Landstar System Inc.LSTR

Morningstar Rating

Stock Research and Analysis

by Anthony Dayrit

As a third-party logistics provider for the trucking industry, Landstar System matches shippers with loads to carriers with capacity. The firm has established an extensive freight network of 1,400 agents, 25,000 broker carriers, and 8,000 Landstar-dedicated Read more

Bulls Say

Landstar has established a network with sufficient scale to attract customers and suppliers. Landstar's agents help shippers find truckers and truckers find loads, fulfilling the needs of both parties.

Landstar remains profitable even during periods of soft shipping demand, since its asset-light business model keeps fixed costs low. When demand slides, most costs fall accordingly because the company pays its contractor drivers and agents only for service rendered.

The company recently expanded its capabilities to include a warehousing service offering. This business adds no assets--all employees work under contractual relationships and only generate expenses when producing revenue. Read more

Bears Say

Landstar is inherently exposed to the cyclical U.S. trucking market. Overcapacity leads to carriers' bidding rates lower to win business and utilize tractors, which can compromise company's top line.

Traffic accidents are not only tragic, but can also be expensive for Landstar. During the past few years, the firm incurred liabilities for several accidents, each one resulting in a $5 million charge.

Landstar depends on third parties to fulfill their contracted services. Thus, customer satisfaction is not entirely in Landstar's control. Read more

Strategy

Landstar's primary strategy is to continue expanding its customer base and trucking capacity, both of which increase freight density within the firm's already-extensive network. Agent recruiting is also Read more

Management

We believe Landstar possesses a solid management team and sound corporate governance policies. CEO Henry Gerkens has been at the helm since 2004 and has held a number of roles, such as COO, during his roughly 20-year tenure at the firm. We like that Read more

Profile

Landstar System is an asset-light transportation firm that provides third-party logistics services. The company's carrier segment is a matchmaker for the U.S. trucking industry, Read more

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