Landstar Sees Agent Growth From Montgomery Ruling - Commercial Carrier Journal

The Montgomery Ruling’s Ripple Effect on Brokerage Stability

In the wake of the U.S. Supreme Court’s Montgomery decision, the landscape for freight brokerages is shifting beneath their feet. Smaller firms, long accustomed to the relative safety of federal preemption, now find themselves navigating a newly exposed legal environment. As defense costs climb and the threat of insurance claims looms larger, many in the industry are seeking the shelter of established, larger-scale networks. Landstar, a prominent player in the space, is reporting a tangible uptick in interest from independent agents and smaller brokerages looking for a “safe haven” to weather this period of increased litigation risk.

Landstar has removed more than 35,000 carriers from its approved network over the past four years — a 35% reduction the company says is driven by a sharper focus on safety, security and fraud prevention. With the Supreme Court's Montgomery ruling now heightening broker liability…

— https://x.com/FreightWaves/status/2086942628570911086

During the company’s third-quarter 2026 earnings conference call, Landstar Chief Executive Officer Frank Lonegro noted that while the industry is still digesting the long-term implications of the ruling, the effect on their own business model is clear. The company, ranked No. 11 on the CCJ Top 250, is positioning its infrastructure to absorb the very risks that have become existential threats to smaller, independent shops. This isn’t a sudden shift, but rather a structural recalibration expected to play out over the next one to two years as existing insurance policies come up for renewal.

Insurance Costs and the Litigation Environment

The financial pressure on the transportation sector is not merely hypothetical. Landstar reported overall revenue of $1.512 billion for the quarter, a 24.5% increase compared to $1.205 billion a year ago. Yet, beneath that growth, insurance and claim costs acted as a significant anchor on performance. The company logged $55.3 million in insurance and claims expenses, a figure bolstered by $13 million in adverse actuarial adjustments and $8 million tied to the settlement of prior-year accidents from 2024 and 2025.

It’s no secret—the truck transportation industry has been under attack of late by an incredibly aggressive plaintiff bar, emboldened by the prospect of nuclear verdicts and the Montgomery decision.

This sentiment, expressed by Lonegro, highlights the core anxiety currently gripping the brokerage community. The legal shield that once protected freight brokers from certain carrier-selection lawsuits has weakened, leaving firms with less robust legal and insurance support vulnerable to high-stakes settlements. For Landstar, the strategy involves leveraging its scale to manage these risks, a move that is already attracting new partners. The company recently signed Show Me Global Logistics, a Midwest brokerage with approximately $20 million in revenue, as an independent agent, with expectations that more signings will follow in the coming months.

Vetting and the Stricter Compliance Baseline

Beyond the legal fallout, Landstar is doubling down on its vetting processes, a move initially sparked by the broader industry struggle with freight fraud. Chief Safety and Operations Officer Matt Miller provided a clear look at the numbers: the approved carrier count, which stood at roughly 100,000 in the second quarter of 2022, has been tightened significantly to 67,915 by the end of the third quarter of 2026. This is not a sign of a shrinking market, but rather a deliberate culling of the carrier base to ensure higher compliance standards.

The company is not accepting “newly minted” MC numbers for owner-operators and maintains a rigorous, 24-hour cycle of rerunning carriers through its vetting system. This focus on quality over quantity is a response to a market that has finally tipped in favor of transportation providers after nearly four years of shipper-driven conditions. As of October 2026, loads hauled by truck were tracking about 7% above October 2025 levels, with revenue per load showing a 29% increase.

Market Momentum and the Road Ahead

While the company has opted for fourth-quarter commentary rather than formal guidance due to the volatility of geopolitics and litigation, the data suggests a period of sustained activity. Historically, the transition from the third to the fourth quarter brings a modest sequential increase in revenue per load and volume, and early indicators show October is performing ahead of traditional seasonal norms. CFO James Todd noted that if the company can return to the historical strength of its new-agent revenue—which has seen significant fluctuations during the 2023-2025 freight recession—it could represent a $100 million tailwind.

The path forward remains tied to how effectively brokerages can navigate the post-Montgomery reality. While some firms may struggle to absorb the rising costs of defense and insurance, larger entities like Landstar are betting that their ability to provide a secure, vetted environment will remain a premium offering in an increasingly litigious market. The upcycle, as Lonegro put it, still has “a good way to run,” provided the industry can manage the mounting legal pressures that continue to redefine the cost of doing business.