Where the relatively small air and ocean forwarding business saw strong revenue growth, all of Landstar Systems trucking businesses reported falls in volumes, rates and revenues in Q1, 2025. For the company as a whole, operating income fell 35.6% y-o-y to $39.42m on revenues that fell 1.6% to $1,152.5m. Landstar CEO Frank Lonegro said, “The Landstar team of independent business owners and employees continued to perform admirably, despite a highly unpredictable macro-economic backdrop.”

Ocean and Air bright spot

A fraction of the size of its trucking sister divisions, Ocean and Air reported a 22.7% y-o-y improvement in revenues to $65.64m. Revenue per load grew 16.2% to $7,197, led by improved ocean freight rates, and volumes are by 4.6%. None of the trucking businesses fared so well.

The CEO pointed out, “This was the first time in fifteen years that the number of loads hauled via truck during the first quarter exceeded the immediately preceding fourth quarter.” Even so on a y-o-y basis, all trucking businesses saw volume, rate and revenue drops.

Truck transportation including the LTL business and FTL business reported revenue decline of 1.8% y-o-y to $1,049.7m, a load count 1.2% down to 484,900 loads, and a revenue per load decline of 0.6% to $2,165. Within this, the Unsided/Platform Equipment subdivision reported a revenue fall of 11.3% y-o-y to $304.4m and the LTL business revenues fell 12.4% to $22,436m.

The Intermodal transportation business, like Ocean and Air is relatively small compared to the trucking division. While this did not have a major impact on overall revenues, this division reported a 22.9% y-o-y fall in revenue that in part came from a 14.1% fall in loads to 6,150 and a revenue per load decline of 10.4% to $2,843.

Sophisticated fraud uncovered hits profits

A sophisticated fraud has been uncovered at the business and this had an impact on overall profits. Lonegro said, “During the last week of Landstar’s 2025 Q1 we identified a supply chain fraud relating to the company’s international freight forwarding operations. This fraud matter does not involve our core North American Truckload Services. While investigation, remediation and collection efforts continue, the Q1 2025 results included a $4.8m pretax charge relating to this matter. This charge reflects the total currently anticipated adverse financial impact to Landstar relating to this fraud net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries This charge is reflected in selling, general and administrative costs, as bad debt expense.”

US trucking recession

As down-cycles go in the US trucking industry, in the eyes of Landstar’s leadership this is a rather protracted one. This has affected every trucking business in the US, and shows no signs of abating, no matter the radical surgery being taken out by the current government on the economy. For now, such businesses are doing what they can in hope that consumer confidence improves so their upstream businesses can at last move towards greater profitability.

Author: Richard Shrubb

Source: Ti Insight

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