I mean, these are things that are more on the industrial side of the economy and more that have kind of a secular item of things. I mean data centers, wind energy, electronic vehicles, things like that. And we’re very well positioned to do well in those markets. I mean, these are sort of our sweet spot. So we’re seeing those things do well. I think that they are reflective of early cycle, how early is a good question to ask. The consumer durable side is still not where we’d like it to be. Our view and many — I think share this view. There was a fair amount of durable goods that were pulled forward during the pandemic, and that’s got to kind of get back to equilibrium before we see that turn positive for us. JT, if you got any more color on some of that?
James Todd: No, Frank, I think you had the nail on the head. We’re watching very, very closely. We get a little bit of Easter impact that was a headwind at the end of the first quarter tailwind the April, and we’re carving that out and we’re looking, John. And from our vantage point, reasonably in line on the volume side and rev per load is just ticking a little bit below.
Jonathan Chappell: Okay. Appreciate it. Thanks, Frank. Thanks, Jim.
Frank Lonegro: Yep. For sure John.
Operator: Thank you. We will move now to the next question coming from the line of Bruce Chan of Stifel. Your line is now open.
Bruce Chan: Hi, good morning, gentlemen. I appreciate the time here. Just want to come back to some of the comments that you made around cross-border. I know it’s still early days there, but maybe you can help us to quantify the size of that business now relative to the opportunity? Or maybe what kind of growth you’ve seen there?
Frank Lonegro: Yes. Bruce, on cross-border, and I think the important thing is we were an early mover in cross-border. We built the facility we call LMO, which is a facility cross-docking facility and a yard and actually, we have a big crane down there [indiscernible]. So it’s a really slick facility. Our customers and agents really like that. We’ve got a shuttle service that goes across the border. We’ve got a small intra-Mexico carrier called Metro. So we’re well positioned in that environment. Clearly, we’re trying to capitalize on near-shoring. So we’ve got a good facility down there. We’re going to continue to look for opportunities to grow that business, to introduce more and more agents to help us sell the cross-border.
So we think it’s a good business. And again, as I mentioned in my opening remarks and I’ll turn it over to JT for numerical color, but we’re already scale — a scale player here. So it’s really about taking business that’s already performing well and really thinking about ways to grow. JT?
James Todd: Yes. Thanks, Frank. I would just — in terms of revenue performance, it was down about 14.5%, our cross-border revs, 1Q 2024 versus 1Q 2023 was about 400 basis points better than what we saw here at the core. Joe, if you have anything to?
Joe Beacom: Yes. No. I’ll just say in last year, we did a little over 600 million. We were looking to move to almost 200,000 loads across the border this year. And it’s a tremendous facility that serves us well. It provides for a great transloading environment to allow us to take advantage of that imbalance in the cross-border business. There’s a lot more northbound than southbound. We’ve got a very solid core Mexican group of carriers that help us service the interior. And then to the earlier emphasis around cross-border, we’ve got a dedicated sales team now working on developing opportunities south of the border, as well as some agent development initiatives, trying to train up and bring agents up to speed on the core capabilities that we have, a multitude of crossing points across the border.
And that’s really, I think, going very, very well. So again, a strength that we have and have had that we’ll just continue to lean on to grow in what we think is a great opportunity, not only in 2024, but into the future.
Bruce Chan: Okay, great. Appreciate it.
Operator: Thank you. We will move now to the next question coming from the line of Stephanie Moore of Jefferies. Your line is now open.
Stephanie Moore: Hi, good morning. Thank you. I wanted to maybe circle back on a prior question talking about maybe the cost structure and some select investments that you called out. If you could maybe kind of expand a little bit on those. You called out some sales organization changes. You just mentioned having a dedicated sales team to go after cross-border. If you could kind of maybe expand on that a little bit more and just key areas of investments, which I think are clearly you’re trying to position yourself well then the upturn. But would love to get a little bit more color there. And then say maybe on the cost side, areas where you’re taking — making some probably quick actions to take cost out of the business. Thanks.
Frank Lonegro: Hi, Stephanie, thanks for the good questions. Let me do them in reverse. I’d say we are looking hard at every position that comes open, whether we need to fill it, whether we need to fill it right now, can we wait until we see additional volume inflections. And again, I give a lot of kudos to JT in terms of how he manages things. And really, the whole leadership organization. Everybody understands that we’re in a freight recession. It’s been a couple of years in difficult circumstances. So we’re being very, very judicious about filling positions that have some level of volume variability to them. In terms of strategic investments, I’m a believer that when a company embarks on a strategy, it’s got to align a lot of things, including capital and human capital resources to be able to bring those to fruition.
So when we talk about strategic initiatives like cross-border and heavy haul, you should expect that we are going to invest both capital and people into those areas to make sure that what we’re saying is follow through with real action and can deliver the value that we think is there. So we — and we’re not talking large dollars or large numbers of people, but the fact that we’re adding salespeople into cross-border. We’re adding salespeople and some leadership positions in heavy haul, like these are important decisions for us. And remember that the headquarters environment, the core environment within Landstar is quite small relative to the agents. So we’re investing there to educate them and to provide them the tools that they need and kick open some doors with customers that can help us get into that business in a more fulsome manner.
