##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 29, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    Number: 0-21238
  
 Landstar System, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

06-1313069(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)13410 Sutton Park Drive South
    Jacksonville, Florida(Address of principal
    executive offices)

32224(Zip Code)  (904) 398-9400
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, $0.01 Par Value

The NASDAQ Stock Market, Inc.  Securities Registered Pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
     DOCUMENTS INCORPORATED BY
    REFERENCE
  Form 10-K
  Part of 10-KDocument

Into Which IncorporatedProxy Statement relating to Landstar System, Inc.s Annual
    Meeting of Stockholders scheduled to be held on May 1, 2008

Part III




---



##### 





LANDSTAR
    SYSTEM, INC.
  2007
    ANNUAL REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


11Item 1B.


Unresolved Staff Comments


13Item 2.


Properties


14Item 3.


Legal Proceedings


14Item 4.


Submission of Matters to a Vote of Security
    Holders


14PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


15Item 6.


Selected Financial Data


18Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


19Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


30Item 8.


Financial Statements and Supplementary Data


31Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


57Item 9A.


Controls and Procedures


57Item 9B.


Other Information


60PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


60Item 11.


Executive Compensation


60Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


60Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


61Item 14.


Principal Accounting Fees and Services


61PART IVItem 15.


Exhibits, Financial Statement Schedules


61Signatures


64EX-10.2 Supplemental Executive Retirement PlanEX-21.1 List of Subsidiary Corporations of the RegistrantEX-23.1 Consent of KPMG LLPEX-24.1 Powers of AttorneyEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO    2




---



##### Table of Contents



PART I  Item 1.
    Business  General
  (904) 398-9400. Form 10-K, Form 10-Q, Form 8-K http://www.sec.gov
  Historical
    Background
    Description
    of Business
    less-than-truckload
 3




---



##### Table of Contents



less-than-truckload
      Form 10-K.
  short-to-long
   4




---



##### Table of Contents



agreed-upon
      Factors
    Significant to the Companys Operations
    Agent
    Network
  non-asset pick-up), pick-up
   5




---



##### Table of Contents



agreed-upon agreed-upon
  day-to-day
          Capacity
    BCO Independent Contractors. his/her
 6




---



##### Table of Contents



Truck Brokerage Carriers. agreed-upon
      Third Party Rail, Air, Ocean and Other Transportation
    Capacity.
  Warehouse Capacity Owners.
 7




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##### Table of Contents



Diversity
    of Services Offered
      Trailers by TypeVans


10,488Temperature-controlled


107Flatbeds, including step decks, drop decks and low boys


3,738Total


14,333   Customers
      Technology
   8




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##### Table of Contents



Corporate
    Services
    accounting, budgeting and taxes

quality programsfinance and treasury services

risk management insurance serviceshuman resource management

safetylegal

strategic planningpurchasing

technology and management information systemscorporate communications

sales administration and pricingadvertising

contract administration   Competition
  less-than-truckload non-asset
    Self-Insured
    Claims
    Insurance
    Above Self-Insured Retention
   9




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##### Table of Contents



Regulation
  and/or
    and/or
  and/or
  Seasonality
    Employees
   10




---



##### Table of Contents



Item 1A.
    Risk
    Factors  Increased severity or frequency of accidents and other
    claims.
  Dependence on third party insurance
    companies.
  Dependence on independent commission sales
    agents.
  Dependence on third party capacity
    providers.
 11




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##### Table of Contents



Decreased demand for transportation
    services.
  Substantial industry competition. less-than-truckload
  Dependence on key personnel.
  Disruptions or failures in the Companys computer
    systems.
  Potential changes in fuel taxes.
  Status of independent contractors.
 12




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##### Table of Contents



Regulatory and legislative changes. and/or and/or and/or
  Catastrophic loss of a Company facility.
    Item 1B.
    Unresolved
    Staff Comments   13




---



##### Table of Contents



Item 2.
    Properties      Item 3.
    Legal
    Proceedings          Item 4.
    Submission
    of Matters to a Vote of Security Holders   14




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    2007 Market Price


2006 Market Price


Dividends DeclaredFiscal Period

High


Low


High


Low


2007


2006First Quarter

$
48.45


$
38.51


$
48.10


$
38.72


$
0.0300


$
0.025Second Quarter


52.19



45.21



47.68



40.55



0.0300



0.025Third Quarter


51.43



39.71



49.01



39.27



0.0375



0.030Fourth Quarter


44.98



36.50



47.76



37.75



0.0375



0.030       Purchases
    of Equity Securities by the Company
    MaximumTotal


Number ofNumber of


Shares ThatTotal





Shares Purchased


May Yet beNumber of


Average


as Part of Publicly


PurchasedShares


Price Paid


Announced


Under theFiscal Period

Purchased


per Share


Programs


ProgramsSeptember 30, 2007














2,000,000Sept. 30, 2007  Oct. 27, 2007


359,956


$
41.67



359,956



1,640,044Oct. 28, 2007  Nov. 24, 2007


905,643


$
39.13



905,643



734,401Nov. 25, 2007  Dec. 29, 2007














734,401Total


1,265,599


$
39.86



1,265,599    15




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##### Table of Contents



Number of SecuritiesNumber of Securities





Remaining Available forto be Issued Upon


Weighted-Average


Future Issuance UnderExercise of


Exercise Price of


Equity CompensationPlan Category

Outstanding Options


Outstanding Options


PlansEquity Compensation Plans Approved by Security Holders


2,198,308


$
31.10



3,791,823Equity Compensation Plans Not Approved by Security Holders


0



0



0    16




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##### Table of Contents



Financial
    Model Shareholder Returns
    Financial
    Model
    Shareholder Returns
  
 17




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##### Table of Contents



Item 6.
    Selected
    Financial Data  LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  SELECTED
    CONSOLIDATED FINANCIAL DATA
 (Dollars
    in thousands, except per share amounts)
  Fiscal YearsIncome Statement Data:

2007


2006


2005


2004


2003Revenue

$
2,487,277


$
2,513,756


$
2,517,828


$
2,019,936


$
1,596,571Investment income


5,347



4,250



2,695



1,346



1,220Costs and expenses:Purchased transportation


1,884,207



1,890,755



1,880,431



1,510,963



1,185,043Commissions to agents


200,630



199,775



203,730



161,011



125,997Other operating costs


28,997



45,700



36,709



37,130



37,681Insurance and claims


49,832



39,522



50,166



60,339



45,690Selling, general and administrative


125,177



134,239



140,345



124,357



111,227Depreciation and amortization


19,088



16,796



15,920



13,959



12,736Total costs and expenses


2,307,931



2,326,787



2,327,301



1,907,759



1,518,374Operating income


184,693



191,219



193,222



113,523



79,417Interest and debt expense


6,685



6,821



4,744



3,025



3,240Income before income taxes


178,008



184,398



188,478



110,498



76,177Income taxes


68,355



71,313



72,880



42,661



29,146Net income

$
109,653


$
113,085


$
115,598


$
67,837


$
47,031Earnings per common share

$
2.01


$
1.95


$
1.95


$
1.13


$
0.77Diluted earnings per share

$
1.99


$
1.93


$
1.91


$
1.10


$
0.75Dividends paid per common share

$
0.135


$
0.110


$
0.050   Dec. 29,


Dec. 30,


Dec. 31,


Dec. 25,


Dec. 27,Balance Sheet Data:

2007


2006


2005


2004


2003Total assets

$
629,001


$
646,651


$
765,814


$
586,802


$
441,072Long-term debt, including current maturities


164,753



129,321



166,973



92,090



91,456Shareholders equity


180,786



230,274



255,689



215,129



145,130  18




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Statements
  Form 10-K Form 10-K
  Introduction
    short-to-long
   19




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##### Table of Contents



Changes
    in Financial Condition and Results of Operations
      Fiscal Year2007


2006


2005Number of Million Dollar Agents


495



490



466Average revenue generated per Million Dollar Agent

$
4,571,000


$
4,700,000


$
5,063,000Percent of consolidated revenue generated by Million Dollar
    Agents


91
%


92
%


94
%Number of independent commission sales agent locations at year
    end


1,397



1,345



1,150    20




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##### Table of Contents



Fiscal Year2007


2006


2005Carrier Segment:External revenue generated through (in thousands):BCO Independent Contractors

$
1,288,070


$
1,270,649


$
1,249,159Truck Brokerage Carriers


520,321



525,967



442,509$
1,808,391


$
1,796,616


$
1,691,668Revenue per revenue mile

$
2.04


$
2.02


$
1.92Revenue per load

$
1,612


$
1,621


$
1,542Average length of haul (miles)


791



803



804Number of loads


1,121,900



1,108,300



1,097,000Global Logistics Segment:External revenue generated through (in thousands):BCO Independent Contractors(1)

$
103,155


$
103,588


$
159,273Truck Brokerage Carriers


361,257



396,141



439,604Rail, Air, Ocean and Bus Carriers and WCOs(2)


177,608



182,813



196,259$
642,020


$
682,542


$
795,136Revenue per load(3)(4)

$
1,572


$
1,528


$
1,555Number of loads(3)(4)


402,900



380,700



334,000     (1)
    
    Includes revenue from freight hauled by carrier segment BCO
    Independent Contractors for global logistics customers.(2)
    
    Included in the 2007, 2006 and 2005 fiscal years was $481,000,
    $25,067,000 and $44,007,000, respectively, of revenue
    attributable to buses provided under a contract between Landstar
    Express America, Inc. and the United States Department of
    Transportation/Federal Aviation Administration (the
    FAA).(3)
    
    Revenue per load and number of loads for the 2007, 2006 and 2005
    fiscal years exclude the effect of $8,511,000, $100,655,000 and
    $275,929,000, respectively, of revenue derived under the FAA
    contract. (See the section Use of
    Non-GAAP Financial Measures on page 25.)(4)
    
    The number of loads in the fiscal period ended 2006 were
    restated. This change had no impact on reported revenue.    Dec. 29,


Dec. 30,


Dec. 31,2007


2006


2005BCO Independent Contractors


8,403



8,516



8,011Truck Brokerage Carriers:Approved and active(1)


16,053



15,247



14,014Other approved


9,362



8,574



8,49725,415



23,821



22,511Total available truck capacity providers


33,818



32,337



30,522Number of trucks provided by BCO Independent Contractors


8,993



9,205



8,728  21




---



##### Table of Contents



(1)
    
    Active refers to Truck Brokerage Carriers who moved at least one
    load in the 180 days immediately preceding the fiscal year
    end.    agreed-upon agreed-upon agreed-upon
  agreed-upon
         22




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##### Table of Contents



Fiscal Year2007


2006


2005Revenue


100.0
%


100.0
%


100.0
%Investment income


0.2



0.2



0.1Costs and expenses:Purchased transportation


75.8



75.2



74.7Commissions to agents


8.1



8.0



8.1Other operating costs


1.1



1.8



1.5Insurance and claims


2.0



1.6



2.0Selling, general and administrative


5.0



5.3



5.5Depreciation and amortization


0.8



0.7



0.6Total costs and expenses


92.8



92.6



92.4Operating income


7.4



7.6



7.7Interest and debt expense


0.3



0.3



0.2Income before income taxes


7.1



7.3



7.5Income taxes


2.7



2.8



2.9Net income


4.4
%


4.5
%


4.6
%   Fiscal
    Year Ended December 29, 2007 Compared to Fiscal Year Ended
    December 30, 2006
       23




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##### Table of Contents



Fiscal
    Year Ended December 30, 2006 Compared to Fiscal Year Ended
    December 31, 2005
       24




---



##### Table of Contents



Use of
    Non-GAAP Financial Measures
  Form 10-K, Form 10-K.
   25




---



##### Table of Contents



Capital
    Resources and Liquidity
        1 2
     26




---



##### Table of Contents



Contractual
    Obligations and Commitments
    Payments Due By PeriodLess Than


1-3


4-5


More ThanContractual Obligation

Total


1 Year


Years


Years


5 YearsLong-term debt

$
80,000






$
80,000Capital lease obligations


93,732


$
27,079



46,876


$
19,777Operating leases


23,411



7,633



7,564



4,313


$
3,901$
197,143


$
34,712


$
134,440


$
24,090


$
3,901  27




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Legal
    Matters
         28




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
          Effects
    of Inflation
    Seasonality
    Recently
    Issued Accounting Standards Not Currently Effective
  Fair Value Measurements
 29




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##### Table of Contents



The
    Fair Value Option for Financial Assets and Financial Liabilities
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk      1 2
    available-for-sale,
 30




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars
    in thousands, except per share amounts)
  Dec. 29, 2007


Dec. 30, 2006ASSETSCurrent AssetsCash and cash equivalents

$
60,750


$
91,491Short-term investments


22,921



21,548Trade accounts receivable, less allowance of $4,469 and $4,834


310,258



318,983Other receivables, including advances to independent
    contractors, less allowance of $4,792 and $4,512


11,170



14,198Deferred income taxes and other current assets


28,554



25,142Total current assets


433,653



471,362Operating property, less accumulated depreciation and
    amortization of $88,284 and $77,938


132,369



110,957Goodwill


31,134



31,134Other assets


31,845



33,198Total assets

$
629,001


$
646,651LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCash overdraft

$
25,769


$
25,435Accounts payable


117,122



122,313Current maturities of long-term debt


23,155



18,730Insurance claims


28,163



25,238Accrued income taxes


14,865



10,023Other current liabilities


40,501



48,455Total current liabilities


249,575



250,194Long-term debt, excluding current maturities


141,598



110,591Insurance claims


37,631



36,232Deferred income taxes


19,411



19,360Shareholders EquityCommon stock, $0.01 par value, authorized
    160,000,000 shares, issued 65,630,383 and
    64,993,143 shares


656



650Additional paid-in capital


132,788



108,020Retained earnings


601,537



499,273Cost of 13,121,109 and 9,028,009 shares of common stock in
    treasury


(554,252
)


(377,662
)Accumulated other comprehensive gain (loss)


57



(7
)Total shareholders equity


180,786



230,274Total liabilities and shareholders equity

$
629,001


$
646,651    31




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##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF INCOME
 (Dollars
    in thousands, except per share amounts)
  Fiscal Years EndedDec. 29,


Dec. 30,


Dec. 31,2007


2006


2005Revenue

$
2,487,277


$
2,513,756


$
2,517,828Investment income


5,347



4,250



2,695Costs and expenses:Purchased transportation


1,884,207



1,890,755



1,880,431Commissions to agents


200,630



199,775



203,730Other operating costs


28,997



45,700



36,709Insurance and claims


49,832



39,522



50,166Selling, general and administrative


125,177



134,239



140,345Depreciation and amortization


19,088



16,796



15,920Total costs and expenses


2,307,931



2,326,787



2,327,301Operating income


184,693



191,219



193,222Interest and debt expense


6,685



6,821



4,744Income before income taxes


178,008



184,398



188,478Income taxes


68,355



71,313



72,880Net income

$
109,653


$
113,085


$
115,598Earnings per common share

$
2.01


$
1.95


$
1.95Diluted earnings per share

$
1.99


$
1.93


$
1.91Average number of shares outstanding:Earnings per common share


54,681,000



57,854,000



59,199,000Diluted earnings per share


55,156,000



58,654,000



60,413,000Dividends paid per common share

$
0.135


$
0.110


$
0.050    32




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##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Dollars
    in thousands)
  Fiscal Years EndedDec. 29,


Dec. 30,


Dec. 31,2007


2006


2005OPERATING ACTIVITIESNet income

$
109,653


$
113,085


$
115,598Adjustments to reconcile net income to net cash provided (used)
    by operating activities:Depreciation and amortization of operating property


19,088



16,796



15,920Non-cash interest charges


174



174



174Provisions for losses on trade and other accounts receivable


4,100



5,349



5,939Gains on sales and disposals of operating property, net


(1,648
)


(475
)


(340
)Deferred income taxes, net


521



3,297



(2,019
)Stock-based compensation


8,288



7,173



6,453Changes in operating assets and liabilities:Decrease (increase) in trade and other accounts receivable


7,653



207,128



(198,894
)Decrease (increase) in other assets


(3,207
)


(7,761
)


686Increase (decrease) in accounts payable


(5,191
)


(42,196
)


44,312Increase (decrease) in other liabilities


(3,147
)


(6,145
)


10,979Increase (decrease) in insurance claims


4,324



(4,257
)


685NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES


140,608



292,168



(507
)INVESTING ACTIVITIESNet change in other short-term investments


3,272



(4,462
)


(1,747
)Sales and maturities of investments


44,224



42,334



4,977Purchases of investments


(48,266
)


(41,239
)


(6,450
)Purchases of operating property


(6,514
)


(4,173
)


(3,857
)Proceeds from sales of operating property


3,708



2,620



4,492NET CASH USED BY INVESTING ACTIVITIES


(3,576
)


(4,920
)


(2,585
)FINANCING ACTIVITIESIncrease (decrease) in cash overdraft


334



(4,394
)


6,282Proceeds from repayment of notes receivable arising from
    exercises of stock options






47



423Dividends paid


(7,389
)


(6,361
)


(2,922
)Proceeds from exercises of stock options


12,862



10,533



9,216Excess tax benefit on stock option exercises


3,624



5,758



7,036Borrowings on revolving credit facility


58,000



5,000



57,000Purchases of common stock


(176,590
)


(156,492
)


(95,600
)Principal payments on long-term debt and capital lease
    obligations


(58,614
)


(79,246
)


(10,629
)NET CASH USED BY FINANCING ACTIVITIES


(167,773
)


(225,155
)


(29,194
)Increase (decrease) in cash and cash equivalents


(30,741
)


62,093



(32,286
)Cash and cash equivalents at beginning of period


91,491



29,398



61,684Cash and cash equivalents at end of period

$
60,750


$
91,491


$
29,398    33




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##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS
    EQUITY
 For the Fiscal Years Ended December 29, 2007,
 December 30, 2006 and December 31, 2005
 (Dollars in thousands)
  NotesReceivableArisingAccumulated


fromAddl





Treasury Stock


Other


ExercisesCommon Stock


Paid-In


Retained


at Cost


Comprehensive


of StockShares


Amount


Capital


Earnings


Shares


Amount


Income (Loss)


Options


TotalBalance December 25, 2004


63,154,190


$
632


$
62,198


$
279,873



2,490,930


$
(127,151
)

$
47


$
(470
)

$
215,129Net income














115,598



















115,598Dividends paid ($0.050 per share)














(2,922
)


















(2,922
)Purchases of common stock


















2,873,053



(95,600
)










(95,600
)Exercises of stock options, including excess tax benefit


991,712



10



16,242























16,252Director compensation paid in common stock


6,000







193























193Stock-based compensation expense










6,260























6,260Repayment of notes receivable arising from exercises of stock
    options






























423



423Incentive compensation paid in common stock










(361
)






(19,100
)


975











614Unrealized loss on
    available-for-sale
    investments, net of income taxes


























(258
)






(258
)Balance December 31, 2005


64,151,902



642



84,532



392,549



5,344,883



(221,776
)


(211
)


(47
)


255,689Net income














113,085



















113,085Dividends paid ($0.110 per share)














(6,361
)


















(6,361
)Purchases of common stock


















3,697,726



(156,492
)










(156,492
)Exercises of stock options, including excess tax benefit


835,241



8



16,283























16,291Director compensation paid in common stock


6,000







265























265Stock-based compensation expense










6,908























6,908Repayment of note receivable arising from exercise of stock
    options






























47



47Incentive compensation paid in common stock










32







(14,600
)


606











638Unrealized gain on
    available-for-sale
    investments, net of income taxes


























204







204Balance December 30, 2006


64,993,143



650



108,020



499,273



9,028,009



(377,662
)


(7
)


0



230,274Net income














109,653



















109,653Dividends paid ($0.135 per share)














(7,389
)


















(7,389
)Purchases of common stock


















4,093,100



(176,590
)










(176,590
)Exercises of stock options, including excess tax benefit


623,663



6



16,480























16,486Director compensation paid in common stock


13,577







678























678Stock-based compensation expense










7,610























7,610Unrealized gain on
    available-for-sale
    investments, net of income taxes


























64







64Balance December 29, 2007


65,630,383


$
656


$
132,788


$
601,537



13,121,109


$
(554,252
)

$
57


$
0


$
180,786    34




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Significant
    Accounting Policies  Consolidation
    Fiscal
    Year
    Revenue
    Recognition
    Insurance
    Claim Costs
    Tires
    Cash
    and Cash Equivalents
    Investments
  available-for-sale,
 35




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Operating
    Property
    Income
    Taxes
      Earnings
    Per Share
      Fiscal Year2007


2006


2005Average number of common shares outstanding


54,681



57,854



59,199Incremental shares from assumed exercises of stock options


475



800



1,214Average number of common shares and common share equivalents
    outstanding


55,156



58,654



60,413    36




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based
    Payments
    (2)
    Comprehensive
    Income    Fiscal Year2007


2006


2005Net income

$
109,653


$
113,085


$
115,598Unrealized holding gains/(losses) on
    available-for-sale
    investments, net of income taxes


64



204



(258
)Comprehensive income

$
109,717


$
113,289


$
115,340   available-for-sale mark-to-market available-for-sale mark-to-market available-for-sale mark-to-market
  (3)
    Income
    Taxes    Fiscal Year2007


2006


2005Current:Federal

$
61,266


$
60,599


$
65,804State


6,568



7,417



9,09567,834



68,016



74,899Deferred:Federal


296



2,650



(2,104
)State


225



647



85521



3,297



(2,019
)Income taxes

$
68,355


$
71,313


$
72,880  37




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Dec. 29, 2007


Dec. 30, 2006Deferred tax assets:Receivable valuations

$
3,927


$
3,847Share-based payments


4,554



3,989Self-insured claims


7,358



4,081Other


3,201



4,562$
19,040


$
16,479Deferred tax liabilities:Operating property

$
21,273


$
18,718Goodwill


5,509



4,982$
26,782


$
23,700Net deferred tax liability

$
7,742


$
7,221     Fiscal Year2007


2006


2005Income taxes at federal income tax rate

$
62,303


$
64,539


$
65,967State income taxes, net of federal income tax benefit


4,415



5,234



5,967Meals and entertainment exclusion


802



720



229Share-based payments


598



443



457Other, net


237



377



260Income taxes

$
68,355


$
71,313


$
72,880      38




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Gross unrecognized tax benefits January 1, 2007





$
15,175Gross increases related to current year tax positions






2,036Gross increases related to prior year tax positions






1,957Gross decreases related to prior year tax positions






(1,511
)Lapse of statute of limitations






(1,256
)Gross unrecognized tax benefits December 29, 2007





$
16,401     (4)
    Operating
    Property    Dec. 29,


Dec. 30,2007


2006Land

$
1,921


$
1,921Leasehold improvements


9,384



8,955Buildings and improvements


8,181



7,741Trailing equipment


167,207



140,426Other equipment


33,960



29,852220,653



188,895Less accumulated depreciation and amortization


88,284



77,938$
132,369


$
110,957     (5)
    Retirement
    Plan     39




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (6)
    Debt    Dec. 29,


Dec. 30,2007


2006Capital leases

$
84,753


$
69,321Revolving credit facility


80,000



60,000164,753



129,321Less current maturities


23,155



18,730Total long-term debt

$
141,598


$
110,591     1 2
     40




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          (7)
    Leases    Capital


OperatingLeases


Leases2008

$
27,079


$
7,6332009


26,150



4,3772010


20,726



3,1872011


14,393



2,2782012


5,384



2,035Thereafter






3,90193,732


$
23,411Less amount representing interest (4.3% to 5.9%)


8,979Present value of minimum lease payments

$
84,753     (8)
    Stock
    Compensation Plans  Share-Based
    Payment Arrangements
    Fiscal YearsDec. 29, 2007


Dec. 30, 2006


Dec. 31, 2005Total cost of the Plans during the period

$
7,610


$
6,908


$
6,260Amount of related income tax benefit recognized during the period


2,187



2,169



1,902Net cost of the Plans during the period

$
5,423


$
4,739


$
4,358  41




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    and Director Stock Option Plans
        2007


2006


2005Expected volatility


33.0
%


34.0
%


31.0
%Expected dividend yield


0.3
%


0.3
%


0.0
%Risk-free interest rate


4.75
%


4.75
%


4.50
%Expected lives (in years)


4.2



4.5



5.0        42




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding


Options ExercisableWeighted Average





Weighted AverageExercise Price





Exercise priceShares


per Share


Shares


Per ShareOptions at December 25, 2004


3,115,764


$
12.31



664,324


$
8.56Granted


683,000


$
35.77Exercised


(991,712
)

$
9.29Forfeited


(12,400
)

$
22.31Options at December 31, 2005


2,794,652


$
19.07



855,816


$
10.37Granted


650,000


$
43.61Exercised


(835,241
)

$
12.61Forfeited


(42,840
)

$
21.14Options at December 30, 2006


2,566,571


$
27.35



779,739


$
16.29Granted


275,500


$
43.00Exercised


(623,663
)

$
20.62Forfeited


(20,100
)

$
39.96Options at December 29, 2007


2,198,308


$
31.10



747,626


$
24.73     Options OutstandingNumber


Weighted Average


Weighted AverageOutstanding


Remaining Contractual


Exercise PriceRange of Exercise Prices per Share

Dec. 29, 2007


Life (Years)


per Share$ 7.11  $10.00


223,000



3.1


$
7.82$10.01  $15.00


252,960



4.9


$
13.55$15.01  $25.00


236,000



6.0


$
19.25$25.01  $35.00


292,001



6.9


$
29.79$35.01  $40.00


370,001



7.3


$
37.47$40.01  $44.00


617,846



8.1


$
43.57$44.01  $46.83


206,500



9.1


$
44.402,198,308



6.8


$
31.10   Options ExercisableNumber


Weighted AverageExercisable


Exercise PriceRange of Exercise Prices per Share

Dec. 29, 2007


per Share$ 7.11  $10.00


223,000


$
7.82$10.01  $15.00


150,240


$
13.47$15.01  $25.00


2,000


$
20.21$25.01  $35.00


55,268


$
32.74$35.01  $40.00


153,334


$
37.31$40.01  $43.66


163,784


$
43.65747,626


$
24.73  43




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (9)
    Shareholders
    Equity      (10)
    Segment
    Information  short-to-long
 44




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       45




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    GlobalCarrier


Logistics


Insurance


Other


Total2007External revenue

$
1,808,391


$
642,020


$
36,866






$
2,487,277Internal revenue


46,132



3,602



29,217







78,951Investment income










5,347







5,347Interest and debt expense













$
6,685



6,685Depreciation and amortization


14,848



78







4,162



19,088Operating income


180,247



21,397



34,055



(51,006
)


184,693Expenditures on long-lived assets


829











5,685



6,514Goodwill


20,496



10,638











31,134Capital lease additions


36,046















36,046Total assets


382,344



102,782



89,383



54,492



629,0012006External revenue

$
1,796,616


$
682,542


$
34,598






$
2,513,756Internal revenue


54,837



2,478



28,293







85,608Investment income










4,250







4,250Interest and debt expense













$
6,821



6,821Depreciation and amortization


12,814



152







3,830



16,796Operating income


181,550



31,433



35,673



(57,437
)


191,219Expenditures on long-lived assets


637



174







3,362



4,173Goodwill


20,496



10,638











31,134Capital lease additions


36,594















36,594Total assets


357,575



115,729



106,322



67,025



646,6512005External revenue

$
1,691,668


$
795,136


$
31,024






$
2,517,828Internal revenue


95,872



2,222



31,036







129,130Investment income










2,695







2,695Interest and debt expense













$
4,744



4,744Depreciation and amortization


11,262



309







4,349



15,920Operating income


169,882



60,115



19,374



(56,149
)


193,222Expenditures on long-lived assets


798



20







3,039



3,857Goodwill


20,496



10,638











31,134Capital lease additions


28,512















28,512Total assets


360,083



304,727



58,379



42,625



765,814   (11)
    Commitments
    and Contingencies     46




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         47




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                KPMG
    LLP
     48




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  QUARTERLY
    FINANCIAL DATA
 (Dollars in thousands, except per share amounts)
 (Unaudited)
  Fourth


Third


Second


FirstQuarter


Quarter


Quarter


Quarter2007


2007


2007


2007Revenue

$
642,865


$
634,811


$
632,952


$
576,649Operating income

$
48,666


$
49,648


$
49,508


$
36,871Income before income taxes

$
46,445


$
47,884


$
48,400


$
35,279Income taxes


17,414



18,536



18,730



13,675Net income

$
29,031


$
29,348


$
29,670


$
21,604Earnings per common share(1)

$
0.55


$
0.54


$
0.53


$
0.39Diluted earnings per share(1)

$
0.54


$
0.54


$
0.53


$
0.38Dividends paid per common share

$
0.0375


$
0.0375


$
0.0300


$
0.0300   Fourth


Third


Second


FirstQuarter


Quarter


Quarter


Quarter2006


2006


2006


2006Revenue

$
611,279


$
649,197


$
643,238


$
610,042Operating income

$
48,652


$
51,701


$
49,255


$
41,611Income before income taxes

$
46,781


$
49,893


$
47,963


$
39,761Income taxes


18,091



19,313



18,498



15,411Net income

$
28,690


$
30,580


$
29,465


$
24,350Earnings per common share(1)

$
0.51


$
0.53


$
0.50


$
0.41Diluted earnings per share(1)

$
0.50


$
0.53


$
0.50


$
0.41Dividends paid per common share

$
0.0300


$
0.0300


$
0.0250


$
0.0250     (1)
    
    Due to the changes in the number of average common shares and
    common stock equivalents outstanding during the year, the sum of
    earnings per share amounts for each quarter do not necessarily
    sum in the aggregate to the earnings per share amounts for the
    full year. 49




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
            /s/  KPMG
    LLP     50




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC.
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
    PARENT COMPANY ONLY BALANCE SHEET INFORMATION
    (Dollars in thousands, except per share amounts)
  Dec. 29,


Dec. 30,2007


2006ASSETSInvestment in Landstar System Holdings, Inc., net of advances

$
180,786


$
230,274Total assets

$
180,786


$
230,274LIABILITIES AND SHAREHOLDERS EQUITYShareholders equity:Common stock, $.01 par value, authorized
    160,000,000 shares, issued 65,630,383 and 64,993,143

$
656


$
650Additional paid-in capital


132,788



108,020Retained earnings


601,537



499,273Cost of 13,121,109 and 9,028,009 shares of common stock in
    treasury


(554,252
)


(377,662
)Accumulated other comprehensive gain/(loss)


57



(7
)Total shareholders equity


180,786



230,274Total liabilities and shareholders equity

$
180,786


$
230,274   See Report
    of Independent Registered Public Accounting Firm.
 51




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC.
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
    PARENT COMPANY ONLY STATEMENT OF INCOME INFORMATION
    (Dollars in thousands, except per share amounts)
  Fiscal Years EndedDec. 29,


Dec. 30,


Dec. 31,2007


2006


2005Equity in undistributed earnings of Landstar System Holdings,
    Inc.

$
109,200


$
113,079


$
115,020Income taxes


(453
)


(6
)


(578
)Net income

$
109,653


$
113,085


$
115,598Earnings per common share

$
2.01


$
1.95


$
1.95Diluted earnings per share

$
1.99


$
1.93


$
1.91Dividends paid per common share

$
0.135


$
0.110


$
0.050Average number of shares outstanding:Earnings per common share


54,681,000



57,854,000



59,199,000Diluted earnings per share


55,156,000



58,654,000



60,413,000   See Report
    of Independent Registered Public Accounting Firm.
 52




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC.
    SCHEDULE I  CONDENSED FINANCIAL INFORMATION OF
    REGISTRANT
    PARENT COMPANY ONLY STATEMENT OF CASH FLOWS INFORMATION
    (Dollars in thousands)
  Fiscal Years EndedDec. 29,


Dec. 30,


Dec. 31,2007


2006


2005Operating ActivitiesNet income

$
109,653


$
113,085


$
115,598Adjustments to reconcile net income to net cash provided by
    operating activities:Equity in undistributed earnings of Landstar System Holdings,
    Inc.


(109,200
)


(113,079
)


(115,020
)Net Cash Provided By Operating Activities


453



6



578Investing ActivitiesAdditional investments in and advances from Landstar System
    Holdings, Inc., net


167,040



146,509



81,269Net Cash Provided By Investing Activities


167,040



146,509



81,269Financing ActivitiesExcess tax benefit on stock option exercises


3,624



5,758



7,036Proceeds from repayment of notes receivable arising from
    exercises of stock options


0



47



423Proceeds from exercises of stock options


12,862



10,533



9,216Dividends paid


(7,389
)


(6,361
)


(2,922
)Purchases of common stock


(176,590
)


(156,492
)


(95,600
)Net Cash Used By Financing Activities


(167,493
)


(146,515
)


(81,847
)Change in cash


0



0



0Cash at beginning of period


0



0



0Cash at end of period

$
0


$
0


$
0   See Report
    of Independent Registered Public Accounting Firm.
 53




---



##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
    SCHEDULE II  VALUATION AND QUALIFYING
    ACCOUNTS
    For the Fiscal Year Ended December 29, 2007
    (Dollars in thousands)
  COL A

COL B


COL C


COL D


COL EAdditionsCharged toBalance at


Charged to


Other


Deductions


Balance atBeginning of


Costs and


Accounts


Describe


End ofPeriod


Expenses


Describe


(A)


PeriodDescriptionAllowance for doubtful accounts:Deducted from trade receivables

$
4,834


$
2,501






$
(2,866
)

$
4,469Deducted from other receivables


4,512



1,586







(1,306
)


4,792Deducted from other non-current receivables


297



13











310$
9,643


$
4,100






$
(4,172
)

$
9,571     (A)
    
    Write-offs, net of recoveries.  See Report
    of Independent Registered Public Accounting Firm.
 54




---



##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    For the Fiscal Year Ended December 30, 2006
    (Dollars in thousands)
  COL A

COL B


COL C


COL D


COL EAdditionsCharged toBalance at


Charged to


Other


Deductions


Balance atBeginning of


Costs and


Accounts


Describe


End ofPeriod


Expenses


Describe


(A)


PeriodDescriptionAllowance for doubtful accounts:Deducted from trade receivables

$
4,655


$
3,235






$
(3,056
)

$
4,834Deducted from other receivables


4,342



2,099







(1,929
)


4,512Deducted from other non-current receivables


282



15











297$
9,279


$
5,349






$
(4,985
)

$
9,643     (A)
    
    Write-offs, net of recoveries.  See Report
    of Independent Registered Public Accounting Firm.
 55




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##### Table of Contents



LANDSTAR
    SYSTEM, INC. AND SUBSIDIARY
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    For the Fiscal Year Ended December 31, 2005
    (Dollars in thousands)
  COL A

COL B


COL C


COL D


COL EAdditionsCharged toBalance at


Charged to


Other


Deductions


Balance atBeginning of


Costs and


Accounts


Describe


End ofPeriod


Expenses


Describe


(A)


PeriodDescriptionAllowance for doubtful accounts:Deducted from trade receivables

$
4,021


$
3,399






$
(2,765
)

$
4,655Deducted from other receivables


4,245



2,521







(2,424
)


4,342Deducted from other non-current receivables


263



19











282$
8,529


$
5,939






$
(5,189
)

$
9,279     (A)
    
    Write-offs, net of recoveries.  See Report
    of Independent Registered Public Accounting Firm.
 56




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Form 10-K, Rule 13a-15(e)
    Internal
    Control Over Financial Reporting
  (a)
    Managements
    Report on Internal Control over Financial
    Reporting  Rules 13a-15(f) 15d-15(f)
       57




---



##### Table of Contents



Form 10-K
 58




---



##### Table of Contents



(b)
    Attestation
    Report of the Registered Public Accounting Firm  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                      59




---



##### Table of Contents



(c)
    Changes
    in Internal Control Over Financial Reporting    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    www.landstar.com Form 8-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Regulation S-K
  Regulation S-K
 60




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements and Supplementary Data
  PageConsolidated Balance Sheets


31Consolidated Statements of Income


32Consolidated Statements of Cash Flows


33Consolidated Statement of Changes in Shareholders Equity


34Notes to Consolidated Financial Statements


35Report of Independent Registered Public Accounting Firm


48   Financial Statement Schedules
  Form 10-K.
  ScheduleNumber


Description

PageI


Condensed Financial Information of Registrant Parent Company
    Only Balance Sheet Information


51I


Condensed Financial Information of Registrant Parent Company
    Only Statement of Income Information


52I


Condensed Financial Information of Registrant Parent Company
    Only Statement of Cash Flows Information


53II


Valuation and Qualifying Accounts For the Fiscal Year Ended
    December 29, 2007


54II


Valuation and Qualifying Accounts For the Fiscal Year Ended
    December 30, 2006


55II


Valuation and Qualifying Accounts For the Fiscal Year Ended
    December 31, 2005


56    61




---



##### Table of Contents



Exhibits
  ExhibitNo.

Description(3)


Articles of Incorporation and By-Laws:3
.1

Restated Certificate of Incorporation of the Company dated
    March 6, 2006, including Certificate of Designation of
    Junior Participating Preferred Stock dated February 10,
    1993. (Incorporated by reference to Exhibit 3.1 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2005 (Commission
    File
    No. 0-21238))3
.2

The Companys Bylaws, as amended and restated on
    November 1, 2007. (Incorporated by reference to
    Exhibit 3.1 to the Registrants Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended September 29, 2007 (Commission
    File
    No. 0-21238))(4)


Instruments defining the rights of security holders,
    including indentures:4
.1

Specimen of Common Stock Certificate. (Incorporated by reference
    to Exhibit 4.1 to the Registrants Registration
    Statement on
    Form S-1
    (Registration
    No. 33-57174))4
.2

Fourth Amended and Restated Credit Agreement, dated July 8,
    2004, among LSHI, Landstar, the lenders named therein and
    JPMorgan Chase Bank as administrative agent (including exhibits
    and schedules thereto). (Incorporated by reference to
    Exhibit 99.1 to the Registrants
    Form 8-K
    filed on July 12, 2004 (Commission File
    No. 0-21238))(10)


Material contracts:10
.1+

Landstar System, Inc. Executive Incentive Compensation Plan
    (Incorporated by reference to Exhibit A to the
    Registrants Definitive Proxy Statement filed on
    April 2, 2007 (Commission File
    No. 0-21238))10
.2*+

Landstar System Holdings, Inc. Supplemental Executive Retirement
    Plan, as amended and restated on February 25, 200810
.3+

Landstar System, Inc. 1993 Stock Option Plan. (Incorporated by
    reference to Exhibit 10.1 to the Registrants
    Registration Statement on
    Form S-1.
    (Registration
    No. 33-67666))10
.4+

Amendment to the Landstar System, Inc. 1993 Stock Option Plan
    (Incorporated by reference to Exhibit 10.10 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 27, 1997 (Commission
    File
    No. 0-21238))10
.5+

Landstar System, Inc. 2002 Employee Stock Option Plan
    (Incorporated by reference to Exhibit A to the
    Registrants Definitive Proxy Statement filed on
    March 22, 2002 (Commission File
    No. 0-21238))10
.6+

Landstar System, Inc. 1994 Directors Stock Option
    Plan. (Incorporated by reference to Exhibit 99 to the
    Registrants Registration Statement on
    Form S-8
    filed July 5, 1995. (Registration
    No. 33-94304))10
.7+

First Amendment to the Landstar System, Inc. 1994 Directors
    Stock Option Plan (Incorporated by reference to
    Exhibit 10.8 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 30, 2000 (Commission
    File
    No. 0-21238))10
.8+

Second Amendment to the Landstar System, Inc.
    1994 Directors Stock Option Plan (Incorporated by reference
    to Exhibit 10.9 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 30, 2000 (Commission
    File
    No. 0-21238))10
.9+

Directors Stock Compensation Plan, dated May 15, 2003
    (Incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 28, 2003 (Commission File
    No. 0-21238))10
.10+

Form of Indemnification Agreement between the Company and each
    of the directors and executive officers of the Company.
    (Incorporated by reference to Exhibit 10.2 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 27, 2003 (Commission
    No. 0-21238))10
.11+

Form of Key Executive Employment Protection Agreement dated
    January 30, 1998 between Landstar System, Inc. and Robert
    C. LaRose (Incorporated by reference to Exhibit 10.9 to the
    Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 27, 1997 (Commission
    File
    No. 0-21238)) 62




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##### Table of Contents



ExhibitNo.

Description10
.12+

Amendment to Key Executive Employment Protection Agreement,
    dated August 7, 2002, between Landstar System, Inc. and
    Robert C. LaRose (Incorporated by reference to Exhibit 10.8
    to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 28, 2002 (Commission
    File
    No. 0-21238))10
.13+

Form of Key Executive Employment Protection Agreement between
    Landstar System, Inc. and each of Joseph J. Beacom, James B.
    Gattoni, Henry H. Gerkens, Jim M. Handoush, Michael K. Kneller,
    Patrick J. OMalley, Jeffrey L. Pundt, Ronald G. Stanley
    and Larry S. Thomas (Incorporated by reference to Exhibit 10.13
    to the Registrants Annual Report on Form 10-K for the
    fiscal year ended December 30, 2006 (Commission File No.
    0-21238))10
.14+

Letter Agreement, dated July 2, 2002 from Jeffrey C. Crowe
    to Henry H. Gerkens. (Incorporated by reference to
    Exhibit 10.17 to the Registrants Annual Report on
    Form 10-K
    for the fiscal year ended December 28, 2002 (Commission
    File
    No. 0-21238))10
.15+

Letter Agreement, dated April 27, 2004, between Landstar
    System, Inc. and Jeffrey C. Crowe (Incorporated by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    filed on April 28, 2004 (Commission
    No. 0-21238))10
.16+

Letter Agreement, dated January 2, 2007, between Landstar
    System, Inc. and Robert C. LaRose (incorporated by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed January 3, 2007 (Commission
    No. 0-21238))10
.17+

Letter agreement, dated January 2, 2008, between Landstar
    System, Inc. and Henry H. Gerkens (Incorporated by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed on January 4, 2008 (Commission File
    No. 0-21238))(21)


Subsidiaries of the Registrant:21
.1*

List of Subsidiary Corporations of the Registrant(23)


Consents of experts and counsel:23
.1*

Consent of KPMG LLP as Independent Registered Public Accounting
    Firm of the Registrant(24)


Power of attorney:24
.1*

Powers of Attorney(31)


Certifications pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002:31
.1*

Chief Executive Officer certification, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 200231
.2*

Chief Financial Officer certification, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002(32)


Certifications pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002:32
.1**

Chief Executive Officer certification pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 200232
.2**

Chief Financial Officer certification pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002     +
    
    management contract or compensatory plan or arrangement*
    
    Filed herewith.**
    
    Furnished herewith.   63




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##### Table of Contents



SIGNATURES      By:
    /s/  Henry
    H. Gerkens   President and
    Chief Executive Officer
  By:
    /s/  James
    B. Gattoni   Vice President and
    Chief Financial Officer
      Signature

Title

Date*Jeffrey
    C. Crowe

Chairman of the Board

February 25, 2008/s/  Henry
    H. GerkensHenry
    H. Gerkens

Director, President and Chief Executive Officer; Principal
    Executive Officer

February 25, 2008/s/  James
    B. GattoniJames
    B. Gattoni

Vice President and Chief Financial Officer; Principal Accounting
    Officer

February 25, 2008*David
    G. Bannister

Director

February 25, 2008*Ronald
    W. Drucker

Director

February 25, 2008*William
    S. Elston

Director

February 25, 2008*Michael
    A. Henning

Director

February 25, 2008*Diana
    M. Murphy

Director

February 25, 2008   By:
    /s/  Michael K. Kneller   Attorney In Fact*
 64