Freight broker Landstar System said flat demand strength largely offset a still soft dry van truck market in the fourth quarter. However, cargo revenue trends exceeded typical seasonality in December and so far in January.

Landstar (NASDAQ: LSTR) reported fourth-quarter adjusted earnings per share of 75 cents after the market closed Wednesday. The result was 56 cents worse year over year. The figure included $22 million (49 cents per share) in unfavorable claims activity from separate tragic vehicle accidents and $2.1 million (5 cents per share) in non-cash impairment charges from its Landstar Metro divestment. (The impairment charge was added back to adjusted EPS.)

The company revealed the items last week and said he plans to appeal a recent post-trial ruling.

Consolidated revenue of $1.17 billion was down 3% on the year, largely due to a 40% decline in revenue in its shipping business.

Trucking revenue was flat on the year at $1.08 billion. Load count was down 1%, but revenue per load was up 1%. The strength of the flatbed was offset by the softer tendencies of dry vans. Flatbed revenue rose 11% year over year to $401 million as cargoes increased 3% and revenue per cargo increased 8%.

Total truckload revenue rose 6% from October to December, due to a reduction in truck capacity, Landstar said. The metric rose 1.5% sequentially in the fourth quarter, which was 50 basis points ahead of normal seasonality.

Landstar saw moderate softness in consumer durables revenues (up 2% y/y) along with continued weakness in the automotive (up 7%) and construction (up 3%) sectors. Flat demand benefited from data center build-out and decent energy-related revenue (up 6%).

The company’s replacement line carrier revenue was down 15% year-over-year. Linehaul’s revenue tends to increase significantly as the market tightens and truck capacity becomes harder to find.

Revenue generated by business capacity owners (BCOs) rose 2% year-over-year to $458 million as loads rose 4% and revenue per load fell 2%.

(Landstar BCOs are owner operators who transport almost exclusively for the company.)

Trucks supplied by BCO decreased by 4% year-on-year to 8,514 units. This was 104 units less than in the third quarter. The third quarter marked the first sequential increase in the number of BCO trucks since the first quarter of 2022. The BCO truck count previously peaked at 11,935 units.

Retention among the group has improved and truck utilization was 8% higher year-on-year to nearly 24 truckloads in the quarter.

BCO truck counts tend to increase as the market sees a sustained period of higher TL rates. Landstar expects the BCO fleet to grow by 2026.

BCO revenue per mile, Landstar’s preferred metric for TL pricing as it excludes fluctuations in diesel fuel prices, was down 1% year-over-year in the fourth quarter for both dry van and flatbed shipments. Dry van revenue per mile was down 1% sequentially in both October and November, but improved 3% sequentially in December, which was slightly better than normal seasonality.

Chart: SONAR: National Truck Load Index (Online Transportation Only – NTIL.USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of spot loads of reserved dry vans of 250,000 lanes. The NTIL is a seven-day moving average of on-line transportation spot rates, excluding fuel. Spot rates increased during peak season as the new driver pool limitations took hold. Severe winter weather amid tighter capacity is keeping rates high in recent days. For more information about SONAR, click here.

The company did not provide formal guidance, but said revenue may only decline by a low-single-digit percentage from the fourth quarter to the first quarter. January truckloads are down 1% year-over-year, but in line with normal seasonal trends, and revenue per load is 4% higher sequentially (800bps ahead of typical seasonality). Landstar typically sees a mid-to-high single-digit sequential revenue decline in the first quarter.

Variable contribution margin, or net income margin, improved 40 bps year-over-year to 14.1%. (The metric measures the remaining revenue after paying for purchased transportation and agent commissions.)

Adjusted operating margin (as a percentage of variable contribution) fell sharply to 19%. Insurance and claims expenses (as a percentage of BCO revenue) increased 560 bps YoY to 12.3% due to recent claims activity.

Shares of LSTR were down 1% in after-hours trading on Wednesday. Shares closed down 1.2% on the day.

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