a1a8e2cfac4fac4905fcbbfa88511c8c4922e4121522dc6a3138f1ceec8b25a6

J.B. Hunt Transport Services, Inc. is one of the largest surface transportation, delivery, and logistics companies in North America, offering a wide range of services across five distinct business segments **[0001437749-24-005368_jbht20231231_10k.htm:3]** **[0001437749-24-032122_jbht20240930_10q.htm:11]**. The company specializes in intermodal transportation, dedicated contract services, integrated capacity solutions, final mile services, and truckload delivery, utilizing a vast network of resources to meet diverse customer needs **[0001437749-24-005368_jbht20231231_10k.htm:3]** **[0001437749-24-032122_jbht20240930_10q.htm:11]**. J.B. Hunt's operations are supported by a significant fleet of containers and advanced logistics platforms, contributing to its position as a leader in the industry **[JBHT_3407962_0]** **[JBHT_3374093_0]**.

1. **Intermodal (JBI)** - Utilizes over 118,000 containers for efficient rail and truck transportation, with plans to expand to 150,000 containers by 2027, significantly contributing to the company's operations **[JBHT_3407962_0]** **[JBHT_3374093_0]**.
2. **Dedicated Contract Services® (DCS®)** - Provides customized freight movement solutions with a high customer retention rate, supporting steady growth through tailored logistics services **[JBHT_3407962_0]** **[JBHT_3374093_0]**.
3. **Integrated Capacity Solutions (ICS)** - Offers brokerage services by leveraging the J.B. Hunt 360 platform to match shippers with carriers, though facing challenges in the current market environment **[JBHT_3370434_8]**.
4. **Final Mile Services® (FMS)** - Handles big and bulky deliveries directly to consumers' homes, showing growth in revenue quality and service metrics **[JBHT_3379866_4]** **[JBHT_3402838_4]**.
5. **Truckload (JBT)** - Provides traditional over-the-road full truckload delivery services, including the J.B. Hunt 360box® program, offering flexible solutions despite a decline in revenue **[0001437749-24-005368_jbht20231231_10k.htm:6]** **[JBHT_3370434_8]**.

8a26acda7de753fcd8c9aa8d13cf39611768850d6356bd6a95adef13b9a07031

6ec460b9133ff7410c8190f442f36cb03d9ea94f82537d78a286aa9ebb8d1237

c440442747ec3b3b003abe240bca8b9d31faa734ffffb246652dd155279c1029

| Business Segment | Q4 2022 ($ million) | Q1 2023 ($ million) | Q2 2023 ($ million) | Q3 2023 ($ million) | Q4 2023 ($ million) | Q1 2024 ($ million) | Q2 2024 ($ million) | Q3 2024 ($ million) |
|------------------|---------------------|---------------------|---------------------|---------------------|---------------------|---------------------|---------------------|---------------------|
| Intermodal (JBI) | **1,750**  **[0001437749-23-001186_ex_464527.htm:0]**      | **1,540**  **[0001437749-23-010454_ex_500675.htm:1]** **[0001437749-23-011573_jbht20230331_10q.htm:10]** | **1,490**  **[0001437749-23-020156_ex_544920.htm:1]**      | **1,560**  **[0001437749-23-028407_ex_581279.htm:2]**      | **1,620**  **[0001437749-24-001629_ex_616141.htm:1]**      | **1,400**  **[0001437749-24-013384_jbht20240331_10q.htm:11]**      | **1,410**  **[0001437749-24-022814_ex_698520.htm:1]**      | **1,560**  **[0001437749-24-031253_ex_732530.htm:1]** **[0001437749-24-031253_ex_732530.htm:6]** |
| Dedicated Contract Services (DCS) | **880**  **[0001437749-23-001186_ex_464527.htm:1]**  | **879**  **[0001437749-23-011573_jbht20230331_10q.htm:11]** **[0001437749-23-011573_jbht20230331_10q.htm:10]**  | **888**  **[0001437749-23-020887_jbht20230630_10q.htm:13]**  | **892**  **[0001437749-23-028407_ex_581279.htm:2]**  | **884**  **[0001437749-24-001629_ex_616141.htm:2]**  | **860**  **[0001437749-24-013384_jbht20240331_10q.htm:11]**  | **851**  **[0001437749-24-023553_jbht20240630_10q.htm:13]**  | **846**  **[0001437749-24-031253_ex_732530.htm:1]** **[0001437749-24-031253_ex_732530.htm:6]**  |
| Integrated Capacity Solutions (ICS) | **496**  **[0001437749-23-001186_ex_464527.htm:1]**  | **385**  **[0001437749-23-011573_jbht20230331_10q.htm:11]** **[0001437749-23-011573_jbht20230331_10q.htm:10]**  | **344**  **[0001437749-23-020887_jbht20230630_10q.htm:13]**  | **298**  **[0001437749-23-028407_ex_581279.htm:2]**  | **364**  **[0001437749-24-001629_ex_616141.htm:2]**  | **285**  **[0001437749-24-013384_jbht20240331_10q.htm:11]**  | **270**  **[0001437749-24-023553_jbht20240630_10q.htm:13]**  | **278**  **[0001437749-24-031253_ex_732530.htm:1]** **[0001437749-24-031253_ex_732530.htm:6]**  |
| Final Mile Services (FMS) | **255**  **[0001437749-23-001186_ex_464527.htm:2]**  | **225**  **[0001437749-23-011573_jbht20230331_10q.htm:11]** **[0001437749-23-011573_jbht20230331_10q.htm:10]**  | **224**  **[0001437749-23-020156_ex_544920.htm:3]**  | **226**  **[0001437749-23-028407_ex_581279.htm:2]**  | **243**  **[0001437749-24-001629_ex_616141.htm:3]**  | **229**  **[0001437749-24-013384_jbht20240331_10q.htm:11]**  | **235**  **[0001437749-24-023553_jbht20240630_10q.htm:13]**  | **218**  **[0001437749-24-031253_ex_732530.htm:1]** **[0001437749-24-031253_ex_732530.htm:6]**  |
| Truckload (JBT) | **276**  **[0001437749-23-001186_ex_464527.htm:2]**  | **206**  **[0001437749-23-011573_jbht20230331_10q.htm:12]** **[0001437749-23-011573_jbht20230331_10q.htm:10]**  | **192**  **[0001437749-23-020156_ex_544920.htm:3]**  | **196**  **[0001437749-23-028407_ex_581279.htm:2]**  | **195**  **[0001437749-24-001629_ex_616141.htm:3]**  | **178**  **[0001437749-24-013384_jbht20240331_10q.htm:11]**  | **168**  **[0001437749-24-023553_jbht20240630_10q.htm:14]**  | **173**  **[0001437749-24-031253_ex_732530.htm:1]** **[0001437749-24-031253_ex_732530.htm:6]**  |

0eb3184e6639b5bf2ca9c35b153cb4e0b2150922b6de72909fb56df14144c084

91e022d4b03c8279afbde30aa64f198a6d9c2dc580aa7667c8d413c56d9ceee5

1. Given the continued pressure on Intermodal margins and the challenges in restoring them, could you elaborate on the specific pricing actions and cost initiatives you are implementing to achieve your margin targets, and how sustainable are these measures in the long term?

2. With the integration of the brokerage assets from BNSF Logistics resulting in additional operating expenses and a $2 million negative impact this quarter, how do you plan to address these integration costs, and when do you expect to see a meaningful improvement in ICS profitability?

3. In light of increased competition in the dedicated market and reports of private fleets expanding their own capacity, how are you adjusting your sales strategy to secure new dedicated contracts, and are you seeing any pressure on pricing or margins in this segment?

4. Considering the significant cost inflation across the industry and the current low rates that you believe are unsustainable, how confident are you in your ability to implement necessary pricing increases in the upcoming bid season without sacrificing volume growth, especially given the excess capacity in the market?

5. With the anticipated shift in market dynamics and your focus on repairing margins, what specific steps are you taking to prepare for a potential market upturn, and how are you balancing investments in capacity and technology with the need for cost control to ensure acceptable returns on capital?

e61e0b04f08f6bf9371afb0fcc8d8494814f151e7e07540f914fd041c7863f58

- Other intermodal marketing companies; other full-load carriers that utilize railroads for a portion of the transportation service; and, to a certain extent, some railroads directly  **[0001437749-24-005368_jbht20231231_10k.htm:8]** .
- Customers' private fleets, other private fleet outsourcing companies, equipment leasing companies, local and regional delivery service providers, and some truckload carriers  **[0001437749-24-005368_jbht20231231_10k.htm:8]** .
- Other non-asset-based logistics companies and freight brokers, as well as full-load carriers  **[0001437749-24-005368_jbht20231231_10k.htm:8]** .
- Thousands of carriers, many of which are very small  **[0001437749-24-005368_jbht20231231_10k.htm:8]** .
- LTL carriers and railroads, some of which have more equipment and greater capital resources  **[0001437749-24-005368_jbht20231231_10k.htm:12]** .

22bef1f69487551d69487f3d3fee86cc0e1b8a080eecfb6430b6167ae334fb72

JBHT projects a 20–25% sequential drop in Q1 operating income, citing seasonality and limited near-term pricing levers in Intermodal. Despite this, ICS aims for a 2025 rebound post-BNSF Logistics integration, focusing on higher-margin customers to drive growth.

f713ea5b6a850fd37f5b4f08603244753374ef11ebf247b1a755c4044a4bc3f7

Other (includes corporate)

Inter-Segment Eliminations

Total Revenue

dd4b7042d8c621aba81d2b0707750e2bcd346e795db5dba25fd3b20468d82b9a

### Q3 2024 Earnings Call
   - **Issued Period**: Q3 2024
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **Tax Rate**: Expected to be approximately **24.5%** for the full year, implying a decrease in the fourth quarter tax rate compared to the prior three quarters  **[JBHT_3402838_2]** .
     - **Net Capital Expenditures**: Revised to approximately **$625 million**, below the previously revised expectation of $650 million to $700 million  **[JBHT_3402838_2]** .

### Q2 2024 Earnings Call
   - **Issued Period**: Q2 2024
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **Tax Rate**: Expected to fall in the range of **24% to 25%** for the full year  **[JBHT_3393376_3]** .
     - **Net Capital Expenditures**: Updated to be in the range of **$650 million to $700 million**, compared to the previous expectation of $800 million to $1 billion  **[JBHT_3393376_3]** .

### Q1 2024 Earnings Call
   - **Issued Period**: Q1 2024
   - **Guided Period**: No specific period guidance provided
   - **Guidance**: J.B. Hunt did not provide specific numerical guidance for metrics such as revenue, earnings, or margins. They emphasized their strategic focus on long-term growth, cost control, and investments without detailed financial guidance  **[JBHT_3379866_14]** .

### Q4 2023 Earnings Call
   - **Issued Period**: Q4 2023
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **Capital Expenditures**: Planned between **$800 million and $1 billion** for 2024, with allocations for new power equipment, trailing equipment, real estate, and technology investments  **[JBHT_3370434_4]** .
     - **Insurance and Cost Pressures**: Expected inflationary cost pressures, particularly in insurance premiums, capital, and people costs  **[JBHT_3370434_4]** .
     - **Leverage Ratio**: Plan to maintain around **1x EBITDA**  **[JBHT_3370434_4]** .
     - **Dividend and Share Repurchase**: Intend to continue supporting their dividend and may repurchase shares when opportunities arise  **[JBHT_3370434_4]** .

c7caf60b7e7a4b2b70e5ba475a2006ef233fefa99bbe9c5bb81ce88d6ecf22a5

**Quarterly guidance for Q1 2025:**
- **Operating income**: Expected to decline sequentially by 20% to 25% from Q4 2024, after adjusting for the $16 million intangible asset impairment charge  **[JBHT_3412726_8]** **[JBHT_3412726_2]**  (no prior guidance)

**Annual guidance for 2025:**
- **Dedicated Contract Services (DCS) net fleet growth**: 800 to 1,000 trucks per year  **[JBHT_3412726_6]**  (no prior guidance)
- **Top line and operating income growth**: Expected to be modest  **[JBHT_3412726_6]**  (no prior guidance)
- **Capital expenditures**: $700 million to $900 million  **[JBHT_3412726_2]**  (raised from $625 million  **[JBHT_3402838_2]** )
- **Intermodal pricing**: Current pricing to remain through the first half of 2025  **[JBHT_3412726_7]**  (no prior guidance)
- **Cost pressures**: Inflationary cost pressures expected to persist  **[JBHT_3412726_2]**  (no prior guidance)
- **Intermodal volume growth**: Opportunities highlighted, but no specific percentage provided  **[JBHT_3412726_7]**  (no prior guidance)

e11214ec6df2440a39286f1d2fd81a8dac152a8c254ef58176b462225c840be3

| Name               | Position                                                                 | Start Date | Short Bio                                                                                                                                                                                                 |
|--------------------|--------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kevin Bracy        | Senior Vice President of Finance and Treasurer                           | 1998       | **Kevin Bracy**, aged 53, joined J.B. Hunt Transport Services, Inc. in **1998** as a Financial Analyst. He currently serves as the Senior Vice President of Finance and Treasurer  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                                        |
| Darren Field       | President of Intermodal and Executive Vice President                     | 1994       | **Darren Field**, aged 53, joined J.B. Hunt Transport Services, Inc. in **1994** as a Night Dispatcher. He currently serves as the President of Intermodal and Executive Vice President  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                                  |
| Spencer Frazier    | Executive Vice President of Sales and Marketing                          | 1992       | **Spencer Frazier** joined J.B. Hunt Transport Services, Inc. in **1992** as a Management Trainee. He currently serves as the **Executive Vice President of Sales and Marketing**  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                                        |
| Bradley Hicks      | President of Highway Services and Executive Vice President of People     | 1996       | **Bradley Hicks**, aged 51, joined J.B. Hunt Transport Services, Inc. in **1996** as a Management Trainee. He currently serves as the President of Highway Services and Executive Vice President of People  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                |
| Nicholas Hobbs     | Chief Operating Officer, President of Contract Services, and Executive Vice President | 1984       | **Nicholas Hobbs** joined J.B. Hunt Transport Services, Inc. in **1984** as a Management Trainee. He currently serves as the **Chief Operating Officer, President of Contract Services, and Executive Vice President**  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** **[0001437749-23-006831_jbht20230310_def14a.htm:17]** .                  |
| David Keefauver    | Executive Vice President of Dedicated Contract Services                  | 1995       | **David Keefauver**, 51, joined J.B. Hunt Transport Services, Inc. in **1995** as a Management Trainee and currently serves as Executive Vice President of Dedicated Contract Services  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                                     |
| John Kuhlow        | Chief Financial Officer, Chief Accounting Officer, and Executive Vice President | 2006       | **John Kuhlow** joined J.B. Hunt Transport Services, Inc. in **2006** as Assistant Corporate Controller. He currently serves as the **Chief Financial Officer, Chief Accounting Officer, and Executive Vice President**  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** **[0001437749-23-006831_jbht20230310_def14a.htm:17]** .                |
| Eric McGee         | Executive Vice President of Highway Services                             | 1998       | **Eric McGee**, aged **50**, joined J.B. Hunt Transport Services, Inc. in **1998** as a National Account Service Monitor. He currently serves as the **Executive Vice President of Highway Services**  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                      |
| Stuart Scott       | Chief Information Officer and Executive Vice President                   | 2016       | **Stuart Scott**, aged 57, joined J.B. Hunt Transport Services, Inc. in **2016** as Chief Information Officer and Executive Vice President. Prior to joining the company, he served as Chief Information Officer at Tempur-Sealy International, Microsoft, and various General Electric businesses  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** **[0001437749-23-006831_jbht20230310_def14a.htm:17]** . |
| Brian Webb         | Executive Vice President of Final Mile Services                          | 2002       | **Brian Webb**, age 55, joined J.B. Hunt Transport Services, Inc. in **2002** as a Business Development Executive. He currently serves as Executive Vice President of Final Mile Services  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** .                                                  |
| Greer Woodruff     | Executive Vice President of Safety, Sustainability, and Maintenance      | 1987       | **Greer Woodruff** joined J.B. Hunt in **1987** as a Management Trainee. He currently serves as the Executive Vice President of Safety, Sustainability, and Maintenance  **[0001437749-24-007781_jbht20240306_def14a.htm:20]** **[0001562180-24-000266_xslF345X02/primarydocument.xml:0]** .                                                                |
| Jennifer R. Boattini | Senior Vice President of Legal and Litigation and General Counsel       | 2006       | Jennifer R. Boattini joined J.B. Hunt Transport Services, Inc. in **2006** as Director of Litigation and Contract Management. She currently serves as Senior Vice President of Legal and Litigation and General Counsel  **[0001437749-24-007781_jbht20240306_def14a.htm:19]** **[0001437749-23-006831_jbht20230310_def14a.htm:17]** .                |
| Shelley Simpson    | Chief Executive Officer and President                                    | 1994       | Shelley Simpson has been with J.B. Hunt Transport Services, Inc. since **1994**, starting as an hourly Customer Service Representative. She became the President in **August 2022** and assumed the role of Chief Executive Officer on **July 1, 2024**  **[0001437749-24-007781_jbht20240306_def14a.htm:18]** **[0001437749-24-032122_ex_735600.htm:0]** **[0001437749-24-023553_ex_701692.htm:0]** . |
| John N. Roberts, III | Executive Chairman of the Board                                        | 1989       | John N. Roberts, III has been with J.B. Hunt Transport Services, Inc. since 1989, starting as a Management Trainee. He became the Chief Executive Officer in 2010 and transitioned to Executive Chairman of the Board in 2024  **[0001437749-24-007781_jbht20240306_def14a.htm:17]** **[0001437749-24-005368_jbht20231231_10k.htm:3]** .          |

d3c2e7217713c72a75d838d1cbf01e4990fa8675d0ef36215298078082967c00

| Program Details           | Program 1                  | Program 2                  |
|---------------------------|----------------------------|----------------------------|
| Approval Date             | July 20, 2022  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**        | August 16, 2024  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**      |
| End Date/Duration         | No expiration date  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**   | No expiration date  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**   |
| Total additional amount   | **$500 million**  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**     | **$1 billion**  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**       |
| Remaining authorization   | Fully exhausted  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**      | **$967 million**  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**     |
| Details                   | Authorization fully used  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**  | Effective upon previous authorization completion  **[0001437749-24-032122_jbht20240930_10q.htm:25]** **[0001437749-24-032122_jbht20240930_10q.htm:7]**  |

b5436520f8ae1cf006ddd4fbe39c1f6f2cff1e36986c005b04b293083d87914c

| Name                        | Start Date | End Date  | Reason for Change                                                                 |
|-----------------------------|------------|-----------|----------------------------------------------------------------------------------|
| PricewaterhouseCoopers LLP  | 2021  **[0001437749-22-004457_jbht20211231_10k.htm:52]**    | Present   | Current auditor.                                                                 |
| Ernst & Young LLP           | N/A        | June 22, 2021  **[0001437749-21-015782_jbht20210625_8k.htm:0]**  | The change followed a competitive request for proposals process.  **[0001437749-21-015782_jbht20210625_8k.htm:0]**              |

6798b3dbf57c6b0dc639ee66ea641599651c3582f9b0b07f02f5b9c4b94da069

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $3.146 billion (-5% YoY)  **[0001437749-25-001274_ex_766622.htm:6]**   

85e4b3f9a9131ec7f15d908514adaa258b2911b40b22904f05195c05e8716cf2

| Year | Amount Due (millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|-----------------------|-----------|-------------------|-----------------|
| 2024 | 500 **[0001437749-24-032122_jbht20240930_10q.htm:2]** | Current portion of long-term debt | N/A | 21.1% = (500 / 2367.3) * 100 **[0001437749-24-032122_jbht20240930_10q.htm:2]** **[0001437749-24-032122_jbht20240930_10q.htm:19]** |
| 2025 | 500 **[0001437749-24-032122_jbht20240930_10q.htm:19]** | Term loans under the senior credit facility | Variable, 6.07% **[0001437749-24-032122_jbht20240930_10q.htm:19]** | 21.1% = (500 / 2367.3) * 100 **[0001437749-24-032122_jbht20240930_10q.htm:2]** **[0001437749-24-032122_jbht20240930_10q.htm:19]** |
| 2026 | 700 **[0001437749-24-032122_jbht20240930_10q.htm:7]** | 3.875% senior notes | 3.875% **[0001437749-24-032122_jbht20240930_10q.htm:7]** | 29.6% = (700 / 2367.3) * 100 **[0001437749-24-032122_jbht20240930_10q.htm:2]** **[0001437749-24-032122_jbht20240930_10q.htm:7]** |

bbe46a2b85c9be9939cfaf597395d467587793e8558bd226176bfe651faef713

acc14fd78818fbcabffb527f373c6be59095329892a1dd518927adcdef9af7b2

5c361dd8518ef52ec4f19b4b7ef6358b0e0c5836046458e620f13bb5fbdadd94

Average effective trailer count for JBT (units)

Trailer turns for JBT (percentage yoy change)

Tractors in JBT power fleet (units)

Load volume for JBI yoy change (percentage yoy change)

Transcontinental loads yoy change (percentage yoy change)

Eastern network load volume yoy change (percentage yoy change)

Revenue per load for JBI yoy change (percentage yoy change)

Load volume for JBT yoy change (percentage yoy change)

Revenue per load for JBT yoy change (percentage yoy change)

Trailing capacity for JBI (units)

Power units assigned to JBI dray fleet (units)

dbe14068a44120a7928b19e48853d0fcf4bb86a11b0c991ed4bd955565c820e2

1. **Q1 Operating Income Guidance**  
   **Q:** What is your expectation for Q1 operating income?  
   **A:** Management expects a **20% to 25% sequential decline** in operating income for Q1, after adjusting for an impairment charge. This reflects normal seasonality and aligns with trends over the last ten years, excluding the unique pandemic years.  **[JBHT_3412726_8]** 

2. **Pricing Increases in Bid Season**  
   **Q:** Are you seeing pricing increases in the current bid season?  
   **A:** While it's still early in the bid season, management is confident that their strong service levels have earned them the right to discuss **price improvements** with customers. Any pricing changes secured now will impact the second half of 2025 and beyond.  **[JBHT_3412726_13]** 

3. **CapEx Plans and Guidance**  
   **Q:** What's your CapEx guidance for the coming year?  
   **A:** The company anticipates capital expenditures between **$700 million and $900 million** for 2025. This range depends on the success of Dedicated sales and includes **$600 million to $700 million** for replacements, with additional property investments planned.  **[JBHT_3412726_9]** 

4. **Improving Returns on Capital and Margins**  
   **Q:** How will you improve returns on capital and margins?  
   **A:** Management plans to focus on **balancing the Intermodal network**, reducing empty miles, controlling costs, and scaling revenues with growth. They aim to engage customers in value-based discussions to justify pricing adjustments, improving margins without relying solely on market recovery.  **[JBHT_3412726_10]** 

5. **Intermodal Volumes and Capacity Utilization**  
   **Q:** Can you discuss Intermodal volumes and equipment utilization?  
   **A:** Record volumes in the latter half of 2024 improved equipment utilization without adding capacity. While turning the fleet at **1.8 times per month** may be challenging, there is room for further improvement. Excess capacity remains, and management is confident in growing into it as demand increases.  **[JBHT_3412726_14]** 

6. **Dedicated Fleet Growth Outlook**  
   **Q:** What is the outlook for growth in the Dedicated fleet?  
   **A:** The company expects **net fleet growth** in Dedicated during 2025. Known customer losses are anticipated to taper off by the second quarter. With a strong sales pipeline, they plan to return to historical fleet growth patterns later in the year.  **[JBHT_3412726_11]** **[JBHT_3412726_19]** 

7. **ICS Margins and Profitability**  
   **Q:** How are margins and profitability in the ICS segment?  
   **A:** The ICS segment achieved **strong gross margins** due to project work and a focus on customers with complex needs. Management intends to scale investments in sales and technology, aiming to maintain high gross margins and drive growth.  **[JBHT_3412726_16]** 

8. **Service Issues with Rail Partners**  
   **Q:** Are rail service issues affecting Intermodal operations?  
   **A:** In October, there were challenges with rail partner BNSF due to changes in employee work patterns following a new union agreement. These are temporary personnel and planning issues, not infrastructure problems, and are expected to be resolved within months.  **[JBHT_3412726_18]** 

9. **Breakdown of Projected Q1 Decline**  
   **Q:** What factors are driving the Q1 decline?  
   **A:** The anticipated sequential decline in Q1 operating income reflects normal seasonality, including weather impacts on trucking operations. Pricing for the first half of 2025 is largely set, limiting immediate opportunities for Intermodal price adjustments. The decline is not confined to any single segment.  **[JBHT_3412726_12]** **[JBHT_3412726_20]** 

10. **Intermodal Volume Expectations**  
    **Q:** How do you view Intermodal volume growth despite tough comps?  
    **A:** Management remains optimistic about Intermodal volume growth, citing opportunities in the Eastern network, highway conversion, and expansion in Mexico. They believe there are **9 to 11 million loads** where Intermodal is the optimal solution, and recent record volumes support their confidence.  **[JBHT_3412726_17]** 

6bcec23163c0ec2a9eb74f8ac5ccee04b452d8413337a8d00cbab1032b6ecbb7

- **Significant declines in financial performance across key metrics:** Revenue declined **7%**, operating income decreased **24%**, and diluted earnings per share fell **27%** year-over-year.  **[JBHT_3393376_3]**
- **Continued margin pressure due to deflationary rate environment and competitive market:** The deflationary rate environment continues to pressure margins.  **[JBHT_3393376_3]**  Intermodal volume decreased **1%** year-over-year due to a depressed truckload market.  **[JBHT_3393376_7]**
- **Challenges in the Integrated Capacity Solutions (ICS) segment:** ICS gross revenue declined **21%** year-over-year, driven by a **25%** decrease in volume.  **[JBHT_3393376_8]**  Additionally, there are challenges integrating the acquisition of BNSF Logistics.  **[JBHT_3393376_8]**

b1f6f522717b7772b07c416a4ccf82488344290692ef6ef4d515122ee86b1251

- **J.B. Hunt is facing significant pressure from an oversupply of capacity in the freight market that is not exiting quickly enough**, leading to competitive pricing and reduced margins across all five business segments.  **[JBHT_3379866_14]**
- **The company has approximately 20% excess capacity, resulting in about $100 million in additional costs**, which is adversely affecting profitability. Management is choosing to retain this capacity for future growth rather than reducing costs in the short term.  **[JBHT_3379866_22]** ,  **[JBHT_3379866_8]**
- **Intense competition in the intermodal segment from both truckload carriers and other intermodal competitors is pressuring pricing**. The inability to predict when the market will turn around adds uncertainty to future performance.  **[JBHT_3379866_14]** ,  **[JBHT_3379866_10]**

03526f4f75babc0b0e46d2473c196df62f55df00eda654a724a13c8cd922f881

- **Intermodal margins are under pressure**, with management acknowledging they are not satisfied with current returns and the pathway to improvement is uncertain. Darren Field stated that "none of us are satisfied with where we're at in terms of the returns on our business" and they have been wrong before about when pricing would improve.  **[JBHT_3402838_9]** **[JBHT_3402838_11]**
- **Increased costs due to network imbalances**, particularly the need to support capacity in Southern California, may persist if the imbalance continues. This leads to higher expenses to reposition equipment, affecting profitability.  **[JBHT_3402838_15]**
- **Brokerage segment margins may face future pressure**, as the high gross margins achieved are considered unsustainable by management. Shelley Simpson noted they are not modeling for a 17%+ gross margin in ICS, indicating potential margin contraction ahead.  **[JBHT_3402838_12]**

4ae12f586c3d1c9591ff533b3f6ffecc0edf6dc7d1c9523b46ceee35000fce57

- **Expected significant decline in Q1 operating income:** The company anticipates a **20%-25% sequential decline in operating income in Q1 2025**, even after adjusting for impairment charges, due to normal seasonality and limited opportunities to improve pricing in the Intermodal segment. This suggests potential weakness in near-term profitability. \[[10]\]
- **Challenges in improving Intermodal utilization and pricing:** J.B. Hunt acknowledges that returning to historical container utilization levels of **2 turns per month** is unlikely due to slower rail networks and customer unloading inefficiencies. Additionally, they have excess capacity and limited ability to improve pricing in the near term because current pricing is already set through the first half of 2025, which could constrain margin improvements in the Intermodal segment. \[[8],  **[JBHT_3412726_12]** ,  **[JBHT_3412726_13]** \]
- **Margin pressure in Dedicated Contract Services due to fleet losses and start-up costs:** The Dedicated Contract Services segment is experiencing known fleet losses that are not expected to be fully resolved until mid-2025. Furthermore, start-up costs associated with new accounts are expected to put pressure on margins, with profitability benefits from fleet growth unlikely to be realized until the following year, indicating potential softness in near-term margins. \[[11],  **[JBHT_3412726_19]** \]

3613d747c137c8ef3606db2ffb8013b95253cff020928ed473521667152353ed

- **J.B. Hunt's two largest segments, Intermodal and Dedicated, have significant market opportunities and potential for high growth**, allowing for continued operating income performance in these areas.  **[JBHT_3402838_17]**
- **The company is focusing on growing its Intermodal business and improving network efficiency**, particularly through its strategic relationship with BNSF, which is expected to contribute to margin improvement.  **[JBHT_3402838_16]**
- **J.B. Hunt's Integrated Capacity Solutions (ICS) segment achieved a significantly high gross margin**, attributed to strategic focus on quality freight, strong customer relationships, and leveraging technology through the J.B. Hunt 360 platform, highlighting operational excellence and potential for sustained profitability.  **[JBHT_3402838_12]**

bae89379990a4a5181a551f46bcf7f6ea4053defd88efba72c2cead6bf41a771

- **J.B. Hunt has significant growth capacity, able to handle up to 20% more volume, which can improve margins by adding volume and fully utilizing their equipment.**  **[JBHT_3393376_16]**
- **The company is experiencing strong growth in Southern California, with volumes up double digits, and expects to outperform the domestic market on eastbound volumes, highlighting their strong market position and growth potential.**  **[JBHT_3393376_14]**
- **Their strategy to focus on quality customers and carriers is starting to pay off, with improved volumes from May to June, indicating optimism for future growth opportunities as the market inflects.**  **[JBHT_3393376_17]** **[JBHT_3393376_15]**

5b09b528219582129114338ff761e3db41d41842db08eff883d1863d9bc9360e

- **Integrated Capacity Solutions (ICS) is expected to return to growth** in 2025 after overcoming previous customer losses and completing the integration of BNSF Logistics, with a focus on higher-margin customers and scaling investments. Nicholas Hobbs stated, "*We think we're in a really good spot right now... We think we've got a lot of the noise behind us, really ready to launch at scale.*"  **[JBHT_3412726_16]**
- **Dedicated Contract Services (DCS) anticipates net tractor growth to get back on plan in the second quarter**, with customer retention rates rebounding and a strong sales pipeline expected to offset previous losses. Bradley Hicks mentioned, "*We feel very good about that... We see our retention rates on overall customers rebounding... do feel great about our pipeline and believe that we'll continue to deliver new sales that will offset known reductions or losses.*"  **[JBHT_3412726_0]**
- **Intermodal segment expects to improve margins and continue volume growth**, leveraging strong service levels and beginning to repair pricing with customers as truck rates climb and new capacity demand increases. Darren Field expressed confidence, stating, "*I'm very confident that as truck rates climb, as new capacity demand hits us, we can certainly begin to repair our margins and improvements in price will have to be part of that.*"  **[JBHT_3412726_13]**

c78dd5fef23b81ab85b396e06d6262257ba4890e0896bc5aed4eb01b3d975c46

1. **Insurance Cost Increases**  
   **Q:** Are insurance costs rising, and will charges continue?  
   **A:** Yes, we are seeing **50% to 60% increases** in insurance premiums for 2024 due to higher claims costs. We believe reserves are now properly valued and do not expect similar charges going forward.  **[JBHT_3370434_11]** **[JBHT_3370434_17]** **[JBHT_3370434_26]** 

2. **Cost Inflation Impact**  
   **Q:** How is cost inflation affecting margins?  
   **A:** We face cost pressures across wages, equipment costs, maintenance, and railroad rates, impacting margins. We're working with customers to deliver more value and reduce costs together.  **[JBHT_3370434_11]** **[JBHT_3370434_17]** 

3. **Intermodal Volume Momentum**  
   **Q:** Will Intermodal volume growth continue into 2024?  
   **A:** The Q4 volume surge surprised us and customers. Due to this unexpected increase, we are uncertain about early 2024 volumes. Traditionally, Q1 sees a drop from Q4, and we're waiting to see how the year unfolds.  **[JBHT_3370434_14]** **[JBHT_3370434_16]** 

4. **Pricing and Margins**  
   **Q:** Can Intermodal pricing improve before Truckload pricing?  
   **A:** In the Western network, Intermodal pricing may decouple and improve ahead of Truckload rates. In the Eastern network, pricing remains closely tied to Truckload rates. We'll focus on consistent service to justify pricing improvements.  **[JBHT_3370434_13]** 

5. **Dedicated Fleet Growth**  
   **Q:** What is the outlook for Dedicated fleet growth?  
   **A:** We plan to sell **1,000 to 1,200 trucks** this year, similar to last year, despite some fleet losses. We're focused on backfilling losses and targeting stable markets like private fleets.  **[JBHT_3370434_15]** **[JBHT_3370434_18]** 

6. **Brokerage Profitability Challenges**  
   **Q:** How can brokerage return to profitability?  
   **A:** The brokerage environment remains difficult with declining volumes and rates. We're focusing on cost control and recalibrating our approach to add value to customers. Market conditions need to inflect to improve profitability.  **[JBHT_3370434_20]** 

7. **West Coast Port Gains**  
   **Q:** How will West Coast port shifts affect you?  
   **A:** Growth in West Coast imports benefits us. In Q4, Transcontinental volumes grew **13%**, reflecting this advantage. Longer hauls may increase revenue per load, but pricing remains uncertain.  **[JBHT_3370434_13]** **[JBHT_3370434_14]** **[JBHT_3370434_21]** 

8. **Customer Pricing Discussions**  
   **Q:** How are pricing conversations with shippers going?  
   **A:** Customers acknowledge our strong service but are hesitant to accept rate increases due to cost pressures. Competition is intense, and it's early in the bid cycle. We'll leverage our service quality in negotiations.  **[JBHT_3370434_23]** 

9. **Intermodal Margin Improvement**  
   **Q:** What drove Intermodal margin improvements in Q4?  
   **A:** Higher volumes allowed us to spread fixed costs over more loads, improving margins. There was no price increase, but volume is now more valuable given our asset base.  **[JBHT_3370434_22]** 

10. **Insurance Legislative Efforts**  
    **Q:** Can legislation help address insurance challenges?  
    **A:** We're enhancing safety with inward-facing cameras and Sideguard Assist technology. Despite safety gains, claim costs are rising. We're working with associations for state-level tort reform, though it's a long process.  **[JBHT_3370434_19]** 

11. **Truckload Capacity Outlook**  
    **Q:** When will truckload rates improve?  
    **A:** Truckload rates need to increase due to rising costs and capacity exits. While timing is uncertain, we expect rates to improve as capacity tightens.  **[JBHT_3370434_23]** 

12. **ICS Contract Mix**  
    **Q:** Why did contractual business percentage decrease?  
    **A:** The decrease to **59%** contractual business is partly due to the BNSF acquisition. Our target mix is **50% to 60%**, and we expect spot opportunities to grow as the market shifts.  **[JBHT_3370434_24]** 

13. **Dedicated EBIT Growth**  
    **Q:** Is it challenging to grow Dedicated EBIT now?  
    **A:** Due to fleet downsizing and loss of momentum, growing Dedicated EBIT is challenging. We're focused on backfilling losses but cannot specify whether this refers to GAAP or non-GAAP figures.  **[JBHT_3370434_26]** 

3e86eba183e37a3c4cc6c59fb35f25f79f7088d7fe8c6b6bf0baf1703a0116f0

1. **Intermodal Volume and Pricing Outlook**  
   **Q:** What's the outlook for intermodal volumes and pricing?  
   **A:** Management reports that intermodal pricing is highly competitive due to both truckload capacity and intermodal competitors, and they expect this is part of the cyclical nature of the market. They anticipate that pricing and volume will return over time. While overall volumes were flat, Southern California eastbound volume grew by **double digits**  **[JBHT_3379866_9]** , but the Eastern network saw a **7% decline** due to competitive truckload pricing.  **[JBHT_3379866_9]**  They are cautious about predicting the future given the depth and duration of the current cycle.  **[JBHT_3379866_10]** **[JBHT_3379866_14]** 

2. **Excess Capacity and Cost Reduction**  
   **Q:** How are you managing excess capacity and cost reductions during the down cycle?  
   **A:** Management acknowledges having about **20% excess capacity**.  **[JBHT_3379866_15]**  They are focused on long-term growth and are reluctant to reduce capacity quickly.  **[JBHT_3379866_8]**  They have made investments in people and equipment, impacting costs, and have insight into productivity and utilization metrics informing their cost measures.  **[JBHT_3379866_8]**  While they could take different actions if focused on the short term, they prefer to grow into this capacity and hold onto commitments to their people.  **[JBHT_3379866_8]** 

3. **Walmart Contract and Growth Plans**  
   **Q:** How should we think about the Walmart contract and its impact on volumes?  
   **A:** The Walmart agreement allows the company to grow towards their **150,000 container** target over the course of a year without adding new capacity to the industry.  **[JBHT_3379866_12]**  Management is limited in discussing specifics due to confidentiality but sees it as an opportunity to accelerate growth.  **[JBHT_3379866_12]**  They cannot comment on whether it will be reflected in volume numbers but are looking to grow with all customers.  **[JBHT_3379866_12]** 

4. **Capital Allocation Priorities**  
   **Q:** How does the company plan to manage operations and capital allocation amid less structural growth and more cyclical volatility?  
   **A:** Management states that their capital allocation priorities remain unchanged: investing in the business, supporting the dividend, maintaining an investment-grade credit rating, and opportunistically buying back stock.  **[JBHT_3379866_13]**  They highlight flexibility in how they deploy capital and emphasize long-term commitments to invest in growth opportunities without significant changes to their approach.  **[JBHT_3379866_13]** 

5. **DCS Growth and Profitability Outlook**  
   **Q:** Can Dedicated Contract Services hold revenue and profitability relatively flat in 2024 amid challenges?  
   **A:** Despite losses from bankruptcies, including losing their **tenth largest customer**  **[JBHT_3379866_11]** , management feels confident about holding flat towards the year.  **[JBHT_3379866_11]**  They had a strong sales quarter, adding **690 trucks**, and their sales pipeline looks good.  **[JBHT_3379866_11]**  Competition is mainly with private fleets, and they feel positive about the competitive environment.  **[JBHT_3379866_11]** 

6. **Bad Debt Expense and Impact of Bankruptcies**  
   **Q:** What was the impact of bad debt expense and bankruptcies on financials?  
   **A:** The company experienced a bad debt expense of **$4.6 million** quarter-over-quarter, with a charge of **$3.6 million** in the first quarter related to bankruptcies, including the loss of their **tenth largest customer** in Dedicated Contract Services.  **[JBHT_3379866_21]**  This impacted margins, especially in DCS.  **[JBHT_3379866_21]** 

7. **ICS Profitability and Brokerage Business**  
   **Q:** How is the company addressing profitability in Integrated Capacity Solutions?  
   **A:** The brokerage market remains extremely competitive, with rates at trough levels for the past four quarters.  **[JBHT_3379866_18]**  Management is focused on growing with customers where they can create value, acknowledging that some customers have shifted to the lowest-cost solutions.  **[JBHT_3379866_18]**  Gross margin recovered throughout the quarter to a little over **14%**, despite being hit severely during winter storms in January.  **[JBHT_3379866_18]** 

8. **Operating Leverage in Intermodal and Margin Outlook**  
   **Q:** How will operating leverage work in Intermodal with excess capacity, and when can margins return to target range?  
   **A:** Pricing is the fastest way to address margin challenges, and current excess capacity makes additional volume highly valuable.  **[JBHT_3379866_15]**  While growing into the **20% excess capacity** could take time, management is prepared for growth but cautious about predicting the pace.  **[JBHT_3379866_15]**  Returning to margin targets depends on when the market inflection occurs, the pace of pricing opportunities, and how quickly capacity exits.  **[JBHT_3379866_15]** 

9. **Fourth Quarter Strength and First Quarter Weakness**  
   **Q:** What changed between the strong fourth quarter and weaker first quarter?  
   **A:** The fourth quarter uptick in demand was a surprise, as was the magnitude of the decline in the first quarter.  **[JBHT_3379866_17]**  Management doesn't have a clear answer on the catalyst but suggests that the comparison may reflect a return to normal after an unexpectedly strong fourth quarter.  **[JBHT_3379866_17]** 

10. **Norfolk Southern's Intermodal Changes**  
    **Q:** Does Norfolk Southern's exit from certain intermodal lanes impact the company?  
    **A:** Management states that Norfolk Southern's announcement was almost completely related to international intermodal and has not impacted J.B. Hunt.  **[JBHT_3379866_16]**  They do not see any effect on their operations from these changes.  **[JBHT_3379866_16]** 

11. **Trailer Count Decrease and 360 Box Strategy**  
    **Q:** Is the decrease in trailer count a sign that the 360 Box strategy is ending?  
    **A:** The company is not abandoning the 360 Box strategy.  **[JBHT_3379866_20]**  The decrease in trailer count is due to making good company-wide decisions to utilize excess capacity in the short term.  **[JBHT_3379866_20]**  Some trailers were transferred to Dedicated Contract Services, and they remain encouraged about the 360 Box service offering.  **[JBHT_3379866_20]** 

2d9c706f7c3b132c434388220915f43e03865d619accb6f6f4fa2ce9dc7d0826

- **J.B. Hunt's Intermodal volumes increased by 8% in December**, outperforming the industry and surprising their own team and partners, showcasing strong execution and adaptability.  **[JBHT_3370434_14]**
- The company benefited from a **significant peak season due to their mix of customers**, allowing them to exceed customer expectations and capitalize on unexpected market opportunities.  **[JBHT_3370434_14]**
- **J.B. Hunt is focused on strategic growth by adding value to customers' networks**, emphasizing quality over quantity to improve profitability as market conditions evolve.  **[JBHT_3370434_20]**

59a1b59e16431aa55878fa5ab6ee017a2040084e5f56b3d01c28fc5a68a7b7ea

- The **brokerage segment is facing an incredibly difficult environment**, with volume declines and revenue quality issues, making it extremely difficult to return to profitability. Customers are acting more transactional, driving down to the lowest price, forcing the company to recalibrate its approach.  **[JBHT_3370434_20]**
- The **pricing environment has too many unknowns**, and while longer length of haul loads could represent higher revenue per load, it doesn't necessarily mean pricing increases. The company is unable to provide clarity on the mix or pricing outlook for 2024.  **[JBHT_3370434_21]**
- The company is under **immense cost pressure**, particularly in the intermodal segment, and there is uncertainty about recovering these costs through pricing in the upcoming bid cycle. The outcome will depend on the market environment, and there's a lot yet to be determined.  **[JBHT_3370434_10]**

673b14e2a4163133b647ebfbed6c0a359878dc653508e97fd51ff35ff896ef3c

- **J.B. Hunt has made strategic long-term investments in capacity**, including expanding their intermodal containers and trailer pool, positioning them to capitalize on future demand growth when the market turns.  **[JBHT_3379866_14]** **[JBHT_3379866_13]** **[JBHT_3379866_8]**
- **Management remains confident in their ability to deliver value to customers and shareholders**, emphasizing strong customer relationships and commitment to service, which they believe will drive long-term growth.  **[JBHT_3379866_14]** **[JBHT_3379866_13]** **[JBHT_3379866_10]**
- **The company is focused on cost control while maintaining investments for future growth**, leveraging their strong balance sheet and financial discipline to navigate current challenges without sacrificing long-term opportunities.  **[JBHT_3379866_8]** **[JBHT_3379866_15]** **[JBHT_3379866_6]**

0d745d1e31253072b3a78b82b7af307fb319fc59a5f8772b7951b6128893759b

1. **Intermodal Margins and Bid Season Strategy**  
   **Q:** How will you balance volume growth and pricing in bid season?  
   **A:** Management emphasized that while volume is important, pricing is crucial for margin improvement. They are not satisfied with current returns and believe carriers are operating at unsustainable rates below cost. Going into bid season, they aim to deliver value to customers, address cost challenges, and prepare to serve needs at the enterprise level, focusing on transparent conversations to improve returns.  **[JBHT_3402838_11]** 

2. **BNSF's Strategy and Impact on JBHT**  
   **Q:** Is BNSF implementing PSR, and how does it affect you?  
   **A:** Management does not believe BNSF is implementing PSR (Precision Scheduled Railroading). BNSF is focused on growing their intermodal business, and they have assured J.B. Hunt that PSR is not part of their strategy. The strong partnership aims to drive efficiency and improve margins together.  **[JBHT_3402838_13]** 

3. **Revenue per Load and Pricing Outlook**  
   **Q:** How did you manage sequential increase in revenue per load?  
   **A:** The increase was due to a longer length of haul in Q3 compared to Q2, despite sequential pricing pressure. Management is not satisfied with current returns and aims to recover margins through future pricing efforts by delivering value and quality service to customers.  **[JBHT_3402838_9]** 

4. **ICS Gross Margin Improvement and Insurance Accruals**  
   **Q:** What's driving the improvement in ICS gross margins?  
   **A:** The gross margin improvement in Q3 is unique to J.B. Hunt, resulting from focusing on quality revenue, the right type of business, and leveraging technology through J.B. Hunt 360. Management does not expect margins above **17%** to be sustained, with a more normal range being **14% to 15%**. On insurance accruals, they feel in a good position after addressing past significant charges.  **[JBHT_3402838_12]** 

5. **Dedicated Business Competition and Private Fleets**  
   **Q:** How is competition affecting your dedicated business?  
   **A:** Management is not seeing unusual competition and remains focused on private fleet replacement. They are disciplined in pricing and feel confident despite some large private fleets growing. The market opportunity is significant, estimated at **$60 to $90 billion**, allowing for continued success.  **[JBHT_3402838_10]** 

6. **Eastern Intermodal Growth and Costs**  
   **Q:** What's driving Eastern intermodal growth and repositioning costs?  
   **A:** There's an uptick in eastbound volume from the West Coast without a corresponding increase westbound, leading to repositioning costs. In the East, customers are shifting small volumes to intermodal due to better service performance and sustainability efforts. Management is encouraged by this growth and aims to fill network gaps over the next bid seasons, which is positive for 2025.  **[JBHT_3402838_15]** 

7. **Long-Term Operating Income Growth Opportunities**  
   **Q:** Where are the biggest opportunities to grow operating income long-term?  
   **A:** Management sees significant market opportunities across all five business units. They expect continued growth in intermodal and dedicated segments, leveraging their large market sizes. While highway services and Final Mile will grow, they don't expect the business mix to change significantly compared to the last **5 to 10 years**.  **[JBHT_3402838_17]** 

8. **Intermodal Margin Repair and BNSF Relationship**  
   **Q:** Can BNSF partnership improve intermodal margins?  
   **A:** Management focuses on driving efficiency and growth with BNSF to improve margins. They aim to grow the intermodal business, enhance network efficiency, and fill empties to benefit margins. Core pricing work is needed to reach margin goals, but no single project with BNSF will unlock margins.  **[JBHT_3402838_16]** 

9. **Definition of 'Normal' Peak Season**  
   **Q:** What does 'normal' peak season mean for intermodal volumes?  
   **A:** 'Normal' refers to the sequential changes from Q2 to Q3 to Q4 and pre-pandemic forecasting accuracy. Customers are not indicating weaker demand, and volumes in Q4 are expected to remain strong, particularly from Southern California, aligning with normal peak season patterns.  **[JBHT_3402838_14]** 

10. **Impact of Pre-Shipping on Results**  
    **Q:** How did pull-forward shipments affect results?  
    **A:** Some customers shifted business due to various reasons, including potential labor strikes and capacity preparedness, leading to some freight being pulled forward. However, many customers expect a normal peak season in Q4, and management anticipates continued demand but acknowledges uncertainty in the extent of pull-forward impact.  **[JBHT_3402838_7]** 

35f10f4f1371d4e51100d58799e529da0d9354c2d1be292d9e4854c64b8c0643

1. **Intermodal Margin Outlook**  
   **Q:** Has revenue per load stabilized for margins to recover?  
   **A:** Management noted that despite completing the 2024 bid cycle in Q2, the prices and yields achieved were not strong enough to improve margins as desired.  **[JBHT_3393376_10]**  They're not changing their long-term margin target but recognize that **pricing improvement is essential** for margin enhancement.  **[JBHT_3393376_10]**  While volume is valuable due to underutilized equipment, over the long term, **pricing will always be the most valuable element** to improving margins.  **[JBHT_3393376_10]** 

2. **Operating Income Decline**  
   **Q:** Can you change outcomes without market improving?  
   **A:** CEO Shelley Simpson acknowledged that the last two years have been the most difficult in her 30-year career.  **[JBHT_3393376_19]**  The company is focused on long-term strategies, investing in people, technology, and capacity to be prepared for customers.  **[JBHT_3393376_19]**  They're working to provide best-in-class service and create value for customers, aiming to deliver appropriate returns for shareholders.  **[JBHT_3393376_19]**  While not pleased with current performance, they see signs that **things are moderating or getting better** and remain cautiously optimistic.  **[JBHT_3393376_19]** 

3. **Volume Growth and Market Share**  
   **Q:** Why aren't you taking share like prior downturns?  
   **A:** Management believes they're **dominating the transcon marketplace** with substantial volume growth.  **[JBHT_3393376_12]**  In the East, significant headwinds from truckload pricing have impacted share gains.  **[JBHT_3393376_12]**  They're optimistic about discussions with customers and will continue to look to grow, especially as concerns about highway capacity arise.  **[JBHT_3393376_12]** 

4. **ICS Division Performance**  
   **Q:** What's causing the 25% volume decline in ICS?  
   **A:** The market has been incredibly difficult and competitive.  **[JBHT_3393376_15]**  A focus on quality has weighed on volume losses.  **[JBHT_3393376_15]**  Unexpected business losses occurred shortly after acquiring BNSF Logistics' brokerage assets.  **[JBHT_3393376_15]**  Integration brought incremental costs in the first half.  **[JBHT_3393376_15]**  While **dissatisfied with ICS performance**, management is encouraged by recent positive volume trends and their strategy starting to take form.  **[JBHT_3393376_15]** 

5. **Dedicated Segment Margins**  
   **Q:** Will dedicated margins improve as start-up costs moderate?  
   **A:** Start-up costs are beginning to come in, with a significant chunk starting in July.  **[JBHT_3393376_13]**  Some pressure on margins will continue in Q3 due to these costs, but it's seen as positive for future growth.  **[JBHT_3393376_13]**  Competitiveness is noted in the retail segment, with aggressive pricing from competitors.  **[JBHT_3393376_13]**  Despite this, the **pipeline is solid**, and they have a good footing on future sales.  **[JBHT_3393376_13]** 

6. **Peak Season Expectations**  
   **Q:** What separates a good peak season from a disappointing one?  
   **A:** Normal seasonal demand is returning, similar to **pre-2020 levels**.  **[JBHT_3393376_18]**  Customers are better with bid compliance and understanding their volumes.  **[JBHT_3393376_18]**  There's cautious optimism, with customers hesitant due to past false starts.  **[JBHT_3393376_18]**  If a more seasonal pattern continues, they expect demand and profitability to reflect that.  **[JBHT_3393376_18]** 

7. **Predicting Downturn and Recovery**  
   **Q:** What did you get wrong about the downturn's magnitude?  
   **A:** The simultaneous occurrence of **price declines and inflationary costs** was unexpected.  **[JBHT_3393376_20]**  They also underestimated how long capacity would stay in the market despite carriers losing money for over two years.  **[JBHT_3393376_20]**  Recovery requires capacity to exit the market or increased demand, with capacity exit being more likely.  **[JBHT_3393376_20]** 

8. **Equipment Utilization and Costs**  
   **Q:** Are lower utilization and costs tied to Walmart assets?  
   **A:** The Walmart equipment acquisition isn't fully reflected in results yet.  **[JBHT_3393376_16]**  They have more equipment than currently utilized, with significant growth capacity—able to handle **20% more volume**.  **[JBHT_3393376_16]**  There's leverage to gain by adding volume and utilizing equipment, but **negative pricing pressure** is a headwind to margins.  **[JBHT_3393376_16]** 

9. **Quantum Product and Mexico Transition**  
   **Q:** How are Quantum and Mexico transition performing?  
   **A:** The **Quantum service is exceeding customer expectations**, though volume benefits haven't been fully realized yet.  **[JBHT_3393376_21]**  There's a long runway for growth with the Quantum product.  **[JBHT_3393376_21]**  The shift from KCS to Ferromex in Mexico has been successful, though customer education and transition took time.  **[JBHT_3393376_21]**  Volume has been recovering, and they feel good about progress.  **[JBHT_3393376_21]** 

10. **Transcon Growth and Market Dynamics**  
    **Q:** Are you losing share due to variable rates?  
    **A:** Management expects to **outperform the domestic market** on Southern California eastbound volume.  **[JBHT_3393376_14]**  They don't believe they're losing share to other intermodal channels.  **[JBHT_3393376_14]**  There's a shift in the mix of transload versus intact international cargo.  **[JBHT_3393376_14]**  Southern California volumes were **up double digits**, and they feel good about their pipeline.  **[JBHT_3393376_14]** 

dbed1c81ab989ceca24cc09bca881cd1d3ffce5344c6d915cf826eab91b7111c

J B Hunt Transport Services Inc (JBHT)

Financials