Dive Brief:
- J.B. Hunt Transport Services reported a 10% revenue increase in Q3 to $190 million for its truckload segment, according to an earnings press release, providing some optimism in a bleak market.
- The uptick came amid a 14% increase in load volumes, the release said. Additionally, despite a soft demand environment, capacity is improving, with exits accelerating, EVP of Sales and Marketing Spencer Frazier said on a Q3 earnings call.
- “Our focus in this business hasn't changed, and we are winning business with strong service from both new and existing customers, leading to our highest quarterly volume in over a decade,” Nick Hobbs, COO and president of highway and final mile services, said during the call.
Dive Insight:
J.B. Hunt’s truckload volume uptick comes as the market continues to face sluggish demand and shifting trade policies, according to the recent Q4 TD Cowen/ AFS Freight Index. There seems to be no indication that there will be relief from excess capacity that has contributed to depressed rates for close to three years.
Even with higher truckload revenue year over year, the company made less money per load and operating income declined 9% to $7.4 million. Revenue per load was $1,646 in Q3 versus $1,717 YoY, according to a securities filing released on Oct. 15.
Length of haul was also down to 576 miles in Q3, compared to 601 miles in the same period last year, per the filing.
While truckload was a bright spot for J.B. Hunt, its Q3 revenue decreased to $3.05 billion, from $3.07 billion YoY, per the earnings release. The drop was led by segment revenue declines in intermodal, integrated capacity solutions and final mile services.
Still, J.B. Hunt remains optimistic about its truckload business.
“Going forward, we are pleased with the direction of this business in this soft demand environment and the progress we are making on lowering our cost to serve,” Hobbs said.
