LSTR - Earnings call transcript Q2 2024

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Operator

Good afternoon, and welcome to Landstar Systems, Inc.

Second Quarter Earnings Release Conference Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions] Joining us today from Landstar are Frank Lonegro, President and CEO; Jim Todd, Vice President and CFO; Joe Beacom, Vice President and Chief Safety and Operations Officer; Jim Applegate, Vice President, Chief Corporate Sales Strategy and Specialized Pride Officer; Matt Dannegger, Vice President, Chief Field Sales Officer.

Now I would like to turn the call over to Mr. Todd. Jim begin. may you Sir,

James Todd

you, Bill. Second to XXXX and Good Earnings Conference afternoon, Quarter welcome Call. Landstar's Thank

Before we begin, let me read the following statement.

a Act made The Securities on historical that is safe forward-looking under based statement following statements. are the are Litigation not Reform this of during Statements facts XXXX. conference call harbor Private

uncertainties Landstar's but we is, strategies plans, not and operational, for detailed Such information XXXX other the call, the may time limited Landstar's contain conference fiscal in objectives, statements this that Factors including, from information business forward-looking Risk in nature, and subject to by During make that risks risks, to, relates to to legal and financial time. described Form and the XX-K filings section SEC year expectations.

results actual information. or those to such no cause could publicly events results differ forward-looking undertakes or from undue uncertainties forward-looking and Investors information, revise risks anticipated. reliance materially or obligation update not historical should place on Landstar to and These any

remarks, Officer. Frank Matt pass Dannegger, and are President Chief the President Field Landstar's CEO, President Jim available and to it With his Safety and Jim Vice Landstar's this Joe, Beacom, I Landstar's Matt and Applegate, and remarks. and will Corporate Operations for handle Lonegro, Sales prepared opening for questions. Vice now Sales, Chief with and and I'll Officer; Lonegro, Frank Joe Officer; afternoon Specialized Chief Strategy Landstar's me Executive Officer; Chief Frank Freight Landstar's

Frank Lonegro

and JT, Thanks, afternoon, everyone. good

network day. align for and safely work entrepreneurial continued and to at at we together BCO success. of our of engage It drivers event were our agents, Roadstar Landstar to purpose with with month. able customers owner-operators every this us growth their First, for shared to deliver and time BCOs as I incredibly thank group mile the All-Star outstanding many BCOs, spend want energizing to to annual whom of exemplify carriers is passion earlier million freight accomplishments Landstar and held This our some safe our future celebrating

this afternoon well. mentioned of As JT Matt's agents earlier, Matt and Applegate will our I'm its the sales coordinated leaders Jim approach our Jim Dannegger, by and Landstar organization. serve and sales be joined to to driving efforts pleased new

As we are we already and we initiatives. our laser-focused of Mexico the executing where scale haul areas significant back incremental identified half and into growth. we move XXXX, we believe opportunities for strategic on heavy have are X Cross-border have have on

each of focused BCOs remain and improvement agents, to on the level our support customers, also and in and We carriers our continuous day. service every provide to commitment we

business relatively Landstar well demand Turning to the to soft the characterized freight X. Slide capacity. truck and resiliency by and I believe our continued the available considering quarter, results Landstar second to speak performed readily be of strength in XXXX environment the that model.

and very sheet balance strong, continues Our be priorities allocation our capital remain unchanged. to

a stockholders. I'm committed and authority program buyback strong long-term to stock our I'm existing believer on executing to benefit company's our in the opportunistically

repurchased noted deployed common million of As the the approximately stock XXXX and XXX,XXX quarter. $XX release, in over we during second shares

our to quarterly X% dividend. announced also We increase today a

owners to of fleet technology refreshing allocated equipment. continue independent of leading significant We trailing a for in of towards our this business and invest network year our capital solutions amount have

freight freight XXXX spending. impact to environment The accumulated overall consumer to amount in continue In in the second demand the of generated inflation goods the quarter, truckload on was impact relation soft. of

environment truck just historical the evidenced output below as and throughout the a shipper. standards, was and above when conditions We remain loose fluctuated IFM capacity in quarter by market by measured inconsistent that favor Industrial XX. an fairly

X% our year-over-year, guidance the loadings, range. heavy first of pleased which mentioned of as quarter our improving growth line bottom exceeded the growth midpoint second that above haul the incrementally is in priorities, to from quarter. one Even with backdrop, plus was X% Landstar's experienced grow year-over-year I XXXX results see strategic

our be load during capacity pandemic. the incredibly expected, the given after line substitute strong and as haul to soft continue and volumes the other an the declined side, run On environment, company more average than

earnings conjunction truck Our loads in to second the number with truck XXXX quarter our be to X% issued be and XXXX guidance for quarter. first to flat quarter overall call release second XXXX below the below X% revenue X% quarter via hauled to the of per second load

X% the XXXX of number end actual the the via The guidance. quarter loads truckload hauled was below second XXXX second of in low our truck quarter at volume

prior in XXXX truck the mostly decades. time year second below X.X% quarter, were to loadings quarter for revenue loadings which our in was the truckload April second guidance. disappointing the fiscal driven below fiscal of a guidance only May, compared X by Actual the slightly below midpoint during in per softness The nearly was

the the into scale, XXXX will our Turning load. JT results second the quarter. drive and X provided network, to to get Slide and revenue, details loadings looking rate systems per the operating and at support during helped generated on we

As culture quarter and our noted of transportation our success. continued realize is for career first to on most sector important call, how the I've in been my earnings Landstar's safety-first

performance agents to at critical Landstar importance the safety direct the is a of result employees of of and Our of Landstar. BCOs work and operating professionalism every safety the safely the day reinforce thousands who

to to discussions the the XXXX. are an DOT customers. dedication impressive index freight I'm highlight to proud compared metric our million strength, accident point to and our and speaks is X.XX our skill, This of period talent of of BCOs that with as improvement agents a of of X% differentiation in miles during reportable provides operating able of report X months per the an first corresponding accidents approximately frequency an XXXX,

decreased first to expectations trucks, slowing in Slide the in side. truck QX of second from sequentially our capacity declines XXX X in relative to BCO count BCO Turning by the consistent with QX. the quarter quarter

repairs. decrease. typical quarter. to continues incur by in be year-over-year truck XX% rates count since cost has increase to is BCO in the BCO On XXXX turnover the of turnover the It BCO influenced basis, repairs of the truck a count approximately significant decreased when truck out to end second period the extended than would the but truck the time saw we operating many BCO owner-operators, pace quarter. continue given in at and coming We expect awaiting by the to of trucks slower count a in service faced second months challenging environment decline of are

I'll now pass through more to in walk to JT you the the call second back financials quarter detail. XXXX

James Todd

Thanks, Frank.

Turning to Slide X.

of guidance. loads soft in guidance midpoint the load earlier, a slightly Frank to previously number at fiscal came of came revenue truck issued by As mentioned end range, company's per low primarily the below a the due Truck in May. the of our hauled

second revenue was X% the million $X XXXX in loadings was Non-truck The or XX% non-truck decrease decreased to attributable XXXX revenue second below due the shipment decrease to transportation in quarter per air high-value mostly from service in customer. a quarter. one revenue transportation

hauled As on hauled year-over-year, equipment on for the revenue per increased van unsided by loads revenue per whereas breakdown loads X% equipment by year-over-year. in platform X% load Truck Transportation, load decreased

per the equipment Revenue on trucks on mile pricing surcharges We pure per excludes by X% quarter BCOs hauled below relatively XXXX number, the fuel XXX% that XXXX it consider van second a mile BCO in followed the billed to by BCO. as loads quarter. are customers revenue second was paid to

the from stay year We remains market believe the approximately has of amount operate It pre-pandemic X Landstar's pre-pandemic second ago. the today rates years mile softened will BCO than relatively compared van XX%. incremental per by as levels revenue that significant cost truck ago, XXXX on that although should a above higher be quarter noted given to to equipment a

increased sequentially to April equipment by decreased BCO hauled per June. BCOs from these per on from from typical X% whereas the X% pre-pandemic April, increased April March X% and May, van on patterns. van month-to-month mile and underperformed equipment changes to Revenue May patterns, to to March to The May June May to change mile historical sequential from in revenue pre-pandemic outperformed April

relative to to equipment is BCOs, van month-to-month increased are more volatility As from to April, the May April revenue and unsided on sequential compared standard hauled mile platform per due revenue increased loads often to March and from mix heavy per on decreased May The equipment trends volume. unpredictable of equipment. X% to June. platform specialized that to This by unsided from X% X% mile flatbed generally between

one quarter of year-over-year areas mixed to the and were strategic our in from up approximately to approximately unsided each load second increased as second year-over-year. in heavy loadings category during was a the focus haul approximately revenue haul tailwind platform Heavy Heavy X% as quarter. up haul XX% X% our represented haul of a revenue the XXXX the of This XX% quarter. revenue load XXXX revenue, per approximately heavy per increased percentage

X% year-over-year a commodity. Transportation decrease XX. provided revenue decrease quarter. in compared revenue a in Slide by revenue to our and down was equal. a category, change durables, Within largest loadings We declined by per second per commodity year-over-year load XX% year-over-year revenue XX% to consumer volumes, in commodity XX% on on Turning approximately while and load Logistics segment in was as decline X% XXXX the revenue share revenue

X to our XX% quarter. our across compared was revenue about commodity collectively which transportation top revenue, categories, Aggregate up of make XX% second the down XXXX

machinery and decreased it include decreased XX%. Slide the Automotive and be From second share parts helpful the commodity our top to of some commodity, displays we thought While Products also XXXX loadings performance X% decreased XXXX quarter, on would X to second Hazardous Building within by XX XX%. equipment Materials quarter color revenue categories. X%. volume total decreased

XXXX Additionally, pandemic based from demand, the the which substitute line us performers haul second decreased varies during for and the on one quarter. consumer one of strongest significantly XX% loadings,

other Landstar EPLs and a for to truck provider truck Also, trucking brokers. is companies capacity

our of providers our to service all almost capacity our to than behalf capacity. haul truck transportation more to During truck Landstar during substitute line available Landstar those often reach readily periods companies The hauled in of is including times reflected offering. all by freight on of capacity, amount tight out transportation the provide groupings, commodity more freight other of truck

second transportation other in more on XXXX model of transportation companies and was clear quarters, is the in XXXX revenue truck Revenue revenue companies XX% XX% hauled quarter XXXX on Overall, respectively. behalf of XXXX transportation below XX% that the in indicator other second truck was a hauled accessible. the capacity and behalf our readily quarter, of second

in contributed the downs revenue highly XX,XXX remains categories, with with in customers, X% the ups of our business half. various customer and which diversified, XXXX Even none first our of over over

Turning XX. to Slide

the quarter, in XXXX. to quarter. XXXX as second XXXX of XX.X% revenue Gross in the the was profit compared in of million period of margin compared gross margin gross corresponding X.X% was quarter profit $XXX gross $XXX.X profit profit For of second the to XXXX second million

year. last to of XX.X% to revenue contribution was In the in variable second XXXX in $XXX.X margin the XXXX same XX.X% the was period Variable quarter million $XXX.X in compared the quarter compared contribution XXXX million second second quarter.

points The contribution quarter to variable carriers decrease XXXX revenue in primarily in decreased higher variable generated modes of truck to quarter, an by XXXX BCO the transportation. brokerage carriers, partially paid margin second brokerage by increased attributable contribution other generated quarter than higher truck which to was the percentage margin the margin XXXX of as was rate revenue than a a by in contribution independent basis as compared variable XXX on second paid by was generated has contractors, the mix second typically rate offset the revenue

variable company's Slide administrative variable gross general infrastructure, a of components comparison percentage to gross selling, certain basis. and principally and due the as impact smaller cost XX. to costs to Operating primarily profit the profit in Turning contribution, of declined income of both contribution and fixed

Other the of increase to were was quarter in in $XX.X primarily million gains This operating trailing decreased million XXXX. costs due sale to used XXXX equipment. on second compared $XX.X

to $XX.X $XX.X XXXX million decrease costs the as XXXX Total accidents million XXXX claims were XXXX of claims were compared insurance revenue costs BCO compared in of and and period period. X.X% attributable to XXXX XXXX both decreased second insurance to The was miles in traveled during the and the in periods. BCO severity primarily and Insurance XXXX. in claims the costs during decreased and quarter,

year XXXX quarter, second and included claims $X adjustment claim costs XXXX net prior During of estimates. both and million unfavorable insurance to the

costs $XX.X in XXXX million $XX.X quarter the general quarter. to second were second compared Selling, million administrative and XXXX in the

As programs model, of we SG&A of in the these have past, important calls key of previously our an nature our the our defensive on compensation provision and the component a discussed Landstar's line incentive given highly relating is feature cyclical business. regularly to

Each to at of In approximately XXXX, following portion these equal, period the quarter, SG&A end million. a $X the Landstar reduce of The established second first credit compensation in end incentive quarter of of at impacted just over each and XXXX the the accrual were of credits second significant credits expense. a recorded booked quarter. each the favorably

our line XXXX by the compared compensation employee increased programs favorable offset the on of costs second customer SG&A provision benefit quarter, bad XXXX Landstar the the increased incentive costs. experienced second partially consulting for in and quarter, debt quarter, the from decreased Apart project impact in net to

second Costs associated and the XXXX appeared in with each quarter XXXX period. convention our in same and each the annual agent in were of approximately

Depreciation second depreciation compared This to agents and in and depreciation was $XX.X quarter, capacity and applications million third-party on to upgraded in primarily on was XXXX. providers. continued use the decreased investment the trailer for software amortization decrease by company's fleet, offset partially new by increased tools in XXXX million resulting from due $XX.X

in the XXXX to second income second quarter effective The tax compared XX.X% rate quarter. income effective tax in of XXXX was an XX.X% rate the

capital significant balance of back stockholders, cash million. to of the cash Cash repurchases with first during from $XX the at short-term operations expenditures was to half XXXX share ended The and first of XXXX company the $XX dividends investments amounts sheet. to our continues paid We million and and were $XXX million return half. of XX capital $XX Turning million. and with $XXX million, for Slide quarter looking flow

addition, quarterly is sheet noted the the the model. release, capabilities press testament company balance regular a cash-generating the in Landstar to of by strength as The X%. In the increased of our dividend

you, to Back Frank.

Frank Lonegro

Thanks, JT.

should progress year-over-year half we through to second As ease. the comparisons begin

by truck, sequentially. improvement a X% Looking truck X% line load from similar patterns decline of via per QX, hauled offset number pre-pandemic a loads QX top to seasonality to at typically yielding historical X% the normally X% would yield revenue to in a in

patterns In volumes XXXX, month-to-month July, seasonal pre-pandemic as our to normal on have we trends. move from June based truck sequential performance trended below

patterns. the On truck these revenue other load hand, per outperformed has pre-pandemic

XX. Turning to Slide

volumes to of flat quarter Our XXXX are revenue truckload third to below that for up the load versus range X% in and third XX% XXXX year-over-year truck will be be the per X% third quarter. quarter expectations the XXXX will a

truckload On for basis, guidance X% the a ranging up to our and revenue quarter. X% third a up X% truck volumes XXXX in to versus decline sequential second implies quarter the per load from X%

similar We to somewhat XXXX to non-truck revenue quarter. our also the loads we for second be expect what in experienced

quarter these $X.XXX in per be on expect billion of variable Based XX% revenue. X.X% billion and we to per $X.XX be the earnings to of to contribution insurance and range guidance and in margin a share XXXX third the quarter $X.XXX claim in assumptions, share. range The to the of revenue third XX.X% incorporates XXXX costs approximately $X.XX BCO range to of of estimated

second That we One obviously of the in $X.XX third the reversal from our second the bonus quarter a the last quarter. quarter of the accrual. XXXX the range point and in a of portion quarter the third before primary of for is EPS difference reason between benefited guidance the in take $X.XX we midpoint achieved EPS your benefit repeat QX significant won't questions,

like we'd open questions. Bill, to for that, With the line

Operator

question-and-answer question of much, Research. [Operator have you we the of the line Group this coming We from At the Instructions] Thank will Wolfe time, begin first session. sir. very Scott

Jacob Lacks

strong This a is that on in for be would is up thoughts Jake large I guess, in pricing is divergence. but improvement this Landstar? that for to guidance LACK this the decline do implies a industry? firm to Or think sequential a on for sign great this The you Scott. it specific more pretty And volumes. your rates, get sequential is I pretty the starting to reason guess,

Frank Lonegro

July a we looked see the as on to of We little Yes, was was numbers. softer. equation, bit to a but Jake, lift rate us surprising certainly at bit little side a were well of the it little July's as excited

holiday be of some there the the that July Some was could of it and week around the that the of Xth sort of seasonality typical the weather and week. second time in There hit.

stay are with So I going at there that not and those to whether things, we couple a of were think, or look us. wonder

early little progress think and to August, the June I call ball to color JT September to inflection July you through. we probably can obviously, a July in August, too second on bit give half. But the it's how around as true of

I and did it's year We it did it and right just didn't that last now. year, think maybe coming off the we happen. bottom this

lean little say are and a to happy here reluctant So days in that again.

think remarks. But little heavy seeing A that lift things bit on. a in that I we're the of do side. we're revenue prepared of working the the mentioned haul on lot We

you me JT exciting color let that's But give on think month-to-month, I the let for too. us. some

James Todd

load end basis per of that weeks quarter, Yes, per about absolutely. of we June truck benefit typically on truck drop We're third good first underperforming the off from XXX both by Thanks, X% walking loadings June we Frank. on strength Jake, July. to points. the revenue loads about workday with the pretty toward saw and X of a

hand, revenue the a we basis better XXX in other good June point to per X load. basis process of points typically On on based we're weeks about load, guide truck XXX and per July, revenue get about

for guide. kind launch that's So of the the point

Jacob Lacks

That's helpful. while seeing we're carriers levels above pre-COVID trending And is do then and lower below active and broker BCO think keeps approved is that? pre-COVID. count you Why nicely

Frank Lonegro

side in color. on some, it it We and analysis kick I'll give and Joe say, over some more to did I'll Yes. to last here a turn you August. the second approved off carrier purging

So you're seeing impact a of basis. that on the year-over-year

of side. to on BCO rate call, downturn we actually let will thought came we we QX rate relative on side, that BCO let that time, impact that decline to provide QX What prior of some on color. well. we're the to lessen what's the But me happening say and and it and hold and Joe really clearly, it true rate the trough was would believe in as the decline slow did the see length continuing the fruition, is of and did, On the largest the over

Joseph Beacom

Yes, Jake. Sure.

that seen we've pressures and cost duration it tightened XXXX the also So pretty front. big of is They've think margin that pressure talked enjoyed the been the as had our Frank The is to continue. we've that tighten. continue we've have impact alluded through about to splits there, and having time. seen over have What on the brokerage a I cost tightening clearly agents BCO

So improve towards leaning more see help going loadings and agents you that's I there. think BCOs, to

I is, though, revocation I counts we thing everybody as just at. at would when X call active but look think look the truck that counts carrier same us the we're still our that can carriers carriers. don't at on probably you data here. carriers, we have X look the carriers carrier, a authority at move, we within caution, One And those and looks and

the industry, as we look seeing Well, and not that I trucks And within that revocations. that revocations see modest of what you're are are think decline don't the in carriers you an number right? mix, in is this at

What the spot our carriers, see the the do, carrier also the of carriers small our only significant carriers. see what's And truck participate were at larger the we carriers. market data the carriers get some number carriers. database still get decline we're is who within but macro especially So to of we declines X count to carriers, don't of X of see couple in a in we some in those We that and we look from years like ago. some that we in active not

carriers exiting looks albeit take and getting business, are from as those cost the viewpoint, effect. to careers the demand kind that the are increased and our So slowly, larger us, it smaller things smaller of just and limited

how of kind it. see we that's So

second And for July leveling truck pretty that since week was And July decline been we've something of quarter of a good positive time count the coming. the had week lowest net seen last indicators of that's we've us, a XXXX. long some in things off. the again, was

early hopefully positive BCO for forward, indicators So indicators, but Jake. count going

Operator

to of now Alliger We from coming will of Sachs. the move the question Jordan next Goldman line

Paul Stoddard

from that the guess we that that on kind of question EBIT ceiling that? when to XX% I there into getting percentage Paul that see quarter, the first variable on when guess Or into high percentage XX at pre-COVID? of keep a Jordan. be that Stoddard range started is for up a just we start we on can see I look the we to going structural have to This coming contribution just is, is costs

Frank Lonegro

some see at declining environment, I'll and crack revenue numbers. the it's drop Yes, first and to the result harder ultimately can to in gaps a take mean, some line. of be bottom fixed environment rate But it obviously, up in the that. turns, our to going costs environment not to volume JT turns mean, more are go I fill a to what I as going as we're going the and

operating you're leverage pull forward. So to get as that going we

of going rate those, how volume how related and that's side to troughed fall coming line. lot to couple looking of A But Obviously, the expect last out in see more both we've as of the of of to much forward we that's quarters, depend we other have we're on to related. it's much and stronger. bottom the

look at got to really some internally initiatives the cost We've structure.

mentioned the JT on not call, I in of fixed opportunity this call, that the on think there's equation. side cost As the much prior and

we've or that the have certain We are loads whether got loads. X.X million X.X million environment, costs in

on one. So we're that focus going to

JT? that doing fill sure cap position. every respects that a that making position the comes cost stays appropriate making level. job an to really of and open of is and we sure at cost And our We're that good have looking in absolutely at some sort JT's structure

James Todd

to operating you I Ultimately, is and to Frank. from through the I highs, 'XX. What it's mid- is a VC will OEM back dollars an Thanks, to income. that respectively, XX Paul, our believer standpoint. we climb of Yes. I'm XXs, how still big a in we OM, tell ability the incremental XX push XX% down 'XX good in question. clearly, high pandemic mean printed and

drive insurance Frank's cetera. it's price of versus and from comes the point, equipment need earlier for vols, the majority price if more exposure, doesn't To more as easier to et that that leverage

last had not to X unique last pressures way note, and -- positive technology. have for the X the big a the Landstar, we've by insurance inflationary here years been -- and that On

X have now programs, our row excess in of decelerating casualty premium a We is on which good. years gross dollar

think I May X gross about was X increase. recent X% our dollar renewal most May a

ease inflation should to bit pressure normalized tech So kind that of begins that more the rate, little as a emphasize. start at hopefully side growing and a

would just Paul, I tell time, And card, of you, the achieve look that incremental ability a take over back pre-pandemic, XX% even demonstrated we've our push-through. to baseball at the

Paul Stoddard

great. follow-up, we And No, view as think we look any about as the obviously, great. just half, and as second look kind kind volumes quarter third the quarter. a season That's volume out you guiding I as well? of to volumes where into heading the of in into lower for could think fourth peak guess

Frank Lonegro

Yes.

I'll a got then so shot terms his first force, the of at folks chime Matt sales some from in the a Dannegger, So little field one, in that that bit who's in field. he's take we'll and hearing color

compressed this be peak a going perspective, is by to a day calendar days. couple season from Just of

per on basis. in volumes So It may things. scheme the of we'll elevated likely see some impactful a be grand day not

couple the But to what months in consumer year. come to income it's going to card disposable down debt of the and the going or with me, the is of credit to do consumer last

peak years. the really last in We haven't had few

that would some half you second year. there's the I GDP So make think going the spending certainly, year, in be think of to numbers this the

to inventory They I back of where consumer knowing lean are build wants up going type want from a them sales lot were peeled the to how wholesalers into And they to But have be. and just certainly of in this honestly, on interest the to the much the it's what equation, a highs. an ultimately, general COVID retailers the rate not the is, the buy. there environment. other think to But depend inventory, in side on where reluctance going of

some of if now, So give Matt can got take conversations Matt? it. that that dive But sort capacity wait-and-see to with customers on. we're We've you it's in. right going I for there, approach. ready good we're We've got to a our color is ready think

Matt Dannegger

and Paul, Matt. with June, are is what going we Yes. good down peak really through this customers a get Normally, about at look take needs their season. our

at lot And of small that group like of wasn't not it to bit. saw drive e-commerce customers anything all. at course, a last last of it's going 'XX a like relatively 'XX. it's Here much projection And is early year, decelerated substitute we line a parcels, a Landstar, the look year. peak in haul. Certainly, little that

And right peak season now, up towards we vibrant for we're next as our not overly an closer We'll that. year. on 'XX. looking month we're or the here But finalize projections that final so in looking get this

Operator

the We from of of will Stephens, Inc. move now to coming next question the line Daniel Imbro

Joe Enderlin

help This routes? is loads to maybe you Daniel. much there provide How better Could you BCO and And on for on maximize Joe productivity? select Enderlin is then go how out BCOs higher? update room an maybe break training or procedures

Frank Lonegro

Yes.

me and one, but on a question. Joe. He's great front it's center one to kick that Let that

Joseph Beacom

is Joe. the slowing kind it's, BCO that with of we X% second question, up We're quarter. and a Good which quarter utilization up from were kind Yes, Yes. And think the of a first X% sign. I year-over-year the again, good in thing. terminations in standpoint,

a sign. it's I think good

navigate to or destination, they app, somebody anything loads utilization -- their around when either plan, to like the that From so haul. and X-day a them have type they orientation a required equipment particular at to them and the business we internally origin, look a or can go country their on loads and customize can based use our leases a standpoint, and fall on, we hands-on through program laptop fit that can that via opportunities, they feed tutorial that them helps tools loading exercise have we we and for it's

really have And emphasize beyond agent we need all do the is relationships the within technology, system. the what to

relationships make and agents, introduce those So very trust unique and back just very the And long X,XXX time. critical BCOs to of that for about and that tend BCOs that and establish is and we've do forth and BCO between take got that and it's a for to a hold as the own and themselves well agent stay to grasp our very, that model. fairly here

in that a off One were could have you struggled 'XX gotten little volumes have those things the when things of live bit and a as freight high, app. And seen relationships the 'XX little we've bit. that those didn't have so leaner,

our redoubled relationships, the pay going new agents it's and those same the perspective are letting the technology and to trying and there's know can we've currently there a great parties. with the help agents make and which to efforts also fleet field and we're make the dividends, that from there sure it's So helping but to thing that efforts doing our in introductions, particularly them out both BCOs to to BCOs redouble

you feel if free. that an Matt, on to And agent from please comment want perspective,

Matt Dannegger

Yes, been big here year. this for Joe, us push a that's

tend model agents, and New with times brokerage they really the of from come BCO lot aren't familiar that and a background, a to how works.

into easy you fall right? And it's to know, what so

that's value come to big BCO new for grained that and customer. get to up bring this culture So that ways with they push the in a Joe We're year. them working the with us some to

Joe Enderlin

That's helpful.

new demand follow-up, underwhelming Durables end demand fake a shippers markets a Manufacturing or increasingly It from during February. in within after remains you As demand? head pull-forward sounds is of anything a contractionary seeing COVID. anything on Are after optimistic Consumer these like

Frank Lonegro

Yes.

North side, I'm things manufacturing manufacturing I and look the basis. of When on manufacturing that. and on nearshoring think mean and up American bullish try I I couple things long-term play. like back on a to a at American there's at

in we the along to to election the where be in part go I going is a highlights look way. forward play actually the Obviously, going been I were at When into it it XXXX. of the with since the wobbles some that as have was It's good you, quarter, durables a I company line. see that Consumer in been in was hear average. to line while the mean consumer There's Durables, but

So that's I'd way back. say its on

Machinery is environment kind rate is doing are Auto there. over-competitive. of okay, vols The

well, wasn't there. -- business Products it So within play a is embedded the that. is Building center data and doing there's volume

in there. So there's a lot of good business

cyclical on the hurt one in It line. that top the were was his a little that bit remarks really out super called that the of JT us prepared things elements

a their going of they do? question to money on. the what it's me, I mean to to is What GDP, are spend going consumer

pull forward. I think seen the you've

I happening at which you think years X durable replaced. bought or well kind X point what's of ago that to it's there. is needs There a the telegraphed, get

that helpful when come So back around. will be us that cycle for does

bullish I'm it's work consumer, American ultimately of economy capabilities. emphasis is on regardless American put the people manufacturing. is, the and U.S. and put to think North manufacturing more to going And victor the to on and the American back again, more I And American the who election going

good I see term, long in So us a spot.

Matt Dannegger

with that the into even was even there a Frank I Yes. whole out, And haul would I the X% touch basis, customers, unsided in component backdrop Jim ISM just increased per volume heavy choppy And pleased we that mentioned, sequentially. across Joe, broad-based a really that X% grew dive you bunch more. sequentially. was if platform of load deeper add, revenue we industries. can demand the called on different on that

James Todd

a seeing that's that a that have over the things of on wind. couple outlined of the been of think, that, strong we're might building and kind data some kick of if we're refurbishment back seeing I side, centers. think gas something really like be kind sign encouraging. just to of keeps future oil are And seeing we also And in Yes. to project that end seeing markets for and projects equipment I products, that's actually industry. But up that. pretty Frank encouraging, the up. We're the the for And starting It something

Operator

the now TD Elliot will of the Cowen. question Alper from We to of next move line coming

Elliot Alper

for And bounce I did was to clarify remarks. weak thought then back Elliot I in Jason prepared in in the just that. I why Any May truckload? want heard idea June? It's that that Seidl. on Great.

James Todd

May Eli, X.X% almost little automotive softer Yes, a we we get good on X.X%. about it's typically and always our tailwind a question. you down per basis, saw accounts a workday The couple weakness We about a were positive. April in from May. of were

a in was May well. companies from loadings little other as transportation soft Some

volume Coming June. a the April to XXX perspective, about bit good From pretty starting It usually which off close a was get an was we May surprising. increased points June, we plus May a basis admittedly XXX we into that point, low it. felt little to off

Elliot Alper

remarks. your up then prepared that. maybe you brought as of hear in an Mexico Okay. focus to Helpful. commentary Would And around more area cross-border love any

Frank Lonegro

it and here a Yes, to Joe. over then I'll kick give shot

in is for great obviously, initiatives. long-term cross-border, It's So play thing near-shoring important us. an of a terms

right it's so the think And absolutely I strategy.

It's getting more competitive, same the thing see not surprisingly, as other people are that we seeing.

were We've there, clearly, a got down the I in facility great mover there. down folks Laredo think first gateway. a great we certainly

introduce to into agents that. continuing So

wasn't thing basis the a cross-border. It's probably right it think quarter do. year-over-year on absolutely do best our I for to So

I'll that. let Joe on some color provide

Joseph Beacom

off kind of bit Thanks, a volumes we've that believe at the average, just little believe were handful are that consumer the business. slow durable of a Frank. actually We that accounts moment. Yes, of to company don't We a than isolated lost greater down. consumer lot they're goods, our accounts, the

top when looking rebound occurs. of for that, we're So any that on

got the are our slogan our facilities of and the But border with in made that PAT CT tools, to interior our certified. all Frank's necessary for point, it's Mexico simple with a which around Mexico on facilities, we've or provide carriers across strategy and to the whether gateways, years, the number we've had really of capabilities,

in We in really think we salespeople the think we've framework. We've back, When interior. we'll that. that dedicated some great to great are a a do be things position bounce added got

them opportunity, So to help got of if but we've has trip make agent the the an along. resources want an to south there doesn't border,

that and a think we right things right for few kind So place of the forward in strategy to just our waiting turn the going with way. we're

Frank Lonegro

cross-border cross-border initiative, ago. folks engaged introducing, in maybe Matt, agents the obviously, done time there haven't that a to long that really Yes. we've have we're down got

you're about doing So what a bit there. tell us little

Matt Dannegger

big really Mexico. Frank. Yes. familiar the push need to It's been a We for get with agents

over You've you're It to borders. something customs used down little there, got going the that doing. it's can scary if a bit be not

we're that them. really from take away trying fear to So

agents. We're meeting So is with there. the the field out

done Mexico country, about the agent business talking Here of meetings a throughout guess, down their in grow help there. round them the we robin I with, spring, got and how can we

to is them to that with tremendous the -- I think them get It's we're them jumping into a at everybody trying comfortable right and lead and just in so industry looking really now opportunity sell expectation fear take to getting their that the up is of it. on of out We've got classes, table down it, what customers. there, coached front Mexico how and in getting the operating XXX

wouldn't team think, So it's now, that in up of agents, a I the is sales crawl-walk-run and really right and starting to over push little entire been right the full but throughout XXX, agents front say market coming pushing of right And chasing to really the to now be opportunities. now. we're we've I get identified a great we're really with we're those, crawl

I of So shape back, economy good the think we pushes in to advantage really should that. be take as

Operator

last have Stephanie of caller will Moore line the Jefferies. the conference We of from today's for

Stephanie Benjamin Moore

shock? to accelerate? going on I own it the your wanted you color but leaning where kind and environment. going this take Or your on a now? to to I'd we I full we answering on to seeing are the keep call opinions know have that in I capacity color, to -- the freight does the what's it. improvement, maybe all just get thoughts do your but appreciate about need inflection. provided rate at a Appreciate it touch you bit of back balls, the, Is crystal our seeing does what meaning cycle a we're demand little overall I need the to not see. some love lower question, appreciate

Frank Lonegro

Thank Yes, Stephanie. thing, sure you.

do it's I that think to capacity the things needs referenced. you come ultimately Joe's out, continue earlier to a to point. I couple think of

It's era. came hard to that exact during trucks COVID-induced number of the know the in

significant. -- of was that new it If granted at number time, period the that just authorities you look of were the during

the the the truck were period. carriers greater significantly that pre-pandemic We to fact coming business used than the believe also that buy and into rate get able the smaller was been given it business it had so a that into was in largely

And of of period time of second 'XX. even during money 'XX, that 'XX, first the so 'XX, folks made a half of lot into of half kind

than sidelines in. that that that So do capacity and there we're operating environment is is a is staying some the think significant appropriately power there capacity. of on given so, amount We authorities in rather the truck

to good helpful. the on not Continuing continued come side capacity to have to growth preference side growth, the or that, that end it's little us you whether could goods IDP out or bit by that's demand unexpected. is we hurricanes GDP economy, like But with a and a be going to it's of then things continuing the up on that going I something other the the to of think return of for and but it's a be helps wish consumer going back equation. be certainly

keep going to cyclical continue more BCO in nature, to And that that strategic have to in nature focused that initiatives going and costs. very, and while we things Joe we're secular and continue very we're we're for all of going that's eye rather age to an that relationship talking and Matt on we're and remain happening, that talk about the to on other internally about, than push you heard are

And result trough out a as really and side good. as I other mentioned, I of going the stronger think, in this be the last come call, to we're

Stephanie Benjamin Moore

overall from of it's just you kind of appreciate large you're like to cases? up that tailwinds of confidence follow customers, to No, we that. in just mean some us. think a feel of your lack then speak all having on you're right. the sidelines of I the And conversations holding secular with Because ahead can lot the I do

hear love demand to that I some maybe environment, would So get in hearing so of commentary on side. they're this the more maybe the

Frank Lonegro

Yes.

the I going being be a that We things. couple chime things generally a have around so cyclical end the in this one. to table on certainly mean can player, of And on spot market of maybe. others we're

I volume. locked the a As folks dropped commentary of through and and people went think there about in bid was the the holding cycle, lot then prices line

took market probably would think decreases commentary heard we've do and some I piece the contract rate that the So with of that that folks. from the publicly consistent be

about we've there. element think we cycle, you inflections bit of the the it of if of a bottom. off different in helpful are to where about are, a The see rate play talked that we And come are beginning we

we had to back that the We've well the instances I'll handles process were, spring. Applegate to nice back are Matt us. the customers beginning in to as handles, where in on think the areas competitive both Jim which are us, is that back see. come underbid I say coming areas Folks maybe to as

are job. good I and think job, how do that the of a BCOs professionalism like and do product we sure we good carriers really at to service But at good that bit our related really we of comes is have, the premium. approved a a what almost that we and make the a we we directly service do and good

got we've true in sure fish we and we of so stay bottom rates. And don't to that, to terms that make

model, But been intend that's of for Landstar not that something and it's have hallmark a the Matt I on And thoughts this? you us and Jim, real to change. guys

James Todd

real in jump quick. I'll Yes,

what through the of from can top hearing look all we As And at all input our for and normal 'XX. year a July, what our back kind the an and year of part go of on at from of a their then customers next agents of early business part expect. agents, through set they're some take of the back we of that, get and half $X we here million the first of and level start the kind

I think pessimism And a quite there's bit still still of out there.

coming recessions election pending up. of the up. coming talk got You've There's still

big and So of of optimistic soon can't It all year, this enough we're switch come to overly I think us. tide cycle. that through not going the the for backside for come

general But optimistic. of term I through is this they're the would say overly most not in the near feedback year,

Matt Dannegger

very And say of versus rate-driven, side rates. about sensitive Frank's service the I'd it, echo that. consumer now, very I rate right to valuing specifically point, would

see some market, think do with haul starting heavy over markets area, some specifically we're the I However, to of around some encouraging end the markets spot signs. in those end the of

-- nice And about thing the I think our agents model. our

model us first. continue of kind I Our some that. typically, And of our very incentivized identify agents to find expect are quickly in markets. kind those find of to get out to it of and those they front And

Stephanie Benjamin Moore

and your no I'll one else was this at -- level love one to I'd buyback be I asked said because last appetite, it, get last had thoughts then I You question here quiet.

Frank Lonegro

No Yes. worries.

blocked And were CEO the call, end of little really to on in the first it transition the quarter beginning at reengage I market of the the quarter. prior as we good buybacks. was out the I from a and So mentioned given bit the think fourth

us a So pass and but did on give obviously back market QX, well. the in

of on the we're one a that returns we're very model of opportunistic. is mean is capital I things patient, hallmark very and the Landstar

average I basis. the that in an we bought see think we bought well in Q and the quarter, sub-X.XX, you'll on

think we I that, to So did as well really terms opportunistic appetite in we and of have and that go doing patient continue forward we'll into QX.

to to We and pocket, it, have we're money our authorization we're to going not the hole speak, engage buybacks. but have in do how we the around to in burn real so going be thoughtful

to in today, the nice able being And return and way we're from terms of perspective was to our real to the to about raise future. confidence that, excited X% It shareholders. capital that's vote do another dividend

Operator

for Wolfe the have Research. conference of of line the caller last from Scott today's We Group

Jacob Lacks

on This Lacks is Jake again.

it expectations a even it one get through picked follow-up. that ocean you just Air Does Just big of up took step there. the rates in trend quarter, looks near-term be expect to pricing sort XQ? continue in and as your up Do like XQ. higher to cargo just good ocean would

James Todd

point, XX% quarter. in second your we the quarter look playing Jake, load up. the you to ocean our uptick from the call and to at leadoff finishing per a revenue first man on No, had

we I couple had of pass of GRIs and rounds a think stick.

agents, Jake, that project in playing Ours XX a probably so space. dozen There's based. is or

calls see the XQ to revenue guidance for to flat multimode XQ. be the will relatively We

So on embedded guidance ocean per move. there's rep bet in the load the of a not continuation that

Operator

questions. remarks. call closing back this no I At to you, show time, like sir, turn to would further for I over the

Frank Lonegro

remains environment the Thanks, challenging, Bill. in some In closing, while the positives see near freight term. we do

XXXX. load per seems potentially rest moving higher, and which positive have is the We stabilized revenue are of is a encouraged for that sign to truck

always continues has forward dynamic the highs we our the market significant Landstar growth look times Regardless company, of the the variable Landstar resiliency business economic well these freight when are higher and generate free positioned cost cash of flow. to way. navigate to to and environment, model cyclical been turns a

you joining us this look in afternoon. Thank late speaking to third quarter our call you. We on conference for with earnings again forward October. you Thank XXXX

Operator

Have at Thank disconnect you conference for a lines Please the call good afternoon. time. today. this joining your

Landstar System (LSTR) 30 Jul 242024 Q2 Earnings call transcript