The reduction in U.S.-bound shipments from China after steep tariffs were imposed in April has yet to show up in J.B. Hunt’s intermodal volumes.
“Our volumes have been steady,” J.B. Hunt (NASDAQ: JBHT) Intermodal President Darren Field told an investor conference on Tuesday.
J.B. Hunt’s eastbound moves out of Southern California — home to the busiest port complex in the U.S. at Los Angeles and neighboring Long Beach — consist predominantly of goods transloaded from international containers. The company is the largest domestic intermodal operator.
In many cases, Field says, retail inventory can sit in warehouses for days, weeks or even months before being shipped inland to BNSF Railway terminals in Texas, Chicago or Kansas City, Missouri.
A relatively small percentage of that volume makes its way east of Chicago via interchange with Norfolk Southern (NYSE: NSC) and CSX (NASDAQ: CSX), Field says. Growth in the East has been outpacing J.B. Hunt’s Western traffic.
Field says overall rail service is the best it’s been in 10 years. “Really all of our providers are excellent,” he said. “ We’re thrilled with where we’re at on rail service.”
And that has helped J.B. Hunt convert freight to intermodal at a time when its customers are under increasing pressure to reduce transportation costs.
NS Chief Financial Officer Jason Zampi says East Coast ports are regaining market share that was lost to the West Coast amid labor and supply chain upheaval, which has helped the railroad’s international intermodal volume hold up.