J.B. Hunt Transport Services said Tuesday that the freight industry is in the early innings of supply correction, but a tightening driver market may limit the recovery's upside when demand ramps. Management noted driver recruitment needs are at their highest level since 2022, driven by regulatory crackdowns, higher fuel costs, and rising insurance expenses that have pushed small operators out of the market. The company has added significantly to its driver recruiting teams in recent weeks, while its dedicated segment benefits from an average length of haul of just 172 miles. J.B. Hunt has achieved an annual cost savings run rate of $135 million on $956 million in last 12 months' operating income, with four straight quarters of year-over-year margin improvement. Intermodal pricing normally lags the truckload market by two to three quarters, but management expects to begin closing the pricing gap, with intermodal currently 34% cheaper than truckload versus historical benchmarks of 10% to 15% in the East and 25% in the West. The company's intermodal bid season starts in October, with 10% of annual contracts repriced in the fourth quarter, and its dedicated pipeline ended the second quarter at an all-time high.
JB Hunt Transport Services IncIntermodal pricing expected to close gap with truckload, aiding margins.
