J.B. Hunt Transport Services’ Truckload revenue
For J.B. Hunt Transport Services’ (JBHT) Truckload segment is its smallest division by revenue. In 3Q17, the segment’s contribution to overall revenues was 5%, down 1% from its contribution in 3Q16.
The segment reported revenues of $93.0 million in 3Q17, down 5% from the $97.0 million it saw in 3Q16. The segment’s revenue fell substantially in 2013 and remained range-bound since then on a yearly basis.
Behind the 3Q17 Truckload revenue slump
In JBHT’s Truckload segment, revenues excluding fuel surcharges fell 6% in 3Q17, due to a 7% YoY (year-over-year) fall in load count, but revenue per load grew ~1%. The rise in the revenue per load was primarily due to a 4% jump in rates per loaded mile, which were offset by a 3% drop in the length of haul.
According to JBHT, comparable contractual customer rates remained unchanged in 3Q17 YoY. At the end of 3Q17, the Truckload segment operated 2,040 tractors, compared with 2,183 in 3Q16. This shows the company’s strategy to shift focus from the asset-intensive truckload business to the asset-light business.
Truckload versus LTL
Remember, spot rates in the truckload (XTN) market have risen at a snail’s pace compared with the LTL (less-than-truckload) spot rates in 2017, likely due to the online shopping boom that fueled growth for LTL players like Old Dominion Freight Line (ODFL), SAIA (SAIA), and YRC Worldwide (YRCW). With the less-than-expected rise in the US industrial economy, pure-play truckload carriers (SWFT) have faced capacity issues, leading to a slow recovery in spot rates.
In the next part, we’ll examine JBHT’s 3Q17 operating margins.