Dive Brief:
- Landstar System’s owner-operator headcount dropped 13.9% year over year to 8,385 last quarter, the company reported last week.
- The carrier's owner-operator truck count dipped to 9,180 as owner-operators faced a significant increase in repair costs and extended out-of-service periods awaiting repairs, Landstar President and CEO Frank Lonegro said during a July 30 earnings call.
- “We would expect [independent contractor] count to continue to decline in the coming months, given the challenging operating environment faced by many truck owner operators, but at a slower pace,” Lonegro said.
Dive Insight:
Landstar had hoped its declining owner-operator headcount would bottom out last year after acknowledging many had been struggling to keep their trucks in service in fall of 2022.
It had no such luck, as freight rates stubbornly refused to budge.
Landstar owner-operator headcount dips for 9 straight quarters
Revenue per mile and van equipment hauled by BCOs in Q2 of this year decreased 4% year over year, VP and CFO Jim Todd said on the earnings call.
Todd gave reason for optimism despite the drop in owner-operator headcount, truck count and revenue per mile.
“Although the market has softened from a year ago, Landstar's revenue per mile on BCO van equipment remains above the pre-pandemic 2019 second quarter by approximately 15%,” Todd said.
“We believe that rates will stay relatively higher than pre-pandemic levels,” he added, “given the significant amount of incremental cost to operate a truck today as compared to five years ago.”
