Trucking giant JB Hunt beats on revenue, misses on profit (JBHT)


JB Hunt, one of the biggest trucking companies in the US, on Thursday reported financial results for the fourth quarter.

Here are the key numbers, compared to what analysts were expecting, according to Bloomberg data:

Earnings per share: $0.81, down 77% year-over-year ($1.21 expected)

Revenue: $2.32 billion, up 16% YoY ($2.30 billion expected)

JB Hunt’s quarterly profit was impacted by a preannounced pretax charge of $134 million for contingent liabilities related to the ongoing arbitration with BNSF Railway.

JB Hunt has seen its stock slide by as much as 33% since peaking at $131.74 in June. Shares have rebounded a bit since Christmas Eve, but are still 24% below their record high.

Like JB Hunt, other trucking giants — Knight-Swift Transportation, Old Dominion Freight Line, Landstar System, Werner Enterprises — have also been under pressure in the past few months.

“Market valuations for most trucking and logistics stocks have been correcting,” Matthew Young, an equity analyst at Morningstar, told Markets Insider in December. “It’s become more obvious that freight demand and pricing gains will slow meaningfully in 2019.”

He added: “Over the past year or so, our take has been that many trucking and logistics stocks were previously overvalued, effectively baking in overly optimistic long-term growth assumptions due in large part to an exceptionally favorable pricing backdrop (rooted in unusually tight capacity) that propped up expectations.”

The truck-driver shortage has dominated headlines in the logistics space as massive demand from retail giants has added to the difficulty of finding trucks and drivers. But on Wednesday, the Federal Reserve’s Beige Book, which conducts local surveys to get a better idea of the US economy, said that the shortage of trucking capacity appears to have eased in some regions, such as Boston.

JB Hunt was down 17% in the past year.


An insider explains why Tesla’s Semi is ‘a good thing for the trucking industry as a whole’

Tesla Semi.

  • Tesla’s heavy-duty electric truck, the Semi, is expected to go into production in 2019.
  • The trucking industry is excited about electric trucks.
  • The truck’s autonomous and self-driving capacity is the most attractive feature because that enables drivers to rest and eases their burden to find parking spaces, said Sean Chenault, a truck driver, and manager.
  • Tesla’s technology also provides a way to ease the truck-driver shortage, said a trucking CEO.

Tesla has stepped up to enter the trucking space, and the industry couldn’t be more excited.

The Tesla Semi, the automaker’s heavy-duty electric truck that was unveiled a year ago, is expected to go into production in 2019 and has secured orders from a number of major companies, such as Pepsi, Walmart, and Albertsons.

Tesla’s electric truck is “a good thing for the trucking industry as a whole,” said Sean Chenault, who has been in the industry for 16 years, taking roles from trucker to manager. While Semi’s many features are attractive — such as zero emissions and the ability to reach higher speeds than diesel trucks — the most appealing trait is the semi-autonomous driving and potential fully self-driving capacity, according to Chenault.

“Having autonomous vehicles, you don’t need to pay a driver, and you don’t need to worry about hours of service,” said Chenault. He currently works at Quality Carrier in Nashville, Tennessee.

Many trucker drivers told Business Insider they hate the hours-of-service rules, which for decades has limited them to 11 hours of driving in a 14-hour window. Because of the rule, drivers have to disrupt their sleep patterns more frequently and sometimes have to park during rush hours to beat the clock, said Dena Wolpert, a truck owner who bought her vehicle in 2002.

Autonomous trucks can run by themselves, which enables drivers to take a rest in their vehicles and eases the burden to find parking spaces, Chenault said. Driver’s workloads would be more focused on the loading and delivery at the starting and ending points, he added.

While not requiring drivers is a little bit of a fantasy, Tesla’s technology at least provides a way to move cargo while reducing the number of people needed, said John Wilbur, CEO of Roadmaster Group, an Arizona-based specialized transportation company.

“We are struggling to find drivers now,” he said. “If autonomous drivers are means to eliminate that deficit, it’s a good thing.”

But people within the industry also have concerns over the Tesla Semi’s autonomous features. Michael Nichols, a truck owner in Cross Plains, Wisconsin, told Business Insider he worries about the safety issues that may occur when heavy-duty autonomous trucks share the road with other vehicles.

“If the truck is not reliable enough, there will be crashes,” he said.

Werner driver Quinton Ward was named the winner of the Transition Trucking: Driving For Excellence Award.

Werner driver Quinton Ward was named the winner of the Transition Trucking: Driving For Excellence Award. 

Werner Enterprises driver Quinton Ward’s owner-operator career received a jumpstart last week when he was named the winner of the Transition Trucking: Driving For Excellence Award, which comes with a fully-loaded 2018 Kenworth T680 Advantage.

Ward, an Army veteran, was announced as the winner during a ceremony Dec. 14 at the U.S. Chamber of Commerce. The award recognizes rookie truck drivers who are U.S. military veterans. It is a partnership between Fastport, the U.S. Chamber of Commerce Foundation’s Hiring Our Heroes initiative, and Kenworth.

“It’s just been a whirlwind and I’m so happy to be your finalist and win the truck and drive the Kenworth and showcase what veterans can do out here because we’re out here and we’re here to stay,” Ward said.

Ward’s new Kenworth comes with a Paccar MX-13 engine, 76-inch sleeper, 12-speed automatic Paccar transmission, premium leather seats and interior trim, a dash with touchscreen multimedia display, radar and camera systems for improved safety, a fridge, microwave, flatscreen television, and premium bed, among other features. The truck is valued at $155,000.

Ward served in the U.S. Army as a tank mechanic, instructor and career counselor. He medically retired from the Army in 2010 after being injured while on active duty. After receiving six years of medical treatment, Ward got his CDL with the support of the VA Vocational Rehabilitation Program. He decided to become a truck driver so that he could travel throughout the nation that he had fought to defend.

“I chose trucking because it gives me the ability to drive and see the country I swore an oath to protect and defend,” Ward said. “The skills that are key for success in the military are the same that we as drivers use every day. Time management, communication skills, flexibility and problem solving are the cornerstones that make a great employee and a professional driver. I see my future with the industry growing exponentially. I don’t want to stay and just do one thing. I want to see every facet of this industry.”

Ward was one of four finalists up for the Transition Trucking award. Army veteran and reservist Chris Young, who drives for Stevens Transport, was named the first runner-up and received $10,000. Air Force veteran and U.S. Xpress driver Summar Hanks tied with Mordaunt “Platt” Brabner, a veteran of the Marines and Navy and current TMC Transportation driver, for the second runner-up spot. Hanks and Brabner each received $5,000.

Five Star Trucking Donates to a Family in Need this Holiday Season

On December 14, 2018, Lee Rozar of Five Star Trucking brought two cars full of wrapped Christmas gifts and groceries to a family in need at Edison Elementary School in Willoughby, Ohio.

Rozar got the initial idea of donating after speaking with Diana Zaverl, a family-liaison for Willoughby-Eastlake Schools on World Kindness Day back in November. After speaking with Zaverl, Lee Rozar approached her boss at Five Star Trucking with the idea for the donations.

“I went to him and said, ‘this is what Diana had told me about the families and how they didn’t have enough food when they went home for Christmas,’” Rozar said. “So it initially started with the food… quickly multiplied talking to Diana and her telling us about other families…”

Lee Rozar along with the Assistant Operations Manager, Lauren Longano, and the Chief Financial Officer of Five Star Trucking, Joe Gramc, donated about $700 worth of gifts to the family in need. CFO, Joe Gramc, hopes to make this effort a regular thing in the future.

Trucking stocks are getting whacked and it’s a sign the industry is facing a big slowdown ahead, analyst says

Trucking stocks have been under pressure in recent months, tumbling by more than 20% since September.
Lower demand and a drop in oil prices are starting to “take their toll on trucking-industry pricing power,” according to Nicholas Colas, co-founder of DataTrek Research.
Matthew Young, an equity analyst stated that “It’s become more obvious that freight-demand and pricing gains will slow meaningfully in 2019.”
Trucking stocks have been under pressure in recent months, signaling the industry is facing a big slowdown ahead, an analyst says.

America’s trucking giants have seen their stocks slide by more than 20% since their September peaks, while the S&P 500 has slumped 13.31%. Here’s the scoreboard through Monday, December 17:

Knight-Swift Transportation: -27.17%
JB Hunt Transportation Service: -26.77%
Old Dominion Freight Line: -26.91%
Landstar System: -26.86%
Werner Enterprises: -24.41%

“Market valuations for most trucking and logistics stocks have been correcting,” Matthew Young, an equity analyst at Morningstar, told Business Insider. “It’s become more obvious that freight demand and pricing gains will slow meaningfully in 2019.”
Trucking stocks saw their valuations soar over the past few years, largely due to a favorable pricing backdrop brought on by unusually tight capacity, Young said.
“It’s a tough market out there and we’re all in need of drivers,” said Ellen Behrhorst, a trucker recruiter at Liberty Tire Recycling.
The truck-driver shortage in the US and massive demand from retail giants such as Amazon have added to the difficulty of finding trucks and drivers, giving the industry pricing power.
But the demand for trucking has seen a slight slowdown in the second half of this year amid the ongoing trade war between the US and China, according to Federal Reserve’s Beige Book published in November.

Data from the US Department of Transportation show the growth rate of the US truck tonnage shipped slowed to 5.4% in year-on-year July, down from 10.1% in June, after President Donald Trump’s first round of tariffs took effect. The growth rate bottomed at 5.2% in August and has recovered a bit, an unusual seasonal pattern that the Beige Book says is happening as firms try to import goods before additional tariffs on Chinese goods take effect next year.
And Nicholas Colas, co-founder of DataTrek Research, agrees that the trucking industry has already reached a cyclical top, due to the cooling of trucking demand and falling oil prices.
“Lower levels of demand combined with declining oil/fuel prices are beginning to take their toll on trucking industry pricing power,” said Nicholas Colas, co-founder of DataTrek Research.
Oil prices have been under pressure recently, with West Texas Intermediate crude oil down 36.76% from its four-year high of $76.90 a barrel set on October 3. And trucking companies are worried.
“The oil industry in the US is now a significant portion of our economy and we do have customers that are in the oil-field and oil-service industry,” said John Wilbur, CEO of Roadmaster Group, an Arizona-based specialized transportation company, adding that falling oil prices are reducing his company’s customer base in the oil-related industry.

While cheaper oil has helped transportation companies lower their costs, tonnage demand also slows, which may be a bigger problem in the long term, he concluded.