Executives from J.B. Hunt Transport Services (NASDAQ:JBHT) told investors at the Barclays 43rd Annual Industrial Select Conference that early first-quarter demand trends appeared stronger than expected, though they cautioned that winter storms have complicated read-throughs on underlying market conditions. Company leaders also discussed capacity tightness, the impact of regulatory enforcement, ongoing cost initiatives and the outlook for the company’s Dedicated Contract Services segment.
Early-quarter demand, weather disruption, and capacity dynamics
Management said the company’s fourth quarter “played out as expected,” with customer forecasts improving versus the prior several years. Executives added that early in the first quarter they saw “better-than-expected strength” in demand before a major winter storm affected broad portions of the U.S., making it difficult to distinguish weather-driven dislocations from more durable changes in supply and demand.
Management also said it is gaining confidence that the regulatory environment is contributing to capacity exits, referencing areas such as ELD-related compliance, non-domestic driver issues and cabotage enforcement. They added that driver hiring has become more difficult in certain geographies even without a significant demand surge.
AI and automation: efficiency focus, not wholesale disintermediation
Asked about artificial intelligence and potential industry disruption, executives framed AI primarily as an enabler of efficiency and productivity rather than a force that will “completely disintermediate” transportation providers. They tied their approach back to a previously announced “lowering the cost to serve” initiative, described as a cross-functional effort that targeted eliminating $100 million of structural costs across 14 areas of the company.
In parallel, management described a “business transformation” track involving engineering and technology teams redesigning processes to remove waste. They said their approach includes building, buying, or partnering, and noted work with UP.Labs aimed at areas such as asset utilization and improving the “quote to cash” process, including billing.
Intermodal: rail service, network flexibility, and M&A uncertainty
On intermodal, executives said they did not see a clear reason that rail industry M&A would necessarily require changes to how J.B. Hunt operates commercially or services customers. Management highlighted its long-standing relationship with BNSF in the West and its use of CSX and Norfolk Southern in the East. They acknowledged that freight has shifted between rail partners at times, describing those moves as part of normal decision-making to best serve customers.
Management said rail service has been consistently good for more than two years, approaching three, and pointed to meaningful growth in eastern volumes over time even as truck rates remain depressed and fuel prices relatively low—conditions they said typically reduce intermodal’s relative advantage.
On pricing and bid season, executives said it was still early and emphasized that customers were not signaling an eagerness to pay higher rates. Management suggested shippers may view recent tightness as weather-driven and said the market will ultimately determine where pricing settles.
Dedicated: retention recovery, growth priorities, and 2026 income cadence
In Dedicated Contract Services, executives said the business is working back toward net tractor growth of roughly 800 to 1,000 tractors per year. Management described a period of “known losses” that were larger than historical norms, which contributed to a retention decline. They said retention bottomed at about 89% in the third quarter of 2024, improved through 2025, and ended 2025 around 94%, with an internal goal to return to roughly 98%.
Management said it sold just over 1,200 tractors of new business last year—below expectations—while also adding 41 new customer names. Executives said new customers can start small but often create opportunities to expand across additional sites if initial service performance is strong.
Looking ahead, leadership said 2026 income growth in dedicated could be “pretty moderate” even if sales improve, due to the typical onboarding ramp. They outlined a model in which dedicated deployments often lose money in the first three months, then return to roughly breakeven over the next three months before reaching targeted performance. As a result, management suggested investors focus more on tractor count trends in 2026, with more meaningful income steps potentially occurring in 2027 if net tractor growth resumes.
Executives also cited cost inflation pressures, particularly insurance premiums that they said have risen about fivefold over the last five to six years. While the company has indices that provide rate increases, management said some cost increases have outpaced those mechanisms, though they expressed confidence in returning to targeted dedicated margins over time.
Capital deployment, cost structure, and positioning for the next cycle
In a closing discussion about what management found most compelling about the current setup, executives pointed to a combination of capital discipline, structural cost progress and existing capacity to grow—particularly in intermodal. Management said the company repurchased $923 million of stock and retired 6.5% of shares, and argued that cost actions should support incremental margin flow-through in an upcycle. They also said they have “pre-funded” much of their growth and see a long runway to expand into existing intermodal capacity.
Executives framed the company’s priorities as operational excellence and disciplined growth, emphasizing that capital deployment in dedicated is tied to underwriting returns and contract terms, which they described as typically five years.
About J.B. Hunt Transport Services (NASDAQ:JBHT)
J.B. Hunt Transport Services, Inc is a leading provider of transportation and logistics solutions headquartered in Lowell, Arkansas. The company offers a comprehensive suite of services designed to move freight efficiently across North America, including intermodal, dedicated contract services, full truckload, less-than-truckload (LTL), final mile delivery and specialized transport.
In its intermodal segment, J.B. Hunt leverages a network of rail and truck assets to transport containers and trailers on major U.S.
