Major US trucking company sees freight shifting from roads to trains

J.B. Hunt Transport Services Inc. said shippers are back to seeking to save money on transportation after two years of supply-chain disruptions that had them paying whatever it took to keep products stocked.

“Most of our customers have been primarily concerned with on-shelf availability, not as much around efficiency,” Shelley Simpson, chief commercial officer, said during an April 18 conference call. “So if it’s a downturn or even in the current environment, we do think there’s a lot of freight from what we’ve seen this season that can move to a more efficient mode, like intermodal.”

That’s a boon to J.B. Hunt’s intermodal business, which cuts the freight cost but lengthens haul time by combining trucks and railroads to move goods. Sales at the intermodal unit, which makes up almost half of J.B. Hunt’s revenue, jumped 36% and operating profit surged 87% to $201 million in the first quarter, the Lowell, Arkansas-based trucker said in a statement.

The company said it could grow intermodal even more if trains were running faster, which would increase capacity. J.B. Hunt expects intermodal also will get a boost from businesses seeking to reduce emissions because trains burn much less fuel than trucks to haul the same cargo.

During the pandemic disruptions, shippers were forced to find trucking capacity in the high-cost, spot market and even turned to expensive alternatives, such as team-driver expedited service and air freight. A lot of that volume may revert back to intermodal as lead time in the supply chain return to normal and railroads improve service, Simpson said.