Landstar rides out the storm
When the economy’s in a tailspin, some observers like to speculate that the owner-operator is about to become an endangered species. Indeed, many contractors have fallen out in recent months, but there’s no doubt about the potential for good operators to make money.
The biggest owner-operator fleet, Landstar Systems, recently announced it earned $14 million in the first quarter. Granted, that’s 41 percent less than a year ago, due to decreased revenue in a serious downturn, but it’s still profit in a period when some corporations are losing billions.
One reason for Landstar’s success is it’s very picky about accepting leased operators, or business capacity owners, as it calls them. Its cream-of-the-crop owner-operators reflect that, bringing in an average net income that’s in the industry’s top tier.
Landstar’s success was recognized by outsiders last month when the company was ranked first in the trucking category in Fortune magazine’s 2009 list of America’s Most Admired Companies. That was the sixth time the company was ranked in the list.
The recent quarterly earnings report was guarded about a second-quarter projection due to the uncertainty of the economy. Still, management appears to feel good about its business model and its owner-operators and how together they can handle whatever comes next: The company bought about $12 million worth of its own shares in the first quarter.
– Max Heine