J.B. Hunt Transport Services (JBHT) Deutsche Bank’s Chicago Industrials Summit summary

Market cycle and demand trends

• Early stages of a supply correction are underway, with tighter capacity and some positive demand signals, especially as ISM remains above 50 for several months.

• Housing starts are a key missing demand driver, but opportunities for stronger demand remain.

• Dedicated contracts provide stability, while intermodal pricing typically lags truckload by two to three quarters.

• Financial performance has improved ahead of broader market recovery, with further pricing tailwinds expected.

Intermodal value proposition and pricing

• Intermodal's value proposition is at its strongest in over a decade, driven by high fuel prices, rising truckload rates, and improved rail service.

• Recent bid seasons saw more competition than expected, but significant pricing opportunities are anticipated through 2027.

• The gap between intermodal and truckload pricing is currently wider than historical norms, but is expected to normalize as truckload rates rise.

• Mini-bids have increased, bringing new customers and more business, especially in the Eastern network.

• Consistent rail service is enabling more highway-to-rail conversions, with five consecutive quarters of double-digit volume growth in the East.

Operational efficiency and driver dynamics

• In-house drayage operations and a robust driver hiring process provide a competitive edge, especially as the industry faces driver shortages and wage inflation.

• More than half of trucks are day cabs, making jobs attractive and aiding recruitment and retention.

• Margin targets for intermodal are set at 10%-12%, considered appropriate for the capital and risk involved.

• Cost-to-serve initiatives have exceeded $135 million in savings, with ongoing focus on discipline and leveraging technology, including AI, for further improvements.