JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q1 2019 Earnings Conference Call Transcript
Apr 15, 2019 • 05:00 pm ET
Yes, sir. (Operator Instructions) And our first question comes from the line of Tom Wadewitz.
Yeah, good afternoon. Wanted to ask you a bit more about the -- your thoughts on the volume in Intermodal in first quarter. If you would care to offer the volume growth year-over-year by month. I know sometimes that noisy with Chinese New Year timing, but if you want to offer that and just I guess maybe more on what happened in the weakness in March, whether that's a demand issue or if you think there was something else going on?
David G. Mee
I'll jump in with the numbers first and then I'll let Terry offer up his observations. In January, the volumes -- and these are based on calendar days, we were down 7% in January. We were down 6% in February, and we were down 7% in March.
Yes, I would say a couple of things that went on in March. First off, I believe that the West Coast was down versus what we anticipated. I think the data that we've seen is that China in February, not only between -- because of Chinese New Year but because of the potential tariffs that were supposed to go in in March 1st, good shipped, I think, is down 20%-plus now to see that land into a much slower West Coast volume of the West Coast.
The other thing that we're hearing from customers is that the warehouses are full. We've had a very late spring, and typically the restocking of spring merchandise did not show up in March as it has in past years. So, those are probably the two major factors along with the things that we had with the PSR, lane closures that we've seen, and then the service disruption that we saw in February, some of the freight that we used to handle, we think, may be drifted some of the French freight drifted from the rails. And we think with the service pickup that we've seen recently, some of that should come back to us here in the second quarter.
Okay. Just I guess to follow up on that a little bit more, is your best read on this that these effects are temporary in terms of, I guess, working down inventory or obviously the meaningful weather effects and causing noise. So do you think they are temporary and would you be optimistic that you return to volume growth in the quarter -- in second quarter in Intermodal or is that -- what are your thoughts about the look forward?
John N. Roberts, III
Well, based on the comps, I think that the volume growth will show up sometime in the third and fourth quarter. I think there is the sales to inventory ratio has crept up a little bit and I think they need to bleed off some inventory here early in the second quarter. Easter doesn't help being this week, which typically is not a good freight weak in past years.
Okay, great. Thank you