Landstar grew revenue about 2% with EPS up roughly 36%, as heavy-haul revenue jumped 18% and overall truck revenue per load rose about 6%, defying typical seasonal declines. Non-truck (ocean) revenue and brokerage volumes fell on tough pull-forward comps and tighter carrier vetting, but lower cargo-claim costs and improving BCO truck retention supported margins. Management offered Q2 commentary rather than formal guidance, citing a fluid freight environment, while expressing growing conviction the cycle is at the beginning of an upturn.
Thanks, Arlene. Good afternoon, and welcome to Landstar's 2026 first quarter earnings conference call. Before we begin, let me read the following statement. The following is a safe harbor statement on the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements. During this conference call, we may make statements that contain forward-looking information that relate to Landstar's business objectives, plans, strategies, and expectations. Such information is, by nature, subject to uncertainties and risks, including, but not limited to, the operational, financial, and legal risks detailed in Landstar's Form 10-K for the 2025 fiscal year described in the section Risk Factors in our other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated.
Investors should not place undue reliance on such forward-looking information, and Landstar undertakes no obligation to publicly update or revise any forward-looking information. I'll now pass it to Landstar's CEO, Frank Lonegro, for his opening remarks.
Thanks, JT, and good afternoon, everyone. We are excited to discuss our results this quarter, given the overall sense of optimism many in our network are sharing with us. It was great to spend time with many of our BCOs at the Mid-America Trucking Show in March, and to celebrate the success of our agent network earlier this month at our annual agent convention. The tone and positivity I heard from my personal interactions with BCOs and agents at these events was the best I've experienced during my tenure at Landstar and provides an emerging sense of confidence as we head further into 2026. Before diving into our results, I'd like to thank our BCOs and agents and all the Landstar employees who support them every day.
The capability, resiliency, and level of commitment exhibited day in and day out by our network of independent business owners is unique in the freight transportation industry. Their adaptability and dedication to safety, security, and service for our customers is truly impressive. They are exceptional business leaders and key to driving the continued success of Landstar's business model. I'd also like to thank Derek Barrs, the head of the FMCSA, who recently appeared at our agent convention and discussed many of the significant initiatives he is leading at the FMCSA. These regulatory efforts are having a real, tangible impact on the trucking industry and have been very positive for Landstar. We look forward to continuing our dialogue with the USDOT and the FMCSA in support of these efforts. Amidst our improved operating performance, the 2026 first quarter was not without challenges that required our focus and attention.
We are driving to incorporate AI into our business and do everything we can to mitigate any perceived industry-specific AI disintermediation risk. We were pleased to have Jim Applegate and Rick Coro participate in the Goldman Sachs AI and Freight Forum in Chicago in late March, where they shared our AI roadmap and several in-flight initiatives across the network. We continue to be encouraged by the level of engagement we're seeing among agents and BCOs participating in our beta programs. That collaboration is already yielding tangible progress across a number of workflows, including customer quoting, carrier negotiations, dispatch decision-making, automated tracking, appointment scheduling, network modeling, and bid optimization. Importantly, these tools are being developed alongside our agents and BCOs with early pilots already live in production or in advanced testing.
Initial feedback points to meaningful time savings, higher shipment lifecycle throughput, and improved visibility across the network, empowering our entrepreneurs to spend more time on revenue-generating and relationship-driven activities. At the same time, we are advancing several AI-driven efficiency initiatives at the corporate level, including our tier one ERP modernization, proprietary fraud prevention and detection capabilities, service center workflows, BCO retention models, and self-service analytics for operations and customer management. Across both the agent network and in our corporate offices, our focus remains on disciplined deployment and scalable adoption. We look forward to providing additional updates as these initiatives continue to progress. We, like everyone else, are monitoring the news on the geopolitical conflict in the Middle East and the related volatility in energy and diesel prices.
We also continue to monitor the potential effect of tariff and trade policy on our business, including the impact of the recent Supreme Court decision and tariff refunds from the federal government. Tariffs have certainly already impacted freight flows. For example, the 2025 first quarter reflected a desire by many customers to pull forward shipments in an effort to get ahead of potential tariffs. This contributed to a relatively tough first quarter volume comp for Landstar. We will also be closely monitoring any developments with respect to trade relations among the United States, Canada, and Mexico this year. Against that backdrop, the Landstar business model performed well, with revenue increasing approximately 2% compared to the 2025 first quarter, gross profit increasing approximately 14%, variable contribution dollars increasing approximately 7%, and basic and diluted earnings per share increasing approximately 36%.
As a reminder, earnings per share during the 2025 first quarter were unfavorably impacted by approximately $0.10 per share related to the previously disclosed supply chain fraud matter. As JT will discuss in more detail during his remarks, the 2026 first quarter also experienced lower insurance and claim cost expense compared to the 2025 first quarter, primarily due to the company's ongoing efforts to address strategic cargo theft. These efforts helped Landstar to achieve both a decrease in the frequency of cargo claims incidents during the 2026 period compared to the 2025 period, as well as decreased severity of cargo claim incidents. One consistent highlight in our results remains the strength of our industry-leading unsided/platform equipment business. This part of our business posted another strong quarter with an 8% year-over-year revenue increase, driven by the performance of Landstar's heavy-haul service offering.
We generated approximately $134 million of heavy-haul revenue during the 2026 first quarter, representing an 18% increase over the 2025 first quarter. This achievement reflected a 12% increase in heavy-haul revenue per load and a 6% increase in heavy-haul volume. Our focus continues to be on accelerating our business model and executing on our strategic growth initiatives. We are continuing to invest in the foundational work that puts Landstar in a great position to leverage improving freight market conditions. We also remain focused on our commitment to continuous improvement in the level of service and support we provide to our customers, agents, BCOs, and carriers each and every day. Turning to slide five.
The freight environment in the 2026 first quarter was characterized by relatively strong demand from a seasonal perspective and an improving price environment as we moved through the quarter. We were encouraged to see the ISM Index above 50 for each of the three-months in the first quarter, a positive sign for our business, as readings from the prior three-years too often reflected a far more challenging economic backdrop. We were pleased to see sequential outperformance in the number of loads hauled via truck and truck revenue per load compared to pre-pandemic normal seasonal patterns. As noted in the press release, we were encouraged to see that overall truck revenue per load increased 6% compared to the 2025 first quarter. Our balance sheet continues to be very strong, and our capital allocation priorities are unchanged.
We will continue to patiently and opportunistically execute on our existing buyback authority to benefit our long-term stockholders. As noted in the slide deck, during the 2026 first quarter, the company returned approximately $104 million to shareholders through our capital return programs. The company returned approximately $82 million in dividends to stockholders during the first quarter and deployed approximately $22 million to share repurchases during the first quarter. Yesterday afternoon, our board declared a regular quarterly dividend of $0.40 per share, payable on June 9 to stockholders of record as of the close of business on May 19th.
We continue to invest through the cycle in leading technology and AI solutions for the benefit of our network of independent business owners and have allocated a significant amount of capital this year towards refreshing our fleet and trailing equipment, with a particular focus on investment in new van equipment. Turning to slide seven and looking at our network, the scale, systems, and support inherent in the Landstar model helped to drive the operating results generated during the 2026 first quarter. JT will get into the details on revenue, loadings, and rate per load in a few minutes. Safety is crucial to our continued success. Our safety performance is a direct result of the professionalism of the thousands of Landstar BCOs operating safely every day and the agents and employees who work to reinforce the critical importance of safety, security, and service at Landstar.
I'm proud to report an accident frequency rate of 0.64 DOT-reportable accidents per million miles during the 2026 first quarter, well below the last available national average DOT-reportable frequency rate released by the FMCSA for 2021 and slightly better than the 0.69 DOT accident frequency we reported during the 2025 first quarter. The company's long-run average is an impressive operating metric that speaks to the strength, skill, talent, and dedication of our BCOs and provides a point of differentiation our agents are able to highlight in discussions with our freight customers. We remain committed to driving a best-in-class safety culture. I'd also like to take a moment to recognize Landstar's $457 million-dollar agents based on our 2025 fiscal year results. Importantly, retention within the million-dollar agent network continues to be extremely high. Turning to slide eight.
On a year-over-year basis, BCO truck count decreased approximately 2% compared to the end of 2025's first quarter and approximately 40 basis points sequentially. It is important to note, however, that the 38 BCO truck decline experienced during the 2026 first quarter is significantly better than our experience in other recent first quarters when on average, Landstar experienced a decline of 365 BCO trucks across the first quarters of 2023, 2024, and 2025. We were also very pleased to see our trailing 12-month BCO truck turnover rate drop from 31.4% as of fiscal year-end 2025 to 29.5% at the end of the 2026 first quarter. This is a directionally positive trend that we hope will continue in the second quarter.
Thanks, Frank. Turn to slide 10. As Frank mentioned earlier, overall truck revenue per load increased 5.6% in the 2026 first quarter compared to the 2025 first quarter, primarily attributable to a 10.8% increase in revenue per load on loads hauled via unsided/platform equipment and a 5.2% increase in revenue per load on loads hauled via van equipment. On a sequential basis, truck revenue per load increased 0.2% in the 2026 first quarter versus the 2025 fourth quarter. It is an unusual sign for truck revenue per load to be higher in the first quarter than in the immediately preceding fourth quarter, as pre-pandemic normal seasonality would typically be expected to yield a 4% sequential decrease in revenue per load in a given first quarter compared to the immediately preceding fourth quarter.
In comparison to overall truck revenue per load, we consider revenue per mile on loads hauled by BCO trucks a purer reflection of market pricing, as it excludes fuel surcharges billed to customers that are paid 100% to the BCO. In the 2026 first quarter, revenue per mile on unsided/platform equipment hauled by BCOs was 2% above the 2025 first quarter, and revenue per mile on van equipment hauled by BCOs was 3% above the 2025 first quarter. Delving deeper into seasonal trends, revenue per mile on loads hauled by BCOs on unsided/platform equipment declined 6% from December to January, was approximately flat January to February, and increased 2% from February to March.
Importantly, the sequential month-to-month performance as we move through the 1st quarter when compared against typical pre-pandemic trends suggest growing positive momentum in this aspect of our business. In fact, while the December to January change in revenue per mile on BCO loads hauled on unsided/platform equipment underperformed pre-pandemic seasonal trends, January to February's flat performance outperformed pre-pandemic seasonal trends, and the February to March increase outperformed pre-pandemic seasonal trends. Turning to van freight, revenue per mile on van equipment hauled by BCOs was approximately flat from December to January, outperforming historical trends, increased 3% from January to February, also outperforming these trends, but decreased 1% from February to March, underperforming pre-pandemic February to March historical trends. Based on preliminary April BCO processed revenue per load data, we expect the underperformance experienced from February to March to reverse during fiscal April.
It should be noted that month-to-month seasonal trends on unsided platform equipment are generally more volatile compared to that of van equipment. This relative volatility is often due to the mix between heavy specialized loads and standard flatbed volume. As Frank alluded to, we've been particularly pleased with the sustained strong performance of our heavy-haul service offering. Heavy-haul revenue was up an impressive 18% year-over-year in the first quarter, significantly outperforming core truckload revenue. Heavy-haul loadings were up approximately 6% year-over-year, and revenue per heavy-haul load increased 12% year-over-year. This represented a mixed tailwind to our unsided platform revenue per load, as heavy-haul revenue as a percentage of the category increased from approximately 33% during the 2025 first quarter to approximately 36% in the 2026 first quarter.
Non-truck transportation service revenue in the 2026 first quarter was 19% or $16 million below the 2025 first quarter. The decrease in non-truck transportation revenue was mostly due to a 31% decrease in ocean volume, which we believe was partially driven by shipper pull-forward behavior during the first quarter of 2025. Turning to slide 11, we've provided revenue share by commodity and year-over-year change in revenue by commodity. Transportation logistics segment revenue was up 2% year-over-year on a 4% increase in revenue per load, partially offset by a 3% decrease in volume compared to the 2025 first quarter. Within our largest commodity category, consumer durables revenue increased 1% year-over-year on a 7% increase in revenue per load, partially offset by a 5% decrease in volume.
Aggregate revenue across our top five commodity categories, which collectively make up about 70% of our transportation revenue, increased approximately 4% compared to the 2025 first quarter. While slide 11 displays revenue share by commodity, we thought it would also be helpful to include some color on volume performance within our top commodity categories. From the 2025 first quarter to the 2026 first quarter, total loadings of machinery increased 5%. Automotive equipment and parts decreased 4%, building products decreased 10%, and hazmat decreased 6%. Additionally, substitute linehaul loadings, one of the strongest performers for us during the pandemic and one which varies significantly based on consumer demand, increased 1% from the 2025 first quarter.
The decline in automotive, hazmat, and building product loadings noted above was partially offset by a 23% increase in electrical volumes, a 17% increase in energy volumes, and an 8% increase in government volumes. Even with the ups and downs in various customer categories, our business remains highly diversified with over 20,000 customers, none of which contributed over 8% of our revenue in the 2026 first quarter. Turning to slide 12. In the 2026 first quarter, gross profit was $112.5 million compared to gross profit of $98.3 million in the 2025 first quarter.
Gross profit margin was 9.6% of revenue in the 2026 first quarter as compared to gross profit margin of 8.5% in the corresponding period of 2025. In the 2026 first quarter, variable contribution was $172.2 million compared to $161.3 million in the 2025 first quarter. Variable contribution margin was 14.7% of revenue in the 2026 first quarter compared to 14% in the same period last year. The increase in variable contribution margin compared to the 2025 first quarter was primarily attributable to an increase in the percentage of revenue generated from BCO independent contractors.
Turning to slide 13, operating income increased as a percentage of both gross profit and variable contribution as we cycle the impact of the international supply chain fraud matter in the 2025 first quarter, lower insurance and claim costs in the 2026 first quarter, and the impact of the company's fixed cost infrastructure, principally certain components of selling, general, and administrative costs in comparison to larger gross profit and variable contribution bases. Other operating costs were $14.8 million in the 2026 first quarter compared to $11.8 million in 2025. This increase was primarily due to increased trailing equipment maintenance costs, increased trailing equipment rental costs, and decreased gains on disposal of used trailing equipment. Insurance and claims costs were $35.6 million in the 2026 first quarter compared to $39.9 million in 2025.
Total insurance and claim costs were 7.5% of BCO revenue in the 2026 first quarter as compared to 9.3% in the 2025 first quarter. The decrease in insurance and claim cost as compared to 2025 was primarily attributable to decreased net unfavorable development of prior year claim estimates, decreased severity of current year trucking claims in the 2026 period, and a decrease in both cargo claim frequency and cargo claim severity, which reflects a significant decrease in expense related to strategic cargo theft in the 2026 period, partially offset by increased BCO miles traveled during the 2026 period. During the 2026 and 2025 first quarters, insurance and claims costs included $4.9 million and $11.4 million of net unfavorable adjustment to prior year claim estimates, respectively.
Selling general administrative costs were $61 million in the 2026 first quarter compared to $61.6 million in the 2025 first quarter. The decrease in selling general administrative costs was primarily attributable to the impact of the $4.8 million charge to selling general administrative costs during the first quarter of 2025 in connection with the previously disclosed international supply chain fraud matter and a lower provision for customer bad debt, largely offset by an increased provision for incentive compensation and increased employee benefit costs. The provision for incentive compensation was $3.4 million during the 2026 first quarter as compared to $1 million during the 2025 first quarter. Depreciation and amortization was $10.6 million in the 2026 first quarter compared to $12.2 million in 2025.
This decrease was primarily due to decreased depreciation on software applications and decreased depreciation on our fleet of trailing equipment. The effective income tax rate was 25.2% in the 2026 first quarter compared to an effective income tax rate of 24.7% in the 2025 first quarter. The increase in the effective income tax rate from the 2025 first quarter to the 2026 first quarter was primarily due to an increased provision for state taxes, the impact of tax deficiencies on stock-based compensation arrangements during the 2026 period, and the impact of nondeductible executive compensation on the 2026 income tax provision. Turning to slide 14, looking at our balance sheet, we ended the quarter with cash and short-term investments of $411 million.
Thanks, JT. Given the highly fluid freight transportation backdrop and a volatile geopolitical and macroeconomic environment, the company will be providing second quarter financial and operational commentary rather than formal guidance. Turning to slide 16 and looking at historical seasonality from Q1 to Q2, pre-pandemic patterns would normally be expected to yield sequential increases of 7% in the number of loads hauled via truck and 2% in truck revenue per load, resulting in a top line that typically increases by a mid-single digit to a high single-digit percentage. It should be noted that with respect to the sequential truck volume increase during more recent history, it has been closer to +3% to +4%.
The number of loads hauled via truck in April 2026 was essentially equal to April 2025 on a dispatch basis, while revenue per load in April was approximately 13% above April 2025 on a profit basis. As a result, we view anticipated truck revenue per load in April as outperforming normal seasonality, while anticipated April truck volumes are trending essentially in line with normal seasonality. Please also note that historically, the company has often experienced a 25 basis point to 45 basis point compression in variable contribution margin from the first quarter to the second quarter, primarily driven by mix, as BCO revenue typically represents a larger percentage of overall revenue in the first quarter of a given year as compared to the immediately following second quarter.
We're excited to build upon the positive momentum generated during the first quarter and are energized by the opportunity to support the best network of independent business owners in the transportation space in an environment that after nearly four years appears to be turning in our favor. With that, operator, we'd like to open the line for questions.