Freight Downturn in Full Swing in Landstar's Q4, but Margins Nicely Ahead of Our Forecast

Wide-moat truck broker Landstar's fourth-quarter gross revenue swung to a 14% year-over-year decline (it was up 5% last quarter and almost 40% in the first half); below our forecast as spot truckload activity corrected more than we expected. The overall theme is that retail-sector restocking has dried up on high inventory levels, and certain industrial end markets are now softening, driving down demand and sell rates to shippers, especially relative to historically strong levels a year ago. For the core truckload business, loads fell 5.5%, while average revenue per load was down 7%.