J.B. Hunt says fuel spike not yet driving intermodal conversion

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e=this;e._store.resetNewCount(),e._view.updateBadgeNode(e._badgeNode),M(e._badgeNode,e._config.badge.hideClass)}},{key:"_showIndicator",value:function(){this._indicatorNode&&(this._store.getNotifications().newCount?M(this._indicatorNode,this._config.panel.indicatorClass):I(this._indicatorNode,this._config.panel.indicatorClass))}},{key:"_showBadge",value:function(){var e=this;e._store.getNotifications().newCount?I(e._badgeNode,e._config.badge.hideClass):M(e._badgeNode,e._config.badge.hideClass)}}]),e}(),F={promos:{eligibleBodyClass:"display-push-promos",enableNotifOnboard:!0,bypassEligibleClassCheck:!1,notifOnboardBtnLabel:"Notify Me",notifOnboardMsg:"Get alerts for breaking news and top stories",promoLogo:"https://s.yimg.com/cv/apiv2/ae/news/circle_bell.png",showYahooLogo:!0,subscriptionTopic:"gondor_homerun_news"},badge:{hideClass:"",maxCount:5,selector:""},panel:{emptyPanelMsg:"You have no new 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That hasn’t been the case yet, J.B. Hunt Transport Services said at an investor conference on Tuesday.Despite a 30% run up in fuel prices since the start of the Iran conflict, little has changed, said Darren Field, J.B. Hunt president of intermodal, at the J.P. Morgan Industrials Conference in Washington, D.C. He said most shippers don’t view energy markets as having structurally changed, noting that the price spikes haven’t begun to shape customer decisions yet.Intermodal currently offers significant cost savings over TL, with FreightWaves data showing the mode is 22.8% cheaper. This is above a recent cost savings range of 10% to 15%.SONAR: Intermodal Contract Savings Index (IMCSI.USA). The IMCSI shows the savings percentage between domestic intermodal contract rate per mile and truckload contract rate per mile. The comparison includes fuel surcharges. To learn more about SONAR, click here.Field didn’t provide any indication on how intermodal bid season will play out this year, other than to say that it’s a “competitive environment.” He noted all players are protecting market share as the industry awaits the outcome of Union Pacific’s (NYSE: UNP) planned merger with Norfolk Southern (NYSE: NSC).“Everybody wants to grow and everybody wants to repair margins at the same time,” Field said.J.B. Hunt’s (NASDAQ: JBHT) intermodal unit saw margin improvement (both sequential and year-over-year) for a second straight time in the fourth quarter, even as yields remained under pressure. A 91.2% operating ratio (8.8% operating margin) in the recent quarter was just 120 basis points off the low end of the company’s long-term margin target (10% to 12%). Cost takeouts and other efficiency initiatives helped drive the improvement.Field said that it’s not just about higher rates. The company is focused on network balance and improving revenue quality. Taking incremental volume on some lanes will help cover fixed costs. In addition, customers are exhibiting flexibility with pickup and delivery schedules where feasible, allowing J.B. Hunt to improve drayage utilization and run a more efficient network.On the fourth-quarter call in January, it said the bridge to the long-term target requires one point of margin from lower costs, better volumes and higher yields (300 bps).Despite the rapid exit of truck capacity, J.B. Hunt’s customers are still keeping inventory levels relatively low. The tightest freight market since the pandemic could expose supply chains to renewed vulnerabilities once demand recovers.“It wouldn’t take a lot of new demand to create an environment where customer inventory wasn’t quite where they wanted it, when they wanted it,” Field said.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoTrending tickersGE GE Aerospace 291.61 -9.35 (-3.11%)FDX FedEx Corporation 356.11 +6.37 (+1.82%)SPOT Spotify Technology S.A. 482.52 -34.20 (-6.62%)PL Planet Labs PBC 26.96 +2.15 (+8.67%)VCX 76.16 +44.91 (+143.71%)PortfolioSign in to access your portfolioSign inTop gainersAXTI AXT, Inc. 58.09 +9.33 (+19.13%)TSEM Tower Semiconductor Ltd. 166.08 +24.12 (+16.99%)VET Vermilion Energy Inc. 14.42 +1.81 (+14.35%)SRRK Scholar Rock Holding Corporation 45.50 +5.71 (+14.35%)SIG Signet Jewelers Limited 89.56 +10.79 (+13.70%)Top losersHYMC Hycroft Mining Holding Corporation 31.76 -4.48 (-12.36%)CENX Century Aluminum Company 49.65 -5.69 (-10.28%)FAF First American Financial Corporation 58.24 -5.73 (-8.96%)AA Alcoa Corporation 58.65 -5.58 (-8.69%)LB LandBridge Company LLC 71.05 -6.61 (-8.51%)Most activeNVDA NVIDIA Corporation 178.56 -1.84 (-1.02%)VG Venture Global, Inc. 14.29 -0.56 (-3.77%)PLUG Plug Power Inc. 2.4000 +0.0800 (+3.45%)RIVN Rivian Automotive, Inc. 16.12 +0.59 (+3.80%)MU Micron Technology, Inc. 444.27 -17.46 (-3.78%)Top economic eventsEarnings eventsMy earnings eventsEarnings events