Marten Transport Stock

Marten Transport, Ltd. operates a multifaceted business that offers a network of refrigerated and dry truck-based transportation services.

The company offers services across its five business platforms – Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. The company is 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.

The company operates throughout the United States and in parts of Mexico and Canada, with its revenue primarily generated from within the United States. The company provides regional truckload carrier services in the Southeast, West Coast, the Midwest, South Central and Northeast regions. The company’s 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 2022, the company’s average length of haul was 412 miles.

The company markets primarily to shippers that offer consistent volumes of freight in the lanes it prefers and is willing to compensate it for a high level of service. With its fleet of 3,660 company and independent contractor tractors, it offers service levels that include up to 99% on-time performance and delivery within the narrow time windows often required when shipping perishable commodities.

Segments

The company operates through Truckload, Dedicated, Intermodal and Brokerage segments.

The company’s Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. The company transports food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. The company’s agreements with customers are typically for one year.

The company’s Dedicated segment provides customized transportation solutions tailored to meet each individual customer’s requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. The company’s agreements with customers range from three to five years and are subject to annual rate reviews.

The company’s Intermodal segment transports its customers’ freight within the United States utilizing its refrigerated containers and its temperature-controlled trailers, each on railroad flatcars for portions of trips, with the balance of the trips using its tractors or, to a lesser extent, contracted carriers.

The company’s Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for its customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation (DOT). The company retains the billing, collection and customer management responsibilities.

The company’s MRTN de Mexico business offers its customers door-to-door service between the United States and Mexico with its Mexican partner carriers is reported within its Truckload and Brokerage segments.

Marketing and Operations

The company targets food and consumer packaged goods companies whose products require temperature-sensitive services and who ship multiple truckloads per week. In 2022, the company’s largest customer was Walmart. The company’s marketing efforts are conducted by a staff of 292 sales, customer service and support personnel under the supervision of its senior management team.

Revenue Equipment

As of December 31, 2022, the company operated a fleet of 3,660 tractors, including 3,564 company-owned tractors and 96 tractors supplied by independent contractors. The average age of the company-owned tractor fleet was approximately 1.7 years. In 2022, the company replaced its-owned tractors within an average of 3.9 years after purchase.

Kenworth and Freightliner manufacture most of the company-owned tractors. The company historically has contracted with independent contractors to provide and operate a portion of its tractor fleet.

As of December 31, 2022, the company operated a fleet of 5,753 trailers, consisting of 3,541 refrigerated trailers and 2,212 dry vans. Most of the company’s refrigerated trailers are equipped with Thermo-King refrigeration units, air ride suspensions, and anti-lock brakes. The average age of the company’s trailer fleet was approximately 3.9 years. In 2022, the company replaced its-owned trailers within an average of 6.7 years after purchase. As of December 31, 2022, the company operated a fleet of 802 refrigerated containers for use on railroad flatcars.

Strategy

The company’s growth strategy is to expand its business organically by offering shippers a high level of service and significant freight capacity.

Regulation

The DOT and various state and local agencies exercise broad powers over the company’s business, governing such activities as authorization to engage in motor carrier operations, safety and insurance requirements. The company’s drivers and independent contractors also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug and alcohol testing, medical and continuous training qualification and hours-of-service.

The DOT, through the Federal Motor Carrier Safety Administration (FMCSA), imposes safety and fitness regulations on the company and its drivers.

History

Marten Transport, Ltd. was founded in 1946. The company was incorporated in 1988.