J.B. Hunt sees TL rates climbing 20% over next 2 years

J. B. Hunt Transport Services sees truckload rates climbing 20% over the next two years as stricter regulatory enforcement continues to remove capacity. Carriers are looking to restore TL and brokerage margins after years of massive cost inflation.

Furthermore, driver wages are stepping higher in certain markets, contributing to the rising operational costs being passed through to shippers. While most TL upcycles are driven by demand, the ongoing recovery has primarily been a supply-side phenomenon. During the Bank of America industrials conference in New York on Tuesday, leadership from J. B.

Hunt (NASDAQ: JBHT) said that first-quarter demand exceeded expectations and conditions have remained steady since. While the food and industrial segments are performing well, the housing sector continues to be a challenge.

Even without significant demand catalysts, it’s “steady as she goes, rates are going up,” said Brad Hicks, president of dedicated contract services. During the first-quarter earnings season, most truckload carriers raised bid season rate expectations from a range of low- to mid-single-digit increases to mid- to high-single digits.

Some carriers said that certain accounts, especially transactional-oriented customers, will likely see double-digit rate hikes. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.

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push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); SONAR: Outbound Tender Rejection Index (OTRI. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers.

Current tender rejections show a tightened truckload market. To learn more about SONAR, click here. SONAR: Van Contract Rate Per Mile Index (VCRPM1. USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line).

The index shows a 7-day moving average of the initial reporting of dry van contract rates without fuel or accessorial charges. J. B. Hunt’s outlook for a 20% two-year-stacked rate increase includes a double-digit run rate by the back half of this year.

It is currently seeing “a lot of bid activity” outside of the typical annual rate cycle as customers look to lock down capacity. Its dedicated contracts have consumer-price escalators that run between 2% and 4% annually. This year’s run rate is likely to be 3% to 3. 5%. However, radical shifts in costs (like driver wages) can result in higher rate increases.

J. B. Hunt has seen an earnings turnaround over the past three quarters, largely due to internal initiatives. It has been taking market share in intermodal and truckload, and in brokerage more recently. It also has a large cost-reduction initiative in place.

It has significantly outgrown the Eastern intermodal market, where its volumes are up 20% on a two-year-stacked comp. Pricing was modestly positive in the last bid season, but the mix shift East, where lengths of haul are shorter, has been a headwind to yields.

It has been successful taking rate on headhaul lanes but it has had to cede ground on backhaul moves. Management said it will likely be the next bid cycle before it can meaningfully increase rates, but noted very good modal conversion opportunities as intermodal is running at a 20% to 25% discount to TL. (FreightWaves data shows the mode is 25% cheaper.)

SONAR: Intermodal Contract Savings Index (IMCSI. USA). The IMCSI shows the savings percentage between domestic intermodal contract rate per mile and truckload contract rate per mile. The comparison includes fuel surcharges. The company’s dedicated pipeline remains at record levels and the unit is expected to add 800 to 1,000 trucks on a net basis annually.

Sign-on bonuses are now required in some markets (Indiana, Michigan, Ohio and Texas) but it expects to recoup the cost increases through higher yields. Management noted “a lot of momentum” at its brokerage unit, where volumes were up 10% year over year in the first quarter.

The segment again booked an operating loss in the period as gross margins were squeezed by higher purchased transportation costs. However, revenue per load stepped 9% higher, and the company expects improved results as contracts are repriced to reflect current market rates. It also said that operating costs haven’t really changed even though volumes are up.

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