The Freight Profit Gap

Happy Monday. Freight rates are climbing, but higher rates don't always mean higher profits. Today, we're looking at Marten Transport's latest earnings and the surprising gap between its trucking and brokerage businesses.

Plus:

• Railroads Cash In on Trucking's Squeeze

• Is FMCSA Bringing a Knife to a Gunfight?

• Longer Rest Breaks Are Producing More Crashes

💡 QUESTION OF THE DAY:

Truckload volumes remain roughly ___% below their 2022 peak, according to ATA’s chief economist.

🍳 WHAT’S COOKIN’ IN FREIGHT

🚆 Railroads Cash In on Trucking's Squeeze. Union Pacific, CSX, and Norfolk Southern all reported higher intermodal volumes in Q3 as high diesel costs and tighter truck capacity shifted long-haul freight to rail. Union Pacific's domestic intermodal volume rose 13% year over year. CSX's total intermodal volume increased 7% to 820,000 units, while Norfolk Southern's increased 3% to 1.06 million units. Norfolk Southern's domestic intermodal shipments rose 10%, offsetting an 8% decline in international traffic. Union Pacific reported 8% growth in international intermodal, driven by stronger West Coast imports. All three railroads posted higher quarterly revenue and operating income.

⚔️ Is FMCSA Bringing a Knife to a Gunfight? Truckload Carriers Association Senior Vice President of Safety and Government Affairs David Heller said FMCSA is running its most aggressive enforcement agenda in history without the staff to back it up. The agency has 1,118 employees overseeing nearly eight million regulated carriers and drivers, about one for every 7,155. By comparison, the FAA employs roughly 46,000 people on a budget more than 27 times larger. FMCSA has about 300 safety investigators and needs closer to 900, Heller said. More than half of FMCSA’s roughly $1.1 billion budget goes to grants instead of the staffing it needs, he added.

😴 Longer Rest Breaks Are Producing More Crashes. J.B. Hunt’s safety team pulled its own telematics data and found that the longer a driver’s 34-hour reset ran, the more likely a crash became in the following 6 to 12 hours back on the road. Isaac Instruments’ Melanie Simard, a former driver, said the pattern didn’t surprise her: with 48 hours at home, she used to try to do everything “very, very fast” and came back with little real rest. J.B. Hunt responded by creating an educational video to help drivers talk with their families about getting real rest at home.

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Freight Rates Are Rising. Who's Profiting?

Marten Transport raised its average truckload rate per total mile by 14.1% in the third quarter. Its truckload division still lost money.

Meanwhile, the same company's brokerage division posted $2 million in operating profit, a 25% increase from a year earlier.

Their latest earnings offer an interesting comparison between hauling freight and arranging it, especially as rates climb nationwide.

Fewer Trucks, Higher Rates

According to FreightWaves' latest SONAR data, renegotiated truckload contracts average 13.11% above the rates they replaced, compared with 3.53% a year earlier.

The index measures contracts being reset, rather than the entire contract market.

Traffix, meanwhile, forecasts another 5–8% increase in U.S. truckload linehaul rates in 2027, excluding fuel.

The increases aren't coming from a surge in freight volumes. ATA chief economist Bob Costello reported that truckload volumes remain approximately 8.6% below their 2022 peak.

“We are in a cycle like we’ve never seen before,” Costello said. “And it is all supply-driven.”

Same Company, Different Bottom Lines

Marten's truckload business is already seeing higher rates, but that hasn't been enough to return the division to profitability.

Its average truckload rate per total mile, excluding fuel surcharges, increased 14.1% year over year. That figure includes empty miles, not just loaded miles.

Despite the improvement, its truckload division recorded a $192,000 operating loss and a 100.2% operating ratio. The loss was smaller than the $2 million reported a year earlier.

Marten's brokerage division, however, remained profitable. Brokerage shipments declined 15%, but revenue per load increased 17%.

The division generated $38.7 million in revenue and $2.01 million in operating profit, up 25% year over year. Its operating ratio improved to 94.8% from 95.9%.

What's Eating Into Carrier Profits?

Marten attributed much of its earnings pressure to unusually high fuel and health insurance costs, along with increased driver pay.

Compared with average quarterly levels during the first half of 2026, net fuel costs rose $3.5 million, health insurance costs increased $2 million, and higher driver pay added $1 million in expenses. A larger gain on equipment sales partially offset those increases.

The company remained profitable overall, earning $2.9 million in Q3, with its dedicated trucking business also generating operating income.

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 🌎 AROUND THE FREIGHT WEB

📺 Still Streaming at Mile Two. The California Highway Patrol says a driver watching Netflix on a dashboard-mounted tablet missed a weigh station and took two miles of lights and sirens to notice police. He received two citations.

🛢️ A Russian Diesel Tanker Is Headed to the U.S. The first shipment under the Trump-Putin sanctions deal left Russia Oct. 22 and is due into New York Nov. 7, though analysts are skeptical it will move pump prices much.

🥑 Your Guacamole Has Only Two Ways In. A new study found Mexican avocado imports generated $641.5 million in U.S. trucking and warehousing activity last year, with nearly all of it moving through two Texas border crossings.

🍺 The Cab Had More Bottles Than a Bar. New Hampshire officers couldn’t find a tractor-trailer that left a truck stop with an intoxicated driver, then found it hours later blocking a school bus lot with roughly 170 beer bottles in the cab.

🧀 No Trucks, No Mozzarella. Truckers' strike in southern Italy halted buffalo mozzarella production, causing an estimated €3 million in losses in 24 hours.

🎣 THE FREIGHT CAVIAR CORNER

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😂 FREIGHT HUMOR

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🎧 THE FREIGHT CAVIAR PODCAST

Gabrielius Stonys, Co-Founder of Spotter Labs, joined Paul-Bernard Jaroslawski and Reed Loustalot on the FreightCaviar Podcast to discuss how he turned an AI dispatching startup into a 650-truck operation while carrier profitability collapsed 80%, why he believes scaling down is guaranteed death in trucking, and why autonomous trucks could make up 30% of the market within five to eight years.

Watch it on YouTube, or listen to the full episode on Spotify and Apple Podcasts.

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