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Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world.
−Removed: 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.
+Added: 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.
The nature of the Company’s business is such that a significant portion of its operating costs varies directly with revenue.
Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight.
−Removed: 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.
+Added: 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.
The Company’s third party capacity providers consist of independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the “BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company under non-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads.
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de C.V., and Landstar Blue, LLC.
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: 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.
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Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue.
−Removed: 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.
+Added: 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.
Truck Transportation Services .
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The insurance segment provides risk and claims management services to certain of Landstar’s Operating Subsidiaries.
−Removed: 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.
+Added: 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.
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.
−Removed: 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.
+Added: 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.
Factors Significant to the Company’s Operations
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The independent commission sales agents use a variety of digital technologies provided by the Company to service the requirements of shippers.
−Removed: 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.
−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.
+Added: 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.
+Added: The Company’s cloud-based available truck platform 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.
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Department of Transportation (“DOT”) to Landstar’s Operating Subsidiary to which such BCO Independent Contractor provides services and has leased his or her equipment.
−Removed: The Company’s network of BCO Independent Contractors provides marketing, operating, customer service, safety, recruiting and retention advantages to the Company.
+Added: The Company’s network of BCO Independent Contractors provides marketing, operating, customer service, safety, freight security, recruiting and retention advantages to the Company.
The Company’s BCO Independent Contractors are compensated primarily based on a contractually agreed-upon percentage of revenue generated by loads they haul.
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The number of trucks provided by BCO Independent Contractors fluctuates daily as a result of truck recruiting and truck terminations.
−Removed: 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.
+Added: The Company recruited fewer trucks in fiscal year 2024 than in fiscal year 2023.
+Added: The Company also terminated fewer trucks in fiscal year 2024 than in fiscal year 2023.
+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.
Approximately 32% of 2024 turnover was attributable to BCO Independent Contractors who had been with the Company for less than one year.
−Removed: 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.
−Removed: Decreasing revenue per load on a sequential basis historically has had an unfavorable impact on BCO Independent Contractor turnover.
−Removed: During fiscal year 2023, revenue per load sequentially decreased quarter to quarter throughout the entire year.
+Added: 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.
+Added: revenue per load on a sequential basis historically has had a favorable impact on BCO Independent Contractor turnover.
+Added: 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.
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Temperature-controlled
−Removed: 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.
+Added: 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.
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.
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The Company’s customer base is highly diversified and dispersed across many industries, commodities and geographic regions.
−Removed: The Company’s top 100 customers accounted for approximately 46% and 44%, respectively, of consolidated revenue during fiscal years 2023 and 2022.
+Added: 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.
These advantages allow the Company to meet the needs of even the largest shippers.
−Removed: 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
+Added: 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,
+Added: whose size and diverse service capabilities enable these core carriers to satisfy most of the shippers’ transportation needs.
The Company’s national account customers include the United States Department of Defense and many of the companies included in the Fortune 500.
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The Company has engaged in a multi-year effort to implement a comprehensive strategy focused on the long-term development of leading edge digital tools to empower participants in our network to succeed in the technology-driven transportation logistics marketplace.
−Removed: As part of the execution of this strategy, the Company has launched the following tools to participants within our network:
+Added: As a result of this strategy, the Company offers the following tools to participants within our network:
+Added: Landstar TMS:
A cloud-based platform for truckload freight agent workflow.
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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.
−Removed: 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.
+Added: Pricing Tools:
+Added: 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™:
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The transportation and logistics services industry is extremely competitive and fragmented.
−Removed: 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.
+Added: 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.
Management believes that Landstar’s overall size, service offerings and availability of a wide range of equipment, together with its geographically dispersed local independent agent network, present the Company with significant competitive advantages over many transportation and logistics service providers.
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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.
−Removed: The Company subsequently extended the 2019 Initial Excess Policy for one additional policy year, from May 1, 2022 through April 30, 2023.
−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.
−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.
For commercial trucking claims incurred on or after May 1, 2023 through April 30, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18 million over the thirty-six-month term ending April 30, 2026.
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These third party arrangements provide coverage on a per occurrence or aggregated basis.
−Removed: 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.
+Added: 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.
Within the transportation logistics industry, these verdicts are often referred to as “Nuclear Verdicts.” The increase in Nuclear Verdicts has had a significant impact on the cost of commercial auto liability claims throughout the United States.
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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.
−Removed: 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
−Removed: 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.
+Added: 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
+Added: actuarially projected losses experienced by the Company at various levels of excess insurance coverage.
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.
+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.
+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.
+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.
Furthermore, the Company’s third party insurance arrangements provide excess coverage up to an uppermost coverage layer, in excess of which the Company retains additional financial exposure.
2 unchanged sentences
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.
+Added: In recent years, the amount of cargo theft throughout the freight transportation and logistics supply chain in the United States has significantly increased.
+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.
In addition, under reinsurance arrangements by Signature of certain risks of the Company’s BCO Independent Contractors, the Company retains liability of up to $500,000, $1,000,000 or $2,000,000 with respect to certain occupational accident claims and up to $750,000 with respect to certain workers’ compensation claims.
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: 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.
Certain of the Operating Subsidiaries are considered motor carriers and/or brokers authorized to arrange for transportation services by motor carriers which are regulated by the Federal Motor Carrier Safety Administration (the “FMCSA”) and by various state agencies.
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Historically, truckload shipments for the quarter ending in March are typically lower than for the quarters ending in June, September and December.
−Removed: The COVID-19 global pandemic and related supply chain issues significantly disrupted these typical seasonal patterns.
−Removed: In particular, the Company’s 2022 and 2023 fiscal year results did not reflect normal seasonal patterns.
−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
2 unchanged sentences
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.
+Added: 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.
1 unchanged sentence
We engage firms nationally recognized in the benefits area to objectively evaluate our programs and benchmark them against peers and other similarly situated organizations.
−Removed: 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.
−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.
−Removed: 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.
−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 28, 2024, the Company and its subsidiaries employed 1,441 individuals.
−Removed: 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.
+Added: 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.
9 unchanged sentences
Courses offered by the training and development department are delivered by Landstar’s team of Association for Talent Development (ATD) certified trainers through both on-line and classroom settings.
−Removed: At our core, Landstar is about providing opportunity to people regardless of background.
−Removed: We do not tolerate racism or discriminatory behavior and strongly believe in diversity and inclusion.
−Removed: The Company reaffirms its commitment to equal employment opportunity for all people.
−Removed: The Company complies with all applicable federal and state laws pertaining to equal
−Removed: employment opportunity and affirmative action.
−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.
+Added: At our core, Landstar is about providing opportunity to qualified candidates and employees regardless of background.
+Added: We do not tolerate discriminatory behavior and strongly believe that diverse perspectives and a collaborative culture lead to better business outcomes.
+Added: The Company complies with all applicable federal and state laws pertaining to employment.
Our management teams and all of our employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.