LOWELL, Ark. — J.B. Hunt, the largest domestic intermodal operator, reported higher third-quarter profits on Wednesday as cost-cutting was more than enough to offset a 1% decline in intermodal volume.
Executives also said they believe the traditional fall intermodal shipping peak will materialize this year as goods imported over the summer to beat tariff deadlines are still sitting in warehouses and waiting to move inland. “No one has cancelled Christmas,” Spencer Frazier, J.B. Hunt’s executive vice president of sales and marketing, said on the company’s earnings call.
“ Our customers are still expecting a peak season, although the magnitude and duration of peak volumes will vary,” he says. “Our conversations indicate there is a large amount of freight that was imported early that hasn’t moved through the inland supply chain yet.”
Meanwhile, trucking capacity is showing signs of tightening, he says, partly due to a wave of new federal regulations targeting safety, security, and workforce eligibility. The regulations have reduced the number of truck drivers, which would bode well for intermodal growth amid the ongoing freight recession.
“The capacity bubble may be deflating as we speak,” Frazier says.
For the third quarter, operating income for the company’s intermodal segment rose 12%, to $125 million, as revenue declined 2%, to $1.52 billion, J.B. Hunt reported.
Transcontinental network loads, which originate on BNSF Railway, declined 6% for the quarter, while Eastern volume, which also includes Mexico cross-border business, rose 6%.
Intermodal President Darren Field says a decision to prioritize network balance, especially in the West, pressured volumes — but reduced the number of empty container moves and helped boost profit margins.
Service levels on BNSF, CSX, and Norfolk Southern helped J.B. Hunt convert over-the-road freight to rail during the quarter, Field says.
“The vast majority of the millions of loads that remain to be converted from highway to intermodal are in the East, so we’re encouraged by our growth in the East and we expect and anticipate we can continue to grow in the East for years to come,” Field says.
J.B. Hunt’s overall financial results — which include its Intermodal, Dedicated Contract Services, Integrated Capacity Solutions, Final Mile Services, and Truckload segments — also improved for the quarter.
Combined operating income rose 8%, to $242.7 million, on flat revenue of $3.05 billion. Earnings per share increased 18%, to $1.76.
