JB Hunt: Shares shipper's pain

JB Hunt reported results Friday – the details are below….including remarks from the CEO that highlighted their big problem:  trailers being held by "delays at customer warehouses”. Once trailers go through the gate there is a “black hole”.  YMS’s tell the warehouse where things are and WMS tell what is in house but most warehouses have little/no prescriptive analytics to tell them what to unload and what to load and when.  Go here to see the solution.
 
JB Hunts results show:
  • Declining margins in brokerage and intermodal
  • Yet more empty miles for truckload (now nearly 20%)
  • Volumes and prices both up
 
JBH’s big push is to become “asset light” – and their 360 program is encouraging the use of other carriers’ power units with their “360” program that provides drop trailers for owner operators.
 
Parcel is running out of capacity:  
One analysis estimate’s that total package-shipping capacity will be 79.1 million parcels a day between Thanksgiving and Christmas, while 86.3 million packages will be looking for space.
 
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JB Hunt results by segment:
  • Intermodal:  Revenue: $1.21 billion; down 2%.  Operating Income: $108.4 million; up 22% – but last year they paid an installment on the $44 million BNSF arbitration
  • Dedicated Contract Services:  Revenue: $553 million; up 1%.  Operating Income: $80.4 million; up 5%
  • Integrated Capacity Solutions:  Revenue: $431 million; up 28%.  Operating Loss: $(18.3) million; compared to $(5.6) million in 3Q’19
  • Home delivery:  Revenue: $182 million; up 22%.  Operating Income: $2.1 million; up 13%
  • Truckload:  Revenue: $109 million; up 16%.  Operating Income: $2.9 million; down 55%
 
Quote from John Roberts, CEO JB Hunt:  The third quarter showed us some new opportunities and spiking customer demands across all businesses that I don't recall seeing in the past.  At different points, we regrettably had to turn away business that was offered but not built into our original network plans and commitments. The supply side of our - of the equation, our carriers and our rail providers all experienced pressure and congestion during the quarter. Also due to what we believe is a labor shortage at our customers causing unloading delays, we have not been able to turn our trailing equipment, as well as we have been able to in the past. Topping off the list is an abnormally high demand and higher company drivers for both replacement and growth.