4/21/22, 1:05 AM US truck rate downturn linked to contract shift: J.B.

Hunt

Published on JOC.com (https://www.joc.com)

Home > US truck rate downturn linked to contract shift: J.B. Hunt

Ari Ashe, Senior Editor | Apr 19, 2022 2:34PM EDT

While J.B. Hunt’s intermodal volume rose 7 percent, shippers were slower to load and unload containers
compared with a year ago. Photo credit: Shutterstock.com.

Domestic intermodal demand is strong and outpacing available capacity, and the sudden downturn in
truckload spot rates is nothing more than a shift of freight into contract markets, J.B. Hunt Transport
Services said Tuesday. 

While the company said there are “varying signals” on the state of the freight market, it does not believe
there is an imminent recession in the works. 

“As we sit here today, demand for our services and in particular, the asset side of our business, is the
strongest I have seen in my 27-year career at the company and this demand continues to put pressure
on our need for more equipment and people,” Shelley Simpson, J.B. Hunt’s chief commercial officer,
said during the company’s first-quarter conference call. 
https://www.joc.com/print/3683288 1/3
4/21/22, 1:05 AM US truck rate downturn linked to contract shift: J.B. Hunt

J.B. Hunt’s truckload volume rose 17 percent year over year, and brokered spot load volume increased
15 percent in the same period. The transportation provider’s intermodal volume rose 7 percent,
outpacing the overall North American domestic intermodal market, which grew 2.8 percent year over
year in the first quarter, according to the Intermodal Association of North America. 

Darren Field, president of J.B. Hunt intermodal, said he is energized by the company’s results and
believes the core intermodal business is performing well. 

“Intermodal demand is extraordinarily high, and we have more demand from customers than we
currently have capacity to serve,” Field said. “I'm very encouraged by that demand cycle and feel
strongly that intermodal can continue to grow. And I don't really feel like, at this time, truckload rates
falling is putting any pressure on intermodal pricing.” 

The JOC Intermodal Savings Index, which measures the pricing between intermodal and truckload,
shows an average shipper saved 36.7 percent nationally on contract intermodal loads and 12.1 percent
on spot intermodal loads in March. 

Volume up, but railroads and shippers slower 

Intermodal volume also increased because J.B. Hunt owns 109,329 containers, or 11.4 percent more
than a year ago. The company expects to take possession of the final portion of a 12,000-container
order placed in 2021 between now and June. 

Box turns, which measure how quickly customers load and unload cargo, deteriorated in the first
quarter. The company reported 1.55 turns per month, down from 1.61 turns in the first quarter of last
year. In early 2020, the number was 1.7 turns per month, which shows how railroads, shippers, and
receivers are less efficient today with cargo than prior to the COVID-19 pandemic. 

Field said J.B. Hunt is turning down thousands of intermodal loads per week because of the
inefficiencies in container usage. 

“In the third quarter of last year, we would have anticipated stronger growth than we achieved, but that
equipment we added really was consumed by weakness in velocity,” he said. “Our rail providers all
know that it needs to get better. They are all working very hard to improve that. We're very aware that
they can improve that, and fully anticipate that they will. The question remains when does that begin to
show up.” 

BNSF Railway — J.B. Hunt’s rail partner in the western US — has acknowledged intermodal fluidity has
been disrupted in the first quarter and outlined a plan April 14 to “restore the level of service that
[customers] expect from us.”  

Norfolk Southern Railway — J.B. Hunt’s primary rail partner in the eastern US — will likely comment on
service when it releases earnings on April 27, but its intermodal train speeds were down 5.9 percent in
the first quarter compared with a year ago, according to the Association of American Railroads. NS has
been beset with problems in Jacksonville, in particular, which has impacted J.B. Hunt and other
intermodal providers.

BNSF’s intermodal train speeds were flat year over year. 

Truckload volume strong 

While J.B. Hunt didn’t rule out a freight recession, the company said the latest downturn in dry-van spot
rates since March is more a rebalancing of freight. 

https://www.joc.com/print/3683288 2/3
4/21/22, 1:05 AM US truck rate downturn linked to contract shift: J.B. Hunt

“We have seen a moderation in spot opportunities as of late, which we attribute partly to more
customers shifting freight out of the spot market into published or contractual business but also
recognizing a movement in the market toward more balance,” said Brad Hicks, president of J.B. Hunt’s
highway services. 

Simpson said some of the labor issues that were a problem six months ago have temporarily eased, but
she expects warehouses to be challenged to unload freight quickly in the coming months. 

“We do forecast that to get a lot worse as we come into the summer months, particularly with what's
happening in the supply chain from an ocean perspective with China [volume] coming inbound,” she
said. “I think that there are cost and structural issues that will continue to remain. I think it's too early to
say if there is anything happening with the consumer over the long-term.” 

Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe. The JOC Intermodal
Savings Index is available to paid subscribers upon request. 

Trucking Logistics › Truckload Freight › J.B. Hunt Transport Services

Rail & Intermodal › Class I Railroads › BNSF Railway
Rail & Intermodal › Class I Railroads › Norfolk Southern Railway
Rail & Intermodal › Intermodal Shipping
North America › United States

Source URL: https://www.joc.com/trucking-logistics/truckload-freight/jb-hunt-transport-services/us-truck-rate-downturn-linked-

contract-shift-jb-hunt_20220419.html

https://www.joc.com/print/3683288 3/3