Sunday, July 14, 2024

‘Follow the money’: Landstar positions for nearshoring, infrastructure business

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Dive Brief:

  • Landstar System is investing in cross-border and heavy-haul operations as the company pursues business from supply chain nearshoring and infrastructure spending, CEO Frank Lonegro said on a Q1 earnings call Thursday. 
  • The company has added sales leadership positions as it introduces its 1,100 agents to selling cross-border and heavy-haul shipments. About 500 of those agents sold cross-border shipments last year and will do so going forward.
  • “Nearshoring, that’s clearly an area that we want to play in,” Lonegro said. “Infrastructure, whenever that money unlocks from the government, that’s an area that really fits well with heavy-haul. So we’re going to be able to do a lot more work in that area.”

Dive Insight:

Lonegro, who joined Landstar in Q1, laid out his vision for what he called “a bit of a follow-the-money-type strategy.”

The strategy involves identifying “secular shifts,” such as nearshoring, infrastructure projects and green energy, among other opportunities less vulnerable to cyclical freight demand, he said.

“Those are all things that we do really well in,” Lonegro said, “and I think you’re going to continue to see us look for those secular opportunities, and then invest the capital and the people in order to unlock those.”

Heavy-haul revenue increased about 1% year over year in Q1, Lonegro said. Heavy haul loadings were up about 2%, partially offset by a 1% decline in revenue per load.

Cross-border revenue declined about 14.5% year over year in Q1 — a better performance than Landstar’s 18.4% yoy overall revenue decline in the quarter, CFO Jim Todd noted on the earnings call. The company is aiming to handle about 200,000 cross-border loads this year. 

Landstar is among several trucking industry companies, including Ryder, Saia and J.B. Hunt, that are investing at the U.S.-Mexico border to capitalize on 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 Mexico operations, departed the company last fall to join PGT Trucking as VP of cross-border operations.

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