Covenant Logistics Group, Inc. (CVLG): Business Model Canvas [Dec-2025 Updated]

You're looking at a logistics player, Covenant Logistics Group, Inc. (CVLG), that's smartly pivoting in this soft freight market. Honestly, the model shows they are doubling down on high-touch, long-term Dedicated contracts while their Managed Freight segment is showing serious growth, up 14.0% year-over-year in Q3 2025. We're seeing a clear strategy: lock in committed capacity for customers needing that high-speed, time-critical service, even while managing the persistent headwind of high insurance costs. Dig into the canvas below to see exactly how their ~1,539 average dedicated tractors and their $3.6 million in Q3 equity income from TEL fit into this specialized, asset-light leaning structure.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Key Partnerships

You're looking at how Covenant Logistics Group, Inc. (CVLG) builds its operational muscle through external relationships. These partnerships are critical for capacity, capital management, and technology access, so let's look at the hard numbers from their late 2025 reporting.

49% minority investment in Transport Enterprise Leasing (TEL)

This equity method investment provides a steady, non-asset-heavy income stream. Here's how that contribution looked across the first three quarters of fiscal year 2025:

Quarter Ended	Pre-Tax Net Income Contribution (USD)
March 31, 2025 (Q1)	$3.8 million
June 30, 2025 (Q2)	$4.3 million
September 30, 2025 (Q3)	$3.6 million

To give you context on TEL's operational scale, in Q2 2025, TEL's revenue increased by 34% year-over-year, driven by growing its truck fleet by 429 units to a total of 2,635, and increasing its trailer fleet by 866 units to 7,880.

Network of thousands of third-party carriers for brokerage capacity

Covenant Logistics Group, Inc. uses its Managed Freight segment to handle brokerage services, which involves subcontracting the carriage of customers' freight to third parties. This asset-light approach supplements internal capacity, especially for the Expedited segment when internal assets are fully utilized.

• Managed Freight offers brokerage services.
• It supports Expedited capacity needs.
• The segment focuses on outsourcing carriage to third parties.

Strategic relationships with equipment manufacturers for fleet CapEx

Managing capital expenditures (CapEx) for revenue equipment is key to maintaining fleet age and operational uptime. Covenant Logistics Group, Inc. has set expectations for its 2025 capital spending plans, which are focused on expanding the Dedicated fleet.

Capital Expenditure Metric	Reported/Expected Amount (USD)
Tentative Baseline Expectation (Balance of 2025, as of Q1)	$55 million to $65 million
Planned Spending (as per Q2 analysis)	$50-60 million
Net CapEx for Revenue Equipment (H1 2025)	Approximately $18.5 million
Expected Net CapEx (Q4 2025)	$15 million to $20 million

This investment directly supports fleet growth; for example, the Dedicated segment grew its average tractor fleet by 212 units, or 16.7% year-over-year, as of Q2 2025.

Technology vendors for Transportation Management Systems (TMS)

Covenant Logistics Group, Inc. relies on technology vendors for its state-of-the-art Transportation Management Systems (TMS) to provide real-time visibility and optimization tools. This technology integration is designed to streamline operations and improve carrier selection.

• TMS use provides real-time visibility and predictive insights.
• Custom reporting and optimization tools are employed.
• In one reported case study, the Integrated TMS reduced freight costs by nearly 15% through shipment consolidation and routing optimization.

Finance: draft 13-week cash view by Friday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Key Activities

Executing long-term Dedicated fleet contracts (3-5 year goal)

For the three months ended September 30, 2025, freight revenue in the Dedicated segment increased 10.8% year-over-year to $91.6 million. The average total tractors for this segment was 1,539 units, an increase of 9.7% or 136 units compared to the prior year\'s quarter. For the second quarter ended June 30, 2025, Dedicated segment revenue was $102.3 million, marking a 9% rise year-over-year. In the first quarter of 2025, the segment saw freight revenue growth of $9.5 million, or 13.1% year-over-year, with average tractors at 1,479 units.

Providing high-service, time-sensitive Expedited truckload transport

The Expedited segment experienced a decrease in freight revenue for the third quarter of 2025 of $7.2 million, or 8.2%. The average total tractors were 861 units, a decrease of 3.4% or 31 units compared to the prior year quarter. For the second quarter of 2025, revenue in the expedited truckload segment fell 10% to $97.3 million. In the first quarter of 2025, freight revenue in the Expedited segment decreased 7.3%, or $6.4 million.

Managing freight brokerage and outsourced logistics (Managed Freight)

The Managed Freight segment reported a freight revenue increase of 14.0% for the third quarter of 2025 compared to the prior year quarter. During the second quarter of 2025, this segment generated revenue of $77.5 million, which was an increase of 28% from the same time last year, supported by a one-off contract that contributed $77M in Q2 2025. However, for the first quarter of 2025, Managed Freight\'s freight revenue decreased 9.6% from the prior year quarter.

Strategic capital allocation, including a $50 million share repurchase program

Covenant Logistics Group, Inc. approved a $50 million stock repurchase program on April 23, 2025. During the second quarter of 2025, the company repurchased approximately 1.6 million shares at an average price of approximately $22.69 per share, amounting to $35.2 million of the program. For the third quarter ended September 30, 2025, the company repurchased approximately $36.2 million of common stock. At September 30, 2025, total indebtedness, net of cash, was approximately $268.3 million. The tentative baseline expectation for net capital equipment expenditures for the balance of 2025 was set between $55 million to $65 million.

Here's a quick look at the segment revenue performance for the three months ended September 30, 2025, compared to the prior year:

Segment	Freight Revenue (3 Months Ended Sept 30, 2025)	Year-over-Year % Change
Dedicated Truckload	$91.6 million	10.8% increase
Expedited Truckload	$80.2 million	Decreased 9%
Managed Freight	Data not explicitly stated for Q3 2025 freight revenue only	14.0% increase

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Key Resources

You're looking at the core assets Covenant Logistics Group, Inc. (CVLG) relies on to execute its strategy. These aren't just line items; they are the engines of the business, especially as the market shifts.

Owned and Leased Tractor Fleet and Equipment

The physical assets, the trucks, are central to their truckload operations. You have to watch the fleet composition closely, as it directly impacts service delivery and maintenance costs. For instance, the Dedicated segment, which is a strategic focus, showed significant growth in its asset base.

Here's a snapshot of that fleet component as of late 2025:

• Dedicated fleet averaged 1,539 total tractors in the third quarter ending September 30, 2025.
• The average age of the overall tractor fleet was reported at 23 months as of September 30, 2025.
• Management has a tentative baseline expectation for net capital equipment expenditures in 2025 ranging from $55 million to $65 million.

Advanced Logistics Technology and Transportation Management Systems

Covenant Logistics Group, Inc. uses web-based transportation management solutions to manage its operations. This technology stack is key for optimizing utilization, which has been a focus area, especially when freight revenue per total mile is under pressure. The system helps them manage complex networks across their Dedicated, Expedited, and Managed Freight segments.

While specific system names aren't always public, the capability to manage a fleet of this size and complexity efficiently is a non-negotiable resource. It's what helps them manage costs related to fuel economy and maintenance, which they see as producing acceptable returns.

Human Capital: Professional Drivers and Employees

You can't move freight without professional drivers, and Covenant Logistics Group, Inc. maintains a substantial workforce to support its operations. This human capital is the direct link to the customer and the road.

The total employee count is reported around 4,800 as of late 2025, which includes the critical driver base.

• Total employees: approximately 4,800.
• This number supports the entire operational structure, including truckload and warehousing services.

Financial Liquidity and Capital Access

Access to capital is a vital resource, especially when making significant equipment purchases or navigating market volatility. You want to see strong liquidity that isn't fully drawn down. As of the first quarter of 2025, Covenant Logistics Group, Inc. had substantial capacity available on its Asset-Based Loan (ABL) credit facility.

Here's the quick math on their liquidity position at March 31, 2025:

Liquidity Metric	Amount (as of March 31, 2025)
Available Borrowing Capacity (ABL Facility)	$90.1 million
Undrawn Letters of Credit Outstanding	$19.9 million
Cash and Cash Equivalents	$11.2 million
Borrowings Outstanding on ABL Facility	$0

Honestly, having $90.1 million available with no borrowings outstanding gives them a solid buffer for unexpected needs or to fund growth opportunities in the Dedicated fleet, which they planned capital expenditures for in the $55 million to $65 million range for the full year 2025.

Finance: draft 13-week cash view by Friday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Value Propositions

You're looking at how Covenant Logistics Group, Inc. (CVLG) delivers distinct value to its customers as of late 2025. The core is built on securing long-term commitments while maintaining the agility to handle specialized, time-sensitive needs.

Guaranteed, customized Dedicated truckload capacity for long contracts is a cornerstone, designed to shield customers from spot market swings. This commitment is backed by fleet expansion; for instance, in the first quarter of 2025, the Dedicated segment increased its average total tractors by 212 units, representing a 16.7% year-over-year jump to 1,479 tractors. This segment aims for committed capacity over contracted periods generally targeted for three to five years in length. The segment showed its strength with revenue growing 13.1% in Q1 2025.

For urgent needs, the value proposition centers on high-speed, time-critical expedited delivery. While the Expedited segment faced headwinds, with revenue decreasing 8.2% in Q3 2025, the company maintains a service focus, targeting an operating ratio between 83-93 for this segment going forward. This service line is about reliability under pressure, even when utilization dips, as seen when utilization decreased 3.5% in Q2 2025, yet freight revenue per total mile still saw a 2.4% increase.

The flexibility comes from integrated asset-based and asset-light 3PL solutions. This blend allows Covenant Logistics Group, Inc. to manage capacity fluctuations effectively. The asset-light Managed Freight segment delivered significant growth in Q2 2025, with revenue increasing 28% to $77.5 million. The Warehousing segment also contributed, posting revenue of $25.5 million in that same quarter, a 1% year-over-year gain. Management is actively allocating capital toward these better-returning, asset-light business units.

Finally, Covenant Logistics Group, Inc. offers specialized, high-service niche transport for complex supply chains. This is where they focus investment, such as growing their dedicated fleet in niche areas. For example, growth in the dedicated protein supply chain business in Q1 2025 drove salaries, wages, and related expenses up by 15 cents, or approximately 12%, on a per total mile basis. Operational excellence in these specialized areas is recognized, with subsidiaries Landair and AAT Carriers earning the 2025 TCA Elite Fleet Certification.

Here's a quick look at the segment performance data from the first three quarters of 2025:

Segment	Key Metric	Value (Latest Reported 2025 Period)
Dedicated Truckload	Revenue Increase (Q1 2025 YoY)	13.1%
Dedicated Tractors (Avg.)	Count (Q1 2025)	1,479 units
Expedited Truckload	Revenue Decrease (Q3 2025 YoY)	8.2%
Expedited Target Operating Ratio	Target Range (Outlook)	83-93
Managed Freight	Revenue Increase (Q2 2025 YoY)	28%
Warehousing	Revenue (Q2 2025)	$25.5 million

The specific service capabilities Covenant Logistics Group, Inc. emphasizes include:

• Committed capacity over contracted periods.
• High-service freight delivery standards.
• Freight brokerage services and TMS (Transportation Management System).
• Distribution Center Management.

The company's overall trailing twelve-month revenue as of September 30, 2025, stood at approximately $1.15B.

Finance: review the Q4 2025 dedicated contract renewal pipeline against the three to five year target commitment length by next Tuesday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Customer Relationships

You're looking at how Covenant Logistics Group, Inc. (CVLG) manages its customer interactions, which clearly splits based on the service type. For the Dedicated segment, the relationship is deep and hands-on. This is where the company commits its own assets, aiming for those multi-year contracts, often three to five years in length, to sidestep the spot market volatility. It's about embedding into a customer's supply chain.

The focus here is definitely on dedicated account management, helping clients optimize their flow. This strategy is translating into growth; for instance, in the second quarter of 2025, freight revenue in the Dedicated segment grew by $8.3 million, which is a 10.2% year-over-year increase, supported by adding 162 tractors, an 11.7% jump from the prior year, reaching 1,546 tractors. By the third quarter of 2025, the Dedicated Truckload Revenue was up another 10.8%, adding $8.9 million, with the average tractor count at 1,539. This investment in owned capacity shows a commitment to specific, long-term partners, even if utilization dipped slightly in Q2 2025 by 7.7%.

The Managed Freight segment, on the other hand, operates more transactionally. This is the brokerage arm where Covenant subcontracts carriers, and interactions are often rate-driven, especially when securing capacity for their Expedited segment. This business saw a significant, but perhaps less stable, revenue spike in Q2 2025, hitting $77.5 million, a 28% increase year-over-year, though one analyst noted this was thanks to a one-off contract. This segment also faced strategic changes, as the company incurred $3.7 million in severance and abandonment expenses in Q3 2025 related to exiting a large Managed Freight contract and exiting legacy Dedicated contracts not providing sufficient returns. That's the cost of pruning relationships that don't meet the long-term return profile.

Building lasting trust through superior service is a stated core value, which is why the shift toward Dedicated is so important. The company is actively allocating capital toward these more stable, specialized services, like poultry or food transportation, which are considered less cyclical. However, customer concentration remains a factor you need to watch; in the 2024 10-K, ten clients accounted for 45% of revenue. You want to see that trust spread out, but the focus on high-touch Dedicated service is the mechanism to keep those big accounts locked in.

Here's a quick comparison of the two primary customer-facing segments based on recent performance:

Metric	Dedicated Segment (Q2 2025)	Managed Freight Segment (Q2 2025)
Freight Revenue Change (YoY)	$8.3 million increase (10.2%)	$77.5 million revenue
Tractor Count Change (YoY)	162 units increase (11.7%)	N/A (Asset-Light)
Utilization Change (Q2 2025)	7.7% decrease	N/A

The operational reality of these customer relationships is reflected in the fleet metrics and financial positioning as of late 2025:

• Consolidated Freight Revenue reached an all-time high of $276.5 million in Q2 2025.
• The average tractor age across the combined Truckload fleet increased to 23 months by September 30, 2025.
• Net Indebtedness stood at approximately $268.3 million as of September 30, 2025.
• Cash and cash equivalents were thin, reported at $2.7 million at the end of Q3 2025.
• The leverage ratio remained around 2x EBITDA following Q2 2025 results.

Finance: draft 13-week cash view by Friday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Channels

You're looking at how Covenant Logistics Group, Inc. gets its services-from dedicated truckload capacity to brokerage-into the hands of its customers. This is all about the physical and digital pathways they use to deliver value across their four main segments: Expedited, Dedicated Services, Managed Freight, and Warehousing.

Direct sales team for securing multi-year Dedicated and Expedited contracts

The sales effort here is focused on locking in committed capacity, which is the backbone of the asset-based side. You see the results of these long-term agreements reflected in the Dedicated segment's growth, even when the broader market is soft. For instance, in the third quarter ending September 30, 2025, freight revenue in the Dedicated segment grew by $8.9 million, or 10.8%, year-over-year. This growth came as the average total tractor count in Dedicated rose to 1,539 units, an increase of 136 units, or about 9.7% compared to the prior year's quarter. This shows the sales team is successfully landing and growing those multi-year commitments, aiming for that three-to-five-year contract length mentioned in their structure.

Company-owned and operated truckload fleet and terminals

The physical assets are the core delivery mechanism for the Expedited and Dedicated services. Covenant Logistics Group owns a fleet that, as of late 2024, was noted to be over 2,500 trucks. The company strategically shifts equipment based on contract performance; for example, the Expedited fleet saw its average tractor count shrink to 861 units in Q3 2025, a decrease of 31 units or 3.4%, as resources moved toward Dedicated operations. The physical network supporting these operations includes shared terminals in key locations:

• Chattanooga, Tennessee
• Hutchins, Texas
• Pomona, California
• Texarkana, Arkansas
• La Vergne, Tennessee
• Allentown, Pennsylvania
• Orlando, Florida
• Greenville, Tennessee

The combined Truckload operations, which include both Expedited and Dedicated, posted total revenue of $199.7 million in the third quarter of 2025.

Digital freight matching and TMS platforms for brokerage

For the asset-light side, specifically the Managed Freight segment which includes brokerage services and the Transportation Management System (TMS), the channel is digital and capacity-focused. The TMS is used both internally and as part of the service offering to customers. The success of this channel varies; for instance, Managed Freight revenue saw a strong 28% increase year-over-year in the second quarter of 2025, though it also experienced a 9.1% reduction year-over-year in Q3 2024. By Q3 2025, Managed Freight revenue was up 14.0% from the prior year quarter. This shows the digital channel's ability to quickly scale revenue based on new business awards.

Warehousing facilities for day-to-day management services

The Warehousing segment uses its physical facilities as the direct channel for providing day-to-day management services. Revenue for this segment in the third quarter ending September 30, 2025, was $24.8 million. Management anticipates growth here from a major new facility startup scheduled for November 2025. The segment's performance is tied directly to the utilization and service levels within these buildings.

Here's a quick look at how the primary revenue-generating channels performed across the latest reported periods. Remember, these figures are snapshots of the top-line revenue contribution for each channel's segment:

Channel/Segment	Reporting Period End Date	Revenue Amount (USD)	Year-over-Year Change
Dedicated Truckload (Asset-Based)	Q3 2025 (Sep 30)	Implied Freight Revenue Growth: $8.9 million	+10.8% (Freight Revenue)
Expedited Truckload (Asset-Based)	Q3 2025 (Sep 30)	Freight Revenue Change: -$7.2 million	-8.2% (Freight Revenue)
Managed Freight (Brokerage/TMS)	Q3 2025 (Sep 30)	Freight Revenue Change: +$1.7 million	+14.0% (Freight Revenue)
Warehousing	Q3 2025 (Sep 30)	$24.8 million	-1.5% (Revenue)
Combined Truckload (Asset-Based)	Q3 2025 (Sep 30)	$199.7 million	+0.3% (Total Revenue)

The overall Trailing Twelve Month (TTM) revenue as of September 30, 2025, stood at $1.15 Billion, up from the full-year 2024 revenue of $1.131 Billion. That's the total flow through all these channels.

Finance: draft 13-week cash view by Friday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Customer Segments

You're looking at Covenant Logistics Group, Inc.'s customer base as of late 2025, which shows a clear strategic pivot toward more stable, contractual business, even while managing the risks of a concentrated top tier of clients. Honestly, the customer concentration is something to watch; in the 2024 10-K, ten clients accounted for 45% of revenue. On top of that, one of those clients alone represented 10% of sales in both 2023 and 2024, and those figures have stayed stable. Still, the company is actively growing its Dedicated segment, which directly targets the food and long-term contract space.

Here's a quick look at how the revenue was split across the main operating segments for the second quarter of 2025, which gives us a good proxy for the types of customers they serve:

Segment	Q2 2025 Revenue (Millions USD)	YoY Growth	Primary Focus Indication
Dedicated Services	102.3	9%	Committed Capacity, Food/Protein
Expedited Truckload	97.3	-10%	Auto Parts (Large Manufacturers)
Managed Freight	77.5	28%	Brokerage, Overflow Capacity
Warehousing	25.5	1%	Supply Chain Support

The Dedicated segment is where you see the focus on long-term relationships, running with more than 1,500 tractors as of late 2024, and it contracts heavily with poultry and food customers. This segment's freight revenue grew 11% year-over-year in the third quarter of 2025, supported by new contracts in the protein supply chain. This directly addresses the food and beverage shippers, including the protein supply chain requirement.

The Expedited segment, which saw revenue fall 10% in Q2 2025, operates on a just-in-time model focused mainly on transporting auto parts. This points directly to serving large manufacturers, likely within the automotive sector, who require high service and delivery standards.

The Managed Freight segment, which includes brokerage services, is the asset-light arm that helps absorb loads when internal capacity is lacking, and it showed strong growth in Q2 2025, up 28% year-over-year to $77.5 million. While not explicitly stated as parcel or LTL carriers, this segment's brokerage function and ability to subcontract other carriers is the mechanism used to serve broader market needs, including potentially those shippers that use parcel or LTL networks.

The commitment to long-term revenue stability is evident in the Dedicated Services segment, which provides committed truckload capacity over contracted periods with the goal of three to five years in length. The company is actively shifting capital toward these better-returning business units, expecting modest contraction in the combined truckload fleet overall but growth in asset-light segments.

• The Dedicated segment is the primary source for customers requiring committed capacity over three to five years.
• Dedicated segment freight revenue was $91.6 million in Q3 2025.
• The company is investing in new start-up contracts within the Dedicated segment, which are expected to improve over time.
• The Expedited segment serves customers with high service freight and delivery standards, likely large manufacturers.
• The Expedited segment generated freight revenue of $80.2 million in Q3 2025.

Finance: draft updated customer concentration analysis based on Q3 2025 data by next Tuesday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Covenant Logistics Group, Inc. (CVLG) operations as of late 2025. The cost structure is heavily weighted toward variable, per-mile expenses, which makes utilization a critical lever for profitability, especially when rates are flat or declining.

The third quarter of 2025 showed clear pressure points. For instance, salaries, wages, and related expenses rose by 5 cents, or about 4%, on a per-total-mile basis year-over-year. That increase was tied to growth in the dedicated protein supply chain business and separation costs incurred during the quarter. That's the reality of labor costs in this environment.

Here's a quick look at the key per-mile cost movements from Q3 2025 compared to the prior year:

• Salaries, wages and related expenses: Increased by 5 cents per total mile, or 4%.
• Operations and maintenance expenses: Increased by 2 cents per total mile, or 10%.
• Total equipment-related expenses (O&M plus Depreciation/Amortization): Increased by 8 cents per total mile, or 15%.
• Insurance and claims expense: Hit 4 cents per mile, marking a 24% year-over-year increase.

Fuel is a wash on the bottom line for Q3 2025, but don't be fooled; when fuel surcharge revenue is netted out, the impact to operating income was unfavorable by 5 cents per total mile. That's a hidden cost you need to track.

The persistent industry headwind, high insurance and claims expense, is definitely biting. In Q3 2025, this cost component alone was 4 cents per mile. This is driven by the incurrence and development of certain large claims, and management expects this expense to remain elevated into Q4.

For capital expenditures (CapEx), the baseline you mentioned for FY2025 was in the $55 million to $65 million range. However, looking at the most recent guidance, Covenant Logistics Group expected net capital equipment expenditures for the fourth quarter alone to be between $15 million to $20 million. This suggests a potential shift or acceleration in equipment spending late in the fiscal year, possibly to support growth in better-returning business units.

You can see how these major cost buckets stack up in the Truckload segment, where operating income dropped sharply to $9.2 million in Q3 2025 from $23.1 million a year earlier, directly due to these rising costs weighing on margins.

Cost Category	Q3 2025 Metric	Year-over-Year Change
Salaries, Wages, Related Expenses (Per Mile)	5 cents	+4%
Operations & Maintenance (Per Mile)	Increased by 2 cents	+10%
Insurance & Claims (Per Mile)	4 cents	+24%
Net Fuel Impact (Per Mile)	Unfavorable by 5 cents	N/A
Truckload Segment Operating Income	$9.2 million	Down from $23.1 million (Q3 2024)

The company is actively managing this by evaluating contracts for improvement or exit, signaling a cost-focused approach to right-size the combined Truckload fleet. Finance: draft 13-week cash view by Friday.

Covenant Logistics Group, Inc. (CVLG) - Canvas Business Model: Revenue Streams

Covenant Logistics Group, Inc. generates revenue across several distinct service lines as of the third quarter of 2025.

Revenue Stream Category	Q3 2025 Revenue Amount	Year-over-Year Change (Freight Revenue)
Dedicated Truckload Freight Revenue	$105 million	10.8% increase
Managed Freight/Brokerage Revenue	$72.2 million	14.0% increase
Expedited Truckload Freight Revenue	$94.6 million	8.2% decrease
Warehousing Revenue	$24.8 million	1.5% decrease

The total revenue for the combined Truckload operations (which includes Dedicated and Expedited) for the quarter was $199.7 million.

• Equity income from TEL (Transport Enterprise Leasing) contributed pre-tax net income of $3.6 million for Q3 2025.
• Revenue from used equipment sales is not separately itemized but is part of the broader operational adjustments, including the disposal of equipment in volatile used equipment markets.