Landstar System is increasing its number of business capacity owners, the owner-operators who operate trucks for the $2.3 billion transportation company.
“Our collective objective is to grow all types of capacity,” Henry Gerkens, Landstar chairman, president and CEO, said Friday in a mid-quarter conference call.
Landstar had 7,697 BCOs at the end of the first quarter, down from 7,800 in the same quarter a year ago and 7,865 at the end of the fourth quarter.
The company shed about 40 BCOs in the first two weeks of the second quarter, but has expanded its owner-operator roster for six straight weeks, Gerkens said.
Owner-operators are increasingly in demand, as truckload carriers look to add marginal capacity without the cost of purchasing assets or hiring employees.
“Owner-operators right now are in the driver’s seat,” said Tony Orr, national sales manager for DriverJobs.com. Carriers “are doing everything they can to entice owner-operators, giving away free plates (registrations), no escrow, even helping them with fuel for the first weeks out.”
Landstar’s business model is based on its owner-operators. BCOs hauled 56 percent of Landstar’s loads in the first quarter and generated 54 percent of its revenue.
“Overall, demand in the first two months of the second quarter has been relatively stable,” Gerkens said. The carrier’s rates rose month-over-month in April and May.
At the end of the first quarter, Landstar BCOs operated 8,226 tractor-trailers, down 2.7 percent from the end of 2010. Landstar’s owner-operator capacity is down 3.4 percent from the end of 2009, and 9 percent from its most recent peak at the end of 2008.
That’s a slightly steeper cut than the 7.4 percent contraction in tractors at a group of large truckload carriers, including Landstar, tracked by The Journal of Commerce.
Contact William B. Cassidy at firstname.lastname@example.org. Follow him on Twitter at @wbcassidy_joc