Dive Brief:
- Landstar System’s operating income fell to $29.6 million in Q4, according to a news release, representing a nearly 49% decline year over year after three crashes sent costs upward.
- Insurance and claims costs rose to $56 million, which included $11 million for two tragic crashes in Q4, the company said. The line item also involved $5.7 million for costs related to a fatal crash on Dec. 31, 2021, on I-10 in Texas, involving a brokered tractor-trailer and a recreational vehicle.
- “A trial court in El Paso, Texas, found Landstar Ranger responsible for 100% of the $22.8 million of total damages awarded,” VP and CFO Jim Todd said on an earnings call Wednesday. “Landstar disagrees with the judgment and plans to vigorously appeal this matter.”
Dive Insight:
The 2021 crash led to a final judgment on Jan. 13 of nearly $22.9 million in damages to 10 people, plus nearly $3.7 million in pre-judgment interest and post-judgment interest accruing at 7%.
Landstar is citing how a jury determined in August that Landstar had 15% responsibility — with “the remainder of the total monetary damages attributable to the hauling motor carrier and the hauling motor carrier’s employee truck driver.”
But the verdict wasn’t unanimous. Subsequently, the final judgment in January by a Texas judge was entirely against Landstar Ranger, an asset-light subsidiary.
The Q4 margin pressure was a sharp contrast to a year ago. In Q4 2024, the company’s insurance and claims line item was $30.1 million.
Meanwhile, Landstar’s insurance premiums have spiked around $22 million — approximately 400% — for the annual policy ending May 31, 2026, the company previously noted in a Q2 securities filing.
