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Dive Summary:
- Landstar System is investing in cross-border and heavy haulage as the company pursues business from supply chain and infrastructure spending, CEO Frank Lonegro said on a first-quarter earnings call Thursday.
- The company has added sales leadership positions as it introduces its 1,100 agents to cross-border and heavy-duty sales. About 500 of these agents sold cross-border consignments last year and will continue to do so in the future.
- “Nearshoring, it’s clearly an area we want to play in,” Lonegro said. “Infrastructure, whenever that money is unlocked by government, that’s an area that goes really well with heavy hauling. So we will be able to do a lot more work in this area.”
Dive Insight:
Lonegrowho joined Landstar in Q1he presented his vision for what he called “a bit of money-following strategy.”
The strategy includes identifying “secular changes” such as decline, infrastructure projects and green energy, among other opportunities that are less vulnerable to cyclical commodity demand, he said.
“These are all things that we’re very good at,” Lonegro said, “and I think you’re going to continue to see us look for these worldly opportunities and then invest the capital and people to unlock them.”
Heavy haul revenue rose about 1 percent year over year in the first quarter, Lonegro said. Long-haul loads increased about 2%, partially offset by a 1% decline in revenue per load.
Cross-border revenue fell about 14.5% year over year in the first quarter — a better performance than Landstar’s total revenue was down 18.4% year over year in the quarter, CFO Jim Todd noted on the earnings call. The company aims to handle around 200,000 cross-border shipments this year.
Landstar is among several trucking industry companies, including Ryder, Saia and JB Hunt, investing in the US-Mexico border to take advantage of shifting supply chains.
Landstar’s pursuit of more cross-border business follows turnover at the top of its Mexico unit. Omar Davila, its former director of Mexican operations, left the company last fall to join PGT Trucking as vice president of cross-border operations.