J.B. Hunt’s third-quarter revenue jumped 20% to $3.68 billion, the company reported on October 15. However, profit barely moved. Net earnings rose about 1% to $172.4 million, or $1.82 a share, just ahead of the $1.81 analysts expected.
For shippers, the takeaway is clear: rates are rising. Revenue per load climbed 29% in both brokerage and truckload, and 11% in intermodal. At the same time, costs are rising even faster, so J.B. Hunt is signaling it wants still higher prices.
Fuel explains part of the jump. Fuel surcharge revenue rose to $670.8 million from $385.6 million a year earlier. Excluding fuel, revenue grew 13%.
Segment results
Intermodal remains the engine. In fact, it produced about 60% of the company’s operating income. Meanwhile, brokerage swung back to a profit after a loss a year ago.
| Segment | Q3 revenue | Revenue change | Operating income | Op. income change | Volume |
| Intermodal (JBI) | $1.83B | +20% | $147.5M | +18% | Loads +8% |
| Dedicated (DCS) | $960M | +11% | $81.7M | −22% | — |
| Brokerage (ICS) | $434M | +57% | $9.6M | vs. $0.8M loss | Loads +22% |
| Truckload (JBT) | $261M | +37% | $7.0M | −6% | Loads +4% |
| Final Mile (FMS) | $200M | −3% | $1.6M | −76% | Stops −10% |
Notably, truckload and dedicated grew revenue but earned less. In other words, higher prices are not yet keeping up with higher costs in the asset-based businesses.
Costs are squeezing profits
Compared with the second quarter, J.B. Hunt absorbed more than $50 million in added costs, according to Talk Business & Politics. More than half came from driver pay and related expenses. In addition, the company cited fuel, insurance claims, group medical costs and higher prices for outside capacity.
As a result, operating margin fell to 6.7% from 7.9% a year earlier. Purchased transportation and rent alone rose to 47.8% of revenue, up from 43.6%.
Fuel adds another wrinkle. “Rapid movements create a timing mismatch and dilute margins,” CFO Brad Delco said. Although surcharges recover fuel costs over time, they lag when diesel spikes, as it did in September.
Therefore, management is focused on pricing. “The largest opportunity ahead of us is ensuring our pricing reflects the value we create,” CEO Shelley Simpson said.
What it means for shippers
J.B. Hunt is one of the largest U.S. carriers, so its results offer an early look at 2027 pricing. Overall, the message is that carriers expect shippers to pay more.
- Budget for higher 2027 rates. Carriers are under cost pressure from drivers, insurance and fuel. Consequently, expect tougher negotiations in upcoming bids, especially for dedicated and truckload.
- Look at intermodal. Intermodal volume grew 8% and remains J.B. Hunt’s most profitable business. For long-haul lanes, it can still cost less than truckload, although rail capacity out of busy ports may tighten.
- Expect brokerage rates to keep climbing. Brokerage revenue per load rose 29%, which mirrors the tighter spot market. Similarly, tender rejections near 14% suggest contract freight is being pushed to the spot market.
- Audit fuel surcharges. Fuel surcharge revenue rose about 74% from a year ago. Therefore, check that your surcharge tables match the DOE index and your contracts.
Looking ahead, analysts at Stephens expect J.B. Hunt’s intermodal and dedicated margins to improve over the next two to three quarters.
