Landstar Earnings: Freight Backdrop Under Pressure but No Major Surprises

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.