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Dive Brief:
- JB Hunt Transport Services’ intermodal The business posted 6% year-over-year volume growth in the fourth quarter the company said Thursday, one of the bright spots in an otherwise difficult district.
- EVP and its President Intermodal Darren Field credited an unexpected peak season boost to the division’s performance, which he said has steadily improved since the spring.
- While executives hailed the positive trend, intermodal’s $1.62 billion Quarterly revenue fell 7% compared to the same period last year — due to a 13% drop in revenue per cargo, the company said.
Dive Insight:
The freight downturn continues to plague carriers, as it has for more than a year, according to CEO John Roberts.
But the company’s cross-modal performance shows encouraging trends. That business posted a 6 percent volume increase in October, followed by 6 percent growth in November and an 18 percent improvement in December, Field said.
“During the (fourth) quarter, we saw a peak period in intermodal transportation that neither we nor our customers nor our rail carriers expected,” Field said. The company put 800 additional containers into service in the fourth quarter, bringing its total to 118,171, up from 115,150 in the same period a year earlier.
Intermodal’s strong Q4 shows mixed executives, Field said, adding that the company’s customers were also surprised to have a “more significant peak period than they anticipated.”
Field is uncertain whether volume growth will continue in Q1 and beyond. Traditionally, commodity activity slows down at the beginning of the year.
“I’d say for my entire career that’s been true,” Field said, adding, “our customers’ inability to tell us about the peak season is still a challenge for us to get good, solid information about what to expect.” .
Conflict in the Red Sea led to cargo diversions, which could benefit western US ports and lead to more intermodal business for JB Hunt.
“Certainly, the increase in import traffic through West Coast ports is an absolute boon for JB Hunt,” said Field. The company said fourth-quarter transcontinental network loads rose 13%.
There is an opportunity to strengthen the company’s market share and convert additional cargo into intermodal, he said. New deals involving JB Hunt and longtime rail partner BNSF could help in that regard.
That includes a new premium service by JB Hunt and BNSF under the Quantum brand, which aims to deliver cargo faster than standard intermodal shipping. The carrier previously noted that about 7 to 11 million freight loads could be switched from over-the-road truck service to intermodal.
Another tool the carrier has is its new US-Mexico service created in collaboration with BNSF and Grupo México Transportes.
“We have the technology and the people capacity in the network to handle much more volume than we handle today,” Field said.