J.B. Hunt has released its Q2 2020 financial results. Total operating revenue was $2.15bn, down 5% year-on-year. Total operating revenue, excluding fuel surcharge revenue, decreased 0.5% year-on-year. Operating income for Q2 2020 totalled $175.2m, down 9.3% year-on-year. The decline was partly attributed to lower revenue and higher purchased transportation costs, continued investment in technology across all segments, and employee and operating supplies costs related to COVID-19. Additionally, operating income was lower due to approximately $4.6m of additional charges for uncollectible customer accounts.
Intermodal (JBI) segment saw revenue declined 7% year-on-year, totalling $1.07bn. Load volumes declined 2% when compared to Q2 2019. Eastern network volumes declined 7% while Transcontinental loads grew 3% year-on-year. COVID-19 volume related disruptions, which began to materialise in March, deteriorated further in April, followed by a steady rebound in demand for the remainder of the quarter. Operating income decreased by 14% to $107.0m. Lower volumes, higher rail purchased transportation costs, and inefficiencies in the network related to less predictable demand patterns, were partially offset by lower driver turnover related costs and a decreased in insurance and claims costs.
Dedicated Contract Services (DCS) segment revenue decreased by 1% to $533m over the prior year. Operating income increased by 9% to $83.1m. Benefits from lower driver turnover, travel and entertainment, and safety related costs were partially offset by higher bad debt costs for uncollectible customer accounts.
Integrated Capacity Solutions (ICS) segment revenue decreased 9% to $304m, primarily due to a 11% decline in volumes. Contractual volumes represented approximately 71% of the total load volume and 63% of the total revenue in the current quarter compared to 68% and 55% respectively, in Q1 2019. Operating income decreased by $12.5m, compared to Q2 2019. This decline is partly attributed to lower gross profit margins, increased costs to expand capacity and functionality of the marketplace for J.B. Hunt 360 and higher personnel costs.
Final Mile Services (FMS) segment revenue decreased 2% compared to the same period in 2019, reaching $140m. Operating losses decreased from a year ago by approximately $10.5m primarily from the absence of the $20m pre-tax claim settlement incurred in 2019. Operating losses in the second quarter 2020 were primarily the result of lost revenue related to the temporary suspension of operations at several of its customers’ sites and higher costs related to operating supplies as a result of COVID-19.
Truckload (JBT) segment revenue increased by 9% to $108.3m. Revenue excluding fuel surcharge revenue increased 13% primarily from a 17% increase in load count partially offset by a 4% decrease in revenue per load excluding fuel surcharge revenue compared to a year. Operating income decreased by 61% compared to the same quarter in 2019. Benefits from the increased load count were offset by increases in purchased transportation expense, higher insurance and claims costs, increased investment in technology and the continued rollout of 360box.
Source: J.B. Hunt
