Company Reports

Wide-moat truck broker Landstar System’s first-quarter gross revenue fell 18% year over year and came in below our expected run rate. The operating backdrop for truck brokers continued to face lackluster retailer restocking and abundant truckload market capacity, which has weighed heavily on spot volume and pricing for more than a year. Additionally, shipments Landstar handles for other trucking and logistics providers has normalized relative to robust levels seen during the capacity crunch.

Landstar System ranks among the largest third-party logistics providers in the highly fragmented $140 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—34% on average over the past seven years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar’s fourth-quarter gross revenue fell 28% year over year but was mostly in line with our forecast. The key theme throughout 2023 was that muted retailer restocking, sluggish industrial end markets, and the swing to loose truckload industry capacity drove down load volumes and sell-rates to shippers, especially relative to strong levels posted during the pandemic-driven freight surge. Furthermore, shipments Landstar handles for other trucking and logistics providers normalized relative to robust levels seen during the capacity crunch.

Wide-moat truck broker Landstar announced that Jim Gattoni will be retiring as CEO in February 2024, and will stay on in advisory role until July. Gattoni has been at the helm since 2014 and the firm's execution under his watch has been impressive; Landstar's returns on capital comfortably exceeded 30% over the past decade and its stock price has almost tripled.

Landstar System ranks among the largest third-party logistics providers in the highly fragmented $140 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—33% on average over the past seven years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar's third-quarter gross revenue fell 29% year over year, though declines weren't far off our forecast. In short, muted retailer restocking, sluggish industrial end markets, and the swing to loose truckload industry capacity continue to pressure freight demand and sell-rates to shippers, especially relative to strong levels a year ago. We also note that shipments Landstar handles for other trucking and logistics providers have diminished relative to robust levels seen during the capacity crunch.

Landstar System ranks among the largest third-party logistics providers in the highly fragmented $90 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—33% on average over the past seven years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Landstar System ranks among the largest third-party logistics providers in the highly fragmented $90 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—33% on average over the past seven years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar’s second-quarter gross revenue plummeted 30% year over year—below our forecast as both price and volume underperformed normal seasonality to a greater degree than we anticipate. Recall revenue swung negative in fourth-quarter 2022 after surging more than 33% year over year over the previous four quarters. In short, retail-sector destocking (high inventories), sluggish industrial end markets, and now-loose truckload industry capacity continue to pressure freight demand and sell-rates to shippers, especially relative to exceptionally strong levels a year ago. For the core truckload business, loads fell 16%, while average revenue per load was down 12.5%, which also includes the impact of falling fuel surcharges.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—37% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar's first-quarter gross revenue fell 27% year over year, mostly in line with our forecast when considering the potential for demand stabilization in the second half. Recall revenue swung negative last quarter, falling 14%, after jumping more than 33% year over year over the previous four quarters. In short, retail-sector destocking (high inventories), softening industrial end markets, and loosening truckload-industry capacity are driving down freight demand and sell-rates to shippers, especially relative to exceptionally strong levels a year ago. For the core truckload business, loads fell 12%, while average revenue per load was down 16%.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns--37% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns--37% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar's fourth-quarter gross revenue swung to a 14% year-over-year decline (it was up 5% last quarter and almost 40% in the first half); below our forecast as spot truckload activity corrected more than we expected. The overall theme is that retail-sector restocking has dried up on high inventory levels, and certain industrial end markets are now softening, driving down demand and sell rates to shippers, especially relative to historically strong levels a year ago. For the core truckload business, loads fell 5.5%, while average revenue per load was down 7%.

Wide-moat truck broker Landstar's third-quarter gross revenue grew 5%, which slowed materially relative to 26% year-over-year growth last quarter and 53% in the first quarter. That said, revenue came in slightly ahead of our forecast on noise from rising fuel surcharges. For the firm's core truckload business, total loads were up 1%, while average revenue per load was flat.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns--more than 30% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns--more than 30% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar’s second-quarter total gross revenue grew 26%, which slowed relative to 53% growth last quarter. That said, this was a healthy showing, and we expected an easing on tough comps and because dry van truckload market spot activity and rates moderated as shipments shifted to the contract market. Recall Landstar has heavy spot exposure. Relative to the year-ago period, growth came from rising fuel surcharges and higher underlying dry van and flatbed demand across retail and industrial end markets. Further, although retail sector demand is probably softening slightly (sequentially) and dry van spot rates have eased, extremely tight TL-market capacity this past year has driven up pricing to historic levels.

Landstar ranks among the largest third-party logistics providers in the highly fragmented $90 billion domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns--more than 30% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Wide-moat truck broker Landstar’s first-quarter gross revenue continued its strong growth trajectory, rising 53% year over year—ahead of our forecast as increases in both loads and pricing (revenue per load) exceeded our expectations. Relative to the year-ago period, growth continued to be driven by healthy underlying dry van and flatbed demand rooted in heavy retailer restocking and favorable industrial end markets. Further, extremely tight TL-market capacity continued to supported excellent core rate gains, especially in the spot market where Landstar has heavy exposure.