“We have turned the page on 2023. Goodbye and good riddance,” John Roberts, CEO of trucking company J.B. Hunt, said during the company’s Q4 earnings call last week.
J.B. Hunt, a Fortune 500 freight transportation company, saw its revenue drop to $12.83 billion, or 13%, for the year, and by 9% since Q3. Its diluted EPS fell 24% for the year and 23% for the quarter.
2023 was a tough year, not only for J.B. Hunt, but for the trucking sector in general. Overcapacity has driven prices down in what’s been termed a “freight recession.” Logistics executives expect the freight recession to continue through at least the first half of 2024, according to a CNBC supply chain survey.
“We are under immense cost pressure,” Darren Field, president of J.B. Hunt’s intermodal sector, said in the earnings call. He noted that inflation has contributed to higher costs for equipment and maintenance, higher railroad rates, and higher wages for drivers. “Across the board, we have cost increases and that inflationary cost lives across our enterprise.”
The company experienced declines in volume and revenue across most of its segments in 2023. It saw a 19% drop in revenue for its JBT, or full-truckload segment, from Q4 2022, and a 13% drop in revenue per load “resulting from changes in mix of freight, customer rates, and fuel surcharge revenue.” Its Final Mile Services segment, which takes “big and bulky” goods like furniture and exercise equipment from warehouses directly to consumers, had 12% fewer stops year over year.
Trucking tonnage fell significantly from 2022, according to data from the American Trucking Associations—a potentially troubling economic indicator, given that trucks carry 72.6% of all freight in the US.
J.B. Hunt also faced higher insurance premiums in 2023, one reason its Q4 operating income dropped 28% YoY, from $281.9 million to $203.3 million.
“Going into 2024,” premiums rose “upwards of 50% to 60%,” CFO John Kuhlow said, and the company paid $53 million more in insurance-related costs in the quarter.
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