US trucking and intermodal giant Landstar Systems felt the headwinds of the US road freight recession in 2023 with a 39.7% y-o-y operating income fall to US $344.1m on a revenue drop of 28.7% to $5,303.3m.
CEO of Landstar Jim Gattoni pointed to the softness in the US freight market. He said, “The soft macro-environment experienced throughout 2023 continued through the fourth quarter.”
Revenues per load and volumes all dropped across the company’s divisions. Briefly, Landstar Systems reported for the full year:
Gattoni explained, “The continuing soft demand driven by continued weakness in the US manufacturing sector and a weaker than typical peak season, plus the continuation of a loose truck capacity market,” were behind the falls in revenue per load and volumes.
Much of this repeats the experience of competitors, some of which have faced bankruptcy in 2023. Even so, the CEO believes that his company will weather the storm. He said, “Landstar’s financial performance in 2023, coming off the back of record setting years in 2022 and 2021 was admirable, considering the very difficult freight transportation backdrop.”
Looking forward, Gattoni is levelling expectations to those of the pre-pandemic era as opposed to business as usual immediately after it. He concluded, “Through the first several weeks of January, the number of loads hauled via truck and truck revenue per load have each trended reasonably in-line with historical, pre-pandemic end of fourth quarter to the beginning of first quarter sequential patterns. Assuming a continuation of these recent trends, I expect revenue per load on loads hauled via truck to be in a range of 8% to 10% below the 2023 first quarter and the number of loads hauled via truck to be in a range of 14% to 16% below the 2023 first quarter.”
Author: Richard Shrubb
Source: Ti Insights
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