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Dive Brief:

• J.B. Hunt Transport Services reduced an operating loss in its Integrated Capacity Solutions segment, its non-asset and light-asset network designed to fulfill customer needs beyond its own network, the carrier announced in its quarterly earnings Tuesday.

• Its Q3 operating income for the segment, negative $3.3 million, improved year over year from negative $9.4 million, according to an investor presentation. The business unit was the only one for the trucking giant with an operating loss.

• “We continued to navigate a challenging freight environment,” CEO Shelley Simpson said on an earnings call, adding that there’s been trend toward more seasonal operating environments.

Operating loss for surplus network improves YoY in Q3

J.B. Hunt's Integrated Capacity Solutions segment improved from a year ago, showing a potential turnaround toward profit.

Dive Insight:

The overall brokerage environment remains competitive, but signs of transforming and a push to diversify a customer base have helped the segment, according to Brad Hicks, president of highway services and EVP of people.

“We continue to make progress on our costs and better aligning our resources with our current business levels,” Hicks said on the earnings call.

The recent decrease in that operating loss “was largely driven by an $11.7 million increase in gross profit and lower cargo claims and personnel-related expenses, partially offset by integration and transition costs related to the purchase of the brokerage assets of BNSF Logistics,” the company said in an earnings announcement.

The carrier completed its acquisition of BNSF’s brokerage in September 2023, unlocking new customers and revenue sources, the company noted in its annual report. But that also came with negative impact of approximately $2 million on operating expenses in Q3 compared to Q2 for integration costs, Hicks said.

Other carriers have reported mixed results with their brokerages operations and other segments. In Q2, Marten Transport reported an intermodal operating loss but posted nearly $2.9 million in operating income for its brokerage segment. RXO, the brokerage spinoff of XPO, reported a net loss of $7 million for that quarter, a swing from $3 million in net income a year earlier.

Marten Transport is slated to report its Q3 earnings on Thrusday, and RXO will post results Nov. 7.

Across J.B. Hunt segments, revenue declined 3%, but sequential volumes outperformed normal seasonality, CFO John Kuhlow said. “We continue to focus on productivity, efficiency and discretionary cost areas to enhance our performance across all of our businesses,” he said.