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BNSF-JB Hunt enhance partnership to replace Schneider, Swift volumes

J.B. Hunt’s growth plans imply an effort to boost its market share by courting shippers who are uneasy about Schneider switching rail partners in 2023. Photo credit: Jason Stillman/Flickr.

BNSF Railway will deepen its partnership with J.B. Hunt Transportation, the two announced Wednesday, a move that allows BNSF to replace the container volumes lost by the end of its deal with Knight-Swift Transportation last year and pending exit of Schneider National.

It also comes as J.B. Hunt has committed to grow its container fleet by more than 40 percent over the next three to five years.

BNSF doubling down on its commitment to J.B. Hunt, its primary domestic intermodal partner, allows it to bounce back from the fallout over Schneider and Swift joining rival Union Pacific Railroad. And J.B. Hunt will provide an option for shippers who do not wish to leave BNSF when Schneider switches to UP in 2023.

“Over the past few years, intermodal has been disrupted by increased demand and tight capacity, resulting in poor container velocity and long dwell times,” J.B. Hunt CEO John Roberts said in a statement. “Together, J.B. Hunt and BNSF will enhance their work to bring back the consistency and reliability customers expect with intermodal services and further embrace intermodal conversion and transloading services.”

J.B. Hunt said it will have 150,000 containers when its fleet expansion is complete, about as many as Hub Group, Schneider, Swift, and XPO Logistics combined. J.B. Hunt has about 107,000 units now, with several thousand due to be delivered by June.

One West Coast-based shipper told JOC.com at TPM22 earlier this month that it had begun talks with J.B. Hunt because it believes BNSF delivers stronger customer service than UP and has an intermodal network that better matches its distribution center locations.

Another shipper at TPM22 said it will tender more freight to J.B. Hunt to re-balance its exposure between the two western US railroads in 2023.

Other shippers were uneasy about whether the BNSF-Schneider relationship will get rocky as it nears its end, and are leaning on J.B. Hunt in 2022 as a hedge in peak season.

Service, volumes sag in early ‘22

Photo credit: Frank Nann/Flickr.

One intermodal executive, speaking on the condition of anonymity, said J.B. Hunt may be on the way to growing its domestic intermodal share to 50 percent of all US intermodal. Today, J.B. Hunt accounts for about one-third of all US domestic intermodal volume, based on a JOC.com analysis of earnings reports and data from the Intermodal Association of North America.

Overcoming sub-par intermodal service, however, is necessary to grab market share from trucking companies and intermodal rivals Hub, Schneider, Swift, and XPO.

BNSF’s average intermodal train speed was 33 miles per hour this year through March 6, the slowest start to a first quarter since 2017, according to the Association of American Railroads (AAR). AAR said BNSF’s intermodal volume fell 10.2 percent year over year in the same period.

UP has struggled with service and volume as well.

UP’s schedule reliability fell 6 percentage points month over month to 71 percent in February, according to a UP customer advisory on Wednesday. That comes as AAR reports UP’s intermodal volume fell 4 percent between Jan. 1 and March 13 compared with the same period last year.

Typically, when intermodal volume falls, service improves, and when volume rises, service reliability declines. It’s unusual for volume and service to decline simultaneously.

Investing in facilities, chassis

BNSF also announced Wednesday it is undertaking several measures to speed the flow of goods through terminals, including opening properties near intermodal hubs in Southern California and Chicago to stage cargo bound for trains. It is also testing the use of semi-automated cranes to boost efficiency and throughput in its terminals and increasing its railcar fleet to accommodate the growing number of containers traveling on the rails.

BNSF’s commitment to improve service and terminal fluidity may convince other intermodal partners to purchase more containers in the coming years.

J.B. Hunt said Wednesday it will order more chassis to cover the 40,000 new containers it has coming in the next several years. That will be a test for CIE Manufacturing to see if the US division of China International Marine Containers (CIMC) can build domestic chassis to support J.B. Hunt while also fulfilling orders from intermodal equipment providers (IEPs) and port authorities for marine chassis.