J.B. Hunt Cost Warning

Happy Friday. Quick gut check is "the freight market is improving" still good news if your costs are improving faster? J.B. Hunt just found out the hard way. Here's what happened.

Plus:

• Why Doesn’t It Feel Better?

• ICE Crackdown on Truck Drivers Continues

• Truckload Capacity Exodus Is Still in Its “Early Innings”

• & more…

💡 QUESTION OF THE DAY:

How much is J.B. Hunt's driver-related costs rising by this quarter alone? Answer in today’s feature.

🍳 WHAT’S COOKIN’ IN FREIGHT

⛽ Why Doesn’t It Feel Better? On paper, trucking looks considerably healthier than a year ago. Cleveland Research says dry-van spot rates were up roughly 40% year-over-year in mid-September, while contract rates, excluding fuel, are up 5% to 15%. But the headline numbers hide a tougher reality. Spot rates have retreated from their summer highs, freight demand has cooled, and brokers are seeing little to no organic truckload growth. Meanwhile, diesel remains roughly 60% more expensive than last year. Carriers got their long-awaited rate spike—only to watch rates start falling while one of their highest costs remains painfully high.

🚨 ICE Crackdown on Truck Drivers Continues. Federal immigration enforcement at truck stops, weigh stations, and inspection sites continues. ICE recently arrested two Uzbek CDL holders in New Jersey and an Indian interstate driver at a New Hampshire inspection station; officials say all three were unlawfully present or had violated their immigration status. The crackdown drew fresh attention this week after Vice President JD Vance highlighted Akhror Bozorov, an Uzbek national wanted on terrorism charges in Uzbekistan who entered illegally in 2023, later received work authorization and a Pennsylvania CDL, and was arrested by ICE last year while working as a truck driver.

🚛 Truckload Capacity Exodus Is Still in Its “Early Innings.” The trucking capacity correction may have much further to run. Executives from Schneider and Werner said this week that tighter regulation, elevated fuel costs and stricter carrier selection continue to push capacity out of the market. Schneider has cut its approved brokerage carrier network from 60,000 at its peak to just 14,000, initially as part of efforts to combat cargo theft. CEO Jim Filter said the company doesn't necessarily need stronger freight demand because so much supply has already disappeared. Werner, meanwhile, expects one-way rates per total mile to rise 10% to 13% year-over-year during Q3.

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J.B. Hunt’s Freight Recovery Comes With a Catch

J.B. Hunt just gave Wall Street an expensive reminder that a stronger freight market doesn’t automatically mean higher profits.

Shares of the trucking and intermodal giant sank roughly 12% Wednesday after executives warned that third-quarter earnings could fall 5% to 10% from Q2. Wall Street had expected them to rise. The culprit isn’t weak freight demand. It’s rapidly rising costs.

CFO Brad Delco said J.B. Hunt is absorbing about $25 million in additional driver-related costs and at least a $10 million fuel headwind this quarter. Diesel rose 10% from July to August, while Hunt described recent fuel moves as among the most abnormal it has seen.

The warning is striking because the underlying freight business has actually been improving. In Q2, J.B. Hunt's revenue jumped 19% year-over-year to $3.5 billion, while operating income climbed 32%. Intermodal volume rose 10%, and the company's brokerage division, Integrated Capacity Solutions, increased loads 19%. (J.B. Hunt)

Three numbers tell the story:

• $25 million: incremental driver-related costs this quarter.

• $10+ million: expected sequential fuel headwind.

• 5%–10%: expected decline in Q3 earnings from Q2.

There is another wrinkle. About 96% of J.B. Hunt's operating income comes from intermodal and dedicated operations, businesses where pricing adjusts more slowly. Intermodal contract rates can lag truckload pricing by roughly two quarters, while many dedicated contracts reset costs annually. In other words, Hunt is paying today's higher costs before it can fully charge tomorrow's higher rates.

Management still says demand is strong across nearly every business and that trucking capacity continues to tighten. Record fuel prices and elevated truckload rates are also making rail more attractive; intermodal is currently about 32% cheaper than truck, according to SONAR data cited by FreightWaves.

As the costs of participating in this freight market continue to rise, so does the urgency for carriers to recapture those costs through higher rates.

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 🌎 AROUND THE FREIGHT WEB

⛽ Diesel Shortages Spark Concern. Some stations in Texas and Florida have reported running out of diesel as prices hit record highs, though GasBuddy says the outages remain isolated and there is no evidence of a widespread national shortage.

📦 Cargo Theft Falls From 2025 Levels. CargoNet recorded 677 cargo-theft incidents during the second quarter, down 26% from a year earlier and 14% from the first quarter, even as strategic and cyber-enabled theft remain major industry concerns.

📈 Fed Raises Rates for First Time in Three Years. The Federal Reserve raised its benchmark rate by a quarter point to 3.75%–4%, reversing three years without a hike as policymakers respond to persistent inflation and surging energy costs.

🚂 Norfolk Southern Adds Charleston-Huntsville Rail Service. Norfolk Southern launched daily direct rail service from the Port of Charleston to Huntsville, Alabama, extending SC Ports' intermodal reach into North Alabama and Middle Tennessee.

📉 Hub Group Expects First-Half Operating Loss. Hub Group now expects to report an operating loss for the first half of 2026 as costs mount from restating three years of financial results following an accounting error discovered earlier this year.

🎣 THE FREIGHT CAVIAR CORNER

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😂 FREIGHT HUMOR

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🎧 THE FREIGHT CAVIAR PODCAST

Michael Grace, Chief Compliance Officer at FreightFlex, joined Paul-Bernard Jaroslawski and Reed Loustalot on the FreightCaviar Podcast, to discuss why he believes freight theft is 99% preventable and how carrier vetting has changed over the past decade. He also breaks down the growing compliance and liability risks facing freight brokers, why shippers are increasingly looking for brokers with documented compliance processes, and much more. 

The FreightCaviar Podcast: Listen to this week's episode on Apple Podcasts, Spotify, or watch the interview on YouTube.

🎙️ FREIGHT GONG FRIDAY

This Freight Gong Friday, Lev Krasnopolskiy, President at Alpha Staffing and Recruiting, joins us as guest host, with Chris Brewer, President & CEO of River City Logistics Inc., as our special guest.