Landstar System (LSTR) 21 Oct 212021 Q3 Earnings call transcript

Good morning and welcome to Landstar System Inc.

Third Quarter 2021 Earnings Release Conference Call. [Operator Instructions] Today’s call is being recorded.

Joining us today from Landstar are Jim Gattoni, President and CEO; Fred Pensotti, Vice President and CFO; Rob Brasher, Vice President and Chief Commercial Officer; Joe Beacom, Vice President and Chief Safety and Operations Officer.

Now I would like to turn the call over to Mr. Gattoni. Jim

begin. now may You

you, Messy. third to XXXX and Good earnings conference morning quarter welcome call. Landstar’s Thank

Before we historical Private begin, following let are made me read the call conference forward-looking Safe Act XXXX. that statement statements. during Reform this is based following Harbor under are Litigation the on Securities not of Statements facts a statement. The

nature year statements objectives, uncertainties XXXX With During year performance the exceeding fiscal from in in section this described any the information strength or XXXX fiscal differ could remainder subject Landstar full Landstar’s record information the company’s information all pace fiscal XXXX XXXX expect place exceed business setting year of quarter revenue Risk which of in achieve plans, that diluted performance events earnings $X.XX. included, to revenue through undertakes go would excess limited mid-summer and results was to diluted forward-looking existing XX% historical fourth and with uncertainties SEC undue forward-looking obligation in per operating results Investors but about is in To conference XX-K from update $X and Landstar’s that risks the year revenue and call, risks annual financial quarter exceeds or to, reliance over to performance by in to actual These extending put financial in revise that continue the XXXX, we risks should record amount, and X and the materially for per Factors year cause relates contain respectively. Landstar’s the the and of XX% forward-looking annual the assuming by exceptional, to XXXX. fiscal began Form may more months and Such of strategies I were third is and no XXXX those make detailed information. of to time-to-time. expectations. not XXXX earnings record to our legal operational, were year-to-date anticipated. strong XXXX not such from diluted on filings publicly revenue XXXX share full of results. equal set XXXX our billion revenue per earnings year we income both guidance, share the perspective, share and and other

third records. and per quarter, it operating As profit, income, earnings revenue, variable XXXX diluted pertains quarterly all-time were the contribution, to gross share

a hauled past the provided freight truckloads third quarter XX we consumer months, with by provide automotive considering carriers contracted XXXX ended third carriers materials, and products increased load and third and parcel load XX% of hazardous transportation Revenue a revenue to third in increased transportation the truckload record XX% with million time in XXX trucks the of year-to-date record was quarter new over third-party hauled services, who revenue XX% on who quarter, revenue the where the Additionally, defined Also, of Landstar’s quarter. third hauled XXXX and over hubs between active which days. quarter, increased carriers. and as number and financial XX quarter history. for over a ability highest revenue historic by revenue and quarterly durables, Revenue contributed of agents we truck per agent supplies third agents XXXX performance Landstar’s quarter strong in at of over the attract third providers. Overall, van quarter and XXXX Truckload has metals, the within Landstar demand $XX last been to for via truckload the number of brokerage the new and machinery, services capacity BCOs XXXX the number have revenue agents years. quarter Landstar driven record XXXX results the XXXX representing truck XX% our second Landstar highest e-commerce over increased third period. parts was via building hauled third truck increased services XXXX unsided/platform in the and in XX%. the the

other conditions, Revenue to demand demand XXXX over quarter influenced to truck the loads increased growth driver second consumer revenue is quarter. the XXXX to Truckload other and rates Landstar’s volume power-only on the compared highly continue for speaks contributed recent revenue spikes. XXXX XXXX hauled straight growth of third hauled quarter. comparing stronger quarter. relatively second to via transportation e-commerce load quarter truck almost the small quarter, third in the by XXXX of over equipment of second also the XXXX which X% network XX% third the in all primary loads over van March. unsided per number through truckload XXXX quarter platform While year normal revenue, doubled equipment and quarter, quarter and in the bands, truck via the XX% increase van XX% consisting and third trends trucks loads The less third in are the seasonal normal truckload strong third the X% standpoint, via to X.X% results. expedited quarter XXXX mostly XXXX across per via and XXXX via power transportation unsided package services, Other than record above volume strong flex sector was From third revenue market XXXX increased be in over to XX% growth products, third in XXXX Both drive continues equipment the to third by in as which third when quarter van types. XX% the of a against of hauled revenue capacity exhibited platform via on ability services quarter manufacturing second XX% that finally, hauled demand, load number equipment third transportation increased of category over quarter. generated quarter. The increased of when via trends revenue And in the markets quarter, at the of the third over the while load mostly platform The market due in the increased durables XXXX seasonal from only, third cargo the hauled continued was an end truck constrained in unsided revenue, XX%. began truck hauled and equipment building led X.X% prior exceeded over XXXX per quarter, revenue quarter, consumer XXXX the improvement U.S. while

As agent it we continue relates model. to the to attract the qualified with new agent pipeline, candidates

in third quarter agents new revenue highest the agents As mentioned revenue earlier, from was in over XX quarterly from XXXX the years. new

during we we the BCO the of in provided the owners, XXXX increased As XXXX the quarters third the approved quarter. far the count. three a of same hauled third-party number number of XX,XXX end BCOs period. third XXX approximately number as have increased X% as to X% with compared defined XXXX in we Year-to-date of below through on quarter more as ended XX% business increase count truck in define of by number third improved a XXX XXXX. increase XX% quarter the as hauled to by XXXX a cancellations while of the carriers load carriers, in BCO record being count, first truck which The We XXXX capacity driven over XXXX a BCOs third-party quarter first recruited XXXX capacity, the average trucks partially XX-week the decrease our BCO truck number the almost third quarter Loads preceding have September, quarters in was through experienced loads per hauled via our we three trucks in who XX% per by network, utilization with thus is retention in quarter. ended offset truck the carriers in year days, truck our active

on now a P&L network quarter other Fred continues items. capacity. third-party additional Our strong and will metrics attract and financial I to few is to to pass comment truck statement third

joining our with as and our in Thanks, Jim. will and about flow thanks variable discuss I comments contribution. us. Good and covered everyone revenue and other profitability again briefly to additional balance well and detail for as metrics cash these profit performance Jim some start morning, alluded expenses will gross make sheet and I gross our metrics profit. performance.

paid included and costs definition BCO less company’s profit such administer variable cost As we and effective defining revenue cost profit, of of selling, contribution earnings the our other two numerous we income, third transportation-related independent the includes expenses developed administrative are consolidated training the the costs earnings internally incurred commissions has purchase includes as commissions of included reinsured as premiums contractors with that our revenue. revenue yesterday, well insurance-related our trailer of release. different of fees in to revenue. in revised revenue, cost expenses, gross to agent term as costs, and other as which detailed and of our revenue and the directly in in insurance gross of XXXX Cost costs qualification cost now variable company other revenue related available revenue of and support in cost are and that of from our BCO Variable categories: such as maintenance policies table that claims the recruiting, programs cost to technology disclosed including depreciation transportation various by insurance the as in we quarter, freight revenue degrees in other general statements and brokerage vary reconciliation to of release and

third measure initiated margin the new of the release. by reconciliation revenue which was as profit of in non-GAAP profit was In amount Gross now the our definition profit of of quarter, to includes XXXX cost contribution use again In margin we profit we conjunction in million the slightly gross table XX% define only XXXX. variable increase represented in in profit, refer XXXX profit the gross transportation compared roughly variable cost third third of the to commissions same detailed with addition, to XXXX gross divided of quarter. gross below margin term the less agents an by $XXX.X profit earnings a contribution, included gross revenue, revenue. and of have gross our purchase quarter, variable as period in financial of to the XX% million, $XXX.X revenue the XX.X% In

XXXX continues are non-GAAP XXX% agent now variable the divided purchase be variable primary the addition, and third and transportation transportation give variable a million roughly and for industry also spot revenue $XXX.X a measure, a into quarter, define contribution $XXX.X contribution basis. the contribution us increased with variable quarter, In This freight to been measure as Since an to revenue view to growth. third are by us. the compared commissions in that we million on revenue. margin, driven In always has financial one XX% expenses in important trends XXXX shipment-by-shipment strong by market

roughly contribution profit leverage $XX.X margin of a The to quarter in of $X.X million This margin XX.X% year. growth, trailer year. majority earlier in described year compared BCO the of at compared year gross decrease The in primarily in in of roughly in to tire by the I the of contribution load costs equipment was XX.X% claims our The income was are in administrative the third third and Total or year. third last by third Insurance quarter attributable variable period is which compared same variable third compared in profit. basis maintenance brokerage was compared fixed year-over-year increased as year. million XXX – purchased higher our XXXX margin of to this quarter the line claim, majority income period expenses and percent XXXX exceeded costs growth I Other of $XX.X in grew prior profit period the contribution impact to quarter year general in same last to and of drove the in came driven to as in compared increase BCO BCOs million in and year model variable bit overall was the mostly X.X% and the from period that represented year. capacity, revenue contractor and compared costs to an in year quarter higher revenue quarter, mentioned variable Our quarter. revenue of a of XX.X% third per attributable year. insurance Getting trailing to to more million increase our to mix to third increased the expense third brokerage our revenue of growth than improvement represented year variable the BCO BCO recruiting, contribution variable a X.X% our training quarter the detail of debt million in offset claims percent which to semi-variable business third bad year. operating compared year. the income, of independent and Landstar of revenue XX% same quarter from XXXX profit a excuse operating with compared the period higher in statements third of the the revenue third our rate to last me, to the related period development quarter between total variable million were faster higher in last or was has XXXX in mix that to as gross transportation last and or in prior gross contribution this performance variable claims pace into in $XX.X on compared premiums the by brokerage revenue cost point last due margin ability significant capacity. the XX% in amortization change XXXX the same a and and capacity, contribution expense XX% this $XX.X the depreciation were as cost included XXXX of consolidated BCO $XX.X earlier, is insurance same Other period prior qualification down in mostly costs the $XXX.X the and costs XX.X% to margin of last per Selling, contribution the and contractor due last count, noted the our the total operating claims higher compared that $XX.X revenue income generated which the insurance expense to Operating same million and gross to this same quarter year. XX.X% severity million XXXX in

cost, As contributed across record-setting financial year. we given stock-based last enhancements to cash This the the roughly by was quarter, economy. the depreciation amortization current year. $XX benefits compensation environment is the plan, that many and million last companies last U.S. due are our majority and compared not incentive plan million, increase, the service incentive million in is the of this to discussed Wage period to also driven increase. since our investments the same put primarily too related variable pressure performance probably XXXX quarter year experiencing And $XX.X technology and in $XX.X and third lastly, to into surprising

income in period XXXX tax Our XXXX third XX.X% in the the last the income compensation the a impact Increase of XX.X% period and effective primarily year. attributable to executive non-deductible was on rate higher during quarter for same rate the compensation tax period. XXXX provision the excess in benefits in to stock effective tax compared was

Our million, net for $XX.X third XX% $XX.X was income million up the XXXX same quarter period the last in year. from

Our last in per earnings third up period XX% year. quarter, was same in XXXX $X.XX diluted the the from $X.XX, share

last with investments XXXX operations quarter $XXX from period million period sheet, to and million the we of year-to-date cash compared flow million $XXX balance during roughly the cash the year. $XXX ended Moving our and to was short-term same in

when even the when I it over I like expectations Business the of I first started. at say exceeded turn quarter am quarter. company to towards to about than has Jim, excited started more my I’d was this I significantly I second performance Landstar, had Before back after I the that end

the capacity is business scale the employees we and recognize and have turn entrepreneurial with BCO the are we the are for very these future. is will a providers some how continuing I within is stronger have as know network the the meet you in stretch And in a into to Landstar riding very had opportunity I industry, looking more with evident we our to getting for discuss working success. prepared everyday. Now enables way model that an and Jim to agents are this our be forward continuing company’s We of independent XXXX. and outlook unique the success as business enthusiasm the passion performing wrap to but make with updated through turn wave, now, industry technology forward our now call Landstar opportunity look it namely pleased leader had on meet also our network also to who and to and our entrepreneurs, quarter Landstar with the put start XXXX of the to to you of I of fourth make keeping and our you remarks. the home back probably some to ahead the we on up today look to

was Freight XXXX. the began consumer Thanks, pandemic. August the August The of impact the demand U.S. increased of end economy spending continued that through Fred. That job excellent significantly in the improve environment recovering began from for strength in the XXXX freight from as security. to in initial

fourth normalized will continue we strong experienced quarter such, third through quarter in year over My comparisons freight quarter XXXX move rate fourth XXXX record XXXX a fourth the third given the from fourth compares the quarter quarter. revenue to quarter in prior decelerate reported XXXX to the growth growth the the year-over-year expectations financial in has revenue that quarter. through experienced quarter over as quarter environment I expect are As Landstar quarter. that the XXXX prior

a the XXXX On the I as the of the in year-over-year experienced XX% strong truck quarter. the XXXX the is rate that that of way be basis, XXXX quarter consider per expect by no should revenue would in volume the with XXXX for fourth on from expect in truck line quarter This freight via in increase XXXX hauled I given we would what hauled quarter load what fourth fourth very truck XX%. impact to be historical normal number year. normal a decelerated rate to line business third be fourth volume change to is a of trends would COVID-XX via estimate in fourth a quarter growth of fourth also quarter XX% This given the in of historical volume viewed impressive to on over in quarter loads consider pandemic move what seasonal in loads we the signal with also exceeded range would XXXX experience. truck fourth However, the hauled when the the particularly load on strength before loads trends – quarter via based the we environment.

to As XX% a per such, revenue hauled increase over on truck XX% expect I fourth the via quarter. healthy loads XXXX load to

to billion total I $X.XX a XXXX Given billion. those to the range within assumptions, in of expect revenue fourth $X.X be quarter

costs for as is positioned any share history continues in per expect XXXX view, volume pleased achieved its I last each September Landstar the profit, the ‘XX contribution highest claims increased Landstar’s over X.X% XX-week be and ever point complete to per year. diluted year fourth see period ever success. gross operating any ended the $X.X record-setting by XX-week strong set or performance. the Landstar The revenue the in diluted and far period. in previously highest these XXXX company’s the at Overall, XXXX period far was earnings and as been XX-week XX-week record metrics and by our the insurance the overall the earnings previous BCO achieved income, company’s Revenues significantly billion it I decades to to expect history net range has quarter, over the of approximately extremely estimated variable we am Assuming XXXX are and compared share to two period XX% of during In amounts were the the $X.XX period to of be fiscal to with revenue tremendous Landstar in in the $X.XX. income with in

in our to network. tools agent both continue for on We providing the enhancing and and increase side available capacity as remain open I of expect at and for with business its small we owners annual easily billion for questions. their revenue Messy, And focused based will first in to technology of the capacity thousands pace history. our surpassed that, record-setting XXXX in we continue the time $X

and of Instructions] Certainly, sir. Majors is We one [Operator queue, from have the on multiple questions Susquehanna. Bascome first

Your now line is open.

calling whatever look the that trucking model just be bridge we But comp of and for your Jim, what well help you this the excellent I outlook would comp where for really question taking a reset to what in market year on on stock into anything Thanks after look think out and think margins and mean, into things from on about going know stack as if happens the comp? kind how next my excess incentive year, comp G&A are more as G&A the this Could we year us next flex normalized about don’t we quarter for next or and Yes. XQ. year. help talking helpful. you. exceptionally about would us would number another be Thank congratulations the like that that’s I clearly, base the year. a without

XX-week third year Yes. SG&A on take and believe say than period the slightly I going we’re quarter. be you to we probably would this the add, if lower

$XX about I million. is think third the quarter

of have we that will quarter. lower than think I fourth in a couple million the

again. comp $XX And add our revenue would So to of in comp related where $XX a blow back if you XXXX. to million we’re year the guess we to variable XX%, we is SG&A normal of have we have out unless a if year you growing that it now, not normalcy million there in, – is million If full programs. tailwind year million probably what go a in of full for be SG&A to variable $XX the next our right not that $XX you have

both and the And stock that Jim, cash? comp include does the

difference the target. of Yes, growth on It’s varies of thing. move that The in both, over based they a comp like cash kind the they stock short-term comp that’s a Yes. is the vest – X-year tandem. on period. kind is And a two based between an over period annual

is So cash of they just of a And to a tail directions. stock slow they but it’s when comp, the the kind in tend great it longer kind back. things than move in elevate. they comp similar down, In pull year,

So tailwind in a we’re have million, a in million $XX going probably to $XX normal year, going next SG&A. year in

– fine a you of, put rising? just not to do variance. should we big it, you And to do pretty too inflation, general a a from just about it’s think point and that But base sense wage have what hiring

would that had actually some maybe I higher about here, $XX was bit $XX have mentioned the that of impacted Yes. a you million inflation. quarter that. wage than little salary million and an that Fred tell And we component by

to have a X%. do actually early decision We made

decision on for annually employees July entire entire the And we’re increasing – relates we were the recruiting as seeing based made much that environment things the a to it retaining or are organization. increases what pretty had X Our X%. in

at We economy, and was on living. of keep we also cost in try with rate and and up took a inflation the going what look the

thinking next employee million $X $X say, about, salary X% X% pop or than $XX year together higher We across to million pool that a raise put – So the adds which million for little is we did a if a and you’re of board. SG&A. about we base, a do. typically base And the

the are have all I could really a is Thanks into how the thoughts earnings if mean, market think big together, flat feel And pricing? you down do challenging or mean for revenues on cushion it just up guys that. a even if preliminary pretty here. be that next tying flat a truck and normal next on year? year any I year isn’t bit, Just to you you even heading

the we’re start first the predict was Like half. But for thing strength some that of talking June, end to turns. when seeing, cycle this when at we might back. good with half, were see hard pretty time we Feeling were first the it we to saying

Now the we’re coming remain more of fourth the metrics no back. into We think of quarter, maybe I or it’s don’t half system because the the pulling we strong. trucks toward demand still end anything thinking see slowing see down. Coming first into very

No. think – are So higher the I – I I market it’s I into things insurance industry, look, the expect or elevated. or historical? the pricing costs elevated continue? Yes, driver stay do in that, costs because that than now expect wages Do the are this think to to whether like

offset So we you’re our But we in back I pullback. pull talking ever were If perform can where going by comp to think we back business, get to that well. million. ‘XX. I don’t think And in ‘XX, variable pullback, cover? do $X $XX cyclical So we you will expect a I’m still about million of

have million we that cushion. So $XX

I that. but to put a earnings, want grow can we commitment think to I

now think you which look if On where don’t unpredictable pullback, see is very see market environment to earnings to expect, the into going and growth. XX think XX like look we see a XX% an I wouldn’t still months trying sitting is or there of what – it’s to I the growth. right in here XX% a earnings XX% a you’d pullback, we I – clearly, see next

for Thanks really the color. all appreciate We that.

Alright. Thanks.

much. so you Thank

Our from Charles Evercore of is [ph] next question ISI. Vukovic

Your open. line is now

in see And call. wanted Clearly, more are you my stay shifts Thank talk be and as may versus reverse? Good and pandemic mix about really you do about across versus the outside is the trends the that retail your pandemic ones views continues think do permanent? in I pre eventually long-term. to for that levels, current you here shortage to what the weight will temporary consumer freight think on industries to chip sector you on morning. autos. result when taking But shifts which mix

affected just Well, highly Look, about in the talk side. by U.S. the we’re manufacturing sector we will consumer the

pandemic we right? at And here industrial So back tie X, changes least when us seeing volumes now to it’s products, load lot like to is we think stuff X, back But you – be to – for we last a years, about I used and X of – production X building U.S., in hit of the we some what’s used you building years. in durables, the like if the our a go volumes appliance industrial if we consumer-driven we’ve consumer production we’re X% seen X volume And lot based could the strong type That’s that to feel some that. see grown the stuff The and consumer stuff. bit product pretty of If tied whether was a we’d We’ve really X%, X%. penetrating said, that, years right? been down have little before into demand we for or growing more driving it down, go home or tightly X improvement. the X%, kind was go with today. of

readily will is impact that it’ll bottlenecks when you on a coming goes disruption supply out but are government a trucks regardless that, into answer we’re more got be supply difficult consumer down. start then pricing, question based on clearly, away, marketplace. Pricing and my the come hasn’t more we have to to really and environment Trucks an high that chain it just that money think there slowly of So driven And about chain demand, getting sitting take stuff the right? will to by bottlenecks. happened little what into you and ramped an in and what the – clear really up. printing in It’s whether all trucks lifetime available

should don’t which – So it’s domestic the we think it’s the not on say soft, off. still want it’s we then – U.S. it sector where feel manufacturing you relatively and got jumped It’s still be. hasn’t flatbed but side, to I whether

see pull see back. in you’re sooner might would market my to going or world, you you’re the so definitely say, And I consumer later,

many You washing can only buy so or house. machines repair dryers and your

will out So that slow sitting U.S. the burning back. market some might are coming consumer down. back up start they and the production coming That on. cash with flatbed that of The some of will balance

market on help if equipment But hung They bridges in infrastructure that side, there stuff that, talking years. the XX-plus the and favorable are on that’s building You’ve that’s and got the and and it pull the this to got very infrastructure to We’ve infrastructure never about been flatbed bill bill for heavy like market. have the off. about talking up they roads been would equipment able anything bills signed U.S.

flatbed later, van is back. sooner XX an rates – than stay better eventually, see if pull flip where the strong flatbed I’ll start starts XX – but months I today, going infrastructure next little – van that the the of it in improve will bill and summary, to would So pull or where got consumer will help bit, starts see the maybe in to to the manufacturing to or a back the – to my you kind into is if the the we And market think be thoughts.

say really the Would That’s think the that great. impacts trailer you helpful. current current all? Okay, environment about the fleet way you at

is Alright. BCOs trailer really many we driven fleet by how Well, our have.

We trailers. BCOs count X:X. keep have it’s really we ratio our a to number So of more using tied the and BCO of

our van using who’s BCO trailers, X:X. a every it’s For

if XX,XXX X,XXX So using hook trailers. in X,XXX guys say, drop we operation, have, have we and our or a trailers

will for the get capacity. they kind generally into So We thing. in more X.X, hook, lot the market isn’t of demand and Kind don’t it’s get point we demand and say drop trailer maintain – consumer trailers they it’s BCO hasn’t from that put pick by a really and to more opportunity. more If drive That have demand-driven. trailer us. disappear. trailers. network, committed us BCOs it, to Throw and but and control If don’t by X,XXX capacity buy B, just third-party try the and we really hard the niche and I we and it buy our into maintaining we count. to them up more of get really of a third-party – That been the worked use used hasn’t a network. That’s

tied So than to count it’s more is really our it BCO else. anything

lot. Okay, a helpful. Thanks great. That’s very

Yes.

Thank you so much.

Stephens. question next of Our Jack from is Atkins

open. now is line Your

Good Great. Okay. morning.

you Jack? are there? Jack, Jack. Hey,

lost We Oppenheimer. think we I Schneeberger have Jack. Scott now of

now line Your is open.

a the I environment. consumer Is that to see in accounts you then popping new Good mean consumables where Could seeing accounts. curious durables? it kind very are Or you in predominantly I’m you business? Jim, robust curious, I speak or Thanks. morning, Thanks. everyone. new obviously, up. guess just Where existing of growth demand and

to Yes, from an for talk. account difficult standpoint, it’s kind of us

XX a about $XXX it’s where XX% to we even kind $X.X doing And a diamond. There And do to billion. really XX,XXX talk We so nickel or new make our hard million it up only billion, $X the business, is. and is have in top of you that over accounts. accounts XX% about our of lot are of when system

across agents an is It’s that the so X,XXX I – And right just around board. you gives really think Scott, when now think, I anybody capacity. truck the have market, it’s advantage. the for tight country, that in us market locally looking is all anybody

durables hungry satisfy are Absolutely. regardless customer customer and Our what aren’t hot Very of Building demand category. been commodity a are Consumer and Is demand us, is it’s other so pretty that hot to great than it big. hot. is now softer things kind in that some? products right There guys hot, right. areas is stuff things for talking. you’re are Food hot. never go of

a specialized. couple have We agents of

prior we any in. happening. resource. as refrigerated No, – There of did but kind quarter? diamond. So is ever we is just kind not from year. across of more that it before, us and nickel what we capacity And add It’s have a but from comes no And it of see board. It’s who – see these that’s customer in, the small coming a all may it’s dealt small pull market lot really over that’s these play the the we shippers not with is something in large they customers we

haul We’ve I the directions. just do. we driving just different all growth handful grown. clearly market – – the have Clearly, couple say talked a there coming Some which e-commerce lot haul, primarily from a substitute accounts is of guys. on it’s about would customers of from But we that sub-line a line that the growth

transportation but see order expectations then what of that of kind that. from reporting truck, you – magnitude, that those Appreciate as breakout Thanks. just Thanks. truck the rank by order can Great. then you services, and expedited by forward just for you And of would subcomponents, van, new straight delving cargo how might into power-only your the other in are of bucket not that going kind give just the percent, you for what category? it

he this that Yes. a I’ll year-to-date. – power And the probably in was like talk only Rob will category, what XX%. sees you is give I but said, about

it million expedite is somebody power million, in to our like then what smallest But – future only in tractor some about talking – that a small other involved expedite. is right? large Rob year-to-date you’re power So then is in. agents moves a to on – a It’s and add maybe for revenue is get we it the And he’s almost down, you can only, provide container the to order $XX So then then would let’s within if speak so million. that there expedite million bunch power I XX% break some say, think that the was $XX There of thinking where nothing. really, and the loaded there million, number, then there container of And that down, only, bunch ground categories about $XX biggest, $XXX other it and I small away. break I stuff of And if somewhere. then about the there a from else’s is haul trailer in there that’s $XX of that. and probably trailer, ground is we

of is it grow, e-commerce to category. out power it’s only and continue of it we’ve needed this seen Jim really – as put is its broke kind we own the the really spending Rob. consumer Scott, The decided kind basically, Yes, of it, reason kind and we

say to deal like spending. a a little lot We things we So driven – a a work, of not do e-commerce as continue to a mainly bit lot of work, lot And that, of international you backlogs deal. especially great great but I if dry containers, won’t a of that, and again, it’s by e-commerce. continue we the compared happen, of the more involved consumer lot on now, to get a will, chassis, do

will I Jim. Thanks, Rob. turn it over. Thanks, Great.

trailer about thing the many one have market right too, think carriers only, is if I now, don’t think power available. about you trailers the

it. a going So the truck waiting I into lot trailers and for get a they there if trying to move to access doing are trailer can and shippers to like stuff of put on just – it think a load to

sense. makes That

Jack much. have Thank Atkins of back now We Stephens. you so

line Your is open. now

now? you me morning. Can hear Okay, good Guys, great.

We can hear now. you

Thanks Great. my Okay. taking questions. for

question going Sorry ago. back guess the moment about of that I just trailer kind earlier. to a

of success BCO. third-party ways maybe you folks may longer the your one the with it’s is maybe guys – the because had two trailers know extending industry for sort Other think it Are BCOs. be carriers? about it been business, guys in curious I program that. have to broker just expand of if you considering sort successful so I’m of looking with are to As to term out your you sort worth trailer it’s

Just trailers several the to right know if you come look as I a but and out are next curious now, could that’s you maybe years? hard talk about over by consideration, that if

this Jack, Yes, is Joe. Sure.

we come then would and it. ever scale, order something capacity utilization capture that on up. It’s that essentially repositioning, of systems would of it’s allow we things think, in We a to constrained there’d the Jim don’t some that do kind I some make to have us case-by-case from challenges environment, out revisit, those topic about, somewhat situations right need And and that not to large, utilizing tends kind conceptually some that trailers but a find time, be you do talked make is certainly it do, on for yourself when something but of going we where internally be can a capacity again, a case-by-case hook would we But we like a the talked that time alluded kind trailers it of of and about and get those We to that sure that a a nothing hands. do it that do our to in and to a are selective third-party tracking be how on basis, drop it larger of of currently we’re sure of we perspective that we especially utilization. we BCO’s us. just we’re it. conversation to some. from on pretty It’s basis do things the in In

So from – tech the but perspective. it’s a radar on

to to has we stuff had right? hook the do opposed Jack, trailer and think, talking I trailer didn’t like could to So a we X years reliable we trailer X with one call that. tracking. fact manage because over tracking lot of when agents trucking right track. things managing us a But really That’s that’s that hard easy and about them it them capacity. them, that’s having a had watching and you trailers – monitor and and what to – much easiest on use BCOs is you like trailer, with become efficient the need been it’s BCO It’s now all utilization devices, always actually knew third-party last ask our it’s tracking easy that to as trailers now is more the to now more

discussion third-party of had is trailers clearly X would X have at there about ago that today or than here Landstar. more capacity we years So usage

Okay.

just be resources as areas in rapid growth Okay. you going, growth That in the a spot. you if degree invest agents to curious or about of are got headcount? just I’m sort I enable there guess. need follow-up next like carriers your your to you makes And of to those how just you to you’ve kind keeping may you’re the – just headquarters investment And that may over Do several good my any folks, like of your that engine at think experiencing of maybe sort I’m the are touched it you on think you sense. about I extremely curious, question, comments, add additional areas feel that need the maybe and are sort where of sort feel you a here years you needed of guys thinking to cycle that additional continues, guess for kind growth as of about some in need if but cycle. support you prepared Jim,

Yes, absolutely.

had I targets going We We of scenario this be out tell the think target on for the be rates we the all receivables the going because volume, transaction think our on we year the truck XXXX. I coming agent. you here, investment. this kind year and we and processing for here on that to there and is is base have what end our of headcount handle that’s payables, budgets, that’s volumes do of going internally And of year. stuff. all kind will into have at internal of came additional all we the kind we we – to behalf

at we it’s all So, fantastic, transaction of They do have today, in seems processing. it decent-sized – actually. are and group home who working are working people a

or we hasn’t make and through, clearly – and administrative we adds. is calls, But going has this people like sitting it year, early it there mean they think of the the I productivity been has headcount backlog. been group down some revenue, number summer with – the anticipated, I what exceeding receivables the volume there of are with a throughput fine.

on are handle we XX jumped had So, – it. receivables. about approved to people We payables we and quickly

some see So to are that will yes, headcount additions going you drive.

as going you just from the offset do we – year because So, of volume or put anything when we in $X I But efficiencies. a to or increases the as is the we a see system headcount just to couple talk going to million more million about revenue are – have I – that clearly, – another am throughput. million it’s add increases, not $X from salary

kind of are for load head. So, loads, That’s anything here. it not or one the not where a it’s every to add got you you XXX works like every the way

keep or going throughput are stuff able that working have we workflows people, and to eye are we our to new head, per we an hard be they overtime if to and we overburden got that. the are to With but and get are starting put and in, still any like doing not more we put they like have on how are in new everything will putting they systems and

more – we standpoint. department. is coming that it there will IT headcount So, in be from enhanced And also have our

Now coding pretty of developers mainframe much We think X X ago, people. or or have a RPG an that. if about company, website didn’t years like to stuff back you and lot were we years app a type

old has transformed made kind So, stuff. organization XXXX, to of move the and us out Rick based to have as in the to just came opposed mainframe Coro transformation. cloud we IT he

converted So, applications the world technology now groups its also of have into and into the handling stores it, the have and mainframe we information new – operational cloud-based who new we people or data right. and have whether highway, people we

already of in, Those processing might transaction and few people So, is stuff. people coming headcount be baked more the of people and in. there that that but in, a are that’s baked coming those some more it’s growth. you kind But in there see of will

Okay, that’s all really Thanks color. helpful. the for

much. Thank you so

next Our is Moore Truist. Stephanie question from of

open. now is line Your

Good morning.

Good morning.

you a patterns. little bit the into for load are seeing on really touch October, sequential revenue release and consistent far in both load are commentary to what want you I the following that normal seeing about per thus just

into thoughts that the driving fourth all with seeing think think low that disruptions curious, on And that’s XXXX. quarter. going I first supply kind just inventory is have trends time, seen you I And chain that the the of what levels, record abnormal am to given we are just sequential an So, just return your and same we into throughout are curious quarter. at trends what more

year, the trends of seasonal the inventory a I saw think and – last delays the lot in of we an restocking. given extension just

obviously into expectations so the and Thanks. to you your first? saw then what the going I for thoughts, love fourth quarter would So, hear far

Yes.

in you – we flatbed per were when our van revenue right. I where were all-time and records, on look think were at both BCO September, we at mile

and months the it’s you disruption not now seven are been so around or – the chain And quite supply going demand while, months. has – to a dynamic for six

we to necessarily off, you look, that to supply feel we seasonal that to continue going up the seasonal, kind or very are the leveled to capacity disruption another mean are lack anticipating for are it’s is are we going we sooner fourth think stay a stable actually It’s October stabilize. what seeing saying quarter, not And above But like saying trends, we very It’s strong. are coming And – going some just of some it’s or seasonal has in I and strong in grow right. drive because freight that doesn’t chain it’s step – norm. later, environment. to of

thing other thinking, The going that, we other a December. about so happen talk what’s that in that thing there seeing of you are lot to are the is

is there I to of But a ships there and little their now. and everybody that right carry pulling think how a December West freight on going is all December lot into that’s on talk market. the freight Coast, know was about unpredictable all early I probably earlier. is

gifts Christmas order backlog. is that not they get And their early. December trying to So, to people are

to pull little bit. start a December does So, back

starts to to are environment. Now, to really sure at right capacity don’t around demand do current to a December, now. change see that’s going And don’t the as I and but I heavy what pulling through or here I am we is pricing then tightness that’s think we maybe to the there it talk of going maybe little this happens. about But happen, going think come in trends, any are I think not bit it’s with back. we are that peaks – see the and just

the of is here we seeing I to look, softer going and in go as seasonally to I quarter, for seasonal to first hard last first pessimist. happen December If about talk transition I then coming into So, would a it’s like said, back quarter. are stable kind year, what’s what and sit And am into thought October. I have

all going slow I driven by more a know stuff. But So, nine strong it was the this first tough holiday consumers. – be to another are of in even money. very it turned quarter. look, and year first on of I on year traveling full quarter was thought of quarter beginning down going year-over-year appliances see I we the the it – That’s got the they strong to fourth a the demand rush months products lot first into would Will I And had August, stuff they the if was it’s a and building good buying. And first quarter. was people was Comps quarter and the all consumer have a about all last weren’t that other thought last this and are in quarter quarter. – other really first because really and

it’s think in years. since are on haven’t right to I going just like my an we is a now, happen been hard the predict I little since what’s environment in to XX time honestly at here environment

That’s very helpful. so Thank much. you

Thank you so much.

is Bruce more And Chan queue. We the from on two next Stifel. questions have one of

open. now is line Your

question. real your quick morning I to for on good thanks taking utilization. Hi, and want go just BCO Jim, comment gents to the back

good you there? I time rates and ‘XX on really think else that vacation and just is decrease. something about or back a ‘XX talked you Is when in like were mentioned X% off, there going

is Yes, Joe. Bruce, this

different think a that I play that. few it’s things into

bit. of decent want making have little make target, I amount of is target to earnings given year. once surpass they tend a a And one think some a that they And got they a slowdown they percentage money. in I think of are BCOs, they to

that’s part it. I of think

the some repairs, hear to trucks that take something still what is could weekend. the those just element of for there you starting to of as of we be used COVID think recently need risk care I trucks to the are more a utilization. And are parts over some

the weeks on takes the truck to parts it get and road. the X.X back get Now

the think one kind length factors of it’s are are those of I I we of and that have of we things percentages that lead But that its our talk I specific they come are to up and time, that as guys So, multiple mean don’t we for kind with. And sitting those that. usually are any hearing to by. reasons seeing

good sick mandate is But a know talking on I ETS’s And vaccine maybe helpful. about the rates question drivers. were mentioned That’s Okay. Joe, everyone you follow-up now. or of right for now. retention for And mandate potential just COVID that right BCOs

is it going think you that may a that should something be As is shippers at you, attrition Do need are be your benefit given a for that IC is to about? composition? proposal, be or be looking vaccine-related concern you worried to or

which think released. mandate one, more are really contractors, tell impact employees. we to been I – or we a how Federal standpoint, because determined than it’s Well, the have out from I too for early the XXX of really Clearly, play think is going Federal haven’t there it’s the to specifics

trying maybe others them to installations, that people impact So, or the And to are to a as office different that out in mandate what they us the if government not. I who customers, figure service than just means. have that be go think here, BCOs would about applied

to are, of or think from sense to right don’t percentage a right we as this now, happens. exploratory what requirements to capacity then source have customer’s And right what expectations. number think of But capacity pandemic are I wearing each they clearly, way to the do of to agents if and not. there up come that at have as their our And if to agents through that to be the were kind are them broad, best some all working to what meet their from BCOs are. were that getting work help heard our to vaccination what customers’ us checks customers, out the of figure our vaccinated you look our the at requirements. our all doing happens, I have or we would of kind different and the were a beginning kind sure make now carrier temperature to drivers mandate, back when shipper handful more if and out to locations of accommodate those mask what very we of different

upon then implement they So, the early it’s And a they hand. side. on they need little of again, customer-by-customer, depending because other specifics don’t lot think one how the OSHA, have of out on feel to I a

that. real Thanks point of a for And then clarification. quick Jim Okay. just Great.

you scenario. that can in grow on type total XX% a Was pullback still specifically or mentioned pullback, have You earnings XX% demand revenue? that that was

think could – didn’t grow I I think I we that said don’t I earnings. say No, grow I could

– could XX% say. to a I the in we in pullback scenario, I think think pullback – what XX% think in is could I market, meant a I I

I think we could bit little based still the either tailwind hit or grow of earnings on just a the expenses.

Thank it. you. Got

Thank you so much.

KeyBanc Todd Markets. question last is Capital from Our Fowler of queue on

now open. Your line is

Great. Thanks and good morning.

Todd. Hi

but Jim, be the of to I almost you like sound more determined on listening guests. little a call, bit by starting will an let are that optimist,

I today. tried. difficult Yes. pretty happy not It’s be to

Todd. takes, it what Look

thought with mean pessimist I these difficult. be lot a I that it’s results,

congratulations. no, So

is? how that So, the wanted you you some ask I to much you there that do about transactional. comes guys I to the strong help of over of if are us has much it. volume you quarter business your that year some going know what are about together end growth, growth can I think is How of I help more XX%. of some stickiness us fourth this underlying think – mean that But perception I a volume how guess think – sticky to

that as think as of considered next balanced year? into go we would to of really how much and is transaction of is recurring in basis away overflow a kind move a much there So, market keep that a more you really volume about how way or

the hook drop I is clearly, XX% and would our business think of the sticky about. stuff,

of So, they clearly mean – I mean are playing I where kind to that’s sticky business, we us. that. committed government. are That’s

disruption is is We high, are supply do side. for demand government the talk more we on which is little less in to automotive. them us, committed about. When good hazardous. what you a is better, sticky. that low demand They is chain when But Automotive are

that met hazmat of look at has the hazmat you our in If certified. A&E, one stuff. is BCOs Every

us we hazardous for true lot haul so have But so can guys isn’t material, for everybody the of So, that who XX,XXX comes a to there. out carriers that.

if So, hot. is that sticky. market It’s

that not our That’s think about Mexico $XXX million. probably annually, maybe or million is about $XXX $XXX right. I But that’s high. cross-border million

a move stuff very effort carriers, that’s it’s little like to a that. third-party, coordinated so disrupt use to that. hard because And Mexican That’s

– So, more little sticky. it’s a that’s

when guy right, spot they you is load I operations. are the a move rates Do the think So, it’s not XX% and big – the piece know these add business. customers. up, world really It’s number, calling where of we on customer for but just and it spot leaving clearly standpoint, talk decent true half are from When one we If exact up then It’s more the moving than a drop a got down, sticky. us, I spot, hook people a you in sticky. not are really world, about about necessarily and for us. being the it’s the

We are capacity buying market. spot really in the

we to so it look We relates we are a relationships ways. of customers, it able or of But as lot to – at but own their relates are to the that they them, on they live I it it, going absolutely to our at you, little and are and it sticky, think them hazmat helping not. a in is capacity, situation. have being with it agent we spot trailers world move difficult. times, percent the we especially And moving their tough guaranteed putting the as is different two good capacity freight, relationships with are sticky they with with would be bit But in it the stick kind provide people’s

Yes. as No, base, be and soon now it the it’s just has I normalize? what is the going a back that up but of substantially. And helpful sounds question, it things forward, not but understand XXXX like revert some cyclicality that levels a seasonality, as of there we moved pretty will going base to overall is higher it’s tough and business off some to it’s are and context

– just it and wouldn’t is this, us. great the they the thing about like expect. the when built people capacity agent need It’s model I it – elevates Yes, relationships

us there You but you launch cycle don’t our think back. is have any seen are it then higher, and since I we going see to question, inception.

pessimist. a be I chance don’t give a you to

on bait the that take one. You

there to how revenue metrics So, or In on my cash maybe the percent much some keep hand, last assets. as Fred. want think around one, of total past, you maybe I a that been just has

generating think as at kind differences. business of cash feel any as point, sheet the you cash the from then that you And you As you point? far have that on about this want of level cushion kind are the of balance and how at the this the kind changed metrics

a think deploy where bit of it’s talked call, capital on opportunities little investments forward? kind and you I and but the Thanks. going been about

Yes.

So, as far way as more business. have cash, than we run need the obviously we cash to

And special it. kind makes to buybacks of how any think personally buybacks, historically think We share dividends, I forward. it dividends. successfully sense kind I just going that with about of that’s I deployed but have dividends, prefer special

in keep so that, model. And really potential as lot of do of opportunities. I haven’t And deploying our a part see we will there with if is through M&A as will we think we potential continue eyes to because conflict open business opportunities, of done it that. far other historically the kind But to any

So, we to with returned capital more maybe bit I think a shareholders share will on buybacks. the focus continue little historical ways have perhaps

know, relates in receivables is We fabulous cyclicality pay as carriers growth days. business like cash XX a we model – in – XX. of just is our business you about in the to the it to Todd, Yes. collect our

to the positive. capacity, just kind our start right. when of are wherein we – works. way billion become soften the And it’s it’s we it’s So, can that, financing a our – $X positive. definitely first cash not this grew the I for flow time are think in things you bit an cash And But history. in little over bigger – of see we up, a environment flow receivables It’s

and We less. are pay more collecting

pull So, things and net bringing things in end have more do if opportunity. cyclicality and – that back, as actually cash we up over period more

to are do environment. pre-XXXX. we times from we the then. Fred, go other borrowed a And until a with see on in run the against – And – FAA, we think the kind didn’t the borrow you is business, itself to have there we haven’t the like buying our we so borrowing we it’s on by long we if government. the time in model to actually were of done. protects revolver. borrowed any That’s because the contract all. was which is we where pay But that stock, one the in So, how set due really I balance It back, They I revolver was was stock the cash need do to had One two is contract buyback program. tasks about don’t keep written, $XXX don’t million mind. sheet a us needed had

Some of collateral is cash insurance claims. that our for

look sheet up. the is we there done and of we how kind So, much it But what have do balance cash more as of kind on is we historically know. it see shareholders. And do to you some locked how have of at we deploy that’s what you and

makes Thanks the That Congratulations morning again. guys. time Alright. That helps. Yes. a lot sense. this for

Todd. Sure

Thanks.

point, have questions this any on do we not Speakers, queue. at more

continue. may You

XXXX call for with forward earnings Have on fourth And a day. I January currently conference you to you. scheduled good speaking quarter our XXth. look again Thank

you today’s participating. everyone. that conference. for Thank concludes much, you so And Thank all

this time. disconnect may your lines You at