicle. Revenue Equipment Our revenue equipment programs are an important part of our overall goal of profitable growth.
These fuel surcharges, which adjust with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase, except for non-revenue miles, out-of-route miles or fuel used while the tractor is idling. As of December 31, 2023, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
These fuel surcharges, which adjust with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase, except for non-revenue miles, out-of-route miles or fuel used while the tractor is idling. As of December 31, 2024, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
We actively manage our fuel costs by purchasing fuel in bulk at a number of our facilities throughout the country and have volume purchasing arrangements with national fuel centers that allow our drivers to purchase fuel at a discount while in transit. During 2023, nearly 100% of our fuel purchases were made at these designated locations.
We actively manage our fuel costs by purchasing fuel in bulk at a number of our facilities throughout the country and have volume purchasing arrangements with national fuel centers that allow our drivers to purchase fuel at a discount while in transit. During 2024, nearly 100% of our fuel purchases were made at these designated locations.
With our fleet of 3,349 company and independent contractor tractors, we offer service levels that include up to 99% on-time performance and delivery within the narrow time windows often required when shipping perishable commodities. We have four reporting segments – Truckload, Dedicated, Intermodal and Brokerage.
With our fleet of 3,006 company and independent contractor tractors, we offer service levels that include up to 99% on-time performance and delivery within the narrow time windows often required when shipping perishable commodities. We have four reporting segments – Truckload, Dedicated, Intermodal and Brokerage.
ITEM 1. BUSINESS Overview 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 five distinct business platforms – Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico.
ITEM 1. BUSINESS Overview 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 marketing efforts are conducted by a staff of 290 sales, customer service and support personnel under the supervision of our senior management team. Marketing personnel travel within their regions to solicit new customers and maintain contact with existing customers. Customer service managers regularly contact customers to solicit additional business on a load-by-load basis.
Our marketing efforts are conducted by a staff of 346 sales, customer service and support personnel under the supervision of our senior management team. Marketing personnel travel within their regions to solicit new customers and maintain contact with existing customers. Customer service managers regularly contact customers to solicit additional business on a load-by-load basis.
We target food and consumer packaged goods companies whose products require temperature-sensitive services and who ship multiple truckloads per week. By emphasizing high-quality service, we seek to become a core carrier for our customers. In 2023, our largest customer was Walmart.
We target food and consumer packaged goods companies whose products require temperature-sensitive services and who ship multiple truckloads per week. By emphasizing high-quality service, we seek to become a core carrier for our customers. In 2024, our largest customer was Walmart.
Independent contractors own their own tractors and are responsible for all associated expenses, including financing costs, fuel, maintenance, insurance and taxes. The percentage of our fleet provided by independent contractors was 2.8% at December 31, 2023, 2.6% at December 31, 2022 and 2.9% at December 31, 2021.
Independent contractors own their own tractors and are responsible for all associated expenses, including financing costs, fuel, maintenance, insurance and taxes. The percentage of our fleet provided by independent contractors was 2.9% at December 31, 2024, 2.8% at December 31, 2023 and 2.6% at December 31, 2022.
In 2010, our top 30 customers accounted for approximately 78% of our revenue. Nine of our top ten customers have been significant customers of ours for the last ten years. We believe we are the largest or second largest temperature-sensitive carrier for seven of our top ten customers.
In 2010, our top 30 customers accounted for approximately 78% of our revenue. Eight of our top ten customers have been significant customers of ours for the last ten years. We believe we are the largest or second largest temperature-sensitive carrier for seven of our top ten customers.
We are also subject to various environmental laws and regulations dealing with vehicle emissions and idling, the handling of hazardous materials, fuel storage tanks, air emissions from our facilities and discharge and retention of storm water. These regulations did not have a significant impact on our operations or financial results in 2021 through 2023.
We are also subject to various environmental laws and regulations dealing with vehicle emissions and idling, the handling of hazardous materials, fuel storage tanks, air emissions from our facilities and discharge and retention of storm water. These regulations did not have a significant impact on our operations or financial results in 2022 through 2024.
We provide regional truckload carrier services in the Southeast, West Coast, Midwest, South Central and Northeast regions. Our primary medium-to-long-haul traffic lanes are between the Midwest and the West Coast, Southwest, Southeast, and the East Coast, as well as from California to the Pacific Northwest. In 2023, our average length of haul was 414 miles.
We provide regional truckload carrier services in the Southeast, West Coast, Midwest, South Central and Northeast regions. Our primary medium-to-long-haul traffic lanes are between the Midwest and the West Coast, Southwest, Southeast, and the East Coast, as well as from California to the Pacific Northwest. In 2024, our average length of haul was 418 miles.
For example, we produced a non-revenue mile percentage of 7.3% during 2023, which points to the efficiency of our operations and we believe compares favorably to other temperature-sensitive and dry van trucking companies. Major Customers A significant portion of our revenue is generated from our major customers.
For example, we produced a non-revenue mile percentage of 7.6% during 2024, which points to the efficiency of our operations and we believe compares favorably to other temperature-sensitive and dry van trucking companies. Major Customers A significant portion of our revenue is generated from our major customers.
In 2023, our top 30 customers accounted for approximately 69% of our revenue excluding fuel surcharges, and our top ten customers accounted for 47% of our revenue. We have emphasized increasing our customer diversity which is shown by the decrease in the portion of our revenue with our top customers.
In 2024, our top 30 customers accounted for approximately 69% of our revenue excluding fuel surcharges, and our top ten customers accounted for 48% of our revenue. We have emphasized increasing our customer diversity which is shown by the decrease in the portion of our revenue with our top customers.
We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 55% in 2021, 57% in 2022 and 67% in 2023. The impact of the clearinghouse has been significant, with a total of approximately 158,000 drivers removed from the trucking industry from January 2020 through December 2023.
We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 57% in 2022, 67% in 2023 and 74% in 2024. The impact of the clearinghouse has been significant, with a total of approximately 181,000 drivers removed from the trucking industry from January 2020 through December 2024.
We periodically evaluate and adjust our insurance and claims reserves to reflect our experience. We have $20.7 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities.
We periodically evaluate and adjust our insurance and claims reserves to reflect our experience. We have $23.1 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities.
CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently considering possible changes to the agency’s safety and fitness regulations.
CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently putting in place changes to generally simplify the agency’s safety and fitness regulations.
In 2023, we replaced our company-owned trailers within an average of 8.0 years after purchase. As of December 31, 2023, we operated a fleet of 787 refrigerated containers for use on railroad flatcars as compared to a fleet of 802 refrigerated containers as of December 31, 2022.
In 2024, we replaced our company-owned trailers within an average of 8.4 years after purchase. As of December 31, 2024, we operated a fleet of 786 refrigerated containers for use on railroad flatcars as compared to a fleet of 787 refrigerated containers as of December 31, 2023.
Approximately 58% of our Truckload and Dedicated revenue in 2023 resulted from hauling temperature-sensitive products and 42% from hauling dry freight. We operate throughout the United States and in parts of Mexico and Canada, with our revenue primarily generated from within the United States.
Approximately 59% of our Truckload and Dedicated revenue in 2024 resulted from hauling temperature-sensitive products and 41% from hauling dry freight. We operate throughout the United States and in parts of Mexico and Canada, with our revenue primarily generated from within the United States.
All testing violations must also be reported to the clearinghouse. Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously.
Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously.
We are one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. In 2023, we generated $1.131 billion in operating revenue.
We are one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. In 2024, we generated $963.7 million in operating revenue.
As of December 31, 2023, we operated a fleet of 5,653 trailers, consisting of 3,347 refrigerated trailers and 2,306 dry vans. Most of our refrigerated trailers are equipped with Thermo-King refrigeration units, air ride suspensions and anti-lock brakes. The average age of our trailer fleet at December 31, 2023 was approximately 4.6 years.
As of December 31, 2024, we operated a fleet of 5,440 trailers, consisting of 3,138 refrigerated trailers and 2,302 dry vans. Most of our refrigerated trailers are equipped with Thermo-King refrigeration units, air ride suspensions and anti-lock brakes. The average age of our trailer fleet at December 31, 2024 was approximately 5.3 years.
As of December 31, 2023, we operated a fleet of 3,349 tractors, including 3,255 company-owned tractors and 94 tractors supplied by independent contractors. The average age of our company-owned tractor fleet at December 31, 2023 was approximately 1.9 years. In 2023, we replaced our company-owned tractors within an average of 4.1 years after purchase.
As of December 31, 2024, we operated a fleet of 3,006 tractors, including 2,918 company-owned tractors and 88 tractors supplied by independent contractors. The average age of our company-owned tractor fleet at December 31, 2024 was approximately 1.9 years. In 2024, we replaced our company-owned tractors within an average of 3.9 years after purchase.
Competition in the trucking industry for qualified drivers is normally intense and has increased. Our operations have been impacted by, and from time-to-time we have experienced under-utilization and increased expense relating to, a shortage of qualified drivers.
Our operations have been impacted by, and from time-to-time we have experienced under-utilization and increased expense relating to, a shortage of qualified drivers.
We believe our employees are a critical part to the continued success of our operations. Our business model depends on the efforts of our support personnel to efficiently and effectively coordinate transportation services for our customers and on the efforts of our drivers to timely and safely execute the delivery of our customers’ cargo.
Our business model depends on the efforts of our support personnel to efficiently and effectively coordinate transportation services for our customers and on the efforts of our drivers to timely and safely execute the delivery of our customers’ cargo. Competition in the trucking industry for qualified drivers is normally intense and has increased.
We believe our relationships with these key customers are sound, but we are dependent upon them and the loss of some or all of their business could have a materially adverse effect on our results. Human Capital As of December 31, 2023, we had 4,213 employees.
We believe our relationships with these key customers are sound, but we are dependent upon them and the loss of some or all of their business could have a materially adverse effect on our results. Seasonality Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments.
Added
At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims, lower fuel efficiency and more equipment repairs. Human Capital As of December 31, 2024, we had 3,776 employees. This total consists of 2,915 drivers, 270 mechanics and maintenance personnel, and 591 support personnel, which includes management and administration.
Added
All testing violations must also be reported to the clearinghouse. Additionally, effective November 2024, all states are required to check the clearinghouse for any prohibitions before issuing, renewing, transferring or upgrading any commercial drivers’ licenses.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

15 edited+5 added−7 removed85 unchanged
Biggest changeOur business is subject to the risk of litigation, which may adversely affect our business and operating results. We are subject to litigation resulting from trucking accidents. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and could impact our insurance costs.
Biggest changeWe are subject to litigation resulting from trucking accidents. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and could impact our insurance costs. In particular, the trucking industry has seen a trend of nuclear verdicts, resulting in the payment of substantial damages for claims related to trucking accidents.
We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our profitability. 11 Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties .
We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our profitability. Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties .
Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices could adversely affect our results of operations. The DOT, through the Federal Motor Carrier Safety Administration, or FMCSA, imposes safety and fitness regulations on us and our drivers.
Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices could adversely affect our results of operations. 10 The DOT, through the Federal Motor Carrier Safety Administration, or FMCSA, imposes safety and fitness regulations on us and our drivers.
In addition, hiring, training and successfully integrating replacement personnel, whether internal or external, could be time consuming, may cause additional disruptions to our operations and may be unsuccessful, which could negatively impact our business, financial condition and results of operations. 12
In addition, hiring, training and successfully integrating replacement personnel, whether internal or external, could be time consuming, may cause additional disruptions to our operations and may be unsuccessful, which could negatively impact our business, financial condition and results of operations.
We can also suffer short-term impacts from weather-related events such as hurricanes, blizzards, ice-storms and floods that could harm our results or make our results more volatile. 9 We are subject to risks associated with public health crises, such as pandemics and epidemics, including the COVID-19 pandemic, which could negatively impact our business and results of operations.
We can also suffer short-term impacts from weather-related events such as hurricanes, blizzards, ice-storms and floods that could harm our results or make our results more volatile. We are subject to risks associated with public health crises, such as pandemics and epidemics, which could negatively impact our business and results of operations.
We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 55% in 2021, 57% in 2022 and 67% in 2023. The impact of the clearinghouse has been significant, with a total of approximately 158,000 drivers removed from the trucking industry from January 2020 through December 2023.
We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 57% in 2022, 67% in 2023 and 74% in 2024. The impact of the clearinghouse has been significant, with a total of approximately 181,000 drivers removed from the trucking industry from January 2020 through December 2024.
Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, or if we are found to be in violation of applicable laws or regulations, we could be subject to liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results.
Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, or if we are found to be in violation of applicable laws or regulations, we could be subject to liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results. 11 Our business is subject to the risk of litigation, which may adversely affect our business and operating results.
CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently considering possible changes to the agency’s safety and fitness regulations.
CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently putting in place changes to generally simplify the agency’s safety and fitness regulations.
All testing violations must also be reported to the clearinghouse. Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously.
Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously.
For 2023 our top 30 customers, based on revenue excluding fuel surcharges, accounted for approximately 69% of our revenue; our top ten customers accounted for approximately 47% of our revenue; our top five customers accounted for approximately 35% of our revenue; our top two customers accounted for approximately 27% of our revenue; and our largest customer accounted for approximately 19% of our revenue.
For 2024, our top 30 customers, based on revenue excluding fuel surcharges, accounted for approximately 69% of our revenue; our top ten customers accounted for approximately 48% of our revenue; our top five customers accounted for approximately 36% of our revenue; our top two customers accounted for approximately 27% of our revenue; and our largest customer accounted for approximately 20% of our revenue.
We may need to incur indebtedness, which may include drawing on our credit facility, or issue debt securities in the future to fund working capital requirements, make investments or for general corporate purposes.
We may need to incur indebtedness, which may include drawing on our credit facility, or issue debt securities in the future to fund working capital requirements, make investments or for general corporate purposes. Additionally, stresses in the credit market causes uncertainty in the equity markets, which may result in volatility of the market price for our securities.
Insurance carriers have significantly raised premiums for trucking companies. As a result, our insurance and claims expense has increased. If these expenses increase, or if we experience a claim in excess of our coverage limits, or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.
If these expenses increase, or if we experience a claim in excess of our coverage limits, or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.
Additionally, stresses in the credit market causes uncertainty in the equity markets, which may result in volatility of the market price for our securities. 10 Risks Related to Regulation of Our Operations We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business .
Risks Related to Regulation of Our Operations We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business .
The State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026.
The State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026. Additionally, on March 6, 2024, the SEC adopted climate-related disclosure rules, which could increase compliance burdens and associated regulatory costs and complexity.
Additionally, the SEC has included in its regulatory agenda potential rulemaking on climate change disclosures that, if adopted, could significantly increase compliance burdens and associated regulatory costs and complexity. Costs associated with future climate change concerns or environmental laws and regulations and sustainability requirements could have a material adverse effect on our operations and operating results.
Following a number of petitions for review filed against the SEC, on April 4, 2024, the SEC issued an order staying the rules pending judicial review. Costs associated with future climate change concerns or environmental laws and regulations and sustainability requirements could have a material adverse effect on our operations and operating results.
Removed
While many countries around the world have removed or reduced the restrictions taken in response to the COVID-19 pandemic, the emergence of new variants of the COVID-19 virus may result in new governmental lockdowns, quarantine requirements or other restrictions to slow the spread of the virus.
Added
Insurance carriers have significantly raised premiums for trucking companies due, in part, to the increase in the number of nuclear verdicts in trucking accident cases. As a result, our insurance and claims expense has increased.
Removed
In addition, any such measures could also impact the global economy more broadly, for example, by leading to further economic slowdowns. While COVID-19 case volumes have decreased in the United States and certain other countries, the global outlook remains uncertain as case counts fluctuate and vaccination and booster rates remain relatively low in many parts of the world.
Added
Our operations are subject to risks related to pandemics, epidemics or other infectious disease outbreaks and government responses thereto.
Removed
The future impact of the pandemic continues to be an unknown. Although transportation services have been generally considered essential services and the overall demand for our services has continued throughout the pandemic, we did experience significant changes in demand from certain customers in certain freight lanes earlier in the pandemic.
Added
COVID-19, which was initially declared a pandemic by the World Health Organization on March 11, 2020 and was declared no longer a global health emergency on May 5, 2023, negatively affected economic conditions, supply chains, labor markets and demand for certain shipped goods. 9 The extent to which our business, results of operations and financial condition may be negatively affected by the COVID-19 pandemic or future pandemics, epidemics or other outbreaks of infectious diseases is highly uncertain and will depend on numerous evolving factors that we cannot predict, including, but not limited to (i) the duration and severity of the infectious disease outbreak; (ii) the imposition of restrictive measures to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures to reduce the impact of the outbreak on the economy; (iv) volatility in the demand for and price of oil and gas; (v) shortages or reductions in the supply of essential goods, services or labor; and (vi) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit.
Removed
We are unable to predict if overall demand for our services will continue at current levels or decrease should an increase in the severity of the pandemic occur.
Added
We cannot predict the effect that an outbreak of a new COVID-19 variant or strain, or any future infectious disease outbreak, pandemic or epidemic may have on our business, results of operations and financial condition, which could be material and adverse.
Removed
We continue to monitor the pandemic’s impact on the health and safety of our employees, but any widespread outbreak among our employees due to an increase in the severity of the pandemic may negatively impact our business. Earlier in the pandemic, some of our customers encountered significant disruptions to their business.
Added
All testing violations must also be reported to the clearinghouse. Additionally, effective November 2024, all states are required to check the clearinghouse for any prohibitions before issuing, renewing, transferring or upgrading any commercial drivers’ licenses.
Removed
An increase in the severity of the pandemic could cause a similar impact for our customers, which could cause a greater risk for collection of amounts owed, potentially requiring us to increase our allowance for credit losses.
Removed
The scope and duration of any future public health crisis, including the potential emergence of new variants of the COVID-19 virus, the pace at which government restrictions are imposed and lifted, the scope of additional actions taken to mitigate the spread of disease, global vaccination and booster rates, the speed and extent to which global markets and utilization rates for our customers’ products fully recover from the disruptions caused by such a public health crisis, and the impact of these factors on our business, financial condition and results of operations, will depend on future developments that are highly uncertain and cannot be predicted with confidence.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed20 unchanged
Biggest changeThese processes include, among other things, system alerts of potential malicious cyber activity, access to real-time dashboards that monitor and assess our systems, status reports provided on a daily, weekly and monthly basis and regular ongoing communications with service providers regarding potential new attach vectors and vulnerabilities. Mr.
Biggest changeThese processes include, among other things, system alerts of potential malicious cyber activity, access to real-time dashboards that monitor and assess our systems, status reports provided on a daily, weekly and monthly basis and regular ongoing communications with service providers regarding potential new attack vectors and vulnerabilities. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−3 removed4 unchanged
Biggest changeThe current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 2023 and December 31, 2022.
Biggest changeA waiver allowing stock redemptions and dividends in excess of the 25% limitation in total amounts of up to $80 million in 2022 was obtained from the lender in March 2022. The current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios.
As of December 31, 2023, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program. 16 Comparative Stock Performance The graph below compares the cumulative total stockholder return on our common stock with the NASDAQ Market index and the SIC code 4213 (trucking, except local) line-of-business index for the last five years.
As of December 31, 2024, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program. 16 Comparative Stock Performance The graph below compares the cumulative total stockholder return on our common stock with the NASDAQ Market index and the SIC code 4213 (trucking, except local) line-of-business index for the last five years.
Research Data Group, Inc. prepared the line-of-business index. The graph assumes $100 is invested in our common stock, the NASDAQ Stock Market index and the line-of-business index on December 31, 2018, with reinvestment of dividends. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock.
Research Data Group, Inc. prepared the line-of-business index. The graph assumes $100 is invested in our common stock, the NASDAQ Stock Market index and the line-of-business index on December 31, 2019, with reinvestment of dividends. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock.
We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022. We did not repurchase any shares in 2023, the third or fourth quarters of 2022, or in 2021.
We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022. We did not repurchase any shares in 2024, in 2023, or in the third or fourth quarters of 2022.
Dividend Policy In 2010, we announced a regular cash dividend program to our stockholders, subject to approval each quarter. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2023 which totaled $19.5 million.
Dividend Policy In 2010, we announced a regular cash dividend program to our stockholders, subject to approval each quarter. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2024 and 2023 which totaled $19.5 million in each year, and in each quarter of 2022 which totaled $19.6 million.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the NASDAQ Global Select Market under the symbol “MRTN.” On February 14, 2024, we had 155 record stockholders and approximately 20,096 beneficial stockholders of our common stock.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the NASDAQ Global Select Market under the symbol “MRTN.” On February 14, 2025, we had 152 record stockholders and approximately 24,701 beneficial stockholders of our common stock.
The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors.
We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors.
The information in the graph below shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. 17
The information in the graph below shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. *$100 invested on 12/31/19 in stock or index, including reinvestment of dividends. Fiscal year ending December 31 17
Removed
Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2022 which totaled $19.6 million.
Added
We were in compliance with all covenants at December 31, 2024 and December 31, 2023.
Removed
We paid cash dividends totaling $54.7 million in 2021 which consisted of a special dividend of $0.50 per share of common stock in October, along with quarterly cash dividends of $0.04 per share of common stock in March, June, October and December. We currently expect to continue to pay quarterly cash dividends in the future.
Removed
Waivers allowing stock redemptions and dividends in excess of the 25% limitation in total amounts of up to $80 million in each of 2022 and 2021 were obtained from the lender in March 2022 and August 2021, respectively.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−0 removed4 unchanged
Biggest changeOTHER INFORMATION 53 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 53 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 54 ITEM 11. EXECUTIVE COMPENSATION 54 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 54 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 54 ITEM 14.
Biggest changeOTHER INFORMATION 54 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 54 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 55 ITEM 11. EXECUTIVE COMPENSATION 55 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 55 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 56 ITEM 14.
ITEM 6. [RESERVED] ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 31 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 53 ITEM 9A. CONTROLS AND PROCEDURES 53 ITEM 9B.
ITEM 6. [RESERVED] ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 18 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 30 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 31 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 54 ITEM 9A. CONTROLS AND PROCEDURES 54 ITEM 9B.
PRINCIPAL ACCOUNTANT FEES AND SERVICES 55 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 55 ITEM 16. FORM 10-K SUMMARY 60 OTHER Signature Page 61 i FORWARD-LOOKING INFORMATION This Annual Report on Form 10-K contains certain forward-looking statements. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
PRINCIPAL ACCOUNTANT FEES AND SERVICES 56 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 56 ITEM 16. FORM 10-K SUMMARY 61 Signature Page 62 i FORWARD-LOOKING INFORMATION This Annual Report on Form 10-K contains certain forward-looking statements. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+9 added−10 removed62 unchanged
Biggest changeThe following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue (Dollars in thousands) 2022 vs. 2021 2022 vs. 2021 2022 2021 Operating revenue $ 290,234 29.8 % 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits 72,342 22.8 30.9 32.7 Purchased transportation 56,571 29.3 19.8 19.8 Fuel and fuel taxes 87,283 66.5 17.3 13.5 Supplies and maintenance 10,241 22.5 4.4 4.7 Depreciation 8,452 8.2 8.8 10.5 Operating taxes and licenses 229 2.2 0.9 1.1 Insurance and claims 8,526 20.3 4.0 4.3 Communications and utilities 827 9.9 0.7 0.9 Gain on disposition of revenue equipment 2,916 17.9 (1.1 ) (1.7 ) Other 11,192 41.6 3.0 2.8 Total operating expenses 258,579 30.0 88.7 88.5 Operating income 31,655 28.3 11.3 11.5 Other (784 ) (1,823.3 ) (0.1 ) - Income before income taxes 32,439 29.0 11.4 11.5 Income taxes expense 7,513 28.6 2.7 2.7 Net income $ 24,926 29.2 % 8.7 % 8.8 % Salaries, wages and benefits expense increased $72.3 million, or 22.8%, in 2022 from 2021.
Biggest changeThe following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue (Dollars in thousands) 2024 vs. 2023 2024 vs. 2023 2024 2023 Operating revenue $ (167,747 ) (14.8 )% 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits (37,086 ) (9.8 ) 35.5 33.5 Purchased transportation (30,192 ) (15.1 ) 17.6 17.6 Fuel and fuel taxes (33,294 ) (18.5 ) 15.3 15.9 Supplies and maintenance (4,074 ) (6.0 ) 6.6 6.0 Depreciation (5,069 ) (4.3 ) 11.6 10.3 Operating taxes and licenses (751 ) (6.8 ) 1.1 1.0 Insurance and claims (2,905 ) (5.2 ) 5.5 5.0 Communications and utilities (1,120 ) (11.0 ) 0.9 0.9 Gain on disposition of revenue equipment 8,641 63.5 (0.5 ) (1.2 ) Other (5,007 ) (14.3 ) 3.1 3.1 Total operating expenses (110,857 ) (10.6 ) 96.6 92.0 Operating income (56,890 ) (63.1 ) 3.4 8.0 Other 680 17.9 (0.3 ) (0.3 ) Income before income taxes (57,570 ) (61.3 ) 3.8 8.3 Income taxes expense (14,119 ) (60.0 ) 1.0 2.1 Net income $ (43,451 ) (61.7 )% 2.8 % 6.2 % 22 Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees’ health insurance, 401(k) plan contributions and other fringe benefits.
We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers.
We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers.
Overview 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 five distinct business platforms – 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.
Overview 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.
Other than our obligations for revenue equipment and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at December 31, 2023.
Other than our obligations for revenue equipment and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at December 31, 2024.
Fuel surcharge revenue decreased to $159.4 million in 2023 from $210.4 million in 2022. 21 In addition to the factors discussed below, our profitability across each segment in 2023 was impacted by a freight market which has considerably softened from the exceptionally tight conditions during 2022.
Fuel surcharge revenue decreased to $159.4 million in 2023 from $210.4 million in 2022. 25 In addition to the factors discussed below, our profitability across each segment in 2023 was impacted by a freight market which has considerably softened from the exceptionally tight conditions during 2022.
The current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 2023 and December 31, 2022.
The current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 2024 and December 31, 2023.
We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022. We did not repurchase any shares in 2023, the third or fourth quarters of 2022, or in 2021.
We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022. We did not repurchase any shares in 2024, in 2023, or in the third or fourth quarters of 2022.
There were no changes to our methodology used to estimate our ultimate claims losses in 2023 or 2022. Projection of losses is subject to a high level of estimation uncertainty and actual results could differ from these current estimates.
There were no changes to our methodology used to estimate our ultimate claims losses in 2024 or 2023. Projection of losses is subject to a high level of estimation uncertainty and actual results could differ from these current estimates.
We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $165 million in 2024. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2023 which totaled $19.5 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months.
We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $150 million in 2025. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2024 which totaled $19.5 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months.
Additionally, we have $20.7 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain insurance coverage for per-incident and total losses in excess of these risk retention levels in amounts we consider adequate based upon historical experience and our ongoing review.
Additionally, we have $23.1 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain insurance coverage for per-incident and total losses in excess of these risk retention levels in amounts we consider adequate based upon historical experience and our ongoing review.
As of December 31, 2023, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.
As of December 31, 2024, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.
The interest rate for the facility that would apply to outstanding principal balances was 8.5% at December 31, 2023. Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million.
The interest rate for the facility that would apply to outstanding principal balances was 7.5% at December 31, 2024. Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million.
Independent contractors provided 94, 96 and 93 tractors as of December 31, 2023, 2022 and 2021, respectively. 20 Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Change Percentage Change (Dollars in thousands) 2023 2022 2023 vs. 2022 2023 vs. 2022 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 395,565 $ 411,448 $ (15,883 ) (3.9 )% Truckload fuel surcharge revenue 69,910 89,014 (19,104 ) (21.5 ) Total Truckload revenue 465,475 500,462 (34,987 ) (7.0 ) Dedicated revenue, net of fuel surcharge revenue 334,962 336,973 (2,011 ) (0.6 ) Dedicated fuel surcharge revenue 73,310 92,119 (18,809 ) (20.4 ) Total Dedicated revenue 408,272 429,092 (20,820 ) (4.9 ) Intermodal revenue, net of fuel surcharge revenue 75,887 100,452 (24,565 ) (24.5 ) Intermodal fuel surcharge revenue 16,191 29,313 (13,122 ) (44.8 ) Total Intermodal revenue 92,078 129,765 (37,687 ) (29.0 ) Brokerage revenue 165,630 204,559 (38,929 ) (19.0 ) Total operating revenue $ 1,131,455 $ 1,263,878 $ (132,423 ) (10.5 )% Operating income/(loss): Truckload $ 24,835 $ 59,392 $ (34,557 ) (58.2 )% Dedicated 48,377 50,566 (2,189 ) (4.3 ) Intermodal (156 ) 10,639 (10,795 ) (101.5 ) Brokerage 17,054 22,747 (5,693 ) (25.0 ) Total operating income $ 90,110 $ 143,344 $ (53,234 ) (37.1 )% Operating ratio: Truckload 94.7 % 88.1 % Dedicated 88.2 88.2 Intermodal 100.2 91.8 Brokerage 89.7 88.9 Consolidated operating ratio 92.0 % 88.7 % Operating ratio, net of fuel surcharges: Truckload 93.7 % 85.6 % Dedicated 85.6 85.0 Intermodal 100.2 89.4 Brokerage 89.7 88.9 Consolidated operating ratio, net of fuel surcharges 90.7 % 86.4 % Our operating revenue decreased $132.4 million, or 10.5%, to $1.131 billion in 2023 from $1.264 billion in 2022.
As a result of the factors described above, net income declined 61.7% to $26.9 million, or $0.33 per diluted share, in 2024 from $70.4 million, or $0.86 per diluted share, in 2023. 24 Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Change Percentage Change (Dollars in thousands) 2023 2022 2023 vs. 2022 2023 vs. 2022 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 395,565 $ 411,448 $ (15,883 ) (3.9 )% Truckload fuel surcharge revenue 69,910 89,014 (19,104 ) (21.5 ) Total Truckload revenue 465,475 500,462 (34,987 ) (7.0 ) Dedicated revenue, net of fuel surcharge revenue 334,962 336,973 (2,011 ) (0.6 ) Dedicated fuel surcharge revenue 73,310 92,119 (18,809 ) (20.4 ) Total Dedicated revenue 408,272 429,092 (20,820 ) (4.9 ) Intermodal revenue, net of fuel surcharge revenue 75,887 100,452 (24,565 ) (24.5 ) Intermodal fuel surcharge revenue 16,191 29,313 (13,122 ) (44.8 ) Total Intermodal revenue 92,078 129,765 (37,687 ) (29.0 ) Brokerage revenue 165,630 204,559 (38,929 ) (19.0 ) Total operating revenue $ 1,131,455 $ 1,263,878 $ (132,423 ) (10.5 )% Operating income/(loss): Truckload $ 24,835 $ 59,392 $ (34,557 ) (58.2 )% Dedicated 48,377 50,566 (2,189 ) (4.3 ) Intermodal (156 ) 10,639 (10,795 ) (101.5 ) Brokerage 17,054 22,747 (5,693 ) (25.0 ) Total operating income $ 90,110 $ 143,344 $ (53,234 ) (37.1 )% Operating ratio: Truckload 94.7 % 88.1 % Dedicated 88.2 88.2 Intermodal 100.2 91.8 Brokerage 89.7 88.9 Consolidated operating ratio 92.0 % 88.7 % Operating ratio, net of fuel surcharges: Truckload 93.7 % 85.6 % Dedicated 85.6 85.0 Intermodal 100.2 89.4 Brokerage 89.7 88.9 Consolidated operating ratio, net of fuel surcharges 90.7 % 86.4 % Our operating revenue decreased $132.4 million, or 10.5%, to $1.131 billion in 2023 from $1.264 billion in 2022.
The following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue (Dollars in thousands) 2023 vs. 2022 2023 vs. 2022 2023 2022 Operating revenue $ (132,423 ) (10.5 )% 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits (11,486 ) (2.9 ) 33.5 30.9 Purchased transportation (50,458 ) (20.2 ) 17.6 19.8 Fuel and fuel taxes (38,134 ) (17.4 ) 15.9 17.3 Supplies and maintenance 11,711 21.0 6.0 4.4 Depreciation 5,708 5.1 10.3 8.8 Operating taxes and licenses 290 2.7 1.0 0.9 Insurance and claims 5,501 10.9 5.0 4.0 Communications and utilities 972 10.6 0.9 0.7 Gain on disposition of revenue equipment (233 ) (1.7 ) (1.2 ) (1.1 ) Other (3,060 ) (8.0 ) 3.1 3.0 Total operating expenses (79,189 ) (7.1 ) 92.0 88.7 Operating income (53,234 ) (37.1 ) 8.0 11.3 Other (2,979 ) (360.2 ) (0.3 ) (0.1 ) Income before income taxes (50,255 ) (34.9 ) 8.3 11.4 Income taxes expense (10,274 ) (30.4 ) 2.1 2.7 Net income $ (39,981 ) (36.2 )% 6.2 % 8.7 % 22 Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees’ health insurance, 401(k) plan contributions and other fringe benefits.
The following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue (Dollars in thousands) 2023 vs. 2022 2023 vs. 2022 2023 2022 Operating revenue $ (132,423 ) (10.5 )% 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits (11,486 ) (2.9 ) 33.5 30.9 Purchased transportation (50,458 ) (20.2 ) 17.6 19.8 Fuel and fuel taxes (38,134 ) (17.4 ) 15.9 17.3 Supplies and maintenance 11,711 21.0 6.0 4.4 Depreciation 5,708 5.1 10.3 8.8 Operating taxes and licenses 290 2.7 1.0 0.9 Insurance and claims 5,501 10.9 5.0 4.0 Communications and utilities 972 10.6 0.9 0.7 Gain on disposition of revenue equipment (233 ) (1.7 ) (1.2 ) (1.1 ) Other (3,060 ) (8.0 ) 3.1 3.0 Total operating expenses (79,189 ) (7.1 ) 92.0 88.7 Operating income (53,234 ) (37.1 ) 8.0 11.3 Other (2,979 ) (360.2 ) (0.3 ) (0.1 ) Income before income taxes (50,255 ) (34.9 ) 8.3 11.4 Income taxes expense (10,274 ) (30.4 ) 2.1 2.7 Net income $ (39,981 ) (36.2 )% 6.2 % 8.7 % Salaries, wages and benefits expense decreased $11.5 million, or 2.9%, in 2023 from 2022.
(In thousands) 2023 2022 2021 Net cash flows provided by operating activities $ 164,378 $ 219,489 $ 171,204 Net cash flows used for investing activities (172,540 ) (134,958 ) (123,734 ) Net cash flows used for financing activities (19,225 ) (60,926 ) (56,602 ) In August 2019, our Board of Directors approved and we announced an increase from current availability in our existing share repurchase program providing for the repurchase of up to $34.0 million, or approximately 1.8 million shares, of our common stock, which was increased by our Board of Directors to 2.7 million shares in August 2020 to reflect the three-for-two stock split effected in the form of a stock dividend on August 13, 2020.
(In thousands) 2024 2023 2022 Net cash flows provided by operating activities $ 134,814 $ 164,378 $ 219,489 Net cash flows used for investing activities (152,138 ) (172,540 ) (134,958 ) Net cash flows used for financing activities (18,622 ) (19,225 ) (60,926 ) In August 2019, our Board of Directors approved and we announced an increase from current availability in our existing share repurchase program providing for the repurchase of up to $34.0 million, or approximately 1.8 million shares, of our common stock, which was increased by our Board of Directors to 2.7 million shares in August 2020 to reflect the three-for-two stock split effected in the form of a stock dividend on August 13, 2020.
At December 31, 2022, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $16.1 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins.
At December 31, 2023, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $20.7 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins.
These expenses vary depending upon the size of our Truckload, Dedicated and Intermodal tractor fleets, the ratio of company drivers to independent contractors, our efficiency, our experience with employees’ health insurance claims, changes in health care premiums and other factors. Salaries, wages and benefits expense decreased $11.5 million, or 2.9%, in 2023 from 2022.
These expenses vary depending upon the size of our Truckload, Dedicated and Intermodal tractor fleets, the ratio of company drivers to independent contractors, our efficiency, our experience with employees’ health insurance claims, changes in health care premiums and other factors. Salaries, wages and benefits expense decreased $37.1 million, or 9.8%, in 2024 from 2023.
The total auto liability and workers’ compensation claims reserves within the insurance and claims accruals in our consolidated balance sheets were $40.3 million and $39.3 million as of December 31, 2023 and 2022, respectively.
The total auto liability and workers’ compensation claims reserves within the insurance and claims accruals in our consolidated balance sheets were $37.5 million and $40.3 million as of December 31, 2024 and 2023, respectively.
The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. At December 31, 2023, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $20.7 million and remaining borrowing availability of $9.3 million.
The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. At December 31, 2024, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $23.1 million and remaining borrowing availability of $6.9 million.
This category will vary depending upon the amount and rates, including fuel surcharges, we pay to third-party railroad and motor carriers, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to independent contractors. Purchased transportation expense decreased $50.5 million in total, or 20.2%, in 2023 from 2022.
This category will vary depending upon the amount and rates, including fuel surcharges, we pay to third-party railroad and motor carriers, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to independent contractors. Purchased transportation expense decreased $30.2 million in total, or 15.1%, in 2024 from 2023.
For our Intermodal and Brokerage segments, our profitability is impacted by the percentage of revenue which is payable to the providers of the transportation services we arrange. This expense is included within purchased transportation in our consolidated statements of operations. Our operating income declined 37.1% to $90.1 million in 2023 from $143.3 million in 2022.
For our Intermodal and Brokerage segments, our profitability is impacted by the percentage of revenue which is payable to the providers of the transportation services we arrange. This expense is included within purchased transportation in our consolidated statements of operations. Our operating income declined 63.1% to $33.2 million in 2024 from $90.1 million in 2023.
The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, increased $1.3 million in 2023. We expect our purchased transportation expense to increase as we grow our Intermodal and Brokerage segments. Fuel and fuel taxes decreased by $38.1 million, or 17.4%, in 2023 from 2022.
The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, increased $1.3 million in 2023. Fuel and fuel taxes decreased by $38.1 million, or 17.4%, in 2023 from 2022.
In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market, a contracting driver market, severe weather conditions and specific customer demand. 18 Our operating revenue decreased $132.4 million, or 10.5%, in 2023 from 2022.
In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market, a contracting driver market, severe weather conditions and specific customer demand. 18 Our operating revenue decreased $167.7 million, or 14.8%, in 2024 from 2023.
Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 92.0% in 2023 and 88.7% in 2022. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 90.7% in 2023 from 86.4% in 2022.
Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 96.6% in 2024 and 92.0% in 2023. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 96.0% in 2024 from 90.7% in 2023.
Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control. Our operating income declined 37.1% to $90.1 million in 2023 from $143.3 million in 2022 as a result of the foregoing factors.
Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control. 23 Our operating income declined 63.1% to $33.2 million in 2024 from $90.1 million in 2023 as a result of the foregoing factors.
In 2023, net cash flows provided by operating activities of $164.4 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $163.9 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $8.6 million, resulting in a $27.4 million decrease in cash and cash equivalents.
In 2024, net cash flows provided by operating activities of $134.8 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $146.8 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $35.9 million decrease in cash and cash equivalents.
Despite this price decrease, our net fuel expense increased to 4.6% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2023 from 3.8% in 2022, primarily due to the record heat in the third quarter of 2023.
The DOE national average cost of fuel decreased to $4.21 per gallon from $4.99 per gallon in 2022. Despite this price decrease, our net fuel expense increased to 4.6% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2023 from 3.8% in 2022, primarily due to the record heat in the third quarter of 2023.
Gain on disposition of revenue equipment was $13.4 million in 2022, down from $16.3 million in 2021 primarily due to a decrease in the number of units sold, partially offset by an increase in the average gain for our tractor and trailer sales.
Gain on disposition of revenue equipment was $13.6 million in 2023, up slightly from $13.4 million in 2022 primarily due to an increase in the number of units sold, offset by a decrease in the average gain for our tractor and trailer sales.
As a result of the factors described above, net income improved 29.2% to $110.4 million, or $1.35 per diluted share, in 2022 from $85.4 million, or $1.02 per diluted share, in 2021. 27 Liquidity and Capital Resources Our business requires substantial ongoing capital investments, particularly for new tractors and trailers.
As a result of the factors described above, net income declined 36.2% to $70.4 million, or $0.86 per diluted share, in 2023 from $110.4 million, or $1.35 per diluted share, in 2022. 27 Liquidity and Capital Resources Our business requires substantial ongoing capital investments, particularly for new tractors and trailers.
Our operating revenue, net of fuel surcharges, decreased $81.4 million, or 7.7%, compared with 2022. Truckload segment revenue, net of fuel surcharges, decreased 3.9% from 2022, primarily due to a decrease in our average revenue per tractor, despite an increase in our average fleet size.
Our operating revenue, net of fuel surcharges, decreased $132.0 million, or 13.6%, compared with 2023. Truckload segment revenue, net of fuel surcharges, decreased 4.6% from 2023, primarily due to a decrease in our average revenue per tractor, despite an increase in our average fleet size.
Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 92.0% in 2023 and 88.7% in 2022.
Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 96.6% in 2024 and 92.0% in 2023.
In 2021, net cash flows provided by operating activities of $171.2 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $118.3 million, to pay cash dividends of $54.7 million and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $9.1 million decrease in cash and cash equivalents.
In 2024, net cash flows provided by operating activities of $134.8 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $146.8 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $35.9 million decrease in cash and cash equivalents.
Brokerage segment revenue decreased 19.0% from 2022, primarily due to decreases in both our revenue per load and our number of loads. Fuel surcharge revenue decreased to $159.4 million in 2023 from $210.4 million in 2022. Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components.
Brokerage segment revenue decreased 11.8% from 2023, primarily due to a decrease in our revenue per load. Fuel surcharge revenue decreased to $123.7 million in 2024 from $159.4 million in 2023. Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components.
Our net income declined 36.2% to $70.4 million, or $0.86 per diluted share, in 2023 from $110.4 million, or $1.35 per diluted share, in 2022. Our business requires substantial ongoing capital investments, particularly for new tractors and trailers.
Our net income declined 61.7% to $26.9 million, or $0.33 per diluted share, in 2024 from $70.4 million, or $0.86 per diluted share, in 2023. Our business requires substantial ongoing capital investments, particularly for new tractors and trailers.
Our supplies and maintenance expense increased $11.7 million, or 21.0%, from 2022 primarily due to higher outside repair, loading/unloading and parts costs. Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal facilities and other assets.
Our supplies and maintenance expense decreased $4.1 million, or 6.0%, from 2023 primarily due to lower outside repair and loading/unloading costs. Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal facilities and other assets.
This decrease resulted primarily from a $9.6 million decrease in bonus compensation expense for our non-driver employees and lower company driver compensation expense of $4.6 million, partially offset by a $4.7 million increase in non-driver compensation expense.
This decrease resulted primarily from a $9.6 million decrease in bonus compensation expense for our non-driver employees and lower company driver compensation expense of $4.6 million, partially offset by a $4.7 million increase in non-driver compensation expense. 26 Purchased transportation expense decreased $50.5 million in total, or 20.2%, in 2023 from 2022.
Results of Operations The following table sets forth for the years indicated certain operating statistics regarding our revenue and operations: 2023 2022 2021 Truckload Segment: Revenue (in thousands) $ 465,475 $ 500,462 $ 396,666 Average revenue, net of fuel surcharges, per tractor per week (1) $ 4,377 $ 4,898 $ 4,315 Average tractors (1) 1,733 1,611 1,539 Average miles per trip 519 510 516 Total miles (in thousands) 155,929 149,868 147,192 Dedicated Segment: Revenue (in thousands) $ 408,272 $ 429,092 $ 329,442 Average revenue, net of fuel surcharges, per tractor per week (1) $ 3,936 $ 3,963 $ 3,377 Average tractors (1) 1,632 1,631 1,572 Average miles per trip 335 341 322 Total miles (in thousands) 133,163 136,310 128,256 Intermodal Segment: Revenue (in thousands) $ 92,078 $ 129,765 $ 102,245 Loads 25,160 31,862 32,987 Average tractors 159 175 143 Brokerage Segment: Revenue (in thousands) $ 165,630 $ 204,559 $ 145,291 Loads 91,077 95,615 66,512 (1) Includes tractors driven by both company-employed drivers and independent contractors.
Results of Operations The following table sets forth for the years indicated certain operating statistics regarding our revenue and operations: 2024 2023 2022 Truckload Segment: Revenue (in thousands) $ 439,792 $ 465,475 $ 500,462 Average revenue, net of fuel surcharges, per tractor per week (1) $ 4,123 $ 4,377 $ 4,898 Average tractors (1) 1,751 1,733 1,611 Average miles per trip 533 519 510 Total miles (in thousands) 158,985 155,929 149,868 Dedicated Segment: Revenue (in thousands) $ 319,135 $ 408,272 $ 429,092 Average revenue, net of fuel surcharges, per tractor per week (1) $ 3,767 $ 3,936 $ 3,963 Average tractors (1) 1,356 1,632 1,631 Average miles per trip 319 335 341 Total miles (in thousands) 110,681 133,163 136,310 Intermodal Segment: Revenue (in thousands) $ 58,754 $ 92,078 $ 129,765 Loads 16,975 25,160 31,862 Average tractors 110 159 175 Brokerage Segment: Revenue (in thousands) $ 146,027 $ 165,630 $ 204,559 Loads 89,138 91,077 95,615 (1) Includes tractors driven by both company-employed drivers and independent contractors.
The $5.7 million, or 5.1%, increase in depreciation in 2023 was primarily due to an increase in our average tractor fleet size during the year, along with higher prices of new equipment.
Our supplies and maintenance expense increased $11.7 million, or 21.0%, from 2022 primarily due to higher outside repair, loading/unloading and parts costs. The $5.7 million, or 5.1%, increase in depreciation in 2023 was primarily due to an increase in our average tractor fleet size during the year, along with higher prices of new equipment.
At December 31, 2023, we had $53.2 million of cash and cash equivalents, $757.4 million in stockholders’ equity and no long-term debt outstanding.
At December 31, 2024, we had $17.3 million of cash and cash equivalents, $767.9 million in stockholders’ equity and no long-term debt outstanding.
Dedicated segment revenue, net of fuel surcharges, decreased 0.6% from 2022, primarily due to a decrease in our average revenue per tractor. Intermodal segment revenue, net of fuel surcharges, decreased 24.5% from 2022, primarily due to decreases in both our number of loads and our revenue per load.
Dedicated segment revenue, net of fuel surcharges, decreased 20.3% from 2023, primarily due to decreases in both our average fleet size and our average revenue per tractor. Intermodal segment revenue, net of fuel surcharges, decreased 34.8% from 2023, primarily due to decreases in both our number of loads and our revenue per load.
Fuel and fuel taxes increased by $87.3 million, or 66.5%, in 2022 from 2021. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) increased $5.0 million, or 18.5%, to $31.9 million in 2022 from $26.9 million in 2021.
Fuel and fuel taxes decreased by $33.3 million, or 18.5%, in 2024 from 2023. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $3.6 million, or 9.7%, to $33.5 million in 2024 from $37.1 million in 2023.
Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2022 which totaled $19.6 million.
Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2024 and 2023 which totaled $19.5 million in each year, and in each quarter of 2022 which totaled $19.6 million. We currently expect to continue to pay quarterly cash dividends in the future.
Auto Liability and Workers ’ Compensation Claims Reserves. We self-insure for our portion of claims exposure resulting from auto liability and workers’ compensation claims. We are responsible for the first $1.0 million on each auto liability claim and for the first $750,000 on each workers’ compensation claim.
Auto Liability and Workers ’ Compensation Claims Reserves. We self-insure for our portion of claims exposure resulting from auto liability and workers’ compensation claims.
Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment increased $9.5 million to $65.3 million in 2022 from $55.8 million in 2021 due to higher fuel surcharges paid to the railroads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased $1.9 million in 2022.
Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $31.6 million in 2024 from $47.5 million in 2023, primarily due to a decrease in the number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased $649,000 in 2024.
Purchased transportation consists of amounts payable to railroads and carriers for transportation services we arrange in connection with Brokerage and Intermodal operations and to independent contractor providers of revenue equipment.
This decrease resulted primarily from both lower company driver compensation expense of $29.5 million and non-driver compensation expense of $3.6 million. Purchased transportation consists of amounts payable to railroads and carriers for transportation services we arrange in connection with Brokerage and Intermodal operations and to independent contractor providers of revenue equipment.
The $8.5 million, or 20.3%, increase in insurance and claims in 2022 was primarily due to increases in our self-insured auto liability claim costs and in the self-insured cost of physical damage claims related to our revenue equipment.
The $2.9 million, or 5.2%, decrease in insurance and claims in 2024 was primarily due to decreases in our self-insured auto liability and workers’ compensation claim costs and in our self-insured cost of physical damage claims related to our revenue equipment, partially offset by higher insurance premiums.
Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads increased to $23.8 million from $13.3 million in 2021. The DOE national average cost of fuel increased to $4.99 per gallon from $3.29 per gallon in 2021.
Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $10.0 million from $16.0 million in 2023. The United States Department of Energy, or DOE, national average cost of fuel decreased to $3.76 per gallon from $4.21 per gallon in 2023.
We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $165 million in 2024. This amount includes commitments to purchase $181 million of new revenue equipment in 2024. Additionally, operating lease obligations total $561,000 through 2028. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2023 which totaled $19.5 million.
We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $150 million in 2025. This amount includes commitments to purchase $191.2 million of new revenue equipment, prior to considering proceeds from dispositions. Additionally, operating lease obligations total $627,000 through 2028.
Despite this increase, our net fuel expense was 3.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in each of 2022 and 2021.
Despite this price decrease, our net fuel expense increased to 4.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2024 from 4.6% in 2023.
The operating ratio for our Truckload segment was 88.1% in 2022 and 87.1% in 2021, for our Dedicated segment was 88.2% in 2022 and 89.0% in 2021, for our Intermodal segment was 91.8% in 2022 and 90.7% in 2021, and for our Brokerage segment was 88.9% in 2022 and 89.8% in 2021.
The operating ratio for our Truckload segment was 99.3% in 2024 and 94.7% in 2023, for our Dedicated segment was 92.8% in 2024 and 88.2% in 2023, for our Intermodal segment was 106.7% in 2024 and 100.2% in 2023, and for our Brokerage segment was 92.6% in 2024 and 89.7% in 2023.
Our previous credit agreement prohibited us from making such payments in excess of 25% of our net income from the prior fiscal year.
Our previous credit agreement prohibited us from making such payments in excess of 25% of our net income from the prior fiscal year. A waiver allowing stock redemptions and dividends in excess of the 25% limitation in total amounts of up to $80 million in 2022 was obtained from the lender in March 2022.
Truckload segment revenue, net of fuel surcharges, increased $65.2 million, or 18.8%, to $411.4 million in 2022 from $346.3 million in 2021 primarily due to an increase in our average revenue per tractor. The operating ratio increased to 88.1% in 2022 from 87.1% in 2021.
Dedicated segment revenue decreased $89.1 million, or 21.8%, to $319.1 million in 2024 from $408.3 million in 2023. Dedicated segment revenue, net of fuel surcharges, decreased 20.3%, primarily due to decreases in both our average fleet size and our average revenue per tractor. The operating ratio increased to 92.8% in 2024 from 88.2% in 2023.
This increase in 2022 was due to a $65.2 million increase in Truckload revenue, net of fuel surcharges, a $60.1 million increase in Dedicated revenue, net of fuel surcharges, a $59.3 million increase in Brokerage revenue, and a $13.0 million increase in Intermodal revenue, net of fuel surcharges.
This decrease in 2024 was due to a $67.9 million decrease in Dedicated revenue, net of fuel surcharges, a $26.4 million decrease in Intermodal revenue, net of fuel surcharges, a $19.6 million decrease in Brokerage revenue and an $18.1 million decrease in Truckload revenue, net of fuel surcharges.
Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 88.7% in 2022 and 88.5% in 2021.
Our operating income declined 37.1% to $90.1 million in 2023 from $143.3 million in 2022 as a result of the foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 92.0% in 2023 and 88.7% in 2022.
Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims. 23 Gain on disposition of revenue equipment was $13.6 million in 2023, up slightly from $13.4 million in 2022 primarily due to an increase in the number of units sold, offset by a decrease in the average gain for our tractor and trailer sales.
Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims.
Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 86.4% in 2022 from 87.0% in 2021. Our effective income tax rate was 23.5% in each of 2022 and 2021.
Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 96.0% in 2024 and 90.7% in 2023. Our effective income tax rate increased to 25.9% in 2024 from 25.1% in 2023 primarily due to increases in per diem and other non-deductible expenses.
Amounts payable to carriers for transportation services we arranged in our Brokerage segment increased $49.0 million to $170.1 million in 2022 from $121.1 million in 2021, primarily due to an increase in the cost per load within the tight freight market and growth in load volume.
Amounts payable to carriers for transportation services we arranged in our Brokerage segment decreased $13.7 million to $122.4 million in 2024 from $136.1 million in 2023, primarily due to a decrease in our cost per load.
The operating ratio in 2022 was positively impacted by an increase in our average revenue per tractor due to increased rates with our customers and reduced depreciation expense as a percentage of revenue, partially offset by higher company driver compensation costs. Intermodal segment revenue increased $27.5 million, or 26.9%, to $129.8 million in 2022 from $102.2 million in 2021.
Impacting the 2024 operating ratio was the decrease in our average revenue per tractor along with higher company driver compensation, depreciation and a lower gain on disposition of revenue equipment, as a percentage of revenue. Intermodal segment revenue decreased $33.3 million, or 36.2%, to $58.8 million in 2024 from $92.1 million in 2023.
Dedicated segment revenue, net of fuel surcharges, increased 21.7% primarily due to an increase in our average revenue per tractor.
Truckload segment revenue decreased $25.7 million, or 5.5%, to $439.8 million in 2024 from $465.5 million in 2023. Truckload segment revenue, net of fuel surcharges, decreased $18.1 million, or 4.6%, to $377.5 million in 2024 from $395.6 million in 2023, primarily due to a decrease in our average revenue per tractor, despite an increase in our average fleet size.
Our operating revenue, net of fuel surcharges, increased $197.5 million, or 23.1%, to $1.053 billion in 2022 from $855.9 million in 2021.
Our operating revenue, net of fuel surcharges, decreased $132.0 million, or 13.6%, to $840.0 million in 2024 from $972.0 million in 2023.
Intermodal segment revenue, net of fuel surcharges, increased 14.8% from 2021 primarily due to an increase in revenue per load. The operating ratio in 2022 was negatively impacted by higher company driver compensation, chassis rental and amounts payable to railroads as a percentage of our revenue, partially offset by increased rates with our customers.
Intermodal segment revenue, net of fuel surcharges, decreased 34.8% from 2023, primarily due to decreases in both our number of loads and our revenue per load. The operating ratio in 2024 increased to 106.7% from 100.2% in 2023.
Removed
The United States Department of Energy, or DOE, national average cost of fuel decreased to $4.21 per gallon from $4.99 per gallon in 2022.
Added
Independent contractors provided 88, 94 and 96 tractors as of December 31, 2024, 2023 and 2022, respectively. 20 Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Change Percentage Change (Dollars in thousands) 2024 2023 2024 vs. 2023 2024 vs. 2023 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 377,452 $ 395,565 $ (18,113 ) (4.6 )% Truckload fuel surcharge revenue 62,340 69,910 (7,570 ) (10.8 ) Total Truckload revenue 439,792 465,475 (25,683 ) (5.5 ) Dedicated revenue, net of fuel surcharge revenue 267,077 334,962 (67,885 ) (20.3 ) Dedicated fuel surcharge revenue 52,058 73,310 (21,252 ) (29.0 ) Total Dedicated revenue 319,135 408,272 (89,137 ) (21.8 ) Intermodal revenue, net of fuel surcharge revenue 49,468 75,887 (26,419 ) (34.8 ) Intermodal fuel surcharge revenue 9,286 16,191 (6,905 ) (42.6 ) Total Intermodal revenue 58,754 92,078 (33,324 ) (36.2 ) Brokerage revenue 146,027 165,630 (19,603 ) (11.8 ) Total operating revenue $ 963,708 $ 1,131,455 $ (167,747 ) (14.8 )% Operating income/(loss): Truckload $ 3,283 $ 24,835 $ (21,552 ) (86.8 )% Dedicated 23,037 48,377 (25,340 ) (52.4 ) Intermodal (3,922 ) (156 ) (3,766 ) (2,414.1 ) Brokerage 10,822 17,054 (6,232 ) (36.5 ) Total operating income $ 33,220 $ 90,110 $ (56,890 ) (63.1 )% Operating ratio: Truckload 99.3 % 94.7 % Dedicated 92.8 88.2 Intermodal 106.7 100.2 Brokerage 92.6 89.7 Consolidated operating ratio 96.6 % 92.0 % Operating ratio, net of fuel surcharges: Truckload 99.1 % 93.7 % Dedicated 91.4 85.6 Intermodal 107.9 100.2 Brokerage 92.6 89.7 Consolidated operating ratio, net of fuel surcharges 96.0 % 90.7 % Our operating revenue decreased $167.7 million, or 14.8%, to $963.7 million in 2024 from $1.131 billion in 2023.
Removed
As a result of the factors described above, net income declined 36.2% to $70.4 million, or $0.86 per diluted share, in 2023 from $110.4 million, or $1.35 per diluted share, in 2022. 24 Comparison of Year Ended December 31, 2022 to Year Ended December 31, 2021 The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Change Percentage Change (Dollars in thousands) 2022 2021 2022 vs. 2021 2022 vs. 2021 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 411,448 $ 346,289 $ 65,159 18.8 % Truckload fuel surcharge revenue 89,014 50,377 38,637 76.7 Total Truckload revenue 500,462 396,666 103,796 26.2 Dedicated revenue, net of fuel surcharge revenue 336,973 276,883 60,090 21.7 Dedicated fuel surcharge revenue 92,119 52,559 39,560 75.3 Total Dedicated revenue 429,092 329,442 99,650 30.2 Intermodal revenue, net of fuel surcharge revenue 100,452 87,468 12,984 14.8 Intermodal fuel surcharge revenue 29,313 14,777 14,536 98.4 Total Intermodal revenue 129,765 102,245 27,520 26.9 Brokerage revenue 204,559 145,291 59,268 40.8 Total operating revenue $ 1,263,878 $ 973,644 $ 290,234 29.8 % Operating income: Truckload $ 59,392 $ 51,032 $ 8,360 16.4 % Dedicated 50,566 36,395 14,171 38.9 Intermodal 10,639 9,479 1,160 12.2 Brokerage 22,747 14,783 7,964 53.9 Total operating income $ 143,344 $ 111,689 $ 31,655 28.3 % Operating ratio: Truckload 88.1 % 87.1 % Dedicated 88.2 89.0 Intermodal 91.8 90.7 Brokerage 88.9 89.8 Consolidated operating ratio 88.7 % 88.5 % Operating ratio, net of fuel surcharges: Truckload 85.6 % 85.3 % Dedicated 85.0 86.9 Intermodal 89.4 89.2 Brokerage 88.9 89.8 Consolidated operating ratio, net of fuel surcharges 86.4 % 87.0 % Our operating revenue increased $290.2 million, or 29.8%, to $1.264 billion in 2022 from $973.6 million in 2021.
Added
Fuel surcharge revenue decreased to $123.7 million in 2024 from $159.4 million in 2023. 21 In addition to the factors discussed below, our profitability across each segment in 2024 was impacted by a freight market which has considerably softened from the conditions during 2023.
Removed
Fuel surcharge revenue increased to $210.4 million in 2022 from $117.7 million in 2021 primarily due to higher fuel costs. 25 Truckload segment revenue increased $103.8 million, or 26.2%, to $500.5 million in 2022 from $396.7 million in 2021.
Added
The operating ratio increased to 99.3% in 2024 from 94.7% in 2023. Impacting the 2024 operating ratio was the decrease in our average revenue per tractor along with higher company driver compensation, depreciation, maintenance and a lower gain on disposition of revenue equipment, as a percentage of revenue.
Removed
Impacting the 2022 operating ratio were higher company driver compensation, driver recruitment and retention and fuel costs, partially offset by an increase in our average revenue per tractor due to increased rates with our customers. Dedicated segment revenue increased $99.7 million, or 30.2%, to $429.1 million in 2022 from $329.4 million in 2021.
Added
Impacting the 2024 operating ratio was the decrease in our revenue per load along with higher depreciation, maintenance and purchased transportation costs, as a percentage of revenue. Brokerage segment revenue decreased $19.6 million, or 11.8%, to $146.0 million in 2024 from $165.6 million in 2023, primarily due to a decrease in our revenue per load.
Removed
Brokerage segment revenue increased $59.3 million, or 40.8%, to $204.6 million in 2022 from $145.3 million in 2021 primarily due to an increase in the number of loads. The improvement in the operating ratio in 2022 was primarily due to increased rates with our customers.
Added
The operating ratio in 2024 of 92.6% was up from 89.7% in 2023. This increase was primarily due to an increase in amounts payable to carriers for transportation services which we arranged as a percentage of our Brokerage revenue.
Removed
This increase resulted primarily from additional company driver compensation expense of $53.8 million, a $7.1 million increase in non-driver compensation expense, a $3.8 million increase in employees’ health insurance expense as a result of higher self-insured medical claims and a $2.5 million increase in bonus compensation expense for our non-driver employees. 26 Purchased transportation expense increased $56.6 million in total, or 29.3%, in 2022 from 2021.
Added
The $5.1 million, or 4.3%, decrease in depreciation in 2024 was primarily due to a decrease in our average tractor fleet size, partially offset by higher prices of new equipment.
Removed
Our supplies and maintenance expense increased $10.2 million, or 22.5%, from 2021, primarily due to higher outside repair, parts and tire costs, along with increased loading/unloading and tolls costs.
Added
Gain on disposition of revenue equipment was $5.0 million in 2024, down from $13.6 million in 2023 due to decreases in the average gain for our tractor and trailer sales, despite an increase in the number of units sold.
Removed
The $11.2 million increase in other operating expenses in 2022 was primarily due to increases in costs associated with driver recruitment and retention along with travel and meals expense. Our operating income improved 28.3% to $143.3 million in 2022 from $111.7 million in 2021 as a result of the foregoing factors.
Added
We renewed our liability insurance policies effective June 1, 2024 and are responsible for the first $2.0 million on each auto liability claim with an annual $5.0 million aggregate for claims between $10.0 million and $20.0 million.
Removed
We paid cash dividends totaling $54.7 million in 2021 which consisted of a special dividend of $0.50 per share of common stock in October, along with quarterly cash dividends of $0.04 per share of common stock in March, June, October and December. We currently expect to continue to pay quarterly cash dividends in the future.
Added
For the policy years effective June 1, 2022 and June 1, 2023, we are responsible for the first $1.0 million on each auto liability claim with no aggregates. We continue to be responsible for the first $750,000 on each workers’ compensation claim.
Removed
Waivers allowing stock redemptions and dividends in excess of the 25% limitation in total amounts of up to $80 million in each of 2022 and 2021 were obtained from the lender in March 2022 and August 2021, respectively.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed4 unchanged
Biggest changeFuel surcharge programs are widely accepted among our customers, though they can vary somewhat from customer-to-customer. These fuel surcharges, which adjust weekly with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase.
Biggest changeThere were no material quantitative changes in market risk from 2023 to 2024. We have historically been able to pass through a significant portion of long-term increases in diesel fuel prices and related taxes to customers in the form of fuel surcharges. Fuel surcharge programs are widely accepted among our customers, though they can vary somewhat from customer-to-customer.
These fuel surcharge provisions are not effective in mitigating the fuel price increases related to non-revenue miles or fuel used while the tractor is idling.
These fuel surcharges, which adjust weekly with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase. These fuel surcharge provisions are not effective in mitigating the fuel price increases related to non-revenue miles or fuel used while the tractor is idling.
Based upon our fuel consumption in 2023, a 5% increase in the average cost of diesel fuel would have increased our fuel expense by $8.8 million. We have historically been able to pass through a significant portion of long-term increases in diesel fuel prices and related taxes to customers in the form of fuel surcharges.
Based upon our fuel consumption in 2023, a 5% increase in the average cost of diesel fuel would have increased our fuel expense by $8.8 million. Based upon our fuel consumption in 2024, a 5% increase in the average cost of diesel fuel would have increased our fuel expense by $7.2 million.

Other MRTN 10-K year-over-year comparisons