Dive Brief:
- J.B. Hunt Transport Services will close its facility at the Home Depot Distribution Center in Lithonia, Georgia, on Oct. 27, according to a Worker Adjustment and Retraining Notification Act letter.
- The company cited “changing business conditions” as the reason for the permanent closure at the site. An email requesting additional comment was not immediately returned.
- The 74 employees that will be affected by the facility’s closure were given notice on Aug. 26, per the letter. While the employees have no bumping rights, they may be able to transfer to other J.B. Hunt locations.
Dive Insight:
J.B. Hunt has been aggressively managing costs since the freight recession began, then-CFO John Kuhlow said during the company’s Q2 earnings call in July.
Those efforts have included headcount reductions through both attrition and performance management, reducing its workforce by about 1,000 workers from 2023 to 2024, according to annual reports.
“Earlier this year, we challenged ourselves to do more, in an effort to accelerate improvement in our financial performance, create greater operating leverage for the company when market dynamics turn, and help support our future growth,” Kuhlow said.
As a result, J.B. Hunt identified $100 million in costs to eliminate across efficiency and productivity, asset utilization and technology, and engineered process improvements.
While the company’s Q2 operating revenue was flat year over year, its operating income decreased 4% to $197.3 million compared to $205.7 million during the same period last year. The lower profit was attributed to an increase in casualty and group medical claims expenses and higher driver wages and equipment costs.
Notably, J.B. Hunt’s final-mile services segment took a particularly big hit, where operating income fell by 60% YoY. Revenue for the division was down by 10% last quarter, primarily due to softening demand across the market.
Other carriers have also noted significant savings and workforce reduction programs.
In July, Werner Enterprises reported for its Q2 results how it saved $20 million through a reduction effort and raised its full-year savings goal from $40 million to more than $45 million.
In April, Volvo Group CEO and President Martin Lundstedt said Mack Trucks and Volvo Trucks North America were reducing their workforces by about 1,000 people collectively amid slowing demand and market uncertainty.
