JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q4 2019 Earnings Conference Call - Final Transcript

Jan 17, 2020 • 10:00 am ET

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JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Operator

All right. [Operator Instructions] All right. We'll go ahead and take the first question. Caller, your line has been unmuted, please state your name and your organization.

Analyst
Christian F. Wetherbee

Yeah. Hey, it's Chris Wetherbee from Citi. Thanks for taking the question. Appreciate it. I guess, I want to talk a little bit about what we expect the Intermodal load growth to look like as we move at least into the first half of the year. You mentioned we're lapping some of the PSR initiatives for lane rationalization. I think there has been some share gains. Do we see an acceleration from what we saw in the fourth quarter? Do we need to see sort of improvement from rail utilization to kind of see that?

Executive
Darren Field

Okay. Fair question, one that we certainly would have expected. We hit a negative volume run rate in the back half of '18. As we entered early '19, the lane closures produced sort of a steeper hill to climb to dig out of the volume position we were in. And so, we're happy that in the back half of '19, we were able to dig out of that and actually represent positive volume growth in the fourth quarter. Certainly, turning the corner on the comparison from last year when we lost an annualized run rate of 60,000 to 70,000 loads during the first quarter due to lane closures, certainly, this year, not having that comparison is going to drive some help for us. So I would expect continued volume growth. We're not guiding on just what that would be, but we're certainly -- have the expectation based on what we know today that we will continue growing in 2020.

Analyst
Christian F. Wetherbee

Okay. That's helpful. I appreciate that. And then just a follow-up on the 360 spend, I know incrementally another four to six quarters of spend. Do you start to see that the potential losses go down or at least the rate of spending decelerates from here? Or maybe the net impact of that spending decelerates because maybe there's some profit coming from the initiative? I just want to get a sense of maybe how to think about the cost and maybe the returns starting to pile up here as we go through the next several quarters.

Executive
Shelley Simpson

Yeah. So if we think about our investment in 360, we really think about it in three key areas. We are making an investment in scaling the business as we believe it's critical to reach mass scale for us to create a more efficient transportation network. So that's the first component that we're very focused on. That will be very dependent on what's happening in the market from a brokerage perspective in both bid season and in the carrier PTE side.

The second piece of our investment is around our people. And so, we do have people for both our shippers and our carriers, making sure that our experience is one that our customers would rave about and want to repeat and continue doing