J.B. Hunt at 60: Thinking Big (Part 2)
Since its founding 60 years ago, bold ventures built on innovative thinking have been at the heart of what J.B. Hunt does best. Part 1 of our two-part “Big Ideas” series shows how in those first decades we led the charge in many ways, including an industry-changing intermodal alliance. Part 2, below, picks up the story at the start of the 21st Century.
Creating Integrated Capacity Services
In the early 2000s, many of J.B. Hunt’s investments that had gone into building up truckload were paying off. In some areas of truckload, business was booming.
A challenge, however, was emerging.
Increasingly, satisfied customers were making requests outside of what was then J.B. Hunt’s scope. They wanted service on lanes that J.B. Hunt wasn’t operating.
Customer demand made it clear that J.B. Hunt needed to start a non-asset brokerage segment. That's how Integrated Capacity Solutions (ICS) began.
“In January of 2007, we named ICS as our fourth business segment and told everyone we were going to grow that segment into a billion dollars,” said J.B. Hunt Chief Commercial Officer and EVP of People and Human Resources Shelley Simpson, who was tasked with leading ICS when it launched.
That growth wasn’t easy.
At first, J.B. Hunt longtimers who were used to serving customers with company trucks and equipment didn’t expect outside sources to match their same level of service.
But J.B. Hunt contracted with qualified carriers, and it became apparent that tapping into the capabilities of third-party carriers helped everyone.
“We're truly trying to solve what's best for the customer,” said Eric McGee, executive vice president of highway services. “In many instances, it is our asset. But in many other instances, it's someone else's. So, for us to solve, the most efficient answer is to use the right truck, whether it's ours or someone else's.”
McGee provided a good example of how it works: Decades ago, if a shipper needed a load picked up in North Dakota and taken to South Dakota, a large logistics provider “would have run one of its own trucks from Minnesota over to North Dakota, picked your load up, went to South Dakota, and delivered it before returning to Minnesota.”
“There would have been a lot of extra time, a lot of extra miles, and a lot of extra cost to the customer in us doing that,” McGee added.
But J.B. Hunt can tap into a pool of qualified carriers throughout the country — some of whom are small or based in a remote location. Since the carrier is local, it can pick up the load much more quickly and for less cost with fewer wasted miles, leading to more efficiency all around.
Ultimately, expanding our access to capacity from asset-only to include qualified non-asset carriers meant J.B. Hunt could more often say “yes” to customer needs. In the long run, all these “yeses” have opened doors for J.B. Hunt to show how it can help customers on multiple fronts using multiple services.
Exceeding those customers’ expectations has paid off. In the years following its founding, ICS went from big idea to big success. A decade after it launched, Simpson’s initial vision of ICS being a billion-dollar business segment for the company was realized, and J.B. Hunt would soon disrupt the industry by taking traditional shipper/carrier match-making to an online marketplace powered by J.B. Hunt 360® technology.
Final Mile Services
Coincidently, 2007 would also be the year that J.B. Hunt would launch one of its fastest-growing segments over the past decade – Final Mile Services® (FMS). While stepping out of the comfort zone isn’t easy, it would be critical to the development of FMS.
The Final Mile story starts in the early 2000s when J.B. Hunt was delivering freight for a major appliance provider primarily through intermodal and highway services.
As that customer grew, they turned to J.B. Hunt to help address new transportation challenges.
“They were growing, expanding into a nationwide cross-dock solution, delivering to builders and retailers and a new market of home delivery,” recalled John Vargo, who was on J.B. Hunt’s first Final Mile team.
Vargo, now senior vice president of operations for Final Mile, added: “They were really struggling with consistency and service. They had 13 providers, and they just couldn't provide the same excellent service across the nation.” Because of the trust and success built up to that point, “they asked us to look at taking over one of their cross-docks and operating it.”
So, in 2005, “we stepped out of our comfort zone and opened up our first local cross-dock in Little Rock, Arkansas, with two delivery teams and a manager.”
That was a success. The customer started giving J.B. Hunt more territories across the nation. Every time, J.B. Hunt delivered. Within a few years, the customer was so pleased it made J.B. Hunt the last mile provider for its entire national network.
J.B. Hunt would use its initial customer success as a model for growing its service and capabilities in the home delivery space. What began with one facility and two delivery teams has expanded to one of the largest nationwide, commingled cross-dock operations in North America, with 116 locations and over 3.5 million square feet of warehouse and facilities space. With the ability to serve 100 percent of the contiguous United States, Final Mile completed more than four million home deliveries in 2021.
Growth has defined each of J.B. Hunt’s services, including the industry-leading tool that is bringing them all together in one place.
J.B. Hunt 360°®
Since the start of Final Mile Services, J.B. Hunt has developed other industry-leading services and products in response to customer needs. Perhaps none is more groundbreaking than J.B. Hunt 360.
This digital freight platform reduces fragmentation in the market by bringing shippers and carriers together in one online marketplace. It creates access to capacity, helps manage costs and improves service offerings. In this way, it leverages the decades of experience that J.B. Hunt has developed in a multitude of services including truckload, intermodal and ICS.
J.B. Hunt 360 offers state-of-the-art technology to help customers find rates and get visibility and transparency into their shipments’ movements to track arrival times and any possible delays.
“Our connection into the market is real time and fast and being able to get to the right truck is a lot easier,” McGee added.
But finding the right capacity at the right time and place doesn’t always mean using full truckload trucks on highways. It may mean using less-than-truckload options, or rail, or even ships or airplanes — whatever mode, or combination of modes, is most efficient.
John Roberts, J.B. Hunt president and CEO, said: “With J.B. Hunt 360, our technology platform, we can now expand the services that we provide to everyone in the industry, every shipper, and every carrier in every service line and we can do it in a way that creates value for every party.”
Superior technology is needed to create a platform this wide ranging and comprehensive. That’s one big reason J.B. Hunt announced a $500 million investment in technology in 2017.
That money has been spent on creating innovative and disruptive technology like real-time data and decision analytics, enhancing operating systems and improving existing infrastructure.
As Chief Information Officer Stuart Scott sees it, such expenditures amplify the customer-oriented core that the company has had since its founding while “putting us on a strategic path to provide new solutions that require a lot of technology investment.”
Because of “J.B. Hunt’s size and market reach, and 60 years of being in the business, we have the best people and the best processes,” he said.
Sarthak Verma, senior vice president of international, sees the potential to build something bigger than North America’s most efficient transportation network.
“To become the most efficient supply chain network in the world is going to take a lot of work,” he said. “But I think it starts with having that vision, identifying what the pain points are, and then trying to find a solution. And we're not going to do it by ourselves.”
Information Fueling Innovation
Just as J.B. Hunt found an important strategic ally to launch what has become an industry-leading intermodal service, it has found another ally in Google to help develop its industry-leading technology for multiple purposes, including scaling into more international business.
As Scott said, “Our vision is to create the most efficient transportation network and to do that, you need to have information, and you need data, and you need visibility.”
That plays into Google’s strong point.
“Google is excellent in the data gathering,” said Vana Matte, senior vice president of technology services. “Not only the data gathering, but getting the best out of the data that is gathered and automating a lot of stuff while overlaying sophisticated machine learning models.”
That reach is expanding all the time. Scott said that J.B. Hunt 360, for instance, wasn’t developed for a limited pool of carriers.
The platform is being built for the industry at large and its 3.5 million drivers, he said. “It was built not just for J.B. Hunt. It was built to enable our industry to be better.”
Thanks to these innovative technologies powered by our people, scaling up and out is a huge part of J.B. Hunt’s future.
“Technology crosses country boundaries very easily, much more easily than, say, building offices and putting a lot of infrastructure in place,” Scott said. “For me what's most exciting is the ability to reach new shippers and new customers, but also being able to reach beyond North America with our technology.”
Already, J.B. Hunt delivers transoceanic shipments from Asia and other continents through air freight and on the water as an NVOCC carrier.
In the coming years, J.B. Hunt expects more business overseas in response to customers’ needs.
“We are part of the global supply chain,” Verma said. “I think our fundamentals and our background are based in domestic, but our customers truly are global.”
Since 1961, J.B. Hunt has risen to the head of the pack in the logistics industry, venturing into realms nobody could have imagined 60 years ago. In the coming decades, there’s no telling how high and wide the company will rise with the help of our investments in people, technology and capacity.
Mr. Hunt taught employees to take chances when called for.
Thinking big helped this company grow from modest beginnings to an industry leader. And looking for the next big thing will help J.B. Hunt create the most efficient transportation network in North America.
This completes a four-part series about what has separated J.B. Hunt from the pack in the past 60 years. Read more about our people and our commitment to service on our 60th anniversary celebration page.