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Important terminology in the trucking industry

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Different freight options

Before we discuss J.B. Hunt’s (JBHT) operations, let’s take a look at important terminology in the trucking industry.

Full truckload shipping, or FTL, is the movement of at least the amount of freight necessary to fill an entire semi-trailer or intermodal container. A truckload carrier is a trucking company that contracts an entire truckload to a single customer. An advantage FTL carriers have over LTL carriers is that the freight is never handled en route. LTL shipments are unloaded and reloaded as necessary.

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Less-than-truckload, or LTL, shipping is the transportation of relatively small freight. LTL combines shipments from multiple customers. Businesses choose this budget-friendly option when the consumer demand for their products is average or stable. It’s affordable for small businesses because they share the transportation costs with other companies. LTL usually includes shipments of 151–20,000 pounds.

Parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds.

Dry van shipping is the most common method for transporting freight across interstates. A dry van is a standard trailer that doesn’t need to have the temperature controlled. It’s designed to carry freight that’s loaded on pallets, packed in boxes, or otherwise secured within the trailer. Dry vans are versatile. They’re ideal for shipping nearly any type of good or equipment that fits within certain size and weight limitations.

Flatbed trailer is an open truck bed that’s used to carry objects—like heavy machinery, steel, lumber, and building products. Flatbeds use a number of devices to secure objects—including chains, straps, and binders. They also use various tarps to protect the products from the weather.

Refrigerated trailer is an insulated truck equipped and used as a refrigerator to transport fresh, perishable, or frozen products.

Major players in this industry include JBHT, Landstar System (LSTR), Old Dominion Freight Line (ODFL), and Werner Enterprises, Inc. (WERN). Some of these companies are part of the First Trust Industrials/Producer Durables AlphaDEX Fund (FXR).

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