J.B. Hunt expects a rebound within its intermodal segment this year, even as some shippers continue to avoid rail over concerns about service.
Months of unpredictable rail service combined with weakened consumer demand pushed down the carrier’s intermodal volumes 1% YoY in the fourth quarter. Despite the headwinds, J.B. Hunt remains committed to grow the segment in collaboration with rail partner BNSF.
“As we think about 2023, we see a lot of opportunities to deliver value to our customers with our industry-leading intermodal service product,” said Intermodal President Darren Field on the company’s Q4 earnings call Jan. 18.
With capacity more plentiful, shippers are now focused on which carriers can provide the best service at the lowest cost, executives said. Intermodal is not only cheaper, but it’s also less carbon intensive — making it more attractive to companies looking to advance sustainability goals.
Growing intermodal may not be easy, however. After consistent delays within rail, many shippers remain wary of reconverting freight back from highway.
“I think [shippers] are appropriately cautious in saying, ‘Hey, J.B. Hunt and BNSF, I need you to prove it to me that you're going to get your service and velocity quality back,’” Field said.
Rail service has already seen “massive improvement,” Field added, noting January was BNSF’s best month since the first quarter of 2020.
“We believe that current trends around velocity present opportunities for us to sell a higher valued and reliable service product in the market,” he said.
Larry Avila contributed to this story.