Landstar System (LSTR) 29 Oct 242024 Q3 Earnings call transcript

Good afternoon, and welcome to Landstar Systems Inc.

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

If you have any objections, you may disconnect at this time.

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 and Chief Corporate Sales, Strategy and Specialized Freight Officer; and Matt Dannegger, Vice President and Chief Field Sales Officer.

to call like to would I turn over the Mr. Now Lonegro ]. Frank [ Sir, you begin. may

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

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

reliance business call, and we subject that may make plans, described contain Such that expectations. information Form the Landstar's risks, to including, filings events information. or SEC results anticipated. nature not conference Risk his statements actual relates but to, risks time forward-looking I'll information historical These to Frank obligation year legal any and in section and results it Landstar's Lonegro, to from XX-K not now undue in this financial update time. CEO, such from other could risks objectives, and by opening should or Landstar's those for and forward-looking to publicly the strategies and cause uncertainties from limited fiscal Factors During is revise remarks. Landstar operational, undertakes detailed to the on to uncertainties XXXX Investors forward-looking no materially pass information, differ or place

Thanks, JT, and everyone. good afternoon,

continued engage unbelievably capacity together to future and employees and and success. who Landstar we energizing work and our support entrepreneurial the First, day. Landstar want to agents our every It thank for as I is BCOs to network growth providers them align agents with of

the agency, and impressed agents as Landstar's country collective as with commitment the this resiliency As the year, I've meeting each the been with I've success. to their well of thoroughly uniqueness capability, traveled

days, with the best BCOs. professionalism business the help at of industry the we drive BCOs July the quarter, are and also meet Landstar's to the hundreds success in I They and of had our third our All-Star September where of opportunity event celebrate appreciation the In accomplishments and model.

of year, possible on accelerating want environment it our position the laser We we strategic in towards turns to As the the XXXX end be initiatives. continue to freight be leverage to on best when we the fiscal and our business our executing model way. move focused

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

Turning conditions continued readily amount freight to continued to impact freight capacity. demand goods consumer quarter generated with the quarter, truckload characterized market spending. mid-XXs. The Industrial be readily to output and on by relation fluctuating and to pockets inflation Slide declines Truck by of was the in of available X. available, soft in the environment small shipper. the supply-demand throughout in year-over-year equilibrium, capacity soft manufacturing, third continued ISM evidenced XXXX only the to truck be as with Accumulated to favor in continue

guidance Landstar admirably top backdrop, delivering bottom the quarter, third line XXXX that With results our within in performed range. and

of lower above loads truckload revenue the of loads the The to in be XX% the below X% third the our to quarter the via X.X% for to earnings to number and per the hauled of Actual XXXX year revenue quarter prior call conjunction Our flat second with above below release XXXX third the quarter was range. per issued the truck of third was third in quarter guidance XXXX overall X% be number within quarter. half via X.X% guidance. hauled above the quarter quarter third truckload in our XXXX XXXX the guidance truck third XXXX actual midpoint slightly quarter,

patiently stock buyback and very I'm opportunistically Our in committed balance to a strong believer allocation stockholders. to long-term our the and sheet be and are priorities on unchanged. benefit strong, executing continues existing company's authority to have capital our our program,

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

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

on Slide and looking quarter. few helped minutes. results in per to Turning X scale, load XXXX rate third during the the in at Landstar our support JT operating To get network. and into the generated model drive the and inherent revenue details loadings systems a will to

most during how continued previous noted career culture realized of safety I've is Landstar's As calls, and earnings to the for important my sector our transportation in been success.

period our our a Our able an compared corresponding the impressive index the is operating provides of the professionalism work and DOT a the million XXXX. XXXX, highlight per in importance and of who freight agents of at safely safety safety of agents proud miles employees to and of frequency the accidents accident and every metric during of BCOs with of XX% speaks result direct as approximately BCOs day I'm of to first an reinforce the Landstar. thousands X.XX of is to our improvement customers. point report to skill, discussions talent performance Landstar to dedication of the that This an reportable operating critical X are strength, months differentiation

Turning to X. Slide

pass the truck in count be XX% QX. turnover by continues count BCO has significant count to JT pace out to to somewhat the through BCO would the low third to repairs truck I decline walk from in our incur relative a similar a lengthy side, third to On quarter of in service, capacity since end count BCO quarter, increase of XXX with XXXX the the challenging environment. in detail. more rate in the BCO and QX pace the awaiting the owner-operators XXXX repairs. of operating is slowing environment the decreased will influenced basis, are fourth truck third to declines year-over-year of third the BCO quarter by We of second consistent back the cost during It often many faced approximately the period sequentially time expect expectations continue at in turnover quarter. quarter the financials call a experienced to trucks decreased in to by On now the trucks, given BCO typical quarter.

Thanks, Frank.

to Slide Turning X.

per As X.X% in the Frank to truck mentioned quarter. earlier, overall, the load revenue third increased compared quarter XXXX XXXX third

BCO unsided, X% In platform comparison pricing number, per as per loads more terms consider excludes hauled the the increased breakdown pure load, revenue load unsided customers trucks on a loads by overall decreased fuel van per mile to revenue truck by van loads paid between hauled In we on billed and year-over-year. revenue year-over-year, equipment X% whereas equipment are it to revenue on to surcharges of BCO. XXX% load per by hauled that

while BCOs In hauled third the the quarter, the quarter, mile XXXX on by XXXX X% per third van revenue by third was unsided hauled below quarter. equipment platform X% above mile was per XXXX equipment revenue on BCOs

pre-pandemic on fleets operate as XXXX revenue truck XX%. on Although years levels loads van per per mile for loads to the including to year van ago. a from mile given revenue today, cost of incremental pre-pandemic mile remains by and compared X softened We service above quarter relatively the a bit a on the than insurance both believe approximately ago, cost stay well higher small significant offering amount of third will that BCO per large this Landstar's revenue

we decline the of lower to sequential average by in compared quarter. to was the impact quarter per strength diesel XXXX carriers, truck impacted diesel of increased rates a versus the seasonal believe quarter. in the negatively load The respect in revenue the prices, second to muted On rate improvement with the X.X% particularly a quarter. We truck basis, some X.X% in third brokerage second third experienced prices the quarter sequential paid

the looking haul. improved when revenue X.X% length revenue hauled second third the from at load XXXX a of X.X% the in BCOs, quarter a Solely on in XXXX quarter average per per increase in mile increase by and loads X.X%

July, BCOs patterns, June August month-to-month flat per from remained from to into Delving September. to these was seasonal van and typical July by seasonal to July underperformed on further August revenue August equipment July X% September to and August trends, June pre-pandemic increased hauled The outperformed. whereas to change to mile flat

compared As off a August unsided XX% platform increased is on often volume. seasonal June month-to-month that The mile the trends van revenue mix July to increased BCOs This point, challenging from by from and loads specialized less between per starting to due equipment, September. X% flatbed loans more unsided and volatility on hauled heavy to August of relative to equipment are July, generally standard to from decreased equipment. platform predictable to X%

revenue third million mostly outperforming to X% slightly declined was focus, X% per strategic year-over-year. revenue shipment. X% were of year-over-year, haul Nontruck third or essentially in third areas heavy approximately X quarter, a XXXX transportation was service Heavy core revenue the XXXX the quarter increase our above transportation increased revenue, year-over-year haul haul per XX% $X The truckload ocean due load Heavy revenue non-truck quarter. increase flat while was loadings in in down revenue. the in of

on in a X% segment our a the load Turning to compared commodity. Slide third Within to year-over-year compared transportation increase Transportation an X% share in revenue XXXX of by revenue X% commodity up per commodity quarter. our revenue on X% by provided partially and our by consumer revenue a revenue down by year-over-year decrease in loadings, X commodity down in revenue Logistics to change about third XX. top was category, We've largest X% the offset which year-over-year quarter. as in volumes, across XXXX decline per increase X% declined X% offset revenue collectively load. make Aggregate was durables, XX% revenue, partially categories,

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

strongest during loadings, third XX% the performers and X for which demand, the based quarter. pandemic varies us XXXX X Additionally, the significantly consumer substitute on decreased from linehaul of

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

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

clear of truck XX% on other categories, our in with and quarter and remains on marketplace. with the that XXXX. truck transportation of XX% the hauled other of Revenue a revenue transportation and which respectively. of accessible the over in Overall, first hauled third XXXX highly of below quarter, the XXXX XX the indicator capacity customer companies was behalf in diversified companies revenue business XX% behalf none third XXXX Even in readily transportation customers, weeks is the contributed in third quarters, various XX,XXX of ups revenue downs over X% our was XXXX

compared In XX. XX.X% XXXX in to XXXX. XXXX million million Slide of third to contribution of X.X% contribution carriers year. third $XXX.X than of third in a Variable was was In attributable contribution profit in compared margin million variable X.X% XXX in the carriers profit on the of to revenue and was gross revenue quarter compared basis brokerage margin variable margin was $XXX.X Gross contribution quarter, compared XXXX Turning margin truck third $XXX.X the The to quarter was the the the $XXX.X to to the period third in of variable last brokerage generated higher XXXX corresponding period mix profit XX.X% revenue the rate gross the was profit quarter, as XXXX quarter. decrease XXXX the the gross compared third XXXX million third in quarter. as decreased a in by XXXX quarter XXXX in rate truck in paid same third primarily headwind margin to points to quarter paid third quarter.

infrastructure. cost of million offset profit variable costs to due income operating contractor to to equipment gross and an gross of in costs modest maintenance contribution certain of $XX.X company's to was decrease selling, impact profit a declined contribution percentage costs, XX. as for were primarily bad almost XXXX the basis. decreased comparison primarily both in Turning Operating million due Principally, XXXX. the entirely $XX.X variable trailing administrative the in third general and and smaller components fixed by increased to This Other provision debt. quarter compared Slide

to the $XX.X XXXX revenue costs increase claims as in third X.X% compared and costs were unfavorable in in in decreased XXXX quarter. XXXX period. insurance increased of primarily partially million estimates, attributable claims XXXX of of to to BCO by the million and claims Total third were to during the net X.X% miles Insurance The offset quarter during the quarter trucking year insurance year BCO was third claim accident the compared traveled $XX.X claims development decreased in prior XXXX. XXXX XXXX frequency and compared and costs period as current

compensation the quarters, costs million respectively. unfavorable and and slight adjustment During claim quarter. included insurance million variable third during compensation Selling, provisions and compared employee incentive increase the compensation XXXX to was general The $XXX,XXX increased $XX.X under to million were of XXXX XXXX and wages for that XXXX quarter and general million programs. and year is offset provision $X.X net under to selling, compensation stock-based $X.X the third for XXXX almost million third costs estimates, costs claims attributable period. the primarily compared XXXX and was costs, variable third by administrative in administrative benefit to prior in during our programs decreased compensation $XX entirely quarter in the The $X.X as

amortization effective the to tax the by applications was rate credits an upgraded resulting capacity tax in of resulting third decrease agents effective tax The The This XXXX. effective due Depreciation income quarter increase during decreased the was third-party income in continued tax rate investment offset use XX.X% depreciation and on $XX.X fleet. $XX.X tax of software in rate compared quarter the quarter. adjustment the federal was partially to in impact to XXXX company's in depreciation by compared was XXXX due the from to XXXX increased income third XX.X% in period. million to onetime on a federal in provision XXXX the trailer and million providers, the third primarily new tools for and

XX our testament with the investments return significant amounts XX strength paid during million Turning capabilities operations share million the of our of quarter the cash ended for looking the $XXX repurchases The Landstar model. of balance The million. million, you, cash-generating capital was of $XXX back balance XX weeks to XXXX. Back weeks with and to company cash continues $XX dividends of $XX to sheet at the a of to were and XXXX $XXX expenditures Slide first sheet. from stockholders first to and Frank. is and short-term of capital of We flow Cash million.

JT. Thanks,

ease As we year-over-year slightly. fourth should progress quarter, comparisons through begin to the

top revenue of Looking moved improvement a at patterns month-to-month seasonality few yielding with September truck October, trends. the from load first QX, historical via a to into our truck, reasonably based and hauled pre-pandemic would line number patterns In QX normally yield slightly XXXX, X% in as the seasonal trended in per loads both in truck volumes of line performance from sequentially. on sequential we normal pre-pandemic weeks higher

to season into However, November on seasonal as reasonably do improvement peak typical a compared muted our anticipate and of fourth expectation historical the based we not December, quarters.

these ] revenue patterns. has truck per [ below rig trended On slightly pre-pandemic load the side,

Slide XX. Turning to

truck a fourth are volumes XXXX expectations increase quarter decline quarter a XXXX our XXXX be to range be of X% in X% X% third X% year-over-year sequential the will per the for quarter, up of ranging revenue above to from in truckload for and implies truckload to X% load the that Our a fourth revenue range and in guidance flat will truck XXXX a X% above load basis, volumes below to quarter. down X% a a the fourth quarter. the versus fourth On per

the somewhat experienced revenue expect what be nontruck in to similar quarter. modes third XXXX our we for also We to

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

on fourth and One The the quarter certain quarter. range normalized our in like tax achieved midpoint provision. of of for most federal for the fourth included occur the guidance the do of quarter take to tax our as tax the rate we $X.XX tax of third expect the questions. similar With reflected a quarter in difference XXXX we'd XXXX onetime of last the not a tax in point accounts EPS third quarter. Bill, benefits benefit $X.XX our The fourth impact we federal credits between EPS We to open before result questions. $X.XX your that, line

Ossenbeck you Instructions] Brian question Thank first much, JPMorgan. [Operator the the sir. coming of of from We have line very

see, a about count. first, to talk just bit you BCO wanted if I the could little

it's say is trending decelerating the a at down You least decrease bit. or little

to them you pretty rates pop and tomorrow, point, to quickly? up think do those at back where might do if folks of other like just Or hypothetically, to X% any have feel have So things? on do maybe when to out that you some you were bottom visibility moved this get come you

certainly a it Brian, good you. over to hear give and then Joe. from I'll turn to start

the slow of to be holidays. you're QX is going coming usually period QX QX that year also And when to add reasons for time is similar just into One us. of is a the the

mean, we've X come we So are in Yes, are. get or last still If over the a that general folks seen begun declines thematic. is the have where to rates, I bump quarters back? moderate. X think the going the X% trend we I we see to

sustainable. and stable it's Assuming

weeks. have the couple quarter, of on weeks I basis, a good and even month-to-month a seen couple then and thing this we a you in tough get of X mean, that year that's throughout this

when folks BCOs offer back. is pay leverage instances prior I where for and turns, environment benefits important. him I we've mean, opportunity we recession going to tremendous But and upturns, the mean, let and we add me had the rate broadly. it And certainly to that come turn over offer all provide to we the to downturns more Joe a freight that the color. in sustainability So that similar percentage let really be some

Yes. that. Thanks, Frank. I echo would Yes,

duration of this downturn been the think unique it. really I the has of part

I I They think of appreciative there, in our making had. We events they money. had great September. we that had appreciation to think XXX storm, and fine. have of low in weather had seen of And Landstar, doing yet experienced. attitudes. and they're operate, the mentioned trucks. good cost And were They lot hundreds we a Frank can quarter, all we it's because them a X They before. lose it they've were all And BCOs the

that But are not to of years kind that is of couple a seen of these little over happened less over is think higher cost operate. I exodus what's that we've of tolerant everybody. And those time a an

much So added like increase, the And decent pretty in see with did obviously, XXX we that XXX in XXXX, when we rate would think trucks turnaround, them. XXXX. benefits I a we over

we attractive. So that's sustainable But get had a be direction, do moving at be starts. could the back add in couple I to rapid I that can We've think something really think model think would sustainable in. And I clip. that a appetite that the whets proves that that capacity pretty anything of false in

the sidelines. think come I you'd people off see

in like softer of elections where noise a last you a the little little bunch the Okay. than And things and both can Maybe, Obviously, on that just cross-border quarter. business. follow-up. there's But It bit bit was the with sides and does now? seemed thought about a that. it like tariffs a border of stand you talk Frank,

so get near seeing we that term? month terms in you're look in of And strategic anything the So the how business here? here past next or the once directions does

of right right right growth that amount that thing to it's to on raised Great. a the whether Great we are near-shoring Mexican you there a invest phenomenon for fair obviously key given U.S. that uncertainties Look, drive the see there. the the drivers are and now points to ones us of lot politics. in politics are or long-term There being exist basis, continue continue that and question a from.

policy trade is what certainly be is to around going an uncertainties the overhang. So

a at businesses looking ticked last Just earlier it months, you when wait-and-see think nearshore foreign at today down investment deploying approach by month. of about the And for I that look a who many the is over direct has capital side. are bit meaningfully, it XX on thinking was and

play a And So that one. continues a for on all long-term Joe, into bit maybe let in trajectory very little this year-over-year the of on that But positive. basis. to translates guys you some be business I'll Jim softer and chime

indecision some say, accounts we mostly that cross-border in just seeing kind just QX. a of do handful area accounts assurances mean, would for there. got the lot a there slow. of I what consumer a we're the We've that we're we small lost I haven't saw Yes, business, Frank, that large the of just us, lot durables getting are or that's of in

But our overall, cross-border and there the Frank's proposition going -- proven of able well kind in the getting flip of will of put I new But in are do hard value just point, to accounts the forward. we've the -- on accounts on to and traction quarter. with the kind salespeople and overcome us the in be larger we've what that the serve side, to as there our declines we're flat It's geographies. space to just interior, some capabilities think new those

Yes. customer pipeline there. And very is is into the a strong. recruiting from to standpoint, too, just as more touch interest definitely on We're market. that that agents That well,

something I that think be be can for I years everybody a Landstar it's good going to potential. come. sees area And to for long-term growth think the

next will question Tom the the We UBS. move from coming of now line Wadewitz of to

has Or been when year to you're about first how offer in kind more? of hurricanes. from to that It rates in pace here the wanted solid the markets like a there, do kind attrition it's and of the supply-demand in balance a if if tough market? about see you I some a just think be the maybe you truckload trading is with improvement optimistic in in whether Great. on could thoughts attrition? slow pace any enough see and next But seems recently of to market changes of Yes. half just pace the seeing in that's bump

Tom. Yes,

a couple When ones of that a be middle those tightness, of the that That's bit us of the So you the X ultimately came That's where did given declines, country, some in tightness. I think little see tells that But just mean, the ones reconstruction, maybe of at a order weekly pace think same that to will to longer is came demolition of close things there. through, we're which at level are the in green are through hurricanes on the I generate a got basis. continuing a going think we to the time, the happening. regional that mean, to to through. I shoot you hurricanes, least damage before the happen of help terms I magnitude track of term. But getting

slow. Our would slow. slowed. did attrition thought We It has it

of the the Now we're of part shorter year. kind in

the Joe, anything you'd -- the before that? few to need and our But exits over think when to think just capability add quarters next to have in to rates. we you're cross-line working little sure see outpace environment is of of and going we're do on boost the calendar. given we the cross to accelerate really in that the continue make we a that accounts we good turns. need we additions, that it's recruiting I that happens, efforts have one So where bleed ended I are But how things we out going that bit the

I that there now, to agree. do some going right? it's sort catalyst, see to of I catalyst has be. is No, be right to just And exactly think hard what a

Yes.

mentioned, on little we're the to I Like this the I Are on likely What's just months, unknowns, on what trade can have in little lot a Fed up going of visibility. X Tom, there's to air, is X a tax while or on we those of but for have going ago, one. XXXX the have to near-term the a like. a clarity mean, going policy do? looks think transition hang lot all all If power? as I policy I sidelines think election. next we of depending are

Right.

That versus there follow-up, for terms the midpoint, is kind Or is of that below on of bit of earnings reported in a And but explain sense. cost similar you line? kind XQ of XQ, XQ it then Or where of or that Okay. maybe what it XQ. earnings headwinds? kind earnings like versus is little difference there guide, of are lower makes some for sounds the in revenues, drives Are particular the below -- guide noise terms the items XQ? the

the is $X.XX one big of the we Tom, kind item tax called out.

variable than you're on fact what don't really, we XQ circle So the typical revs slightly compression. the [ on quarter, that points about that same kind anticipate you're is square a Based we've compress trying XXX at It to a XQ basis the of lower saw midpoint, the bit to -- typically XXX contribution XX of by But third margin. little ]. in mitigated to that walk. we we got degree

on XQ about that point XQ the other I'd XQ to then And Tom, worth is call XQ. excess Reserve cut impact balance to XX basis the Federal Those are the our in biggies. walk item out, only $X.XX, was cash

Okay. Do you're move maybe that room you rates in think up you rates? you? improvement assuming Is got some not for benefit and to like

Tom. Yes,

to interesting give trends a you in on within daily terms some October. watch weekly it's this the of JT basis. honestly, can So more color and

of came October a of September. of July. mean I and September off soft the counterbalance it were weeks soft The couple to was first

was a days last really soft have And of been part soft. If pretty in, then you think about X July comes or a September. October the X good third had really quarter, October the first we And the good. and

line really not obviously where a snap peak. do And it's we're you So expecting from. strong a

and part peak, upper the of probably some JT? get range. then So the rate in if some we we're

basis walk seasonally see Yes. would kind to we we to we The revenue July. then downtick of saw Tom, echo quarter, truck normal front August. that. today, good No, When September guy a that I third about seasonal down. underperformed. just XX in primarily like was into Based it's rate the flat loaded to load. We the strength saw October, slightly information in be on a typically we've per going it's got September on point looking And

our in that below the about set for October revenue was fourth quarter probably per month which opening July, circumstances, the with $XX for XQ. load So is opening of

we good need the So rest way in. a would pretty of

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

maybe little what has van dry especially Thinking I about mean, between businesses, talk if you're and unsided. differences sluggish. bit Can seeing a manufacturing X? the about the the the of then flatbed the kind been given you or -- the

curious side I I'm of specifically, the equation So about just the flatbed guess.

up Let certainly me and can chime open JT it then in.

be in haul say you're say bullish mean, the the the we since our that on a you JT us competitive talked in about or have that. think X the and van a which durables average, about, that of then to I that the platform focus there part real equation. see advantage space, broadly I continue going and unsided continue We was heavy business. I interesting certainly -- in to to the go been business actually could could side, performed slides company consumer of than to us while here back the if room of any better it's What

of So bit a spot. a that's actually bright

to appropriate JT, VAN. the a to future. that's for sign to relative comes little the rate, can perform well the question immediately piece back good moving mind But But to Obviously, platform and at continues give platform color? a it's if rate business the you an and

the second a of guy our a we we for loadings Yes. second the the started step Frank's only started unsided machinery. strength pretty interesting weaken the the XQ to So little X%, weakness see XQ of sequential, in that's Certainly, in to outpaced category. been back. XQ up pricing, on and walked the XQ to was bit the We Jordan, to dipping We were has van. us, X%. Jordan, took whereas on the saw little platform the That bit good of just tailwind a comment, we good. manufacturing held were seeing I in backdrops held which What X% -- loading in better, little right? a if saw of haul platform inside on X% up think bit to to we Heavy with walk van kind XQ dipped -- what And quarter. a quarter, numbers in XQ pleased

So then building on interesting revenue Good building van see it little triple-digit the to about, us customers in growth X van for well. a talked hold performance was products equipment. and and up loadings was consumer durables bit Frank stuff of had -- some products in that We largest better. that had as

if I from sense political about have sort uncertainty? on a mean, helpful. Or holdup? of the side Any manufacturing-oriented bottom what's any that that the the be I it color you Is your market? customers -- guess, would of around

X obviously, months it's the I Fed if more back dust around X in January. wait tax then policy, so deploying build away, or manufacturing either or industrial -- clarity mean, the and trade the the have you're probably week policy. in settles you year. to space. things. to capital much And just policy, election I just you're and deploying build Politics, you new late or until inventories capital in is plant, a The anything more industrial thinking business broadly today a in to about inauguration we're

get And capital leaning are folks much uncertainty. We actually I think now up. right that's just uncertainty that have cleared so of into don't there because going deploying to

coming move We'll Evercore to Chappell line of now Jon question from the of the ISI. next

stabilization When and the think in given you. has will we that is feel XXXX cycle, these operating much on Jim, that like were eventual a they it and leverage than or next for cetera, greater of cost same of some as model the so you the maybe et of about percentage items SG&A, do revenue just the downturn? other, in this or inflection, insurance the line side, kind any prior

are a through down good of income. ability Frank contribution question. in believers incremental it's Jon, variable to I big our still to XX% operating push and the

$XX Jon, given out, comp in be lines, versus been about the tough. year-over-year incentive call insurance going has we're will next on 'XX I those 'XX. facing XXXX, baseline million and comp year, Now a The headwind stock to

It's our the accident insurance. overall, called overall trend me out XX% heard friend that a frequency, accident in the first [ severity got single revenue high and year-over-year. has Jon. been still DOT digits, frequency, BCO XXXX, accidents, X%. XX before, claim cost down per down is of that and weeks ] the severe You've the factor, decline Unfortunately, more load Frank say not on we've XX our

lot on volume So easier going on which we've the to than have premium some to to push a operating yield, but of down we're income the is the seen side some to you know stabilization in help side. house, get

had quarter, that think pulled weeks then noticeable kind you've on you in And is the the Or from and some anticipate others you a that's more more a side of fourth string base seasonality some follow-up. December that fourth makes the issues and seeing breadth that bit of may of the the just maybe next helpful. your pause these in you're of bridge the maybe post the rest bit there a just That's kind in little have of little that first where something little there's Do others what here the to few demand just October? couple trend. customer that provide the know greater bit a seasonal the weeks? lot seen quarter that's optimism November of of that the certainty I just think maybe conservatism around a you Okay. a we've follow but in way don't guys the you in operate more the and said bit

start, Let have point, revenue Matt, portfolio. it we little peak. a me chime and very on a your maybe you give diversified in then To a bit have

either to side. do going year, prior answer it's the dependent the the on what the think be end people to question. toward mentioned uncertainties on I I industrial a in of

going be to So that's think I muted.

-- customer And peak. a have and leaned UPS of the feel we a leaned Obviously, into our good then view in and But given It's a share we consumer. going nobody peak. have we'll robust peak. the of of the services timing If call of turns to you in split holidays, guidance. really the volume. the half pulled more little over a goods toward get be of we listened broad on Matt. of be We how rate, holding a trending lift obviously, we in But last be our been nobody of cetera. and side right like are just et own now, they upper great from peak of season, numbers. duration the And in and upside bit better out, the peak still get has to that couple in there GDP that Go saying has the in customers, is the feel little certainly has of of shorter but terms then peak the ahead, into leaning the terms really about not all it's years. strategy to a agents and holiday seeing the it going We're

whatever they basis, have Yes. to customers. end I'll trying pulse of how can And may trailing dealing that, a equipment to need serve with the we -- top see customers on on pull pipeline, of XX, their top we just down and our we them agents. in They're their case on get better, be. the really quarter, at a what's sit if in, XX the they every daily

just we the through in So going hear base fourth the we're echoing really, what agent quarter here.

this Frank a huge year. as expecting side, peak we're not peak the said, On

and sure that telling to gone cycle, that line I which think in the just on to us. almost drivers projections it's trailing sub bit. for 'XX. talk are peak our I handful starting and on equipment really place. we've about see quite drive Within -- of year, based that on by is may kind folks think comparable be towards going got as there start make we a talking pandemic expectations what us 'XX, years the the and agents what what We that for we And -- should to monthly to those customers for down it's we them line And we're haul in we in us, side 'XX, really like June, little last with a more muted has be a the saw of shortened the shortened year brick-and-mortar. bit their the cycle

coming next of line Group question We'll move Research. Scott now from the to the of Wolfe

Frank, X on just So QX. you about tightness. regional talked more

we worse that in underperformed of a the and the guys of given us gotten data seasonality has I spot saying impact [ in maybe, understand there better you but looks gotten opportunity still maybe I like X, better. volume I data disconnect it's it's of have October. hurricane think if Some benefit bit just October, guess, contract, hurricane anymore? thought the help some national like is you get do clarify, data gotten then just guys. some FEMA little direct can spot there looks we you a was with And don't the or ]

Yes, Scott.

talk kind in we're I We've heard about. is QX going say revenue reconstruction. question on a trying essentially I before demolition think peak think from is QX, got to mark you a that line Matt to relative be to around what of perspective. that The QX is piece hurricane

some needle mover food but prepositioning products, anything a little doubt building had some that's agents little you've we're water see bit nothing going a of of scheme with things. customers. near bit in, of So A conversations and Matt, to of grand I the JT? some term. in coming

No, add, to Yes. nothing Frank.

I'd add last around of would storms. of benefit the these hurricane selecting I around the whole carriers on to that from asset-based lot quite a bit expectations the has years. process hurricane, It the hurricane and XX streamed a the that of be the think of used carriers kind over a handful

type with bidding are have of government brokers a on of along you carriers lot hundreds business. that Now the

is across carriers point, see rebuilding But really, the Frank's in you see to the kind later that little the rates in a think of cycle. more prize see going past. out than they've of broader bit to that and spread the you're and real suppressed been you're on efforts, to going base So the what I a

a posted clarifying. get What to One to it's doesn't it's little lot thing posted bit posted That then things at A discussed going is looking spot truck and times, at worth move you're think ] that rate. and it's the at ultimately rate. the there's and to necessarily DAT mean I a rates like and the different get of rates. it on traffic going of going moved stop from [ that just are

at price a little point. moves different freight Our

I we've is we we market. spot transacts at got And higher What at rung of which haul higher freight. a a mentioned before, the little As as obviously, I've business rate well, there. think quality generally necessarily don't the play platform the bottom

throughout month, come down, seen the rates have have back we up. gone rates So have

look the trend difficult is and September for for more X really of weeks lot there's strong then So was couple going made it something pretty the fine, quarters line, been good. to first Last what of that's example, of predict have last was August soft, a and quarter couple the XX soft. July. to like. was of around volatility July, and or a that October, days has more

So hard again, to, the which point it's Joe? pick snap really line. on to the

kind all things those of of by to days the the are I'm there's around lot ] that lot occur. state on some hurricanes, a And didn't national of prepositioning you a of lead to of state. these say time gone. yes, run going contract, used And now FEMA just with have [ that's kind of

themselves better So the they life little of trying in forth of bit quicker these past a normal around opportunity some heydays to contract states be in were it and lot for and get and is not so to the [ what position to power back ] than I to put Landstar. storms a in the people used in think years a with as FEMA prepositioning get

the a Okay. understand -- pretty think the X just the like but we're in I And at That's decade. BCO helpful. like a it's low on follow-up lowest of cyclicality totally more and count, see count. then level at And BCO I the

you how back? And Can cycle? of it think some much like take of so to don't this contemplated you wondering, you've can curious I something you I'm you BCO retention? next back that Or all in change do add at like in a does more? cycle like but this plays splits terms the it I'm better to so, that think thought And the in get maybe just how is there encourage any of guess, I need if all? out

really, a what for what But the point. added your a of and see I The worked combination time. BCO this I long for remember, it's comes we've on academically, compensation, obviously, really think count, out. has us well

and produced would obviously you're continue the good we would a in has We the which The continue something get rate the can challenge will departure additions departures the and to is any hundreds, of set thousands basis, the additions will Joe guide is add decline, to to model have a cycle go for that of net if and therefore, the we're seeing reasons. is certainly when for that number go going What every year. significant us, of expect not happen Joe? produce up a turns it past, into. will and future. in

the a number Yes. retention improved trended I Scott, -- now difficult I actually at I is a -- has to earlier, Where mentioned more little interest at guys have programs don't historically a of but need are mean, as has terminations our that truck, get lot purchase have operator we purchase and there of operators the volume leaving have downward. those say, levels think would in we're bit bit. truck. who it's that lease lease asset-based from the a down. owner truck. had. owner you A a The is The carriers the don't they are

access can elevated but used bit for costs environment are now, in. we're you little the a -- can the that You still trucks

little is just So bit of appeal I the the market a hazy. spot think

aren't I around to have and we up the to inflation to we get that maintaining of report a that sideline. Journal and potential are think elevated, mentioning cost operate the and truck rate payment and have earlier today there's low just investment. the now, I that to demand week have the And willing out was If Commercial if at all to rates in upturn a on I up BCOs think the this Carrier last improve, don't you -- don't starts I saw operate a people you see make rate September, have the X%, that so a levels the just right truck that lot cost you given go that since X%.

So do door that to want think as opportunity you when in this really operators in the appeal owner to there, I past. and time? I attract at is we the when we'll investment make and the opens think come have

to has phenomena to And an continue I I But count. things promote do, those trying spreads The the and and grown BCO may the and haven't went of there considered the think time the think in your reason model, recruit -- using as BCOs economic volume brokerage have better, for kind I margins, we potential pretty from do brokerage some to over spreads our -- think to done try this. we that clearly probably the with we're working that changes again, elevated. address too decision for to I consider change. differently I different on think And that which tighten, the some have been have maker how is in social that it's our earlier think isn't which many outcome to agent, there to that they trying as ways media agents to of growth to thing. --

you, Thank the guys. time. Appreciate

Thank you.

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

a weak demand like revenue been guess, specifically. but now. feels declining. to want landscape your I when And that want It's actually XX% viewing I from the growing again? to domestic automotive start it's category, on production That's you side, begin still automotive of are market given about to large quarter I the Frank. it that would OEMs? hearing the the you the reductions about we're into how fourth expect ask

Yes.

mean I need that an robust expedited as as the is to when business, something really capacity it you OEM much automotive good truck available the it's side, expedited demand component capacity. and got is don't at. think readily not I obviously then It's we're on

get terms rates, loan, points of uncertainty X Back market today for you're probably it in XXX wait. could new to there's So on the and to if your that going wait lower a element to car you're it. consumer basis the you as months and in

looking time, on the numbers is of what that the and -- in of So things to JT? I think some of there. at got little seeing softness at bit little has us basis that from same your a point, auto I you're that revenue the sequential a combination we're we quarter at think that we're a surprised in

nothing No, add, to Frank.

Yes.

too. Just well, as

you're on the year, COVID, ] disruption in lot But at quarter side, a of [ there the pretty expedites happened over Just a supply looking really last to if industry going a the spot right if fourth that that after market. back what on of lot going healthy on, Experis was industry. you were look in

that fast of a getting than of a year. it inventory was and reasons, and more lot market where like their demand the there last supply It's and You stable market, today forward stabilized. lot rates a to of isn't to spot at business last half just

about begin this pull to growing can into but know Just what I you insurance cost you to are And 'XX. we I kind talked trying I would up you it's the early, of incentive follow tough. guess, remains previous if a think could side. of does And think on Understood. actually the comp, inflation? to cost overall about again next expect year? year, $XX headwind, some costs levers if probably on question million this remains offset macro there base next challenging

Daniel, the line. happy walk to

recession. heard freight So elongated talk now me this a of years with other operating for costs, you've couple

bad at kind Our contractor are running of to numbers close Xx debt historical norms.

truck say you to we to from which, and rate, the there's dropped turnover a if has to point, return -- could So XX%. XX% market more balanced Joe's

XX%, a out costs that million As reverts there's mean of in our other contractor operating on bad to debt. couple probably closer XX%, ringing

in of shrinking the fleet, new plus size trailers. some been have we're the We bringing trailer

BCOs. quarter talked and calls this get Safety specific, our So Safety the that with Thursday that to Safety numbers program prepared So the customers, and Landstar tires the got seeing side. the not accident should you on on Together we're result the Landstar in get larger. all Clearly, right? quasi in in accident that remarks. Insurance, bad saw controllables, truck an with agents. mutual we and frequency we of continue understanding giveaways focus We I is When a reduced maintenance our venue, about the expense the in the that with like trends Officer we've

XX BCOs supporting through the folks count X,XXX annually million G&A, we've We've attrition. in folks pushing agents, by head bills been -- X,XXX network. we've Daniel, X,XXX through probably so, or X reduced got freight

of our fully real on We've depreciated So in history then 'XX. we're depreciation. is in cautious fourth company IT last finally, being headcount. here largest becomes the quarter probably And got project the X

So pressure on of side -- some the depreciation X that's but the some project, will of slow. pressure from the on tech

taking playing flip are -- is refreshing to we delivery a weren't of bunch up. catch trailers. The new of a that 'XX, We've trailers. 'XX, we're of lot we

in chunk tailwind form to going is the trailers. get depreciation of of a eaten So that IT up new

high a of structure kind how going 'XX, cost about the I into Daniel. that's So think level

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

on is Elliot Jason Seidl. for This

are you past that the into you that overall shed the exiting the view sizes seeing capacity in guys tractors? maybe larger still business. to fleet You good fleets Can a Are landscape have speak sense? in had

view a we say, majority fence, obviously is the less operators, a is view truck capacity We that have speak. or twosie against of parked better than [ I there I Yes. that's the trucks. which a of have have the probably think our X ] mean to onesie single so

as are terms of the net from we those accounts. think better watch a if week. pretty little much in good every bit database in a FMCSA we shape, So the adds certainly We not

a got how is. that good we've of view So

there. I capacity out think there's

fleets, that numbers get and comes is like there the and sure that's that's combination destination the the make who private business to that they it about, with high-value of some I we provide, time, a securely. I heard value think capacity folks of the think safely customers want At on sidelines. as the same differentiator sitting I to when mean, safety doing there that JT have to I asset-heavy likely real the you the some as speak the Joe? out well goods

trucks. because visibility in this only small a a going of year. Tends with brokerage to quarter of of lack couple to is required than on some to XX% of little volumes, was I few versus And you Yes, fleet size bit carriers carrier update a carriers be with their And of only XX third volume if years. more also, of every echo are there that would -- the our the the it carriers XXXX less our XX% at trucks that. participation in moved in look

So XX. you and there you've they out got have could they have actually to only or believe there X carriers be think XX trucks showed they got that XX when

your FMCSA So a they're it participation they on. some little smaller to database. there appear kind hard of idea just is hand certainly mix, in bit than their our to that's in the put would shrinking maybe But the support by that be

color guess Will towards this some skew that you're other sense. makes for And to what something I on the too Is of it spoke support any I just tell? line? is starting platform or time then No, to the Or the business? now? the as you soon about guess, look begins. plan longer-term rebuild that could that like? magnitude

soon and It's first second. terms a of I I'll let tell probably been involved in hurricane I magnitude. to with. that we in has chime in not Landstar Matt mean, both have mean, is timing a playbook. the too this hurricane

a help making a Matt? done we've customers them try already, that and or to willing agents not just us obviously to sure they are and customers with So we them. that have of we ready have terms just the here good people of making some if know us give we're sure what and with do with and playbook in business familiar are we

we're really the now that, the couple we sector everything that, moving it folks the dozen the Frank the customers customers once products, doing talking to building through water, placing food, in that But in water, in in yet. of early the on of a front some as started getting got roaring we we're not and something We machinery. front with That's equipment, to, they're success food, get Yes. that them. out on now We've started of rebuild, participate that. had alluded heavy is some some

just later, out. timing Hopefully, front they're of it start just bit be here handle we're out. to when than a if rolling we going we're that, they're rolling talking when to a the number on So good I that yet on they put could little a have think I certainly sooner to use quarter. But and in think them don't still start that. early to do in we trying fourth them those and ready the

sooner on roofs you're and that. rebuilding the think like Florida I in a storm, because probably it's things little the

amount demolition ] there's fair know, don't think a at And we guys the [ to do when reconstruction in that's hopper be and of think ready we I work. you Holloway happen path I ] Helene, we'll the open demolition But of Holloway commences. before there [ as of and sort participate. got

Moore We'll move to now the next Stephanie the Jefferies. from of of line question coming

touch maybe capital here. allocation, capital I Thank afternoon. on bit priorities little wanted to Good a you.

maybe on buybacks in would remains net any third then cash despite really to a M&A. also strategic potential solid just bit thoughts love what little more updated slowed just But the quarter a First, position. from lens, maybe gauge a

all we're and here be might market coming of backed for assets for looking lot that PE other aware I a up kind of there's exit. think

any as your thoughts historical in we cycle, where like, allocation your are on as capital any well potentially given So the and more positioning the M&A doing priorities?

important certainly We to as obviously, Stephanie. trailing talk the yield. trailing to currently thinking question, and JT in XXXX the continue the business. as good equipment we're about going going well based the both core technology is That's we're less an for heard in on to on what environment equipment thing side, invest No, purchases us the

quarter the and market many know. buyback opportunities the believer kind the in the obviously didn't restarted on program. quarter. a stock we of this patient both type at I'm that in strong the have a opportunities. was thought it quarter opportunistic We little what jump And program to were quarter, continued price in and I'd that of favorable in just was being ago you we to Buybacks, say prior volatility this less probably a than as

logistics question. the really but along of company to fairly that terms internally. of that and the more certainly little it is X the transportation conversation. open provider. But with a of integrate a We'd certainly well. it's typical that model, if been be companies there's comes would your to something we've us months us narrow out are we've opportunity than targets. to that about an so. M&A, talk bit is to that's that about good something of And begun Gosh, there come, provide something In I've And again, our set fits in that talked And or smaller uniqueness seamlessly that number

that. leave Great. it I Thank Well, you. will at

have the from person a James David Hicks question of We last coming of ask Financial. line to Raymond the

headwinds we these Can just talk the resulting impact of kind making, guys you've of been you kind agents look maybe been cost truck that have as tried to offset recent investments about inflation BCOs of your workforce, have and persistent XXXX? productivity to into

Yes.

a table the we'll this run So on around probably bit. X little

and the So we or over tech investment gosh, but investments. which on inside We're lot turn been allows BCOs. agents of going the lens last of last have share ability so say I'd in the has decade to behalf lion's us the to been decade of the in building. heavy would done investing, the been say over that lifting to continue has invest then IT a the I spaces, those there,

we center for some service give we're better pretty here provide to working agents that the So ability have and will certainly BCOs. neat service that our technologies on our us

forward to could basis. to those BCOs things go They to they important on a ability basis. of and the handle productive our have our our if great ability are But more. well, some that agents we a a out job sell more and Sure. have can serving And on things efficiency? And are us do customers, going then they really the unlock

able line that internally, doing think at and good successful shape. so then really we're I be And if we'll we're the hold in to

of the technology So side. spear Jim Applegate of a been on in tip respects for some maybe the Business the while. side technology has

hand let Jim. maybe me it to you, So over

handle it. can more that our giving rolled Yes. making single has around BCOs that handle efficient. more if agencies. really, their Yes. more Great. standpoint, And sure our so ability significantly Frank. better improved We've we've and see we've technology you it's to actually with -- revenue our about whole agents playbook Thanks, technology revenue. agents our have ability employees, single From out, And with to they be documented tools the been a

not standpoint, be ahead embracing over, over road. on from So paperwork. And have pulling to BCO on go with dealing well, they out add on the side. them They're to BCO they're we're don't go too. take employees able the keeps and seeing to more and technology side new business. One as a the It

look and more at it of to Joe, as and grow the But that. has to out open kind BCOs to you the that do of I marketplace. continue of allowed both strategy technology capacity map. a So for really us had road a comment? as in Frank got and agents lot tools to there do we're our along said, tech But far pretty in want up We've

Yes. matching be between going our agents and time to long that. And would just some I BCOs. tweaks capability pretty freight David, for here a add robust had we're a making to we've that,

market agents between think of profile to I that changes, freight freight needs the ability freight direct to our As that also and change. BCOs and

some And do that's decision about to BCOs success we're to things to do. I good should we're from to so make our little be putting the what to bit more on ability good do targeted think and horizon and excited makers, to working the them allow our information kind quickly. us comes decisions that And the to And enhance that's of a they a be agents model people on stuff more and kind going and allow that. of let

that's deeper Particularly, as tractor around have Okay. just Great. any of dig of impact service BCOs. you peers? industry, And kind I you to if a costs in having the age kind wanted maintenance spoke then to into their of rest bit guys follow-up, which our the just to the health of earlier and current visibility relative the to and kind associated on relative downtime, of kind a

to of a Not lot impact David. Yes. Sure. service,

I tend a service. ones active always their do don't them BCOs profitable. Not years largely very and inclined, I average in a are is us are think and mechanically they operate. We've think, so I very environment. to it the work that, the But truck in of the pretty provides are used lot repair because to the X that XX very like And of and And our operated affects for that, is low that challenges. old. doing is reasons it about those make our everybody cost And that be our they truck still think on with own, fleet right?

corporate perspective, a we FMCSA, to every require days. inspection required from an think get on Based I it you're XXX annually.

perspective us we measure safety all that don't from tires So every days. from perspective. we XXX And require get allow a equipment to stuff really -- away do or a them to maintenance and we

at puts it a think them don't disadvantage. I So

of over an others. give in I from may this a think standpoint advantage actually kind cost environment them

operate. and program good pricing X,XXX and And we've fundamental [ a on and fuel out repairs all gone authority. they very were got trucks fleet truck then taken bit or might on to pricing we've need get they that than own beneficial it's of that -- a their and the those X ] as X they better services them, We've pretty where fleet and negotiated if so LCAP negotiated for a inspections quite out X,

I So a we tandem, out nice I think do job think those things in pretty here.

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

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

to stabilization variable the experienced of Landstar company the freight growth the by a are encouraged quarter. business model cost economic been of free higher look cyclical navigate speaking forward the January. well has And XXXX late elongated significant to the We resiliency our Thank this again on when and and fourth look you. these you regardless us generate our always the afternoon. second Thank forward joining downturn way. We in freight are call dynamic quarter conference after XXXX turns the with cash rates to we recent times highs environment, flow. earnings Landstar market in to positioned you continues for

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