JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q4 2019 Earnings Conference Call - Final Transcript
Jan 17, 2020 • 10:00 am ET
to some rail service interruptions and we incurred some additional costs recovering from those events, trying to meet customer expectations.
In Dedicated, we benefited from our customers' fluid freight patterns during the condensed peak season as the year-over-year asset productivity improvement and steady and predictable new contract start-ups kept sequential margins from experiencing their normal seasonal decline from third quarter to fourth quarter.
In ICS, we realized both volume and revenue growth versus last year, but this was almost entirely due to freight mix changes away from LTL business and toward truckload freight. This mix change resulted from both customer directives and a more concerted effort on our product to penetrate further into truckload brokered freight and then drive it through our Marketplace 360 platform. Most of this freight was contractual business, where we experienced very competitive pricing during the bid season over the prior several quarters. However, we did not experience similar competitive pricing in the third-party carrier markets, nor did we capture a materially larger portion of spot activity during the fourth quarter, hence, our margins were squeezed.
Our operating income declined as we continue to disproportionately invest in a disruptive technology of Marketplace 360. And as John alluded to, we will continue to do so, most likely for the next four to six quarters, as we complete and improve our digital platforms to generate revenue growth and operating income longer term.
In truck, we were down in both revenue and operating income, primarily from a smaller volume of spot activity and general customer rate pressure compared to a year ago. However, the mixture of Company-owned equipment with independent contract carriers buffered the operating income and return on capital impacts we have historically experienced during these volume and rate declines when we were operating with 100% owned fleet.
Brad, that pretty much covers my prepared remarks. I think we're now ready for questions.
All right. We're ready for questions. You can open up the lines.