JB Hunt expects strong freight demand to continue through 2022
Freight barometer JB Hunt Transport Services Inc. expects bottlenecks at west coast ports to intensify as the holidays approach, as congestion continues to plague stretched logistics networks -work and strong shipping demand extending until 2022.
“As peak season is upon us, we believe bottlenecks on the West Coast will decrease and even intensify peak season capacity requirements in November and December,” said Shelley Simpson, Commercial Director of JB Hunt, in a conference call Friday. to discuss the company’s third quarter earnings.
Executives speaking on the call attributed much of the wider disruption in the supply chain to a shortage of truck drivers and railroad workers, as well as a shortage of workers in the cities. customer warehouses.
The backlog of ships awaiting berths in congested west coast ports is adding to the challenges, Ms. Simpson said, and is delaying delivery of some of the company’s containers that are on ships awaiting. an offshore berth in the ports of Los Angeles and Long Beach.
Ms Simpson said the company has asked its retail customers if they think there are any products that will be missing from store shelves before Christmas. “I think we’re leaning towards a yes, which means there would be more shopping and more retail sales in January and obviously no more need to restock any of these products,” she said.
The company based in Lowell, Ark. transports goods by truck and train and its operations include last mile delivery services.
“This year we have achieved record levels of business engine needs across all segments,” JB Hunt Managing Director John Roberts said during the earnings call. The company sees “persistent irregularities in demand patterns resulting primarily from shipping, labor and inventory issues with our customers,” he said.
The carrier said its net profit increased 59% in the third quarter from a year earlier to nearly $ 200 million, while its revenue rose 27% to $ 3.14 billion.
Revenues from JB Hunt’s full truck business carrying full trailers of freight to shippers, where demand has been particularly strong as retailers rush to restock inventory, jumped 85% from the previous level. previous year, excluding fuel supplements. The unit’s operating profit soared almost 400% thanks to higher prices and a 12% increase in expenses compared to the quarter of the previous year.
Shipping volumes declined in JB Hunt’s core intermodal business of moving goods long distances by truck and rail. Overcrowded rail networks limited the flow of freight, while customers kept containers and other equipment tied up at their facilities longer than usual, the company said.
Write to Jennifer Smith at [email protected]
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Appeared in the print edition of October 16, 2021 under the title “Freight company sees high demand”.