Executive Pay Cuts at Marten Transport: Navigating the Freight Recession

[Freight Relocators]

Marten Transport has made headlines by announcing temporary salary cuts for their top executives, including the CEO and COO, as part of their cost-reduction strategies amidst the ongoing freight recession. With revenues down and the operational costs climbing due to inflation, it seems like even the big players are feeling the pinch.

What are your thoughts on this move? Is it fair for executives to take pay cuts during tough times, and do you think this will help stabilize the company financially? How is the current market affecting your own operations?

Marten Transport Implements Executive Pay Cuts Amid Freight Market Challenges

Marten Transport cuts executive salaries amid freight recession, aiming to reduce costs as demand drops and operational expenses rise

www.freightrelocators.com

 

[Electric Chicken]

I always like to see the entire company sacrifice, not just the lowly peons who need money the most.

The current market has me saying no a lot little less. Still not doing lives (yet).

Fuel is basically pre-covid cheap where I get it so I'm running a little quicker than I normally would, which really just means the speed limits. The idea being to get a little more done and open up more hours to do more runs, even if it's for that extra day rather than daily. I'm pretty much happy with my fuel cost being 50cpm or under, which I'm currently hitting without plodding along.

 

[Mike]

Everyone from the CEO down to the Janitor has agreed to pay cuts where I work. None of us liked it, but we had to all sacrifice in these tough times.

 

[Reptar]

I think there would be a lot less fluctuations in the economy if they capped corporate profit margins to say 30% instead of the 60%+ that they are averaging now. Less flex = less recessions. Less margin = cheaper product = consumer spends more....I think it would sort itself out. I don't know. I'm just spit balling.

 

[Mike]

I think there would be a lot less fluctuations in the economy if they capped corporate profit margins to say 30% instead of the 60%+ that they are averaging now. Less flex = less recessions. Less margin = cheaper product = consumer spends more....I think it would sort itself out. I don't know. I'm just spit balling.

I just want the market to flip back into my favor so I can get even with a few of these cut throat brokers and shippers.

 

[Reptar]

I just want the market to flip back into my favor so I can get even with a few of these cut throat brokers and shippers.

I'd like my paychecks to go back to 2020 era.

 

[Electric Chicken]

I just want 23 trillion dollars so I can invest it and live off the dividends.

That would only be like 180m annually but I think I could survive. Might have to give up some vices though.

 

[Electric Chicken]

I think there would be a lot less fluctuations in the economy if they capped corporate profit margins to say 30% instead of the 60%+ that they are averaging now. Less flex = less recessions. Less margin = cheaper product = consumer spends more....I think it would sort itself out. I don't know. I'm just spit balling.

This is where I agree but also disagree. If I was in those positions I'd expect to get as stupid rich as possible. I'm not a martyr.

 

[Reptar]

This is where I agree but also disagree. If I was in those positions I'd expect to get as stupid rich as possible. I'm not a martyr.

While I see your point and I'm not against capitalism but, if your a company making 600billion in profit. You're not any less stupid rich by that getting rolled back to 300billion. Another thing is if your consumer is buying twice the product, because it's more affordable, you're not really going to notice the loss.

 

[Electric Chicken]

While I see your point and I'm not against capitalism but, if your a company making 600billion in profit. You're not any less stupid rich by that getting rolled back to 300billion. Another thing is if your consumer is buying twice the product, because it's more affordable, you're not really going to notice the loss.

I want my 599 billion. Because I'm me.

And yes I acknowledge that it makes me out to be a selfish asshole.

The reason I say this, is because I own my truck and want to profit as much as possible. Other people deciding how much I should profit is anti-American in my opinion.

 

[Reptar]

I want my 599 billion. Because I'm me.

And yes I acknowledge that it makes me out to be a selfish asshole.

The reason I say this, is because I own my truck and want to profit as much as possible. Other people deciding how much I should profit is anti-American in my opinion.

I didn't say this should apply to small business, I specifically said corporations, and would be quite impressed if your profit margin is above 30% most trucks don't do that well. Between paying for fuel, maintenance, insurance, taxes upon taxes, your driver wage, I would think that the margin isn't there.

But I could be wrong, I have been known to be wrong often. Like I also said it's a spitball theory, like taxing the rich. But I think corporate caps would be more successful.

 

[Mike]

Doesn't matter to me how much profit they earn, as long as they aren't provided help when they begin to fail. This is where it all goes wrong, and this is likely where this went wrong.

Multiple trucking companies have quietly cut payroll at the top over the past year or two.

Why? Because they gave themselves big fat raises when the capacity overtightened and the foolishly thought that the high freight volumes and high rates were the new normal. Also, because they received money from the government that was meant to help them through the pandemic. That pandemic money was used for bonuses and to expand fleets. Wasn't that long ago when you had to wait over a year to get a truck if you ordered it, and a new dry van was upwards of $100k if you could find one.

Why have they done it as quietly as possible? Because they don't want talk being out there about how they raised their pay to begin with on the backs of money being thrown into the economy and on the backs of shippers being forced into paying massive rates to get their freight moved.

Shippers fought back once the market began to flip. Brokers tried to keep the same profits by even further screwing carriers beyond the normal drop in rates due to the shippers no paying as much.

We all took advantage of a disaster and grabbed as much money as possible.

Now, we are all paying the price. If you didn't take all you could when it was there, then it's even harder to pay that price now because you didn't stock up when it was good.

Marten is trying to make up for whatever mistakes they made up to this point by cutting payroll. Problem is, all that money that was lost while they were paying big bonuses and salaries is gone. They are trying to slow the bleeding now by cutting costs everywhere they can, but time will tell if they did it soon enough. If they are cutting payroll, they are likely already cutting corners everywhere else they can.

Some of these carriers, large and small, have been cutting back on maintenance in hopes things turn around. When things don't turn around, as I think is the case, they are going to have to pay for the cuts they made in their equipment maintenance because they won't be able to upgrade equipment as early as they would normally, and the breakdowns are going to be increasing due to that lack of maintenance.

The amount of trucks on the side of the road with blowouts is higher than I can ever remember. Trucks are blowing steer tires and tearing up the entire front end of their trucks as a result. You used to hardly ever see a truck on the side of the road with a steer tire blown. Perfect case of avoiding maintenance. Try to save money on tires by over-extending their life, and end up paying thousands dollars to replace everything that got destroyed by the blown tire.

A large number of trucking companies have become a house of cards. It wouldn't take much at all right now to see many of them crumble.

/rant over

 

[Reptar]

Doesn't matter to me how much profit they earn, as long as they aren't provided help when they begin to fail. This is where it all goes wrong, and this is likely where this went wrong.

Multiple trucking companies have quietly cut payroll at the top over the past year or two.

Why? Because they gave themselves big fat raises when the capacity overtightened and the foolishly thought that the high freight volumes and high rates were the new normal. Also, because they received money from the government that was meant to help them through the pandemic. That pandemic money was used for bonuses and to expand fleets. Wasn't that long ago when you had to wait over a year to get a truck if you ordered it, and a new dry van was upwards of $100k if you could find one.

Why have they done it as quietly as possible? Because they don't want talk being out there about how they raised their pay to begin with on the backs of money being thrown into the economy and on the backs of shippers being forced into paying massive rates to get their freight moved.

Shippers fought back once the market began to flip. Brokers tried to keep the same profits by even further screwing carriers beyond the normal drop in rates due to the shippers no paying as much.

We all took advantage of a disaster and grabbed as much money as possible.

Now, we are all paying the price. If you didn't take all you could when it was there, then it's even harder to pay that price now because you didn't stock up when it was good.

Marten is trying to make up for whatever mistakes they made up to this point by cutting payroll. Problem is, all that money that was lost while they were paying big bonuses and salaries is gone. They are trying to slow the bleeding now by cutting costs everywhere they can, but time will tell if they did it soon enough. If they are cutting payroll, they are likely already cutting corners everywhere else they can.

Some of these carriers, large and small, have been cutting back on maintenance in hopes things turn around. When things don't turn around, as I think is the case, they are going to have to pay for the cuts they made in their equipment maintenance because they won't be able to upgrade equipment as early as they would normally, and the breakdowns are going to be increasing due to that lack of maintenance.

The amount of trucks on the side of the road with blowouts is higher than I can ever remember. Trucks are blowing steer tires and tearing up the entire front end of their trucks as a result. You used to hardly ever see a truck on the side of the road with a steer tire blown. Perfect case of avoiding maintenance. Try to save money on tires by over-extending their life, and end up paying thousands dollars to replace everything that got destroyed by the blown tire.

A large number of trucking companies have become a house of cards. It wouldn't take much at all right now to see many of them crumble.

/rant over

All facts, I fully support the no bail out as well. It will be interesting to see where everything lands. While I don't see freight rates going back to 2018-2021 rates. I don't see them staying this low. There has to be some rebound eventually. Seeing a lot of loads that used to pay $2.50/mile clocking in at around $1.50/mile or less.

 

[Mike]

All facts, I fully support the no bail out as well. It will be interesting to see where everything lands. While I don't see freight rates going back to 2018-2021 rates. I don't see them staying this low. There has to be some rebound eventually. Seeing a lot of loads that used to pay $2.50/mile clocking in at around $1.50/mile or less.

The continual drop in rates is where a company like Marten is really seeing the struggle.

Q1 to Q2 revenue per truck dropped $400/week.

Meanwhile, cost of operations are still climbing.

They are down to below $4100 per truck in revenue earned per week. That factors in team trucks as well.

The big companies are seeing their contracts continue to get reduced or lost completely to the spot market now. They weren’t suffering like spot market trucks until recently.

The big companies will be forced to make tough decisions regarding their company drivers. Might have to push them to stay out longer. Might miss time off requests because it’s too costly to deadhead them long distance to get home. Maybe start cutting pay. They did that in 2008.

 

[Reptar]

The continual drop in rates is where a company like Marten is really seeing the struggle.

Q1 to Q2 revenue per truck dropped $400/week.

Meanwhile, cost of operations are still climbing.

They are down to below $4100 per truck in revenue earned per week. That factors in team trucks as well.

The big companies are seeing their contracts continue to get reduced or lost completely to the spot market now. They weren’t suffering like spot market trucks until recently.

The big companies will be forced to make tough decisions regarding their company drivers. Might have to push them to stay out longer. Might miss time off requests because it’s too costly to deadhead them long distance to get home. Maybe start cutting pay. They did that in 2008.

Yeah, I wasn't driving in 08 I was still in the military. My dad was still driving and the company he worked for changed to a 3 week out rotation, said it was easier to line freight up to get him back home that way. Started around May of 08. He retired in 2011. But as far as I know the company still operates that way to this day.

 

[Electric Chicken]

Doesn't matter to me how much profit they earn, as long as they aren't provided help when they begin to fail. This is where it all goes wrong, and this is likely where this went wrong.

Multiple trucking companies have quietly cut payroll at the top over the past year or two.

Why? Because they gave themselves big fat raises when the capacity overtightened and the foolishly thought that the high freight volumes and high rates were the new normal. Also, because they received money from the government that was meant to help them through the pandemic. That pandemic money was used for bonuses and to expand fleets. Wasn't that long ago when you had to wait over a year to get a truck if you ordered it, and a new dry van was upwards of $100k if you could find one.

Why have they done it as quietly as possible? Because they don't want talk being out there about how they raised their pay to begin with on the backs of money being thrown into the economy and on the backs of shippers being forced into paying massive rates to get their freight moved.

Shippers fought back once the market began to flip. Brokers tried to keep the same profits by even further screwing carriers beyond the normal drop in rates due to the shippers no paying as much.

We all took advantage of a disaster and grabbed as much money as possible.

Now, we are all paying the price. If you didn't take all you could when it was there, then it's even harder to pay that price now because you didn't stock up when it was good.

Marten is trying to make up for whatever mistakes they made up to this point by cutting payroll. Problem is, all that money that was lost while they were paying big bonuses and salaries is gone. They are trying to slow the bleeding now by cutting costs everywhere they can, but time will tell if they did it soon enough. If they are cutting payroll, they are likely already cutting corners everywhere else they can.

Some of these carriers, large and small, have been cutting back on maintenance in hopes things turn around. When things don't turn around, as I think is the case, they are going to have to pay for the cuts they made in their equipment maintenance because they won't be able to upgrade equipment as early as they would normally, and the breakdowns are going to be increasing due to that lack of maintenance.

The amount of trucks on the side of the road with blowouts is higher than I can ever remember. Trucks are blowing steer tires and tearing up the entire front end of their trucks as a result. You used to hardly ever see a truck on the side of the road with a steer tire blown. Perfect case of avoiding maintenance. Try to save money on tires by over-extending their life, and end up paying thousands dollars to replace everything that got destroyed by the blown tire.

A large number of trucking companies have become a house of cards. It wouldn't take much at all right now to see many of them crumble.

/rant over

Yeah I'm thankful I did the opposite. It seemed more logical to me to use the easy money to essentially refurbish the truck and pay it off, and get rid of everything that was debt (mostly the cars) before I even started because I didn't know if I could still afford it.

Rates keep getting worse but my truck should be fine for a while and I still only have the mortgage and living expenses on the personal side to worry about.

I never had to take out any repair loans or anything like I've heard some guys do.

But I never treated myself to a new vehicle, boat, ATV, motorcycle etc either. I did buy myself some things, with cash, as a kind of reward that I could appreciate daily.

I did also acquire a shit load of tools and stockpiled consumables for the truck though.

I gave myself a $100/wk raise in August (still a modest personal salary) and a few months before that started putting $1,000 a month aside for a new vehicle or the mortgage, whichever I feel is more prudent when it's big enough. The longer the F250 satisfies me, the more likely it'll be the mortgage.

If I have to adjust the new savings down I can. Hopefully things hold for a bit.

 

[Duck]

Like I also said it's a spitball theory, like taxing the rich.

Kind of off topic but it's pretty much impossible to "tax the rich", because say for example, they tax a megafleet trucking company.. In @Mike's post he explains how they cut corners to recoup losses.

Slap a big tax on a trucking company and you get dangerous trucks and underpaid drivers.

Slap a big tax on a manufacturer of anything (food, cars, anything) and you get lower quality products, underpaid employees, and outsourced jobs.

Most huge companies are owned by stock holders and they want their profits or they're gonna dump their stocks and kill the company.

I like the idea of taxing the hell outta the super filthy stinkin' rich billionaires like who use their wealth to influence (bribe) politicians,.. But I don't know how they can do that in such a way that won't result in hurting their employees or the end consumer of their products or services. Or everybody's market-based 401ks and retirement accounts.

 

[Electric Chicken]

Kind of off topic but it's pretty much impossible to "tax the rich", because say for example, they tax a megafleet trucking company.. In @Mike's post he explains how they cut corners to recoup losses.

Slap a big tax on a trucking company and you get dangerous trucks and underpaid drivers.

Slap a big tax on a manufacturer of anything (food, cars, anything) and you get lower quality products, underpaid employees, and outsourced jobs.

Most huge companies are owned by stock holders and they want their profits or they're gonna dump their stocks and kill the company.

I like the idea of taxing the hell outta the super filthy stinkin' rich billionaires like who use their wealth to influence (bribe) politicians,.. But I don't know how they can do that in such a way that won't result in hurting their employees or the end consumer of their products or services. Or everybody's market-based 401ks and retirement accounts.

Yeah if you kill the puppeteer, the puppet falls too.

 

[Duck]

Yeah if you kill the puppeteer, the puppet falls too.

Yes. Too bad nobody is currently hunting oligarchs.

 

[389 Hood]

Aside of just being billionaires, what good do Musk, Bezos, Zuckerman and other like them do? They are all in competition to see who can hold the title of the worlds richest person the longest. Between just the three of them, this country could be the rage of the world. The thing is, we have the government cult that holds us back. Rep, Dem, Ind, it doesn't matter. They **** on graves as they walk by and put every dollar they can scrape up right into their pockets. Every one of them has an agenda and that is to be fat cats in the political world.