Landstar System (NASDAQ:LSTR) reported stronger freight revenue and pricing in the second quarter of 2026, while higher insurance and claims costs, including unfavorable development on prior-year claims, remained a significant challenge.
Revenue increased 18% from the prior-year quarter, President and CEO Frank Lonegro said, as truck revenue per load climbed 17% and the number of truckloads hauled rose nearly 2%. The company said both pricing and load volumes exceeded typical pre-pandemic seasonal patterns, with truck capacity tightening during the quarter.
Pricing, Heavy Haul Drive Revenue Growth
Chief Financial Officer Jim Todd said the 17% year-over-year increase in truck revenue per load reflected a 19.9% gain in revenue per load for unsided platform equipment and a 15.8% increase for van equipment. Sequentially, truck revenue per load increased 14.4% from the first quarter, which Todd described as the company’s largest sequential increase in more than 15 years.
Heavy haul remained a key source of growth. Landstar generated approximately $164 million in heavy haul revenue, up 18% year over year, supported by a 9% increase in loads and an 8% increase in revenue per load. Management said demand was broad-based across areas including data centers, power and energy, aerospace, defense and machinery.
Jim Applegate, Vice President and Chief Corporate Sales, Strategy and Specialized Freight Officer, said the company has seen new customers enter its top-customer list and characterized its customer pipeline as strong through the rest of 2026 and into 2027. Todd said 22 heavy-haul customers increased their volume with Landstar by at least 50 loads during the quarter.
Transportation and Logistics segment revenue rose 18%, driven by a 16% increase in revenue per load and a 2% increase in volume. Consumer durables revenue grew 24%, while loadings in building products rose 8% and electrical loadings increased 31%. Automotive equipment and parts loadings declined 1%.
Margins Face Brokerage and Claims Pressure
Second-quarter gross profit totaled $132.3 million, compared with $109.3 million a year earlier. Gross profit margin was 9.2%, up from 9.0%. Variable contribution increased to $199.4 million from $170.5 million, though variable contribution margin declined to 13.9% from 14.1%.
Todd attributed the margin decline primarily to lower truck brokerage profitability as the rate paid to brokerage carriers was 136 basis points higher than in the prior-year period. Brokerage net revenue margin compressed 129 basis points sequentially as carrier capacity tightened.
Insurance and claims costs rose to $39.4 million from $30.4 million a year earlier, representing 7.0% of BCO revenue, compared with 6.6% in the 2025 quarter. The company recorded $10.5 million of net unfavorable adjustments to prior-year claim estimates, versus $2.3 million a year earlier. Lonegro said the prior-year development was almost entirely tied to five specific claims, including three truck brokerage claims.
Management discussed the impact of the Montgomery legal decision and broader broker-liability environment. Lonegro said smaller and medium-sized brokers could face increased legal and financial risk, potentially making Landstar’s platform more attractive to prospective agents. The company said it renewed its insurance coverage effective June 1 and reported a favorable outcome, with auto liability coverage effectively flat and broker liability coverage increasing 3%.
Matt Miller, Vice President and Chief Safety and Operations Officer, said Landstar reduced its approved third-party carrier base to just over 64,000 from more than 100,000 in the second quarter of 2022, a 35% reduction. He said the tighter vetting process has been supported by investments in technology and information developed partly in response to cargo fraud risks.
BCO Network Shows Improvement
Landstar’s BCO truck count declined less than 1% from the end of the 2025 second quarter but increased about 80 basis points sequentially. The company added a net 68 trucks during the second quarter, its strongest quarterly improvement since the first quarter of 2022, and said truck count increased by a net 49 vehicles during the first four weeks of the third quarter.
The trailing 12-month BCO turnover rate fell to 28.3% at the end of the second quarter from 31.4% at the end of 2025. Miller said gross truck additions rose 4.2% sequentially and gross cancellations fell 13.6%.
Landstar reported a DOT-reportable accident frequency rate of 0.62 accidents per million miles in the first half, below its 0.67 rate in the first half of 2025. The company also said it had 457 agents producing at least $1 million in revenue based on 2025 results.
Capital Returns and Third-Quarter Commentary
Landstar ended the quarter with $348 million in cash and short-term investments. Cash flow from operations was $28 million in the first half, while cash capital expenditures were $9 million. Free cash flow was negative in the second quarter because of sharp sequential revenue growth and associated working-capital needs, Todd said.
During the first half, the company returned about $120 million to shareholders, including approximately $95 million in dividends and $24 million in share repurchases. Its board declared a quarterly dividend of $0.44 per share, payable Sept. 9 to shareholders of record on Aug. 18. The dividend represented a 10% increase from the regular quarterly dividend declared following each of the preceding five quarters.
Rather than issue formal third-quarter guidance, Landstar provided operating commentary because of what it called a fluid freight, geopolitical and litigation backdrop. July truckloads were approximately 5% above July 2025, while revenue per load was approximately 26% higher year over year. Todd said July demand was modestly ahead of normal seasonal patterns, while pricing remained about 150 basis points better than typical seasonal trends.
The company also announced that Bill Clement will join Landstar as Vice President and Chief Commercial Officer on Aug. 1, while Applegate will become Chief Strategy and Transformation Officer.
About Landstar System (NASDAQ:LSTR)
Landstar System, Inc provides integrated transportation management solutions through a network of independent agents and third-party capacity providers. The company specializes in truckload brokerage, intermodal, air and ocean freight, expedited and heavy-haul services, along with value-added offerings such as cargo insurance, customs brokerage and supply chain management. Landstar’s proprietary technology platform enables real-time load matching, shipment tracking and data analytics to optimize fleet utilization and improve customer service.
Founded in 1968 and headquartered in Jacksonville, Florida, Landstar pioneered an asset-light brokerage model that has evolved into a global logistics operation.
