Freight broker Landstar System said strength in flatbed demand largely offset a still weak dry truck freight market during the fourth quarter. However, cargo revenue trends exceeded typical seasonality in December and so far in January.
Landstar (NASDAQ: LSTR) reported fourth-quarter adjusted earnings per share of 75 cents after the market closed Wednesday. The result was 56 cents worse year over year. The figure included $22 million (49 cents per share) in unfavorable claims activity from separate tragic vehicle accidents and $2.1 million (5 cents per share) in non-cash impairment charges arising from its sale of Landstar Metro. (The impairment charge was added back to adjusted EPS.)
The company disclosed the articles last week and said it plans to appeal a recent post-trial ruling.
Consolidated revenue of $1.17 billion was 3% lower year-over-year, largely due to a 40% decline in revenue in its shipping business.
Trucking revenue was flat year over year at $1.08 billion. The number of loads fell by 1%, but revenue per load increased by 1%. The strength of rigs was offset by softer trends in dry vans. Platform revenue increased 11% year over year to $401 million, as loads increased 3% and revenue per load increased 8%.
Total truckload revenue increased 6% from October to December, due to a reduction in truck capacity, Landstar said. The metric rose 1.5% sequentially in the fourth quarter, 50 basis points ahead of normal seasonality.
Landstar noted modest weakness in consumer durables revenue (down 2% YoY) along with continued weakness in the automotive (down 7%) and construction (down 3%) verticals. Platform demand benefited from data center construction and decent energy-related revenues (up 6%).
The company’s substitute liner transportation revenue decreased 15% year-over-year. Linehaul’s revenue typically increases markedly as the market tightens and truck capacity becomes harder to find.
Revenue generated by business capacity owners (BCOs) increased 2% year-on-year to $458 million, as loads increased 4% and cargo revenue fell 2%.
(Landstar BCOs are owner operators who transport almost exclusively for the company.)
Trucks provided by BCO decreased 4% year-on-year to 8,514 units. That was 104 units less than in the third quarter. The third quarter marked the first sequential increase in the number of BCO trucks since the first quarter of 2022. The number of BCO trucks previously reached a high of 11,935 units.
Retention among the group has improved and truck utilization was 8% higher year over year at nearly 24 loads per truck during the quarter.
The number of BCO trucks generally increases as the market experiences a sustained period of higher TL rates. Landstar expects BCO’s fleet to grow in 2026.