The leaders of Landstar System say they expect revenue per load to be “relatively stable” this spring, with truckloads showing percentage growth in the mid-teens from last year.
Jacksonville-based Landstar (No. 10 on the 2022 FleetOwner 500: For-Hire) reported a net income of $125 million on revenues of $1.97 billion during the first three months of 2022. Those numbers were up 62% and 53%, respectively, from the same period of last year. The company’s revenue per truckload climbed more than 22% year-over-year (and 4% from the fourth quarter) and operating margins ticked up to 8.3% from 8% as total truckload volume rose 20% year over year.
President and CEO Jim Gattoni and CFO Fred Pensotti said, like their peers at Knight-Swift and J.B. Hunt did the same week, that the freight market remains in healthy shape despite a slight pullback of late. Revenues per mile driven by Landstar’s independent owner-operators this month are down about 5% from March, but Gattoni noted that he doesn’t think that’s unusual, especially since it has come after month-to-month increases of 5% in January and 3% in February before staying essentially flat in March.
See also: Rising fuel prices keep TL rates elevated
“We sit here today in a position where I don't think in the history of my career here, I've seen a differential between what some of the Street is saying and some of the information out there compared to what we're seeing,” he said on an April 21 conference call with analysts and investors. “We've seen a little softness, absolutely, but it's not what you're reading about.”
Gattoni added that he could envision spot rates pulling back 15% to 20% from their record highs over a longer period—he took specific exception to a recent Wall Street Journal report that rates had fallen 37% in just a few months—but also said that today’s higher built-in fixed and operating costs mean rates won’t retreat to 2018 levels.
On the conference call, Gattoni and Pensotti also discussed:
- Prices for new trailers likely remain about 30% higher than a year ago and supply continues to be tight. Pensotti said the Landstar team has “been given a little bit of hope that we might get a small number of trailers very late in the year […], but we do anticipate it will be at a premium.”
- Landstar being a beneficiary of China reopening freight operations after several COVID-19 lockdowns. Gattoni said that when West Coast ports begin processing container ships now held up in Chinese waters, railroads won’t be able to handle the added volume on their own.
Shares of Landstar (Ticker: LSTR) rose nearly 4% on April 21 to about $155. They’re still down about 13% year to date.
