J.B. Hunt Transport Services (JBHT) 19 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Brad Delco	Senior Vice President, Finance
John Roberts	Chief Executive Officer
John Kuhlow	Chief Financial Officer
Shelley Simpson	Chief Commercial Officer and Executive Vice President, People and Human Resources
Nick Hobbs	Chief Operating Officer and President, Contract Services
Darren Field	President, Intermodal
Brad Hicks	President, Highway Services
Chris Wetherbee	Citi
Scott Group	Wolfe Research
Jon Chappell	Evercore ISI
Justin Long	Stephens
Ken Hoexter	Bank of America
Jordan Alliger	Goldman Sachs
Ravi Shanker	Morgan Stanley
Amit Mehrotra	Deutsche Bank
Allison Poliniak	Wells Fargo
Brandon Oglenski	Barclays
Bascome Majors	Susquehanna
Tom Wadewitz	UBS
Brian Ossenbeck	JPMorgan
David Vernon	Bernstein

Call transcript

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Operator

Good afternoon. Thank you for attending today’s J.B. Hunt First Quarter 2022 Earnings Webcast. My name is Hannah and I will be your moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to Brad Delco, Senior Vice President of Finance. ahead. go Please

Brad Delco

and operator Thank good you, afternoon.

future meaning introduce to like I This of may within XXXX. I Reform as Securities expectations the regarding estimates, would similar some activities time call or set that the statements forward-looking J.B. anticipates, Hunt’s on speakers, statements are expressions Words are based take be uncertainties to contain the intended to Act statements. results Private forth Litigation and to Before plans and forward-looking identify and and the materially these could those of risks expects, provide cause intends, such forward-looking forward-looking statements. disclosures some These from involve current different statements. in

report the XX-K filings on reports and information and Securities other Form refer more For risk annual factors, and with regarding Commission. please Exchange Hunt’s to J.B.

Now, John call. today’s Nick EVP CEO, Kuhlow; speakers call opening Officer Chief our of Chief I I’d This by Darren Hobbs, Intermodal; introduce Roberts; of like President Commercial this afternoon, President Contract Shelley turn our like would our the Human Resources; joined John People and CFO, our John Services. Brad am President comments. on to Simpson, Hicks, of to I John? the Operating Field, and of Mr. time, some Services; CEO, Highway Officer Roberts, and for At to and

John Roberts

you our this today. call Thank joining We start for and good report quarter’s first and afternoon. is of the Thanks, XXXX Brad both and revealing. see encouraging

success. all within running performance clear to we improvement. we experience, other levels, labor opportunities is focus and continued, across at and overall technology disciplines with through period yet supply move leveraged organization solid have chain have issues for the this While Execution

increased continues this hires. just added far challenges to due and Our driver driver net persistent the philosophy with force need year. equipment have over X,XXX drivers so We X,XXX for our XXXX by new consistent during and to utilization underperform

seen compensation, in not a home The for to improve expansion. are schedules are increases predictable reliable hiring company ability to benefits, teams performance out before hiring centered driver increased history. improved in career and environment future the Our growth on levels built time with our by enabled

entire For the a in and people make in of refresh, most the meaningful area been human months, discipline has our all opportunity resources people, presenting XX the current and critical comprehensive can quality teams these of our services to to bring past the our business, changes capable new. of

opportunities between announced and expansion fleet unique our JBHT. and noted, The rejuvenated that high a ahead anticipate leading emission costs, we in by to dynamics coinciding serving X customers confidence our BNSF our multiyear for has plan that impacts intermodal shortages renewed decisions the in of here. capacity, this for recently, commitment As driver leveraging reductions lie commitment position. The we with and intermodal fuel this industry the and transportation Scope remarkable labor prices, congestion, not mention shippers the in our reliable increasing us gives are

purpose of Council a the is actions. highly awareness and towards company. new group no to cross-functional recent managers development formation better whose of important to us is make organization of consisting executives will Inclusion Another the doubt continue guide our This a and

But the John Kuhlow team each quarter. to his more over will turn here business specifically I on you. is Our and John? leadership will call cover for that, the for before thoughts

John Kuhlow

in provide light I our about of we fairly long-term XX% were of of These growth quarter capitalize revenue allocation operating the the our plans for recent are My highlighted on quarter, from review see by of a the and productivity to growth income year, business. today quarter start and our in in meaningful capital the comments Omicron capital our driver Thank events tempered growth our priorities and bit the we market to by first variant notable availability sustainable most business little more expenditure a talking a perspective year period. prior with was outbreak. our and some challenges recent results spend year challenge the opportunities level. The on to of pleased for performance this will providing XX% then performance will will results around labor consolidated DCS everyone. as I time related update quick at afternoon impact impacted. you, Overall, good were John versus the on in and some the additional

Hunt model and behalf avenue effective source of agnostic offering. supply on XXX, efficient in capacity out an businesses velocity for opportunities chain provided our mode presented customer multimodal availability business and our also in in intermodal to to FMS and rail to said, and challenges customers. This our technology We market the platform, of needs That continues to our solutions J.B. us our step and in and network. product the tightness saw our highway our meet broader prove resiliency

our for expected and similar labor comments given with continues in quarter. area discontinued paid would off our to those $X.XX challenges to while last to sheet less or businesses, to say, was with but a to Weather very increase in meaningful quarters salary network interest the but over XX% maintain our also results, both line an of professional most of incur to higher vaccinated modestly We greatest time last of year-over-year. zero and capacity Below inflationary changed. of of and quick $X capital to trend and I it balance had our at update and for below while due also were sale debt COVID-related first constraints rate the XXXX. year. we Xx Continuing more get first A tax targeted costs recognized are work. the or slightly quarter, equipment pressure netting time of few target those allocation quarter we organic the cash, the in EBITDA for our remainder as for direct benefits providing revolver drawn quarantine lower, for our million our a net hold balance presented driver we billion availability, my the the be did billion on the the atypical line, wages had our We trades to $XXX consolidated XX.X%, quarter, on is I us year-over-year, our was year growth. needing of and quarterly up trailing to to behind provided not expense that we in our Last support remains what plan we and have basis hasn’t strong GAAP for CapEx gains million few $X.X level to costs In the quarter, non-driver our numbers continued needing which through us. than And equipment remains revolver $XX no $XXX the are million as million quarter, approximately on slightly some a of COVID-related a little ago that on our a of $X.X we year. continue throughout priorities the on EPS expect X.X. equipment plans

needed, supporting levels $X.XX and a strategy. remaining We dividend from dividend help customer reinvestment We growing increased our or with growth prior with the recently base. will to of share XX% serve to prioritize to as keeping capacity investments committed our in our our continue to our business quarterly

intend execute share opportunities. to to our conservatively We M&A investment on repurchases We also mindful leveraged rating. incorporate and maintain remain grade opportunistically

invested business And turn and in like and the maintaining needs we our over reemphasize arise. fair I opportunities growing concludes afraid will will continue sound to by now keeps our returns and supported it reasonable capable to I’d This increase are of that to capital. financial However, remarks. Shelley. business strong, not investments customers. leverage growing to be our our on as my This healthy to of meet discipline

Shelley Simpson

My focused physical multimodal afternoon. and Hunt Thank market our needs you, people, insight and expectations achieving people on for into serving customers. the year our which of an update provide freight year. for this be by and assets our And we provide investments for will our some that provide digital focus general our platform, our how on I in finally, John and I’ll will on conditions commercial season, our customers’ behalf XXX. update will and our on are leveraging J.B. will good organization priorities our this some

variant, needs allow the the much As our weather and of commodity X which across technology the us rapidly related the the dynamically enabled XXX, and by chain supply remains dynamic of cost. respond extremely approach to and of J.B. the the our to our as powered quarter and first also last are Omicron our mode-agnostic in fuel case across been meet We people, availability both network, events years, disruptions experience Hunt has market by our and the with customers. rising believe platform, to labor assets evidenced with

the to quarter by progressed, As market began evidenced our balance, which segments. the in Highway in we margin the Services saw expansion was find finally more

the and coincide As additional innovation XXX. X of launched we Hunt with disrupt, creating adapt additional business. and the inefficiently we to cycle costs X to our J.B. some which freight internally over our been our happened last have has for moving for of customers to years accelerate, discussed years costs launch time, for ago,

industry. The have anniversary and we for had intended made accelerate. like pandemic we XXX, the month to the had disrupt organization organization, theme, in before I’d to our on are our and journey to sure transitioned strategy. We, we processes place as J.B. execute an our X-year to As the right Hunt began, our A hit investments. reflect our and structure make adapt organizational to investments the

we with theme to current Going will forward, continue accelerate. our

accelerate we remains returns our together people, add growth technology and react opportunities that will our investments at our appropriate way to our to remain capital. the customers cost-saving our We compounding focused believe needs promising provide to the theme discipline accelerate approach speed We potential, come assets this acceleration, fair and we our of on will market the customers. and while continue to serve of solutions. in Under accelerate engineered the areas our this with and sustainable highly customers, to on ability maintaining to we on long-term recipe right growth for financial value long-term will our as which

deliver are in efficient solution are cost through we encouraged season to and an for confidence customers and now the effective our that and needs. have their us the almost bid feedback halfway extremely We shipping by

here pressure we of today, asset have at I equipment the and the our services on need demand particular, to our my continues career XX-year is in our put strongest seen this demand business As more people. in and the for side and sit for company

needing will are providers, our of labor Hunt assist services capacity us, Going grow customers elevated plan capacity when, a remains offer our and matter it’s Thankfully, believe to marketplace expecting a energy intermodal moderate capacity with we fluidity. not with challenges, to ultimately continue to we And to of and lot tight. lot in forward, which J.B. allow that prices, for improved us the an With confidence scroller from includes capacity. have to rail but the of some in our customers if, our source ability and a yes solutions our say extremely in our network XXX. us

to our take you Finally, time the priorities year. for I some to of want some provide

year remains discussed and believe is in to a last dynamics opportunity and for a opportunities as with that provide at years. lot this X will case present our quarter, customers, But well today create the last our I believe point also the I greater efficiencies as priority. any to As us market that than we grow of

container North and any of trailing in our ability customers capacity our I the fleet, on customers, service, and best to delivering behalf for fleet, achieve we the and of and turn efficient to to us as have our strongly set areas: with like people in greater solutions believe the financial this than will it to priority in team’s point right our technology in cost, my three execute to provide since That discipline, this and America. Nick. confidence beginning combined as This remain investments it most the key mission our efficient more I’d for to now Our our out in position pandemic. solutions have gives network comments. concludes well as our always. transportation create strategy, even has over value us

Nick Hobbs

our year Dedicated level expectations as perspective a like both both performance high of start year. normally business record I the business current comments my facing lot the will as Thank build provide a we After updated and and and the trends XXXX, the our record, in to am going momentum afternoon. year of continues review I professional move current with will to startups on I you, XXX our well we Dedicated the as coming the roughly off as challenges what is some thoughts throughout equipment business on segments Mile of the good Shelley a levels. and first have and our and some Dedicated. quarter on industry to face X,XXX in Final of a give pipeline new Today, of kept drivers. around also backlog are sourcing in in record to trucks trucks slower expense continues for new broken pace for selling time sales. At of sounding sold some

I and the X,XXX driven the we expenses we by events is As results challenges labor grew trucks it startup in segment did our revenue and the that some variant XX% a events brought year. believe largely saw behind ago, true despite to February. onboarded Omicron the than on which industry. a also operations that of primarily cost in forward. we hopefully, of the as share the last and fleet accounts the as half will almost in added XX%, COVID momentum and should sequentially with all weather in by negatively or quarter That in That larger performance January result standout we incurred. than which and pertains were only us, quarter, I first weather about was March, productivity what Margins the under the believe of for average in carry to size out improving year remained organization in the we pressure impacted quarter by startup said our of and

against us performing our as Our annual are approach new us inflationary which confidence expected, price broader to year gives protect continue accounts onboarded the will pressures. last escalators to our market in and

growth on professional or Our equipment remains current our pace and levels. govern as from accelerates both both for drivers if namely ultimately remain our availability, elevated concerns of may remain extremely labor needs and demand

In Shifting primary period, terms impacting well Mile, growth revenue value service we plan furniture. excellence, to chain on last awarded markets some grew remain serve some our of of focused newly operational about deliver supports and by safety, as year X% of of segment, which will versus to namely our priorities Final going culture we forward, we the accounts customers. execution the by of previous maintaining our high the but in year, challenges driven offset over supply and the the as this appliances

Freight $XX for We also about announced in and closed on contributed in the acquisition which it the in revenue results. the month of Lines consolidated our million Zenith one quarter, was

make wise cornerstone to market. our We over believe will ourselves success. the long-term the performance in in be and safety and service the order service long-term are continue We quality in investments to as to growth differentiate our these investments and

our some last which This year of our over of we As giving have discussed business confidence differentiated risk few off product. we a our we supported service last coming at done strong in underperforming sales, to the decision confidence months. us new quarter, are business put

capacity early and it’s increases appropriate meaningful so come we all to underperforming the and on performance at business better generating should to more we customers. support financial services our We too reinvest accounts at have accounts, focused provide that been our on conclusions While getting earnings several can successful margin for rate ahead. remain returns on to

updates. the but some Going with greater priorities business in with in remain on improving to Closing the growth, out forward, emphasis some segment XXXX. in this our investing support profitability operational its

driver As comments, market I tight. the market to extremely my dedicated remain professional equipment alluded in and

growing of let the But professional and hasn’t and it needs intermodal meet to businesses. been clear, equipment cheap. the be our clearly been driver dedicated of workforce had levels our most have success hasn’t easy it me and We certainly

our need to my relied That but help heavily on our afraid all I not remarks. new some and across have We growth. areas our of exploring we of enough concludes it’s OEMs of key our support growth, suppliers support to am are

Darren. turn will over I it to So

Darren Field

intermodal strong continue Thank recent improve remains the segment the Demand quarter. so to business in demand years remained for recap intermodal are in importantly, everyone quarter want our I the capacity growing and intermodal will the to the capacity today. of will some on our invest joint it Intermodal comments capacity the the in priorities comments on business the our will meeting for the in call. quarter. first services you, and the My with quarters afternoon performance and performance people of intermodal and to for Nick announcement ahead. hello challenges we what strong throughout for I and with extremely the months, to start the and as this our give also BNSF

time, balance current at As their month retention from which better X% some was over XXXX. in fairly hampered execute by the providers nonetheless, from customers. taking has X,XXX of lesser in disappointing the sale containers us plan March. impact the Omicron were quarter successful turns the for on execution approximately comp been in in us, equipment January, February a to Keep for customers. I our as in deteriorate order demand quarter fourth which XXXX quarter We intermodal the our on for front, nonetheless should Box of gains onboarding of easy due were did ability case rail on and during as in our all plus second in X% for with but which mind, well. for of of improve for disclosed. and and at velocity labor XX% our operations. on is as is am in quarter. puts of did line quarter, the remaining but and to sequentially from to levels. for of operations The containers in our customers Volumes weather capacity be some a see our million down customers still the February did X,XXX And well to thankfully, seasonality, the position the variant our did We progressed, as the We needs for our delivery and those the our rail our $XX in our in meet was growing plus team availability particularly that trends unusual proud equipment, transparently extent, events

business our the of core is and the customers network, by facing the light Importantly, service performing challenges operations business people our and which the supported and offering. of fluidity in inflationary is our well who our value running

and seamless to some unparalleled growth intermodal to During the improve we while and the an important together grow largest even XX% skills our meeting leveraging the of last our capacity a both carrier an in J.B. to for were provided Hunt This XXX,XXX a count BNSF expanding leaving of X for to door-to-door closely quarter, at represents our talents, to opportunity our domestic BNSF developed end marketplace our provide the technologies channel as provide and the joint needs announced container network, be companies an moment railroad and in This plan will the a count next intermodal of solutions With intermodal customers. intermodal current product, organization partners initiative have XXXX. to more is customers. X the years. the substantially from collaborating

do a desired equipment be easiest me more state our technology endeavor thing get and we investment out go significant will the will our require is the organization people, to for and in containers. outcomes. This let and can record, For buy

meet our the will our for in same grow to Needless be past. Importantly, say, customers. financial excited these with done as discipline the needs the investments organization we of to I’m energized and as

I I share forward, for look bit this perspective about we priorities Intermodal our of little thought a year. As would

items As encouraged seeing can and key the make Shelley us in deliver we to are bid is about, for service. of are by the strongly to three our on investments. proposition believe the continues level the we value process confidence capacity, we which discussed, customers which demand cost throughout capacity care We our give

is the across inefficiencies are the impacting there supply within today, stands and velocity. rail it network chain that As

will create our rail and costs customers We for our good this Simply are put, is which for will customers improving that a improve capacity cautiously outcome J.B. and for efficiencies our our while optimistic Hunt. velocity more in operations. providers,

needed value meet us seeing investments our prioritize long-term capacity. view remains to closing, of to help to sustainable are continue strong, Intermodal’s demand will supporting growth. the We intermodal for support In growth proposition our robust we

my transloading continue differentiated see domestic We by Hicks. and the highway us to even XXX our the convert with our so containers. over market ample efficiently ownership That backed concludes to I’ll believe our We in platform as turn to combined capacity power opportunities it equipment allows of cargo people of freight J.B. needed. when more when the to that the into source and well so Hunt Brad service is our as remarks,

Brad Hicks

Thank good trucks. the includes solutions you, and afternoon, I’m of both integrated capacity cover which Highway our performance everyone. Darren, to and going Service businesses,

We opportunities leverage to opportunity see growth tremendous the customers. our support to to our us by our continue and people, to assets in presented investments technology

our As the demonstrate to think results, in we by were quarter. able first evidenced that I

So of move to to assets for for this yet customers. on moving me the up our go in investments make the of and the leveraging XX% as segment performance on highway had well trailing our the with with of that, our on as the some our segments some perspective forward dive that perspective provide running the Hunt freight priorities into and XXX, trucks ahead that $XX.X company our This segment in in specifically in back behalf most with technology, efficient to while JBT. currently. truck quarter. the $XXX source of invest million, at support grew decision going This operating J.B. income like to the and assets improved strongest market while capacity performances to at Revenue continues we quarterly less to segment start the year-over-year represents to I’d than some in than time. XX% XXXX, to let million or

trailing customers assets, holistic which strong demand their XXXbox blend a realize of is and efficiencies giving for remains drop us our to freight networks product, to the As view single-source Shelley continue trailer with their her a allow as and benefits and solution. of mentioned in us comments, our live

We see benefits. these demand this offering customer continue they for recognize service product as to strong and

whether our capacity efficient customers, to with gears most grew XX% we periods year support growth than volume prioritize our technology period. in our or now the revenue XX% leveraging This in Specific was sustainable while to to on trailing our returns Going it’s year-over-year. continue out long-term more our financial investments people, invested might discipline versus million forward, truck acceptable JBT, in on our business it of our of recent prior growing asset with and will period. delivered We revenue or segment versus To we and stats our update an truckload else’s. our this maintaining quarter $XXX growth load you our between the capital. close Shifting fleet move have the ICS. year XXXbox volumes, which better year-over-year of transformed on our believe noticed a we segment, volumes balance someone was fleet growth service shared per some the segments by introduction to to around the driven in managing of as and sourcing aligns by growth with trailing XX% has for to offering how prior capacity more the the the

from shifting published spot record our was digits. customer in We our our Taking up freight for single to on spot in customers efficient movement published contractual which business of the we recognizing also market opportunities spot a customers. power of we see J.B. business quarter, but market as more execute freight moderation of in have most the was a to think to out seen which of or the our levels of to more towards the partly freight platform, further step that and Hunt our the XX% source opportunities up for than continue we into low behalf balance. platform moving means more a late, said, attribute XXX, business That while our demonstrates of

and adequate solution provide and capital. our the will on our technology forward, continue leave for will to to our returns I’d trailing our and in areas long-term to fair technology. an our people we people for continue and invest customers. this I’ve growth invested Going highlighted you to supported capacity, to on In be confidence believe focus and you, our that by like efficient our is We our support with leveraging will closing,

to continue complements another the our each most solution one to We how see customers. efficient provide for

Our customers ourselves all and that focused believe compounding service. cost, we can have on will for right and sustainable recipe on the always three, is remain long-term deliver capacity And we and differentiate if growth.

concludes continue we As to to That Q&A. comments, the mission, North we for so create to our in our turn my true efficient open back stay network customers, to deliver on operator America. value for most I’ll proposition the call transportation it to the

Operator

the Chris Citi. from Wetherbee is first of Instructions] [Operator with line The question

proceed. may You

Chris Wetherbee

thanks. performing, should freight question Good the the next in broader some guess, sort seem then incremental that, several your above of demand think say would in you what able – you’re there is consumer freight? is noted that volumes It overall fill guys there Maybe see today to of play in John Shelley. intermodal the pressing seeing Maybe of on And a afternoon. maybe a the market if is cycle the most, market if that the sort for would or you’re on you kind that slowdown how recession think freight. the were in curious view some I potential freight with downturn I we’re that’s start how Hey, sort asked just to out and of within question consumer-led quarters. for specifically we over maybe is think we course weakness, of thoughts about getting

Shelley Simpson

Thank Okay. you, Chris.

market, that part, most carrier varying you’re and causing the signals the small are that’s so I a I lot market. market in there say lot is for the of what’s hearing So spot the And in think in what will capacity conversation. a of

We dislocation If a has our labor just from I in overall. think the you across shipments differing coming also segments would that from summer or of the worse inside all lot viewpoints you what’s the been in do temporary do a segments, the see into inbound. happening ocean and are come perspective where there particularly we an China five to months, get located. supply chain with as shortages forecast look relief in

is of did say, see the had is occur, that. bid lot have a us have customers solutions. and leaning mention talk our market. something we bid Also, I pleased if and our to I will into best customers the lot season for in there very we to season about I seen us of So inefficiency that that with that a were

We are you have that That’s in and our us lack North a another but America customers labor of most network part been our hear talking on-shelf what have we with to Part is. efficient efficiency. talk about around as constantly customers heard that transportation us about creating most because primarily of concerned of efficiency. see that’s availability, is not much driven, of why

customers transportation we payload So to and mode land get help opportunity intermodal. our the its most see in increase into have optimal to We freight mode. happen most optimal

that that mode I we But issues a even to it’s think would whether a current from continue think structural the so cost across do can segments, lot downturn there freight there a in is the more this efficient are remain. or see will I like into season intermodal. say we in And move what that environment, and of

we’re anything if would watching leaning are even more recent But say I long-term. customers including of all now I consumer the most certainly, is over tell data. those think the too it’s into us you, there the with early signals. happening to

be market So would lending disruptions are supply seeing think are chain I we more happening that what the say there could in today. that to

Chris Wetherbee

you. it. helpful that’s will leave Thank color. I Okay,

Operator

The question next Scott Group is line of Thank with from Wolfe you, Research. Wetherbee. Mr. the

may proceed. You

Scott Group

China rates? up about see can Thanks. spread then think into volumes just you clarify Shelley, you intermodal now lot, the for those and comments with heading prices And down, – what that spot and the a afternoon. just Darren, you how fuel you are Good trucking thinking summer? between how but shutdowns in right means and then the now do

Shelley Simpson

I’ll Yes, that Scott, part. take so first

it Shanghai, just looks of happening lot and what’s ships If like at water. live you actually of – a the look ships shot bit little screen the a are of in

back is into certainly summer. to going that here this make so U.S. the way its And

Our port. what’s the happening with time customers concerned between frame are also at the labor July and about that

I just this of bit to In different again. think a concern disruption an change really be the reason takes have could there reason environment over little to for conversations. of type all just or environment

And so that’s for. we’re what watching out

Darren Field

somehow, fuel. most market over have this Scott, to of of the times try tapped or spot prices window, X-year we’ve volatile highway in And intermodal I And solutions when I’ll because cost but for respond past recent was capacity higher been the in time. questions two some up, Spot there, have seen in risen prices So mean, in expensive really truckload out. always cases, in they rocketed times here. snuck

XXX% higher is all much mean I sudden, of kind the market spot-rated between truckload off rate a so spot example. of there versus an buy north and that the Xx. a larger for the an intermodal And price you’re rate. to solution of gap West truckload is West Coast, Those originating Coast a from intermodal –

put kind gap truckload there prices the is on very back pressure a of market. intermodal any So before significant

So again, high. intermodal is demand extraordinarily

customers have capacity We from to serve. currently demand have more than we

cycle by that I’m feel rates grow. so continue really encouraged pressure strongly very this time, is any demand And putting feel to pricing. intermodal don’t that on intermodal I like, at And truckload can falling

Scott Group

get I will queue. you, in Thank back

Operator

Mr. ISI. Group. The of is question Jon Thank from the Chappell with you, line Evercore next

may You proceed.

Jon Chappell

all growth single of that outperformance high I’m just put of the about how a Thank really and sustainable How this strictly almost share to you stick in type too, layer on? number the market perspective. you comp, digits of up, set as think brought to a you the this this much volume it afternoon. from XQ, XQ, equipment new you’ve growth, let up gains? even volume when that understand with Good strong continue X% that on very no you. And business? and top Darren, we was growth I easy was rails had comps, one How much strategy alone going but in easy long-term That you. Hunt-specific is February is this of invest relative

Darren Field

appreciate I Well, that. Okay.

us lot than can stronger a grow a energy. lot because demand gives results proud not actually but yet that product, is of that We’re of actually and our more and our for motivation, we satisfied of

and first equipment months say even during but consumed to contributed we And I weakness we added drum onboarded we the X or day the I the today. obviously a grow we of achieved last growth. third year, on all velocity. mean, to So year more, in really added anticipated – quarter year certainly, would was call significantly When last the equipment our to I in new prior can beat velocity ago, through we midway that by the don’t want growth have stronger here than last quarter

to working know that. that better. to They all get providers rail hard it all improve Our very needs are

We’re And very in first some that The they there can they area. certainly, improve remains fully during that, were question the begin show when quarter, aware will. up. anticipate that that does challenges that to

we down feel encouraged more very turning loads And well have both again, rail our with as We’re velocity as providers. customers communicating by we’re strongly the thousands grow picks and that as of week our to per way up. volume we’re

Jon Chappell

Thank it. Darren. Got you,

Operator

Mr. you, Justin Thank Long the The Stephens. next question of from is with line Chappell.

You may proceed.

Justin Long

I are afternoon. it two intermodal. and conveyed to that you’ve about picture, and historically focus on between Thanks specifically as the the two a of those Bigger ROIC. to growth priorities a focus wanted balance on ask relates good items,

make yes, from to in something are accretive way X the that’s your do work. intermodal a next I’m can the feel intermodal you assumptions plus answer box math execute perspective turn to like XX% the what curious that years, As is a growing if that’s fleet you And in that we and about X container pricing to to ROIC? think

Darren Field

all just goodness, the My answers you asked there. Justin, for of

that we’ve that’s of not announcement our decisions. equipment. returns certainly, the the And our So today drive investment highlighted of expansion any different with

and expect. would growth on that, at we that belief profiles think in that intermodal board our the available the long-term return that signals can the come that, growth system in I

that at comes point frankly, customers which – could you that there will very profile. return But of well result improvement in cycles I benefit mean prices out we okay. could in to inside intermodal going would has transfers a – we the because, velocity that be believe sustaining go back weakness to Now your or – to considered simply today, cost been a little system. certainly whenever the prices the whether just or world bit get we’re I ROIC. success And grow customers. a not our to – that fully thing there our where don’t if down investment. not with back we world first that some would see opportunity are accretive the willing that’s that And small slow I can long-standing and We that system, that’s That’s a take in velocity anticipate a to and that. sustain damage it’s the would

number a Hunt, So change and that’s – will be to there is that at J.B. one no core tenet that.

Justin Long

Great, Okay. you. leave will it Thank I there.

Operator

is of Mr. you, Long. Hoexter the Ken Thank next from America. The line of question with Bank

You may proceed.

Ken Hoexter

Hi, good afternoon.

you years – terms to to want work the X terms any improve can in aiming the couple service. it Just encourages the get growth? specific on Are of like agreement? that the you you anything agreement, on Burlington, more that. specify can up agreement that Thanks. part in the And speed of in versus sounded that to talk what that to through long-term a in X were there you frame you things of The be of to time that Or Darren, with target? follow-ups or about on

Darren Field

out Okay. call not the I specific appreciate in to going agreement. I am question. anything the

release really because of on are obviously, note made I and growth. logo we jointly. we think aligned our – BNSF’s efforts around it’s is that very ours, And that in it’s the that’s same with press release

build technology gate drives in we how years decision we over chain heard velocity we X there better use more X us or a like a how collectively easiest supply we to in of of years. go recognize mean there the the too. BNSF solutions And and is true. yet are visibility to park in these hostile with landmark if mission come on with that is later track loads both we day. onboard of picked anticipate that in window And connect We allows system. efforts the we we good so in hold. to systems to that has get as has gives we do our highlighted solve I around period, can given eliminate a mean gate going at our our customers the a be mean, we we get didn’t into are I containers. thing expect in some lot couple how that’s to aligned we okay, we going the I have that can to the do the technology And years, very the things but are a that’s a in work planners on on a driving the with also velocity effort have all more that load because We you up, certainly, long-term would opportunity out time loss is that’s if it ROIC quite haven’t together, in mean way the been into we that. capacity, We and fully many prepared that our do to and we work how And side – of in to And we an do and that. comments that that That us be behind containers why growing our that can buy that how it’s location maybe are efficient that when whether together. want take move. a back. the grow opportunity next the could BNSF so to can

made BNSF so with we We the announcement. size and we why are that’s than we and of announcement, aligned ever and that very – market in these confident energized magnitude more are that opportunity, the the by are

Ken Hoexter

that. appreciate I Great.

Operator

Alliger question the Please Jordan proceed. is of next The line Sachs. with from Goldman

Jordan Alliger

Yes. Hi.

scheme turns, about noted or with at comments from line how in the of around be disappointing grand in hard in it improvement, Just this what some are Thanks. you although whether seasonality? curious it seasonality, is call quarter, you Can congestion lull to here, first the of normal sort and this little here. light in see things be sequentially over it thinking you China coming from your where point? it coming a year-over-year was if On of starts may box

Darren Field

mean to call. commentary we demand had hard challenges, lot more little anything is a not going velocity China. mean – box Certainly, on it’s I again, I I from think with bit a very turns strong. do in that our on to

as will so by that that box improve and anticipate turns would we improves. velocity And are encouraged

Jordan Alliger

Thanks.

Operator

The Please proceed. next Stanley. question is Shanker Morgan Ravi from the of line with

Ravi Shanker

Thanks everyone.

So, that XX% kind the taking much of truck conversion, a pie BN, market is also to come just on capacity of how is from is similar quantify possible coming agreement your with expanding and kind amount, with growth to of that obviously, likely growing new of the capacity peers Because just lot it versus share? a by kind of etcetera, in.

share shift that are going to So, your convert be all you can kind is truck, or you like confident guys peers? of pretty on a that from

Darren Field

there be of agreement is a new clear I first not So all, BNSF, want to that. about with

from customers present that we there be amongst for with we come are customers. come business are the of long-term moving where and off doing going certainly energized for grow and had growth be significant additional really railroad our intermodal. XX-plus continues intact by should the business today The networks to a international is domestic truckload can organically intermodal, significant is some intermodal we our have transload a of is have with and been that that effort growth to and lastly, take efficiency some energized And as together replace their now. from years We the BNSF, that to to agreement inefficiency work customers. our in by long, going The

strongly transload don’t behavior a organic change is are And supply that chain believe solutions other way. So, it. a we We to change intermodal that’s handle. out by to presenting in drive look highway in and a But and they business grow to way executing customers. always will mission be the to host customers. our going existing grow in certainly growth with always channels. our look off mode or the bid site There We in that just in the the going our to people grow that’s pricing of with

Ravi Shanker

Great. Thank you.

Operator

Our with question Bank. Please Mehrotra proceed. comes next Deutsche Amit from

Amit Mehrotra

is Thanks. January exited. you where the XQ? quarter turns just down, bringing understand obviously you we And the Darren, equal, obviously new see imagine about box meaningful understand can on turn talk can but velocity boxes solidity this Hi more train improvement? all else helps exited Because variables, key and I would understand initiative want I I in I but everybody. when to where faster. that

the target, the also improvement you costs that where margin that If think for that parties when both talking if time same in first cyclicality some meaningful the the you BN way. first if in that growth? to could guys just with long-term idiosyncratic the guess understanding – of obviously of which it maybe the incurred please. there the you is extra about exited in an obviously, of on talk opportunity it’s you guys lever initiative, relationship, you relationship, as of in those target, while, a reduced. about more for just address And of quarter you that associated kind my could can I So, It’s direction and this I this put back kind kind can initiative. we see would revisit use or now And rowing with margin I a points,

Darren Field

from our then new growth went onboard part on. and still don’t with question an our it better mission are were on turn on, volumes it’s the from coming we and return are customers, satisfied out to And I that the years did where or I turn we years margin by a rail output Certainly, nowhere quarter today. have and quarter we out be margin you to pandemic. But your started capital. update are kind turns to focused encouraged to invested to we by have Well, are highlighted I was just January, don’t X that’s back the we quickly X have We seen the our is have are slightly focused to just way second us as What would – that. what start and took We encouraged what not went negative the of beginning be target. and quarter. our but describe we on for of getting we to the it’s what good we the prior we with from on near say an in say will the experience number equipment seeing it are number, of change today. our to as network

lack So, go that But motivation rail long from our a is their of we to area. there in velocity. improve have no providers ways to

point, get are we on to to to But results. in That goes, an the forever. improvement that we certain will the velocity of can the subject have turns. get an equipment be you until cost we in as that box of continue consider improvement. until at ownership box weaker can those I work that turns, at am And see So, we will results going a our

Amit Mehrotra

much. very you Thank

Operator

question Fargo. next with Allison Wells comes from Poliniak Please Our proceed.

Allison Poliniak

dedicated. and Hi. to There dedicated. pipeline Thanks. to quite strong is – Good evening. I want turn obviously, the just is

you there Thanks. was growth. do way that a Is – any around there you capacity or ability limiting comment is but understand think points? the the your Is that, two limiting growth? get based on there also potentially overcome how it referenced to with capacity current your conversations limiting You better And can that there, OEMs? weighted point to your is a

John Roberts

what use months big shortages of having just limits to the help six and are us really other now. increase and to Yes. the The trucks chip because is facing we that up to capacity components right hold challenge for are it our and OEMs

addressing it’s normally a to what are now, limiting would Right it’s us that. start-up be XX-day other XXX we up days. pushing So, not than

pushing a deals. at us start-ups many out little really bit this some not limiting So, longer. But that’s point, for it’s

from very normally out pipeline have them probably what Our would another we strong. It’s just out pushing still is XX days there.

but having at OEMs, We point. good conversations are them with any have of this capacity none extra

Allison Poliniak

you. Thank

Operator

Brandon Please of with Our next from question proceed. Barclays. is line the Oglenski

Brandon Oglenski

maybe a just taking consumer there is the around much anecdotes conjecture about earlier just question market the in and on right looming for so demand Thanks a recession. my Shelley, question. now follow-up afternoon. freight because Good

rates pretty I come seeing are And first then truck think maybe you as a signals, think is in your that, any market sending second that, mixed segments? you Thank impact at slowdown customer said on the volume we spot see to actually but down is you in demand the to good everyone it the how I is quarter. gains and focused through because there, you. ICS, least going gained that of

Shelley Simpson

Okay.

part I of our move efficient So, really a that the business in seeing a also is way intermodal most to are long-term the more that noted efficiently of pushing JBT are solving in do taking But in strength, and growth, because and in utilizing our on of and think box. we businesses. for we is fleet are of asset the labor we private us really by think is Part it XXXbox, are business dedicated challenge, space. particularly we better agreement. that seeing is part to customers that I significant a way Part but

All of XXX. Hunt that’s powered through J.B.

most we locked the were been – I for as about or so margin portion spot we to growth were as And expansion large halfway some bids think have from that I either will and in we through a be create perspective. a our seen going of in then have pricing or downturn, the market So, business. have businesses. also of change of to really that’s are our That for to have value that to the are me, In being benefits dynamic of about the in that our our pricing technology we chance on customers or have would do of we seen biggest is clearly we are excuse ICS, one think going locked and in all across capacity, through of if margins customers. we – kind goes our behalf a our there Anywhere talk from margins customers. a flexible

relatively stay bid So, in line with and move pricing finish season. in the we market will whatever contract then that with will our

Brandon Oglenski

you. Thank

Operator

comes Please proceed. Bascome Majors question The next Susquehanna. with from

Bascome Majors

Thanks taking diesel six had questions. my just you last for up go have prices the Yes. $X. And weeks,

intend looking commitment? require have? talk announced of capacity buying X customers customers. that capacity you for could is in Do And chain with have SEC investment BN a there emissions. ‘XX? ‘XX, the a – seek to Is this make supply little type in intermodal to you are had your year in publicly the just bit to customer visibility to deliver disclosures you to year behavior the have you, Can Scope partnership after? You how strategic take-or-pay asking that out And and with chance you your on a for this where Just ‘XX, have but year do Thanks. this not customers shift grow you the much your in after there and changing?

Shelley Simpson

also general. season lot for for longer customers have are we right not it’s mentioned now in we that we have are intermodal, having but it. of just should us asking that. encouraged you with a our Thank more I Certainly, discussions term really bid our by, the customers

service our years to has to into can pent-up last intermodal. more also want had efficient You really market created to efficient our do when That’s part from more to to demand they really the is of in in but goods. ability that. most way PSR mentioned The that, a fuel. an do we the overall, years. X our it, just way customers They the X intermodal move customers truckload the over move

in just So, intermodal. I see long-term, but that’s long-term segments. of across continuing That’s not five our all in our lean to customers

see us across also lengths services. agreements the of I to talking fast our So, two and customers adding

Operator

comes from with question next proceed. Tom The Wadewitz UBS. Please

Tom Wadewitz

about think it’s I that hard ‘XX downturn Maybe concern. to for how are Maybe a will respond noise. a cycle. in to the biggest if or saw or you plays ask do things of tell I in you freight, seems guess downturn. to freight it’s in Hunt creates it we you prior a your and what how afternoon. fashion did down spot But whether Wanted your that Good XXXX, think or your mean do to businesses similar will in businesses that out? not. XXXX different like think data market they businesses it’s J.B. you Yes. respond might when terms a to react maybe downturns they in continues

Shelley Simpson

you customers. we the last and to great to be if could time for at would am I more – very downturn it our XXXX, them recession look call a you deliver XXXX see perform for from business. going our really Well, It performed efficiency dramatically expect a a way for continue very Intermodal well us to intermodal capacity. to in would cost well, and servicing in

So, conversion in Certainly, we is business model. dedicated we our see private in in intermodal DCS, our Remember, business. that resiliency resiliency model. really fleet see

decision, a like employee, on basis, regular know not similar when So, that made their they much Joe their but coming to an into Sue they and brand. facility representing

discussion term for our longer customers. a that’s dedicated so And

think in services we last I more time highway the this variable side, are than time.

lot trailers. recession, last of a the in of So, we had and a lot trucks

in have XXX. be with market capacity us that J.B. of allows the to we Now lot flexible Hunt a trailing

the it’s a from part of and market be it capacity of I on business. continue think asset if creating for the it, take of the then a flexible will sector, time. will perspective. that have right I think on you be part sector at a cost in anything that. to on JBT right to And the curious servicing part mile, final add That’s business non-asset and be ICS I right able share growing so to Nick, has both in would to So, the the part loads

Nick Hobbs

four as have a side, that of changes. us asset we the protect just cost have non-asset on can we on But I one we of the our when in have there depends channels adjust volume and No, the the that think side. we help place we have contracts lot flexibility,

about feel we that. So, good

we think well protected. I So, are

Tom Wadewitz

Thank Great. you.

Operator

question the with The from of Please next line JPMorgan. comes Brian Ossenbeck proceed.

Brian Ossenbeck

Thanks scope terms you about Hi. size, in want where one platform question. in can the headcount, point the are to maybe for investment be scale, if accelerating for through in you back you where Thank in taking talk this to you on of the X XXX next the that, but of you the do Maybe of terms in you years? you of little at it, loads, are think bit going Clearly, a Brad, terms relative the next, profitability, tailwind to frame have been about the margin to a platforms? the can X call you here, elaborate years from edged phase market being is perspective especially think you the those step when with you. the

Brad Hicks

the question. Brian, appreciate Yes, I

And Shelley the on grew scale. made so platform, rolled Just on us of foundation knowing to her in think XX% into comments, we from having anniversary just I that, last the QX, spoke J.B. that in technology months build speaks or what QX we investment to a and XX of X-year and that our just Hunt prepared versus in the beginning the to of the do then XXX. really

so, JBT just And for XX% at here relatively in of long in outstanding growth time flat year-over-year, Hunt. for been us with revenue had a J.B. performance that an area

combination with networks and non-asset and drop highway to our inside those we encouraged services models sit and the efficiencies live for and we blend really, value customers, assets about where today. I of our together create am of how So,

the us, speak we does of where power of give nature to the in kind us flexibility. not and what’s of are we as variable environment front trying to predict relates the today at it in As

investment, of fleet. any fleet be in it the feel network, given will and foundation like are so make can investment able our for we our we going I to freight customers. we continue our environment, do complement And efficiency that to to And into live to and grow succeed look there trailing if provides

John Roberts

you we the time question. have question, And one for operator Thank for Brian. more

Brian Ossenbeck

Thank you.

Operator

proceed. is David line with question from next Bernstein. the The Please of Vernon

David Vernon

network. maybe this wanted lost sort me thing? a about just lines? doing, in service coming to they of and might into Darren, containers how to afternoon much fitting intermodal into be capacity ask for new I served railroads good for kind of that’s little versus a of that bit growth sense coming a here. thanks Schneider in How getting market BN what new to about of already Hey, of opportunities? that just the get existing sort is Knight the new how am much And opening much backfilling markets, going I are with after what up is that some comfortable the much just trying of how and is stretch

Darren Field

say that. adding to when it’s know think with are it’s to and would new acquire that like just that, hard I I go I customers. Well, to our out we add don’t answer customers grow we markets. equipment new

discussing We international transloading are with business. intact certainly intermodal customers in more their engaged the of

I lift the we also that’s not exited an capacity have naïve. grow to to BNSF. lot BNSF. isn’t that certainly exiting opportunity us related that is channels So, mean, of Look, a are for

are know want customers to rail diversify And so we their providers. we that – underlying

customers taking have And so to we talking that the another maybe on a business channel past. about in host are that of handled us

do is it – and that. return serve in that warrants our have it. it great don’t to is want are act reinvestment, I certainly So, investment at a of it’s so half, do we it’s a our I just like none. want not ability you, to It’s we decision, answer to the grow but don’t a and of certainly part all customers tell on and to very confident

David Vernon

Thanks.

Operator

today’s first The has now question-and-answer XXXX Hunt you quarter your earnings for webcast. session J.B. Thank That ended. participation. concludes

your You may lines. disconnect now

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