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The importance of diversifying into newer industries

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Final Mile service

J.B. Hunt (JBHT) started its Final Mile service in 2013 as a part of its Dedicated Contract Services, or DCS, segment. In this service, the company collects bulky packages from online retail orders for items like treadmills, dishwashers, and furniture and other large items—like grills, doors, and other building supplies. Then, it delivers and installs them from one of its warehouse locations. It has more than 90 warehouse locations scattered across the country.

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The warehouse locations account for a total of more than one million square feet of space. This niche segment was identified by the company. The segment continued to grow along with the growth of e-commerce orders. The segment averaged 2 million deliveries a year. It helped boost the DCS segment’s revenues. JBHT is also diversifying into newer industries to include various other products for delivery and installation. In the future, JBHT plans to keep its focus on customer service.

Diversifying into the poultry industry

Similar to the Final Mile service last year, this year JBHT started hauling live poultry to slaughter houses. It’s part of the company’s DCS offerings. It’s helping to transform the company into a full-solution, logistics leader.

JBHT’s Agri Transportation Services division is part of the DCS segment. Recently, the division started converting the private fleet of an unnamed poultry company for part of its live haul, feed, and hatchery deliveries. The company’s agricultural service offers experienced drivers and management. The service delivers to farms, mills, or retailers.

This extension also comes as part of JBHT’s owners’ gratitude to the poultry industry. In its formative years, JBHT served the poultry industry.

JBHT’s major competitors in the US are YRC Worldwide (YRCW), Swift Transportation (SWFT), and Werner Enterprises, Inc. (WERN). These companies are part of the iShares Transportation Average ETF (IYT).

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