Mike's Book Club: JB Hunt The Long Haul to Success

I've heard mixed things about JB Hunt. I think JB Hunt is alright if you are okay with big mega fleet micro managing corporate mentality. See management at JB Hunt has to ride everyone's rear end because they sell dedicated high quality service without interruption. So everything has to work like a conveyor belt.

Every night the truck leaves at 10:00pm and goes from the chicken plant to Chicken Farm A-B and C and then returns when it's empty.

Like Longarm was telling me he worked for Prime and they were okay if you got a decent dispatcher. But if you had some dispatcher who couldn't work worth a crap then you were going to have bad loads and poorly planned loads.

 

J.B. Hunt into the 1980s

During the 1980s J.B. Hunt was still a pretty small company really. However the company was set up for growth.

Johnnie him self actually was not really ever the CEO or every really an operations man in charge of anything. J.B. and Johnelle really were more or less the idea people. They basically had the idea's and then let the operations people and management people implement those dreams.

In the 1980s management at J.B. Hunt decided that and I didn't know this, but J.B. Hunt stayed in the rice hul business way into like the mid 1980s. In the mid 1980s management decided the rice hul business while profitable was a no growth business and J.B. Hunt sold off there rice hul business.

Mr.Hunt figured that the truck load business was way open for growth and offered way more opportunities for growth.

He figured there were 3 customer types:

Truck Load Customers who were people who had outgrown LTL companies and needed more truck load service.
Dedicated Customers who would use J.B. for there shipping

Then private fleets yes as early as the 1980s. J.B. Hunt was planning on ways to buyout and take over private fleets. The sales pitch was and always has been. You don't need the expense and worry of transportation. Your not in the truck business we are we can handle all your needs by dedicating equipment to your account. Will take over the drivers and power, but will keep your crappy trailer fleet gotta save money somewhere were not going to waste our good trailers on you we got those parked back at one of our terminals in the back where nobody can touch them you know how stuff gets pooped up once it hits the road you want the good company trailers you got's to pay for it! Toy's R Us is a great example of this:


Actually I did some looking I didn't realize how cheap 53' dry van trailers actually were. I saw some trailer dealership advertising the new Hyundai Translead 53' 101" inch width trailer for like $29,000 brand new. I said huh that's all, that's pretty reasonable.

Hey not to get off topic, but what has happened to Wabash Trailer? They used to be huge all the big companies used to use them and now it's like I see Schneider pulling Great Dane and Hyundai trailers and man it used to be every major company that's all they bough were Wasbash trailers, but I don't see Wabash trailers like I used to Great Dane and Hyundai must have cut into there market share.

We I work we have Great Dane trailers it's all we have they have never bought a trailer from anyone else, wouldn't even dream of it and the Great Dane trailers seem pretty good to me.

Anyhow J.B. Hunt got out of the rice hul business.

Offered an IPO.

Expanded there fleet. With International Harvester tractors.

They also partnered with Santa Fe and really brought piggy back service to the forefront.

J.B. Hunt also streamlined there fleet same trucks, same trailers company trucks and company drivers better control and more efficient then using owner operators.

J.B. Hunt with a streamlined fleet:

Was able set speed limits at 55 which gave the company the best millage and also streamlined maintenance and break down predictability.

Now J.B. Hunt did have a slow down in 1989, but the one thing about J.B. Hunt was they did not force growth, if they were trying to expand and the economics were not right they would pull back and push ahead later.

Now J.B. Hunt did run into some trouble with used tractor trade in values in 1990 the economy slowed way down. Causing used truck prices to plummet. This did hurt J.B. Hunt, because when they went to trade in semi tractors that were starting to age out of there fleet which they tried to change the fleet over every 3 years. J.B. Hunt the tractors they bought cost them about $70,000.

In the late 1980s early 1990s J.B. Hunt had about 1000 tractors.

One of there trucks, may have traded in at $38,000.00 or something like that. However because of the bad economy in 1990 there trucks were trading it at $28,000 or less. This was not conducive to trading in, so what ended up happening was J.B. Hunt kept there older trucks longer and watched there operating ratio drop and watched there costs associated with older equipment rise. Companies get into that vicious circle. My company is in that circle right now. We have aging fleet that is costing the company a very expensive amount to maintain, and while they haven't had to shell out money for new trucks, there at the break even point where it's costing them as much to maintain as it would be to just buy new. The problem is the truck we buy just got redesigned and now corporate and management have to poke and prod at the new design before they decide to go with it. So in 2018 they said were not getting any new power. Anyhow that has nothing to do with anything.

However in 1990 J.B. Hunt bought out a company called Bull Dog Express which was a flatbed company from Georgia and got into the flatbed business which is where J.B. Hunts flatbed division came from. J.B. Hunts flatbed division ran mostly in the south there flatbed division is pretty specialized to certain customers it was never there major thing, but they had to diversify a little bit in the 1990s and find work for there older more unreliable fleet and flatbed work was shorter hauls and paid alright so they could put there older no longer economically viable to trade in trucks on shorter runs. That's basically why they got into flatbed. J.B. Hunt couldn't trade in there older tractors, but had to do something with them so they put them work on shorter flatbed runs.

While the company did grow the fleet one of there executives said it was like every-time we grew the fleet we would expand rates and then rates would go down and we would have to lower our rates in order to get the fleet moving again.

J.B. Hunt was always a stable company they never moved people around and shuffled executives they kept things mostly the same and very stable and because of that they were able to grow during bad times and then really grow during good times.

The thing about J.B. Hunt was they were always a public traded company so they always had big money to expand and meet big customer demands.

J.B. Hunt and Schneider are fierce direct competitors and for most of the 1980s Schneider was ahead of J.B. Hunt, but around the mid to late 1980s J.B. Hunt surpassed Schneider. The difference between Schneider and J.B. Hunt is Schneider is privately held and J.B. Hunt is publicly traded.

However as J.B. Hunt grew during the 1980s they were set up for big growth during the go-go 1990's:

 

J.B. Hunt Ch4

Chapter 4 is about J.B. Hunt driver Mike Stier and life on the road for J.B. Hunt in 1991.

It's mostly just OTR trials and tribulations nothing to really report that we don't already know typical OTR stuff. It's good reading but it's not a lot to report on.

 

Tune in next time for Ch5 Operations. Real nuts and bolts stuff.
Ch4 was typical OTR bs. Go some place and wait. Go some place and the directions are wrong call the office and talk to some schmo who doesn't give a crap.

Find where your going get there wait. Get unloaded drive to next place wait more and then get loaded leave drive a little more and shut it down before your headed back to the terminal park your trailer and assigned another load. That was Ch4 in a nutshell.