Survival of the Biggest

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HAPPY FRIDAY

J.B. Hunt posted one of its best quarters in years, and its own executives say they know where the extra business is coming from.

Plus:

• Two Huge Brokerage Brands Just Got Retired

• Is Echo About to Un-Private Itself?

• Trump's "New" CDL Fix Is 15 Years Old

💡 QUESTION OF THE DAY:

🍳 WHAT’S COOKIN’ IN FREIGHT

✂️ Two Huge Brokerage Brands Just Got Retired. ArcBest is cutting about 2% of its workforce and closing 10 of its roughly 240 ABF Freight terminals, folding those locations into nearby service centers. MoLo Solutions, its truckload brokerage brand, and Panther Premium Logistics, its expedite arm, are both being retired and absorbed under the ArcBest name. The move includes $76.5 million in impairment charges tied to the two brands, offset by $40 million in expected annualized savings. CEO Seth Runser said the restructuring "improves efficiency, strengthens profitability." The terminal closures still need sign-off from the Teamsters under the National Master Freight Agreement.

💰 Is Echo About to Un-Private Itself? TJC-backed Echo Global Logistics is weighing a sale or IPO later this year, according to three sources familiar with the matter. The $5.4 billion logistics giant would be a contender for the biggest supply chain IPO of the year. Echo declined to confirm or deny interest, with Executive Vice President of Marketing Christopher Clemmensen saying, "Our policy is to not comment on industry rumors." TJC took Echo private in 2021 for $1.3 billion — the valuation on the table has more than quadrupled since then. Echo also raised $930 million in debt financing this June to fund future acquisitions, following its acquisition of ITS Logistics earlier this year.

⏳ Trump's "New" CDL Fix Is 15 Years Old. At a Carlisle, Pennsylvania, event this week, President Trump said, "any American who's driven a heavy truck for our military will automatically be eligible" for a CDL, framing it as a fix he was about to deliver. It isn't new, though. The Military Skills Test Waiver Program has done exactly that since 2011, and FMCSA says more than 40,000 veterans have already used it. OOIDA's Lewie Pugh, who got his CDL through the military in 1994, 17 years before the program existed, argues military driving and real-world trucking aren't the same skill set.

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J.B. Hunt Just Showed Its Hand

J.B. Hunt's stock closed Thursday up 6.9% from the day before, after a quarter that blew past what Wall Street expected.

Net earnings came in at $181 million, or $1.91 per diluted share, up from $128.6 million, or $1.31 per share, a year ago, a 41% jump. Total revenue rose 19% to $3.5 billion, beating a $3.26 billion consensus estimate.

CFO Brad Delco reported the company removed more than $135 million in structural costs over the past year through process simplification, asset utilization, and automation. CEO Shelley Simpson told investors on the call: "We spent the last four years preparing for it."

Bigger Is Winning Right Now

J.B. Hunt's intermodal segment set a quarterly record of 578,000 loads, a 10% volume increase, and its first double-digit growth quarter in more than a decade.

Segment revenue rose 22% to $1.75 billion, while operating income surged 58% to $150.9 million.

Executives pointed to a sudden capacity shift following May's CVSA Roadcheck inspections, combined with driver shortages and rising carrier operating costs, as shippers increasingly consolidate with larger, asset-backed providers.

The Montgomery Effect, Quantified

The brokerage business turned an operating profit for the first time in 14 quarters, reporting operating income of $1.7 million compared to a loss of $3.6 million a year ago.

Revenue jumped 49.3% to $388 million, up from $260 million, on an 18.5% increase in load volume and a 25.9% increase in revenue per load.

COO Nick Hobbs told analysts on the call: "We've seen more carriers come to our platform, likely migrating from smaller brokers." He added that the Montgomery decision "increased focus on carrier selection and broker responsibility" industry-wide.

Not Every Bet Paid Off

Not every segment moved in the same direction. Dedicated Contract Services grew revenue 9% to $921 million on a 9% gain in weekly truck productivity and roughly 96% customer retention.

Truckload revenue jumped 35% to $240 million but swung to a $1.3 million operating loss, as the unit paid more for outside capacity to keep up with demand. Final Mile revenue fell 6% to $198 million as the company intentionally shed lower-quality business, a move only a company with room to spare can make.

That same capacity squeeze cuts the other way in intermodal. SONAR has intermodal pegged at 30% cheaper than truckload right now, roughly double the 10-15% savings gap that normally triggers a shipper's switch to rail.

J.B. Hunt's intermodal bid season opens every October, when management said it plans to raise contractual rates to close that gap.

That pricing power sits atop the carrier migration Hobbs pointed to earlier — carriers leaving smaller brokers for J.B. Hunt's platform.

Rates going up and carriers moving to bigger platforms are both signs of the same shift: freight consolidating toward fewer, larger, better-capitalized providers, leaving smaller brokers to compete for what's left over.

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 🌎 AROUND THE FREIGHT WEB

🎖️ Uncle Sam Says Hold My Beer. The Department of Defense's logistics, maintenance, and sustainment spending is estimated at $250 billion a year; more than double what UPS ($88.7B), FedEx ($94.7B), or DHL Group ($96.9B) individually bring in.

😷 Canadian Wildfire Smoke Disrupts Freight. Wildfire smoke drifting from Canada pushed air quality to hazardous levels across parts of the Midwest, forcing some warehouses and shippers in Ohio to cancel loads as Chicago briefly recorded some of the worst air quality in the world.

⛽ Diesel Crossed $5 Again. Diesel is back above $5 a gallon nationally, driven by a fresh flare-up between the US and Iran and a Russian ban on diesel exports. It's the fourth time diesel has crossed $5 this year.

💀 Final Destination, in Reverse. A Florida Highway Patrol trooper cited a truck driver after a sudden stop on I-75 near Apollo Beach sent a lumber load crashing forward through the cab. No injuries were reported, and the driver got a load securement ticket.

🚨 75 CDL Schools Get a Federal Visit. The Department of Homeland Security announced Thursday it's partnering with DOT to investigate roughly 75 CDL training schools suspected of fraud, including improper certifications and falsified training records.

💸 Half of Owner-Ops Say They Never Got Paid. A survey of more than 500 owner-operators found that half reported being stiffed by a broker on the entire payment for an entire load, and another 30% on a partial load. 93% said the $75,000 federal broker bond isn't enough to cover claims when a broker goes bust.

🎣 THE FREIGHT MAGAZINE

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😂 FREIGHT HUMOR

🎧 THE FREIGHT CAVIAR PODCAST

CEO and Owner of Best Express Inc., Salvador Munoz, joined Paul-Bernard Jaroslawski on the FreightCaviar podcast to discuss why Juárez is becoming a high-tech manufacturing hub, how cross-border trucking actually operates, why rising diesel costs have become a business killer, why the driver shortage is not just about finding drivers, and more.

Watch it on YouTube, or listen to the full episode on Spotify and Apple Podcasts.