Landstar System, Inc. (Landstar) operates as a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees.
The company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third-party logistics solutions to me...
Landstar System, Inc. (Landstar) operates as a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees.
The company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third-party logistics solutions to meet all a customer’s transportation needs. Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world.
The company’s services emphasize safety, information coordination and customer service; and are delivered through a network of approximately 1,050 independent commission sales agents and over 78,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies, which are provided and coordinated by the company.
Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight. Landstar’s independent commission sales agents enter contractual arrangements with the company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers. The company’s third-party capacity providers consist of independent contractors who provide truck capacity to the company under exclusive lease arrangements (the ‘BCO Independent Contractors’), unrelated trucking companies who provide truck capacity to the company under non-exclusive contractual arrangements (the ‘Truck Brokerage Carriers’), air cargo carriers, ocean cargo carriers and railroads. Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America.
Segments
The company operates through two operating segments: Transportation Logistics and Insurance.
Transportation Logistics Segment
The transportation logistics segment provides a wide range of integrated transportation management solutions. Transportation services are provided by Landstar’s ‘Operating Subsidiaries’: Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., Landstar Metro, S.A.P.I. de C.V., and Landstar Blue, LLC. Transportation services offered by the company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, cold chain/temperature-controlled, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage. Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment and general commodities.
In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers. The independent commission sales agents market services provided by the transportation logistics segment. Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue.
Truck Transportation Services
The transportation logistics segment’s truck transportation services include a full array of truckload transportation for a wide range of commodities, and to a lesser degree, less-than-truckload and other truck transportation services. A significant portion of the company’s truckload services is priced in the spot market and delivered over irregular or non-repetitive routes, while approximately 25% of the company’s fiscal year 2024 truck transportation revenue was generated by BCO Independent Contractors utilizing Landstar provided trailing equipment, which frequently is used on more routine, regular routes.
The company utilizes a broad assortment of equipment, including dry and specialty vans of various sizes, unsided/platform trailers (including flatbeds, drop decks and specialty trailers) and temperature-controlled vans. Available truck transportation services also include short-to-long haul movement of containers by truck and expedited ground and dedicated power-only truck capacity.
During the year ended December 28, 2024 (fiscal year 2024), revenue generated by BCO Independent Contractors and Truck Brokerage Carriers was 38% and 52%, respectively, of consolidated revenue. Also, during fiscal year 2024, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 56% and 33%, respectively, of truck transportation revenue and less-than-truckload and other truck transportation revenue was 2% and 8%, respectively, of truck transportation revenue.
Rail Intermodal Services
The transportation logistics segment’s rail intermodal services operate with contracts with Class 1 domestic and Canadian railroads, certain short-line railroads and most major asset-based intermodal equipment providers, including agreements with stacktrain operators and container and trailing equipment companies. In addition, the transportation logistics segment’s rail intermodal services operate with contracts with a vast network of local trucking companies that handle pick-up and delivery of rail freight. These contracts provide the transportation logistics segment the ability to transport freight via rail throughout the United States, Canada, and Mexico. The transportation logistics segment’s rail intermodal service capabilities include trailer on flat car, container on flat car, box car and railcar.
Air and Ocean Services
The transportation logistics segment provides domestic and international air services and ocean services to its customers. The company executes international air freight transportation as an International Air Transport Association (‘IATA’) certified Indirect Air Carrier (‘IAC’) and international ocean freight transportation as an Ocean Transportation Intermediary (‘OTI’) licensed by the Federal Maritime Commission (‘FMC’) as a non-vessel operating common carrier (‘NVOCC’) and ocean freight forwarder. Through its network of independent commission sales agents, relationships within a global network of foreign transportation intermediaries and contracts with a number of airlines and ocean lines, the transportation logistics segment provides efficient and cost-effective door-to-door transportation to most points in the world for a vast array of cargo types such as over-sized break bulk, consolidations, full container loads, less-than container loads and refrigerated freight.
Insurance Segment
The insurance segment consists of Signature Insurance Company (‘Signature’), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. (‘RMCS’). The insurance segment provides risk and claims management services to certain of Landstar’s Operating Subsidiaries. In addition, it reinsures certain risks of the company’s BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstar’s Operating Subsidiaries. Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is ultimately borne by Signature.
Agent Network
The company’s primary day-to-day contact with its customers is through its network of independent commission sales agents and, to a lesser extent, through employees of the company. The typical Landstar independent commission sales agent maintains a relationship with a number of shippers and services these shippers utilizing the company’s digital technologies and extensive network of third-party capacity that provides various modes of transportation services to the company. The company helps the agents in developing additional relationships with shippers and enhancing agent and company relationships with larger shippers through the company’s field employees, located throughout the United States and Canada. The Operating Subsidiaries provide programs to support the agents’ operations and tools and data to assist agents in establishing pricing for freight hauled by the various modes of transportation available to the agents. It is important to note that the Operating Subsidiaries, and not the company’s agents, contract directly with customers and generally assume the related credit risk and potential liability for freight losses or damages when the company is providing transportation services as a motor carrier.
The company has more independent commission sales agents than any other asset-light integrated transportation management solutions company in the United States. Landstar’s vast network of independent commission sales agent locations provide the company regular contact with shippers at the local level and the capability to be highly responsive to shippers’ changing needs. The company’s large network of available capacity provides independent commission sales agents with the resources needed to service both large and small shippers. Through its agent network, the company offers smaller shippers a level of service comparable to that typically enjoyed only by larger customers. While the majority of the agents in the company’s network arrange truck transportation services for shippers, a number of the company’s agents specialize in certain types of freight and transportation services (such as oversized or heavy loads and/or rail, air and international freight transportation). Each independent commission sales agent has the opportunity to market all of the services provided by the transportation logistics segment.
The independent commission sales agents use a variety of digital technologies provided by the company to service the requirements of shippers. For truckload services, the company’s independent commission sales agents primarily use a Landstar cloud-based platform to enter available freight, dispatch capacity and process most administrative tasks and then communicate that information to Landstar and its capacity providers. The company’s cloud-based available truck platform provides a listing of available truck capacity to the company’s independent commission sales agents. The company also offers independent commission sales agents a variety of proprietary pricing, operational and financial tools via web or mobile applications. For modes of transportation other than truckload, the independent commission sales agents utilize both proprietary and third-party information technology applications provided by the company.
The company has 485 agents during fiscal years 2024. Landstar revenue from the Million Dollar Agents in the aggregate represented 94% of consolidated revenue in 2024. Included among the company’s Million Dollar Agents, the company had 81 independent sales agencies that generated at least $10 million in Landstar revenue during the 2024 fiscal year, which in aggregate comprised approximately 67% of Landstar’s consolidated revenue. The majority of the Million Dollar Agents choose to represent the company exclusively.
Third Party Capacity
The company relies exclusively on independent third parties for its hauling capacity other than for trailing equipment owned or leased by the company and utilized primarily by the BCO Independent Contractors. These third-party transportation capacity providers consist of BCO Independent Contractors, Truck Brokerage Carriers, air and ocean cargo carriers, and railroads. Landstar’s use of capacity provided by third parties allows it to maintain a lower level of capital investment, resulting in lower fixed costs and a higher return on invested capital. During fiscal year 2024, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 52% and 2%, respectively, of the company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 6% of the company’s consolidated revenue during fiscal year 2024.
BCO Independent Contractors
The company has the largest fleet of truckload BCO Independent Contractors in the United States. BCO Independent Contractors provide truck capacity to the company under exclusive lease arrangements. Each BCO Independent Contractor operates under the motor carrier operating authority issued by the U.S. Department of Transportation (“DOT”) to Landstar’s Operating Subsidiary to which such BCO Independent Contractor provides services and has leased his or her equipment. The company’s network of BCO Independent Contractors provides marketing, operating, customer service, safety, freight security, recruiting and retention advantages to the company.
The company maintains an ecosystem of digital technologies and applications through which BCO Independent Contractors can view a comprehensive listing of the company’s available freight, allowing them to consider rate, size, origin and destination when planning trips. The company’s LandstarOne mobile application provides BCO Independent Contractors information on loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations. The Landstar Contractors’ Advantage Purchasing Program (‘LCAPP’) leverages Landstar’s purchasing power to provide discounts to eligible BCO Independent Contractors when they purchase equipment, fuel, tires and other items. In addition, Landstar Contractor Financing, Inc. provides a source of funds at competitive interest rates to the BCO Independent Contractors to purchase trailing equipment.
The number of trucks provided to the company by BCO Independent Contractors was 8,843 as of December 28, 2024. As of December 28, 2024, approximately 97% of the trucks provided by BCO Independent Contractors were provided by BCO Independent Contractors who provided five or fewer trucks to the company.
Truck Brokerage Carriers
As of December 28, 2024, the company maintained a database of over 70,000 approved Truck Brokerage Carriers who provide truck capacity to the company. Truck Brokerage Carriers provide truck capacity to the company under non-exclusive contractual arrangements, and each operates under its own DOT-issued motor carrier operating authority. Truck Brokerage Carriers are paid either a negotiated rate for each load hauled or, to a lesser extent, a contractually agreed-upon fixed rate per load. The company recruits, approves, establishes contracts with and tracks safety ratings and service records of these third-party trucking companies. In addition to providing additional capacity to the company, the use of Truck Brokerage Carriers enables it to pursue different types and quality of freight such as short-haul traffic, less-than-truckload and, in certain instances, lower-priced freight that generally would not be desirable to the company’s BCO Independent Contractors.
The company maintains an ecosystem of digital technologies and applications through which Truck Brokerage Carriers can view a listing of the company’s freight that is available to them. The Landstar Savings Plus Program leverages Landstar’s purchasing power to provide discounts to eligible Truck Brokerage Carriers when they purchase fuel and equipment and provides the Truck Brokerage Carriers with an electronic payment option.
Railroads and Air and Ocean Cargo Carriers
The company has contracts with Class 1 domestic and Canadian railroads, certain short-line railroads and domestic and international airlines and ocean lines. These relationships allow the company to pursue the freight best serviced by these forms of transportation capacity. Railroads and ocean cargo carriers are paid either a negotiated rate for each load hauled or a contractually agreed-upon fixed rate per load. Air cargo carriers are generally paid a negotiated rate for each load hauled. The company also contracts with other third-party capacity providers, such as air charter service providers, when required by specific customer needs.
Trailing Equipment
The company offers its customers a large and diverse fleet of trailing equipment. The company also provides power-only services, as reported in other truck transportation revenue, utilizing trailing equipment generally provided by the shipper or other third party. In general, Truck Brokerage Carriers utilize their own trailing equipment when providing transportation services on behalf of Landstar.
Specialized services offered by the company include those provided by a large fleet of platform trailers and multi-axle trailers capable of hauling extremely heavy or oversized loads. The company, along with its network of capacity providers, offers one of the largest fleets of heavy/specialized trailing equipment in North America.
As of December 28, 2024, 14,225 of the trailers available to the BCO Independent Contractors were owned by the company and 184 were rented. In addition, as of December 28, 2024, 3,258 trailers were provided by the BCO Independent Contractors. Approximately 25% of Landstar’s truck transportation revenue was generated on Landstar-provided trailing equipment during fiscal year 2024.
Customers
The company’s customer base is highly diversified and dispersed across many industries, commodities and geographic regions. The company’s top 100 customers accounted for approximately 46% of consolidated revenue during 2024.
The company’s national account customers include the United States Department of Defense and many of the companies included in the Fortune 500. Large shippers also use third party logistics providers (‘3PLs’) to outsource the management and coordination of their transportation needs. 3PLs and other transportation companies also utilize the company’s available transportation capacity to satisfy their obligations to their shippers. There were 10 transportation service providers, including 3PLs, included in the company’s top 25 customers for fiscal year 2024.
Technology
Landstar focuses on providing integrated transportation management solutions which emphasize customer service and information coordination among its independent commission sales agents, customers, capacity providers and employees. The company continues to focus on identifying, purchasing or developing and implementing software applications and tools which are designed to assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of their independent businesses; assist customers in meeting their transportation needs; assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses; and improve operational and administrative efficiency throughout the company.
The company has engaged in a multi-year effort to implement a comprehensive strategy focused on the long-term development of leading-edge digital tools to empower participants in its network to succeed in the technology-driven transportation logistics marketplace. As a result of this strategy, the company offers the following tools to participants within its network:
Landstar TMS: A cloud-based platform for truckload freight agent workflow;
Blue TMS: A cloud-based platform built specifically to service the truckload brokerage contract services market;
Analytics: A suite of business intelligence applications powered by Microsoft Power BI for independent sales agents and BCO Independent Contractors to access information and identify trends in their businesses;
Pricing Tools: Landstar-proprietary pricing application developed with data scientists using historical Company information and third-party pricing data to provide independent commission sales agents with near real time market data;
LandstarOne: Mobile application available to BCO Independent Contractors and third-party motor carriers providing a one-stop location for available loading opportunities, as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations;
Clarity: Landstar’s proprietary freight tracking tool that incorporates geo-locational data from, among other sources, electronic logging devices, trailer tracking devices and third-party data aggregators;
Agent and Capacity Portals: New and improved cloud-based portals built to provide a single on-ramp to a multitude of applications, tools and information available to Landstar independent agents and capacity providers;
Trailer Tools: Applications empowering independent commission sales agents through the automation of the company’s trailer request and trailer pool management processes;
Credit: Application that automates the process for independent commission sales agents to request customer credit.
The company’s information technology systems used in connection with its operations are located in Jacksonville, Florida and, to a lesser extent, in Rockford, Illinois. In addition, the company utilizes several third-party data centers throughout the U.S. Landstar relies, in the regular course of its business, on the proper operation of its information technology systems.
Corporate Services
The company provides many administrative support services to its network of independent commission sales agents, third party capacity providers and customers. The mobile and digital applications purchased or developed and maintained by the company and its administrative support services provide operational and financial advantages to its independent commission sales agents, third party capacity providers and customers.
Regulation
Certain of the Operating Subsidiaries are considered motor carriers and/or brokers authorized to arrange for transportation services by motor carriers, which are regulated by the Federal Motor Carrier Safety Administration (the ‘FMCSA’) and by various state agencies. The FMCSA has broad regulatory powers with respect to activities such as motor carrier operations, practices, periodic financial reporting and insurance.
Interstate motor carrier operations are subject to safety requirements prescribed by the FMCSA. Each truck operator, whether working as a BCO Independent Contractor or for a Truck Brokerage Carrier, is required to have a commercial driver’s license and may be subject to mandatory drug and alcohol testing. The FMCSA’s commercial driver’s license and drug and alcohol testing requirements have not adversely affected the company’s ability to source the capacity necessary to meet its customers’ transportation needs.
Additionally, certain of the Operating Subsidiaries are licensed as Ocean Transportation Intermediaries by the U.S. Federal Maritime Commission as non-vessel-operating common carriers and/or as ocean freight forwarders. The company’s air transportation activities in the United States are subject to regulation by the U.S. Department of Transportation as an indirect air carrier. One of the Operating Subsidiaries is licensed by the U.S. Department of Homeland Security through the Bureau of U.S. Customs and Border Protection (“U.S. Customs”) as a customs broker. The company is also subject to regulations and requirements relating to safety and security promulgated by, among others, the U.S. Department of Homeland Security through the U.S. Customs and the Transportation Security Administration, the Canada Border Services Agency and various state and local agencies and port authorities. In addition, because the U.S. government is one of the company’s customers, the company must comply with and is affected by laws and regulations relating to doing business with the federal government.
Seasonality
Landstar’s operations are subject to seasonal trends common to the trucking industry. Historically, truckload shipments for the quarter ending in March are typically lower than for the quarters ending in June, September and December.
History
Landstar System, Inc. was incorporated in 1991 under the laws of the state of Delaware.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
