J.B. Hunt’s Strategic Response to the Freight Recession

Since I began my internship at J.B. Hunt, we have been made aware of the freight recession and its significant impact on the transportation industry. The ongoing recession, which is negatively affecting J.B. Hunt was triggered by the high demand for freight during COVID, causing more carriers to enter the market and slowing the demand for transportation services. Currently, the demand for delivery services is low, with the market becoming more concentrated with 3PL companies, creating more competition. As FreightWaves declared on March 31, 2022, "a freight recession was imminent. Over two years later, the freight market remains in one of its deepest and longest recessions in history.” Despite these challenges, J.B. Hunt, as a Fortune 500 company, is focusing on long-term growth and strategizing to strengthen its financial resilience.

Current State of J.B. Hunt

Looking back at Q1 of 2024, “J.B. Hunt’s total operating revenue for the quarter was $2.94 billion, compared to $3.23 billion in the first quarter of 2023.” During the bull run of COVID, J.B. Hunt expanded its fleet and built a strong balance sheet, allowing rapid growth and profitable returns. In that growth era, tender rejections were likely high as J.B. Hunt was frequently chosen to move companies' freight. However, the current freight recession is now forcing our team to actively search for freight opportunities and compete fiercely with other carriers to secure business.

Initiatives

To combat the recession, J.B. Hunt is focused on innovation, excellent customer service, and investing in its people. These initiatives are designed to build long-term resilience throughout the recession and into a growth period. Trucking companies that survive the recession must be willing to adapt and evolve, and J.B. Hunt is doing just that. They are adopting AI technology for track and trace, utilizing automation processes such as EDI, and offering the Shipper 360 app for customers to manually book loads. These efforts will help them become more efficient as carriers and, once the recession subsides, will free up time for account managers to focus less on manual tasks and more on creating value for customers.

Commitment to Customers and Employees

J.B. Hunt has some of the highest rates in the market, but customers remain loyal because of JB Hunt's capacity to drop a variety of trailers in one day and the exceptional customer service they deliver. Additionally, CEO Shelley Simpson has emphasized that their people are their greatest asset. In line with this belief, the company has chosen not to lay off employees during the freight recession. This commitment speaks volumes about J.B. Hunt's values and how they prioritize their people, which in return leads to greater customer service and profitable returns. By delivering excellent customer service, J.B. Hunt ensures customer satisfaction and is able to help strengthen long-term relationships, solidifying its reputation as a reliable and trusted partner in the transportation industry.

Strategic Trailer Pool Management

J.B. Hunt is setting itself apart from the competition during the freight recession by strategically building up trailer pools in key network areas around the U.S. Currently, the network is noticing too many inbound trailers to the West, such as California, without much movement coming out, leaving empty trailers stuck there. On the flip side, there are too many outbound trailers from Texas, causing a shortage in that area. J.B. Hunt is addressing this issue by positioning their trailers to maintain balanced pools in each location, relying on forecasts of customer demand. As an intern overseeing customer accounts, it’s crucial to ask customers about their future freight needs and peak seasons to prepare the trailer team and ensure network needs are met in advance.

Diversified Services?

J.B. Hunt also is utilizing the variety of its diversified services, such as truckload, intermodal, dedicated, and integrated capacity solutions, to optimize freight movements and gain access to new markets. This creates value for all different customer needs and attracts more business than a typical carrier would have if they offered one truckload service. Although J.B. Hunt's rates are higher than most transportation companies in the market, they are mitigating the impact of the freight recession through proactive initiatives and resource utilization, setting them apart in the marketplace.

By implementing this strategies, J.B. Hunt has positioned themselves for sustaining success and growth during the ongoing Freight Recession.

Works Cited

Fuller, C. (2024, April 17). The great freight recession has now lasted longer than the Covid Bull Market. FreightWaves. https://www.freightwaves.com/news/the-great-freight-recession-has-now-lasted-longer-than-the-covid-bull-market