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LANDSTAR SYSTEM INC

LANDSTAR SYSTEM INCLSTREarnings & Financial Report

Nasdaq · transport

Landstar System, Inc. is an American transportation services company specializing in logistics and, more specifically, third-party logistics. Landstar utilizes an extensive network of over 8,800 independent owner-operators, referred to internally as business capacity owners (BCOs), over 1,000 independent freight agents, and over 70,000 vetted carriers. Landstar provides services principally throughout the United States and to a lesser extent in Canada and between the U.S. and Canada, Mexico, ...

What changed in LANDSTAR SYSTEM INC's 10-K — 2023 vs 2024

Top changes in LANDSTAR SYSTEM INC's 2024 10-K

245 paragraphs added · 275 removed · 210 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

56 edited+9 added−12 removed74 unchanged
Independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers.
Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers.
Management believes the factors that have historically favorably impacted turnover include the Company’s extensive agent network, the quantity and quality of available freight, the proprietary technology-based tools the Company makes available to BCO Independent Contractors to empower them to manage their businesses, the Company’s programs to reduce the operating costs of its BCO Independent Contractors and Landstar’s reputation for quality, service, reliability and financial strength.
Management believes the factors that have historically favorably impacted turnover include the Company’s extensive agent network, the quantity and quality of available freight, the proprietary technology-based tools the Company makes available to BCO Independent Contractors to empower them to manage their businesses, the Company’s programs to reduce the operating costs of its BCO Independent Contractors and Landstar’s reputation for quality, safety, service, reliability and financial strength.
For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, “Risk Factors.” 11 Seasonality Landstar’s operations are subject to seasonal trends common to the trucking industry. Historically, truckload shipments for the quarter ending in March are typically lower than for the quarters ending in June, September and December.
For a discussion of the risks associated with these laws and regulations, see Part I, Item 1A, “Risk Factors.” Seasonality Landstar’s operations are subject to seasonal trends common to the trucking industry. Historically, truckload shipments for the quarter ending in March are typically lower than for the quarters ending in June, September and December.
Management believes that competition for freight transported by the Company is based on service, efficiency, safety and freight rates, which are influenced significantly by the economic environment, particularly the amount of available transportation capacity and freight demand.
Management believes that competition for freight transported by the Company is based on service, efficiency, safety, freight security and freight rates, which are influenced significantly by the economic environment, particularly the amount of available transportation capacity and freight demand.
A significant portion of the Company’s truckload services is priced in the spot market and delivered over irregular or non-repetitive routes, while approximately 25% of the Company’s fiscal year 2023 truck transportation revenue was generated by BCO Independent Contractors utilizing Landstar provided trailing equipment, which frequently is used on more routine, regular routes.
A significant portion of the Company’s truckload services is priced in the spot market and delivered over irregular or non-repetitive routes, while approximately 25% of the Company’s fiscal year 2024 truck transportation revenue was generated by BCO Independent Contractors utilizing Landstar provided trailing equipment, which frequently is used on more routine, regular routes.
As part of the execution of this strategy, the Company has launched the following tools to participants within our network: • Agent TMS: A cloud-based platform for truckload freight agent workflow. • Blue TMS: A cloud-based platform built specifically to service the truckload brokerage contract services market. • Analytics: A suite of business intelligence applications powered by Microsoft Power BI for independent sales agents and BCO Independent Contractors to access information and identify trends in their businesses. • Pricing: Landstar-proprietary pricing tools developed with data scientists using historical Company information and third party pricing data to provide independent commission sales agents with near real time market data. • LandstarOne ™ : Mobile application available to BCO Independent Contractors and third party motor carriers providing a one-stop location for available loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations. • Clarity: Landstar’s proprietary freight tracking tool that incorporates geo-locational data from, among other sources, electronic logging devices, trailer tracking devices and third party data aggregators. • Agent and Capacity Portals: New and improved cloud-based portals built to provide a single on-ramp to a multitude of applications, tools and information available to Landstar independent agents and capacity providers. • Trailer Tools: Applications empowering independent commission sales agents through the automation of the Company’s trailer request and trailer pool management processes. • Credit: Application that automates the process for independent commission sales agents to request customer credit.
As a result of this strategy, the Company offers the following tools to participants within our network: • Landstar TMS: A cloud-based platform for truckload freight agent workflow. • Blue TMS: A cloud-based platform built specifically to service the truckload brokerage contract services market. • Analytics: A suite of business intelligence applications powered by Microsoft Power BI for independent sales agents and BCO Independent Contractors to access information and identify trends in their businesses. • Pricing Tools: Landstar-proprietary pricing application developed with data scientists using historical Company information and third party pricing data to provide independent commission sales agents with near real time market data. • LandstarOne™: Mobile application available to BCO Independent Contractors and third party motor carriers providing a one-stop location for available loading opportunities as well as fueling station locations, retail fuel prices, fuel prices net of Landstar-arranged discounts and applicable state fuel tax credits, and equipment inspection site locations. • Clarity: Landstar’s proprietary freight tracking tool that incorporates geo-locational data from, among other sources, electronic logging devices, trailer tracking devices and third party data aggregators. • Agent and Capacity Portals: New and improved cloud-based portals built to provide a single on-ramp to a multitude of applications, tools and information available to Landstar independent agents and capacity providers. • Trailer Tools: Applications empowering independent commission sales agents through the automation of the Company’s trailer request and trailer pool management processes. • Credit: Application that automates the process for independent commission sales agents to request customer credit.
Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is ultimately borne by Signature. Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue in each of fiscal years 2023, 2022 and 2021.
Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is ultimately borne by Signature. Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue in each of fiscal years 2024, 2023 and 2022.
Each BCO Independent Contractor operates under the motor carrier operating authority issued by the U.S. Department of Transportation (“DOT”) to Landstar’s Operating Subsidiary to which such BCO Independent Contractor provides services and has leased his or her equipment. The Company’s network of BCO Independent Contractors provides marketing, operating, customer service, safety, recruiting and retention advantages to the Company.
Each BCO Independent Contractor operates under the motor carrier operating authority issued by the U.S. Department of Transportation (“DOT”) to Landstar’s Operating Subsidiary to which such BCO Independent Contractor provides services and has leased his or her equipment. The Company’s network of BCO Independent Contractors provides marketing, operating, customer service, safety, freight security, recruiting and retention advantages to the Company.
Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers.
Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment and general commodities. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers.
Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage 10 layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.
Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and 9 Table of Contents actuarially projected losses experienced by the Company at various levels of excess insurance coverage.
The transportation logistics segment’s rail intermodal service capabilities include trailer on flat car, container on flat car, box car and railcar. The transportation logistics segment’s rail intermodal services contributed 2% of consolidated revenue in each of fiscal years 2023, 2022 and 2021. Air and Ocean Services.
The transportation logistics segment’s rail intermodal service capabilities include trailer on flat car, container on flat car, box car and railcar. The transportation logistics segment’s rail intermodal services contributed 2% of consolidated revenue in each of fiscal years 2024, 2023 and 2022. Air and Ocean Services.
The insurance segment provides risk and claims management services to certain of Landstar’s Operating Subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance directly to certain of Landstar’s Operating Subsidiaries.
The insurance segment provides risk and claims management services to certain of Landstar’s Operating Subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstar’s Operating Subsidiaries.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various factors including the extent to which such carriers maintain their own insurance coverage.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage.
The transportation logistics segment’s air and ocean services contributed 5% of consolidated revenue in fiscal year 2023, 8% of consolidated revenue in fiscal year 2022 and 5% of consolidated revenue in fiscal year 2021. Insurance Segment The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. (“RMCS”).
The transportation logistics segment’s air and ocean services contributed 6% of consolidated revenue in fiscal year 2024, 5% of consolidated revenue in fiscal year 2023 and 8% of consolidated revenue in fiscal year 2022. Insurance Segment The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. (“RMCS”).
Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $5.3 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.
Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.8 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.
There were 11 transportation service providers, including 3PLs, included in the Company’s top 25 customers for fiscal year 2023. Management believes the Company’s network of agents and third party capacity providers allows it to efficiently attract and service smaller shippers which may not be as desirable to other large transportation providers (see above under “Agent Network”).
There were 10 transportation service providers, including 3PLs, included in the Company’s top 25 customers for fiscal year 2024. Management believes the Company’s network of agents and third party capacity providers allows it to efficiently attract and service smaller shippers which may not be as desirable to other large transportation providers (see above under “Agent Network”).
In addition, the Company utilizes several third party data centers throughout the U.S. Landstar relies, in the regular course of its business, on the proper operation of its information technology systems. 9 Corporate Services The Company provides many administrative support services to its network of independent commission sales agents, third party capacity providers and customers.
In addition, the Company utilizes several third party data centers throughout the U.S. Landstar relies, in the regular course of its business, on the proper operation of its information technology systems. 8 Table of Contents Corporate Services The Company provides many administrative support services to its network of independent commission sales agents, third party capacity providers and customers.
Landstar retains liability through a self-insured retention for commercial trucking claims up to $5 million per occurrence. Effective May 1, 2019, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2019 Initial Excess Policy”) with a third party insurance company.
Landstar retains liability through a self-insured retention for commercial trucking claims up to $5 million per occurrence. Effective May 1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of over 1,000 independent commission sales agents and over 85,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.
The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of approximately 1,050 independent commission sales agents and over 78,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.
Annual terminations of Million Dollar Agents have typically been less than 3% of the total number of Million Dollar Agents. 6 Third Party Capacity The Company relies exclusively on independent third parties for its hauling capacity other than for trailing equipment owned or leased by the Company and utilized primarily by the BCO Independent Contractors.
Annual terminations of Million Dollar Agents have typically been less than 3% of the total number of Million Dollar Agents. 5 Table of Contents Third Party Capacity The Company relies exclusively on independent third parties for its hauling capacity other than for trailing equipment owned or leased by the Company and utilized primarily by the BCO Independent Contractors.
Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.
Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, cold chain/temperature-controlled, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.
Commissions to agents are recognized over the freight transit period as the performance obligation to the customer is completed. The Company had 524 and 625 agents that each generated at least $1 million in Landstar revenue (the “Million Dollar Agents”) during fiscal years 2023 and 2022, respectively.
Commissions to agents are recognized over the freight transit period as the performance obligation to the customer is completed. The Company had 485 and 524 agents that each generated at least $1 million in Landstar revenue (the “Million Dollar Agents”) during fiscal years 2024 and 2023, respectively.
No customer accounted for more than 4% of the Company’s 2023 revenue. Technology Landstar focuses on providing integrated transportation management solutions which emphasize customer service and information coordination among its independent commission sales agents, customers, capacity providers and employees.
No customer accounted for more than 7% of the Company’s 2024 revenue. Technology Landstar focuses on providing integrated transportation management solutions which emphasize customer service and information coordination among its independent commission sales agents, customers, capacity providers and employees.
See “Notes to Consolidated Financial Statements” for the amount of revenue from external customers, measure of profit and total assets attributable to the insurance segment for the last three fiscal years. 5 Factors Significant to the Company’s Operations Management believes the following factors are particularly significant to the Company’s operations: Agent Network The Company’s primary day-to-day contact with its customers is through its network of independent commission sales agents and, to a lesser extent, through employees of the Company.
See “Notes to Consolidated Financial Statements” for the amount of revenue from external customers and measure of profit attributable to the insurance segment for the last three fiscal years. 4 Table of Contents Factors Significant to the Company’s Operations Management believes the following factors are particularly significant to the Company’s operations: Agent Network The Company’s primary day-to-day contact with its customers is through its network of independent commission sales agents and, to a lesser extent, through employees of the Company.
The Company’s top 100 customers accounted for approximately 46% and 44%, respectively, of consolidated revenue during fiscal years 2023 and 2022. Management believes that the Company’s overall size, ecosystem of digital technologies and applications, geographic coverage, access to equipment and diverse service capability offer the Company significant competitive marketing and operating advantages.
The Company’s top 100 customers accounted for approximately 46% of consolidated revenue during both fiscal years 2024 and 2023. Management believes that the Company’s overall size, ecosystem of digital technologies and applications, geographic coverage, access to equipment and diverse service capability offer the Company significant competitive marketing and operating advantages.
Trailing Equipment The Company offers its customers a large and diverse fleet of trailing equipment. The following table illustrates the mix of the trailing equipment as of December 30, 2023, either provided by the BCO Independent Contractors or owned or leased by the Company and made available primarily to BCO Independent Contractors.
Trailing Equipment The Company offers its customers a large and diverse fleet of trailing equipment. The following table illustrates the mix of the trailing equipment as of December 28, 2024, either provided by the BCO Independent Contractors or owned or leased by the Company and made available primarily to BCO Independent Contractors.
In addition, at December 30, 2023, 3,428 trailers were provided by the BCO Independent Contractors. Approximately 25% of Landstar’s truck transportation revenue was generated on Landstar-provided trailing equipment during fiscal year 2023. Customers The Company’s customer base is highly diversified and dispersed across many industries, commodities and geographic regions.
In addition, at December 28, 2024, 3,258 trailers were provided by the BCO Independent Contractors. Approximately 25% of Landstar’s truck transportation revenue was generated on Landstar-provided trailing equipment during fiscal year 2024. Customers The Company’s customer base is highly diversified and dispersed across many industries, commodities and geographic regions.
These third party arrangements provide coverage on a per occurrence or aggregated basis. In recent years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past decade, there has been a significant increase in the prevalence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
During fiscal year 2023, the Company billed customers $324 million in fuel surcharges and passed 100% of such fuel surcharges to the BCO Independent Contractors. These fuel surcharges are excluded from revenue and the cost of purchased transportation.
During fiscal year 2024, the Company billed customers $253 million in fuel surcharges and passed 100% of such fuel surcharges to the BCO Independent Contractors. These fuel surcharges are excluded from revenue and the cost of purchased transportation.
Since the launch of this initiative in 2016, the Company has invested approximately $158 million in this strategic development effort, including approximately $35 million and $33 million, respectively, in fiscal years 2023 and 2022. The Company’s information technology systems used in connection with its operations are located in Jacksonville, Florida and, to a lesser extent, in Rockford, Illinois.
Since the launch of this initiative in 2016, the Company has invested approximately $192 million in this strategic development effort, including approximately $34 million and $35 million, respectively, in fiscal years 2024 and 2023. The Company’s information technology systems used in connection with its operations are located in Jacksonville, Florida and, to a lesser extent, in Rockford, Illinois.
The Company’s truck transportation services contributed 91% of consolidated revenue in fiscal year 2023, 89% of consolidated revenue in fiscal year 2022 and 91% of consolidated revenue in fiscal year 2021. Rail Intermodal Services.
The Company’s truck transportation services contributed 90% of consolidated revenue in fiscal year 2024, 91% of consolidated revenue in fiscal year 2023 and 89% of consolidated revenue in fiscal year 2022. Rail Intermodal Services.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2024, the Company experienced an increase of approximately $21 million, or over 380%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2025, the Company experienced an increase of approximately $22 million, or over 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
For example, with respect to a single hypothetical claim in the amount of $60 million incurred during the annual policy year ending April 30, 2024, the Company would have an aggregate financial exposure of approximately $25 million.
For example, with respect to a single hypothetical claim in the amount of $65 million incurred during the annual policy year ending April 30, 2025, the Company would have an aggregate financial exposure of approximately $30 million.
A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.
A material increase in the frequency or severity of accidents, cargo claims, including further increases in the amount of cargo theft, or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.
At December 30, 2023, the Company maintained a database of over 76,000 approved Truck Brokerage Carriers who provide truck capacity to the Company. Truck Brokerage Carriers provide truck capacity to the Company under non-exclusive contractual arrangements and each operates under its own DOT-issued motor carrier operating authority.
At December 28, 2024, the Company maintained a database of over 70,000 approved Truck Brokerage Carriers who provide truck capacity to the Company. Truck Brokerage Carriers provide truck capacity to the Company under non-exclusive contractual arrangements and each operates under its own DOT-issued motor carrier operating authority.
See “Notes to Consolidated Financial Statements” for the amount of revenue from external customers, measure of profit and total assets attributable to the transportation logistics segment for the last three fiscal years. 4 Truck Transportation Services .
See “Notes to Consolidated Financial Statements” for the amount of revenue from external customers and measure of profit attributable to the transportation logistics segment for the last three fiscal years. 3 Table of Contents Truck Transportation Services .
During fiscal year 2023, revenue generated by BCO Independent Contractors and Truck Brokerage Carriers was 38% and 53%, respectively, of consolidated revenue.
During fiscal year 2024, revenue generated by BCO Independent Contractors and Truck Brokerage Carriers was 38% and 52%, respectively, of consolidated revenue.
Landstar revenue from the Million Dollar Agents in the aggregate represented 95% and 97% of consolidated revenue in 2023 and 2022, respectively. Included among the Company’s Million Dollar Agents, the Company had 87 independent sales agencies that generated at least $10 million in Landstar revenue during the 2023 fiscal year, which in aggregate comprised approximately 68% of Landstar’s consolidated revenue.
Landstar revenue from the Million Dollar Agents in the aggregate represented 94% and 95% of consolidated revenue in 2024 and 2023, respectively. Included among the Company’s Million Dollar Agents, the Company had 81 independent sales agencies that generated at least $10 million in Landstar revenue during the 2024 fiscal year, which in aggregate comprised approximately 67% of Landstar’s consolidated revenue.
During fiscal year 2023, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 53% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Company’s consolidated revenue during fiscal year 2023.
During fiscal year 2024, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 52% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 6% of the Company’s consolidated revenue during fiscal year 2024.
Management believes the Company, along with its network of capacity providers, offers one of the largest fleets of heavy/specialized trailing equipment in North America. At December 30, 2023, 14,270 of the trailers available to the BCO Independent Contractors were owned by the Company and 319 were rented.
Management believes the Company, along with its network of capacity providers, offers one of the largest fleets of heavy/specialized trailing equipment in North America. At December 28, 2024, 14,225 of the trailers available to the BCO Independent Contractors were owned by the Company and 184 were rented.
Power-only and Truck Brokerage Carrier trailing equipment is not included in the following table: Trailers by Type Van 15,046 Unsided/platform, including flatbeds, step decks, drop decks and low boys 2,780 Temperature-controlled 191 Total 18,017 Specialized services offered by the Company include those provided by a large fleet of flatbed trailers and multi-axle trailers capable of hauling extremely heavy or oversized loads.
Power-only and Truck Brokerage Carrier trailing equipment is not included in the following table: Trailers by Type Van 14,788 Unsided/platform, including flatbeds, step decks, drop decks and low boys 2,718 Temperature-controlled 161 Total 17,667 Specialized services offered by the Company include those provided by a large fleet of platform trailers and multi-axle trailers capable of hauling extremely heavy or oversized loads.
These advantages allow the Company to meet the needs of even the largest shippers. Larger shippers often consider reducing the number of authorized carriers they use in favor of a small number of “core carriers,” such as the Company, whose size and diverse service capabilities enable these core carriers to satisfy most of the shippers’ transportation 8 needs.
Larger shippers often consider reducing the number of authorized carriers they use in favor of a small number of “core carriers,” such as the Company, 7 Table of Contents whose size and diverse service capabilities enable these core carriers to satisfy most of the shippers’ transportation needs.
Three Landstar Ranger drivers (out of a Company total of approximately 9,809 drivers for BCO Independent Contractors) are members of the International Brotherhood of Teamsters. The turnover rate for Landstar employees located in the United States and Canada was 14% in 2023, 17% in 2022 and 13% in 2021. The Company considers relations with its employees to be good.
Two Landstar Ranger drivers (out of a Company total of approximately 8,843 drivers for BCO Independent Contractors) are members of the International Brotherhood of Teamsters. The turnover rate for Landstar employees located in the United States and Canada was 12% in 2024, 14% in 2023 and 17% in 2022. The Company considers relations with its employees to be good.
The number of trucks provided to the Company by BCO Independent Contractors was 9,809 at December 30, 2023, compared to 11,281 at December 31, 2022. At December 30, 2023, approximately 97% of the trucks provided by BCO Independent Contractors were provided by BCO Independent Contractors who provided five or fewer trucks to the Company.
The number of trucks provided to the Company by BCO Independent Contractors was 8,843 at December 28, 2024, compared to 9,809 at December 30, 2023. At December 28, 2024, approximately 97% of the trucks provided by BCO Independent Contractors were provided by BCO Independent Contractors who provided five or fewer trucks to the Company.
The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.
In addition, because the U.S. government is one of the Company’s customers, the Company must comply with and is affected by laws and regulations relating to doing business with the federal government. 10 Table of Contents The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.
Also, during fiscal year 2023, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 57% and 31%, respectively, of truck transportation revenue and less-than-truckload and other truck transportation revenue was 2% and 10%, respectively, of truck transportation revenue.
Also, during fiscal year 2024, truck transportation revenue generated via van equipment and unsided/platform trailing equipment was 56% and 33%, respectively, of truck transportation revenue and less-than-truckload and other truck transportation revenue was 2% and 8%, respectively, of truck transportation revenue.
For truckload services, the Company’s independent commission sales agents primarily use Landstar proprietary software which enables agents to enter available freight, dispatch capacity and process most administrative tasks and then communicate that information to Landstar and its capacity providers through cloud-based applications.
For truckload services, the Company’s independent commission sales agents primarily use a Landstar cloud-based platform to enter available freight, dispatch capacity and process most administrative tasks and then communicate that information to Landstar and its capacity providers. The Company’s cloud-based available truck platform provides a listing of available truck capacity to the Company’s independent commission sales agents.
For modes of transportation other than truckload, the independent commission sales agents utilize both proprietary and third party information technology applications provided by the Company.
The Company also offers independent commission sales agents a variety of proprietary pricing, operational and financial tools via web or mobile applications. For modes of transportation other than truckload, the independent commission sales agents utilize both proprietary and third party information technology applications provided by the Company.
We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations. To attract and retain top talent in our highly competitive industry, we have designed our compensation and benefits programs to provide a balanced and effective reward structure.
To attract and retain top talent in our highly competitive industry, we have designed our compensation and benefits programs to provide a balanced and effective reward structure.
Landstar’s BCO Independent Contractor truck turnover was approximately 41% in fiscal year 2023, compared to 29% in fiscal year 2022. Approximately 34% of 2023 turnover was attributable to BCO Independent Contractors who had been with the Company for less than one year.
Approximately 32% of 2024 turnover was attributable to BCO Independent Contractors who had been with the Company for less than one year.
The number of trucks provided by BCO Independent Contractors fluctuates daily as a result of truck recruiting and truck terminations. More trucks were recruited in fiscal year 2023 than in fiscal year 2022 but trucks terminated were higher in fiscal year 2023 than in fiscal year 2022, resulting in an overall net decrease of 1,472 trucks during fiscal year 2023.
The number of trucks provided by BCO Independent Contractors fluctuates daily as a result of truck recruiting and truck terminations. The Company recruited fewer trucks in fiscal year 2024 than in fiscal year 2023. The Company also terminated fewer trucks in fiscal year 2024 than in fiscal year 2023.
Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim.
Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim. In recent years, the amount of cargo theft throughout the freight transportation and logistics supply chain in the United States has significantly increased.
We engage firms nationally recognized in the benefits area to objectively evaluate our programs and benchmark them against peers and other similarly situated organizations. Landstar seeks to compensate employees in a manner that is fair, consistent, and reflective of the external market and provides recognition for the achievement of individual goals, corporate objectives, and professional competencies while maintaining fiscal responsibility.
Landstar seeks to compensate employees in a manner that is fair, consistent, and reflective of the external market and provides recognition for the achievement of individual goals, corporate objectives, and professional competencies while maintaining fiscal responsibility. Our short and long-term incentive programs are aligned with key business objectives and are intended to motivate strong performance.
Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace. All of our employees must adhere to a code of ethics and employee compliance code that set standards for appropriate behavior and includes required annual training.
All of our employees must adhere to a code of ethics and employee compliance code that set standards for appropriate behavior and includes required annual training. As of the end of 2024, a majority of the Company’s employees work remotely or on a hybrid basis.
Decreasing revenue per load on a sequential basis historically has had an unfavorable impact on BCO Independent Contractor turnover. During fiscal year 2023, revenue per load sequentially decreased quarter to quarter throughout the entire year. 7 Truck Brokerage Carriers.
Increasing 6 Table of Contents revenue per load on a sequential basis historically has had a favorable impact on BCO Independent Contractor turnover. During fiscal year 2024, revenue per load on loads hauled by BCO Independent Contractors sequentially increased in the second, third and fourth fiscal quarters. Truck Brokerage Carriers.
At our core, Landstar is about providing opportunity to people regardless of background. We do not tolerate racism or discriminatory behavior and strongly believe in diversity and inclusion. The Company reaffirms its commitment to equal employment opportunity for all people. The Company complies with all applicable federal and state laws pertaining to equal 12 employment opportunity and affirmative action.
At our core, Landstar is about providing opportunity to qualified candidates and employees regardless of background. We do not tolerate discriminatory behavior and strongly believe that diverse perspectives and a collaborative culture lead to better business outcomes.
Removed
The Company’s cloud-based available truck information system provides a listing of available truck capacity to the Company’s independent commission sales agents. The Company also offers independent commission sales agents a variety of proprietary pricing, operational and financial tools via web or mobile applications.
Added
However, the decrease in the number of trucks recruited was larger than the decrease in the number of trucks terminated, resulting in an overall net decrease of 966 trucks during fiscal year 2024. Landstar’s BCO Independent Contractor truck turnover was approximately 35% in fiscal year 2024, compared to 41% in fiscal year 2023.
Removed
The Company subsequently extended the 2019 Initial Excess Policy for one additional policy year, from May 1, 2022 through April 30, 2023.
Added
These advantages allow the Company to meet the needs of even the largest shippers.
Removed
For commercial trucking claims incurred on or after May 1, 2022 through April 30, 2023, the extended 2019 Initial Excess Policy provides for a limit for a single loss of $5 million, with an aggregate limit of $10 million for the policy period ended April 30, 2023.
Added
Within the Company’s third party insurance arrangements providing excess coverage for commercial trucking liabilities, structured arrangements with third party reinsurers within a specific loss layer may include provisions that require additional payments of premium in the event of unfavorable loss experience or a refund of premium in the event of favorable loss experience.
Removed
Effective May 1, 2023, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
Added
With respect to one such three year commercial auto liability reinsurance arrangement relating to certain excess claims incurred between May 1, 2020 through April 30, 2023, it is anticipated that during the 2025 second fiscal quarter, the Company will receive a $12,000,000 cash payment from a third party reinsurance provider in the form of a “no claims bonus” due to favorable loss experience during the policy period.
Removed
In addition, because the U.S. government is one of the Company’s customers, the Company must comply with and is affected by laws and regulations relating to doing business with the federal government.
Added
The Company intends to record the receipt of this payment as a deferred gain on the balance sheet until such time as all underlying claims with exposure under the applicable excess layer insurance arrangement are resolved and the gain can be recognized.
Removed
The COVID-19 global pandemic and related supply chain issues significantly disrupted these typical seasonal patterns. In particular, the Company’s 2022 and 2023 fiscal year results did not reflect normal seasonal patterns.
Added
The Company has experienced, and may continue to experience, increases in the amount of cargo theft, resulting in increased exposure to liability from cargo claims.
Removed
No assurances can be given regarding the extent to which or when trends common to the trucking industry, in general and to Landstar’s operations, in particular, will return to more typical, pre-pandemic, seasonal patterns. Human Capital Resources We believe our employees are among our most important resources and are critical to our continued success.
Added
Human Capital Resources We believe our employees are among our most important resources and are critical to our continued success. We focus significant attention on attracting and retaining talented and experienced individuals to manage and support our operations.
Removed
Our short and long-term incentive programs are aligned with key business objectives and are intended to motivate strong performance.
Added
We engage firms nationally recognized in the benefits area to objectively evaluate our programs and benchmark them against peers and other similarly situated organizations. As of December 28, 2024, the Company and its subsidiaries employed 1,441 individuals.
Removed
To help us achieve this goal, in 2021, Landstar completed a review of employee compensation that included the establishment of new pay grades and applicable salary ranges for all exempt positions. This review followed a similar review of employee compensation for all information technology positions completed in 2020 and a review of all non-exempt positions completed in 2019.
Added
The Company complies with all applicable federal and state laws pertaining to employment. 11 Table of Contents Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.
Removed
Based on applicable pay grades, salary ranges and market data, Landstar completed an annual salary review for all positions in 2022 in conjunction with its annual review and salary adjustment process. As of December 30, 2023, the Company and its subsidiaries employed 1,468 individuals.
Removed
It is our philosophy to treat our employees and applicants fairly without regard to race, color, sex, religion, national origin, disability, present, past, or future service in a branch of the uniformed services of the United States, citizenship, sexual orientation or gender identity.
Removed
As of the end of 2023, a majority of the Company’s employees work remotely or on a hybrid basis.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+8 added−25 removed78 unchanged
Various legislative or regulatory proposals have been introduced at the federal and state levels that may affect the classification status of individuals as 16 independent contractors or employees for either employment tax purposes (e.g., withholding, social security, Medicare and unemployment taxes) or other benefits available to employees (most notably, workers’ compensation benefits).
Various legislative or regulatory proposals have been introduced at the federal and state levels that may affect the classification status of individuals as independent contractors or employees for either employment tax purposes (e.g., withholding, social security, Medicare and unemployment taxes) or other benefits available to employees (most notably, workers’ compensation benefits).
No assurances can be provided regarding the conflict between Russia and Ukraine and the extent of potential future operational disruption the conflict may have on either of these Landstar agencies and the related impact of these disruptions on the Company. 14 Landstar competes with motor carriers and other third parties for the services of independent commission sales agents.
No assurances can be provided regarding the conflict between Russia and Ukraine and the extent of potential future operational disruption the conflict may have on either of these Landstar agencies and the related impact of these disruptions on the Company. Landstar competes with motor carriers and other third parties for the services of independent commission sales agents.
Nevertheless, federal, state and local governmental agencies may engage in efforts to support legislation and regulations mandating the transition of diesel-fuel based commercial motor vehicles, such as Class 8 tractors operated by the Company’s BCO Independent Contractors 18 and Truck Brokerage Carriers, to ZEVs.
Nevertheless, federal, state and local governmental agencies may engage in efforts to support legislation and regulations mandating the transition of diesel-fuel based commercial motor vehicles, such as Class 8 tractors operated by the Company’s BCO Independent Contractors and Truck Brokerage Carriers, to ZEVs.
Customs and the Transportation Security Administration, the Canada Border Services Agency and various state and local agencies and port authorities. 17 The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.
Customs and the Transportation Security Administration, the Canada Border Services Agency and various state and local agencies and port authorities. 16 Table of Contents The transportation industry is subject to other potential regulatory and legislative changes (such as the possibility of more stringent environmental, climate change and/or safety/security regulations, limits on vehicle weight and size and regulations relating to the health and wellness of commercial truck operators) that may affect the economics of the industry by requiring changes in operating practices, by changing the demand for motor carrier services or the cost of providing truckload or other transportation or logistics services, or by adversely impacting the number of available commercial truck operators.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various factors including the extent to which such carriers maintain their own insurance coverage.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage.
Recently, certain states (most prominently, California) have seen significant increased activity by tax and other regulators and numerous class action lawsuits filed against transportation companies that engage independent contractors. There are many different tests and standards that may apply to the determination of whether a relationship is that of an independent contractor or one of employment.
Certain states (most prominently, California) have experienced significant activity by tax and other regulators and numerous class action lawsuits filed against transportation companies that engage independent contractors. There are many different tests and standards that may apply to the determination of whether a relationship is that of an independent contractor or one of employment.
The loss of some of the Company’s Million Dollar Agents and/or a significant decrease in revenue generated by Million Dollar Agents could have a material adverse effect on Landstar, including its results of operations and revenue. Dependence on third party capacity providers.
The loss of some of the Company’s Million Dollar Agents and/or a significant decrease in revenue generated by Million Dollar Agents could have a material adverse effect on Landstar, including its results of operations and revenue. 13 Table of Contents Dependence on third party capacity providers.
While new in California, versions of the ABC test have existed in a number of other states over the years and have been challenged in various courts as violating the federal government’s exclusive right to regulate trucking in certain areas of law and interstate commerce.
Versions of the ABC test have existed in a number of other states over the years and have been challenged in various courts as violating the federal government’s exclusive right to regulate trucking in certain areas of law and interstate commerce.
Landstar retains liability through a self-insured retention for commercial trucking claims up to $5 million per occurrence. Effective May 1, 2019, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2019 Initial Excess Policy”) with a third party insurance company.
Landstar retains liability through a self-insured retention for commercial trucking claims up to $5 million per occurrence. Effective May 1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
In addition, cybersecurity and business interruption insurance could in the future become more expensive and difficult to maintain and may not be available on commercially reasonable terms or at all. Dependence on key vendors.
In addition, cybersecurity and business interruption insurance could in the future become more expensive and difficult to maintain and may not be available on commercially reasonable terms or at all. 14 Table of Contents Dependence on key vendors.
Any decision by the U.S. government to adopt actions such as a border tax on imports, an increase in customs duties or tariffs, the renegotiation of U.S. trade agreements or any other action that could have a negative impact on international trade could cause a reduction in the volume of freight shipped by many Landstar customers.
Any decision by the U.S. government to adopt actions such as an increase in tariffs or customs duties, a border tax on imports, the renegotiation of U.S. trade agreements, in particular, the United States-Mexico-Canada Agreement, or any other action that could have a negative impact on international trade could cause a reduction in the volume of freight shipped by many Landstar customers.
These third party arrangements provide coverage on a per occurrence or aggregated basis. In recent years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past decade, there has been a significant increase in the prevalence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
As noted above in Item 1, “Business — Factors Significant to the Company’s Operations — Agent Network,” the Company markets its services primarily through independent commission sales agents. During fiscal year 2023, 524 agents generated revenue for Landstar of at least $1 million each, or in the aggregate approximately 95% of Landstar’s consolidated revenue.
As noted above in Item 1, “Business — Factors Significant to the Company’s Operations — Agent Network,” the Company markets its services primarily through independent commission sales agents. During fiscal year 2024, 485 agents generated revenue for Landstar of at least $1 million each, or in the aggregate approximately 94% of Landstar’s consolidated revenue.
Many large shippers use 3PLs other than the Company to outsource the management and coordination of their transportation needs rather than directly arrange for transportation services with carriers. As noted above, there were 11 transportation service providers, including 3PLs, included in the Company’s top 25 customers for the fiscal year ended December 30, 2023.
Many large shippers use 3PLs other than the Company to outsource the management and coordination of their transportation needs rather than directly arrange for transportation services with carriers. As noted above, there were 10 transportation service providers, including 3PLs, included in the Company’s top 25 customers for the fiscal year ended December 28, 2024.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2024, the Company experienced an increase of approximately $21 million, or over 380%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2025, the Company experienced an increase of approximately $22 million, or over 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
As an example, for every 100 basis point increase in the U.S. corporate income tax rate the Company would recognize a one-time tax charge of approximately $1,100,000 in connection with revaluing its ending net deferred tax liabilities at December 30, 2023.
As an example, for every 100 basis point increase in the U.S. corporate income tax rate, the Company would recognize a one-time tax charge of approximately $800,000 in connection with revaluing its ending net deferred tax liabilities at December 28, 2024.
For example, with respect to a single hypothetical claim in the amount of $60 million incurred during the annual policy year ending April 30, 2024, the Company would have an aggregate financial exposure of approximately $25 million.
For example, with respect to a single hypothetical claim in the amount of $65 million incurred during the annual policy year ending April 30, 2025, the Company would have an aggregate financial exposure of approximately $30 million.
The Company cannot predict whether, or in what form, any increase in corporate income tax rates, motor fuel tax rates or other tax rates applicable to the transportation services provided by the Company will be enacted and, if enacted, how such increased tax rates may impact the Company.
The Company cannot predict whether, or in what form, any increase in corporate income tax rates, state tax rates, taxes related to the procurement of insurance, motor fuel tax rates or other tax rates applicable to the transportation services provided by the Company will be enacted and, if enacted, how such increased tax rates may impact the Company.
Of these larger agencies, one such Landstar independent commission sales agency, itself with a very diversified customer base, generated approximately $553,000,000, or 10%, of Landstar’s consolidated revenue and approximately 6% of Landstar’s consolidated variable contribution in fiscal year 2023.
Of these larger agencies, one such Landstar independent commission sales agency, itself with a very diversified customer base, generated approximately $470,000,000, or 10%, of Landstar’s consolidated revenue and approximately 5% of Landstar’s consolidated variable contribution in fiscal year 2024.
A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. Dependence on third party insurance companies.
A material increase in the frequency or severity of accidents, cargo claims, including further increases in the amount of cargo theft, or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. 12 Table of Contents Dependence on third party insurance companies.
Included among these Million Dollar Agents, 87 agents generated at least $10,000,000 of Landstar revenue during the 2023 fiscal year, or in the aggregate approximately 68% of Landstar’s consolidated revenue.
Included among these Million Dollar Agents, 81 agents generated at least $10,000,000 of Landstar revenue during the 2024 fiscal year, or in the aggregate approximately 67% of Landstar’s consolidated revenue.
As disclosed in a Current Report on Form 8-K filed by the Company on February 28, 2022, the largest Landstar independent commission sales agency by revenue referenced above, while based in the United States, has significant administrative operations located in Ukraine. The administrative operations of this agency were significantly disrupted during the onset of the Russian invasion of Ukraine.
As disclosed in a Current Report on Form 8-K filed by the Company on February 28, 2022, the largest Landstar independent commission sales agency by revenue referenced above, while based in the United States, has significant administrative operations located in Ukraine.
It is difficult to predict in what form FMCSA regulations may be implemented, modified or enforced and what impact any such regulations may have on motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company. For example, in December 2010, the FMCSA introduced the Compliance Safety Accountability (“CSA”) motor carrier oversight program.
It is difficult to predict in what form FMCSA regulations may be implemented, modified or enforced and what impact any such regulations may have on motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company.
The Inflation Reduction Act establishes a one percent excise tax on stock repurchases made by publicly traded U.S. corporations. This provision was effective for tax years beginning after December 31, 2022. Accrued excise tax of $348,000 was included in other current liabilities in the consolidated balance sheet at December 30, 2023.
On August 16, 2022, the Inflation Reduction Act was signed into law and established a one percent excise tax on stock repurchases made by publicly traded U.S. corporations. This provision was effective for tax years beginning after December 31, 2022. Accrued excise tax of $717,000 was included in other current liabilities in the consolidated balance sheet at December 28, 2024.
The transportation industry historically has experienced cyclical financial results as a result of slowdowns in economic activity, the business cycles of customers, and other economic factors beyond Landstar’s control.
Economic, Competitive and Industry Risks Decreased demand for transportation services; U.S. trade relationships. The transportation industry historically has experienced cyclical financial results as a result of slowdowns in economic activity, the business cycles of customers, and other economic factors beyond Landstar’s control.
Moreover, competition from other transportation service companies including those that provide non-trucking modes of transportation would likely increase if state or federal taxes on fuel were to increase without a corresponding increase in taxes imposed upon other modes of transportation. On August 16, 2022, the Inflation Reduction Act was signed into law by President Biden.
Moreover, competition from other transportation service companies including those that provide non-trucking modes of transportation would likely increase if state or federal taxes on fuel were to increase without a corresponding increase in taxes imposed upon other modes of transportation.
In particular, the FMCSA in recent years proposed a number of regulatory changes that affect the operation of commercial motor carriers across the United States.
In particular, the FMCSA may propose regulatory changes that affect the operation of commercial motor carriers across the United States.
No assurances can be given with respect to the changes that may be made to the CSA program, or any replacement or supplemental program, in the future and what impact new or revised motor carrier oversight programs implemented by the FMCSA could have on the Company, its motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company.
No assurances can be given with respect to what impact new or revised motor carrier oversight programs implemented by the FMCSA could have on the Company, its motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company. Regulations focused on diesel emissions and other air quality matters.
Moreover, the occurrence of a Nuclear Verdict, or the settlement of a catastrophic injury and/or fatality claim that could have otherwise resulted in a Nuclear Verdict, could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. 13 Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim.
Moreover, the occurrence of a Nuclear Verdict, or the settlement of a catastrophic injury and/or fatality claim that could have otherwise resulted in a Nuclear Verdict, could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.
A significant incident, including system failure, security breach, disruption by malware or ransomware, or other damage, could interrupt or delay our operations, damage our reputation, cause a loss of customers, agents and/or third party capacity providers, expose us to a risk of loss or litigation, and/or cause us to incur significant time and expense to remedy such an event, any of which could have a material adverse impact on our results of operations and financial condition. 15 Although the Company maintains cybersecurity and business interruption insurance, the Company’s insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems.
A significant incident, including system failure, security breach, disruption by malware or ransomware, or other damage, could interrupt or delay our operations, damage our reputation with customers, agents, third party capacity providers, employees, vendors, investors or other stakeholders, cause a loss of customers, agents and/or third party capacity providers, expose us to a risk of loss or litigation, and/or cause us to incur significant time and expense to remedy such an event, any of which could have a material adverse impact on our results of operations and financial condition.
Moreover, irrespective of the enactment of these regulations, no assurances can be provided that the technology advancements that will need to occur to make ZEVs commercially viable for long-haul trucking or the extensive nationwide charging/fueling infrastructure and maintenance network that would be necessary to support such operations will develop in the time frame that would be necessary to enable efforts to comply with legislative or regulatory mandates requiring the transition of diesel fuel-based vehicles to ZEVs.
An increase in the costs to purchase, lease or maintain tractor equipment or in purchased transportation cost caused by existing or new regulations without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition. 17 Table of Contents Moreover, irrespective of the enactment of these types of regulations, no assurances can be provided that the technology advancements that will need to occur to make ZEVs commercially viable for long-haul trucking or the extensive nationwide charging/fueling infrastructure and maintenance network that would be necessary to support such operations will develop in the time frame that would be necessary to enable efforts to comply with legislative or regulatory mandates requiring the transition of diesel fuel-based vehicles to ZEVs.
Any inability to negotiate satisfactory terms with one of these key vendors or any other significant disruption to or termination of a relationship with one of these key vendors could disrupt the Company’s operations and impose significant costs on the Company. Economic, Competitive and Industry Risks Decreased demand for transportation services; U.S. trade relationships.
Any inability to negotiate satisfactory terms with one of these key vendors or any other significant disruption to or termination of a relationship with one of these key vendors could disrupt the Company’s operations and impose significant costs on the Company. Adoption of artificial intelligence (“AI”).
Any changes in tax and trade policies in the United States and corresponding actions by other countries could adversely affect our financial performance. Substantial industry competition. As noted above in Item 1, “Business — Factors Significant to the Company’s Operations — Competition,” Landstar competes primarily in the transportation and logistics services industry. This industry is extremely competitive and fragmented.
As noted above in Item 1, “Business — Factors Significant to the Company’s Operations — Competition,” Landstar competes primarily in the transportation and logistics services industry. This industry is extremely competitive and fragmented.
On September 18, 2019, California enacted Assembly Bill (AB) 5 into law, codifying the strict “ABC” test for purposes of determining a worker’s status as an independent contractor or employee under California law.
Certain states, most notably California, have enacted laws codifying the strict “ABC” test for purposes of determining a worker’s status as an independent contractor or employee under that state’s law.
Furthermore, mandates requiring the transition to ZEVs would create substantial costs for the Company’s third party capacity providers and, in turn, increase the cost of purchased transportation to the Company.
The following states have also adopted the ACT regulation: Colorado, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington. Mandates requiring the transition to ZEVs would create substantial costs for the Company’s third party capacity providers and, in turn, increase the cost of purchased transportation to the Company.
A prolonged decrease in freight rates could have a material adverse effect on Landstar, including its revenue and operating income. Legal, Tax, Regulatory and Compliance Risks Status of independent contractors. In recent years, the topic of the classification of individuals as employees or independent contractors has gained increased attention among federal and state regulators as well as the plaintiffs’ bar.
A prolonged decrease in freight rates could have a material adverse effect on Landstar, including its revenue and operating income. 15 Table of Contents Legal, Tax, Regulatory and Compliance Risks Status of independent contractors.
The regulation includes a manufacturer sales requirement and a reporting requirement that applies to large employers including retailers, manufacturers, brokers and others, as well as fleet owners with 50 or more trucks operating in California. The following states have also adopted the ACT regulation: Colorado, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington.
For example, CARB has adopted a regulation, the Advanced Clean Trucks (“ACT”) regulation intended to accelerate a large-scale transition to medium-and heavy-duty ZEVs. The regulation includes a manufacturer sales requirement and a reporting requirement that applies to large employers including retailers, manufacturers, brokers and others, as well as fleet owners with 50 or more trucks operating in California.
Nevertheless, there remains significant uncertainty regarding many aspects of the new law, including how the law will be interpreted and enforced by state and local governments as well as by courts.
The Company monitors these laws and what steps may be necessary or advisable to adapt to a changing legal and regulatory environment. Nevertheless, there remains significant uncertainty regarding how these types of laws will be interpreted and enforced by state and local governments as well as by courts.
Removed
The Company subsequently extended the 2019 Initial Excess Policy for one additional policy year, from May 1, 2022 through April 30, 2023.
Added
Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim. In recent years, the amount of cargo theft throughout the freight transportation and logistics supply chain in the United States has significantly increased.
Removed
For commercial trucking claims incurred on or after May 1, 2022 through April 30, 2023, the extended 2019 Initial Excess Policy provides for a limit for a single loss of $5 million, with an aggregate limit of $10 million for the policy period ended April 30, 2023.
Added
The Company has experienced, and may continue to experience, increases in the amount of cargo theft, resulting in increased exposure to liability from cargo claims.
Removed
Effective May 1, 2023, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
Added
The administrative operations of this agency were significantly disrupted during the onset of the Russian invasion of Ukraine and continue to be affected by the ongoing conflict.
Removed
The Company continues to monitor and analyze the impact of the new law, which became effective as of January 1, 2020, including what steps may be necessary or advisable to adapt to a changing legal and regulatory environment in California.
Added
Although the Company maintains cybersecurity and business interruption insurance, the Company’s insurance may not be adequate to cover all losses that may be incurred in the event of a significant disruption or failure of its information technology systems.
Removed
The Company has BCO Independent Contractors, Truck Brokerage Carriers and independent commission sales agents who reside in and/or principally operate their business in California that could be impacted by AB 5 or similar laws, which could eventually affect our relationship with them.
Added
The adoption of AI and other emerging technologies may become significant to operating results in the future. While AI and other technologies may offer substantial benefits, they may also introduce additional risk. If we are unable to successfully adapt to, implement and utilize such emerging technologies as effectively as competitors, our results of operations may be negatively affected.
Removed
Additionally, the new law may have a significant impact on our Truck Brokerage Carriers based in California who utilize owner-operators to provide various types of transportation services such as drayage, regional or local delivery.
Added
There is significant uncertainty in the marketplace as to the potential actions of the U.S. government with respect to international trade policy and the potential for significant tariffs to be enacted, particularly with respect to trade between the United States and, respectively, Mexico, Canada and China.
Removed
Since the Company is neither incorporated nor headquartered in California and the vast majority of BCO Independent Contractors, Truck Brokerage Carriers and independent commission sales agents currently doing business with the Company reside and principally operate outside of California, we do not expect AB 5 to have a material impact on Landstar’s overall network of BCO Independent Contractors, Truck Brokerage Carriers and independent commission sales agents.
Added
Any changes in tax and trade policies in the United States and corresponding actions by other countries, including a retaliatory increase in tariffs on goods destined for export from the United States, could adversely affect our financial performance. Substantial industry competition.
Removed
Under CSA, the FMCSA monitors seven Behavior Analysis and Safety Improvement Categories, or BASICs, under which a motor carrier may be evaluated against established threshold scores for each such BASIC.
Added
For many years, the topic of the classification of individuals as employees or independent contractors has garnered significant attention among federal and state regulators as well as the plaintiffs’ bar.
Removed
In the event a motor carrier has one or more BASIC scores that exceeds the applicable threshold, the motor carrier has an increased risk of roadside inspection and/or compliance review by FMCSA.
Removed
Under the Fixing America’s Surface Transportation Act, or the “FAST Act” signed into law on December 4, 2015, the FMCSA was required to engage the National Research Council to conduct a study of CSA and the Safety Measurement System (“SMS”) utilized by the CSA program.
Removed
As a result of the FAST Act, the FMCSA announced the removal of the BASIC scores from public view and that such scores are expected to remain hidden from public view while changes to CSA are considered.
Removed
In 2018, the FMCSA announced significant anticipated changes to CSA that if enacted would be expected to have a material impact on the current program. As of the end of 2023, no such changes to CSA have yet been enacted.
Removed
Regulations focused on diesel emissions and other air quality matters.
Removed
For example, CARB has adopted two new regulations, the Advanced Clean Trucks (“ACT”) regulation and the Advanced Clean Fleets (“ACF”) regulation, that would mandate the transition of commercial trucking operations in California to ZEVs over time. CARB’s ACT regulation, as enacted, is intended to accelerate a large-scale transition to medium-and heavy-duty ZEVs.
Removed
CARB’s ACF regulation is intended to work in conjunction with the ACT regulation to require the deployment of medium- and heavy-duty ZEVs in California. Components of the ACF regulation, as adopted by CARB, include the following requirements: • Manufacturer sales mandate.
Removed
Manufacturers would be required to sell only zero-emission medium- and heavy-duty vehicles in California starting in 2036. • Drayage fleets. Beginning January 1, 2024, trucks must be required to be registered in the CARB Online System to conduct drayage activities in California.
Removed
Any truck that is to conduct drayage activities in California and is added to the California fleet on or after January 1, 2024, is required to be a ZEV. • High priority fleets.
Removed
High priority fleets (defined by the regulation to include an entity that owns, operates or directs vehicles in California and has $50 million or more in total gross revenue or a fleet that owns, operates, or directs 50 or more vehicles in its California fleet) are required to either (i) purchase only ZEVs beginning 2024 and, starting January 1, 2025, remove internal combustion engine vehicles at the end of their minimum useful life as specified in the regulation or (ii) use the ZEV Milestones Option to phase-in ZEVs into their fleets to meet ZEV targets as a percentage of their total California fleet according to the following schedule: Table A: ZEV Fleet Milestones by Milestone Group and Year Percentage of vehicles that must be ZEVs 10% 25% 50% 75% 100% Milestone Group 1: Box trucks, vans, buses with two axles, yard tractors, light-duty package delivery vehicles 2025 2028 2031 2033 2035 and beyond Milestone Group 2: Work trucks, day cab tractors, buses with three axles 2027 2030 2033 2036 2039 and beyond Milestone Group 3: Sleeper cab tractors and specialty vehicles 2030 2033 2036 2039 2042 and beyond On October 16, 2023, the California Trucking Association (the “CTA”) filed a lawsuit in the Eastern District of California challenging the ACF regulation as, among several alternative theories, preempted by federal law under the Federal Clean Air Act and the Federal Aviation Administration Authorization Act of 1994.
Removed
The CTA seeks declaratory relief that the ACF regulation is invalid and unenforceable as well as preliminary and permanent injunctive relief barring the implementation and enforcement of the ACF regulation.
Removed
On December 27, 2023, CARB and the CTA reached an understanding that CARB will not take enforcement action as to the drayage or high priority fleet reporting requirements or registration prohibitions under the ACF regulation until U.S.
Removed
EPA grants a preemption waiver under the federal Clean Air Act applicable to those regulatory provisions or determines a waiver is not necessary, and CTA agreed not to file a preliminary injunction motion seeking to enjoin enforcement of the challenged provision of the ACF regulation while the waiver request is pending before U.S. EPA.
Removed
No assurances can be provided regarding whether U.S.
Removed
EPA may grant a preemption waiver, when such a decision may be made or the CTA’s litigation challenging the ACF regulation, including the timing of any proceedings relating to the litigation. 19 To the extent that the ACF regulation remains in effect, no assurances can be given with respect to the extent BCO Independent Contractors will choose to become CARB-compliant by purchasing a ZEV.
Removed
Accordingly, many of the Company’s BCO Independent Contractors may not be permitted to haul loads that would require travel within California, which could negatively affect the ability of the Company to service customer freight needs for freight originating from, delivering to or traveling through California.
Removed
An increase in the costs to purchase, lease or maintain tractor equipment or in purchased transportation cost caused by existing or new regulations without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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These third parties analyze data on the interactions of users of our information technology resources, including employees, and conduct penetration tests and scanning exercises to assess the performance of our cybersecurity controls, systems and processes.
These third parties analyze data on the interactions of users of our information technology resources, including employees, and conduct penetration tests and vulnerability scanning exercises to assess the performance of our cybersecurity controls, systems and processes.
In particular, the Vice President of Network Services leads a team of IT professionals that includes individuals with significant cybersecurity expertise. The Vice President of Network Services has over 26 years of experience in various roles with the Company as well as with the U.S. Army involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs.
In particular, the Vice President of Network Services leads a team of IT professionals that includes individuals with significant cybersecurity expertise. The Vice President of Network Services has over 27 years of experience in various roles with the Company as well as with the U.S. Army involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs.
Material cybersecurity threat risks are also considered during separate Board and Board committee meeting discussions relating to matters such as enterprise risk management, internal controls over financial reporting and business continuity planning.
Material cybersecurity threat risks are also considered during separate Board and Board committee meeting discussions relating to matters such as enterprise risk management, IT strategy, internal controls over financial reporting and business continuity planning.
Members of our IT department collaborate with the Management Risk Committee, as necessary, to gather insights for identifying and assessing cybersecurity threats, their severity, and potential mitigations. Our cybersecurity risk management and strategy processes are led by the Chief Information Officer, who is a member of the Management Risk Committee, and the Vice President of Network Services.
Members of our IT department collaborate with the Management Risk Committee, as necessary, to gather insights for identifying and assessing cybersecurity threats, their severity, and potential mitigations. Our cybersecurity risk management and strategy processes are led by the Chief Information Officer and the Vice President of Network Services, who are each members of the Management Risk Committee .
The Company describes whether and how risks from identified cybersecurity threats materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Disruptions or failures in the Company’s computer systems; cyber and other information security incidents” included as part of our risk factor disclosure at Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.
The Company describes whether and how risks from identified cybersecurity threats materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Disruptions or failures in the Company’s computer systems; cyber and other information security incidents” included as part of our risk factor disclosure at Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein. 19 Table of Contents Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management.
At least semi-annually, the Management Risk Committee and, subsequently, the Safety and Risk Committee of the Board receives an overview of our cybersecurity threat risk management and strategy processes from the Chief Information Officer and the Vice President of Network Services.
The Safety and Risk Committee of the Board is responsible for the oversight of risks from cybersecurity threats. At least semi-annually, the Management Risk Committee and, subsequently, the Safety and Risk Committee of the Board receive an overview of our cybersecurity threat risk management and strategy processes from the Chief Information Officer and the Vice President of Network Services.
Additionally, we may require certain third parties to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. 21 During the period covered by this Annual Report, the Company has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
During the period covered by this Annual Report, the Company has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Third-party risks are included within our enterprise risk management assessment program, as well as our cybersecurity-specific risk identification program. Cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third-parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threats identified through such diligence.
Third party risks are included within our enterprise risk management assessment program, as well as our cybersecurity-specific risk identification program. Cybersecurity considerations affect the selection and oversight of our third party service providers.
The team of IT professionals led by the Vice President of Network Services includes individuals with relevant degrees and certifications, including Certified Information Security Systems Professional (CISSP), Certified Cyber Security Architect (CCSA), EC-Council Certified Ethical Hacker (CEH), GIAC Certified Forensic Examiner (GCFE), SANS Digital Forensics And Incident Response (FOR408), CompTIA Certified PenTest+, Cisco Certified Network Associate (CCNA), and CompTIA Certified Security+.
The team of IT professionals led by the Vice President of Network Services includes individuals with relevant degrees and certifications, including Certified Information Security Systems Professional (CISSP), GIAC Foundational Cybersecurity Technologies (GFACT), GIAC Certified Incident Handler Certification (GCIH), GIAC Security Essentials (GSEC), ITIL 4 Foundations, Qualys Certified Specialist - Vulnerability Management Detection & Response, Microsoft Technology Associate: Security Fundamentals, Google Cloud Certified: Professional Cloud Security Engineer, Cisco Certified CyberOps Associate, Cisco Certified Network Associate (CCNA), CompTIA Security+, and CompTIA Pentest+.
Removed
Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. The Safety and Risk Committee of the Board is responsible for the oversight of risks from cybersecurity threats.
Added
We perform diligence on third parties that have access to our systems, data or facilities that house such systems or data, and continually monitor cybersecurity threats identified through such diligence.
Added
Additionally, we may require certain third parties to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Board of Directors authorized the Company to purchase up to 1,912,824 shares of the Company’s Common Stock from time to time in the open market and in privately negotiated transactions. On December 6, 2022, the Landstar System, Inc.
On December 7, 2021, the Landstar System, Inc. Board of Directors authorized the Company to purchase up to 1,912,824 shares of the Company’s Common Stock from time to time in the open market and in privately negotiated transactions. On December 6, 2022, the Landstar System, Inc.
As of such date, Landstar had 35,716,673 shares of Common Stock outstanding and had 133 stockholders of record of its Common Stock. However, the Company estimates that it has a significantly greater number of stockholders because a substantial number of the Company’s shares are held by brokers or dealers for their customers in street name.
As of such date, Landstar had 35,316,073 shares of Common Stock outstanding and had 136 stockholders of record of its Common Stock. However, the Company estimates that it has a significantly greater number of stockholders because a substantial number of the Company’s shares are held by brokers or dealers for their customers in street name.
The following table presents information related to securities authorized for issuance under these plans at December 30, 2023: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options Weighted-average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Equity Compensation Plans Approved by Security Holders 0 0 3,201,405 Equity Compensation Plans Not Approved by Security Holders 0 0 0 Under the 2011 EIP, the issuance of (i) a non-vested share of Landstar Common Stock issued in the form of restricted stock and (ii) a share of Landstar Common Stock issued upon the vesting of a previously granted restricted stock unit each counts as the issuance of two securities against the number of securities available for future issuance.
The following table presents information related to securities authorized for issuance under these plans at December 28, 2024: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options Weighted-average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Equity Compensation Plans Approved by Security Holders 0 0 2,981,152 Equity Compensation Plans Not Approved by Security Holders 0 0 0 Under the 2011 EIP, the issuance of (i) a non-vested share of Landstar Common Stock issued in the form of restricted stock and (ii) a share of Landstar Common Stock issued upon the vesting of a previously granted restricted stock unit each counts as the issuance of two securities against the number of securities available for future issuance.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Common Stock of the Company is listed and traded on the NASDAQ Global Select Market under the symbol “LSTR.” The reported last sale price per share of the Common Stock as reported on the NASDAQ Global Select Market on January 26, 2024 was $197.11 per share.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Common Stock of the Company is listed and traded on the NASDAQ Global Select Market under the symbol “LSTR.” The reported last sale price per share of the Common Stock as reported on the NASDAQ Global Select Market on January 24, 2025 was $173.04 per share.
Board of Directors authorized the Company to purchase up to 319,332 additional shares of its Common Stock from time to time in the open market and in privately negotiated transactions under its share purchase program. As of December 30, 2023, the Company had authorization to purchase in the aggregate up to 3,000,000 shares of its Common Stock under these programs.
Board of Directors authorized the Company to purchase up to 319,332 additional shares of its Common Stock from time to time in the open market and in privately negotiated transactions under its share purchase program. As of December 28, 2024, the Company had authorization to purchase in the aggregate up to 2,547,981 shares of its Common Stock under these programs.
Included in the number of securities remaining available for future issuance under equity compensation plans were 187,260 shares of Common Stock reserved for issuance under the 2022 DSCP. 23 Financial Model Shareholder Returns The following graph illustrates the return that would have been realized, assuming reinvestment of dividends, by an investor who invested $100 in each of the Company’s Common Stock, the Standard and Poor’s 500 Stock Index and the Dow Jones Transportation Stock Index for the period commencing December 29, 2018 through December 30, 2023. 24 Item 6.
Included in the number of securities remaining available for future issuance under equity compensation plans were 181,450 shares of Common Stock reserved for issuance under the 2022 DSCP. 21 Table of Contents Financial Model Shareholder Returns The following graph illustrates the return that would have been realized, assuming reinvestment of dividends, by an investor who invested $100 in each of the Company’s Common Stock, the Standard and Poor’s 500 Stock Index and the Dow Jones Transportation Stock Index for the period commencing December 28, 2019 through December 28, 2024. 22 Table of Contents Item 6.
Purchases of Equity Securities by the Company The following table provides information regarding the Company’s purchase of its Common Stock during the period from October 1, 2023 to December 30, 2023, the Company’s fourth fiscal quarter: Fiscal Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Share Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares That May Yet Be Purchased Under the Programs September 30, 2023 2,910,339 Oct. 1, 2023 – Oct. 28, 2023 — $ — — 2,910,339 Oct. 29, 2023 – Nov. 25, 2023 229,671 169.08 229,671 2,680,668 Nov. 26, 2023 – Dec. 30, 2023 — — — 3,000,000 Total 229,671 $ 169.08 229,671 On December 7, 2021, the Landstar System, Inc.
Purchases of Equity Securities by the Company The following table provides information regarding the Company’s purchase of its Common Stock during the period from September 29, 2024 to December 28, 2024, the Company’s fourth fiscal quarter: Fiscal Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Programs Maximum Number of Shares That May Yet Be Purchased Under the Programs September 28, 2024 2,563,081 Sept. 29, 2024 – Oct. 26, 2024 — $ — — 2,563,081 Oct. 27, 2024 – Nov. 23, 2024 15,100 178.96 15,100 2,547,981 Nov. 24, 2024 – Dec. 28, 2024 — — — 2,547,981 Total 15,100 $ 178.96 15,100 (1) The average price paid per share does not include the 1% excise tax on net stock repurchases, as applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The increase in shareholders’ equity was primarily the result of net income, partially offset by dividends declared by the Company and purchases of shares of the Company’s common stock in fiscal year 2023.
The increase in shareholders’ equity in fiscal year 2023 was primarily the result of net income, partially offset by dividends declared by the Company and purchases of shares of the Company’s Common Stock in fiscal year 2023.
Such statements are by nature subject to uncertainties and risks, including but not limited to: the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2023 fiscal year; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in this and Landstar’s other SEC filings from time to time and described in Item 1A in this Form 10-K under the heading “Risk Factors.” These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated.
Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2024 fiscal year; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in this and Landstar’s other SEC filings from time to time and described in Item 1A in this Form 10-K under the heading “Risk Factors.” These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated.
Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.
Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.
In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most 38 recently completed fiscal quarter.
In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter.
During the Company’s 2023 fiscal year, freight demand was soft throughout the year and culminated with an unusually weak peak season in the 2023 fourth quarter. The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 17% and decreased revenue per load of 33 approximately 15% compared to fiscal year 2022.
During the Company’s 2023 fiscal year, freight demand was soft throughout the year and culminated with an unusually weak peak season in the 2023 fourth quarter. The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 17% and decreased revenue per load of approximately 15% compared to fiscal year 2022.
Other operating costs, net of gains on asset sales/dispositions Maintenance costs for Company-provided trailing equipment, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and BCO Independent Contractor recruiting and qualification costs are the largest components of other operating costs.
Other operating costs, net of gains on asset sales/dispositions Maintenance costs for Company-provided trailing equipment, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and recruiting and qualification costs for BCO Independent Contractors are the largest components of other operating costs.
The change in the number of Million Dollar Agents on a year-over-year basis may also be affected by agents that remain with the Company yet experienced lower year-over-year 26 revenue that resulted in such agent moving below the Million Dollar Agent category.
The change in the number of Million Dollar Agents on a year-over-year basis may also be affected by agents that remain with the Company yet experienced lower year-over-year revenue that resulted in such agent moving below the Million Dollar Agent category.
Effective May 1, 2023, the Company entered into a new three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
Effective May 1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.
Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.
Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable and reasonably estimable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.
The Company believes that operating income as a percentage of variable contribution is useful and meaningful to investors for the following principal reasons: (i) the variable costs of revenue for a significant portion of the business are highly influenced by short-term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; (ii) disclosure of this measure allows investors to better understand the underlying trends in the Company’s results of operations; (iii) this measure is meaningful to 32 investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissions to agents that the Company incurs to provide services to our customers; and (iv) management considers this financial information in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs.
The Company believes that operating income as a percentage of variable contribution is useful and meaningful to investors for the following principal reasons: (i) the variable costs of revenue for a significant portion of the business are highly influenced by short-term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; (ii) disclosure of this measure allows investors to better understand the underlying trends in the Company’s results of operations; (iii) this measure is meaningful to 30 Table of Contents investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissions to agents that the Company incurs to provide services to our customers; and (iv) management considers this financial information in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs.
Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers.
Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment and general commodities. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers.
The decrease in revenue per load on loads hauled via truck was primarily due to pricing pressure throughout fiscal year 2023 as industry-wide truck capacity was significantly more readily available as compared to fiscal year 2022, particularly during the 2022 first quarter during which pandemic-related supply chain disruption was at a high point, partially offset by an increased average length of haul during fiscal year 2023.
The decrease in revenue per load on loads hauled via truck was primarily due to pricing pressure throughout fiscal year 2023 as industry-wide truck capacity was significantly more readily available as compared to fiscal year 2022, particularly during the 2022 first quarter during which pandemic-related supply chain disruption was at a high point, partially offset by an increased average length 33 Table of Contents of haul during fiscal year 2023.
Approximately 43% of the Company’s consolidated revenue in fiscal year 2023 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 57% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.
Approximately 43% of the Company’s consolidated revenue in fiscal year 2024 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 57% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.
Significant variances from management’s estimates for the ultimate resolution of self-insured claims could be expected to positively or negatively affect Landstar’s earnings in a given quarter or year.
Significant variances from the Company’s estimates for the ultimate resolution of self-insured claims could be expected to positively or negatively affect Landstar’s earnings in a given quarter or year.
Included in selling, general and administrative costs was incentive compensation expense of $591,000 and $16,507,000 for the 2023 and 2022 fiscal years, respectively, and stock-based compensation expense of $4,282,000 and $12,399,000 for the 2023 and 2022 fiscal years, respectively. Depreciation and amortization increased $700,000 in fiscal year 2023 compared to fiscal year 2022.
Included in selling, general and administrative costs was incentive compensation expense of $591,000 and $16,507,000 for the 2023 and 2022 fiscal years, respectively, and stock-based compensation expense of $4,282,000 and $12,399,000 for the 2023 and 2022 fiscal years, respectively. 34 Table of Contents Depreciation and amortization increased $700,000 in fiscal year 2023 compared to fiscal year 2022.
Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $5.3 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.
Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.8 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.
It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at December 30, 2023, primarily due to the inherent difficulty in estimating the severity of commercial trucking claims and the potential judgment or settlement amount that may be incurred in connection with the resolution of such claims.
It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at December 28, 2024, primarily due to the inherent difficulty in estimating the severity of commercial trucking claims and the potential judgment or settlement amount that may be incurred in connection with the resolution of such claims.
It should be noted that billings to many customers of the Company’s truck brokerage services include a single all-in rate that does not separately identify fuel surcharges on loads hauled via Truck Brokerage Carriers.
It should be noted that billings to many customers of the Company’s truck brokerage services include a single all-in rate and do not separately identify fuel surcharges on loads hauled via Truck Brokerage Carriers.
Revenue from accounts formerly handled by terminated Million Dollar Agents is often retained by the Company as the customer may choose to transfer its account to an existing Landstar agent. 27 Management monitors business activity by tracking the number of loads (volume) and revenue per load by mode of transportation.
Revenue from accounts formerly handled by terminated Million Dollar Agents is often retained by the Company as the customer may choose to transfer its account to an existing Landstar agent. 25 Table of Contents Management monitors business activity by tracking the number of loads (volume) and revenue per load by mode of transportation.
The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of over 1,000 independent commission sales agents and over 85,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.
The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of approximately 1,050 independent commission sales agents and over 78,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.
(2) Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. 28 Expenses Purchased transportation Also critical to the Company’s success is its ability to secure capacity, particularly truck capacity, at rates that allow the Company to profitably transport customers’ freight.
(2) Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. 26 Table of Contents Expenses Purchased transportation Also critical to the Company’s success is its ability to secure capacity, particularly truck capacity, at rates that allow the Company to profitably transport customers’ freight.
During fiscal year 2023, the Company purchased 319,332 shares of its Common Stock at a total cost of $54,267,000, including $53,919,000 in cash purchases and accrued excise tax of $348,000 which is included in other current liabilities in the consolidated balance sheet at December 30, 2023.
During fiscal year 2023, the Company purchased 319,332 shares of its Common Stock at a total cost of $54,267,000, including $53,919,000 in cash purchases and excise tax of $348,000 which was included in other current liabilities in the consolidated balance sheet at December 30, 2023 and paid during fiscal year 2024.
The following table shows the number of Million Dollar Agents, the average revenue generated by these agents and the percent of consolidated revenue generated by these agents during the past three fiscal years: Fiscal Years 2023 2022 2021 Number of Million Dollar Agents 524 625 593 Average revenue generated per Million Dollar Agent $ 9,645,000 $ 11,499,000 $ 10,371,000 Percent of consolidated revenue generated by Million Dollar Agents 95 % 97 % 94 % In fiscal year 2023, the change in the number of Million Dollar Agents was attributable to agents who remained with the Company yet experienced lower year-over-year revenue that resulted in such agents moving below the Million Dollar Agent category due to the softer freight demand environment.
The following table shows the number of Million Dollar Agents, the average revenue generated by these agents and the percent of consolidated revenue generated by these agents during the past three fiscal years: Fiscal Years 2024 2023 2022 Number of Million Dollar Agents 485 524 625 Average revenue generated per Million Dollar Agent $ 9,388,000 $ 9,645,000 $ 11,499,000 Percent of consolidated revenue generated by Million Dollar Agents 94 % 95 % 97 % In fiscal year 2024, the change in the number of Million Dollar Agents was primarily attributable to agents who remained with the Company yet experienced lower year-over-year revenue that resulted in such agents moving below the Million Dollar Agent category due to the softer freight demand environment.
These third party arrangements provide coverage on a per occurrence or aggregated basis. In recent years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
These third party arrangements provide coverage on a per occurrence or aggregated basis. Over the past decade, there has been a significant increase in the prevalence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.
Employee compensation and benefits include wages and employee benefit costs as well as incentive compensation and stock-based compensation expense. Incentive compensation and stock-based compensation expense is highly variable in nature in comparison to wages and employee benefit costs. Depreciation and amortization Depreciation and amortization primarily relate to depreciation of trailing equipment and information technology hardware and software.
Incentive compensation and stock-based compensation expense is highly variable in nature in comparison to wages and employee benefit costs. Depreciation and amortization Depreciation and amortization primarily relate to depreciation of trailing equipment and information technology hardware and software.
Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities and U.S. Treasury obligations having maturities of up to five years. Fair value of investments is based primarily on quoted market prices. See “Notes to Consolidated Financial Statements” included herein for further discussion on measurement of fair value of investments.
Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities and commercial paper having maturities of up to five years. Fair value of investments is based primarily on quoted market prices. See “Notes to Consolidated Financial Statements” included herein for further discussion on measurement of fair value of investments.
During fiscal year 2022, the Company purchased 1,900,826 shares of its Common Stock at a total cost of $285,983,000. During fiscal year 2021, the Company purchased 733,854 shares of its Common Stock at a total cost of $122,722,000. The Company has used cash provided by operating activities to fund the purchases.
During fiscal year 2022, the Company purchased 1,900,826 shares of its Common Stock at a total cost of $285,983,000. The Company has used cash provided by operating activities to fund the purchases.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various factors including the extent to which such carriers maintain their own insurance coverage.
The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport 28 Table of Contents freight on behalf of the Company is reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2024, the Company experienced an increase of approximately $21 million, or over 380%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2025, the Company experienced an increase of approximately $22 million, or over 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.
For example, with respect to a single hypothetical claim in the amount of $60 million incurred during the annual policy year ending April 30, 2024, the Company would have an aggregate financial exposure of approximately $25 million.
For example, with respect to a single hypothetical claim in the amount of $65 million incurred during the annual policy year ending April 30, 2025, the Company would have an aggregate financial exposure of approximately $30 million.
The increase in investment income was attributable to higher average rates of return on investments and a higher average investment balance held by the insurance segment during fiscal year 2023. Other operating costs increased $8,999,000 in fiscal year 2023 compared to fiscal year 2022.
Investment income was $10,141,000 and $3,162,000 in fiscal years 2023 and 2022, respectively. The increase in investment income was attributable to higher average rates of return on investments and a higher average investment balance held by the insurance segment during fiscal year 2023. Other operating costs increased $8,999,000 in fiscal year 2023 compared to fiscal year 2022.
Such other factors include consolidations among agencies or transactions in connection with ownership changes often due to retirement planning, estate planning or similar transitional matters.
Such other factors include consolidations among agencies or transactions in connection with ownership 24 Table of Contents changes often due to retirement planning, estate planning or similar transitional matters.
Landstar has historically operated with current ratios within the range of 1.5 to 1 to 2.0 to 1. Cash provided by operating activities was $393,648,000, $622,659,000, and $276,740,000 in fiscal years 2023, 2022 and 2021, respectively.
Landstar has historically operated with current ratios within the range of 1.5 to 1 to 2.0 to 1. Cash provided by operating activities was $286,561,000, $393,648,000, and $622,659,000 in fiscal years 2024, 2023 and 2022, respectively.
On July 1, 2022, Landstar entered into a second amended and restated credit agreement with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”).
On July 1, 2022, Landstar entered into a second amended and restated credit agreement with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (as further amended as of June 21, 2024, the “Credit Agreement”).
Included among the Company’s Million Dollar Agents in the 2022 fiscal year, the Company had 133 independent sales agencies that generated at least $10 million in Landstar revenue.
Included among the Company’s Million Dollar Agents in the 2024 fiscal year, the Company had 81 independent sales agencies that generated at least $10 million in Landstar revenue.
Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air 25 delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.
Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air 23 Table of Contents delivery of time-critical freight, heavy-haul/specialized, cold chain/temperature-controlled, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage.
Since paying its first cash dividend in August 2005, the Company has paid approximately $845,000,000 in cash dividends in the aggregate to its stockholders, inclusive of the $2.00 per share special dividend paid on January 19, 2024.
Since paying its first cash dividend in August 2005, the Company has paid approximately $965,000,000 in cash dividends in the aggregate to its stockholders, inclusive of the $2.00 per share special dividend paid on January 21, 2025.
During fiscal year 2023, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 53% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Company’s consolidated revenue during fiscal year 2023.
During fiscal year 2024, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 52% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 6% of the Company’s consolidated revenue during fiscal year 2024.
None of these covenants are presently considered by management to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement. At December 30, 2023, the Company had no borrowings outstanding and $33,492,000 of letters of credit outstanding under the Credit Agreement.
None of these covenants are presently considered by the Company to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement. At December 28, 2024, the Company had no borrowings outstanding and $35,250,000 of letters of credit outstanding under the Credit Agreement.
Since January 1997, the Company has purchased approximately $2,254,000,000 of its Common Stock under programs authorized by the Board of Directors of the Company in open market and private block transactions. As of December 30, 2023, the Company may purchase in the aggregate up to 3,000,000 shares of its Common Stock under its authorized stock purchase programs.
Since January 1997, the Company has purchased approximately $2,335,000,000 of its Common Stock under programs authorized by the Board of Directors of the Company in open market and private block transactions. As of December 28, 2024, the Company may purchase in the aggregate up to 2,547,981 shares of its Common Stock under its authorized stock purchase programs.
During fiscal years 2023, 2022 and 2021, the Company acquired $4,093,000, $30,659,000 and $48,674,000, respectively, of trailing equipment by entering into finance leases. During fiscal years 2023, 2022 and 2021, the Company also purchased $25,688,000, $26,005,000 and $23,261,000, respectively, of operating property.
During fiscal years 2024, 2023 and 2022, the Company acquired $62,194,000, $4,093,000 and $30,659,000, respectively, of trailing equipment by entering into finance leases. During fiscal years 2024, 2023 and 2022, the Company also purchased $30,998,000, $25,688,000 and $26,005,000, respectively, of operating property.
The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers during fiscal year 2023. 34 Investment income was $10,141,000 and $3,162,000 in fiscal years 2023 and 2022, respectively.
Commissions to agents were 8.7% and 8.3% of revenue in fiscal years 2023 and 2022, respectively. The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers during fiscal year 2023.
The increase in shareholders’ equity in fiscal year 2022 was primarily the result of net income, almost entirely offset by purchases of shares of the Company’s Common Stock and dividends declared by the Company in fiscal year 2022.
The decrease in shareholders’ equity was primarily the result of dividends declared by the Company and purchases of shares of the Company’s Common Stock in fiscal year 2024, partially offset by net income.
The increase in the number of loads hauled via truck compared to fiscal year 2021 was due to a broad-based increase in demand for the Company’s truck transportation services during fiscal year 2022.
The decrease in the number of loads hauled via truck compared to fiscal year 2023 was primarily due to a broad-based decrease in demand for the Company’s truck transportation services.
The following table summarizes the number of available truck capacity providers as of the end of the three most recent fiscal years: Dec. 30, 2023 Dec. 31, 2022 Dec. 25, 2021 BCO Independent Contractors 9,024 10,393 11,057 Truck Brokerage Carriers: Approved and active (1) 49,111 66,745 64,476 Other approved 27,524 30,999 25,870 76,635 97,744 90,346 Total available truck capacity providers 85,659 108,137 101,403 Trucks provided by BCO Independent Contractors 9,809 11,281 11,864 (1) Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal year end.
The following table summarizes the number of available truck capacity providers as of the end of the three most recent fiscal years: Dec. 28, 2024 Dec. 30, 2023 Dec. 31, 2022 BCO Independent Contractors 8,082 9,024 10,393 Truck Brokerage Carriers: Approved and active (1) 43,718 49,111 66,745 Other approved 26,527 27,524 30,999 70,245 76,635 97,744 Total available truck capacity providers 78,327 85,659 108,137 Trucks provided by BCO Independent Contractors 8,843 9,809 11,281 (1) Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal year end.
Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for fiscal year 2023. Changes in Financial Condition and Results of Operations Management believes the Company’s success principally depends on its ability to generate freight through its network of independent commission sales agents and to deliver freight safely and efficiently utilizing third party capacity providers.
Changes in Financial Condition and Results of Operations Management believes the Company’s success principally depends on its ability to generate freight through its network of independent commission sales agents and to deliver freight safely and efficiently utilizing third party capacity providers.
Revenue per load on revenue generated by multimode capacity providers is influenced by many factors, including revenue mix among the various modes of transportation used, length of haul, complexity of freight, density of freight lanes, fuel costs and availability of capacity.
Revenue per load on revenue generated by multimode capacity providers is influenced by many factors, including revenue mix among the various modes of transportation used, length of haul, complexity of freight, density of freight lanes, fuel costs and availability of capacity. Purchased transportation was 77.7% and 76.7% of revenue in fiscal years 2024 and 2023, respectively.
Fiscal Year 2023 2022 2021 Gross profit $ 545,327 $ 788,396 $ 721,010 Operating income $ 344,149 $ 571,083 $ 505,668 Operating income as % of gross profit 63.1 % 72.4 % 70.1 % Variable contribution $ 772,392 $ 1,017,680 $ 915,692 Operating income $ 344,149 $ 571,083 $ 505,668 Operating income as % of variable contribution 44.6 % 56.1 % 55.2 % The decrease in operating income as a percentage of gross profit from fiscal year 2022 to fiscal year 2023 resulted from operating income decreasing at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base.
Fiscal Year 2024 2023 2022 Gross profit $ 456,014 $ 545,327 $ 788,396 Operating income $ 248,907 $ 344,149 $ 571,083 Operating income as % of gross profit 54.6 % 63.1 % 72.4 % Variable contribution $ 681,253 $ 772,392 $ 1,017,680 Operating income $ 248,907 $ 344,149 $ 571,083 Operating income as % of variable contribution 36.5 % 44.6 % 56.1 % The decrease in operating income as a percentage of gross profit from fiscal year 2023 to fiscal year 2024, as well as from fiscal year 2022 to fiscal year 2023, resulted from the decrease of operating income at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base.
In addition, on December 4, 2023, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share, or $71,433,000 in the aggregate, payable on January 19, 2024 to stockholders of record of its Common Stock as of January 3, 2024.
In addition, on December 9, 2024, the Company announced that its Board of Directors declared a special cash dividend of $2.00 per share, or $70,632,000 in the aggregate, payable on January 21, 2025 to stockholders of record of its Common Stock as of January 7, 2025.
The Company believes variable contribution and variable contribution margin are important performance measurements and management considers variable contribution and variable contribution margin in evaluating the Company’s financial performance and in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs. 31 The reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin are each presented below: Fiscal Year 2023 2022 2021 Revenue $ 5,303,322 $ 7,436,562 $ 6,537,568 Costs of revenue: Purchased transportation 4,068,262 5,804,017 5,114,667 Commissions to agents 462,668 614,865 507,209 Variable costs of revenue 4,530,930 6,418,882 5,621,876 Trailing equipment depreciation 31,319 36,653 35,204 Information technology costs 25,486 19,834 13,560 Insurance-related costs (1) 116,069 127,605 109,387 Other operating costs 54,191 45,192 36,531 Other costs of revenue 227,065 229,284 194,682 Total costs of revenue 4,757,995 6,648,166 5,816,558 Gross profit $ 545,327 $ 788,396 $ 721,010 Gross profit margin 10.3 % 10.6 % 11.0 % Plus: other costs of revenue 227,065 229,284 194,682 Variable contribution $ 772,392 $ 1,017,680 $ 915,692 Variable contribution margin 14.6 % 13.7 % 14.0 % (1) Insurance-related costs in the table above include (i) other costs of revenue related to the transportation of freight that are included as a portion of insurance and claims in the Company’s Consolidated Statements of Income and (ii) certain other costs of revenue related to reinsurance premiums received by Signature that are included as a portion of selling, general and administrative in the Company’s Consolidated Statements of Income.
The Company believes variable contribution and variable contribution margin are important performance measurements and management considers variable contribution and variable contribution margin in evaluating the Company’s financial performance and in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs. 29 Table of Contents The reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin are each presented below: Fiscal Year 2024 2023 2022 Revenue $ 4,819,245 $ 5,303,322 $ 7,436,562 Costs of revenue: Purchased transportation 3,745,241 4,068,262 5,804,017 Commissions to agents 392,751 462,668 614,865 Variable costs of revenue 4,137,992 4,530,930 6,418,882 Trailing equipment depreciation 27,950 31,319 36,653 Information technology costs 22,744 25,486 19,834 Insurance-related costs (1) 115,764 116,069 127,605 Other operating costs 58,781 54,191 45,192 Other costs of revenue 225,239 227,065 229,284 Total costs of revenue 4,363,231 4,757,995 6,648,166 Gross profit $ 456,014 $ 545,327 $ 788,396 Gross profit margin 9.5 % 10.3 % 10.6 % Plus: other costs of revenue 225,239 227,065 229,284 Variable contribution $ 681,253 $ 772,392 $ 1,017,680 Variable contribution margin 14.1 % 14.6 % 13.7 % (1) Insurance-related costs in the table above include (i) other costs of revenue related to the transportation of freight that are included as a portion of insurance and claims in the Company’s Consolidated Statements of Income and (ii) certain other costs of revenue related to reinsurance premiums received by Signature that are included as a portion of selling, general and administrative in the Company’s Consolidated Statements of Income.
Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for fiscal year 2023 was $4,829,530,000, representing 91% of total revenue, a decrease of $1,801,309,000, or 27%, compared to fiscal year 2022.
Truck transportation revenue generated by third party truck capacity providers for fiscal year 2023 was $4,829,530,000, representing 91% of total revenue, a decrease of $1,801,309,000, or 27%, compared to fiscal year 2022.
Dividends payable of $71,433,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December 30, 2023.
Dividends payable of $70,632,000 related to this special dividend were included in current liabilities in the consolidated balance sheet at December 28, 2024.
Loads hauled via van equipment increased 5%, loads hauled via unsided/platform equipment increased 7%, less-than-truckload loadings increased 4% and loads hauled via other truck transportation services increased 7% as compared to fiscal year 2021.
Loads hauled via other truck transportation services decreased 20%, less-than-truckload loadings decreased 13%, loads hauled via van equipment decreased 7% and loads hauled via unsided/platform equipment decreased 6% as compared to fiscal year 2023.
At December 30, 2023, there was $266,508,000 available for future borrowings under the Credit Agreement and access to an additional $300,000,000 under the Credit Agreement’s “accordion” feature. In addition, the Company has $77,054,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $85,616,000 at December 30, 2023.
At December 28, 2024, there was $264,750,000 available for future borrowings under the Credit Agreement and access to an additional $300,000,000 under the Credit Agreement’s “accordion” feature. In addition, the Company has $74,321,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $82,579,000 at December 28, 2024.
Fiscal Year Ended December 30, 2023 Compared to Fiscal Year Ended December 31, 2022 Revenue for fiscal year 2023 was $5,303,322,000, a decrease of $2,133,240,000, or 29%, compared to fiscal year 2022. Transportation revenue decreased $2,127,162,000, or 29%.
Net income was $264,394,000, or $7.36 per basic and diluted share, in fiscal year 2023. Fiscal Year Ended December 30, 2023 Compared to Fiscal Year Ended December 31, 2022 Revenue for fiscal year 2023 was $5,303,322,000, a decrease of $2,133,240,000, or 29%, compared to fiscal year 2022. Transportation revenue decreased $2,127,162,000, or 29%.
Management believes that cash flow from operations combined with the Company’s borrowing capacity under the Credit Agreement will be adequate to meet Landstar’s debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase programs and meet working capital needs.
Management believes that cash flow from operations combined with the Company’s borrowing capacity under the Credit Agreement will be adequate to meet Landstar’s debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase programs and meet working capital needs. 36 Table of Contents Legal Proceedings The Company is involved in certain claims and pending litigation arising from the normal conduct of business.
The ultimate resolution of these claims may be for an amount greater or less than the amount estimated by management. The Company continually revises its existing claim estimates as new or revised information becomes available on the status of each claim. Historically, the Company has experienced both favorable and unfavorable development of prior years’ claims estimates within its various programs.
The ultimate resolution of these claims may be for an amount greater or less than the amount estimated by the Company. The Company continually revises its existing claim estimates as new or revised information becomes available on the status of each claim.
The increase in investment income was primarily attributable to higher average rates of return on investments during fiscal year 2022, partially offset by a lower average investment balance held by the insurance segment during fiscal year 2022. Other operating costs increased $8,661,000 in fiscal year 2022 compared to fiscal year 2021.
The increase in investment income was attributable to a higher average investment balance held by the insurance segment during fiscal year 2024 and higher average rates of return on investments in fiscal year 2024. Other operating costs increased $4,590,000 in fiscal year 2024 compared to fiscal year 2023.
Accordingly, the overall impact of changes in fuel prices on revenue and revenue per load on loads hauled via truck is likely to be greater than that indicated. Transportation revenue generated by multimode capacity providers for fiscal year 2022 was $704,003,000, or 9% of total revenue, an increase of $216,869,000, or 45%, compared to fiscal year 2021.
Accordingly, the overall impact of changes in fuel prices on revenue and revenue per load on loads hauled via truck is likely to be greater than that indicated. Transportation revenue generated by multimode capacity providers for fiscal year 2023 was $364,935,000, or 7% of total revenue, a decrease of $339,068,000, or 48%, compared to fiscal year 2022.
The number of loads hauled by third party truck capacity providers increased approximately 6% in fiscal year 2022 compared to fiscal year 2021, and revenue per load on loads hauled by third party truck capacity providers increased approximately 5% compared to fiscal year 2021.
The number of loads hauled by third party truck capacity providers decreased approximately 8% in fiscal year 2024 compared to fiscal year 2023, and revenue per load on loads hauled by third party truck capacity providers decreased approximately 2% compared to fiscal year 2023.
As compared to fiscal year 2021, revenue per load on loads hauled via van equipment increased 5%, on loads hauled via unsided/platform equipment increased 6%, on less-than-truckload loadings increased 17% and on loads hauled by other truck transportation services increased 2%.
Revenue per load on loads hauled via other truck transportation services decreased 10%, on loads hauled via van equipment decreased 4% and on less-than-truckload loadings decreased 3%, while revenue per load on loads hauled via unsided/platform equipment increased 3% as compared to fiscal year 2023.
The following table summarizes this information by trailer type for truck transportation and by mode for all others for the past three fiscal years: Fiscal Years 2023 2022 2021 Revenue generated through (in thousands): Truck transportation Truckload: Van equipment $ 2,742,281 $ 3,892,085 $ 3,525,830 Unsided/platform equipment 1,490,393 1,760,357 1,549,037 Less-than-truckload 117,683 142,438 117,505 Other truck transportation (1) 479,173 835,959 770,846 Total truck transportation 4,829,530 6,630,839 5,963,218 Rail intermodal 98,297 145,017 159,974 Ocean and air cargo carriers 266,638 558,986 327,160 Other (2) 108,857 101,720 87,216 $ 5,303,322 $ 7,436,562 $ 6,537,568 Revenue on loads hauled via BCO Independent Contractors included in total truck transportation $ 1,998,408 $ 2,636,036 $ 2,612,188 Number of loads: Truck transportation Truckload: Van equipment 1,259,578 1,496,247 1,422,734 Unsided/platform equipment 504,765 558,530 521,891 Less-than-truckload 175,650 191,233 183,975 Other truck transportation (1) 201,407 320,790 300,710 Total truck transportation 2,141,400 2,566,800 2,429,310 Rail intermodal 29,620 40,710 52,310 Ocean and air cargo carriers 32,820 41,850 41,450 2,203,840 2,649,360 2,523,070 Loads hauled via BCO Independent Contractors included in total truck transportation 898,610 1,027,480 1,039,630 Revenue per load: Truck transportation Truckload: Van equipment $ 2,177 $ 2,601 $ 2,478 Unsided/platform equipment 2,953 3,152 2,968 Less-than-truckload 670 745 639 Other truck transportation (1) 2,379 2,606 2,563 Total truck transportation 2,255 2,583 2,455 Rail intermodal 3,319 3,562 3,058 Ocean and air cargo carriers 8,124 13,357 7,893 Revenue per load on loads hauled via BCO Independent Contractors $ 2,224 $ 2,566 $ 2,513 Revenue by capacity type (as a % of total revenue): Truck capacity providers: BCO Independent Contractors 38 % 35 % 40 % Truck Brokerage Carriers 53 % 54 % 51 % Rail intermodal 2 % 2 % 2 % Ocean and air cargo carriers 5 % 8 % 5 % Other 2 % 1 % 1 % (1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment.
The following table summarizes this information by trailer type for truck transportation and by mode for all others for the past three fiscal years: Fiscal Years 2024 2023 2022 Revenue generated through (in thousands): Truck transportation Truckload: Van equipment $ 2,447,810 $ 2,742,281 $ 3,892,085 Unsided/platform equipment 1,455,663 1,490,393 1,760,357 Less-than-truckload 99,828 117,683 142,438 Other truck transportation (1) 343,253 479,173 835,959 Total truck transportation 4,346,554 4,829,530 6,630,839 Rail intermodal 84,328 98,297 145,017 Ocean and air cargo carriers 289,902 266,638 558,986 Other (2) 98,461 108,857 101,720 $ 4,819,245 $ 5,303,322 $ 7,436,562 Revenue on loads hauled via BCO Independent Contractors included in total truck transportation $ 1,821,989 $ 1,998,408 $ 2,636,036 Number of loads: Truck transportation Truckload: Van equipment 1,170,772 1,259,578 1,496,247 Unsided/platform equipment 476,815 504,765 558,530 Less-than-truckload 153,253 175,650 191,233 Other truck transportation (1) 160,120 201,407 320,790 Total truck transportation 1,960,960 2,141,400 2,566,800 Rail intermodal 27,970 29,620 40,710 Ocean and air cargo carriers 34,440 32,820 41,850 2,023,370 2,203,840 2,649,360 Loads hauled via BCO Independent Contractors included in total truck transportation 814,150 898,610 1,027,480 Revenue per load: Truck transportation Truckload: Van equipment $ 2,091 $ 2,177 $ 2,601 Unsided/platform equipment 3,053 2,953 3,152 Less-than-truckload 651 670 745 Other truck transportation (1) 2,144 2,379 2,606 Total truck transportation 2,217 2,255 2,583 Rail intermodal 3,015 3,319 3,562 Ocean and air cargo carriers 8,418 8,124 13,357 Revenue per load on loads hauled via BCO Independent Contractors $ 2,238 $ 2,224 $ 2,566 Revenue by capacity type (as a % of total revenue): Truck capacity providers: BCO Independent Contractors 38 % 38 % 35 % Truck Brokerage Carriers 52 % 53 % 54 % Rail intermodal 2 % 2 % 2 % Ocean and air cargo carriers 6 % 5 % 8 % Other 2 % 2 % 1 % (1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment.
The increase in depreciation and amortization expense was primarily due to increased depreciation on new and updated digital tools deployed for use by the Company’s network of agents, capacity providers and employees, and to a lesser extent, in connection with increased trailing equipment depreciation. Interest and debt expense in fiscal year 2022 decreased $356,000 compared to fiscal year 2021.
The decrease in depreciation and amortization expense was primarily due to decreased trailing equipment depreciation, partially offset by increased depreciation on new and updated digital tools deployed for use by the Company’s network of agents, capacity providers and employees. Net interest and debt income increased $1,473,000 in fiscal year 2024 compared to fiscal year 2023.
The unfavorable development of prior years’ claims in the 2022 fiscal year was attributable to several specific claims. The unfavorable development of prior years’ claims in the 2021 fiscal year was primarily attributable to five claims.
The unfavorable development of prior years’ claims in the 2024, 2023 and 2022 fiscal years was attributable in each year to several specific claims.
A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. 30 Selling, general and administrative During the 2023 fiscal year, employee compensation and benefits accounted for approximately 61% of the Company’s selling, general and administrative costs.
A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.
Shareholders’ equity was $983,923,000, or 93% of total capitalization (defined as long-term debt including current maturities plus equity), at December 30, 2023, compared to $887,221,000, or 90% of total capitalization at December 31, 2022 and $862,010,000, or 89% of total capitalization at December 25, 2021.
Long-term debt, including current maturities, was $102,307,000 at December 28, 2024, compared to $71,140,000 at December 30, 2023 and $103,400,000 at December 31, 2022. 35 Table of Contents Shareholders’ equity was $972,439,000, or 90% of total capitalization (defined as long-term debt including current maturities plus equity), at December 28, 2024, compared to $983,923,000, or 93% of total capitalization at December 30, 2023 and $887,221,000, or 90% of total capitalization at December 31, 2022.
The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers during fiscal year 2022. 36 Investment income was $3,162,000 and $2,857,000 in fiscal years 2022 and 2021, respectively.
The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers during fiscal year 2024. Investment income was $14,810,000 and $10,141,000 in fiscal years 2024 and 2023, respectively.
The Company declared and paid $0.92 per share, or $35,191,000 in the aggregate, in cash dividends during fiscal year 2021 and, during such period, also paid $76,770,000 of dividends payable which were declared during fiscal year 2020 and included in current liabilities in the consolidated balance sheet at December 26, 2020.
The Company declared and paid $1.38 per share, or $49,043,000 in the aggregate, in cash dividends during fiscal year 2024, and during such period, also paid $71,433,000 of dividends payable which were declared during fiscal year 2023 and included in current liabilities in the consolidated balance sheet at December 30, 2023.
Included among the Company’s Million Dollar Agents in the 2023 fiscal year, the Company had 87 independent sales agencies that generated at least $10 million in Landstar revenue. In fiscal year 2022, the change in the number of Million Dollar Agents was attributable to new agents and existing agents who were not formerly Million Dollar Agents.
Included among the Company’s Million Dollar Agents in the 2023 fiscal year, the Company had 87 independent sales agencies that generated at least $10 million in Landstar revenue.
Revenue per load on loads hauled via air, ocean and rail intermodal increased 118%, 56% and 16%, respectively, during fiscal year 2022 as compared to fiscal year 2021.
Revenue per load on loads hauled via ocean increased 15%, while revenue per load on loads hauled via air and rail intermodal decreased 51% and 9%, respectively, during fiscal year 2024 as compared to fiscal year 2023.
The actual effective income tax rate for fiscal year 2022 was 24.1%, which was higher than the statutory federal income tax rate of 21%, primarily attributable to state taxes and nondeductible executive compensation, partially offset by excess tax benefits realized on stock-based awards.
The effective income tax rate was higher than the statutory federal income tax rate of 21% in fiscal year 2023 primarily attributable to state income taxes and nondeductible executive compensation, partially offset by excess tax benefits realized on stock-based awards. Net income was $195,946,000, or $5.51 per basic and diluted share, in fiscal year 2024.
Revenue per load on revenue generated by multimode capacity providers increased approximately 64% in fiscal year 2022 compared to fiscal year 2021, while the number of loads hauled by multimode capacity providers decreased approximately 12% over the same period. Revenue per load on loads hauled by multimode capacity providers increased for all modes.
Revenue per load on revenue generated by multimode capacity providers increased approximately 3% in fiscal year 2024 compared to fiscal year 2023, while the number of loads hauled by multimode capacity providers was approximately the same in fiscal year 2024 compared to fiscal year 2023.
Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for fiscal year 2023 was $364,935,000, or 7% of total revenue, a decrease of $339,068,000, or 48%, compared to fiscal year 2022.
Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for fiscal year 2024 was $374,230,000, or 8% of total revenue, an increase of $9,295,000, or 3%, compared to fiscal year 2023.
Landstar anticipates spending approximately $19,000,000 on information technology hardware and software in fiscal year 2024, $16,000,000 of which relates to either building or buying software applications that enhance or add to the Company’s technology ecosystem. In addition, Landstar anticipates spending approximately $9,000,000 on buildings and improvements.
Landstar anticipates acquiring either by purchase or lease financing approximately $16,000,000 in new trailing equipment, primarily to replace older trailing equipment in fiscal year 2025. Landstar anticipates spending approximately $14,000,000 on information technology hardware and software in fiscal year 2025, $12,000,000 of which relates to either building or buying software applications that enhance or add to the Company’s technology ecosystem.
In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance directly to certain of Landstar’s Operating Subsidiaries. Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk is ultimately borne by Signature.
Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk is ultimately borne by Signature. Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for fiscal year 2024.
The increase in operating income as a percentage of variable contribution from fiscal year 2021 to fiscal year 2022 resulted from operating income increasing at a more rapid percentage rate than the increase in variable contribution, as the Company was able to scale our fixed cost infrastructure, primarily certain components of selling, general and administrative costs, as well as certain components of our other costs of revenue, across a larger variable contribution base.
The decrease in operating income as a percentage of variable contribution from fiscal year 2023 to fiscal year 2024 resulted from the decrease of operating income at a more rapid percentage rate than the decrease in variable contribution, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller variable contribution base.
The increase in cash flow provided by operating activities for fiscal year 2022 was primarily attributable to favorable net working capital impacts in connection with the timing of collections of receivables and payment of certain payables and increased net income as compared to the 2021 fiscal year.
The decrease in cash flow provided by operating activities for fiscal year 2024 was primarily attributable to decreased net income and decreased favorable net working capital impacts in connection with decreased net receivables, defined as accounts receivable less accounts payable.
On April 1, 2022, Landstar Investment Holdco, LLC, a newly formed Delaware LLC and wholly owned subsidiary of Landstar System Holdings, Inc., purchased Class A units of Cavnue, LLC for approximately $4,999,000 in cash consideration. Cavnue, LLC is a privately held company focused on combining technology and road infrastructure to unlock the full potential of connected and autonomous vehicles.
In addition, Landstar anticipates spending approximately $4,000,000 on buildings and improvements in fiscal year 2025. On April 1, 2022, Landstar Investment Holdco, LLC, a newly formed Delaware LLC and wholly owned subsidiary of Landstar System Holdings, Inc., purchased Class A units of Cavnue, LLC for approximately $4,999,000 in cash consideration.
Net income was $381,524,000, or $9.98 per basic and diluted share, in fiscal year 2021. 37 Capital Resources and Liquidity Working capital and the ratio of current assets to current liabilities were $677,517,000 and 2.0 to 1, respectively, at December 30, 2023, compared with $561,255,000 and 1.6 to 1, respectively, at December 31, 2022, and $512,917,000 and 1.5 to 1, respectively, at December 25, 2021.
Capital Resources and Liquidity Working capital and the ratio of current assets to current liabilities were $646,713,000 and 2.0 to 1, respectively, at December 28, 2024, compared with $677,517,000 and 2.0 to 1, respectively, at December 30, 2023, and $561,255,000 and 1.6 to 1, respectively, at December 31, 2022.
During fiscal years 2022 and 2021, insurance and claims costs included $11,331,000 and $9,708,000 of net unfavorable adjustments to prior years’ claims estimates, respectively. Selling, general and administrative costs were essentially the same in fiscal year 2022 as compared to fiscal year 2021.
During the 2024 and 2023 fiscal years, insurance and claims costs included $8,824,000 and $6,058,000 of net unfavorable adjustments to prior years’ claims estimates, respectively. 32 Table of Contents Selling, general and administrative costs increased $5,909,000 in fiscal year 2024 as compared to fiscal year 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The revolving credit loans under the Credit Agreement as of December 30, 2023, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10% and an applicable margin ranging from 1.25% to 2.00%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.00%, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.
The revolving credit loans under the Credit Agreement as of December 28, 2024, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10% and an applicable margin ranging from 1.25% to 2.00%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 1.00%, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.
Assuming that the long-term portion of investments remains at $92,100,000, the balance at December 30, 2023, a hypothetical increase or decrease in interest rates of 100 basis points would not have a material impact on future earnings on an annualized basis. Short-term investments consist of short-term investment-grade instruments and the current maturities of investment-grade corporate bonds, asset-backed securities and U.S.
Assuming that the long-term portion of investments remains at $92,246,000, the balance at December 28, 2024, a hypothetical increase or decrease in interest rates of 100 basis points would not have a material impact on future earnings on an annualized basis. Short-term investments consist of short-term investment-grade instruments and the current maturities of investment-grade corporate bonds and asset-backed securities.
During all of fiscal year 2023, the entire fourth quarter of 2022 and as of both December 30, 2023 and December 31, 2022, the Company had no borrowings outstanding under the Credit Agreement. Long-term investments, all of which are available-for-sale and are carried at fair value, include primarily investment-grade bonds and asset-backed securities having maturities of up to five years.
During all of fiscal years 2024 and 2023 and as of both December 28, 2024 and December 30, 2023, the Company had no borrowings outstanding under the Credit Agreement. Long-term investments, all of which are available-for-sale and are carried at fair value, include primarily investment-grade bonds and asset-backed securities having maturities of up to five years.
On July 1, 2022, Landstar entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”) with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent.
On July 1, 2022, Landstar entered into the Second Amended and Restated Credit Agreement (as further amended as of June 21, 2024, the “Credit Agreement”) with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent.
Transactional gains and losses arising from receivable and payable balances, including intercompany balances, in the normal course of business that are denominated in a currency other than the functional currency of the operation are recorded in the statements of income when they occur.
Adjustments resulting from the translation process are included in accumulated other comprehensive income. Transactional gains and losses arising from receivable and payable balances, including intercompany balances, in the normal course of business that are denominated in a currency other than the functional currency of the operation are recorded in the statements of income when they occur.
The assets held at the Company’s Canadian and Mexican subsidiaries at December 30, 2023 were collectively, as translated to U.S. dollars, approximately 4% of total consolidated assets. Accordingly, translation gains or losses of 20% or less related to the Canadian and Mexican operations would not be material. 40 2.50http://fasb.org/us-gaap/2023#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#DeferredIncomeTaxesAndOtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentNet
The assets held at the Company’s Canadian and Mexican subsidiaries at December 28, 2024 were collectively, as translated to U.S. dollars, approximately 4% of total consolidated assets. Accordingly, translation gains or losses of 15% or less related to the Canadian and Mexican operations would not be material. 38 Table of Contents 2.50http://fasb.org/us-gaap/2024#OtherAssetsNoncurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#DeferredIncomeTaxesAndOtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNet
Assets and liabilities of the Company’s Canadian and Mexican operations are translated from their functional currency to U.S. dollars using exchange rates in effect at the balance sheet date and revenue and expense accounts are translated at average monthly exchange rates during the period. Adjustments resulting from the translation process are included in accumulated other comprehensive income.
Accordingly, any future interest rate risk on these short-term investments would not be material to the Company’s operating results. 37 Table of Contents Assets and liabilities of the Company’s Canadian and Mexican operations are translated from their functional currency to U.S. dollars using exchange rates in effect at the balance sheet date and revenue and expense accounts are translated at average monthly exchange rates during the period.
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Treasury obligations. Accordingly, any future interest rate risk on these short-term investments would not be material to the Company’s operating results.

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