<PAGE>

                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C.  20549

                                FORM 10-Q

(Mark One)
[  X  ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  
        Exchange Act of 1934

For the quarterly period ended June 29, 1996

                              or

[     ] Transition Report Pursuant to Section 13 or 15(d) of the Securities 
        Exchange Act of 1934

For 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                        (I.R.S. Employer
of incorporation or organization)                     Identification No.)

First Shelton Place, 1000 Bridgeport Avenue, Shelton, Connecticut          
                 (Address of principal executive offices)                      

                                   06484-0898
                                   (Zip Code)

                                 (203) 925-2900
             (Registrant's telephone number, including area code)

                                      N/A
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                                             Yes  (  X  )      No  (    )     

The number of shares of the registrant's Common Stock, par value $.01 per
share, outstanding as of the close of business on August 7, 1996 was
12,787,833.







<PAGE>

                                    PART I

                            FINANCIAL INFORMATION



                        Item 1.  Financial Statements

     The interim consolidated financial statements contained herein reflect
all adjustments (all of a normal, recurring nature) which, in the opinion of
management, are necessary for a fair statement of the financial condition,
results of operations, cash flows and changes in shareholders' equity
for the periods presented.  They have been prepared in accordance with Rule
10-01 of Regulation S-X and do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements.  Operating results for the thirteen and twenty-six weeks
ended June 29, 1996 are not necessarily indicative of the results that may be
expected for the entire fiscal year ending December 28, 1996.

     These interim financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Company's
1995 Annual Report on Form 10-K.


                                    Index


Item 1
    
Consolidated Balance Sheets as of June 29, 1996
  and December 30, 1995 ........................................ Page 3

Consolidated Statements of Income for the Twenty-Six and 
  Thirteen Weeks Ended June 29, 1996 and July 1, 1995 .......... Page 4

Consolidated Statements of Cash Flows for the Twenty-Six Weeks
  Ended June 29, 1996 and July 1, 1995 ......................... Page 5

Consolidated Statement of Changes in Shareholders'
  Equity for the Twenty-Six Weeks Ended June 29, 1996........... Page 6

Notes to Consolidated Financial Statements...................... Page 7


Item 2

Management's Discussion and Analysis of 
  Financial Condition and Results of Operations ................ Page 9















<PAGE>
                          LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                              CONSOLIDATED BALANCE SHEETS
                   (Dollars in thousands, except per share amounts)
                                     (Unaudited)

<TABLE>
<CAPTION>                                                           June 29,      December 30,
                                                                      1996             1995
                                                                   ----------     -----------
ASSETS
<S>                                                               <C>             <C> 
Current assets:
   Cash                                                            $    3,503     $     3,415
   Trade accounts receivable, less allowance of $6,132                174,300         151,009
      and $6,923
   Other receivables, including advances to independent
      contractors, less allowance of $5,316 and $4,205                 11,739          13,359
   Inventories                                                          2,119           2,292
   Prepaid expenses and other current assets                           12,586           8,501
                                                                   ----------     -----------
                    Total current assets                              204,247         178,576
                                                                   ----------     -----------
Operating property, less accumulated depreciation
   and amortization of $47,984 and $39,796                            111,977         108,052
Goodwill, less accumulated amortization of $6,219 and $5,354           56,184          57,049
Deferred income taxes and other assets                                  9,269           9,402
                                                                   ----------     -----------
Total assets                                                       $  381,677     $   353,079
                                                                   ==========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Cash overdraft                                                  $   12,588     $    13,449
   Accounts payable                                                    43,809          37,427
   Current maturities of long-term debt                                39,236          20,668
   Estimated insurance claims                                          22,241          23,654
   Other current liabilities                                           26,043          32,018
                                                                   ----------     -----------
                    Total current liabilities                         143,917         127,216
                                                                   ----------     -----------
Long-term debt, excluding current maturities                           73,709          73,199
Estimated insurance claims                                             25,092          24,031
Other liabilities                                                         178             237

Shareholders' equity:
   Common stock, $.01 par value, authorized 20,000,000
      shares, issued 12,881,874 shares and 12,871,674 shares              129             129
   Additional paid-in capital                                          61,721          61,504
   Retained earnings                                                   78,898          68,730
   Cost of 94,041 shares of common stock in treasury                   (1,967)         (1,967)
                                                                   ----------     -----------
                    Total shareholders' equity                        138,781         128,396
                                                                   ----------     -----------
Total liabilities and shareholders' equity                         $  381,677     $   353,079
                                                                   ==========     ===========

See accompanying notes to consolidated financial statements.

                                          3
</TABLE>



<PAGE>
                          LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                           CONSOLIDATED STATEMENTS OF INCOME
                    (Dollars in thousands, except per share amounts)
                                     (Unaudited)


<TABLE>
<CAPTION>


                                         Twenty-Six Weeks Ended        Thirteen Weeks Ended
                                       -------------------------     -----------------------
                                         June 29,       July 1,        June 29,      July 1, 
                                           1996          1995            1996         1995   
                                       -----------    ----------     ----------   ----------
<S>                                    <C>           <C>            <C>           <C>       
Revenue                                $   624,589    $  603,854     $  329,112   $  308,148
Costs and expenses:
    Purchased transportation               425,229       407,490        225,016      206,466
    Drivers' wages and benefits             22,730        24,149         11,225       12,228
    Fuel and other operating costs          37,292        33,479         19,514       16,572
    Insurance and claims                    17,756        19,428          7,959        9,833
    Commissions to agents and brokers       40,661        35,506         21,894       18,286
    Selling, general and administrative     47,269        48,945         23,199       24,275
    Depreciation and amortization           12,201         9,807          6,187        5,136
                                        ----------    ----------     ----------   ----------
         Total costs and expenses          603,138       578,804        314,994      292,796
                                        ----------    ----------     ----------   ----------
Operating income                            21,451        25,050         14,118       15,352
Interest and debt expense, net               3,973         3,670          2,051        2,142
                                        ----------    ----------     ----------   ----------
Income before income taxes                  17,478        21,380         12,067       13,210
Income taxes                                 7,310         8,803          5,053        5,390
                                        ----------    ----------     ----------   ----------
Net income                              $   10,168    $   12,577     $    7,014   $    7,820
                                        ==========    ==========     ==========   ==========
Earnings per share                      $     0.80    $     0.98     $     0.55   $     0.61
                                        ==========    ==========     ==========   ==========
Average number of common
  shares outstanding                    12,781,000    12,836,000     12,783,000   12,824,000
                                        ==========    ==========     ==========   ==========

See accompanying notes to consolidated financial statements.

                                          4
</TABLE>

















<PAGE>
                                  LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (Dollars in thousands)
                                              (Unaudited)

<TABLE>
<CAPTION>                                                             Twenty-Six Weeks Ended  
                                                                   ---------------------------
                                                                     June 29,          July 1,
                                                                      1996              1995
                                                                   ----------      -----------
<S>                                                              <C>             <C>          
OPERATING ACTIVITIES
     Net income                                                    $  10,168       $   12,577
     Adjustments to reconcile net income to net cash used
        by operating activities:
          Depreciation and amortization of operating property         11,113            8,896
          Amortization of goodwill and non-competition agreements      1,088              911
          Non-cash interest charges                                      132              125
          Provisions for losses on trade and other accounts
               receivable                                              1,361            1,675
          Gains on sales of operating property                        (1,183)            (435)
          Deferred income taxes, net                                    (176)           1,073
          Changes in operating assets and liabilities,
             net of businesses acquired:
                 Increase in trade and other accounts receivable     (23,032)          (6,841)
                 Increase inventories, prepaid expenses and
                    other assets                                      (3,958)          (1,740)
                 Increase (decrease) in accounts payable and
                     other liabilities                                   348          (19,903)
                 Increase (decrease) in estimated insurance claims      (352)           3,140
                                                                  -----------      -----------
NET CASH USED BY OPERATING ACTIVITIES                                 (4,491)            (522)
                                                                  -----------      -----------
INVESTING ACTIVITIES
     Purchases of businesses, net of cash acquired                                    (32,373)
     Purchases of operating property                                  (4,774)          (4,126)
     Proceeds from sales of operating property                         4,616            2,623
                                                                  -----------      -----------
NET CASH USED BY INVESTING ACTIVITIES                                   (158)         (33,876)
                                                                  -----------      -----------
FINANCING ACTIVITIES
     Borrowings to finance businesses acquired                                         45,900
     Borrowings under revolving credit facility                       16,000           10,000
     Proceeds from exercise of stock options and
       related income tax benefit                                        217
     Increase (decrease) in cash overdraft                              (861)             543
     Purchases of Common Stock                                                         (1,727)
     Principal payments on long-term debt and capital lease
        obligations                                                  (10,619)         (32,416)
                                                                  -----------      -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                              4,737           22,300
                                                                  -----------      -----------
Increase (decrease) in cash                                               88          (12,098)
Cash at beginning of period                                            3,415           17,755
                                                                  -----------      -----------
Cash at end of period                                             $    3,503       $    5,657
                                                                  ===========      ===========
See accompanying notes to consolidated financial statements.
                                          5
</TABLE>


<PAGE>
                                  LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                                   CONSOLIDATED STATEMENT OF CHANGES
                                        IN SHAREHOLDERS' EQUITY
                                   Twenty-Six Weeks Ended June 29, 1996
                                          (Dollars in thousands)
                                                (Unaudited)

<TABLE>
<CAPTION>

                                                                      Treasury Stock
                               Common Stock    Additional                at Cost
                             ----------------   Paid-In   Retained  -----------------
                              Shares   Amount   Capital   Earnings   Shares   Amount    Total
                             --------  ------  --------- ---------- -------- -------- -------

<S>                       <C>         <C>     <C>        <C>        <C>      <C>     <C>      
Balance December 30, 1995  12,871,674 $   129  $  61,504   $ 68,730   94,041 $(1,967) $128,396
  
Exercise of stock options
  and related income tax
   benefit                     10,200                217                                   217

Net income                                                   10,168                     10,168
                           ---------- -------  ---------   --------   ------ -------- --------

Balance June 29, 1996      12,881,874 $   129  $  61,721   $ 78,898   94,041 $(1,967) $138,781
                           ========== =======  =========   ========   ====== ======== ========
















See accompanying notes to consolidated financial statements.



                                          6
</TABLE>













<PAGE>

                 LANDSTAR SYSTEM, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)

The consolidated financial statements include the accounts of
Landstar System, Inc. and its subsidiary, Landstar System Holdings,
Inc., and reflect all adjustments (all of a normal, recurring
nature) which are, in the opinion of management, necessary for a
fair statement of the results for the periods presented.  The
preparation of the consolidated financial statements requires
the use of management's estimates.  Actual results could differ
from those estimates.  Landstar System, Inc. and its subsidiary
are herein referred to as "Landstar".

(1)   Acquisitions
      
      During the first quarter of 1995, Landstar, through different
      subsidiaries of Landstar System Holdings, Inc. ("LSHI"),
      acquired the businesses and net assets of Intermodal Transport
      Company, a California-based intermodal marketing company, LDS
      Truck Lines, Inc., a California-based drayage company, and
      T.L.C. Lines, Inc., a Missouri-based temperature-controlled
      and long-haul, time sensitive dry van carrier.  Also in the
      1995 first quarter, Landstar, through another subsidiary of
      LSHI, acquired all of the outstanding common stock of Express
      America Freight Systems, Inc., a North Carolina-based air
      freight and truck expedited service provider.

      The following unaudited pro forma information represents the
      consolidated results of operations of Landstar and the four
      acquired businesses as if the acquisitions had occurred at the
      beginning of the period presented, and gives effect to increased
      depreciation of operating property, amortization of goodwill and
      non-competition agreements and increased interest expense, at
      rates available to Landstar under the acquisition line of its
      revolving credit facility (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                  Twenty-Six
                                                  Weeks Ended
                                                    July 1,
                                                     1995
                                                  ----------
<S>                                               <C>
      Revenue                                     $  613,454
      Net income                                  $   11,957
      Earnings per share                          $      .93
</TABLE>


      The above pro forma information is not necessarily indicative
      of the results of operations which actually would have been
      obtained during such period.
                                          7







<PAGE>
(2)   Income Taxes

      The provisions for income taxes for the 1996 and 1995
      twenty-six week periods were based on estimated combined
      full year effective income tax rates of approximately 42%
      and 41%, respectively, which are higher than the statutory
      federal income tax rate, primarily as a result of state
      income taxes, amortization of certain goodwill and the
      meals and entertainment exclusion.

(3)   Earnings Per Share

      Earnings per share amounts were based on the weighted average
      number of common shares outstanding.

(4)   Additional Cash Flow Information

      During the 1996 period, Landstar paid income taxes and
      interest of $10,430,000 and $3,523,000, respectively, and
      acquired operating property by entering into capital leases in
      the amount of $13,697,000.  During the 1995 period, Landstar
      paid income taxes and interest of $13,060,000 and $3,563,000,
      respectively, and acquired operating property by entering into
      capital leases in the amount of $15,964,000.

(5)   Commitments and Contingencies

      At June 29, 1996, Landstar had commitments for letters of
      credit outstanding in the amount of $22,939,000, primarily as
      collateral for estimated insurance claims.

      Landstar is involved in certain claims and pending litigation 
      arising from the normal conduct of business.  Based on the 
      knowledge of the facts and, in certain cases, opinions of 
      outside counsel, management believes that adequate provisions
      have been made for probable losses with respect to the resolution
      of all claims and pending litigation and that the ultimate outcome,
      after provisions thereof, will not have a material adverse effect
      on the financial condition of Landstar, but could have a material 
      effect on the results of operations in a given quarter or year.

(6)   Subsequent Event

      On July 1, 1996, Landstar announced it would close all but one of
      the Landstar Poole, Inc. terminals, including those that function
      as Landstar Centers, effective August 1, 1996.  A provision for the
      cost of closing the facilities in the amount $347,000 was recorded
      in the 1996 thirteen week period.  This charge, after related income
      tax benefits of $145,000, reduced earnings per share by $.02 in the
      1996 thirteen and twenty-six week periods.

                                          8









<PAGE>
                                                                            
M
ANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
attached interim consolidated financial statements and notes
thereto, and with the Company's audited financial statements and
notes thereto for the fiscal year ended December 30, 1995 and

Management's Discussion and Analysis of Financial Condition and
Results of Operations, included in the Annual Report to
Shareholders.

                          RESULTS OF OPERATIONS

Introduction

Landstar System, Inc. and its subsidiary, Landstar System Holdings,
Inc. ("Landstar" or the "Company"), serve a variety of different
market niches through its operating subsidiaries which employ
different operating strategies.  Four of Landstar's subsidiaries,
Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc.
and Landstar Gemini, Inc. (collectively, the "Owner-Operator
Companies"), provide truckload transportation services through
independent contractors and independent commission sales agents. 
The nature of the Owner-Operator Companies' business is such that a
significant portion of their operating costs vary directly with
revenue.  

Landstar Poole, Inc.("Poole")and Landstar T.L.C., Inc.("TLC")
provide truckload transportation services using both company-owned
or leased equipment driven by company-employed drivers, and independent 
contractors.  During the twenty-six week period ended June 29, 1996,
revenue generated through independent contractors was 39.3% of Poole's
total revenue and 61.7% of TLC's total revenue.

During the first quarter of 1996, the operations of Landstar ITCO,
Inc. and Landstar Logistics, Inc. ("Logistics") were combined.
As a result, Logistics' operations have been divided into a contract
services division and an intermodal services division.  The contract
services division provides logistics support, single source alternatives,
dedicated fleet services, brokerage and other transportation solutions
to large customers.  The intermodal services division provides intermodal
transportation services primarily by arranging for the movement of
customers' goods by a combination of rail and truck.  Both the railroad
and drayage carriers utilized by Logistics are independent contractors.

Landstar Express America, Inc. ("Express") provides air and surface
expedited transportation services through independent contractors,
including air cargo carriers, and principally utilizes independent 
commission sales agents.
                                           9







<PAGE>
Purchased transportation represents the amount an independent contractor 
is paid to haul freight and is primarily based on a contractually 
agreed upon percentage of revenue generated by the haul for the Owner-
Operator Companies, TLC and the truck operations of Express.  Purchased
transportation for Poole is primarily based on a fixed rate per mile.
Purchased transportation for the intermodal services division of 
Logistics and the air freight operations of Express is based on a
contractually agreed-upon fixed rate. Purchased transportation
as a percentage of revenue for the intermodal services division of 
Logistics is normally higher than that of Landstar's other transportation
companies.  Purchased transportation is the largest component of costs 
and expenses and, on a consolidated basis, increases or decreases in 
proportion to the revenue generated through independent contractors. 
Commissions to agents and brokers are primarily based on contractually 
agreed upon percentages of revenue or contractually agreed upon percentages
of gross profit.  Commissions to agents and brokers as a percentage of
consolidated revenue will vary directly with the revenue generated through
independent commission sales agents.  Both purchased transportation and
commissions to agents and brokers generally will also increase or decrease
as a percentage of the Company's consolidated revenue if there is a change
in the percentage of revenue contributed by the intermodal services division
of Logistics or through air cargo carriers or through company-employed drivers.

Drivers' wages and benefits represent the amount Poole and TLC
employed drivers are compensated.  Drivers are compensated on a
cents per mile driven basis.  Drivers' wages and benefits as a
percentage of consolidated revenue generally will vary only if
there is a change in the revenue contribution generated through
independent contractors or a change in Poole's or TLC's rate of
driver pay or benefit structure.

The Company's intention is to continue its expansion of truckload
capacity provided by independent contractors and to reduce its 
truckload capacity provided by company-owned equipment and company-
employed drivers.  It is also the Company's intention to favor independent
commission sales agent locations over company-owned and operated locations.
Historically, the intermodal services division of Logistics, and TLC have
principally utilized a company employee sales structure and to a lesser degree,
independent commission sales agents.  During the second quarter of 1995,
Management began the process of converting company-owned sales locations to
independent commission sales agent locations.  Accordingly, purchased
transportation and commissions to agents and brokers are anticipated to
increase as a percentage of total consolidated revenue and drivers' wages
and benefits are anticipated to decline as a percentage of total
consolidated revenue over time.


                                         10












<PAGE>
Potential liability associated with accidents in the trucking
industry is severe and occurrences are unpredictable.  The industry
is also subject to substantial workers' compensation expense.  A
material increase in the frequency or severity of accidents or
workers' compensation claims or the unfavorable development of
existing claims can be expected to adversely affect Landstar's
operating income.

The cost of fuel is the largest component of fuel and other
operating costs.  Changes in prevailing prices of fuel or increases
in fuel taxes can significantly affect Poole's or TLC's operating
results.  Also included in fuel and other operating costs are costs of
equipment maintenance paid to third parties and the operating costs of Poole
and TLC terminals.  On July 1, 1996, Landstar announced it would close all
but one of the Landstar Poole terminals, including those that function as
Landstar Centers, effective August 1, 1996.  The closings are part of Landstar's
strategy to reduce the fixed cost elements of Landstar Poole.

Employee compensation and benefits account for more than half of the
Company's selling, general and administrative expense.  Other
significant components of selling, general and administrative
expense are data processing expense, communications costs and rent
expense.

The following table sets forth the percentage relationships of
expense items to revenue for the periods indicated:

<TABLE>
<CAPTION>
                                         Twenty-Six Weeks Ended     Thirteen Weeks Ended
                                        ------------------------   -----------------------
                                         June 29,       July 1,     June 29,     July 1,
                                          1996           1995         1996        1995  
                                        ---------     ----------   ----------   ----------
<S>                                     <C>           <C>         <C>          <C>        
Revenue                                   100.0%        100.0%        100.0%       100.0%

Costs and expenses:
    Purchased transportation               68.1%         67.5%         68.4%        67.0%
    Drivers' wages and benefits             3.6%          4.0%          3.4%         4.0%
    Fuel and other operating costs          6.0%          5.5%          5.9%         5.4%
    Insurance and claims                    2.8%          3.2%          2.4%         3.2%
    Commissions to agents and brokers       6.5%          5.9%          6.7%         5.9%
    Selling, general and administrative     7.6%          8.1%          7.0%         7.9%
    Depreciation and amortization           2.0%          1.6%          1.9%         1.6%
                                          -------       -------       -------      -------
            Total costs and expenses       96.6%         95.8%         95.7%        95.0%
                                          -------       -------       -------      -------
Operating income                            3.4%          4.2%          4.3%         5.0%
Interest and debt expense, net              0.6%          0.6%          0.6%         0.7%
                                          -------       -------       -------      -------
Income before income taxes                  2.8%          3.6%          3.7%         4.3%
Income taxes                                1.2%          1.5%          1.6%         1.8%
                                          -------       -------       -------      -------
Net income                                  1.6%          2.1%          2.1%         2.5%
                                          =======       =======       =======      =======
</TABLE>

                                         11




<PAGE>
TWENTY-SIX WEEKS ENDED JUNE 29, 1996 COMPARED TO TWENTY-SIX WEEKS
ENDED JULY 1, 1995

Revenue for the 1996 twenty-six week period was $624,589,000, an
increase of $20,735,000, or 3.4%, over the 1995 twenty-six week
period entirely due to the inclusion of the revenue of the businesses
acquired during the first quarter of 1995 for the full twenty-six weeks
in 1996.  Revenue from the Owner-Operator Companies and Poole decreased
$1,599,000 which was attributable to a decrease of approximately 840,000
revenue miles (volume) to approximately 326,900,000 and a decrease in
revenue per revenue mile (price) of less than 1%.  In the 1996 period,
revenue generated through independent contractors, including railroads
and air cargo carriers, was 89.2% of total consolidated revenue compared
with 88.2% in the 1995 period.

Purchased transportation was 68.1% of revenue in 1996 compared
with 67.5% in 1995.  Drivers' wages and benefits were 3.6% of revenue in 1996
compared with 4.0% in 1995.  The increase in purchased transportation and
decrease in drivers' wages and benefits as a percentage of revenue was
primarily attributable to an increase in the percentage of revenue generated
through independent contractors.

Fuel and other operating costs were 6.0% of revenue in 1996 compared
with 5.5% in 1995. The increase in fuel and other operating costs as a
percentage of revenue was attributable to the effects of the 1995 first
quarter acquisition of TLC, increased net trailer costs, which primarily
reflected decreased rental income from independent contractors for
trailers, increased provision for contractor bad debts and a $347,000
charge to record certain costs associated with closing the Poole
and Landstar Center terminals.  Insurance and claims were 2.8% of revenue in 
1996 compared with 3.2% in 1995.  The favorable variance to prior year was due
to lower third party premiums and favorable development of prior years'
claims.  Commissions to agents and brokers were 6.5% of revenue in 1996
compared with 5.9% in 1995, primarily due to an increased percentage of
revenue generated through independent commission sales agents.  Selling,
general and administrative costs were 7.6% of revenue in 1996 compared with
8.1% of revenue in 1995, primarily due to a lower bonus accrual under the
Company's management incentive compensation plan and a lower provision for
customer bad debts.

Depreciation and amortization was 2.0% of revenue in 1996 compared with 1.6%
in 1995, primarily due to increased depreciation of company tractors.
Although the number of company-owned or leased tractors has decreased
compared to the 1995 period, depreciation increased as a percentage of revenue
as a result of the modernization of the company-owned or leased fleet.

Interest and debt expense, net was 0.6% of revenue both in 1996 and in 1995.

The provisions for income taxes for the 1996 and 1995 twenty-six
week periods were based on estimated full year combined effective income
tax rates of approximately 42% and 41%, respectively, which are higher
than the statutory federal income tax rate primarily as a result of state
income taxes, amortization of certain goodwill and the meals and entertainment
exclusion.

                                         12





<PAGE>
Net income was $10,168,000, or $0.80 per share, in the 1996 period,
compared with $12,577,000, or $0.98 per share, in the 1995 period.  If
the 1995 first quarter acquisitions had taken place at the beginning 
of 1995, net income for the 1995 period would have been $11,957,000, or
$0.93 per share.

THIRTEEN WEEKS ENDED JUNE 29, 1996 COMPARED TO THIRTEEN WEEKS
ENDED JULY 1, 1995

Revenue for the 1996 thirteen week period was $329,112,000, an
increase of $20,964,000, or 6.8%, over the 1995 thirteen week
period.  The increase was primarily attributable to an increase 
in revenue miles of approximately 16,200,000 to 202,800,000 and an
increase in revenue per revenue mile of approximately 1%, at the
Owner-Operator Companies, Poole and TLC.  In the 1996 period, revenue
generated through independent contractors, including railroads and air
cargo carriers, was 89.7% of total consolidated revenue compared with
88.1% in the 1995 period.

Purchased transportation was 68.4% of revenue in 1996 compared
with 67.0% in 1995.  Drivers' wages and benefits were 3.4% of revenue in 1996
compared with 4.0% in 1995.  The increase in purchased transportation
and decrease in drivers' wages and benefits as a percentage of
revenue was primarily attributable to an increase in the percentage of
revenue generated through independent contractors. 

Fuel and other operating costs were 5.9% of revenue in 1996 compared
with 5.4% in 1995. The increase in fuel and other operating costs as a
percentage of revenue was attributable to increased net trailer costs,
which primarily reflected decreased rental income from independent contractors
for trailers, increased fuel costs, increased provision for contractor bad
debts and the costs associated with closing the Poole and Landstar Center
terminals.  Insurance and claims were 2.4% of revenue in 1996 compared with
3.2% in 1995.  The favorable variance to prior year was primarily attributable
to lower third party premiums and favorable development of prior years'
claims.  Commissions to agents and brokers were 6.7% of revenue in 1996 compare
with 5.9% in 1995, primarily due to an increased percentage of revenue
generated through independent commission sales agents.  Selling, general and
administrative costs were 7.0% of revenue in 1996 compared with 7.9% of revenue
in 1995, primarily due to a lower bonus accrual under the Company's management
incentive compensation plan and a lower provision for customer bad debts in
1996.

Depreciation and amortization was 1.9% of revenue in 1996 compared with 
1.6% in 1995, primarily due to increased depreciation of company-owned or
leased tractors.

Interest and debt expense, net was 0.6% of revenue in 1996 and 0.7% in 1995
primarily attributable to lower average borrowings outstanding under the senior
credit facility during the 1996 period.
                                         13










<PAGE>
The provisions for income taxes for the 1996 and 1995 thirteen
week periods were based on estimated full year combined
effective income tax rates of approximately 42% and 41%, respectively, 
which are higher than the statutory federal income tax rate primarily
as a result of state income taxes, amortization of certain goodwill and
the meals and entertainment exclusion.

Net income was $7,014,000, or $0.55 per share, in the 1996 period compared
with $7,820,000, or $0.61 per share, in the 1995 period.

                 CAPITAL RESOURCES AND LIQUIDITY

Shareholders' equity increased to $138,781,000 at June 29,
1996, compared with $128,396,000 at December 30, 1995,
reflecting the results of operations for the period. Shareholders'
equity declined to 55.1% of total capitalization at June 29, 1996,
compared with 57.8% at December 30, 1995, as a result of net borrowings,
including capital lease additions, in excess of net income during the 1996
period.

Working capital and the ratio of current assets to current
liabilities were $60,330,000 and 1.42 to 1, respectively, at June
29, 1996, compared with $51,360,000 and 1.40 to 1, respectively,  at
December 30, 1995.  Landstar has historically operated with current
ratios ranging from approximately 1.0 to 1 to 1.4 to 1.  Cash used
by operating activities was $4,491,000 in the 1996 twenty-six week
period compared with $522,000 in the 1995 twenty-six week period.
The increase in cash flow used by operating activities was primarily
attributable to reduced earnings and the timing of cash collections
and payments.  During the 1996 twenty-six week period, Landstar
purchased $4,774,000 of operating property and acquired $13,697,000
of operating property by entering into capital leases.  Landstar plans
to acquire approximately $18,000,000 of operating property during the
remainder of fiscal year 1996 either by purchase or by lease financing.

Management believes that cash flow from operations combined with
its borrowing capacity under the Amended and Restated Credit Agreement
will be adequate to meet Landstar's debt service requirements, fund
continued growth, both internal and through acquisitions, and meet
working capital needs.

Management does not believe inflation has had a material impact on the 
results of operations or financial condition of Landstar in the past five
years.  However, inflation higher than that experienced in the past five
years might have an adverse effect on the Company's results of operations.

                            SEASONALITY

Landstar's operations are subject to seasonal trends common to the
trucking industry.  Results of operations for the quarter ending in
March is typically lower than the quarters ending June, September
and December due to reduced shipments and higher operating costs in
the winter months.
                                         14







<PAGE>                                    PART II

                                     OTHER INFORMATION


I
tem 1.  Legal Proceedings

The Company is routinely a party to litigation incidental to
its business, primarily involving claims for personal injury
and property damage incurred in the transportation of freight.
The Company maintains insurance which covers liability amounts
in excess of retained liabilities from personal injury and property
damages claims.


Item 2.  Changes in Securities

None.


Item 3.  Defaults Upon Senior Securities

None.


Item 4. Submission of Matters to a Vote of Security Holders

On April 18, 1996, Landstar System, Inc. (the "Company") held its
Annual Meeting of Shareholders (the "Meeting") at the Trumbull
Marriott, 180 Hawley Lane, Trumbull, Connecticut 06611.  The matters
voted upon at the Meeting included (i) the election of two Class III
directors for terms to expire at the 1999 Annual Meeting of Shareholders
and (ii) the ratification of appointment of KPMG Peat Marwick LLP as
the Company's independent auditors for fiscal year 1996.

Pursuant to the Company's Restated Certificate of Incorporation, the
Board of Directors has fixed the number of directors at six:  two ClassI
directors whose members' terms will expire at the 1997 Annual Meeting of
Shareholders; two Class II directors whose members' terms will expire at
the 1998 Annual Meeting of Shareholders; and two Class III directors whose
members' terms will expire at the 1999 Annual Meeting of Shareholders.  With
respect to the election of the two Class III directors, nominee David G.
Bannister and nominee Jeffrey C. Crowe were elected to the Board of Directors
of the Company.  Mr. Bannister received 10,769,496 votes for election to
the Board and 22,843 votes were withheld.  Mr. Crowe received 10,678,159 votes
for election to the Board and 114,180 votes were withheld. The names of the
other directors whose terms of office as a director continued after the Meeting
are as follows:  John B. Bowron (a Class I director), Ronald W. Drucker
(a Class I director), Arthur J. Fritz, Jr. (a Class II director), and
Merritt J. Mott (a Class II director).

The appointment of KPMG Peat Marwick LLP as the Company's independent auditors
for fiscal year 1996 was ratified by the Company's shareholders.  Votes for the
ratification were 10,776,769, votes against were 13,345, and votes abstaining
were 2,225.


Item 5.  Other Information

None.

                                         15





<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         The exhibits listed on the Exhibit Index are filed as part
         of this quarterly report on Form 10-Q.

(b)      Form 8-K

         No reports on Form 8-K were filed by the Registrant during the
         twenty-six week period ended June 29, 1996.


                              EXHIBIT INDEX

Registrant's Commission File No.: 0-21238

Exhibit No.       Description
- -----------       -----------

   (11)           Statement re: Computation of Per Share Earnings:

        (11.1)*   Statement re: Computation of Per Share Earnings for the
                  Twenty-Six and Thirteen Weeks ended June 29, 1996.

        (11.2)*   Statement re: Computation of Per Share Earnings for the 
                  Twenty-Six and Thirteen Weeks ended July 1, 1995.

   (27)           Statement re: Financial Data Schedule:

        (27  )*   Statement re: Financial Data Schedule


__________________
* Filed herewith












                                         16
















<PAGE>

                                     SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                          LANDSTAR SYSTEM, INC.



Date:     August 8, 1996                  Henry H. Gerkens                  
                                          ----------------------------
                                          Henry H. Gerkens
                                          Executive Vice President and
                                          Chief Financial Officer;
                                          Principal Financial Officer



Date:     August 8, 1996                  Robert C. LaRose
                                          ----------------------------
                                          Robert C. LaRose
                                          Vice President Finance and Treasurer
                                          Principal Accounting Officer

































<PAGE>
[DESCRIPTION]   CALCULATION OF 1996 EARNINGS PER SHARE  


                                                                 EXHIBIT 11.1


                         LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                          CALCULATION OF EARNINGS PER SHARE
                       (In thousands, except per share amounts)
                                       (Unaudited)

<TABLE>
<CAPTION>


                                                   Twenty-Six      Thirteen
                                                  Weeks Ending   Weeks Ending
                                                    June 29,        June 29, 
                                                      1996           1996    
                                                  ------------   ------------


Earnings available for earnings per share:

<S>                                             <C>            <C>
Net income                                        $     10,168   $      7,014
                                                  ============   ============






Average number of common shares outstanding             12,781         12,783
                                                  ============   ============






Earnings per share                                $       0.80   $       0.55
                                                  ============   ============

</TABLE>















<PAGE>
[DESCRIPTION]   CALCULATION OF 1995 EARNINGS PER SHARE  


                                                                 EXHIBIT 11.2


                         LANDSTAR SYSTEM, INC. AND SUBSIDIARY
                          CALCULATION OF EARNINGS PER SHARE
                       (In thousands, except per share amounts)
                                       (Unaudited)

<TABLE>
<CAPTION>


                                                   Twenty-Six      Thirteen
                                                  Weeks Ending   Weeks Ending
                                                    July 1,         July 1,  
                                                      1995           1995    
                                                  ------------   ------------


Earnings available for earnings per share:

<S>                                             <C>            <C>
Net income                                        $     12,577   $      7,820
                                                  ============   ============






Average number of common shares outstanding             12,836         12,824
                                                  ============   ============






Earnings per share                                $       0.98   $       0.61
                                                  ============   ============

</TABLE>






<TABLE> <S> <C>











<PAGE>
       

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets at June 29, 1996 (Unaudited) and the Consolidated
Statements of Income for the twenty-six weeks ended June 29, 1996 (Unaudited) 
and is  qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000

<S>                                        <C>        
<PERIOD-TYPE>                                    OTHER
<FISCAL-YEAR-END>                          DEC-28-1996
<PERIOD-START>                             DEC-31-1995
<PERIOD-END>                               JUN-29-1996
<CASH>                                           3,503
<SECURITIES>                                         0
<RECEIVABLES>                                  180,432
<ALLOWANCES>                                     6,132
<INVENTORY>                                      2,119
<CURRENT-ASSETS>                               204,247
<PP&E>                                         159,961
<DEPRECIATION>                                  47,984
<TOTAL-ASSETS>                                 381,677
<CURRENT-LIABILITIES>                          143,917
<BONDS>                                         73,709
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                           129
<OTHER-SE>                                     138,652
<TOTAL-LIABILITY-AND-EQUITY>                   381,677
<SALES>                                              0
<TOTAL-REVENUES>                               624,589
<CGS>                                                0
<TOTAL-COSTS>                                  485,251
<OTHER-EXPENSES>                                17,756
<LOSS-PROVISION>                                 1,361
<INTEREST-EXPENSE>                               3,973
<INCOME-PRETAX>                                 17,478
<INCOME-TAX>                                     7,310
<INCOME-CONTINUING>                             10,168
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    10,168
<EPS-PRIMARY>                                     0.80
<EPS-DILUTED>                                     0.80

        

</TABLE>