Segment Information

12 Months Ended

Dec. 28, 2024

Segment Information

(12) Segment Information

Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight. Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Company’s third party capacity providers consist of independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the “BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company under non-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads. Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.8 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.

The transportation logistics segment provides a wide range of integrated transportation management solutions. Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo and customs brokerage. Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment and general commodities. In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers. The independent commission sales agents market services provided by the transportation logistics segment. Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue. The results of operations from Landstar Blue and Landstar Metro are presented as part of the Company’s transportation logistics segment.

The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. The insurance segment provides risk and claims management services to certain of Landstar’s operating subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance directly to certain of Landstar’s operating subsidiaries. Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk is ultimately borne by Signature. Internal revenue for premiums billed by the insurance segment to the transportation logistics segment is calculated each fiscal period based primarily on an actuarial calculation of historical loss experience and is believed to approximate the cost that would have been incurred by the transportation logistics segment had similar insurance been obtained from an unrelated third party.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company’s chief operating decision maker (“CODM”) is our Chief Executive Officer. The CODM evaluates each segment’s performance and makes decisions about resource allocations primarily based on operating income, which is the principal financial metric utilized to monitor budgeted versus actual results by segment of the Company. Asset information by segment is not typically provided to the CODM for purposes of evaluating performance or allocating resources, and therefore such information has not been presented.

No single customer accounted for more than 10% of the Company’s consolidated revenue in fiscal years 2024, 2023 and 2022. Substantially all of the Company’s revenue is generated in North America, primarily through customers located in the United States.

The following tables summarize information about the Company’s reportable business segments as of and for the fiscal years ending December 28, 2024, December 30, 2023 and December 31, 2022 (in thousands):

	Transportation Logistics		Insurance		Total
2024
External revenue	$	4,756,008	$	63,237	$	4,819,245
Internal revenue		—		57,476		57,476
Total revenue		4,756,008		120,713		4,876,721
Investment income				14,810		14,810
Purchased transportation		3,745,241				3,745,241
Commissions to agents		392,751				392,751
Other operating costs, net of gains on asset sales/dispositions		58,781				58,781
Insurance and claims		92,712		78,693		171,405
Selling, general and administrative		204,089		13,619		217,708
Depreciation and amortization		56,738				56,738
Operating income		205,696		43,211		248,907
Goodwill		40,933				40,933

	Transportation Logistics		Insurance		Total
2023
External revenue	$	5,230,846	$	72,476	$	5,303,322
Internal revenue		—		67,977		67,977
Total revenue		5,230,846		140,453		5,371,299
Investment income				10,141		10,141
Purchased transportation		4,068,262				4,068,262
Commissions to agents		462,668				462,668
Other operating costs, net of gains on asset sales/dispositions		54,191				54,191
Insurance and claims		101,179		81,039		182,218
Selling, general and administrative		197,819		13,980		211,799
Depreciation and amortization		58,153				58,153
Operating income		288,574		55,575		344,149
Goodwill		42,275				42,275

	Transportation Logistics		Insurance		Total
2022
External revenue	$	7,358,008	$	78,554	$	7,436,562
Internal revenue		—		79,229		79,229
Total revenue		7,358,008		157,783		7,515,791
Investment income				3,162		3,162
Purchased transportation		5,804,017				5,804,017
Commissions to agents		614,865				614,865
Other operating costs, net of gains on asset sales/dispositions		45,192				45,192
Insurance and claims		105,477		99,587		205,064
Selling, general and administrative		206,504		14,775		221,279
Depreciation and amortization		57,453				57,453
Operating income		524,500		46,583		571,083
Goodwill		41,220				41,220

	Fiscal Years Ended
	December 28, 2024			December 30, 2023			December 31, 2022
Total revenue	$	4,876,721		$	5,371,299		$	7,515,791
Elimination of internal revenue		(57,476	)		(67,977	)		(79,229	)
Total consolidated revenue		4,819,245			5,303,322			7,436,562
Operating income	$	248,907		$	344,149		$	571,083
Interest and debt (income) expense (1)		(5,419	)		(3,946	)		3,620
Income before income taxes		254,326			348,095			567,463

(1)  Interest and debt (income) expense includes (1) interest income earned on cash balances held by the transportation logistics segment of $9,495, $7,811 and $900 in 2024, 2023 and 2022, respectively and (2) consolidated total interest expense of $4,076, $3,865 and $4,520 (1) in 2024, 2023 and 2022, respectively.