Landstar System (NASDAQ:LSTR) reported an 18% year-over-year increase in second-quarter 2026 revenue as truck pricing strengthened and demand modestly exceeded typical seasonal patterns, though higher insurance and claims costs weighed on operating results.
President and CEO Frank Lonegro said the freight transportation environment shifted significantly during the quarter, with capacity tightening after market conditions had favored shippers since late 2022. Truck revenue per load rose 17% from a year earlier, while the number of truckloads hauled increased nearly 2%.
“Market conditions which have favored the shipper since late 2022 have begun shifting rather rapidly in favor of the transportation provider,” Lonegro said.
Pricing Momentum and Heavy-Haul Growth
Jim Todd, Landstar’s vice president and CFO, said truck revenue per load increased 14.4% sequentially from the first quarter, representing the company’s largest quarter-over-quarter increase in more than 15 years. Revenue per load increased 19.9% for unsided platform equipment and 15.8% for van equipment compared with the prior-year quarter.
Revenue per mile for loads hauled by business capacity owners, or BCOs, increased 10% year over year for unsided platform equipment and 11% for van equipment. Todd said both equipment categories outperformed typical pre-pandemic seasonal trends in each month of the quarter.
Heavy-haul services remained a notable area of growth. Landstar generated approximately $164 million in heavy-haul revenue during the quarter, up 18% from the second quarter of 2025. Heavy-haul volume rose 9%, while revenue per heavy-haul load increased 8%.
Lonegro said the company continues to see strong demand tied to the broader data-center ecosystem, including energy, cooling, machinery and building-products freight. Todd added that 22 customers increased their heavy-haul volumes with Landstar by at least 50 loads during the quarter, with activity also supported by aerospace, defense, power and energy markets.
Transportation logistics segment revenue increased 18% on a 16% rise in revenue per load and a 2% volume gain. Consumer durables revenue, the company’s largest commodity category, rose 24%, driven by a 23% increase in revenue per load and a 2% volume increase. Electrical loadings rose 31%, building-products loadings increased 8%, machinery loadings rose 2%, and automotive equipment and parts loadings declined 1%.
Margins, Claims Costs and Cash Flow
Gross profit totaled $132.3 million, compared with $109.3 million in the year-earlier period, while gross profit margin improved to 9.2% of revenue from 9.0%. Variable contribution increased to $199.4 million from $170.5 million, although variable contribution margin declined to 13.9% from 14.1%.
Todd attributed the variable contribution margin decline primarily to lower brokerage profitability as rates paid to truck brokerage carriers increased 136 basis points from a year earlier. Brokerage net revenue margin compressed 129 basis points sequentially as capacity tightened.
Insurance and claims costs increased to $39.4 million from $30.4 million a year earlier. The second-quarter figure included $10.5 million of net unfavorable adjustments to prior-year claim estimates, compared with $2.3 million in the prior-year period. Lonegro said the unfavorable development was almost entirely associated with five specific claims, including three truck-brokerage claims.
The company said current-year trucking claim severity increased, though it was partially offset by lower frequency of current-year trucking and cargo claims. Insurance and claims costs represented 7% of BCO revenue, compared with 6.6% a year earlier.
Selling, general and administrative expense rose to $68.2 million from $55.7 million. Excluding a prior-year $4.8 million reclassification related to a supply-chain fraud charge, SG&A increased about $7.7 million, reflecting higher incentive compensation, stock-based compensation and information technology project costs.
Landstar entered the quarter with $348 million in cash and short-term investments. Cash flow from operations totaled $28 million during the first half, while cash capital expenditures were $9 million. Todd said free cash flow was negative in the second quarter because of the sharp sequential increase in revenue and related working-capital needs, marking only the third negative free-cash-flow quarter in the past decade.
The company returned approximately $120 million to shareholders in the first half through about $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 Aug. 18. The dividend represents a 10% increase from the regular dividend declared following each of the prior five quarters.
Network Trends and Broker Liability Focus
Landstar’s BCO truck count increased by a net 68 trucks during the second quarter, its strongest quarterly improvement since the first quarter of 2022. The truck count was down less than 1% from the end of the 2025 second quarter but increased about 80 basis points sequentially. The company also added a net 49 trucks during the first four weeks of the third quarter, according to Matt Miller, vice president and chief safety and operations officer.
BCO turnover declined to 28.3% at the end of the quarter from 31.4% at year-end 2025. Miller said gross truck additions rose 4.2% sequentially and gross truck cancellations declined 13.6%.
Landstar reported an accident frequency rate of 0.62 DOT-reportable accidents per million miles in the first half, down from 0.67 in the first half of 2025. The company has reduced its approved third-party carrier base from more than 100,000 in the second quarter of 2022 to just over 64,000 at the end of the latest quarter, a 35% reduction, as it tightened carrier-vetting practices amid cargo fraud and safety concerns.
Management also discussed the legal environment for freight brokers following the Montgomery decision. Lonegro said smaller and midsized brokers may face increased litigation and compliance burdens, potentially making Landstar’s platform more attractive to prospective agents. The company signed an approximately $18 million Midwest freight broker as a new agent during the quarter, one of its largest new agent additions in 15 years.
Third-Quarter Commentary
Given a fluid freight, geopolitical and claims backdrop, Landstar said it would provide third-quarter operational commentary rather than formal financial guidance. In July, truckload volume was approximately 5% above July 2025 levels on a dispatch basis, while revenue per load was approximately 26% above the prior-year month on a processed basis.
Todd said July demand was about 60 basis points better than normal seasonal trends on a loads-per-workday basis, while pricing was about 150 basis points above typical seasonal performance. Lonegro said the company expects to build on the momentum generated during the first half as freight-market conditions improve.
About Landstar System (NASDAQ:LSTR)
Landstar System, Inc (NASDAQ: LSTR) is an asset-light transportation and logistics company headquartered in Jacksonville, Florida. Through a network of independent owner-operators, agents and third-party capacity providers, the company arranges the movement of freight for commercial and industrial customers.
Landstar’s services include truckload transportation, specialized and heavy-haul freight, expedited and time-critical shipping, less-than-truckload transportation, intermodal services and logistics management.
