Paul Stauder's questions to Landstar System Inc (LSTR) leadership • Q4 2024
Question
Speaking for Jordan Alliger, Paul Stauder of Goldman Sachs questioned how the declining BCO count is affecting the variable contribution margin mix and whether margins are expected to improve as BCOs return to the network.
Answer
CEO Frank Lonegro confirmed that the BCO decline and brokerage margin compression have impacted the variable contribution margin. He explained that if BCO-handled freight grows faster than brokerage freight during the recovery, the margin should increase. However, he stressed that both channels are valuable to the bottom line and that the company is focused on initiatives to grow the BCO count by mid-2025, aided by an improving rate environment.