Why Landstar is Outperforming in a Weak Dry Van Market

In a freight landscape marked by divergent sector performances, Landstar System Inc (LSTR) has emerged as a standout performer despite the broader dry van market's struggles. While dry van revenue contracted by 3% year-over-year in 2025 due to softer freight demand and flat revenue per load, according to Flatbed trends, Landstar's strategic focus on flatbed and heavy haul segments has shielded it from the worst of the downturn. This article examines how divergent freight sector dynamics and Landstar's operational resilience are driving its outperformance.

Divergent Freight Sector Dynamics: Flatbed and Heavy Haul as Growth Engines

The dry van sector's weakness contrasts sharply with the strength of flatbed and heavy haul transportation. Landstar reported a 4% year-over-year increase in flatbed revenue, driven by higher volumes and a 17% surge in heavy haul business, as that Yahoo article noted. This divergence stems from shifting demand patterns: while retail and consumer goods logistics (traditionally dry van-dependent) face headwinds, industrial and construction sectors-reliant on flatbed and heavy haul-are gaining momentum.

Regulatory tailwinds further bolster flatbed's advantage. Changes affecting non-domiciled commercial drivers and potential enforcement shifts could tighten dry van capacity while flatbed remains less impacted, the article added. Meanwhile, the Southeast Asia data center colocation market's projected 18.41% compound annual growth rate through 2030, according to a GlobeNewswire report, underscores a broader trend of infrastructure-driven freight demand, which aligns with Landstar's specialized capabilities.

Operational Resilience: Strategic Adjustments and Fleet Optimization

Landstar's third-quarter 2025 results reveal a company actively reshaping its operations to navigate sector-specific challenges. A strategic review led to non-cash impairment charges, impacting reported earnings per share (EPS) to $0.56 from an estimated $1.25, according to the company's Q3 2025 earnings. However, adjusted EPS of $1.22-excluding these charges-reflects underlying strength.

Key to Landstar's resilience is its focus on fleet diversification. The company achieved sequential growth in its BCO (Broker Company Owner) truck count for the first time since early 2022, the earnings report showed, signaling successful market expansion. Additionally, Landstar's emphasis on unsided/platform equipment services-critical for flatbed and heavy haul-has insulated it from dry van volatility, the same report noted.

Shareholder Returns and Long-Term Positioning

Despite near-term earnings pressures, Landstar remains committed to shareholder returns. In Q3 2025, the company spent $40.6 million repurchasing 308,709 shares and declared a $0.40 per share dividend, the earnings release noted. These actions underscore confidence in its long-term strategy, particularly as flatbed and heavy haul demand continues to outpace dry van.

Conclusion: A Model of Sector Agility

Landstar's outperformance in a weak dry van market is a testament to its ability to pivot toward high-growth freight segments and optimize operational efficiency. By capitalizing on flatbed and heavy haul trends while streamlining underperforming assets, the company is well-positioned to navigate sector-specific headwinds. For investors, Landstar's strategic agility and disciplined capital allocation present a compelling case for resilience in an evolving transportation landscape.