J.B. Hunt commits extra $25M to driver spending as freight capacity tightens
Key takeaways
- J.B. Hunt is increasing driver-related spending as freight capacity tightens.
- Rising fuel, claims, and medical costs are adding pressure to third-quarter expenses.
- Tighter capacity is giving carriers more room to pursue higher rates.
As carrier costs continue to rise this year, J.B. Hunt Transport Services executives are investing $25 million more in driver-related initiatives this quarter than in the spring, CFO Brad Delco told investors September 15.
The fleet is also facing other significant expenses in the second half of the year, which could cause third-quarter profits at the No. 4 carrier on the 2026 FleetOwner 500 list to slip below Q2 levels.
Speaking at Morgan Stanley’s 14th Annual Laguna Conference, Delco and other J.B. Hunt leaders said the extra spending on drivers in the form of “recruiting, advertising, onboarding, training [and] sign-on bonuses” reflects the continued tightening of supply in the freight market and the short-term opportunities J.B. Hunt has to add to its market share.
“This is not something that we normally do,” Delco said about providing earnings guidance during a quarter. “But I think it’s indicative of just this incredibly strong demand we’re seeing across our businesses […] This is, to me, just a really strong indicator of what our customers are feeling in terms of the challenge of sourcing capacity.”
Spending on driver-related issues isn’t the only line item growing for J.B. Hunt, however. Delco added that the recent rapid rise in fuel prices will add about $10 million to the company’s Q3 costs, and that claims and group medical expenses are also climbing in line with industry and broader economic trends.
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sndr_trucks_1Though Delco noted that growing volumes are enabling J.B. Hunt to recover some of those costs this quarter, investors didn’t like the sound of his short-term message. Shares of J.B. Hunt (Ticker: JBHT) fell more than 13% to about $237 in trading on September 16 on volume about quadruple its daily average. The fall erased four months of gains and cut more than $2.5 billion from the company’s market capitalization.
Darren Field, J.B. Hunt’s president of intermodal, echoed Delco’s message about the solid demand picture, noting that customers’ forecasts in the aggregate are “pretty normal” for this time of year. The issue driving tightness remains the exit of many carriers and drivers due to several regulatory enforcement drives, which means “it’s very, very expensive to buy highway capacity.”
That’s opening the door for J.B. Hunt and its large-company peers to raise prices on several services—something the team also discussed two months ago. But, Field said, price hikes are also necessary because “these new cost challenges that we’re facing are a little bit more ingrained in this part of the cycle.”
Executives from Schneider National (No. 6 on the FleetOwner 500) and Werner Enterprises (No. 11) also spoke at the Laguna conference. They addressed rising expenses, though their commentary focused far more on fuel costs. Werner CFO Chris Wikoff called the jump in fuel “a distraction right now and a headwind in the quarter” and said it’s “still difficult for those weekly resets to keep pace” even though Werner leans more toward dedicated business with fewer empty miles to work around. (Relatedly, Werner President and Chief Legal Officer Nathan Meisgeier said the cost environment is also more likely to push more private fleets to Werner.)
Each leader who spoke to the Morgan Stanley audience on September 15 said they expect to push through significant rate increases. Wikoff said the combination of more capacity leaving the market and strong demand should create “a very strong operating environment.” Schneider President and CEO Jim Filter, meanwhile, said the traditional peak season is looking “a little bit gray” but called the operating environment for intermodal business “stellar” as truckload rates push higher.
“It’s the trifecta because you have high fuel, improving truckload rates, and really good rail service,” Filter said. “All three items are in place, but we also want to grow in a very disciplined manner.”
J.B. Hunt’s Field and Delco agreed with the bright outlook for intermodal, with Delco adding that he’s “really glad” about the timing of seeing higher costs come through before the 2027 intermodal bid season opens in a few weeks.
“I think it opens the door to a pretty big opportunity,” Delco said. “We’ve been talking about seeing the widest gap between the cost of where truckload rates are today—I’m not convinced that they’re staying where they are today—versus where intermodal is, and there’s a big opportunity to close that gap.”
About the Author
Geert De LombaerdeGeert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of experience in business journalism. Since 2021, he has written about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal, and T&D World.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati. He later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector and many of its publicly traded companies.