Landstar System Inc., the giant freight broker and third-party logistics provider with significant exposure to Ukraine, has suspended its operations there in the wake of Russia’s invasion, according to a highly placed source.
Jacksonville, Florida-based Landstar’s (NASDAQ: LSTR) Ukrainian agency is “offline” as of Saturday, the source told FreightWaves.
The agency generates as much as $1.1 billion in annual revenue from its Ukrainian operations, according to the source. That would represent about 15% of the company’s $6.53 billion in fiscal year 2021 revenue. It employs about 400 people, the source said
The impact of the action is material enough for the company to consider submitting an 8-K filing with the Securities and Exchange Commission, the source said. An 8-K filing is reserved for unusual or extraordinary events that may influence a company’s operations.
In its annual 10-K filing with the SEC, Landstar acknowledged that some of its agencies maintain operations in Ukraine. Landstar executives did not return requests for comment on Saturday.
Landstar operates through thousands of independent sales agents and a network of owner-operator drivers known as Business Capacity Operators. Landstar’s drivers don’t operate under a forced dispatch system and can pick up any loads they want.
Landstar performed strongly during 2021, culminating in a terrific fourth quarter where it set all-time quarterly records for revenue, operating and net income, and diluted earnings per share. In late 2021, the company’s board declared a one-time cash dividend of $2 per share.