Q2 2026 J. B. Hunt Transport Services Inc Earnings Call

Speaker #1: Good afternoon, and welcome to the J.B. Hunt Transport Q2 2026 earnings conference call. All participants will be in a listen-only mode; should you need assistance, please signal a conference specialist by pressing the star key followed by 0.

Speaker #1: After today's presentation, there will be an opportunity to ask questions, to ask a question you may press star, then 1 on a telephone keypad, to withdraw your question, please press star, and then 2.

Speaker #1: Please note this event is being recorded. I would now like to turn the conference over to Andrew Hall, Senior Director of Finance. Please go ahead.

Speaker #2: Good afternoon. Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the private securities litigation reform act of 1995.

Speaker #2: Words such as "expects", "anticipates", "intends", "estimates", or similar expressions are used to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations, and involve risk and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements.

Speaker #1: Good afternoon, and welcome Good afternoon, and welcome to the JB HUNT to the JB HUNT Transport Transport Q2 2026 earnings Q2 2026 earnings conference call.

Speaker #1: conference call. All participants will All participants will be an elicit-only mode; should be an elicit-only mode. Should you need you need assistance, please signal a conference assistance, please signal a conference specialist by pressing the star key followed specialist by pressing the star key followed by by 0.

Speaker #1: 0. After today's After today's presentation, there will be an opportunity to ask presentation, there will be an opportunity to ask questions. To ask a question, you may questions.

Speaker #1: To ask a question, you may press press star, then 1 on the star, then 1 on the telephone telephone keypad. To withdraw your question, keypad.

Speaker #2: For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission.

Speaker #1: To withdraw your question, please please press star, and then press star, and then 2. Please note this event 2. Please note this event is being is being recorded.

Speaker #1: recorded. I would now like to I would now like to give the conference over to Andrew give the conference over to Andrew Hall, Hall, Senior Director of Finance.

Speaker #2: Now, I would like to introduce the speakers on today's call. This afternoon I am joined by our President and CEO, Shelley Simpson. Our CFO, Brad Delco.

Speaker #1: Senior Director of Finance. Please go Please go ahead.

Speaker #1: ahead.

Speaker #2: Good afternoon. Before Before I introduce the speakers, I would like to I introduce the speakers, I would like to provide provide some disclosures regarding forward-looking some disclosures regarding forward-looking statements.

Speaker #2: Spencer Fraser, EVP of Sales and Marketing. Our COO and President of Highway Services and Final Mile, Nick Hobbs. Brad Hicks, President of Dedicated Contract Services, and Darren Field, President of Intermodal.

Speaker #2: statements. This call may contain forward-looking This call may contain forward-looking statements within the meeting of the Private statements within the meaning of the private securities Securities Litigation Reform Act of litigation reform act of 1995.

Speaker #2: 1995. Words such as Words such as "ex," "anticipate," "expects," "anticipate," "intends," "intends," "estimate," or similar "estimate," or similar expressions expressions are used to identify these are used to identify these forward-looking forward-looking statements.

Speaker #2: I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley?

Speaker #3: Thank you, Andrew. Good afternoon. I want to start by thanking our employees across the organization for their hard work and relentless focus on serving our customers safely.

Speaker #2: These statements are based statements. These statements are based on on JB HUNT's current plans and JB HUNT's current plans and expectations, expectations, and involve risk and uncertainties that and involve risk and uncertainties that could could cause future activities and cause future activities and results to results to be materially different from those be materially different from those set set forth in the forward-looking forth in the forward-looking statements.

Speaker #3: We continue to operate in a dynamic environment that requires us to be nimble, make decisions quickly, and adapt as conditions change. Time and again, our people have demonstrated their ability to do exactly that while remaining operationally excellent.

Speaker #2: For statements. For more information regarding risk factors, more information regarding risk factors, please please refer to JB HUNT's annual refer to JB HUNT's annual report on report on Form 10-K and other Form 10-K and other reports and reports and filings with the Securities and Exchange filings with the Securities and Exchange Commission.

Speaker #2: and CEO, Shelley Simpson. Our CFO, Brad Our CFO, Brad Delco. Spencer Frazier, VP of Delco. Spencer Frazier, VP of Sales and Sales and Marketing.

Speaker #2: Now, I would like to Commission. Now, I would like to introduce introduce the speakers on today's call. This the speakers on today's call. This afternoon, I am joined by our afternoon, I am joined by our President President and CEO, Shelley Simpson.

Speaker #3: As we move through the year, we remain focused on executing against the priorities we outlined at the beginning of 2026. First and foremost, that means driving discipline, growth through operational excellence.

Speaker #2: Brad Hicks, President of Dedicated Contract Services, Hicks, President of Dedicated Contract Services, and Darren Field, President of and Darren Field, President of Intermode. I'd now like to turn the call over Intermodal.

Speaker #2: Our COO Marketing. Our COO and and President of Highway Services and Final President of Highway Services and Final Mile, Mile, Nick Hobbs. Brad Nick Hobbs.

Speaker #3: Customer conversations around pricing continue to evolve, alongside a market that is changing rapidly. We are pushing where we can, and where we need to.

Speaker #2: I'd now like to turn the call over to to our CEO, Ms. Shelley Simpson, for some our CEO, Ms. Shelley Simpson, for some opening opening comments.

Speaker #2: comments. Shelley?

Speaker #3: you, Andrew. Good afternoon. I Thank you, Andrew. Good afternoon. I want to start by thanking our employees want to start by thanking our employees across across the organization for their hard the organization for their hard work work and relentless focus on and relentless focus on serving serving our customers our customers safely.

Speaker #3: Second, we are leveraging the investments we've made in our people, technology, and capacity to create sustainable, competitive, advantages. While the market environment has improved, our focus on cost control has not changed.

Speaker #2: Shelley? Thank

Speaker #3: safely. We continue to operate in a dynamic We continue to operate in a dynamic environment that requires us to environment that requires us to be be nimble, make decisions nimble, make decisions quickly, and adapt to quickly, and adapt to conditions change.

Speaker #3: conditions change. Time and Time and again, our people have demonstrated their again, our people have demonstrated their ability ability to do exactly that while to do exactly that while remaining operationally remaining operationally excellent.

Speaker #3: We remain committed to removing structural costs from the business and improving the way we operate. That discipline is a critical component of our long-term strategy and positions us to perform well across market cycles.

Speaker #3: excellent. As we move through the year, we remain As we move through the year, we remain focused on executing against focused on executing against the the priorities we outlined at the beginning priorities we outlined at the beginning of of 2026.

Speaker #3: Third, we are focused on repairing margins and generating long-term shareholder returns. We have made meaningful progress repairing margins and, while further opportunity remains, we are encouraged by the trajectory of the business.

Speaker #3: 2026. First and foremost, that First and foremost, that means means driving discipline growth through driving discipline growth through operational excellence. operational excellence. Customer Customer conversations around pricing continue conversations around pricing continue to to evolve alongside a evolve alongside a market market that is changing that is changing rapidly.

Speaker #3: We continue to have transparent conversations with customers about the investments required to maintain the service, capacity, and innovation that supports their growth while producing appropriate returns for their orders.

Speaker #3: rapidly. We are pushing where we can We are pushing where we can and where and where we need to. we need to. Second, we are leveraging the Second, we are leveraging the investments investments we've made in our people, we've made in our people, technology, and capacity to create technology, and capacity to create sustainable, competitive sustainable, competitive advantages.

Speaker #3: advantages. While the market environment While the market environment has improved, our focus on has improved, our focus on cost control has not cost control has not changed.

Speaker #3: It is increasingly clear that the freight market has changed. Capacity has tightened across the industry, as safety-focused enforcement and broader supply pressures continue to affect available truckload capacity.

Speaker #3: operate. That discipline is a critical That discipline is a critical component of our long-term component of our long-term strategy and positioned us to strategy and positions us to perform perform well across market well across market cycles.

Speaker #3: changed. We remain committed to We remain committed to removing removing structural costs from the structural costs from the business business and improving the way we and improving the way we operate.

Speaker #3: We saw that tightening build throughout the quarter, including a noticeable step change around the annual road check event in early May that has persisted.

Speaker #3: While demand is improving gradually, the current market tightness is being driven primarily by supply conditions. We didn't spend the last 4 years waiting for the cycle to turn.

Speaker #3: We have have made meaningful progress repairing made meaningful progress repairing margins and, while further margins and, while further opportunity opportunity remains, we are encouraged by the remains, we are encouraged by the trajectory of the business.

Speaker #3: Third, we are focused cycles. Third, we are focused on on obtaining margins and generating repairing margins and generating long-term long-term shareholder returns. We shareholder returns.

Speaker #3: trajectory of the business. We We continue to have transparent continue to have transparent conversations with conversations with customers about the investments customers about the investments required required to maintain the service to maintain the service capacity and innovation that capacity and innovation that supports supports their growth while producing their growth while producing appropriate returns for our appropriate returns for our shareholders.

Speaker #3: We spent the last 4 years preparing for it. In this environment, I am confident in our strategy that has enabled us to gain market share.

Speaker #3: The foundation we built over our history, our commitment to people, technology, and capacity, being a leader in safety performance, consistent operational excellence, and delivering value to our customers through our CBD process has positioned us to succeed today and to deliver even stronger results in the future.

Speaker #3: shareholders. It is increasingly clear that the It is increasingly clear that the great freight market has changed. market has changed. Capacity has tightened across the Capacity has tightened across the industry, industry, as safety focus enforcement as safety-focused enforcement and and broader supply pressures continue broader supply pressures continue to to affect available truckload affect available truckload capacity.

Speaker #3: capacity. We saw that tightening build We saw that tightening build throughout the quarter, including in throughout the quarter, including in noticeable step change around the noticeable step change around the annual annual road check event in early May road check event in early May that that has persisted.

Speaker #3: We have structurally lowered our cost to serve customers, creating additional growth opportunities while driving progress toward our margin goals. Even without a material benefit from pricing.

Speaker #3: has persisted. While While demand is improving gradually, the demand is improving gradually, the current current market tightness is being market tightness is being driven primarily by supply driven primarily by supply conditions.

Speaker #3: The financial leverage and our business model continues to improve through discipline growth and the application of technology across the enterprise. All of this positions our company to compound growth through cycles.

Speaker #3: conditions. We didn't spend the We didn't spend the last 4 years waiting for the cycle to last 4 years waiting for the cycle to turn.

Speaker #3: turn. We spent the We spent the last 4 years preparing for last 4 years preparing for it. In this it. In this environment, I environment, I am confident in our strategy that has am confident in our strategy that has enabled us to gain market enabled us to be market share.

Speaker #3: Looking ahead, I'm excited about the opportunities in front of us during the second half of the year. We expect demand for our services to remain strong and remain closely aligned with our customers on their capacity needs.

Speaker #3: The share. The foundation we built over our foundation we built over our history, our commitment to history, our commitment to people, people, technology, and technology, and capacity, being a leader in capacity, being a leader in safety safety performance, consistent performance, consistent operational operational excellence, and delivering excellence, and delivering value to value to our customers through our CBD our customers through our CBD process has positioned us to succeed process has positioned us to succeed today and to deliver even today and to deliver even stronger results in the stronger results in the future.

Speaker #3: We have proven that our model works and that our service delivers value. We remain focused on ensuring that we receive the appropriate return for the value we provide while continuing to create discipline, sustainable growth, and long-term value for our shareholders.

Speaker #3: With that, I'll turn the call over to Brad.

Speaker #3: future. We have structurally lowered our cost to We have structurally lowered our cost to serve serve customers, creating additional customers, creating additional growth growth opportunities while driving opportunities while driving progress progress toward our margin goals.

Speaker #3: future. We have structurally lowered our cost to We have structurally lowered our cost to serve serve customers, creating additional customers, creating additional growth growth opportunities while driving opportunities while driving progress progress toward our margin goals. toward our margin goals.

Speaker #2: Thanks, Shelley, and good afternoon. I'll start with some quick comments about our financial performance in the quarter. As you've seen in our release, on a gap basis, total revenue increased 19%.

Speaker #3: Even without a material benefit from Even without a material benefit from pricing. The financial pricing. The financial leverage leverage on our business model continues to on our business model continues to improve improve the discipline growth and the application the discipline growth and the application of of technology across the technology across the enterprise.

Speaker #3: enterprise. All of this positions our company All of this positions our company to compound growth to compound growth tactics. Looking ahead, tactics. Looking ahead, I'm I'm excited about the opportunities in front of us excited about the opportunities in front of us during the second half of the year.

Speaker #2: Operating income improved 32%, and diluted earnings per share improved 45% compared to the prior year period. These results reflect disciplined execution and continued momentum from the strategy.

Speaker #3: during the second half of the year. We We expect demand for our services to expect demand for our services to remain remain strong and remain closely strong and remain closely aligned aligned with our customers on their capacity with our customers on their capacity needs.

Speaker #2: We've been discussing for several quarters around operational excellence and lowering our cost to serve. While market conditions have improved, the biggest driver of our performance continues to be our people, executing at a high level on service, safety, productivity, and cost discipline, while leveraging our technology investments.

Speaker #3: delivers value. We remain focused We remain focused on ensuring that we receive the on ensuring that we receive the appropriate returns for the value we appropriate returns for the value we provide provide while continuing to create while continuing to create discipline, sustainable growth, and discipline, sustainable growth, and long-term value for our shareholders.

Speaker #3: We have proven that needs. We have proven that our our model works and that our model works and that our service service delivers value.

Speaker #3: Brad.

Speaker #2: Thanks, Shelley. Shelley. Good afternoon. I'll start Good afternoon. I'll start with with some quick comments about our some quick comments about our financial financial performance in the performance in the quarter.

Speaker #3: With long-term value for our shareholders. With that, I'll turn the call over to that, I'll turn the call over to Brad.

Speaker #2: Thanks,

Speaker #2: As demonstrated this quarter, our cost discipline performance wasn't at the expense of supporting future growth, as we achieved double-digit volume growth across JBI, ICS, and JBT in the quarter.

Speaker #2: 19%. Operating income improved Operating income improved 32%, and 32%, and diluted earnings per share diluted earnings per share improved improved 45% compared to 45% compared to the the prior year prior year period.

Speaker #2: quarter. As you've seen in our release on As you've seen in our release on a a gap basis, total gap basis, total revenue revenue increased increased 19%.

Speaker #2: The investments we have made over the past several years in our people, technology, and capacity are creating meaningful advantages for our business and allowing us to respond quickly to opportunities in the market.

Speaker #2: period. These results reflect These results reflect discipline execution discipline execution and and continued momentum in the continued momentum in the strategy we've been discussing for strategy we've been discussing for several quarters around several quarters around operational excellence and lowering operational excellence and lowering our our cost to cost to serve.

Speaker #2: Let me turn to our efforts on lowering our cost to serve. While market financials have shifted, this remains one of the most important operational initiatives underway across the company.

Speaker #2: serve. While market conditions have While market conditions have improved, the biggest driver of our improved, the biggest driver of our performance continues to be our performance continues to be our people, executing at a high people, executing at a high level level on service, on service, safety, productivity, and safety, productivity, and cost discipline, while cost discipline while leveraging our technology leveraging our technology investments.

Speaker #2: Over the past year, we've removed over 135 million of structural costs from our company, and we continue to look for opportunities to simplify processes and improve productivity and increase asset utilization and leverage technology to automate work.

Speaker #2: As demonstrated investments. As demonstrated this this quarter, our cost quarter, our cost discipline performance wasn't at discipline performance wasn't at the the expense of supporting expense of supporting future future growth as we growth as we achieved double-digit volume growth achieved double-digit volume growth across JBI, across JBI, ICS, and JBT in the ICS, and JBT in the quarter.

Speaker #2: Just as importantly, these efforts are improving the customer experience while creating operating leverage across the organization. Our objective remains the same as it has been since the beginning of this initiative: build a stronger, more efficient company that can generate higher returns across all market environments.

Speaker #2: The investments we quarter. The investments we have have made over the past several made over the past several years in years in our people, our people, technology, technology, and capacity are creating and capacity are creating meaningful advantages for our meaningful advantages for our business and allowing us to respond business and allowing us to respond quickly to opportunities in the quickly to opportunities in the market.

Speaker #2: market. Let me turn to Let me turn to our efforts on lowering our our efforts on lowering our cost cost to serve. to serve.

Speaker #2: While While market fundamentals have shifted, market fundamentals have shifted, this remains one of the most this remains one of the most important important operational operational initiatives initiatives underway across the underway across the company.

Speaker #2: We are encouraged by the progress we are making and believe there remains additional runway ahead as we continue to scale our technology investments and improve efficiencies across our scroll of services.

Speaker #2: company. Over the past year, we've Over the past year, we've removed over removed over 135 135 million of structural million of structural costs from costs from our company and we continue our company, and we continue to to look for opportunities look for opportunities to to simplify processes and simplify processes and improve productivity and improve productivity and increase asset increase asset utilization utilization and leverage technology and and leverage technology and automated automated work.

Speaker #2: Turning to capital allocation. Our approach remains consistent. We are a disciplined growth company and we are equally disciplined in how we deploy capital. Our first priority continues to be investing in the business where we see opportunities to generate attractive long-term returns.

Speaker #2: work. Just as Just as importantly, these efforts are importantly, these efforts are improving the improving the customer experience customer experience while while creating operating creating operating leverage leverage across the across the organization.

Speaker #2: We remain committed to maintaining a strong investment-grade balance sheet, supporting the growth of our dividend, and being opportunistic with sharing purchases when appropriate. We believe the investments we have made throughout this cycle have positioned the company exceptionally well for future growth.

Speaker #2: organization. Our objective remains the same Our objective remains the same as as it has been since the beginning of it has been since the beginning of this this initiative: build a initiative: build a stronger, more efficient company that stronger, more efficient company that can can generate higher returns generate higher returns across all market across all market environments.

Speaker #2: environments. We are encouraged by the We are encouraged by the progress progress we are making and believe we are making and believe there there will be additional runway will be additional runway ahead as ahead as we continue to scale our we continue to scale our technology investments and technology investments and improve improve efficiency across our efficiency across our scroll of scroll of services.

Speaker #2: Importantly, much of our capacity has already been funded, providing us with significant flexibility as demand for our services improves. The combination of a strong balance sheet, healthy cash generation, and disciplined capital deployment gives us confidence in our ability to continue creating long-term shareholder value.

Speaker #2: Turning the capital services. Turning the capital allocation. Our approach allocation, our approach remains remains consistent. We consistent. We are a are a discipline growth company and disciplined growth company and we we are equally disciplined in are equally disciplined in how how we deploy capital.

Speaker #2: we deploy capital. Our Our first priority continues to first priority continues to be investing in the business be investing in the business where where we see opportunities to we see opportunities to generate generate attractive long-term attractive long-term returns.

Speaker #2: That concludes my comments. I'll now turn it over to Spencer.

Speaker #2: returns. We remain committed to We remain committed to maintaining a strong investment rate maintaining a strong investment grade balance sheet supporting the balance sheet supporting the growth of our dividend growth of our business and and being opportunistic with sharing being opportunistic with sharing purchases when purchases when appropriate.

Speaker #4: Thank you, Brad. And thanks to everyone for joining the call. I'll start by saying how proud I am of our team's performance this quarter.

Speaker #4: In a rapidly changing environment, our people stayed focused on what we could control, serving customers, managing through volatility, and helping them make the best decisions across their transportation networks.

Speaker #2: appropriate. We believe the investments we have We believe the investments we have made throughout this cycle have made throughout this cycle have positioned the company exceptionally positioned the company exceptionally well for well for future growth.

Speaker #2: future growth. Importantly, much of our capacity Importantly, much of our capacity has has already been funded, already been funded, providing providing us with significant us with significant flexibility as demand for our flexibility as demand for our services services improves.

Speaker #4: During the quarter, we saw an acceleration of the structural changes in the market that we discussed in April. Truckload capacity continued to tighten from ongoing regulatory enforcement, while at the same time many carriers continued to face higher operating costs that are not fully supported by prevailing rates.

Speaker #2: The improves. The combination combination of a strong balance sheet, of a strong balance sheet, healthy cash generation, healthy cash generation, and and disciplined capital deployment disciplined capital deployment gives gives us confidence in our ability us confidence in our ability to continue creating to continue creating long-term long-term shareholder value.

Speaker #4: As a result, several industry indicators including higher tender rejections, higher spot pricing, and lower driver employment moved toward levels not seen since 2021 and 2022.

Speaker #1: Thank you, Brad. And thanks to Thank you, Brad. And thanks to everyone for joining the everyone for joining the call. call. I'll start by saying how proud I I'll start by saying how proud I am of am of our team's performance this our team's performance this quarter.

Speaker #2: That shareholder value. That concludes concludes my comment. I'll now turn it my comments. I'll now turn it over over to to Spencer. Spencer.

Speaker #4: The pace of change has created real planning and execution challenges for our customers. Many shippers were not positioned for the speed and magnitude of these shifts, and they are now looking to the best providers who can help them build more durable and flexible plans around capacity, cost, service, and mode.

Speaker #1: In a rapidly quarter. In a rapidly changing changing environment, our people environment, our people stay stayed focused on what we could focused on what we could control: serving control: serving customers, managing through customers, managing through volatility, and helping them make the best volatility, and helping them make the best decisions across their transportation decisions across their transportation networks.

Speaker #1: April. Truckload capacity Truckload capacity continued to tighten from continued to tighten from ongoing ongoing regulatory enforcement, regulatory enforcement, while at while at the same time many the same time many carriers continued to face carriers continued to face higher higher operating costs that are operating costs that are not not fully supported by prevailing fully supported by prevailing rates.

Speaker #1: During the networks. During this quarter, we saw an acceleration quarter, we saw an acceleration of of the structural changes in the the structural changes in the market market that we discussed in that we discussed in April.

Speaker #4: In the second quarter, overall freight demand improved mostly from the first quarter. Demand in many industrial markets is improving, and US consumer demand remains resilient.

Speaker #1: As a rates. As a result, several industry result, several industry indicators including higher vendor indicators including higher finger rejection, higher stock retention, higher stock pricing, and lower pricing, and lower driver driver employment moved towards employment moved towards levels not seen since levels not seen since 2021 and 2021 and 2022.

Speaker #4: That said, demand for JB Hunt's suite of services continues to outpace the market, supported by record volumes in JBI and double-digit volume growth in both JBT and ICS.

Speaker #1: 2022. The pace of change has The pace of change has created real planning and created real planning and execution challenges for our execution challenges for our customers.

Speaker #4: We gained market share across our services, retention remained strong, and our pipelines in all business units continue to expand. As demand improved, and capacity tightened, pricing and planning conversations with customers became more transparent, more frequent, and more flexible.

Speaker #1: Many customers. Many shippers were not positioned for shippers were not positioned for the the speed and magnitude of speed and magnitude of these these shifts, and they are now shifts, and they are now looking to the best providers who looking to the best providers who can can help them build more help them build more durable and flexible durable and flexible plans plans around capacity, around capacity, cost, service, and cost, service, and load.

Speaker #1: load. In the second In the second quarter, overall trade demand quarter, overall trade demand improved modestly from the first improved modestly from the first quarter, demand in many quarter, demand in many industrial industrial markets is markets is improving, improving, and US consumer and US consumer demand demand remains remains resilient.

Speaker #4: We saw customers initiate more out-of-cycle/mini-bids, as they worked to keep pricing aligned with the rising cost of capacity. Customers are also becoming increasingly mindful of the carriers they rely on, consolidating more of their business with providers that can deliver capacity at scale.

Speaker #1: resilient. That said, demand That said, demand for for JB Hunt's fleet of services JB Hunt's fleet of services continues to outpace the continues to outpace the market, supported by record market, supported by record volume volume and JBI and and JBI and double-digit volume growth in both double-digit volume growth in both JBT and JBT and ICS.

Speaker #1: ICS. We gained market share across We gained market share across our services, our services, retention retention remains strong, and remains strong, and our our pipeline in all business pipeline in all business units continues to units continues to expand.

Speaker #4: This is where our mode-neutral business model and our continued investments in people, technology, and capacity create meaningful value. We are positioned to help customers optimize across orders, shipments, and modes, and to provide practical solutions as their network suggests.

Speaker #1: As demand expand. As demand improves and capacity improves and capacity tightens, pricing and planning tightens, pricing and planning conversations with customers conversations with customers became became more transparent, more transparent, more more frequent, and more frequent, and more flexible.

Speaker #4: During the quarter, the strongest areas of customer engagement centered on highway to intermodal conversion, dedicated fleets, and access to safe, secure, and reliable capacity.

Speaker #1: We saw flexible. We saw customers customers initiate more initiate more out-of-cycle/mini-bids out-of-cycle/mini-bids as they worked to keep pricing as they worked to keep pricing aligned aligned with the rising cost of with the rising cost of capacity.

Speaker #1: capacity. Customers are Customers are also becoming also becoming increasingly increasingly mindful of the carriers mindful of the carriers they they rely on, rely on, consolidating more of their business consolidating more of their business with with providers that can deliver providers that can deliver capacity at capacity at scale.

Speaker #4: Looking ahead, we are actively helping customers prepare for fall peak, reset capacity assumptions, and begin transportation planning for 2027. While many customers did not plan for this level of a change, to occur this quickly, through external customer surveys and our ongoing customer conversations, show a growing recognition that it is becoming more expensive to support the capacity, service, and professional driving jobs that power our nation's supply chains.

Speaker #1: scale. This is where our load-neutral This is where our low-neutral business model and our business model and our continued continued investments in people, investments in people, technology, and capacity technology, and capacity create create meaningful meaningful value.

Speaker #1: value. We are positioned to help customers We are positioned to help customers optimize across optimize across quarters, quarters, shipments, and shipments, and mode, mode, and provide practical and provide practical solutions as their networks solutions as their networks adjust.

Speaker #1: adjust. During the During the quarter, the strongest areas of quarter, the strongest areas of customer engagement customer engagement centered centered on highway intermodal on highway intermodal conversion, dedicated conversion, dedicated fleets, and access to fleets, and access to safe, secure, and reliable safe, secure, and reliable capacity.

Speaker #4: We believe that reality will shape future supply chain planning and budgeting discussions and reinforces the role JB Hunt will play in helping lead customers through a very dynamic operating environment.

Speaker #1: capacity. Looking Looking ahead, we are actively ahead, we are actively helping helping customers prepare for fall customers prepare for fall peak, reset peak, reset capacity capacity assumptions, and assumptions, and begin transportation planning for begin transportation planning for 2027.

Speaker #1: capacity. Looking Looking ahead, we are actively ahead, we are actively helping helping customers prepare for fall customers prepare for fall peak, reset peak, reset capacity capacity assumptions, and assumptions, and begin transportation planning for begin transportation planning for 2027. 2027.

Speaker #4: With that, I'll turn the call over to Nick.

Speaker #5: Thanks, Spencer, and good afternoon. I'll share updates on our final mile and highway businesses but first, as we do it internal meetings, I'll start with an update on safety.

Speaker #1: While While many many customers did not plan for this customers did not plan for this level level of exchange, to of exchange, to occur this occur this quickly, quickly, through through external customer surveys external customer surveys and and our ongoing customer our ongoing customer conversations, show a conversations, show a growing growing recognition that it is recognition that it is becoming more expensive to becoming more expensive to support the capacity, support the capacity, service, and professional service, and professional driving driving jobs that power our job that power our nation's supply nation's supply chains.

Speaker #5: Our culture at JB Hunt, and we continue to challenge ourselves to improve on our record safety performance as measured by DOT preventable accidents, per million mile.

Speaker #5: I'm proud that year-to-date through the second quarter, we are besting last year's results by 11%. To support our current and future growth, we will bring on drivers to maintain our high service levels to our customers.

Speaker #1: chains. We believe that We believe that reality reality will shape future supply will shape future supply chain chain planning and budgeting planning and budgeting discussions, and it discussions, and it reinforces the role JB Hunt will reinforces the role JB Huckle play in helping lead customers played in helping lead customers through through a very dynamic a very dynamic operating operating environment.

Speaker #5: As the driver market has tightened, we have implemented various strategies to recruit and retain drivers to meet our growing need. We have implemented sign-on bonuses in several markets and targeted driver wage increases in select markets.

Speaker #1: With environment. With that, I'll turn the call over to that, I'll turn the call over to Nick.

Speaker #5: While these are important early actions, we believe the industry will need to continue investing in professional drivers who operate safely and comply with regulations designed to protect both themselves and the motoring public.

Speaker #3: business this but first, as we do it This but first, as we do it internally, I'll start internally, I'll start with an with an update on update on safety.

Speaker #3: Thanks, Spencer,

Speaker #3: and good afternoon. I'll share Nick. Thanks, Spencer, and good afternoon. I'll share updates on our final mile on highway updates on our final mile on highway business.

Speaker #5: Moving to final mile. Demand remains stable across our core end markets of furniture, exercise equipment, and appliances, demand in our fulfillment business remains strong driven by off-price retail channels.

Speaker #3: Safety is core to our culture at safety. Safety is core to our culture at JB Hunt, and we continue to challenge JB Hunt, and we continue to challenge ourselves to improve on our record ourselves to improve on our record safety safety performance as measured by performance as measured by DOT preventable accidents, DOT preventable accidents, permitting miles.

Speaker #3: permitting miles. I'm proud I'm proud that here today, through the second that year to date we're the second quarter quarter, we are besting last year's results we are besting last year's results by by 11%.

Speaker #5: Our sales pipeline remains healthy and we are adding new opportunities as we work to offset as much of our previously disclosed $90 million revenue headwind due to our focus on being disciplined.

Speaker #3: To 11%. To support support our current and future growth, our current and future growth, we we will bring on drivers to maintain will bring on drivers to maintain our high service level to our our high service level to our customers.

Speaker #3: As the driver customers. As the driver market market has tightened, we have implemented has tightened, we have implemented various various strategies to strategies to recruit and recruit, retain drivers, to meet retain drivers to meet our our growing needs.

Speaker #3: growing needs. We have implemented We have implemented time-on bonuses in several markets time-on bonuses in several markets and and targeted driver wage increases in targeted driver wage increases in select select markets.

Speaker #5: We remain committed to being safe and secure and providing customers with the high service levels that they have come to expect from JB Hunt.

Speaker #3: markets, while these are important While these are important early actions, we believe the early actions we believe the industry industry will need to continue will need to continue investing investing in professional drivers in professional drivers to to operate safely and comply operate safely and comply with with regulations designed to regulations designed to protect protect both themselves and the motor and both themselves and the motor and public.

Speaker #5: In JBT, our focus on operational excellence continues to drive growth and market share gains, highlighted by our fifth consecutive quarter of double-digit volume growth.

Speaker #3: public. Moving to final Moving to final mile. Demand remains mile, demand remains stable stable across our core end markets of across our core end markets of furniture, exercise equipment, and furniture, exercise equipment, and appliances, demand in our appliances, demand in our fulfillment fulfillment business remains strong driven by business remains strong driven by off-price retail channels.

Speaker #5: As we discussed last quarter, the top truckload market remains challenging for independent contractors leading us to rely more heavily on third-party capacity at current market spot rates.

Speaker #3: off-price retail channels. Our Our sales pipeline remains sales pipeline remains healthy healthy and we are adding new opportunities and we are adding new opportunities as that will work to offset as much of we work to offset as much of our our previously disclosed $90 previously disclosed $90 million revenue million revenue headwinds.

Speaker #5: During the quarter, our revenue increased 35% with low growth of 14%, but our gross profit dollars declined 12%. Primarily due to higher purchase transportation rates.

Speaker #3: headwind. Due to our focus on Due to our focus on being disciplined, we being disciplined, we remain remain committed to being safe and committed to being safe and secure and secure and providing customers with a providing customers with the high high service level that they have service level that they have come to come to expect from JB expect from JB Hunt.

Speaker #5: While we are seeing spot market opportunities in ICS to help offset some margin pressure, we don't have the same degree of opportunity within our trailer network business, given the pace of market change, pricing implemented just a few months ago, is no longer sufficient.

Speaker #3: In Hunt. In JBT, our focus on JBT, our focus on operational excellence continues to drive operational excellence continues to drive growth and market share growth and market share gaining highlighted by our fifth gaining highlighted by our fifth consecutive quarter of consecutive quarter of double-digit double-digit volume growth.

Speaker #5: Going forward, we remain disciplined in taking appropriate risk in our working with customers to better align rates with current market conditions and the value we provide.

Speaker #5: I'll close out the edge. The positive we have felt in our business is beginning to translate to improved financial performance. We have been successful in bid season, winning more volume, and our securing double-digit rate increases.

Speaker #3: As volume growth. As we we discussed last quarter, the discussed last quarter, the top top truckload market remains truckload market remains challenging for independent challenging for independent contractors contractors leading us to rely more heavily leading us to rely more heavily on on third-party capacity at current third-party capacity at current market spot rates.

Speaker #3: During the market spot rates. During the quarter, our revenue increased quarter, our revenue increased 35% with low growth of 35% with low growth of 14%, but our gross 14%, but our gross profit dollars declined profit dollars declined 12%.

Speaker #3: During the market spot rates. During the quarter, our revenue increased quarter, our revenue increased 35% with low growth of 35% with low growth of 14%, but our gross 14%, but our gross profit dollars declined profit dollars declined 12%. 12%.

Speaker #5: While gross margin remains under pressure compared to last year, they improved sequentially from the first quarter, supported by increased spot and mini-bid opportunities and contractual freight repriced closer to current market conditions.

Speaker #3: Primarily due to Primarily due to higher purchase transportation higher purchase transportation rates. While we are seeing spot market rates. While we are seeing spot market opportunities in ICS to help opportunities in ICS to help offset some market offset some market pressure, we pressure, we don't have the same degree of don't have the same degree of opportunity opportunity within our trailer network within our trailer network business.

Speaker #5: The market remains dynamic and going forward, our focus remains on leveraging our cost as volume scales through the platform and generating more gross profit dollars.

Speaker #3: business. Given the pace of market Given the pace of the market change, pricing implemented just a few change, pricing implemented just a few months months ago is no longer ago is no longer sufficient.

Speaker #5: While encouraged by the second quarter results, we remain focused on building sustained momentum with that I'd now like to turn the call over to Brad.

Speaker #3: Going sufficient. Going forward, forward, we remain disciplined in taking we remain disciplined in taking appropriate risks and are working with appropriate risks in our working with customers to better align rates customers to better align rates for for current market conditions and the current market conditions and the value we value we provide.

Speaker #4: Thanks, Nick, and good afternoon, everybody. I'll provide an update on our dedicated business. Starting with the quarter, our second quarter results once again highlight the strength of our dedicated business.

Speaker #3: provide. I'll close with I'll close with ICS. ICS. The positive momentum we have felt in our The positive momentum we have felt in our business is beginning to translate to business is beginning to translate to improved improved financial performance.

Speaker #3: financial performance. We have We have been successful in this season been successful in this season winning winning more volume in our more volume in our securing securing double-digit rate double-digit rate increases.

Speaker #4: Despite a slow start due to weather, demand in the lawn and garden category improved, and demand across our other end markets performed as expected.

Speaker #3: increases. While gross margin remains under While gross margin remains under pressure compared to last pressure compared to last year, year, they improved sequentially in the they improved sequentially from the first first quarter, supported by quarter, supported by increased increased spot and mini-bid spot and mini-bid opportunities opportunities and contractual rate and contractual rate reprice closer to current market reprice closer to current market conditions.

Speaker #4: The second quarter also delivered another record safety performance for DCS. As our teams commitment to safety and operational excellence continues to lower our cost to serve, and deliver greater value for our customers.

Speaker #3: The market remains conditions. The market remains dynamic and going forward, our focus dynamic and going forward, our focus remains on leveraging our remains on leveraging our costs cost and volume sales through the as volume scales through the platform and generating more gross platform and generating more gross profit dollars.

Speaker #4: It's worth reminding everyone that while fuel is barely passed through in our business, it is dilutive to operating income margin percentage. In the second quarter, we estimate that fuel was close to a 100 basis point headwind to operating margin percentage compared with the prior year quarter.

Speaker #3: profit dollars. While While encouraged by the second quarter ensuring by the second quarter results, we remain focused on building results, we remain focused on building sustained momentum with that sustained momentum with that I'd now I'd now like to turn the call over to like to turn the call over to Brad.

Speaker #3: Brad.

Speaker #1: Thanks, Nick, and good and good afternoon, everybody. I'll provide an afternoon, everybody. I'll provide an update update on our dedicated on our dedicated business.

Speaker #4: During the second quarter, we sold approximately 250 trucks and remain confident we will achieve our full year target for gross truck sales of $1,000 to $1,200 new trucks.

Speaker #1: Thanks, Nick,

Speaker #1: dedicated business. Despite a close start due to Despite a close start due to weather, weather, demand in the lawn and garden demand in the lawn and garden category category improved, and demand improved, and demand across our across our other end markets performed as other end markets performed as expected.

Speaker #1: business. Starting with the quarter, our second Starting with the quarter, our second quarter quarter results once again highlight the strength of results once again highlight the strength of our our dedicated business.

Speaker #4: Our sales pipeline remains robust and has strengthened over the past few months, as the tightening truckload market has driven increased customer interest in a dedicated solution.

Speaker #4: In fact, our pipeline is currently at a record level in terms of number of trucks, which is a testament to the strength of our dedicated business and the value we consistently deliver for our customers.

Speaker #1: The second expected. The second quarter quarter also delivered another record safety also delivered another record safety performance for ACS. As performance for ACS. As our our team's commitment to safety and team's commitment to safety and operational excellence continues to lower operational excellence continues to lower our cost to serve, and deliver our cost to serve, and deliver greater value for our greater value for our customers.

Speaker #1: customers. It's worth reminding It's worth reminding everyone that while fuel is primarily everyone that while fuel is primarily a a pass-through in our business, it pass-through in our business, it is is diluted operating income dilutive to operating income margin margin percentage.

Speaker #4: Even with more opportunities in the pipeline, we have not altered our pricing or return discipline to chase growth. We have a proven track record of value creation through our customer value delivery platform, and with our scale and density, we believe we can offer differentiated solutions to customers in the market.

Speaker #1: In the second percentage. In the second quarter, we estimate the fuel quarter, we estimate the fuel was close was close to 100 business points to $150 point headwind headwinds to operating margin to operating margin percentage percentage compared with the prior year compared with the prior year quarter.

Speaker #4: Last quarter, I outlined our expectation that we would return to fleet growth this year while achieving only modest operating income growth for 2026. On the fleet side, we need to see a wave of new truck growth for a few months before that growth translates into improved profitability.

Speaker #1: During the second quarter. During the second quarter, we sold approximately quarter, we sold approximately 250 250 trucks and remained trucks and remained confident we confident we will achieve our full-year target will achieve our full year target for for gross truck sales of 1,000 to gross truck sales of $1,000 to 1,200 new trucks.

Speaker #1: $1,200 new trucks. Our Our sales pipeline remains sales pipeline remains robust robust and has strengthened over the past few and has strengthened over the past few months.

Speaker #4: Given the expenses associated with starting up an account. However, we remain unwilling to sacrifice our discipline around margins and returns, particularly at this point in the cycle, simply to accelerate growth.

Speaker #1: As the tightening truckload months, as the tightening truckload market has market has driven increased customer interest driven increased customer interest in in a dedicated a dedicated solution.

Speaker #1: solution. In fact, our pipeline is In fact, our pipeline is currently at a record level in terms of number currently at a record level in terms of number of of trucks, which is a testament to the trucks, which is a testament to the strength strength of our dedicated business of our dedicated business and the and the value we consistently deliver for value we consistently deliver for our our customers.

Speaker #1: customers. Even Even with more opportunities in the with more opportunities in the pipeline, we have not altered our pipeline, we have not altered our pricing pricing or return discipline to or return discipline to chase chase growth.

Speaker #4: Doing so would add risk and variability to our dedicated business, which has proven resilient throughout cycles. In fact, our win rate on new deals remains consistent with historic levels.

Speaker #1: We have a proven growth. We have a proven track track record of value creation through our record of value creation through our customer value delivery platform, customer value delivered platform, and with and with our scale and density, we our scale and density, we believe believe we can offer differentiated we can offer differentiated solutions to customers in the solutions to customers in the market.

Speaker #4: While dedicated has historically been the last part of our business to see an inflection from a change in the freight cycle and that will likely be true again in this cycle, I remain confident in our business and the growth opportunities ahead of us.

Speaker #1: market. Last quarter, I outlined Last quarter, I outlined our expectation that we would return our expectation that we would return to fleet to fleet growth this year while growth this year while achieving achieving only modest operating income growth only modest operating income growth for for 2026.

Speaker #4: We have a large untapped addressable market to grow into and a proven track record of disciplined financial and operational performance. I remain proud of our entire team's efforts, the great work of our professional drivers, and the value we create for our customers.

Speaker #1: On 2026. On the the fleet side, we need to see a wave of new fleet side, we need to see a wave of new truck truck growth for a few months before growth for a few months before that that growth translates into improved growth translates into improved profitability.

Speaker #1: profitability. Given the Given the expenses associated with starting up expenses associated with starting up again. I remain confident again. I remain confident that this that this wave of growth is coming, wave of growth is coming, however, we remain unwilling to however, we remain unwilling to sacrifice our discipline around margin sacrifice our discipline around margin and and returns, particularly returns, particularly at this at this point in the cycle, point in the cycle, simply simply to accelerate to accelerate growth.

Speaker #4: With that, I'll turn it over to Derek. Thank you, Brad, and thank you, everyone, for joining us this afternoon. The consistent execution of our strategy over the past several years has positioned us well to capture market share gains in the current environment, service levels remain strong, and we have available capacity to support customer growth at a time when intermodals value proposition is the strongest it has been in more than a decade.

Speaker #1: growth. Doing so would add risk and Doing so would add risk and variability variability to our dedicated business, to our dedicated business, which has proven resilient throughout which has proven resilient throughout cycles.

Speaker #1: cycles. In fact, our win In fact, our win rate on new deals remains consistent rate on new deals remains consistent with with historic levels.

Speaker #1: historic levels. While While dedicated has historically been the last dedicated has historically been the last part of part of our business to see an inflection our business to see an inflection from from a change in the price cycle and that a change in the price cycle and that will will likely be true again in this likely be true again in this cycle, I remain confident in our cycle, I remain confident in our business business and the growth opportunities ahead of and the growth opportunities ahead of us.

Speaker #4: During the second quarter, demand for our intermodal service outperformed normal seasonality for the third consecutive quarter and we also set a quarterly volume record with over 578,000 loads.

Speaker #1: us. We have a large We have a large untapped addressable market to grow untapped addressable market to grow into and a proven track record into and a proven track record of of disciplined financial and disciplined financial and operational operational performance.

Speaker #4: For the quarter, volumes were up 10% year over year, the first double-digit volume growth quarter in over a decade. On a monthly basis, volumes were up 9% in April, up 9% in May, and up 12% in June.

Speaker #1: I remain performance. I remain proud proud of our entire team's efforts, of our entire team's efforts, the the great work of our professional drivers, and the great work of our professional drivers, and the value we create for our value we create for our customers.

Speaker #1: there. Thank you, Thank you,

Speaker #1: Brad, and thank you, everyone, for joining us

Speaker #1: customers. With that, I'll turn it over to Without food over Darren.

Speaker #1: this afternoon. The

Speaker #1: consistent execution of our strategy over the consistent execution of our strategy

Speaker #2: Brad, and thank you, everyone, for joining

Speaker #1: past several years has over the past several years

Speaker #4: Transcon volume grew 5% while our eastern volume increased 16%. Our eastern growth comped against a plus 15% performance in the prior year or set differently up 31% on a two-year stacked basis.

Speaker #2: us this afternoon. The

Speaker #1: positioned us well to capture

Speaker #1: market share gains in the current

Speaker #1: environment, service levels remain environment, service levels remain

Speaker #1: strong, and we have available strong, and we have available

Speaker #2: has positioned us well to capture

Speaker #1: capacity to support customer growth

Speaker #2: market share gains in the current

Speaker #1: at a time when in-model

Speaker #1: value proposition is the

Speaker #1: strongest it has been in more than a

Speaker #2: capacity to support customer

Speaker #1: decade. During the second

Speaker #2: growth at a time when intermodal

Speaker #4: We continue to see significant road to rail conversion opportunities in the east, particularly as rising truckload rates fuel prices and tightening truckload capacity make intermodal an increasingly attractive solution for shippers.

Speaker #2: value proposition is the

Speaker #1: quarter, demand for our in-model

Speaker #1: service outperformed normal

Speaker #2: strongest it has been in more than a

Speaker #1: seasonality for the third consecutive

Speaker #2: decade. During the

Speaker #2: second quarter, demand for our intermodal

Speaker #1: quarter and we also

Speaker #1: set quarterly volume records

Speaker #2: service outperformed normal

Speaker #1: with over

Speaker #2: seasonality for the third

Speaker #1: 578,000 loads. For the

Speaker #2: consecutive quarter and we also

Speaker #4: While we have available container capacity to grow with our customers, we remain disciplined to ensure the growth is sustainable over the long term and add acceptable returns for the value we create.

Speaker #1: quarter volume for up 10%

Speaker #2: set quarterly volume records

Speaker #1: year over year, the first

Speaker #2: with over

Speaker #2: 578,000 loads. For the

Speaker #1: double-digit volume growth quarter in over a

Speaker #1: decade. On a monthly

Speaker #2: quarter volume corrupt

Speaker #2: 10% year over year, the first

Speaker #1: basis, volumes were up 9%

Speaker #2: double-digit volume growth quarter in

Speaker #1: in April, up 9% in

Speaker #2: over a decade. On a

Speaker #1: May, and up 12% in

Speaker #4: The rail network is experiencing quality growth and we remain actively engaged with our rail providers on resource planning to support both current and future growth.

Speaker #2: monthly basis, volumes were up

Speaker #1: June. Transpond

Speaker #2: 9% in April, up

Speaker #1: volume grew 5% while our Eastern

Speaker #2: 9% in May, and up 12%

Speaker #1: volume increased

Speaker #1: 16%. Our Eastern

Speaker #2: in June. Transplant

Speaker #1: growth comps against a plus

Speaker #2: volume grew 5% while our

Speaker #4: While rail service has moderated slightly as volumes accelerated, conversion activity is at levels we have not seen in more than a decade, we remain confident in our rail providers' commitment to service and our collective ability to support higher volume levels while maintaining dependable and reliable performance.

Speaker #1: 15% performance in the prior

Speaker #2: eastern volume increased

Speaker #2: 16%. Our eastern

Speaker #2: growth comp against a plus

Speaker #1: 31% on a

Speaker #1: two-year stack basis. two-year stack

Speaker #2: 15% performance in the prior

Speaker #1: We continue to see significant basis.

Speaker #2: year or set differently up 31% on a

Speaker #1: growth to grill conversion opportunities in

Speaker #1: the East, particularly

Speaker #1: as rising truckload rates

Speaker #2: We continue to see significant growth to grill conversion

Speaker #1: fuel prices and tightening

Speaker #2: opportunities in the east,

Speaker #1: truckload capacity make

Speaker #2: particularly as rising truckload

Speaker #1: intermodal an increasingly attractive

Speaker #4: The same supply challenges affecting truckload capacity are impacting the drayage market where driver availability remains tight and we are working diligently to attract quality drivers to support our growth.

Speaker #2: rates fuel prices and

Speaker #2: tightening truckload capacity make

Speaker #1: have available container capacity

Speaker #2: intermodal an increasingly attractive

Speaker #1: to grow with our customers,

Speaker #1: we remain disciplined to

Speaker #2: solution for shippers. While we have available container

Speaker #1: ensure the growth is sustainable over

Speaker #2: capacity to grow with our

Speaker #1: the long term and add

Speaker #2: customers, we remain disciplined to

Speaker #1: acceptable returns for the value we

Speaker #4: In this environment, our in-source drayage strategy is a meaningful competitive advantage. By owning our tractors, containers, and chassis, and utilizing primarily company drivers, we maintain greater control of the customer experience while reducing reliance on more costly and less reliable third-party drayage capacity.

Speaker #1: create. The rail

Speaker #2: ensure the growth is sustainable

Speaker #1: network is experiencing quality

Speaker #2: over the long term and add

Speaker #1: growth and we remain actively engaged

Speaker #2: acceptable returns for the value we

Speaker #2: create. The

Speaker #1: with our rail providers on

Speaker #1: resource planning to support both current

Speaker #2: rail network has experienced some quality

Speaker #1: and future growth. While

Speaker #2: growth and we remain actively

Speaker #2: engaged with our rail providers on

Speaker #1: rail service has moderated

Speaker #1: slightly as volumes

Speaker #2: resource planning to support both

Speaker #1: accelerated, conversion activity is at

Speaker #2: current and future growth.

Speaker #2: While rail service has moderated

Speaker #1: levels we have not seen in more than a

Speaker #1: decade, we remain confident

Speaker #2: slightly as volumes

Speaker #4: We've previously outlined a path to the low end of our long-term margin range through contributions from cost, volume, and price. We have done great work on lowering our cost to serve and believe we have achieved the point of margin from cost.

Speaker #2: accelerated, conversion activity is at

Speaker #1: in the rail providers' commitment

Speaker #2: levels we have not seen in more than

Speaker #1: to service and our collective ability to support higher volume

Speaker #2: a decade, we remain

Speaker #2: confident in our rail providers'

Speaker #1: levels while maintaining

Speaker #2: commitment to service and our

Speaker #1: dependable and reliable

Speaker #1: performance. The same

Speaker #2: collective ability to support higher volume levels while

Speaker #1: supply challenges affecting truckload

Speaker #2: maintaining dependable and reliable

Speaker #1: capacity are impacting the drayage

Speaker #4: On volume, the growth has materialized while remaining disciplined to attract the right freight that adds balance and connectivity across the network. So I would say we are pretty much there with the point from volume.

Speaker #2: performance. The

Speaker #1: market where driver

Speaker #1: availability remains tight and we are

Speaker #2: same supply challenges affecting

Speaker #2: truckload capacity are impacting the

Speaker #1: working diligently to attract

Speaker #2: drayage market where driver

Speaker #1: quality drivers to support our

Speaker #2: availability remains tight and we

Speaker #1: growth. In this environment,

Speaker #1: our in-source drayage

Speaker #2: are working diligently to

Speaker #1: strategy is a meaningful competitive

Speaker #2: attract quality drivers to support

Speaker #4: The opportunity that is still in front of us is price. As you all know, our intermodal bid season begins each year in October and finalizes in Q3.

Speaker #2: our growth. In this

Speaker #1: advantage. By owning our

Speaker #2: environment, our in-source drayage

Speaker #1: tractors, containers, and

Speaker #1: chassis, and utilizing primarily

Speaker #2: strategy is a meaningful

Speaker #2: competitive advantage. By owning our

Speaker #1: company drivers, we

Speaker #1: maintain greater control of customer

Speaker #2: tractors, containers, and

Speaker #4: So we're nearing completion of the 2026 bid season. In the first half of this year's bids, the operating environment at that time didn't present the same pricing opportunities that the current environment has.

Speaker #2: chassis, and utilizing

Speaker #1: experience while reducing

Speaker #2: primarily company drivers, we

Speaker #1: reliance on more costly and

Speaker #1: less reliable third-party drayage

Speaker #2: maintain greater control of customer

Speaker #2: experience while reducing

Speaker #1: capacity. We've

Speaker #1: previously outlined a path to the

Speaker #2: reliance on more costly and

Speaker #1: low end of our long-term margin

Speaker #2: less reliable third-party

Speaker #1: range through contribution from

Speaker #2: drayage capacity. We've

Speaker #4: Historically, intermodal contract pricing has lagged truckload pricing and we continue to believe that to be the case moving forward. However, given the pace of change in the truckload market, we are increasingly encouraged by the pricing opportunity heading into the 2027 bid season than we were even a couple of months ago.

Speaker #1: cost, volume, and price.

Speaker #2: previously outlined a path to the

Speaker #1: We have done great work on lowering

Speaker #2: low end of our long-term margin

Speaker #2: range through contribution

Speaker #1: our cost to serve and believe we have

Speaker #2: from cost, volume, and

Speaker #1: achieved the point of margin from

Speaker #2: price. We have done great work on

Speaker #1: cost. On volume,

Speaker #2: lowering our cost to serve and believe

Speaker #1: the growth has materialized

Speaker #1: while remaining disciplined to attract materialized while remaining disciplined to

Speaker #2: we have achieved the point of margin

Speaker #2: from cost. On

Speaker #1: the right rate to add balance

Speaker #2: volume, the growth has

Speaker #1: and connectivity across the

Speaker #1: network. So I would say we are pretty

Speaker #4: Encouragingly, our improved financial performance over the last several quarters is unrelated to any material contributions from price to cover inflation. While in prior cycles we would typically see our financial performance lag other transportation modes, we feel like we've led the broader industry as this cycle ensues.

Speaker #2: attract the right rate to add

Speaker #1: much there with the point from

Speaker #1: volume. The opportunity that is still

Speaker #2: balance and connectivity across the

Speaker #2: network. So I would say we are pretty

Speaker #1: in front of us is

Speaker #1: price. As you all know, our intermodal

Speaker #2: much there with the point from

Speaker #2: volume. The opportunity that

Speaker #1: business season begins each year in

Speaker #1: October and finalizes in

Speaker #2: is still in front of us is

Speaker #2: price. As you all know, our

Speaker #2: intermodal business season begins each year in

Speaker #1: the 2026 bid

Speaker #1: season. In the first half of

Speaker #2: October and finalizes in

Speaker #1: this year's bid, the operating

Speaker #2: Q3, so we're nearing completion of the 2026 bid

Speaker #1: environment at that time didn't

Speaker #1: present the same pricing opportunities

Speaker #2: season. In the first half

Speaker #4: With that, I'd like to turn it back over to the operator to open the call for questions.

Speaker #1: that the current environment

Speaker #2: of this year's bid, the operating

Speaker #1: has. Historically, intermodal

Speaker #2: environment at that time didn't

Speaker #2: present the same pricing

Speaker #1: contract pricing has lagged truckload

Speaker #2: opportunities that the current environment

Speaker #1: pricing and we continue to believe

Speaker #1: Thank you. We will now begin the question and answer session. Do you ask a question, you may press star, then one on your telephone keypad.

Speaker #2: had. Historically,

Speaker #1: that to be the case moving believe that to be the case moving

Speaker #1: forward. However, given the pace forward.

Speaker #2: intermodal contract pricing has lagged

Speaker #2: truckload pricing and we continue to

Speaker #1: of change in the truckload market,

Speaker #1: we are increasingly encouraged by

Speaker #1: If you are using a speakerphone, please pick up your handset before pressing the keys. Do you withdraw your question, please press star, and then two.

Speaker #1: the pricing opportunity heading

Speaker #2: However, given the pace of change in the truckload

Speaker #1: into the 2027 bid

Speaker #2: market, we are increasingly encouraged

Speaker #1: season than we were even a

Speaker #1: couple of months ago.

Speaker #1: The first question will come from Bascom Majors with Stevens. Please go ahead.

Speaker #2: by the pricing opportunity

Speaker #2: heading into the 2027

Speaker #1: Encouragingly, our improved

Speaker #1: financial performance over the last several quarters is unrelated to any material contributions financial performance over the last

Speaker #2: bid season than we were even

Speaker #5: Thanks for taking my questions. Hey, hey, Brad. Darren, following up on sort of how you ended that on the pricing discussion and the optimism going forward, can we talk through how prevalent the multi-year price agreements are with intermodal customers today compared to prior cycles and how much visibility do these commitments give you into the contract rate renewal plan into 2027 and even beyond?

Speaker #2: a couple of months

Speaker #2: ago. Encouragingly, our improved

Speaker #1: from price to cover

Speaker #1: inflation. While in prior

Speaker #2: several quarters is unrelated to any material contributions from price to cover

Speaker #1: cycles we would typically see our prior cycles we would typically see our

Speaker #1: financial performance lag

Speaker #1: other transportation modes, we feel

Speaker #2: inflation. While in

Speaker #1: like we've led the broader

Speaker #1: industry as this cycle

Speaker #2: financial performance lag

Speaker #1: ensues. With that, I'd like

Speaker #2: other transportation modes, we

Speaker #2: feel like we've led the broader

Speaker #1: to turn it back over to the operator to

Speaker #2: industry as this cycle

Speaker #1: open the call for

Speaker #1: questions.

Speaker #2: ensues. With that,

Speaker #2: I'd like to turn it back over to the

Speaker #2: operator to open the call for

Speaker #5: And just beyond the renewals, taking a step back beyond or past core pricing, what opportunities does Hunt have to increase intermodal revenue per load over the next few quarters that might not show up in a renewal number, but could still meaningfully impact the business?

Speaker #2: Thank

Speaker #2: you. We will now begin the

Speaker #2: questions.

Speaker #2: question-and-answer session. To ask a question, you

Speaker #2: may first start, then one on your telephone

Speaker #3: Thank you. We will now begin the question

Speaker #2: keypad. If you are using a

Speaker #2: speakerphone, please pick up your handset before

Speaker #3: and answer session. To ask a

Speaker #3: question, you may first start, then one on your

Speaker #2: pressing the key. To start your question,

Speaker #3: telephone keypad. If you are using a

Speaker #2: please press start and then

Speaker #3: speakerphone, please pick up your handset

Speaker #2: Bastian Majors with Stevens. Please go

Speaker #3: before pressing the key. To start your

Speaker #2: ahead.

Speaker #3: question, please press start and then

Speaker #4: Sure. On the multi-year conversation, certainly we have customers that we have engaged with multi-year programs. I don't know that we've ever talked about the percentage of our business that that entails.

Speaker #3: two. The first question will come from Bastian Majors with Stevens. Please go

Speaker #3: Thanks for that Thanks,

Speaker #3: question. Hey, hey

Speaker #3: Brad. Darren, following up

Speaker #3: ahead.

Speaker #3: on sort of how you ended that on the

Speaker #4: Bastian. Hey, hey

Speaker #3: pricing discussion and the optimism going

Speaker #4: Brad. Darren, following up

Speaker #3: forward, can we talk

Speaker #4: on sort of how you ended that on

Speaker #3: through how prevalent the multi-year

Speaker #4: the pricing discussion and the

Speaker #3: price agreements are with intermodal

Speaker #4: optimism going forward, can we

Speaker #3: customers today compared to

Speaker #4: And so I'm not ready to highlight that specifically, but we're aware of customers' value to our network and maybe areas that we can work with those customers specifically related to cost around serving their business.

Speaker #4: talk through how prevalent the

Speaker #3: prior cycles and how

Speaker #3: much visibility do these

Speaker #4: multi-year price agreements are with

Speaker #4: intermodal customers today compared

Speaker #3: commitments give you into the contract rate

Speaker #4: to prior cycles and how

Speaker #3: renewal plan into rate renewal and into

Speaker #3: 2027 and even 2027 and

Speaker #4: much visibility do these

Speaker #3: beyond? And just beyond the

Speaker #4: commitments give you into the contract

Speaker #3: renewals, taking a step

Speaker #3: back, beyond the past core

Speaker #4: beyond? And just beyond

Speaker #4: And so the behavior of our multi-year business is typically a little bit different than the constant change that we may face with customers that aren't engaged in multi-year agreements.

Speaker #3: pricing, what

Speaker #3: opportunities does HUNT have to increase

Speaker #4: the renewals, taking a step

Speaker #4: back, beyond the past four

Speaker #3: intermodal revenue per load over the next

Speaker #3: three quarters that might not show

Speaker #4: pricing, what

Speaker #4: opportunities does HUNT have to

Speaker #3: up in renewal number, but

Speaker #4: increase intermodal revenue per load over the

Speaker #3: could still meaningfully impact the

Speaker #3: business?

Speaker #4: next three quarters that might not show

Speaker #4: Look, the environment we're in today does present new opportunities for us. I think that the number of mini-bids or the number of times customers are reaching out to us looking for an answer, I don't remember it ever being any stronger than it is right now.

Speaker #4: Sure. On the Sure.

Speaker #4: up in renewal number, but

Speaker #4: could still meaningfully impact the

Speaker #4: multi-year conversation, certainly

Speaker #4: business?

Speaker #4: we

Speaker #4: have customers that we have

Speaker #2: On the multi-year conversation,

Speaker #4: engaged with multi-year programs. I don't know that we've ever talked

Speaker #2: certainly we

Speaker #2: have customers that we have

Speaker #4: about the percentage of

Speaker #4: our business that

Speaker #2: engaged with multi-year

Speaker #4: that entails. So

Speaker #2: programs. I don't know that we've ever talked about the percentage

Speaker #4: We have tremendous numbers of opportunities to talk to our customers about new opportunities. Not every single one of those opportunities is going to drive intermodal volume.

Speaker #4: I'm not ready to highlight that

Speaker #2: of our business that

Speaker #4: specifically, but we're aware

Speaker #2: that entails.

Speaker #4: of customers' value to

Speaker #2: So I'm not ready to highlight that

Speaker #4: our network and maybe

Speaker #2: specifically, but we're

Speaker #2: aware of customers' value

Speaker #4: areas that we can work with those

Speaker #4: It's coming in the door for JB Hunt's total book of solutions. And so we're constantly looking for that opportunity. I do think new business pricing has contributed to benefits in our network and I fully expect that will continue through the remainder of this year and deep into next year's bid cycle.

Speaker #4: customers specifically related

Speaker #4: to cost around serving their

Speaker #2: to our network and

Speaker #2: maybe areas that we can work with those

Speaker #4: business. And so the

Speaker #2: customers specifically related

Speaker #4: behavior of our multi-year

Speaker #4: business is typically a little bit

Speaker #2: to cost around serving their

Speaker #4: different than the

Speaker #2: business. And so

Speaker #4: constant change that we may face

Speaker #2: the behavior of our multi-year

Speaker #4: with customers that aren't

Speaker #2: business is typically a little bit

Speaker #2: different than the

Speaker #4: engaged in multi-year agreements.

Speaker #2: constant change that we may

Speaker #4: Look, the environment

Speaker #4: I know Spencer may also want to comment on this.

Speaker #2: face with customers that

Speaker #4: we're in today does

Speaker #4: present new opportunities for us. I

Speaker #2: aren't engaged in multi-year

Speaker #2: agreements. Look, the

Speaker #2: Yeah. Hey, Bascom. Thanks for the question. And Darren, I'll kind of start where you left off. I'm really around mini-bids. I think the frequency of bids has definitely increased.

Speaker #4: think that the

Speaker #2: environment we're in today does

Speaker #4: number of mini-bids or the number

Speaker #2: present new opportunities for

Speaker #4: of times customers are reaching

Speaker #2: us. I think

Speaker #4: out to us looking for an

Speaker #2: that the number of mini-bids or the

Speaker #4: answer, I don't remember it ever

Speaker #4: being any stronger than it is right

Speaker #2: number of times customers are

Speaker #4: now. We have tremendous numbers of

Speaker #2: reaching out to us looking for

Speaker #2: You said extraordinary it was actually a record in the quarter of the number of opportunities. And that comes across bids proposals as well as reviews.

Speaker #2: an answer, I don't remember it

Speaker #4: opportunities to talk to our

Speaker #2: ever being any stronger than it is

Speaker #4: customers about new

Speaker #4: opportunities. Not every single one of those

Speaker #2: right now. We have tremendous

Speaker #2: numbers of opportunities to talk to

Speaker #4: opportunities is going to

Speaker #4: drive intermodal volume. It's coming in

Speaker #2: our customers about new

Speaker #2: The main point on mini-bids I'd like to say is. I would like to get rid of the mini-bid term they are structurally larger bids as customers are competing for capacity to reset their networks.

Speaker #2: opportunities. Not every single one of

Speaker #4: the door for JB HUNT

Speaker #2: those opportunities is going to

Speaker #4: total book of solutions. And so

Speaker #2: drive intermodal volume. It's

Speaker #4: we're constantly looking for that so we're constantly looking for that

Speaker #4: opportunity. I do think new opportunity.

Speaker #2: coming in the door for JB

Speaker #2: HUNT total book of solutions. And

Speaker #4: business pricing

Speaker #4: has contributed to benefits

Speaker #4: in our network and

Speaker #2: I do think new business pricing

Speaker #4: I fully expect that will continue through

Speaker #2: Our customers are still having significant challenges across their routing guides. And that gives, again, all of our services opportunities to step up and be the go-to for them and create opportunities again to hopefully get the right returns that we need on all of our businesses.

Speaker #4: the remainder of this year

Speaker #2: has contributed to benefits

Speaker #2: in our network

Speaker #4: and deep into next year's bid

Speaker #2: and I fully expect that will continue

Speaker #4: cycle. I know Spencer

Speaker #4: may also want to comment on

Speaker #2: through the remainder of this

Speaker #4: this.

Speaker #2: year and deep into next year's bid

Speaker #5: Hey

Speaker #5: Bastian. Thanks for the question.

Speaker #2: cycle. I know Spencer

Speaker #5: And Darren, I'll kind of start where you And Darren, I'll kind of start where

Speaker #2: may also want to comment

Speaker #2: on this.

Speaker #5: left off. Really around

Speaker #1: Hey Yeah.

Speaker #2: So we look forward to continuing those conversations and working through and set our customers up with capacity plans that they can count on.

Speaker #1: Bastian. Thanks for the question.

Speaker #5: mini-bids. I think the frequency

Speaker #5: of bids has

Speaker #1: you left off. Really around

Speaker #5: definitely increased. You said it's

Speaker #5: ordinary. It was actually a

Speaker #1: mini-bids, I think the

Speaker #5: record in the quarter, the number

Speaker #1: frequency of bids

Speaker #1: The next question will come from Chris Wetherby with Wells Fargo. Please go ahead.

Speaker #1: has definitely increased. You said

Speaker #5: of opportunities. And

Speaker #5: that comes across bids proposals as

Speaker #1: extraordinary is actually a

Speaker #1: record in the quarter, the

Speaker #5: well as reviews.

Speaker #5: Hey, Chris.

Speaker #1: number of opportunities.

Speaker #6: Hey, Brad. Good afternoon, guys. I guess maybe just picking up on that point, Spencer, you're talking about mini-bids. I guess we understand sort of how the bids cycle works and kind of what's locked in and maybe what needs to wait a bit.

Speaker #1: And that comes across bids

Speaker #5: say is I'd almost like to get rid of the

Speaker #1: proposals as well as reviews.

Speaker #5: mini-bid

Speaker #5: term. They are structurally

Speaker #1: The main point on mini-bids I'd like to say is I'd almost like to get rid of

Speaker #5: larger bids. As

Speaker #1: the mini-bid

Speaker #5: customers are competing for

Speaker #1: term. They are structurally

Speaker #5: capacity, to reset their

Speaker #5: networks, our customers are still

Speaker #6: But I guess how do you think about the back half from sort of a realized yield on the intermodal side with the combination of mini-bids and then maybe a little bit of an opportunity around peak season?

Speaker #1: larger bids.

Speaker #1: As customers are competing for

Speaker #5: having significant challenges across their

Speaker #1: capacity, to reset their

Speaker #5: routing guides. And that

Speaker #1: networks, our customers are

Speaker #5: gives, again, all of our

Speaker #5: services opportunities to step up

Speaker #1: still having significant challenges across

Speaker #1: their routing guides. And

Speaker #5: and be the go-to for

Speaker #6: Because we have seen some announcements from other folks about peak season surcharges. So maybe just sort of wrapping that all in and maybe how we can think about the second half if there is going to be any change and what maybe we could see.

Speaker #5: them and create opportunities again

Speaker #1: that gives, again, all of our

Speaker #1: services opportunities to step

Speaker #5: to hopefully get the

Speaker #1: up and be the go-to for

Speaker #5: right returns that we need on all of our

Speaker #1: them and create opportunities

Speaker #5: forward to continuing those conversations and

Speaker #1: again to hopefully get

Speaker #4: Yeah. Chris, thanks for the question too. I'll let Darren talk about yields and things like that. I think he's got a good answer for you there.

Speaker #5: working through and set our customers up with

Speaker #1: the right returns that we need on all of our

Speaker #1: businesses. So we're looking forward to continuing those conversations

Speaker #5: capacity plans that they can count on.

Speaker #2: The

Speaker #1: and working through and set our customers up

Speaker #2: next question will come from Chris on.

Speaker #2: Weatherby, with Wells Fargo. Please go

Speaker #1: with capacity plans that they can count

Speaker #4: But regarding peak season, I will talk about that. We do engage in peak season planning conversations at the end of the peak season of the prior year.

Speaker #2: ahead.

Speaker #3: Hey

Speaker #3: Chris. Hey

Speaker #3: The next question will come from Chris Weatherby with Wells Fargo. Please go

Speaker #6: Hey

Speaker #6: Bradley. Good afternoon, Bradley.

Speaker #6: guys. I guess maybe just picking up on

Speaker #3: ahead.

Speaker #6: that point, I'm sure you're talking about

Speaker #4: Chris.

Speaker #4: Chris.

Speaker #6: mini-bids, I guess. We understand sort of

Speaker #5: Good afternoon, guys. I guess maybe just picking up on

Speaker #4: So we've been in peak discussions since the end of '25. We do have peak agreements with our customers today. That have proactively planned for the 2026 season.

Speaker #6: how the bid cycle works

Speaker #5: that point, I'm sure you're talking about

Speaker #6: and kind of what's locked in and maybe what needs to

Speaker #5: mini-bids, I guess. We understand sort of

Speaker #6: wait a bit. But I guess how do you think

Speaker #5: how the bid cycle

Speaker #6: about the back half and sort of a

Speaker #5: works and kind of what's locked in and what

Speaker #6: realized yield on the

Speaker #6: intermodal side? Would the combination of

Speaker #5: needs to wait a bit. But I guess how do

Speaker #4: And then we're in discussions right now trying to get forecasts with our customers and setting up really our plan and sharing with them the cost to serve and execute peak.

Speaker #6: mini-bids and then maybe a little bit of an

Speaker #5: you think about the back half and sort of

Speaker #6: opportunity around PCs? We have seen

Speaker #5: a realized yield on the

Speaker #5: intermodal side? The combination of

Speaker #6: some announcements from other folks about

Speaker #6: PCs and surcharges. Maybe just sort of wrapping that all

Speaker #5: mini-bids and then maybe a little bit of

Speaker #5: an opportunity around two seasons. We have

Speaker #6: in and see how we can think about the second

Speaker #6: half. If there is going to be any change in

Speaker #5: seen some announcements from other folks about

Speaker #4: So as far as that goes, I would say that peak from my perspective is going to be similar in timing and shape. The import peak that talks about coming in early, that can happen early, a little bit later, but really the lag is always lag from the import peak to the execution of the domestic peak because that domestic peak is really matched to meet their consumer demand.

Speaker #6: what maybe we could

Speaker #5: two-season surcharges. Maybe just for wrapping that

Speaker #6: see.

Speaker #5: all in, maybe how we can think about the second

Speaker #5: Yeah. Chris, thanks for the

Speaker #5: half. If there is going to be any change

Speaker #5: question too. I'll thanks for the question too.

Speaker #5: let Darren talk about yields and things

Speaker #5: in what maybe we could

Speaker #5: see.

Speaker #5: I think he's got a good answer for you

Speaker #5: there. But

Speaker #5: regarding peak season, I will talk about

Speaker #2: I'll let Darren talk about yields and

Speaker #5: that. We do engage in peak

Speaker #2: things like that.

Speaker #2: you there. But

Speaker #2: regarding peak season, I will talk about

Speaker #5: season planning

Speaker #5: conversations at the end

Speaker #2: that. We do engage in

Speaker #5: of the peak season of the prior

Speaker #2: peak season planning

Speaker #5: year. So we've been in

Speaker #2: conversations at the end

Speaker #5: discussions since the end of

Speaker #4: And that's why I say the timing and shape that we expect to be similar and we continue to have ongoing discussions to make sure we're set up for success with our customers.

Speaker #5: '25. We do have peak agreements with

Speaker #2: of the peak season of the

Speaker #2: prior year. So we've been in

Speaker #5: our customers today. That

Speaker #2: discussions since the end of

Speaker #5: have proactively planned for the

Speaker #2: '25. We do have peak agreements

Speaker #5: 2026 season. And

Speaker #2: Yeah. And Chris, let me just jump in. It's Darren again. I'll jump in on pricing change and magnitude. Look, we're not going to I don't have a forecast number for you or any kind of guidance.

Speaker #5: then we're in discussions right now trying to

Speaker #2: with our customers today.

Speaker #2: That have proactively planned

Speaker #5: get forecasts with our

Speaker #5: customers and setting

Speaker #2: for the 2026 season.

Speaker #5: up really our plan

Speaker #2: And then we're in discussions right now trying

Speaker #5: and sharing with them the cost to serve and

Speaker #2: to get forecasts with our

Speaker #2: customers and setting

Speaker #5: execute peak. So

Speaker #2: What I'll tell you is our eastern network business behaves and trends tracks against highway competition. And we have massive opportunities coming in the door.

Speaker #2: up really our

Speaker #5: as far as that goes, I would

Speaker #2: plan and sharing with them the cost to

Speaker #5: say that peak from

Speaker #2: serve and execute peak.

Speaker #5: my perspective is going to

Speaker #2: So as far as that goes, I

Speaker #5: be similar in timing

Speaker #5: and shape.

Speaker #2: would say that peak

Speaker #2: from my perspective is going to

Speaker #5: The import peak that talks about 2

Speaker #2: be similar in timing

Speaker #5: minute early, that can

Speaker #5: happen early, a little bit later,

Speaker #2: Spencer just highlighted that we're setting records with the opportunities that we see. The gap between the highway rates and intermodal rates has grown in this cycle.

Speaker #2: and

Speaker #2: shape. The import peak that talks about

Speaker #5: but really the lag, there's

Speaker #2: two minute early, that can

Speaker #5: always a lag from the import

Speaker #2: happen early, a little bit

Speaker #5: peak to the execution of the domestic

Speaker #2: later, but really the

Speaker #5: peak because that domestic peak

Speaker #2: lag, there's always a lag from the import

Speaker #5: is really matched to meet their peak is really matched to meet their

Speaker #2: And we have long-time for a long time, we've said somewhere between 10 and 15 percent discount fuel inclusive in the eastern network is and has been sustainable for intermodal.

Speaker #5: consumer demand. And so that's why

Speaker #2: peak to the execution of the

Speaker #2: domestic peak because that domestic

Speaker #5: I say the timing and the shape

Speaker #5: that we expect to be similar and

Speaker #2: consumer demand. And so that's

Speaker #5: we continue to have ongoing discussions to

Speaker #2: why I say the timing and the

Speaker #5: make sure we're set up for success with our

Speaker #5: customers.

Speaker #2: shape that we expect to be similar

Speaker #4: Chris, let me

Speaker #2: and we continue to have ongoing

Speaker #4: Just jump in, and Darren, again, I'll—

Speaker #2: And we have a larger gap in the price today largely because of rates that are now 6, 7, 8, 10 months old. So as we go through the rest of the year, and bring on new business, we anticipate certainly closing that gap.

Speaker #2: discussions to make sure we're set up for success with our

Speaker #4: jump in on pricing

Speaker #4: change and magnitude. Look, they're not

Speaker #2: customers.

Speaker #1: Yeah, Chris, Yeah.

Speaker #1: Let me just jump in, and Darren, again,

Speaker #4: going to I don't

Speaker #4: have a forecast number for you, or any

Speaker #1: I'll jump in on

Speaker #1: pricing change and magnitude. Look,

Speaker #4: kind of guidance, but I'll tell you,

Speaker #4: is our eastern

Speaker #1: we're not going to

Speaker #1: I don't have a forecast number for you.

Speaker #4: network business

Speaker #4: behaves and trends

Speaker #1: or any kind of guidance, but I'll tell you,

Speaker #1: is our eastern

Speaker #2: I don't know what magnitude that presents in terms of the mix of the rate, how you model that, just know that certainly the opportunity to improve pricing.

Speaker #4: tracks against highway

Speaker #4: competition. And we have

Speaker #1: network business

Speaker #1: behaves and

Speaker #4: massive opportunities coming

Speaker #1: trends tracks against highway

Speaker #4: in the door. Spencer just

Speaker #4: highlighted that we’re setting records with the

Speaker #1: competition. And we have

Speaker #4: opportunities that we

Speaker #4: Opportunities that we see—the gap between the highway rates and intermodal rates has grown in this, see.

Speaker #1: massive opportunities

Speaker #2: Now, we're also faced with inflationary pressures, driver wage cost is going to move up, the cost of labor is going to move up, our rail providers are all going to be talking to us about cost challenges they're facing.

Speaker #1: coming in the door. Spencer just

Speaker #1: highlighted that we're setting records with

Speaker #1: the opportunities that we

Speaker #1: The gap between the highway rate and intermodal rates has grown in this, and we have a larger gap in the price today, largely because of rates that are now six, seven, eight, ten months old.

Speaker #2: And so we're looking for pricing to recover against inflation while also improving our margin a little bit. So certainly as the rest of the year goes on and as we move into the next bid season, we will look for that gap from intermodal to truckload to close.

Darren Field: We have a larger gap in the price today, largely because of rates that are now six, seven, eight, 10 months old. As we go through the rest of the year and bring on new business, we anticipate certainly closing that gap. I do not know what magnitude that presents in terms of the mix of the rate, how you model that. Just know that certainly, the opportunity to improve pricing. Now, we are also faced with inflationary pressures. Driver wage cost is going to move up. The cost of labor is going to move up. Our rail providers are all going to be talking to us about cost challenges they are facing. We are looking for pricing to recover against inflation while also improving our margin a little bit.

Operator: Good afternoon, welcome to the J.B. Hunt Transport Q2 2026 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Andrew Hall, Senior Director of Finance. Please go ahead.

Operator: Good afternoon, welcome to the J.B. Hunt Transport Q2 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Andrew Hall, Senior Director of Finance. Please go ahead.

Darren Field: We have a larger gap in the price today, largely because of rates that are now six, seven, eight, 10 months old. As we go through the rest of the year and bring on new business, we anticipate certainly closing that gap. I do not know what magnitude that presents in terms of the mix of the rate, how you model that. Just know that certainly, the opportunity to improve pricing. Now, we are also faced with inflationary pressures. Driver wage cost is going to move up. The cost of labor is going to move up. Our rail providers are all going to be talking to us about cost challenges they are facing. We are looking for pricing to recover against inflation while also improving our margin a little bit.

Speaker #1: The next question will come from John Chappelle with Evercore ISI. Please go ahead.

Speaker #6: Thank you. Darren, on the volume side, the acceleration from April through June and then we look at the second half of '25 or even if you wanted two-year stack it, it feels like it's an easier comp.

Andrew Hall: Good afternoon. Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are used to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now, I would like to introduce the speakers on today's call.

Andrew Hall: Good afternoon. Before I introduce the speakers, I would like to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are used to identify these forward-looking statements.

Speaker #6: So when you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as a related to capacity, rail service, the spread, is that a number now for volume in the second half of the year that continues to build off of that 12%?

Darren Field: Certainly, as the rest of the year goes on, and as we move into the next bid season, we will look for that gap from intermodal to truckload to close.

Speaker #6: And if not, what kind of derails that? No pun intended.

Darren Field: Certainly, as the rest of the year goes on, and as we move into the next bid season, we will look for that gap from intermodal to truckload to close.

Andrew Hall: These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission. Now, I would like to introduce the speakers on today's call.

Speaker #5: Chappelle, is that a guidance question?

Speaker #6: No, no, no. It's a cadence question.

Operator: The next question will come from Jonathan Chappell with Evercore ISI. Please go ahead.

Operator: The next question will come from Jonathan Chappell with Evercore ISI. Please go ahead.

Speaker #5: Listen, I think that demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth.

Jonathan Chappell: Thank you. Darren, on the volume side, the acceleration from April through June, then we look at H2 of 2025, or even if you want to 2-year stack it feels like it is an easier comp. When you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as it related to capacity, rail service, the spread, is that a number now for volume in H2 of the year that continues to build off of that 12%? If not, what kind of derails that? No pun intended.

Jon Chappell: Thank you. Darren, on the volume side, the acceleration from April through June, then we look at H2 of 2025, or even if you want to 2-year stack it feels like it is an easier comp. When you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as it related to capacity, rail service, the spread, is that a number now for volume in H2 of the year that continues to build off of that 12%? If not, what kind of derails that? No pun intended.

Andrew Hall: This afternoon, I'm joined by our President and CEO, Shelley Simpson; our CFO, Brad Delco; Spencer Frazier, EVP of Sales and Marketing; our COO and President of Highway Services and Final Mile, Nick Hobbs; Brad Hicks, President of Dedicated Contract Services; and Darren Field, President of Intermodal. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley?

Andrew Hall: This afternoon, I'm joined by our President and CEO, Shelley Simpson; our CFO, Brad Delco; Spencer Frazier, EVP of Sales and Marketing; our COO and President of Highway Services and Final Mile, Nick Hobbs; Brad Hicks, President of Dedicated Contract Services; and Darren Field, President of Intermodal. I'd now like to turn the call over to our CEO, Ms. Shelley Simpson, for some opening comments. Shelley?

Speaker #5: There were opportunities in the second quarter for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us.

Speaker #5: So we're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. And I would anticipate that opportunity will continue.

Shelley Simpson: Thank you, Andrew, good afternoon. I want to start by thanking our employees across the organization for their hard work and relentless focus on serving our customers safely. We continue to operate in a dynamic environment that requires us to be nimble, make decisions quickly, and adapt as conditions change. Time and again, our people have demonstrated their ability to do exactly that while remaining operationally excellent. As we move through the year, we remain focused on executing against the priorities we outlined at the beginning of 2026. First and foremost, that means driving disciplined growth through operational excellence. Customer conversations around pricing continue to evolve alongside a market that is changing rapidly. We are pushing where we can and where we need to. Second, we are leveraging the investments we've made in our people, technology, and capacity to create sustainable competitive advantages.

Shelley Simpson: Thank you, Andrew, good afternoon. I want to start by thanking our employees across the organization for their hard work and relentless focus on serving our customers safely. We continue to operate in a dynamic environment that requires us to be nimble, make decisions quickly, and adapt as conditions change. Time and again, our people have demonstrated their ability to do exactly that while remaining operationally excellent.

Darren Field: Chappell, is that a guidance question?

Darren Field: Chappell, is that a guidance question?

Jonathan Chappell: No. It's a cadence question.

Jon Chappell: No. It's a cadence question.

Speaker #5: We're also careful with our own capacity challenges. We need to hire more drivers. We need to onboard more drayage capacity today. So that can be a bit of a headwind for us.

Darren Field: Listen, I think the demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth. There were opportunities in Q2 for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us. We're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. I would anticipate that opportunity will continue. We're also careful with our own capacity challenges. We need to hire more drivers. We need to onboard more drayage capacity today. That can be a bit of a headwind for us, but I'm confident in J.B. Hunt's ability to go out and attract and retain and bring on drivers for our needs.

Darren Field: Listen, I think the demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth. There were opportunities in Q2 for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us. We're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. I would anticipate that opportunity will continue. We're also careful with our own capacity challenges. We need to hire more drivers. We need to onboard more drayage capacity today. That can be a bit of a headwind for us, but I'm confident in J.B. Hunt's ability to go out and attract and retain and bring on drivers for our needs.

Speaker #5: But I'm confident in JB Hunt's ability to go out and attract and retain and bring on drivers for our needs. As the rest of the year goes on, I don't know how to give you a forecast of percentage change.

Shelley Simpson: As we move through the year, we remain focused on executing against the priorities we outlined at the beginning of 2026. First and foremost, that means driving disciplined growth through operational excellence. Customer conversations around pricing continue to evolve alongside a market that is changing rapidly. We are pushing where we can and where we need to. Second, we are leveraging the investments we've made in our people, technology, and capacity to create sustainable competitive advantages.

Speaker #5: But I know that demand is really strong for what we're doing.

Speaker #1: The next question will come from Tom Wadowitz with UBS. Please go ahead.

Speaker #3: Hey, Tom.

Speaker #7: Yeah. Hey, good afternoon. And congratulations on the strong growth and execution on the plan. Wanted to get a sense related to intermodal margin of just where you're at on drayage productivity.

Shelley Simpson: While the market environment has improved, our focus on cost control has not changed. We remain committed to removing structural costs from the business and improving the way we operate. That discipline is a critical component of our long-term strategy and positions us to perform well across market cycles. Third, we are focused on repairing margins and generating long-term shareholder returns. We have made meaningful progress repairing margins, and while further opportunity remains, we are encouraged by the trajectory of the business. We continue to have transparent conversations with customers about the investments required to maintain the service, capacity, and innovation that supports their growth while producing appropriate returns for our shareholders. It is increasingly clear that the freight market has changed. Capacity has tightened across the industry as safety-focused enforcement and broader supply pressures continue to affect available truckload capacity.

Shelley Simpson: While the market environment has improved, our focus on cost control has not changed. We remain committed to removing structural costs from the business and improving the way we operate. That discipline is a critical component of our long-term strategy and positions us to perform well across market cycles. Third, we are focused on repairing margins and generating long-term shareholder returns. We have made meaningful progress repairing margins, and while further opportunity remains, we are encouraged by the trajectory of the business.

Speaker #7: And also, I guess just rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop and say 23, 24.

Speaker #7: And then I think for I'm not sure how long, maybe the past year, you've had some nice improvement in that productivity. Which I think has helped.

Darren Field: As the rest of the year goes on, I don't know how to give you a forecast of percentage change, I know that demand is really strong for what we're doing.

Darren Field: As the rest of the year goes on, I don't know how to give you a forecast of percentage change, I know that demand is really strong for what we're doing.

Speaker #7: Just where are you at on loads for dray truck and container utilization? Is that can that go up further and help your margin in intermodal?

Operator: The next question will come from Thomas Wadewitz with UBS. Please go ahead.

Operator: The next question will come from Thomas Wadewitz with UBS. Please go ahead.

Speaker #7: Or is that kind of peaked out and you can't squeeze out more there? Thank you.

Shelley Simpson: We continue to have transparent conversations with customers about the investments required to maintain the service, capacity, and innovation that supports their growth while producing appropriate returns for our shareholders. It is increasingly clear that the freight market has changed. Capacity has tightened across the industry as safety-focused enforcement and broader supply pressures continue to affect available truckload capacity.

Darren Field: Hey, Tom.

Darren Field: Hey, Tom.

Thomas Wadewitz: Yeah. Hey, good afternoon, and congratulations on the strong growth and execution on the plan. Wanted to get a sense related to intermodal margin of just where you're at on drayage productivity, and also, I guess just rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop in, say, 2023, 2024. I think for, I'm not sure how long, maybe the past year, you've had some nice improvement in that productivity, which I think has helped. Just where are you at on loads per dray truck and container utilization? Can that go up further and help your margin in intermodal, or is that kind of peaked out and you can't squeeze out more there? Thank you.

Tom Wadewitz: Yeah. Hey, good afternoon, and congratulations on the strong growth and execution on the plan. Wanted to get a sense related to intermodal margin of just where you're at on drayage productivity, and also, I guess just rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop in, say, 2023, 2024. I think for, I'm not sure how long, maybe the past year, you've had some nice improvement in that productivity, which I think has helped. Just where are you at on loads per dray truck and container utilization? Can that go up further and help your margin in intermodal, or is that kind of peaked out and you can't squeeze out more there? Thank you.

Speaker #4: Sure. So on productivity around the assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. And clearly, we've didn't pre-fund capacity on the tractor front or the driver front like we have containers.

Shelley Simpson: We saw that tightening build throughout the quarter, including a noticeable step change around the annual International Roadcheck event in early May that has persisted. While demand is improving gradually, the current market tightness is being driven primarily by supply conditions. We didn't spend the last four years waiting for the cycle to turn. We spent the last four years preparing for it. In this environment, I am confident in our strategy that has enabled us to gain market share. The foundation results of our history, our commitment to people, technology, and capacity, being a leader in safety performance, consistent operational excellence, and delivering value to our customers through our CVD process has positioned us to succeed today and to deliver even stronger results in the future.

Shelley Simpson: We saw that tightening build throughout the quarter, including a noticeable step change around the annual International Roadcheck event in early May that has persisted. While demand is improving gradually, the current market tightness is being driven primarily by supply conditions. We didn't spend the last four years waiting for the cycle to turn. We spent the last four years preparing for it. In this environment, I am confident in our strategy that has enabled us to gain market share.

Speaker #4: So we do have excess containers still. And there are thousands of loads for us to go grow into that capacity. So certainly, volume growth in intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement.

Speaker #4: I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we've really, really just.

Darren Field: Sure. On productivity around the assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. Clearly, we didn't pre-fund capacity on the tractor front or the driver front like we have containers. We do have excess containers still, and there are thousands of loads for us to go grow into that capacity. Certainly, volume growth in intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement. I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we really did a great job as an organization, and the team was very successful in finding productivity benefits, and that is part of our cost to serve initiatives that we announced a year ago.

Darren Field: Sure. On productivity around the assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. Clearly, we didn't pre-fund capacity on the tractor front or the driver front like we have containers. We do have excess containers still, and there are thousands of loads for us to go grow into that capacity. Certainly, volume growth in intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement. I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we really did a great job as an organization, and the team was very successful in finding productivity benefits, and that is part of our cost to serve initiatives that we announced a year ago.

Shelley Simpson: The foundation results of our history, our commitment to people, technology, and capacity, being a leader in safety performance, consistent operational excellence, and delivering value to our customers through our CVD process has positioned us to succeed today and to deliver even stronger results in the future.

Speaker #4: Great job as an organization and the team was very successful in finding productivity benefits. And that is part of our cost to serve initiatives that we announced a year ago.

Shelley Simpson: We have structurally lowered our cost to serve customers, creating additional growth opportunities while driving progress towards our margin goals, even without a material benefit from pricing. The financial leverage in our business model continues to improve through disciplined growth and the application of technology across the enterprise. All of this positions our company to compound growth through cycles. Looking ahead, I'm excited about the opportunities in front of us during the H2 of the year. We expect demand for our services to remain strong and remain closely aligned with our customers on their capacity needs. We have proven that our model works and that our service delivers value. We remain focused on ensuring that we receive the appropriate return for the value we provide while continuing to create disciplined, sustainable growth and long-term value for our shareholders. With that, I'll turn the call over to Brad.

Shelley Simpson: We have structurally lowered our cost to serve customers, creating additional growth opportunities while driving progress towards our margin goals, even without a material benefit from pricing. The financial leverage in our business model continues to improve through disciplined growth and the application of technology across the enterprise. All of this positions our company to compound growth through cycles. Looking ahead, I'm excited about the opportunities in front of us during the H2 of the year.

Speaker #4: And so we've been as successful there. But I don't I will always put some pressure on that team. For productivity improvement, but I'm not looking for that area to really unlock margin expansion.

Speaker #1: And— and continue to unlock margin improvement. I— I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion.

Speaker #4: On the container front, certainly, getting back to, call it, 2018 type container terms is certainly where we would anticipate to move. And over the last year or two, seeing that improvement, well, we stopped buying containers was one of the ways that has really helped that while we continue to grow into it.

Shelley Simpson: We expect demand for our services to remain strong and remain closely aligned with our customers on their capacity needs. We have proven that our model works and that our service delivers value. We remain focused on ensuring that we receive the appropriate return for the value we provide while continuing to create disciplined, sustainable growth and long-term value for our shareholders. With that, I'll turn the call over to Brad.

Speaker #1: I think over the last 12 months, we've really, really just— Great job as an organization and— and the team was— was very successful in finding productivity benefits.

Speaker #1: The next question will come from Jason Seidel with TD Callan. Please go ahead.

Speaker #1: And that is part of our cost-to-serve initiatives that we announced a year ago. And so, we've been successful there, but I don't— I don't— I will always put some pressure on that team.

Speaker #7: Yeah. Thank you, operator.

Speaker #6: Hey, guys. How are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts from at least early on from the Montgomery decision, both looking at ICS as well as the asset-based side?

Darren Field: We've been successful there, but I will always put some pressure on that team for productivity improvement, but I'm not looking for that area to really unlock margin expansion. On the container front, certainly, getting back to call it 2018 type container terms is certainly where we would anticipate to move. Over the last year or two, seeing that improvement, well, we stopped buying containers, was one of the ways that has really helped that while we continue to grow into it.

Darren Field: We've been successful there, but I will always put some pressure on that team for productivity improvement, but I'm not looking for that area to really unlock margin expansion. On the container front, certainly, getting back to call it 2018 type container terms is certainly where we would anticipate to move. Over the last year or two, seeing that improvement, well, we stopped buying containers, was one of the ways that has really helped that while we continue to grow into it.

Andrew Hall: Thanks, Shelley, and good afternoon. I'll start with some quick comments about our financial performance in the quarter. As you've seen in our release, on a GAAP basis, total revenue increased 19%, operating income improved 32%, and diluted earnings per share improved 45% compared to the prior year period. These results reflect disciplined execution and continued momentum from the strategy we've been discussing for several quarters around operational excellence and lowering our cost to serve.

Andrew Hall: Thanks, Shelley, and good afternoon. I'll start with some quick comments about our financial performance in the quarter. As you've seen in our release, on a GAAP basis, total revenue increased 19%, operating income improved 32%, and diluted earnings per share improved 45% compared to the prior year period. These results reflect disciplined execution and continued momentum from the strategy we've been discussing for several quarters around operational excellence and lowering our cost to serve.

Speaker #1: For productivity improvement, I'm not looking for that area to really unlock margin expansion. On the container front, certainly getting back to, call it, 2018-type container terms is certainly where we would anticipate to move.

Speaker #6: And then if you haven't seen it thus far, what are you expecting down the road from both the capacity as well as an insurance cost standpoint?

Speaker #5: Yeah. I would just say this is Nick. So I'll jump in on that. I would say that we've seen more carriers come to our platform and more carriers getting approved.

Speaker #1: And over the last year or two, seeing that improvement, well, we—we stopped buying containers, was one of the ways that has—has really helped that, while we continue to grow into it.

Speaker #5: So I think we have seen carriers migrating from small brokers as our speculation on that, trying to go to higher ground. Plus, we have a lot of freight, as we've talked about, our volumes are way up.

Speaker #2: The next question will come from Jason Seidel with TD Cowen. Please go ahead.

Operator: The next question will come from Jason Seidl with TD Cowen. Please go ahead.

Operator: The next question will come from Jason Seidl with TD Cowen. Please go ahead.

Speaker #5: Yeah, thank you, operator.

Jason Seidl [Managing Director, Industrials: Thank you, operator. Hey, guys. How are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts from, at least early on, from the Montgomery decision, both looking at ICS as well as the asset-based side? If you haven't seen it thus far, what are you expecting down the road, from both a capacity as well as an insurance cost standpoint?

Jason Seidl: Thank you, operator. Hey, guys. How are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts from, at least early on, from the Montgomery decision, both looking at ICS as well as the asset-based side? If you haven't seen it thus far, what are you expecting down the road, from both a capacity as well as an insurance cost standpoint?

Brad Delco: While market conditions have improved, the biggest driver of our performance continues to be our people, executing at a high level on service, safety, productivity, and cost discipline while leveraging our technology investments. As demonstrated this quarter, our cost discipline performance wasn't at the expense of supporting future growth as we achieved double-digit volume growth across JBI, ICS, and JBT in the quarter. The investments we have made over the past several years in our people, technology, and capacity are creating meaningful advantages for our business and allowing us to respond quickly to opportunities in the market. Let me turn to our efforts on lowering our cost to serve. While market fundamentals have shifted, this remains one of the most important operational initiatives underway across the company. Over the past year, we've removed over $135 million of structural costs from our company.

Brad Delco: While market conditions have improved, the biggest driver of our performance continues to be our people, executing at a high level on service, safety, productivity, and cost discipline while leveraging our technology investments. As demonstrated this quarter, our cost discipline performance wasn't at the expense of supporting future growth as we achieved double-digit volume growth across JBI, ICS, and JBT in the quarter.

Speaker #6: Hey, guys, how are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts, at least early on, from the Montgomery decision?

Speaker #5: So I think we have a lot of opportunity. But from our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility.

Speaker #6: Both looking at ICS as well as the asset-based side. And then, if you haven't seen it thus far, what are you expecting down the road from both the capacity, as well as an insurance cost standpoint?

Speaker #5: But we already exceeded the federal minimums and we have dynamic monitoring going on. So no risk exposure, increased there for us because we think we've been doing a really, really good job for many years with our safety focus.

Speaker #4: Yeah, I would just say—this is Nick, so I'll jump in on that. I would say that we've seen more carriers come to our platform and more carriers getting approved.

Nick Hobbs: I would just say This is Nick, I'll jump in on that.

Nick Hobbs: I would just say This is Nick, I'll jump in on that.

Speaker #5: So but we think we have seen more carriers migrate over to our platform because of that.

Jason Seidl [Managing Director, Industrials: Hey, Nick.

Jason Seidl: Hey, Nick.

Nick Hobbs: I would say that we've seen more carriers come to our platform and more carriers getting approved. I think we have seen carriers migrating from small brokers, is our speculation on that, trying to go to higher ground. We have a lot of freight, as we've talked about. Our volumes are way up. I think we have a lot of opportunity. From our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility. We already exceeded the federal minimums, and we have dynamic monitoring going on. No risk exposure increase there for us because we think we've been doing a really, really good job for many years with our safety focus. We think we have seen more carriers migrate over to our platform, because of that.

Nick Hobbs: I would say that we've seen more carriers come to our platform and more carriers getting approved. I think we have seen carriers migrating from small brokers, is our speculation on that, trying to go to higher ground. We have a lot of freight, as we've talked about. Our volumes are way up. I think we have a lot of opportunity. From our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility. We already exceeded the federal minimums, and we have dynamic monitoring going on. No risk exposure increase there for us because we think we've been doing a really, really good job for many years with our safety focus. We think we have seen more carriers migrate over to our platform, because of that.

Speaker #4: I might just add too. This is Brad Hicks. From a dedicated standpoint, I give my prepared remarks. I talked about record pipeline how much of that is directly related to the outcome of that ruling.

Brad Delco: The investments we have made over the past several years in our people, technology, and capacity are creating meaningful advantages for our business and allowing us to respond quickly to opportunities in the market. Let me turn to our efforts on lowering our cost to serve. While market fundamentals have shifted, this remains one of the most important operational initiatives underway across the company. Over the past year, we've removed over $135 million of structural costs from our company.

Speaker #4: So, I think we have seen carriers migrating from small brokers—as our speculation on that—trying to go to higher ground. Plus, we have a lot of freight. As we've talked about, our volumes are way up.

Speaker #4: It's hard to say, but I certainly think that along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to insure that they are partnered with the right reliable supply chain partner.

Speaker #4: So, I think we have a lot of opportunity, but from our standpoint, the Montgomery decision has just increased a lot of focus on carrier selection and broker responsibility. But we already exceed the federal minimums, and we have dynamic monitoring going on.

Speaker #4: And I do think that's a factor. It's really hard to pinpoint to what extent, but I do think that that is showing up to some degree.

Speaker #4: So, no risk exposure increased there for us because we think we've been doing a really, really good job for many years with our safety focus.

Brad Delco: We continue to look for opportunities to simplify processes, improve productivity, increase asset utilization, and leverage technology to automate work. Just as importantly, these efforts are improving the customer experience while creating operating leverage across the organization. Our objective remains the same as it has been since the beginning of this initiative: build a stronger, more efficient company that can generate higher returns across all market environments. We are encouraged by the progress we are making and believe there remains additional runway ahead as we continue to scale our technology investments and improve efficiencies across our suite of services. Turning to capital allocation. Our approach remains consistent. We are a disciplined growth company, and we are equally disciplined in how we deploy capital. Our first priority continues to be investing in the business where we see opportunities to generate attractive long-term returns.

Brad Delco: We continue to look for opportunities to simplify processes, improve productivity, increase asset utilization, and leverage technology to automate work. Just as importantly, these efforts are improving the customer experience while creating operating leverage across the organization. Our objective remains the same as it has been since the beginning of this initiative: build a stronger, more efficient company that can generate higher returns across all market environments.

Speaker #2: And Jason, Shelley, I would just add that in the driver market, there are specific markets that are as tight as we have ever seen.

Speaker #4: So—but we think we have seen more carriers migrate over to our platform because of that.

Speaker #1: I might just add, too, this is Brad Hicks. From a dedicated standpoint, you know, I— in my prepared remarks, I talked about record pipeline: how much of that is directly related to— to the outcome of that ruling is hard to say, but— but I certainly think that, along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner.

Brad Hicks: I might just add, too. This is Brad Hicks. From a dedicated standpoint, in my prepared remarks, I talked about record pipeline. How much of that is directly related to the outcome of that ruling is hard to say. I certainly think that along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner, and I do think that's a factor. It's really hard to pinpoint to what extent, I do think that that is showing up to some degree.

Brad Hicks: I might just add, too. This is Brad Hicks. From a dedicated standpoint, in my prepared remarks, I talked about record pipeline. How much of that is directly related to the outcome of that ruling is hard to say. I certainly think that along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner, and I do think that's a factor. It's really hard to pinpoint to what extent, I do think that that is showing up to some degree.

Speaker #2: And so you're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers.

Speaker #2: And so it is a challenge in the market, but I think it's a welcome challenge for us.

Speaker #1: The next question will come from Brian Ossenbeck with JPMorgan. Please go ahead.

Brad Delco: We are encouraged by the progress we are making and believe there remains additional runway ahead as we continue to scale our technology investments and improve efficiencies across our suite of services. Turning to capital allocation. Our approach remains consistent. We are a disciplined growth company, and we are equally disciplined in how we deploy capital. Our first priority continues to be investing in the business where we see opportunities to generate attractive long-term returns.

Speaker #5: Hey, Brian.

Speaker #8: Hey. Afternoon, everybody. Maybe just two follow-up questions on capacity. Shelley mentioned some of the markets are really tight in terms of the driver size, tight as ever seen.

Speaker #1: And I—I do think that's a factor. It's really hard to pinpoint to what extent, but I do think that is showing up to some degree.

Speaker #3: And Jason, Shelley— I would just add that in the driver market, there are specific markets that are as tight as we have ever seen.

Shelley Simpson: Jason, Shelley. I would just add that in the driver market, there are specific markets that are as tight as we have ever seen. You're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers. It is a challenge in the market, but I think it's a welcome challenge for us.

Shelley Simpson: Jason, Shelley. I would just add that in the driver market, there are specific markets that are as tight as we have ever seen. You're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers. It is a challenge in the market, but I think it's a welcome challenge for us.

Speaker #8: Darren, does that cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would.

Speaker #3: And so, you're—you're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers.

Speaker #8: But is that something where if you're already kind of at the top end of productivity, maybe that becomes a little bit more of through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while.

Brad Delco: We remain committed to maintaining a strong investment-grade balance sheet, supporting the growth of our dividend, and being opportunistic with share repurchases when appropriate. We believe the investments we have made throughout this cycle have positioned the company exceptionally well for future growth. Importantly, much of our capacity has already been funded, providing us with significant flexibility as demand for our services improves. The combination of a strong balance sheet, healthy cash generation, and disciplined capital deployment gives us confidence in our ability to continue creating long-term shareholder value. That concludes my comments. I'll now turn it over to Spencer.

Brad Delco: We remain committed to maintaining a strong investment-grade balance sheet, supporting the growth of our dividend, and being opportunistic with share repurchases when appropriate. We believe the investments we have made throughout this cycle have positioned the company exceptionally well for future growth. Importantly, much of our capacity has already been funded, providing us with significant flexibility as demand for our services improves.

Speaker #3: And so, it is a challenge in the market, but I think it's a welcome challenge for us.

Speaker #8: So really peak season discussions are already underway. What are you thinking about managing that stack and maybe bringing some of that more to the market?

Speaker #2: The next question will come from Brian Ossenbeck with JPMorgan. Please go ahead.

Operator: The next question will come from Brian Ossenbeck with J.P. Morgan. Please go ahead.

Operator: The next question will come from Brian Ossenbeck with J.P. Morgan. Please go ahead.

Speaker #8: Thanks very much.

Speaker #4: Hey, Brian.

Nick Hobbs: Hey, Brian.

Darren Field: Hey, Brian.

Speaker #4: Well, certainly, any time there's challenge with the driver supply, all parts of the supply chain that hire professional truck drivers are going to face some amount of challenge.

Speaker #1: Hey. Afternoon, everybody.

Brian Ossenbeck: Hey. Afternoon, everybody. Maybe just two follow-up questions on capacity. Shelley mentioned some of the markets are really tight in terms of the driver side, as tight as ever seen. Darren, is that a cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would. Is that something where if you're already at the top end of productivity, maybe that becomes a little bit more of a challenge? If you can just talk through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while. Clearly peak season discussion is already underway. What are you thinking about managing that stack and maybe bringing some of that more to the market?

Brian Ossenbeck: Hey. Afternoon, everybody. Maybe just two follow-up questions on capacity. Shelley mentioned some of the markets are really tight in terms of the driver side, as tight as ever seen. Darren, is that a cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would. Is that something where if you're already at the top end of productivity, maybe that becomes a little bit more of a challenge? If you can just talk through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while. Clearly peak season discussion is already underway. What are you thinking about managing that stack and maybe bringing some of that more to the market?

Speaker #7: Maybe just two follow-up questions on capacity. Shelley mentioned some of the— the markets are really tight in terms of the driver size, as tight as ever seen.

Brad Delco: The combination of a strong balance sheet, healthy cash generation, and disciplined capital deployment gives us confidence in our ability to continue creating long-term shareholder value. That concludes my comments. I'll now turn it over to Spencer.

Speaker #7: Darren, does that— is that a cause for concern on the— on the dray side? I know you have a lot in-house, so everybody else probably feels it more than— more than you would, but is that something where if you're already kind of at the top end of productivity, maybe that becomes a little bit more of a challenge?

Speaker #4: I think the third-party drayage capacity out there has been under some pressure. And so I do think we have an advantage against our competition given the amount of in-source the amount of company drivers we use.

Speaker #7: And then, if you can, just talk through a little bit more about pulling back some of the containers off of the stacks, because I know you're over about 90% right now for the first time in a while.

Spencer Frazier: Thank you, Brad. Thanks to everyone for joining the call. I'll start by saying how proud I am of our team's performance this quarter. In a rapidly changing environment, our people stayed focused on what we could control: serving customers, managing through volatility, and helping them make the best decisions across their transportation networks. During the quarter, we saw an acceleration of the structural changes in the market that we discussed in April. Truckload capacity continued to tighten from ongoing regulatory enforcement, while at the same time, many carriers continued to face higher operating costs that are not fully supported by prevailing rates. As a result, several industry indicators, including higher tender rejections, higher spot pricing, and lower driver employment, moved towards levels not seen since 2021 and 2022. The pace of change has created real planning and execution challenges for our customers.

Spencer Frazier: Thank you, Brad. Thanks to everyone for joining the call. I'll start by saying how proud I am of our team's performance this quarter. In a rapidly changing environment, our people stayed focused on what we could control: serving customers, managing through volatility, and helping them make the best decisions across their transportation networks. During the quarter, we saw an acceleration of the structural changes in the market that we discussed in April.

Speaker #4: We do partner with outside carriers, though, and have had a lot of success for a number of years to do that. And that will remain an important part of our strategy.

Speaker #7: So, really, peak season discussions are already underway. What are you thinking about managing that stack and maybe bringing some of that more to the market?

Speaker #4: But as we see specific markets that are most challenged, we feel that as well. And it just sends customers looking for an inner modal conversion opportunity from the highway that much faster in those markets.

Speaker #7: Thanks very much.

Brian Ossenbeck: Thanks very much.

Brian Ossenbeck: Thanks very much.

Speaker #1: Well, certainly, anytime there's a challenge with the driver supply, all parts of— of the supply chain that hire professional truck drivers are going to— are going to face some— some amount of challenge.

Darren Field: Well, certainly, anytime there's a challenge with the driver supply, all parts of the supply chain that hire professional truck drivers are going to face some amount of challenge. I think the third-party drayage capacity out there has been under some pressure, so I do think we have an advantage against our competition given the amount of insource, the amount of company drivers we use. We do partner with outside carriers, though, and have had a lot of success for a number of years to do that, and that will remain an important part of our strategy. As we see specific markets that are most challenged, we feel that as well. It just sends customers looking for an intermodal conversion opportunity from the highway that much faster in those markets.

Darren Field: Well, certainly, anytime there's a challenge with the driver supply, all parts of the supply chain that hire professional truck drivers are going to face some amount of challenge. I think the third-party drayage capacity out there has been under some pressure, so I do think we have an advantage against our competition given the amount of insource, the amount of company drivers we use. We do partner with outside carriers, though, and have had a lot of success for a number of years to do that, and that will remain an important part of our strategy. As we see specific markets that are most challenged, we feel that as well. It just sends customers looking for an intermodal conversion opportunity from the highway that much faster in those markets.

Speaker #4: And so it just kind of contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers and we'll continue to work on that.

Spencer Frazier: Truckload capacity continued to tighten from ongoing regulatory enforcement, while at the same time, many carriers continued to face higher operating costs that are not fully supported by prevailing rates. As a result, several industry indicators, including higher tender rejections, higher spot pricing, and lower driver employment, moved towards levels not seen since 2021 and 2022. The pace of change has created real planning and execution challenges for our customers.

Speaker #1: I think the— the third-party drayage capacity out there has been under some pressure, and so I do think we have an advantage against our competition, given the amount of insourced— the— the amount of company drivers we use.

Speaker #4: As far as the container supply, we don't obviously, we manage forecasts with customers. We manage expectations. We have a network plan around our volumes.

Speaker #1: We do partner with outside carriers, though, and have had a lot of success for a number of years doing that. That will remain an important part of our strategy.

Speaker #4: And as we see new opportunities come at us, we're going to look for how much capacity do we need to bring out of storage.

Speaker #1: But, as we see, specific markets that are most challenged—we feel that as well. And it just sends customers looking for an intermodal conversion opportunity from the highway that much faster in those markets.

Speaker #4: That's been an ongoing process for us for well over a decade. Now, it's just been more visible with the amount of equipment we've had in storage over the last few years.

Spencer Frazier: Many shippers were not positioned for the speed and magnitude of these shifts, they are now looking to the best providers who can help them build more durable and flexible plans around capacity, cost, service, and mode. In Q2, overall freight demand improved modestly from Q1. Demand in many industrial markets is improving, US consumer demand remains resilient. That said, demand for J.B. Hunt suite of services continues to outpace the market, supported by record volumes in JBI and double-digit volume growth in both JBT and ICS. We gained market share across our services. Retention remains strong, our pipelines in all business units continue to expand. As demand improved and capacity tightened, pricing and planning conversations with customers became more transparent, more frequent, and more flexible.

Spencer Frazier: Many shippers were not positioned for the speed and magnitude of these shifts, they are now looking to the best providers who can help them build more durable and flexible plans around capacity, cost, service, and mode. In Q2, overall freight demand improved modestly from Q1. Demand in many industrial markets is improving, US consumer demand remains resilient. That said, demand for J.B. Hunt suite of services continues to outpace the market, supported by record volumes in JBI and double-digit volume growth in both JBT and ICS.

Speaker #1: And so it just kind of contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers. And we'll continue to work on that.

Darren Field: It just contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers, and we'll continue to work on that. As far as the container supply, obviously we manage forecasts with customers. We manage expectations. We have a network plan around our volumes. As we see new opportunities come at us, we're going to look for how much capacity do we need to bring out of storage. That's been an ongoing process for us for well over a decade now. It's just been more visible with the amount of equipment we've had in storage over the last few years. I don't think that our behavior around when to bring containers into the market is any different today than it ever has been.

Darren Field: It just contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers, and we'll continue to work on that. As far as the container supply, obviously we manage forecasts with customers. We manage expectations. We have a network plan around our volumes. As we see new opportunities come at us, we're going to look for how much capacity do we need to bring out of storage. That's been an ongoing process for us for well over a decade now. It's just been more visible with the amount of equipment we've had in storage over the last few years. I don't think that our behavior around when to bring containers into the market is any different today than it ever has been.

Speaker #4: So I don't think that our behavior around when to bring containers into the market is any different today than it ever has been. But certainly, I can understand and appreciate the question.

Speaker #1: As far as the container supply, you know, we don't— obviously, we— we— we manage forecasts with customers, we manage expectations, we have a network plan around our volumes, and as we see new opportunities come at us, we're going to look for how much capacity do we need, to— to bring out of— out of storage.

Speaker #2: Brian, I would say in inner modal, it's a strategic advantage for us. And so if you just think about what the market looks like today, it is very, very tight markets.

Speaker #2: Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the inner modal market. We continue to have strong service performance.

Speaker #1: That's been an ongoing process for us for well over a decade. Now, it's just been more visible with the amount of equipment we've had in storage over the last few years.

Speaker #2: I believe that's the operational excellence that's happening inside our inner modal business. And that includes how much that we actually in-source with our own professional drivers.

Spencer Frazier: We gained market share across our services. Retention remains strong, our pipelines in all business units continue to expand. As demand improved and capacity tightened, pricing and planning conversations with customers became more transparent, more frequent, and more flexible.

Speaker #1: So, I don't think that our behavior around when to bring containers into the market is any different today than it ever has been. But certainly, I can understand and appreciate the question.

Speaker #1: The next question will come from Jacob Lax with Wolf Research. Please go ahead.

Speaker #6: Hey, good afternoon. Thanks. Hey. Hey. Thanks for your time. Maybe just to follow up on that, how much capacity for internal growth do you think you have today with inner modal?

Darren Field: Certainly, I can understand and appreciate the question.

Darren Field: Certainly, I can understand and appreciate the question.

Spencer Frazier: We saw customers initiate more out-of-cycle/mini bids as they worked to keep pricing aligned with the rising cost of capacity. Customers are also becoming increasingly mindful of the carriers they rely on, consolidating more of their business with providers that can deliver capacity at scale. This is where our mode-neutral business model and our continued investments in people, technology, and capacity create meaningful value. We are positioned to help customers optimize across orders, shipments, and modes, to provide practical solutions as their networks adjust. During the quarter, the strongest areas of customer engagement centered on highway to intermodal conversion, Dedicated fleets, and access to safe, secure, and reliable capacity. Looking ahead, we are actively helping customers prepare for fall peak, reset capacity assumptions, and begin transportation planning for 2027.

Spencer Frazier: We saw customers initiate more out-of-cycle/mini bids as they worked to keep pricing aligned with the rising cost of capacity. Customers are also becoming increasingly mindful of the carriers they rely on, consolidating more of their business with providers that can deliver capacity at scale. This is where our mode-neutral business model and our continued investments in people, technology, and capacity create meaningful value.

Shelley Simpson: Brian, I would say, in intermodal, it's a strategic advantage for us. If you just think about what the market looks like today, it is very, very tight markets. Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the intermodal market. We continue to have strong service performance. I believe that's the operational excellence that's happening inside our intermodal business, and that includes how much that we actually insource with our own professional drivers.

Shelley Simpson: Brian, I would say, in intermodal, it's a strategic advantage for us. If you just think about what the market looks like today, it is very, very tight markets. Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the intermodal market. We continue to have strong service performance. I believe that's the operational excellence that's happening inside our intermodal business, and that includes how much that we actually insource with our own professional drivers.

Speaker #3: Brian, I would say in intermodal, it's a strategic advantage for us. And so, if you just think about what the market looks like today, it has very, very tight markets.

Speaker #6: And how do you think about balancing volumes versus pricing going forward? And then is it competitive backdrop in Transcon improving at all? Thanks.

Speaker #3: Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the intermodal market. We continue to have strong service performance.

Speaker #4: So first of all, on the volume front, how much excess capacity? I don't know. We've got I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Speaker #3: I believe that's the operational excellence that's happening inside our intermodal business, and that includes how much we actually insource with our own professional drivers.

Speaker #8: And then we grew 10, so.

Speaker #4: And then we grew 10, so. Good point.

Spencer Frazier: We are positioned to help customers optimize across orders, shipments, and modes, to provide practical solutions as their networks adjust. During the quarter, the strongest areas of customer engagement centered on highway to intermodal conversion, Dedicated fleets, and access to safe, secure, and reliable capacity. Looking ahead, we are actively helping customers prepare for fall peak, reset capacity assumptions, and begin transportation planning for 2027.

Speaker #8: We'll settle on 10.

Speaker #2: The next question will come from Jacob Lax with Wolfe Research. Please go ahead.

Operator: The next question will come from Jacob Lacks with Wolfe Research. Please go ahead.

Operator: The next question will come from Jacob Lacks with Wolfe Research. Please go ahead.

Speaker #4: And as it relates to the comparison of price versus volume, look, we're in this business and own these assets to generate a return on those investments.

Speaker #5: Hey, good afternoon. Thanks. Hey. Hey, thanks for your time. Maybe just to follow up on that, how much capacity for incremental growth do you think you have today within Intermodal?

Jacob Lacks: Hey, afternoon. Hey. Thanks for your time. Maybe just to follow up on that, how much capacity for incremental growth do you think you have today within intermodal? How do you think about balancing volumes versus pricing going forward? Is the competitive backdrop in transcon improving at all? Thanks.

Jacob Lacks: Hey, afternoon. Hey. Thanks for your time. Maybe just to follow up on that, how much capacity for incremental growth do you think you have today within intermodal? How do you think about balancing volumes versus pricing going forward? Is the competitive backdrop in transcon improving at all? Thanks.

Speaker #5: And how do you think about balancing volumes versus pricing going forward? And then, is the competitive backdrop in TransCon improving at all? Thanks.

Speaker #4: And so we certainly balance our pricing. Opportunity. The volume growth opportunity around how it can contribute to our network and add value and expand our margin.

Speaker #4: And those decisions are going on every day with the opportunities, and we'll continue to come through the door like that. I think in the Transcon competitive space, I do think it has behaved a little bit different than normal.

Speaker #1: So, first of all, on— on— on the volume front, how much excess capacity? I— I don't know. We— we— we've got, I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Darren Field: First of all, on the volume front, how much excess capacity? I don't know. I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Darren Field: First of all, on the volume front, how much excess capacity? I don't know. I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Spencer Frazier: While many customers did not plan for this level of a change to occur this quickly, through external customer surveys and our ongoing customer conversations, show a growing recognition that it is becoming more expensive to support the capacity, service, and professional driving jobs that power our nation's supply chains. We believe that reality will shape future supply chain planning and budgeting discussions, it reinforces the role J.B. Hunt will play in helping lead customers through a very dynamic operating environment. With that, I'll turn the call over to Nick.

Spencer Frazier: While many customers did not plan for this level of a change to occur this quickly, through external customer surveys and our ongoing customer conversations, show a growing recognition that it is becoming more expensive to support the capacity, service, and professional driving jobs that power our nation's supply chains. We believe that reality will shape future supply chain planning and budgeting discussions, it reinforces the role J.B. Hunt will play in helping lead customers through a very dynamic operating environment. With that, I'll turn the call over to Nick.

Speaker #4: And would have expected a little bit more pricing strength there than what we've seen. That has just shown up a lot of rail-owned competitor rail-owned asset-based I'm sorry, the rail control competition that we face.

Brad Hicks: We grew 10.

Brad Hicks: We grew 10.

Darren Field: We grew 10, good point.

Speaker #1: And then we grew 10. Good point.

Darren Field: We grew 10, good point.

Speaker #7: So it's—let's settle on 10.

Brad Hicks: We'll settle on 10.

Brad Hicks: We'll settle on 10.

Speaker #1: And as it relates to the— the comparison of price versus volume, look, we're— we're in this business and own these assets to generate a return on those investments.

Darren Field: As it relates to the comparison of price versus volume, look, we're in this business and own these assets to generate a return on those investments. We certainly balance our pricing opportunity, the volume growth opportunity around how it can contribute to our network and add value and expand our margin. Those decisions are going on every day with the opportunities and will continue to come through the door like that. I think in the transcon competitive space, I do think it has behaved a little bit different than normal, and would have expected a little bit more pricing strength there than what we've seen. That has just shown up, a lot of rail-owned, competitor rail-owned. The rail control competition that we face has been a little more aggressive than what we've seen in the past.

Darren Field: As it relates to the comparison of price versus volume, look, we're in this business and own these assets to generate a return on those investments. We certainly balance our pricing opportunity, the volume growth opportunity around how it can contribute to our network and add value and expand our margin. Those decisions are going on every day with the opportunities and will continue to come through the door like that. I think in the transcon competitive space, I do think it has behaved a little bit different than normal, and would have expected a little bit more pricing strength there than what we've seen. That has just shown up, a lot of rail-owned, competitor rail-owned. The rail control competition that we face has been a little more aggressive than what we've seen in the past.

Speaker #4: Has been a little more aggressive than what we've seen in the past. And so there's times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow.

Speaker #1: And so we certainly balance our pricing opportunity, the volume growth opportunity, around how it can contribute to our network and add value and expand our margin.

Speaker #1: And those decisions are going on every day with the opportunities, and we'll continue to— to come through the door like that. I think in the TransCon competitive space, I do think it has behaved a little bit different than normal.

Nick Hobbs: Thanks, Spencer, good afternoon. I'll share updates on our Final Mile and highway businesses. First, as we do at internal meetings, I'll start with an update on safety. Safety is core to our culture at J.B. Hunt, we continue to challenge ourselves to improve on our record safety performance as measured by DOT preventable accidents per million miles. I'm proud that year to date, through Q2, we are besting last year's results by 11%. To support our current and future growth, we will bring on drivers to maintain our high service levels to our customers. As the driver market has tightened, we have implemented various strategies to recruit and retain drivers to meet our growing need. We have implemented sign-on bonuses in several markets and targeted driver wage increases in select markets.

Nick Hobbs: Thanks, Spencer, good afternoon. I'll share updates on our Final Mile and highway businesses. First, as we do at internal meetings, I'll start with an update on safety. Safety is core to our culture at J.B. Hunt, we continue to challenge ourselves to improve on our record safety performance as measured by DOT preventable accidents per million miles. I'm proud that year to date, through Q2, we are besting last year's results by 11%. To support our current and future growth, we will bring on drivers to maintain our high service levels to our customers.

Speaker #4: We're not losing share in Transcon. But it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that.

Speaker #1: And would have expected a little bit more pricing strength there than what we've seen. That has just shown up, you know, a lot of rail-owned, competitor rail-owned, asset-based—I'm sorry, the rail-controlled competition that we face has—has been a little more aggressive than what we've seen in the past.

Speaker #4: Our prices are up year over year in the Transcon. It's just the truckload capacity market is not as big of an influencer on that market as it is in the East.

Speaker #1: The next question will come from Ken Hexter with Bank of America. Please go ahead.

Speaker #5: Hey, Greg, good afternoon. And nice job on handling the double-digit inner modal load growth into flowing into results. Brad or Darren, if utilization up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment?

Speaker #1: And so there are times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow.

Darren Field: There's times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow. We're not losing share in transcon, but it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that. Our prices are up year over year in the transcon. It's just that the truckload capacity market is not as big of an influencer on that market as it is in the East.

Darren Field: There's times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow. We're not losing share in transcon, but it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that. Our prices are up year over year in the transcon. It's just that the truckload capacity market is not as big of an influencer on that market as it is in the East.

Nick Hobbs: As the driver market has tightened, we have implemented various strategies to recruit and retain drivers to meet our growing need. We have implemented sign-on bonuses in several markets and targeted driver wage increases in select markets.

Speaker #5: And can you detail a bit more on the rail service level comments that you made? Are you concerned this is a cap on your growth rates near term?

Speaker #1: You know, we're not losing share in TransCon, but it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that.

Nick Hobbs: While these are important early actions, we believe the industry will need to continue investing in professional drivers who operate safely and comply with regulations designed to protect both themselves and the motoring public. Moving to Final Mile. Demand remains stable across our core end markets of furniture, exercise equipment, and appliances. Demand in our fulfillment business remains strong, driven by off-price retail channels. Our sales pipeline remains healthy, and we are adding new opportunities as we work to offset as much of our previously disclosed $90 million revenue headwind due to our focus on being disciplined. We remain committed to being safe and secure and providing customers with the high service levels that they have come to expect from J.B. Hunt. In JBT, our focus on operational excellence continues to drive growth and market share gains, highlighted by our fifth consecutive quarter of double-digit volume growth.

Nick Hobbs: While these are important early actions, we believe the industry will need to continue investing in professional drivers who operate safely and comply with regulations designed to protect both themselves and the motoring public. Moving to Final Mile. Demand remains stable across our core end markets of furniture, exercise equipment, and appliances. Demand in our fulfillment business remains strong, driven by off-price retail channels.

Speaker #5: Is there any particular region or market feeling more pain? Thanks, guys.

Speaker #1: Our prices are up year-over-year in the TransCon. It's just that the truckload capacity market is not as big of an influencer on that market as it is in the East.

Speaker #4: Yeah, Ken, let me start with

Speaker #8: maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity in the simple math of saying we grew 10 would suggest 10." I think there's still opportunities, particularly and I'll let Darren support this comment.

Speaker #2: The next question will come from Ken Hexter with Bank of America. Please go ahead.

Operator: The next question will come from Ken Hoexter with Bank of America. Please go ahead.

Operator: The next question will come from Ken Hoexter with Bank of America. Please go ahead.

Nick Hobbs: Our sales pipeline remains healthy, and we are adding new opportunities as we work to offset as much of our previously disclosed $90 million revenue headwind due to our focus on being disciplined. We remain committed to being safe and secure and providing customers with the high service levels that they have come to expect from J.B. Hunt. In JBT, our focus on operational excellence continues to drive growth and market share gains, highlighted by our fifth consecutive quarter of double-digit volume growth.

Speaker #6: Hey Greg, good afternoon, and nice job on handling the double-digit intermodal load growth flowing into results. Brad or Darren, if utilization is up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment?

Ken Hoexter: Hey, great. Good afternoon. Nice job on handling the double-digit intermodal load growth into flowing into results. Brad or Darren, if utilization up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment? Can you detail a bit more on the rail service level comments that you made? Are you concerned this is a cap on your growth rates near term? Is there any particular region or market feeling more pain? Thanks, guys.

Ken Hoexter: Hey, great. Good afternoon. Nice job on handling the double-digit intermodal load growth into flowing into results. Brad or Darren, if utilization up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment? Can you detail a bit more on the rail service level comments that you made? Are you concerned this is a cap on your growth rates near term? Is there any particular region or market feeling more pain? Thanks, guys.

Speaker #8: When we're growing in the East, we have opportunities to turn those boxes faster. And so a load isn't necessarily a load in every instance.

Speaker #8: And so with the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster I don't recall there ever really being a time when we could put out an earnings report and you see a length of haul in inner modal below 1,600 miles.

Speaker #6: And— and can you detail a bit more on the rail service level comments that you made? Are— are you concerned this is a cap on your growth rates near term?

Speaker #6: Is— is there any particular region or market feeling more pain? Thanks, guys.

Speaker #8: I think that two consecutive quarters of that. And so the 31% two-year stack growth in the East, if that trend continues, there's probably opportunity to get more productivity on that container.

Speaker #1: Yeah. Yeah, Ken, let me—let me

Brad Hicks: Yeah, Ken, let me start with maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity," and the simple math of saying we grew 10 would suggest 10. I think there's still opportunities, particularly. I'll let Darren support this comment. When we're growing in the East, we have opportunities to turn those boxes faster. A load isn't necessarily a load in every instance. With the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster. I don't recall there ever really being a time when we put out an earnings report and you see a length of haul in intermodal below 1,600 miles. I think we've had two consecutive quarters of that.

Brad Hicks: Yeah, Ken, let me start with maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity," and the simple math of saying we grew 10 would suggest 10. I think there's still opportunities, particularly. I'll let Darren support this comment. When we're growing in the East, we have opportunities to turn those boxes faster. A load isn't necessarily a load in every instance. With the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster. I don't recall there ever really being a time when we put out an earnings report and you see a length of haul in intermodal below 1,600 miles. I think we've had two consecutive quarters of that.

Speaker #7: Maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity," and the simple math of saying, "We grew 10," would suggest 10.

Nick Hobbs: As we discussed last quarter, the top truckload market remains challenging for independent contractors, leading us to rely more heavily on third-party capacity at current market spot rates. During the quarter, our revenue increased 35% with load growth of 14%. Our gross profit dollars declined 12%, primarily due to higher purchase transportation rates. While we are seeing spot market opportunities in ICS to help offset some margin pressure, we don't have the same degree of opportunity within our trailer network business. Given the pace of market change, pricing implemented just a few months ago is no longer sufficient. Going forward, we remain disciplined in taking appropriate risk and are working with customers to better align rates with current market conditions and the value we provide. I'll close with ICS. The positive momentum we have felt in our business is beginning to translate to improved financial performance.

Nick Hobbs: As we discussed last quarter, the top truckload market remains challenging for independent contractors, leading us to rely more heavily on third-party capacity at current market spot rates. During the quarter, our revenue increased 35% with load growth of 14%. Our gross profit dollars declined 12%, primarily due to higher purchase transportation rates. While we are seeing spot market opportunities in ICS to help offset some margin pressure, we don't have the same degree of opportunity within our trailer network business.

Speaker #8: And so let's not just get too set in viewing that we only have 10% capacity and then Darren, I'll let you take over from there.

Speaker #7: I think there's still opportunities, particularly—and I'll let Darren support this comment—when we're growing in the East, we have opportunities to turn those boxes faster.

Speaker #4: Well, I think on the rail capacity front, look, when you start throwing the amount of growth that has come at those teams, in pretty short order, everybody needs a minute to sort of build their plan, understand their resource planning.

Speaker #7: And so, a load isn't necessarily a load in every instance. And so, with the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster.

Speaker #7: I don't recall there ever really being a time when we put out an earnings report and you see a length of haul in intermodal below 1,600 miles.

Speaker #4: I'm not at all concerned about rail service moving forward. And especially just the commitment to growth capacity and having the people available for our rail providers to operate.

Nick Hobbs: Given the pace of market change, pricing implemented just a few months ago is no longer sufficient. Going forward, we remain disciplined in taking appropriate risk and are working with customers to better align rates with current market conditions and the value we provide. I'll close with ICS. The positive momentum we have felt in our business is beginning to translate to improved financial performance.

Speaker #7: I think that two consecutive quarters of that, and so, you know, the 31% two-year stack growth in the East—if that trend continues, you know, there's probably opportunity to get more productivity.

Brad Hicks: The 31% two-year stack growth in the East, if that trend continues, there's probably opportunity to get more productivity on that container. Let's not just get too set in viewing that we only have 10% capacity. Darren, I'll let you take over from there.

Brad Hicks: The 31% two-year stack growth in the East, if that trend continues, there's probably opportunity to get more productivity on that container. Let's not just get too set in viewing that we only have 10% capacity. Darren, I'll let you take over from there.

Speaker #4: And that's universal amongst all of our rail providers. Everyone is very focused on maintaining the right levels of their headcount and their equipment and just all of their ability to do that.

Speaker #7: On that container, and so let's not just get too set in viewing that we only have 10% capacity. And then, Darren, I'll let you take over from there.

Nick Hobbs: We have been successful in bid season, winning more volume and are securing double-digit rate increases. While gross margin remains under pressure compared to last year, they improved sequentially from Q1, supported by increased spot and mini bid opportunities and contractual freight repriced closer to current market conditions. The market remains dynamic. Going forward, our focus remains on leveraging our cost as volume scales through the platform and generating more gross profit dollars. While encouraged by Q2 results, we remain focused on building sustained momentum. With that, I'd now like to turn the call over to Brad.

Nick Hobbs: We have been successful in bid season, winning more volume and are securing double-digit rate increases. While gross margin remains under pressure compared to last year, they improved sequentially from Q1, supported by increased spot and mini bid opportunities and contractual freight repriced closer to current market conditions. The market remains dynamic. Going forward, our focus remains on leveraging our cost as volume scales through the platform and generating more gross profit dollars.

Speaker #4: So will there be blips along the way if growth shows up unexpected or if we and our customers are unable to forecast it and communicate what's coming?

Speaker #1: Well, I think on the rail capacity front—look, when you start throwing the amount of growth that has come at those teams, in pretty short order, everybody needs a minute to sort of build their plan and understand their resource planning.

Darren Field: Well, I think on the rail capacity front, look, when you start throwing the amount of growth that has come at those teams in pretty short order, everybody needs a minute to sort of build their plan, understand their resource planning. I'm not at all concerned about rail service moving forward, and especially just the commitment to growth capacity and having the people available for our rail providers to operate. That's universal amongst all of our rail providers. Everyone is very focused on maintaining the right levels of their headcount and their equipment, and just all of their ability to do that. Will there be blips along the way if growth shows up unexpected or if we and our customers are unable to forecast it and communicate what's coming? That's what makes me concerned.

Darren Field: Well, I think on the rail capacity front, look, when you start throwing the amount of growth that has come at those teams in pretty short order, everybody needs a minute to sort of build their plan, understand their resource planning. I'm not at all concerned about rail service moving forward, and especially just the commitment to growth capacity and having the people available for our rail providers to operate. That's universal amongst all of our rail providers. Everyone is very focused on maintaining the right levels of their headcount and their equipment, and just all of their ability to do that. Will there be blips along the way if growth shows up unexpected or if we and our customers are unable to forecast it and communicate what's coming? That's what makes me concerned.

Speaker #4: That's what makes me concerned. So I think we're doing a really good job of highlighting information we need and the ability to forecast how much volume is going to come out and how do we communicate that with our rail providers and everybody is very receptive and the teams have never worked the way that they are today.

Speaker #1: I'm not at all concerned about rail service moving forward, and especially just the commitment to growth, capacity, and having the people available for our rail providers to operate.

Nick Hobbs: While encouraged by Q2 results, we remain focused on building sustained momentum. With that, I'd now like to turn the call over to Brad.

Speaker #1: And that—that's universal amongst all of our rail providers. Everyone is very focused on maintaining the right levels of their headcount, as well as their equipment, and just all of their ability to do that.

Speaker #4: In preparing for this growth.

Speaker #3: Hey, Ken, and just to add, we are going to challenge ourselves on our turns on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that you move.

Brad Hicks: Thanks, Nick. Good afternoon, everybody. I'll provide an update on our Dedicated business. Starting with the quarter, our Q2 results once again highlight the strength of our Dedicated business. Despite a slow start due to weather, demand in the lawn and garden category improved. Demand across our other end markets performed as expected. Q2 also delivered another record safety performance for DCS, as our team's commitment to safety and operational excellence continues to lower our cost to serve and deliver greater value for our customers. It's worth reminding everyone that while fuel is primarily a pass-through in our business, it is dilutive to operating income margin percentage. In Q2, we estimate that fuel was close to a 100-basis point headwind to operating margin percentage compared with the prior year Q.

Brad Hicks: Thanks, Nick. Good afternoon, everybody. I'll provide an update on our Dedicated business. Starting with the quarter, our Q2 results once again highlight the strength of our Dedicated business. Despite a slow start due to weather, demand in the lawn and garden category improved. Demand across our other end markets performed as expected. Q2 also delivered another record safety performance for DCS, as our team's commitment to safety and operational excellence continues to lower our cost to serve and deliver greater value for our customers.

Speaker #1: So, you know, will there be blips along the way if—if growth shows up unexpected, or if we and our customers are unable to forecast it and communicate what's coming?

Speaker #3: And how efficient is the freight that you move? And so we'll have an opportunity to really get more efficient on our current boxes and then we still have several thousand that or thousands that are still available and ready for growth.

Speaker #1: That's what makes me concerned. So, I think we're doing a really good job of highlighting the information we need, the ability to forecast how much volume is going to come at us, and how we communicate that with our rail providers. Everybody is very receptive.

Darren Field: I think we're doing a really good job of highlighting information we need and ability to forecast how much volume is going to come at us, and how do we communicate that with our rail providers, everybody is very receptive. The teams have never worked more closely than they are today in preparing for this growth.

Speaker #3: So between those two, we will not put in cackle plans until we get confident what our turns can move up to with our base fleet first.

Darren Field: I think we're doing a really good job of highlighting information we need and ability to forecast how much volume is going to come at us, and how do we communicate that with our rail providers, everybody is very receptive. The teams have never worked more closely than they are today in preparing for this growth.

Brad Hicks: It's worth reminding everyone that while fuel is primarily a pass-through in our business, it is dilutive to operating income margin percentage. In Q2, we estimate that fuel was close to a 100-basis point headwind to operating margin percentage compared with the prior year Q.

Speaker #1: The next question. Georgia Bank. Please go ahead.

Speaker #1: And the teams have—have never worked more closely than they are today in preparing for this growth.

Speaker #6: Hey, Ken. Hi. See, I guess just zooming in on some things. First, Darren, I think you said pricing was positive in Transcon. So the inner modal pricing that we saw reported X fuel going positive for the first time since 2022, that's not just driven by mix, right?

Speaker #5: Hey, Ken, and just to add, we are going to challenge ourselves on our terms on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that—that you move.

Shelley Simpson: Hey, Ken, just to add, we are going to challenge ourselves on our turns on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that you move, and how efficient is the freight that you move. We'll have an opportunity to really get more efficient on our current boxes. We still have thousands that are still

Shelley Simpson: Hey, Ken, just to add, we are going to challenge ourselves on our turns on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that you move, and how efficient is the freight that you move. We'll have an opportunity to really get more efficient on our current boxes. We still have thousands that are still

Brad Hicks: During Q2, we sold approximately 250 trucks and remain confident we will achieve our full-year target for gross truck sales of 1,000 to 1,200 new trucks. Our sales pipeline remains robust and has strengthened over the past few months as the tightening truckload market has driven increased customer interest in a Dedicated solution. In fact, our pipeline is currently at a record level in terms of number of trucks, which is a testament to the strength of our Dedicated business and the value we consistently deliver for our customers. Even with more opportunities in the pipeline, we have not altered our pricing or return discipline to chase growth. We have a proven track record of value creation through our Customer Value Delivery process, and with our scale and density, we believe we can offer differentiated solutions to customers in the market.

Brad Hicks: During Q2, we sold approximately 250 trucks and remain confident we will achieve our full-year target for gross truck sales of 1,000 to 1,200 new trucks. Our sales pipeline remains robust and has strengthened over the past few months as the tightening truckload market has driven increased customer interest in a Dedicated solution. In fact, our pipeline is currently at a record level in terms of number of trucks, which is a testament to the strength of our Dedicated business and the value we consistently deliver for our customers.

Speaker #6: It's driven by some real same-store pricing growth. I wanted to clarify that. And then regarding a little more than normal Transcon competition, I was encouraging to hear you're still able to defend share in the market despite that.

Speaker #5: And how efficient is the freight that you move? And so we'll have an opportunity to really get more efficient on our current boxes, and then we still have several thousand that are still available and ready for growth.

Speaker #6: But we're just trying to understand if there's anything changing that would prohibit inner modal's ability to narrow its gap to TL rates over the next several quarters.

Shelley Simpson: Available and ready for growth. Between those two, we will not put in capital plans until we get confident what our terms can move up to with our base fleet.

Shelley Simpson: Available and ready for growth. Between those two, we will not put in capital plans until we get confident what our terms can move up to with our base fleet.

Speaker #5: So between those two, we will not put in capital plans until we get confident what our terms can—can move up to with our base fleet first.

Speaker #6: You reminded us that could be a very attractive pricing opportunity over time given how widespread it is. Just yeah, I just wanted to see if there's any significant opportunity for JBI or for the competitive environment has changed to make that more or less likely.

Speaker #2: The next question will come from Richa Harnain with Deutsche Bank. Please go ahead.

Operator: The next question will come from Richa Harnain with Deutsche Bank. Please go ahead.

Operator: The next question will come from Richa Harnain with Deutsche Bank. Please go ahead.

Brad Hicks: Even with more opportunities in the pipeline, we have not altered our pricing or return discipline to chase growth. We have a proven track record of value creation through our Customer Value Delivery process, and with our scale and density, we believe we can offer differentiated solutions to customers in the market.

Speaker #8: Hey, thanks, Ken. Hi. So, I guess just zooming in on some things. First, you know, Darren, I think you said pricing was positive in TransCon.

Darren Field: Hey, Richa.

Darren Field: Hey, Richa.

Richa Harnain: Thanks, team. Hi. I guess just zooming in on some things. First, Darren, I think you said pricing was positive in transcon. The intermodal pricing that we saw reported ex-fuel going positive for the first time since 2022, that's not just driven by mix, right? It's driven by some real same-store pricing growth. I wanted to clarify that. Regarding a little more than normal transcon competition, it was encouraging to hear you're still able to defend share in the market despite that. We're just trying to understand if there's anything changing that would prohibit intermodal's ability to narrow its gap to TL rates over the next several quarters. You reminded us that could be a very attractive pricing opportunity over time, given how wide the spread is.

Richa Harnain: Thanks, team. Hi. I guess just zooming in on some things. First, Darren, I think you said pricing was positive in transcon. The intermodal pricing that we saw reported ex-fuel going positive for the first time since 2022, that's not just driven by mix, right? It's driven by some real same-store pricing growth. I wanted to clarify that. Regarding a little more than normal transcon competition, it was encouraging to hear you're still able to defend share in the market despite that. We're just trying to understand if there's anything changing that would prohibit intermodal's ability to narrow its gap to TL rates over the next several quarters. You reminded us that could be a very attractive pricing opportunity over time, given how wide the spread is.

Speaker #6: Thanks.

Speaker #4: Well, more than anything, I want to make sure 1% positive price on revenue per load excess fuel is what we reported and is accurate.

Speaker #8: So the intermodal pricing that we saw reported ex-fuel going positive for the first time since 2022, that's not just driven by mix, right?

Speaker #4: But as you heard, our Eastern growth is up 16% where Transcon was plus 5, taking our that's a negative to mix. So the positive pricing that's out there is more has been material for us to overcome a negative from the mix as we grow in the Eastern network.

Brad Hicks: Last quarter, I outlined our expectation that we would return to fleet growth this year while achieving only modest operating income growth for 2026. On the fleet side, we need to see a wave of new truck growth for a few months before that growth translates into improved profitability, given the expenses associated with starting up an account. I remain confident that this wave of growth is coming. However, we remain unwilling to sacrifice our discipline around margins and returns, particularly at this point in the cycle, simply to accelerate growth. Doing so would add risk and variability to our Dedicated business, which has proven resilient throughout cycles. In fact, our win rate on new deals remains consistent with historic levels.

Brad Hicks: Last quarter, I outlined our expectation that we would return to fleet growth this year while achieving only modest operating income growth for 2026. On the fleet side, we need to see a wave of new truck growth for a few months before that growth translates into improved profitability, given the expenses associated with starting up an account. I remain confident that this wave of growth is coming. However, we remain unwilling to sacrifice our discipline around margins and returns, particularly at this point in the cycle, simply to accelerate growth.

Speaker #8: It's driven by some real same-store pricing growth—I wanted to clarify that. And then, regarding a little more than normal TransCon competition, you know, it's encouraging to hear you're still able to defend share in the market despite that.

Speaker #8: But, you know, we're just trying to understand if there's anything changing that would prohibit intermodal's ability to narrow its gap to TL rates over the next several quarters.

Speaker #4: Those loads are lower revenue per load units than a Transcon load is. That doesn't mean it works at a worse margin. That's not at all what I'm saying is.

Speaker #8: You know, you reminded us that could be a very attractive pricing opportunity over time, given how widespread it is. I just wanted to see if there's any significant opportunity for JBI, or if the competitive environment has changed to make that more or less likely.

Richa Harnain: Wanted to see if there's a significant opportunity for JBI or if the competitive environment has changed to make that more or less likely. Thanks.

Richa Harnain: Wanted to see if there's a significant opportunity for JBI or if the competitive environment has changed to make that more or less likely. Thanks.

Speaker #4: It's all contributing to positive benefits inside our network. But prices in the Transcon I absolutely believe will absolutely continue to close the gap back to what is their historical norm against truckload over time.

Brad Hicks: Doing so would add risk and variability to our Dedicated business, which has proven resilient throughout cycles. In fact, our win rate on new deals remains consistent with historic levels.

Speaker #8: Thanks.

Speaker #1: Well, more than anything, I want to make sure 1% positive price on revenue per load, ExoFuel, is— is— is what we reported and is accurate.

Darren Field: Well, more than anything, I want to make sure 1% positive price on revenue per load, ex-fuel, is what we reported and is accurate. As you heard, our eastern growth is up 16%, where transcon was +5%, taking our. That's a negative to mix. The positive pricing that's out there has been material for us to overcome a negative from the mix. As we grow in the eastern network, those loads are lower revenue per load units than a transcon load is. That doesn't mean it works at a worse margin. That's not at all what I'm saying is it's all contributing to positive benefits inside our network. Prices in the transcon, I absolutely believe will absolutely continue to close the gap back to what is their historical norm against truckload over time.

Darren Field: Well, more than anything, I want to make sure 1% positive price on revenue per load, ex-fuel, is what we reported and is accurate. As you heard, our eastern growth is up 16%, where transcon was +5%, taking our. That's a negative to mix. The positive pricing that's out there has been material for us to overcome a negative from the mix. As we grow in the eastern network, those loads are lower revenue per load units than a transcon load is. That doesn't mean it works at a worse margin. That's not at all what I'm saying is it's all contributing to positive benefits inside our network. Prices in the transcon, I absolutely believe will absolutely continue to close the gap back to what is their historical norm against truckload over time.

Brad Hicks: While Dedicated has historically been the last part of our business to see an inflection from a change in the freight cycle, and that will likely be true again in this cycle, I remain confident in our business and the growth opportunities ahead of us. We have a large untapped addressable market to grow into and a proven track record of disciplined financial and operational performance. I remain proud of our entire team's efforts, the great work of our professional drivers, and the value we create for our customers. With that, I'll turn it over to Darren.

Brad Hicks: While Dedicated has historically been the last part of our business to see an inflection from a change in the freight cycle, and that will likely be true again in this cycle, I remain confident in our business and the growth opportunities ahead of us. We have a large untapped addressable market to grow into and a proven track record of disciplined financial and operational performance. I remain proud of our entire team's efforts, the great work of our professional drivers, and the value we create for our customers. With that, I'll turn it over to Darren.

Speaker #1: But y as you heard, our Eastern growth is up 16%. Where TransCon was plus 5, taking our that's a negative to mix. So the— the positive pricing that's out there is— is more it has been material for us to overcome a negative from the mix, as we grow in the Eastern network.

Speaker #4: It just hasn't it hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in Transcon is just a smaller percentage of the opportunities.

Speaker #4: There's not as much of that business for us to go convert today. As there is in the East. And so that's where you see a greater opportunity to impact price mid-cycle with new opportunities that present itself.

Speaker #1: Those loads are lower revenue-per-load units than a TransCon load is. That doesn't mean it works at a worse margin. That's not at all what I'm saying.

Darren Field: Thank you, Brad, thank you everyone for joining us this afternoon. The consistent execution of our strategy over the past several years has positioned us well to capture market share gains in the current environment. Service levels remain strong, we have available capacity to support customer growth at a time when intermodal's value proposition is the strongest it has been in more than a decade. During Q2, demand for our intermodal service outperformed normal seasonality for the third consecutive quarter, we also set a quarterly volume record with over 578,000 loads. For the quarter, volumes were up 10% year-over-year, the first double-digit volume growth quarter in over a decade. On a monthly basis, volumes were up 9% in April, up 9% in May, up 12% in June. Transcon volume grew 5%, while our Eastern volume increased 16%.

Darren Field: Thank you, Brad, thank you everyone for joining us this afternoon. The consistent execution of our strategy over the past several years has positioned us well to capture market share gains in the current environment. Service levels remain strong, we have available capacity to support customer growth at a time when intermodal's value proposition is the strongest it has been in more than a decade.

Speaker #4: It's just stronger in the East than it is Transcon. As we move into next year's mid-cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well.

Speaker #1: It's all contributing to positive benefits inside our network. But prices in the TransCon, I absolutely believe, will continue to close the gap back to what is their historical norm against truckload over time.

Speaker #5: And I want to add hey, Richard, spread. I want to add something to that and kind of reiterate points that Darren made in some of his prepared comments.

Speaker #1: It just hasn't—it hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in TransCon is just a smaller percentage of the opportunities.

Darren Field: It hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in transcon is just a smaller percentage of the opportunities. There's not as much of that business for us to go convert today as there is in the east, That's where you see a greater opportunity to impact price mid-cycle with new opportunities that present itself. It's just stronger in the east than it is transcon. As we move into next year's bid cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well. I want to add, Hey Rich, it's Brad.

Darren Field: It hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in transcon is just a smaller percentage of the opportunities. There's not as much of that business for us to go convert today as there is in the east, That's where you see a greater opportunity to impact price mid-cycle with new opportunities that present itself. It's just stronger in the east than it is transcon. As we move into next year's bid cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well.

Darren Field: During Q2, demand for our intermodal service outperformed normal seasonality for the third consecutive quarter, we also set a quarterly volume record with over 578,000 loads. For the quarter, volumes were up 10% year-over-year, the first double-digit volume growth quarter in over a decade. On a monthly basis, volumes were up 9% in April, up 9% in May, up 12% in June. Transcon volume grew 5%, while our Eastern volume increased 16%.

Speaker #5: But also take a step back and think about our broader portfolio. I mean, in cycles past, everyone sort of understands that intermodal pricing lags truckload pricing.

Speaker #1: There's not as much of that business for us to go convert today as there is in the East. And so that's where you see a greater opportunity to impact price mid-cycle with new opportunities that present themselves.

Speaker #5: And pricing is typically what drives improvements in financial performance. And I want to just make sure to reiterate this team is executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, and then obviously giving you guys the update on our cost to serve initiative.

Speaker #1: It's just stronger in the East than it is TransCon. As we move into next year's mid-cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well.

Darren Field: Our Eastern growth comped against a plus 15% performance in the prior year, or said differently, up 31% on a 2-year stacked basis. We continue to see significant road-to-rail conversion opportunities in the East, particularly as rising truckload rates, fuel prices, and tightening truckload capacity make intermodal an increasingly attractive solution for shippers. While we have available container capacity to grow with our customers, we remain disciplined to ensure the growth is sustainable over the long term and at acceptable returns for the value we create. The rail network is experiencing quality growth, and we remain actively engaged with our rail providers on resource planning to support both current and future growth. While rail service has moderated slightly as volumes accelerated, conversion activity is at levels we have not seen in more than a decade.

Darren Field: Our Eastern growth comped against a plus 15% performance in the prior year, or said differently, up 31% on a 2-year stacked basis. We continue to see significant road-to-rail conversion opportunities in the East, particularly as rising truckload rates, fuel prices, and tightening truckload capacity make intermodal an increasingly attractive solution for shippers. While we have available container capacity to grow with our customers, we remain disciplined to ensure the growth is sustainable over the long term and at acceptable returns for the value we create.

Speaker #5: And with our two largest segments, both intermodal and dedicated, that don't really have the as quick of a movement in transactional pricing as what we've seen in ICS and I think what we'll see in the coming quarters with JBT, our financial performance has largely been driven by what we can control.

Speaker #7: And I want to add—hey, Richard, Brad—I want to add something to that and kind of reiterate points that Darren made in some of his prepared comments.

Brad Hicks: I want to add, Hey Rich, it's Brad. I want to add something to that and kind of reiterate points that Darren made in some of his prepared comments, Also take a step back and think about our broader portfolio. In cycles past, everyone sort of understands that intermodal pricing lags truckload pricing. Pricing is typically what drives improvements in financial performance. I want to just make sure to reiterate, this team has executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, and then obviously giving you guys the update on our cost to serve initiative.

Brad Hicks: I want to add something to that and kind of reiterate points that Darren made in some of his prepared comments, Also take a step back and think about our broader portfolio. In cycles past, everyone sort of understands that intermodal pricing lags truckload pricing. Pricing is typically what drives improvements in financial performance. I want to just make sure to reiterate, this team has executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, and then obviously giving you guys the update on our cost to serve initiative.

Speaker #7: But— but also take a step back and— and think about our broader portfolio. I mean, in cycles past, you know, everyone sort of understands that intermodal pricing lags truckload pricing.

Speaker #5: With the benefits of what has happening in the market still to come. And so I fully anticipate dedicated intermodal, JBT, ICS, that all of the businesses will have the benefit of seeing improved pricing opportunities.

Speaker #7: And pricing is typically what drives improvements in financial performance. And I want to just make sure to reiterate, this team has executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, and— and then obviously giving you guys the update on our cost-to-serve initiative.

Speaker #5: But what you've seen executed from the team over the last several quarters has largely been what we can control. And so I know pricing is a big topic.

Darren Field: The rail network is experiencing quality growth, and we remain actively engaged with our rail providers on resource planning to support both current and future growth. While rail service has moderated slightly as volumes accelerated, conversion activity is at levels we have not seen in more than a decade.

Speaker #5: We look forward to what the market presents us for opportunities to price to the Truckload pricing has moved up a lot. We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing.

Speaker #7: And with our two largest segments, both Intermodal and Dedicated, those don't really have as quick of a movement in transactional pricing as what we've seen in ICS.

Brad Hicks: With our two largest segments, both intermodal and dedicated, that don't really have as quick of a movement in transactional pricing as what we've seen in ICS, and I think what we'll see in the coming quarters with JBT, our financial performance has largely been driven by what we can control with the benefits of what is happening in the market still to come. I fully anticipate dedicated intermodal, JBT, ICS, that all of those businesses will have the benefit of seeing improved pricing opportunities. What you've seen executed from the team over the last several quarters has largely been what we can control. I know pricing is a big topic. We look forward to what the market presents us for opportunities to price to the value we create. Truckload pricing has moved up a lot.

Brad Hicks: With our two largest segments, both intermodal and dedicated, that don't really have as quick of a movement in transactional pricing as what we've seen in ICS, and I think what we'll see in the coming quarters with JBT, our financial performance has largely been driven by what we can control with the benefits of what is happening in the market still to come. I fully anticipate dedicated intermodal, JBT, ICS, that all of those businesses will have the benefit of seeing improved pricing opportunities. What you've seen executed from the team over the last several quarters has largely been what we can control. I know pricing is a big topic. We look forward to what the market presents us for opportunities to price to the value we create. Truckload pricing has moved up a lot.

Darren Field: We remain confident in our rail providers' commitment to service and our collective ability to support higher volume levels while maintaining dependable and reliable performance. The same supply challenges affecting truckload capacity are impacting the drayage market, where driver availability remains tight, and we are working diligently to attract quality drivers to support our growth. In this environment, our insourced drayage strategy is a meaningful competitive advantage. By owning our tractors, containers, and chassis, and utilizing primarily company drivers, we maintain greater control of the customer experience while reducing reliance on more costly and less reliable third-party drayage capacity. We previously outlined a path to the low end of our long-term margin range through contributions from cost, volume, and price. We have done great work on lowering our cost to serve and believe we have achieved the point of margin from cost.

Darren Field: We remain confident in our rail providers' commitment to service and our collective ability to support higher volume levels while maintaining dependable and reliable performance. The same supply challenges affecting truckload capacity are impacting the drayage market, where driver availability remains tight, and we are working diligently to attract quality drivers to support our growth. In this environment, our insourced drayage strategy is a meaningful competitive advantage.

Speaker #7: And I think what we'll see in the coming quarters with J.B. Hunt, you know, our financial performance has largely been driven by, well, what we can control.

Speaker #5: And so we'll just see how supply and demand play out in the industry. But I think that there will be opportunities for us to take advantage of what the market presents.

Speaker #7: With the benefits of what is happening in the market still to come, I fully anticipate Dedicated, Intermodal, JBT, ICS—that all of the businesses will have the benefit of seeing improved pricing opportunities.

Speaker #1: The next question that come from Jordan Aliger with Goldman Sachs. Please go ahead.

Speaker #5: Hey, Jordan.

Speaker #2: Yeah, hi. Hi. So a couple of things. One, I'm just curious. In the context of what you mentioned on the pipeline and against the startup timing and how do you think about that modest EBIT growth that you talked about?

Speaker #7: But what you've seen executed from the team over the last several quarters has largely been what we can control. And so I know pricing is a big topic.

Darren Field: By owning our tractors, containers, and chassis, and utilizing primarily company drivers, we maintain greater control of the customer experience while reducing reliance on more costly and less reliable third-party drayage capacity. We previously outlined a path to the low end of our long-term margin range through contributions from cost, volume, and price. We have done great work on lowering our cost to serve and believe we have achieved the point of margin from cost.

Speaker #7: We look forward to what the market presents us for opportunities to price to the value we create. Truckload pricing has moved up a lot.

Speaker #2: I don't know if you provided an update around that or sort of the progression as we think from here. And then I just wanted to come back to a volume question again.

Speaker #7: We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing. And so, we'll just see how supply and demand play out in the industry.

Darren Field: We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing, we'll just see how supply and demand play out in the industry. I think that there will be opportunities for us to take advantage of what the market presents.

Brad Hicks: We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing, we'll just see how supply and demand play out in the industry. I think that there will be opportunities for us to take advantage of what the market presents.

Speaker #2: I think you had mentioned the shape of the peak could look similar. And I just wanted to understand if you mean similar to 2025 as we went from Q2 to 3Q and into 4Q.

Speaker #2: Thanks.

Speaker #7: But I think that there will be opportunities for us to take advantage of what the market presents.

Speaker #5: Jordan, this is Brad. I'll start with dedicated and maybe flip it over to Spencer to reiterate comments on peak. One thing we've certainly seen the pipeline grow, it's at record levels even higher than we saw at the peak of COVID.

Speaker #2: The next question will come from Jordan Aliger with Goldman Sachs. Please go ahead.

Darren Field: On volume, the growth has materialized while remaining disciplined to attract the right freight that adds balance and connectivity across the network. I would say we are pretty much there with the point from volume. The opportunity that is still in front of us is price. As you all know, our intermodal bid season begins each year in October and finalizes in Q3, we're nearing completion of the 2026 bid season. In the H1 of this year's bids, the operating environment at that time didn't present the same pricing opportunities that the current environment has. Historically, intermodal contract pricing has lagged truckload pricing, and we continue to believe that to be the case moving forward.

Darren Field: On volume, the growth has materialized while remaining disciplined to attract the right freight that adds balance and connectivity across the network. I would say we are pretty much there with the point from volume. The opportunity that is still in front of us is price. As you all know, our intermodal bid season begins each year in October and finalizes in Q3, we're nearing completion of the 2026 bid season. In the H1 of this year's bids, the operating environment at that time didn't present the same pricing opportunities that the current environment has.

Operator: The next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.

Operator: The next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.

Speaker #7: Hey, Jordan.

Darren Field: Hey, Jordan.

Darren Field: Hey, Jordan.

Speaker #3: Yeah, hi. Hi. So a couple of things. One, I'm just curious—just coming on, talking about Dedicated, you know, in the context of what you mentioned on the pipeline and against the startup timing—and how do you think about that modest EBIT growth that you talked about?

Jordan Alliger: Yeah. Hi. A couple of things. One, I'm just curious, just coming on talking about Dedicated, in the context of what you mentioned on the pipeline and against the startup timing and how do you think about that modest EBIT growth that you talked about? I don't know if you provided an update around that or sort of the progression as we think from here. I just wanted to come back to a volume question again. I think you had mentioned the shape of the peak could look similar, I just wanted to understand if you mean similar to 2025 as we went from Q2 to Q3 and into Q4. Thanks.

Jordan Alliger: Yeah. Hi. A couple of things. One, I'm just curious, just coming on talking about Dedicated, in the context of what you mentioned on the pipeline and against the startup timing and how do you think about that modest EBIT growth that you talked about? I don't know if you provided an update around that or sort of the progression as we think from here. I just wanted to come back to a volume question again. I think you had mentioned the shape of the peak could look similar, I just wanted to understand if you mean similar to 2025 as we went from Q2 to Q3 and into Q4. Thanks.

Speaker #5: And so I do think that demand for professional dedicated solutions is peaking. Is that a factor of the driver market and the pressure that people are seeing?

Speaker #5: Yes. Is it a factor on what we're seeing in the one-way rate market and the pressures that shippers are seeing? Yes. I commented already that Montgomery probably plays a role as well.

Speaker #3: I don't know if you provided an update around that, or—or sort of the progression as we think from here. And then I just wanted to come back to a—to a volume question again.

Speaker #3: I think you had mentioned the shape of the peak could look similar, and I just wanted to understand if you mean similar to 2025 as we went from Q2 to Q3 and into Q4.

Speaker #5: But we can't forget that it's often a long sales cycle in dedicated. Historically, that's 12 to 18 months. There are times when shippers are motivated to go a little faster.

Darren Field: Historically, intermodal contract pricing has lagged truckload pricing, and we continue to believe that to be the case moving forward.

Speaker #3: Thanks.

Speaker #5: To introduce those solutions and the value that those solutions create. Hard to say if at this point, if we're seeing that speed up, decision-making, but we're really excited about not only where we sit with the pipeline, but really just the great performance that our team has had through execution.

Speaker #7: Jordan, this is Brad. I'll start with Dedicated and maybe flip it over to Spencer to— to reiterate comments on Peak. You know, one thing—we've certainly seen the pipeline grow.

Darren Field: Jordan, this is Brad. I'll start with Dedicated and maybe flip it over to Spencer to reiterate comments on peak. One thing, we've certainly seen the pipeline grow. It's at record levels, even higher than we saw at the peak of COVID. I do think that demand for professional dedicated solutions is peaking.

Brad Hicks: Jordan, this is Brad. I'll start with Dedicated and maybe flip it over to Spencer to reiterate comments on peak. One thing, we've certainly seen the pipeline grow. It's at record levels, even higher than we saw at the peak of COVID. I do think that demand for professional dedicated solutions is peaking.

Darren Field: However, given the pace of change in the truckload market, we are increasingly encouraged by the pricing opportunity heading into the 2027 bid season than we were even a couple of months ago. Encouragingly, our improved financial performance over the last several quarters is unrelated to any material contributions from price to cover inflation. While in prior cycles, we would typically see our financial performance lag other transportation modes, we feel like we've led the broader industry as this cycle ensues. With that, I'd like to turn it back over to the operator to open the call for questions.

Darren Field: However, given the pace of change in the truckload market, we are increasingly encouraged by the pricing opportunity heading into the 2027 bid season than we were even a couple of months ago. Encouragingly, our improved financial performance over the last several quarters is unrelated to any material contributions from price to cover inflation. While in prior cycles, we would typically see our financial performance lag other transportation modes, we feel like we've led the broader industry as this cycle ensues. With that, I'd like to turn it back over to the operator to open the call for questions.

Speaker #7: It's at record levels—even higher than we saw at the peak of COVID. And so I do think that demand for professional, dedicated solutions is— is peaking.

Speaker #5: Our safety performance of our professional runners and really the great work of our field operations and execution supporting our customer routing. A lot of our growth historically has been organically and there are numerous conversations and opportunities inside that pipeline growing with customers that we already have.

Speaker #7: you know, is that a factor of the driver market and the pressure that people are seeing? yes. Is it a is it a factor on— on what we're seeing in the one-way rate market and the pressures that— that shippers are seeing?

Brad Hicks: Is that a factor of the driver market and the pressure that people are seeing? Yes. Is it a factor on what we're seeing in the one-way rate market and the pressures that the shippers are seeing? Yes. I commented already that Montgomery probably played a role as well. We can't forget that it's often a long sales cycle in dedicated. Historically, that's 12 to 18 months. There are times when shippers are motivated to go a little faster to introduce those solutions and the value that those solutions create. Hard to say if at this point, if we're seeing that speed up decision-making.

Brad Hicks: Is that a factor of the driver market and the pressure that people are seeing? Yes. Is it a factor on what we're seeing in the one-way rate market and the pressures that the shippers are seeing? Yes. I commented already that Montgomery probably played a role as well. We can't forget that it's often a long sales cycle in dedicated. Historically, that's 12 to 18 months. There are times when shippers are motivated to go a little faster to introduce those solutions and the value that those solutions create. Hard to say if at this point, if we're seeing that speed up decision-making.

Speaker #7: Yes, I commented already that Montgomery probably plays a role as well, but we can't forget that it's often a long sales cycle in Dedicated.

Speaker #5: We certainly are always motivated and driven to grow our customer count and grow with new customers. And there's a fair amount of those opportunities inside of our pipeline as well.

Speaker #7: Historically, that's 12 to 18 months. There are times when—when shippers are motivated to go a little faster to—to introduce those solutions and the value that—that those solutions create.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. The first question will come from Bascome Majors with Stephens. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. The first question will come from Bascome Majors with Stephens. Please go ahead.

Speaker #5: And so we're really optimistic about where we sit, really excited about our performance coming through Q2. If you really think about close to 100 basis point headwind or pressure on what fuel did coming in at 100 operating ratio in terms of how our fuel surcharge mechanisms work, puts us fundamentally inside of our target margins just barely, but we're excited that we made that step.

Speaker #7: hard to say if— if, at this point, if we're seeing that— that speed speed up, decision-making, but we're really excited about, not only, where we sit with the pipeline, but really just the— the great performance that— that our team has had, through execution, our— our safety performance of our professional drivers, and really the great work of our— of our, field operations and execution supporting our customers and driving value.

Brad Hicks: We're really excited about not only where we sit with the pipeline, but really just the great performance that our team has had through execution, our safety performance of our professional drivers, and really the great work of our field operations and execution supporting our customers and driving value. A lot of our growth historically has been organically, there are numerous conversations and opportunities inside that pipeline growing with customers that we already have. We certainly are always motivated and driven to grow our customer count and grow with new customers. There's a fair amount of those opportunities inside of our pipeline as well. We're really optimistic about where we sit, really excited about our performance coming through Q2.

Brad Hicks: We're really excited about not only where we sit with the pipeline, but really just the great performance that our team has had through execution, our safety performance of our professional drivers, and really the great work of our field operations and execution supporting our customers and driving value. A lot of our growth historically has been organically, there are numerous conversations and opportunities inside that pipeline growing with customers that we already have. We certainly are always motivated and driven to grow our customer count and grow with new customers. There's a fair amount of those opportunities inside of our pipeline as well. We're really optimistic about where we sit, really excited about our performance coming through Q2.

Bascome Majors: Thanks for taking my questions. Hey, Brad. Darren, following up on how you ended that on the pricing discussion and the optimism going forward, can we talk through how prevalent the multiyear price agreements are with intermodal customers today compared to prior cycles? How much visibility do these commitments give you into the contract rate renewal plan into 2027 and even beyond? Just beyond the renewals, taking a step back beyond or past core pricing, what opportunities does Hunt have to increase intermodal revenue per load over the next few quarters that might not show up in a renewal number but could still meaningfully impact the business?

Bascome Majors: Thanks for taking my questions. Hey, Brad. Darren, following up on how you ended that on the pricing discussion and the optimism going forward, can we talk through how prevalent the multiyear price agreements are with intermodal customers today compared to prior cycles? How much visibility do these commitments give you into the contract rate renewal plan into 2027 and even beyond?

Speaker #5: I'll turn it over to Spencer.

Speaker #4: Yeah, hey Jordan. I think to your question, I would answer that, that it would be similar to 2025 and also as our volumes move from Q2 to 3 to 4 when I talk about shape and timing.

Speaker #7: You know, a lot of our growth historically has been—been organically. And there are numerous conversations and opportunities inside that pipeline, growing with customers that we already have.

Speaker #7: We certainly are always motivated and driven to grow our customer count and grow with new customers. And there's a fair amount of those opportunities inside of our pipeline as well.

Speaker #1: The final question will come from David Vernon with Bernstein. Please go ahead.

Bascome Majors: Just beyond the renewals, taking a step back beyond or past core pricing, what opportunities does Hunt have to increase intermodal revenue per load over the next few quarters that might not show up in a renewal number but could still meaningfully impact the business?

Speaker #2: Hey, good afternoon. Thank you. Just a quick call about driver wages. Let me tell your next could you maybe put some numbers around what kind of training wage increases are you seeing out in the marketplace?

Speaker #7: And so, we're really optimistic about where we sit, really excited about our performance coming through Q2. If you really think about close to 100 basis point headwind or— or pressure on— on what fuel did coming in at 100 operating ratio in terms of how our— our, fuel surcharge mechanisms work, puts us fundamentally inside of our— our target margins, just barely, but we're excited that we made that step.

Brad Hicks: If you really think about close to 100 basis point headwind or pressure on what fuel did coming in at 100 operating ratio in terms of how our fuel surcharge mechanisms work puts us fundamentally inside of our target margins, just barely, but we're excited that we've made that step. I'll turn it over to Spencer.

Brad Hicks: If you really think about close to 100 basis point headwind or pressure on what fuel did coming in at 100 operating ratio in terms of how our fuel surcharge mechanisms work puts us fundamentally inside of our target margins, just barely, but we're excited that we've made that step. I'll turn it over to Spencer.

Speaker #2: A little bit about how you guys are positioned. The rest of the broader industry. And if you're talking to a generalist, supply-demand problem with labor, if wages go up, where does the industry labor from in this kind of market?

Darren Field: Sure. On the multiyear conversation, certainly, we have customers that we have engaged with multiyear programs. I don't know that we've ever talked about the percentage of our business that entails, I'm not ready to highlight that specifically. We're aware of customers' value to our network and maybe areas that we can work with those customers specifically related to cost around serving their business. The behavior of our multiyear business is typically a little bit different than the constant change that we may face with customers that aren't engaged in multiyear agreements. Look, the environment we're in today does present new opportunities for us. I think that the number of mini-bids or the number of times customers are reaching out to us looking for an answer, I don't remember it ever being any stronger than it is right now.

Darren Field: Sure. On the multiyear conversation, certainly, we have customers that we have engaged with multiyear programs. I don't know that we've ever talked about the percentage of our business that entails, I'm not ready to highlight that specifically. We're aware of customers' value to our network and maybe areas that we can work with those customers specifically related to cost around serving their business. The behavior of our multiyear business is typically a little bit different than the constant change that we may face with customers that aren't engaged in multiyear agreements.

Speaker #8: I'll turn it over to Spencer.

Speaker #1: Yeah. Hey, Jordan. I think, to your question, I would answer that it would be similar to 2025, and also, as our volumes move from Q2 to Q3 to Q4, when I talk about shape and timing.

Spencer Frazier: Yeah. Hey, Jordan. I think to your question, I would answer that it would be similar to 2025, and also as our volumes move from Q2 to Q3 to Q4, when I talk about shape and timing.

Spencer Frazier: Yeah. Hey, Jordan. I think to your question, I would answer that it would be similar to 2025, and also as our volumes move from Q2 to Q3 to Q4, when I talk about shape and timing.

Speaker #5: Hey David, you kind of were coming in and out. I think we understand it to be a driver wage question and where do we think the supply of drivers would be coming from.

Speaker #5: We'll let Nick handle that.

Speaker #3: Yeah. I would just say we are seeing some pressure on driver wages. There are certain markets where we've had sign-on bonuses and those are increasing.

Speaker #2: The final question will come from David Vernon with Bernstein. Please go ahead.

Operator: The final question will come from David Vernon with Bernstein. Please go ahead.

Operator: The final question will come from David Vernon with Bernstein. Please go ahead.

Speaker #9: Hey, David.

Speaker #3: Hey, good afternoon. Thank you. Just a quick call about driver wages. Let me tell you, Nick, could you maybe put some numbers around what kind of training wage increases you're seeing out in the marketplace?

David Vernon: Hey, good afternoon. Thank you. Just a quick call about driver wage. Shelley or Nick, could you maybe put some numbers around what kind of wage increases are you seeing out in the marketplace? A little bit about how you guys are positioned to the rest of the broader industry. If you're talking to a generalist and you're seeing this sort of supply-demand problem with labor, if wages go up, where is the industry getting this labor from in this kind of market?

David Vernon: Hey, good afternoon. Thank you. Just a quick call about driver wage. Shelley or Nick, could you maybe put some numbers around what kind of wage increases are you seeing out in the marketplace? A little bit about how you guys are positioned to the rest of the broader industry. If you're talking to a generalist and you're seeing this sort of supply-demand problem with labor, if wages go up, where is the industry getting this labor from in this kind of market?

Speaker #3: The locations are increasing where we have sign-on bonuses. So the driver market is clearly getting tighter. But that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers.

Speaker #3: A little bit about how you guys are—are positioned versus the rest of the broader industry. And if you're talking to a generalist and you're seeing this sort of supply-demand problem with labor, if wages go up, where does the industry get labor from in this kind of market?

Darren Field: Look, the environment we're in today does present new opportunities for us. I think that the number of mini-bids or the number of times customers are reaching out to us looking for an answer, I don't remember it ever being any stronger than it is right now.

Speaker #3: We think it sets us up very well across pretty much every segment. And so really excited about that. The second part of the question, where you think you'll get I think it'll pull some people that maybe have left the industry.

Speaker #3: Previously, come back into the industry. I also think there'll be some good training opportunities for young people, but that's nothing quick that's going to solve that.

Speaker #7: Hey David, you were kind of coming in and out. I think we understand it to be a driver wage question and where we think the supply of drivers would be coming from.

Brad Hicks: Hey, David, you were kind of coming in and out. I think we understand it to be a driver wage question and where do we think the supply of drivers would be coming from. I'll let Nick handle that.

Brad Hicks: Hey, David, you were kind of coming in and out. I think we understand it to be a driver wage question and where do we think the supply of drivers would be coming from. I'll let Nick handle that.

Darren Field: We have tremendous numbers of opportunities to talk to our customers about new opportunities. Not every single one of those opportunities is going to drive intermodal volume. It's coming in the door for J.B. Hunt's total book of solutions, we're constantly looking for that opportunity. I do think new business pricing has contributed to benefits in our network, I fully expect that will continue through the remainder of this year and deep into next year's bid cycle. I know Spencer may also want to comment on this.

Darren Field: We have tremendous numbers of opportunities to talk to our customers about new opportunities. Not every single one of those opportunities is going to drive intermodal volume. It's coming in the door for J.B. Hunt's total book of solutions, we're constantly looking for that opportunity. I do think new business pricing has contributed to benefits in our network, I fully expect that will continue through the remainder of this year and deep into next year's bid cycle. I know Spencer may also want to comment on this.

Speaker #3: So I think we're in for a longer-term answer. To get the capacity where it needs to be. And I think there's always a good source of maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military.

Speaker #7: We'll let—I'll let Nick handle that.

Speaker #8: Yeah. I would just say we are seeing some pressure on driver wages. There are certain markets where we've had higher sign-on bonuses, and those are increasing.

Nick Hobbs: Yeah. I would just say we are seeing some pressure on driver wages. There are certain markets where we've had higher sign-on bonuses, and those are increasing. The locations are increasing where we have sign-on bonuses. The driver market is clearly getting tighter, but that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers. We think it sets us up very well across pretty much every segment, really excited about that. The second part of the question, where you think you'll get, I think it'll pull some people that maybe have left the industry previously, come back into the industry. I also think there'll be some good training opportunities for young people, but that's nothing quick that's going to solve that.

Nick Hobbs: Yeah. I would just say we are seeing some pressure on driver wages. There are certain markets where we've had higher sign-on bonuses, and those are increasing. The locations are increasing where we have sign-on bonuses. The driver market is clearly getting tighter, but that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers. We think it sets us up very well across pretty much every segment, really excited about that. The second part of the question, where you think you'll get, I think it'll pull some people that maybe have left the industry previously, come back into the industry. I also think there'll be some good training opportunities for young people, but that's nothing quick that's going to solve that.

Speaker #8: The locations are increasing where we have sign-on bonuses. So the driver market is clearly getting tighter. But that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers.

Speaker #3: So there's some good sources out there, but there's not a good, quick solution tomorrow. So I think that means we have to remain tight for a while which that means sets everything up for more intermodal conversions.

Speaker #8: We think it sets us up very well across pretty much every segment, and so we're really excited about that. The second part of the question: where do you think you'll get—I think it'll pull some people that maybe have left the industry.

Spencer Frazier: Yeah. Hey, Bascome. Thanks for the question. Darren, I'll start where you left off, really around mini-bids. I think the frequency of bids has definitely increased. You said extraordinary. It was actually a record in the quarter, the number of opportunities, and that comes across bids, proposals, as well as reviews. The main point on mini-bids I'd like to say is I'd almost like to get rid of the mini-bid term. They are structurally larger bids. As customers are competing for capacity to reset their networks, our customers are still having significant challenges across their routing guides. That gives, again, all of our services opportunities to step up and be the go-to for them and create opportunities again to hopefully get the right returns that we need on all of our businesses.

Spencer Frazier: Yeah. Hey, Bascome. Thanks for the question. Darren, I'll start where you left off, really around mini-bids. I think the frequency of bids has definitely increased. You said extraordinary. It was actually a record in the quarter, the number of opportunities, and that comes across bids, proposals, as well as reviews. The main point on mini-bids I'd like to say is I'd almost like to get rid of the mini-bid term. They are structurally larger bids.

Speaker #3: While we get that sorted out on the capacity side.

Speaker #2: Okay.

Speaker #5: David, I was just going to expand on one of Nick's comments around our corporate driver personnel and I think we've talked about this over the years, but we have tremendous experience.

Speaker #8: Previously, come back into the industry. I also think there will be some good training opportunities for young people. But that's nothing quick that's going to solve that.

Speaker #5: We believe that it is a competitive advantage for us and we believe that we are positioned to outperform the market with respect to attract, recruit, and retain drivers.

Speaker #8: So I think we're in for a longer-term answer to get the capacity where it needs to be. And I think there's always a good source—maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military.

Nick Hobbs: I think we're in for a longer-term answer to get the capacity where it needs to be. I think there's always a good source of maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military. There's some good sources out there, but there's not a good quick solution tomorrow. I think that means capacity will remain tight for a while, which that means sets everything up for more intermodal conversions while we get that sorted out on the capacity side.

Nick Hobbs: I think we're in for a longer-term answer to get the capacity where it needs to be. I think there's always a good source of maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military. There's some good sources out there, but there's not a good quick solution tomorrow. I think that means capacity will remain tight for a while, which that means sets everything up for more intermodal conversions while we get that sorted out on the capacity side.

Speaker #5: And so while this pressure is felt, across the entire industry, we think that we're best positioned to succeed when that pressure exists. And I think that we've proven that in our history in the past.

Spencer Frazier: As customers are competing for capacity to reset their networks, our customers are still having significant challenges across their routing guides. That gives, again, all of our services opportunities to step up and be the go-to for them and create opportunities again to hopefully get the right returns that we need on all of our businesses.

Speaker #8: So, there are some good sources out there, but there's not a good, quick solution for tomorrow. So, I think that means capacity will remain tight for a while.

Speaker #5: And I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now.

Speaker #2: Yeah. That's exactly what I was going to say, Brad, just a couple of comments. This has been a long time coming. So very welcoming to be in this part of the cycle.

Speaker #8: Which means that sets everything up for more intermodal conversions while we get that sorted out on the capacity side.

Speaker #2: And if you look at our performance over the past decade and look at when the periods of tightness occurred, you will see that organizations thrive during those periods because our customers get constrained since they're talked about that and they come to who they trust and they trust our people.

Spencer Frazier: We look forward to continuing those conversations and working through and set our customers up with capacity plans that they can count on.

Speaker #1: Okay, David.

Spencer Frazier: We look forward to continuing those conversations and working through and set our customers up with capacity plans that they can count on.

Speaker #7: Hey, David. So, David, I was just going to expand on one of Nick’s comments around our corporate driver personnel, and I think we’ve talked about this over the years, but we have tremendous experience.

Spencer Frazier: David, I was just going to expand on one of Nick's comments around our corporate driver personnel. I think we've talked about this over the years, but we have tremendous experience. We believe that it is a competitive advantage for us, and we believe that we are positioned to outperform the market with respect to attract, recruit, and retain drivers. While this pressure is felt across the entire industry, we think that we're best positioned to succeed when that pressure exists. I think that we've proven that in our history in the past. I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now. Yeah, that's exactly what I was going to say, Brad. Just a couple of comments.

Brad Hicks: David, I was just going to expand on one of Nick's comments around our corporate driver personnel. I think we've talked about this over the years, but we have tremendous experience. We believe that it is a competitive advantage for us, and we believe that we are positioned to outperform the market with respect to attract, recruit, and retain drivers. While this pressure is felt across the entire industry, we think that we're best positioned to succeed when that pressure exists. I think that we've proven that in our history in the past. I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now.

Operator: The next question will come from Chris Wetherbee with Wells Fargo. Please go ahead.

Operator: The next question will come from Chris Wetherbee with Wells Fargo. Please go ahead.

Speaker #7: We believe that it is a competitive advantage for us, and we believe that we are positioned to outperform the market with respect to attracting, recruiting, and retaining drivers.

Darren Field: Hey, Chris.

Darren Field: Hey, Chris.

Speaker #2: And so what makes it great for us to work with our customers is we can help them with conversion intermodal. We can build better fleets for them and we have plenty of capacity to help them on the highway and final mile side.

Chris Wetherbee: Hey, Brad, and good afternoon, guys. I guess maybe just picking up on that point, Spencer, you're talking about mini-bids. I guess we understand how the bid cycle works and what's locked in and maybe what needs to wait a bit, how do you think about the back half from a realized yield on the intermodal side with the combination of mini-bids and then maybe a little bit of an opportunity around peak season? We have seen some announcements from other folks about peak season surcharges. Maybe just wrapping that all in and maybe how we can think about the H2, if there is going to be any change and what maybe we could see.

Chris Wetherbee: Hey, Brad, and good afternoon, guys. I guess maybe just picking up on that point, Spencer, you're talking about mini-bids. I guess we understand how the bid cycle works and what's locked in and maybe what needs to wait a bit, how do you think about the back half from a realized yield on the intermodal side with the combination of mini-bids and then maybe a little bit of an opportunity around peak season? We have seen some announcements from other folks about peak season surcharges.

Speaker #7: And so, while this pressure is— we think that we're best positioned to succeed when that pressure exists. And I think that we've proven that in our history and in the past.

Speaker #2: So I think we are best set up and positioned to do very well in this cycle.

Speaker #1: This concludes our question and answer session. I would like to turn the conference back over to Miss Shelley Simpson for any closing remarks.

Speaker #7: And I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now.

Speaker #2: You know, this quarter was a great example of what we do best. Our team stayed focused. We executed. We were serving our customers. Operated safely.

Speaker #1: Yeah, that's exactly what I was going to say, Brad. Just a couple of comments—this has been a long time coming, so it's very welcome to be in this part of the cycle.

Shelley Simpson: Yeah, that's exactly what I was going to say, Brad. Just a couple of comments.

Chris Wetherbee: Maybe just wrapping that all in and maybe how we can think about the H2, if there is going to be any change and what maybe we could see.

Spencer Frazier: This has been a long time coming, very welcoming to be in this part of the cycle. If you look at our performance over the past decade and look at when the periods of tightness occurred, you will see the organization thrives during those periods because our customers get constrained, Spencer talked about that, and they come to who they trust, and they trust our people. What makes it great for us to work with our customers is we can help them with conversion in intermodal, we can build better fleets for them, and we have plenty of capacity to help them on the highway and last mile side. I think we are best set up and positioned to do very well in this cycle.

Shelley Simpson: This has been a long time coming, very welcoming to be in this part of the cycle. If you look at our performance over the past decade and look at when the periods of tightness occurred, you will see the organization thrives during those periods because our customers get constrained, Spencer talked about that, and they come to who they trust, and they trust our people. What makes it great for us to work with our customers is we can help them with conversion in intermodal, we can build better fleets for them, and we have plenty of capacity to help them on the highway and last mile side. I think we are best set up and positioned to do very well in this cycle.

Speaker #1: And if you look at our performance over the past decade and look at when the periods of tightness occurred, you will see that organizations thrived during those periods because our customers get constrained, since you talked about that, and they come to who they trust, and they trust our people.

Speaker #2: And just made great discipline decisions and that strengthened our business. And that will happen even over time. You'll see more strengthening. But the results and the work we've done we've improved our efficiency.

Spencer Frazier: Yeah. Chris, thanks for the question, too. I'll let Darren talk about yields and things like that. I think he's got a good answer for you there. Regarding peak season, I will talk about that. We do engage in peak season planning conversations at the end of the peak season of the prior year. We've been in peak discussions since the end of 2025. We do have peak agreements with our customers today that have proactively planned for the 2026 season. We're in discussions right now trying to get forecasts with our customers and setting up really our plan and sharing with them the cost to serve and execute peak. As far as that goes, I would say that peak, from my perspective, it's going to be similar in timing and shape.

Spencer Frazier: Yeah. Chris, thanks for the question, too. I'll let Darren talk about yields and things like that. I think he's got a good answer for you there. Regarding peak season, I will talk about that. We do engage in peak season planning conversations at the end of the peak season of the prior year. We've been in peak discussions since the end of 2025. We do have peak agreements with our customers today that have proactively planned for the 2026 season.

Speaker #2: We've lowered our cost to serve. And the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe, we are seeing the benefit and we'll only continue to see more benefit going forward.

Speaker #1: And so what makes it great for us to work with our customers is we can help them with conversion intermodal. We can build better fleets for them, and we have plenty of capacity to help them on the highway and final mile side.

Speaker #1: So I think we are best set up and positioned to do very well in this cycle.

Speaker #2: They may have a stronger company, not just for this cycle, but for any cycle. And because of the work of our 31,000 people, we're entering the second half of the year with momentum and clear focus on creating long-term value for our customers and our shareholders thanks to your time continued support and can't wait to update you next quarter.

Speaker #2: This concludes our question-and-answer session. I would like to turn the conference back over to Ms. Shelley Simpson for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Ms. Shelley Simpson for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Ms. Shelley Simpson for any closing remarks.

Spencer Frazier: We're in discussions right now trying to get forecasts with our customers and setting up really our plan and sharing with them the cost to serve and execute peak. As far as that goes, I would say that peak, from my perspective, it's going to be similar in timing and shape.

Speaker #1: You know, this quarter was a great example of what we do best. Our team stayed focused, we executed, and we served our customers. We operated safely.

Shelley Simpson: This quarter was a great example of what we do best. Our team stayed focused. We executed, we're serving our customers, operated safely, and just made great disciplined decisions, and that strengthened our business.

Shelley Simpson: This quarter was a great example of what we do best. Our team stayed focused. We executed, we're serving our customers, operated safely, and just made great disciplined decisions, and that strengthened our business.

Speaker #1: And just made great discipline decisions, and that strengthened our business. That will happen even over time—you'll see more strengthening. But the results reflect the strength of the foundation we've been building.

Shelley Simpson: That will happen even over time, you'll see more strengthening. The results reflect the strength of the foundation we've been building and the work we've done. We've improved our efficiency, we've lowered our cost to serve, and the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe we are seeing the benefit and will only continue to see more benefit going forward. They've made us a stronger company, not just for this cycle, but for any cycle. Because of the work of our 31,000 people, we're entering the H2 with momentum and clear focus on creating long-term value for our customers and our shareholders. Thanks for your time, continued support, and can't wait to update you next quarter.

Shelley Simpson: That will happen even over time, you'll see more strengthening. The results reflect the strength of the foundation we've been building and the work we've done. We've improved our efficiency, we've lowered our cost to serve, and the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe we are seeing the benefit and will only continue to see more benefit going forward. They've made us a stronger company, not just for this cycle, but for any cycle. Because of the work of our 31,000 people, we're entering the H2 with momentum and clear focus on creating long-term value for our customers and our shareholders. Thanks for your time, continued support, and can't wait to update you next quarter.

Spencer Frazier: The import peak that talks about coming in early, that can happen early, a little bit later, there's always a lag from the import peak to the execution of the domestic peak, that domestic peak is really matched to meet their consumer demand. That's why I say the timing and shape we expect to be similar, we continue to have ongoing discussions to make sure we're set up for success with our customers.

Spencer Frazier: The import peak that talks about coming in early, that can happen early, a little bit later, there's always a lag from the import peak to the execution of the domestic peak, that domestic peak is really matched to meet their consumer demand. That's why I say the timing and shape we expect to be similar, we continue to have ongoing discussions to make sure we're set up for success with our customers.

Speaker #1: And the work we've done—we've improved our efficiency. We've lowered our cost to serve. And the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe we are seeing the benefit and will only continue to see more benefit going forward.

Speaker #1: They've made us a stronger company, not just for this cycle, but for any cycle. And because of the work of our 31,000 people, we're entering the second half of the year with momentum.

Darren Field: Yeah, Chris, let me just jump in. It's Darren again, I'll jump in on pricing change and magnitude. Look, I don't have a forecast number for you or any kind of guidance. What I'll tell you is, our Eastern network business behaves, trends, tracks against highway competition, we have massive opportunities coming in the door. Spencer just highlighted that we're setting records with the opportunities that we see. The gap between the highway rates and intermodal rates has grown in this cycle, for a long time, we've said somewhere between 10% and 15% discount, fuel inclusive, in the Eastern network is and has been sustainable for intermodal. We have a larger gap in the price today, largely because of rates that are now six, seven, eight, 10 months old.

Darren Field: Yeah, Chris, let me just jump in. It's Darren again, I'll jump in on pricing change and magnitude. Look, I don't have a forecast number for you or any kind of guidance. What I'll tell you is, our Eastern network business behaves, trends, tracks against highway competition, we have massive opportunities coming in the door.

Speaker #1: And clear focus on creating long-term value for our customers and our shareholders, thanks to your continued support. I can't wait to update you next quarter.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Darren Field: Spencer just highlighted that we're setting records with the opportunities that we see. The gap between the highway rates and intermodal rates has grown in this cycle, for a long time, we've said somewhere between 10% and 15% discount, fuel inclusive, in the Eastern network is and has been sustainable for intermodal. We have a larger gap in the price today, largely because of rates that are now six, seven, eight, 10 months old.

Darren Field: As we go through the rest of the year and bring on new business, we anticipate certainly closing that gap. I don't know what magnitude that presents in terms of the mix of the rate, how you model that. Just know that certainly, the opportunity to improve pricing. Now, we're also faced with inflationary pressures. Driver wage cost is going to move up. The cost of labor is going to move up. Our rail providers are all going to be talking to us about cost challenges they're facing. We're looking for pricing to recover against inflation while also improving our margin a little bit. Certainly, as the rest of the year goes on, and as we move into the next bid season, we will look for that gap from intermodal to truckload to close.

Darren Field: As we go through the rest of the year and bring on new business, we anticipate certainly closing that gap. I don't know what magnitude that presents in terms of the mix of the rate, how you model that. Just know that certainly, the opportunity to improve pricing. Now, we're also faced with inflationary pressures. Driver wage cost is going to move up. The cost of labor is going to move up. Our rail providers are all going to be talking to us about cost challenges they're facing. We're looking for pricing to recover against inflation while also improving our margin a little bit.

Darren Field: Certainly, as the rest of the year goes on, and as we move into the next bid season, we will look for that gap from intermodal to truckload to close.

Operator: The next question will come from Jonathan Chappell with Evercore ISI. Please go ahead.

Operator: The next question will come from Jon Chappell with Evercore ISI. Please go ahead.

Jonathan Chappell: Thank you. Darren, on the volume side, the acceleration from April through June, then we look at the H2 of 2025, or even if you want to two-year stack it feels like it's an easier comp. When you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as it related to capacity, rail service, the spread, is that a number now for volume in the H2 of the year that continues to build off of that 12%? If not, what kind of derails that? No pun intended.

Jon Chappell: Thank you. Darren, on the volume side, the acceleration from April through June, then we look at the H2 of 2025, or even if you want to two-year stack it feels like it's an easier comp. When you take that June number of 12%, look at potentially easier comps, the backdrop that you just laid out as it related to capacity, rail service, the spread, is that a number now for volume in the H2 of the year that continues to build off of that 12%? If not, what kind of derails that? No pun intended.

Darren Field: Chappell, is that a guidance question?

Darren Field: Chappell, is that a guidance question?

Jonathan Chappell: No. It's a cadence question.

Jon Chappell: No. It's a cadence question.

Darren Field: Listen, I think the demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth. There were opportunities in Q2 for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us. We're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. I would anticipate that opportunity will continue. We're also careful with our own capacity challenges. We need to hire more drivers. We need to onboard more drayage capacity today. That can be a bit of a headwind for us. I'm confident in J.B. Hunt's ability to go out and attract and retain, and bring on drivers for our needs.

Darren Field: Listen, I think the demand for our services is extraordinarily strong. What you heard in some of the prepared comments is a lot of focus on disciplined growth. There were opportunities in Q2 for even more volume that wasn't going to be sticky or might have contributed to even worse cost challenges for us. We're being careful in ensuring that intermodal is the correct long-term answer for volume to onboard and convert from the highway. I would anticipate that opportunity will continue. We're also careful with our own capacity challenges.

Darren Field: We need to hire more drivers. We need to onboard more drayage capacity today. That can be a bit of a headwind for us. I'm confident in J.B. Hunt's ability to go out and attract and retain, and bring on drivers for our needs.

Darren Field: As the rest of the year goes on, I don't know how to give you a forecast of percentage change, but I know that demand is really strong for what we're doing.

Darren Field: As the rest of the year goes on, I don't know how to give you a forecast of percentage change, but I know that demand is really strong for what we're doing.

Operator: The next question will come from Tom Wadewitz with UBS. Please go ahead.

Operator: The next question will come from Tom Wadewitz with UBS. Please go ahead.

Darren Field: Hey, Tom.

Darren Field: Hey, Tom.

Tom Wadewitz: Yeah. Hey, good afternoon, and congratulations on the strong growth and execution on the plan. Wanted to get a sense related to intermodal margin of just where you're at on drayage productivity, and also, I guess just, rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop in, say, 2023, 2024. I think for, I'm not sure how long, maybe the past year, you've had some nice improvement in that productivity, which I think has helped. Just where are you at on loads per drayage truck and container utilization? Can that go up further and help your margin in intermodal, or is that kind of peaked out and you can't squeeze out more there? Thank you.

Tom Wadewitz: Yeah. Hey, good afternoon, and congratulations on the strong growth and execution on the plan. Wanted to get a sense related to intermodal margin of just where you're at on drayage productivity, and also, I guess just, rising utilization of containers. It seems like you probably had a period where productivity was below normal, maybe against a weaker freight backdrop in, say, 2023, 2024. I think for, I'm not sure how long, maybe the past year, you've had some nice improvement in that productivity, which I think has helped.

Tom Wadewitz: Just where are you at on loads per drayage truck and container utilization? Can that go up further and help your margin in intermodal, or is that kind of peaked out and you can't squeeze out more there? Thank you.

Darren Field: Sure. On productivity around the assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. Clearly, we didn't pre-fund capacity on the tractor front or the driver front like we have containers. We do have excess containers still, and there are thousands of loads for us to go grow into that capacity. Certainly, volume growth in intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement. I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we really did a great job as an organization, and the team was very successful in finding productivity benefits, and that is part of our cost to serve initiatives that we announced a year ago.

Darren Field: Sure. On productivity around the assets and our people, our driver productivity as well as our tractor productivity has been extremely strong. Clearly, we didn't pre-fund capacity on the tractor front or the driver front like we have containers. We do have excess containers still, and there are thousands of loads for us to go grow into that capacity. Certainly, volume growth in intermodal will continue to help spread fixed cost out over the system and continue to unlock margin improvement.

Darren Field: I don't want to lean into driver productivity and tractor productivity on the dray front as being a major contributor to margin expansion. I think over the last 12 months, we really did a great job as an organization, and the team was very successful in finding productivity benefits, and that is part of our cost to serve initiatives that we announced a year ago.

Darren Field: We've been successful there. I will always put some pressure on that team for productivity improvement, but I'm not looking for that area to really unlock margin expansion. On the container front, certainly, getting back to call it 2018-type container terms is certainly where we would anticipate to move. Over the last year or two, seeing that improvement. Well, we stopped buying containers was one of the ways that has really helped that while we continue to grow into it.

Darren Field: We've been successful there. I will always put some pressure on that team for productivity improvement, but I'm not looking for that area to really unlock margin expansion. On the container front, certainly, getting back to call it 2018-type container terms is certainly where we would anticipate to move. Over the last year or two, seeing that improvement. Well, we stopped buying containers was one of the ways that has really helped that while we continue to grow into it.

Operator: The next question will come from Jason Seidl with TD Cowen. Please go ahead.

Operator: The next question will come from Jason Seidl with TD Cowen. Please go ahead.

Nick Hobbs: Hey, Jason.

Nick Hobbs: Hey, Jason.

Nick Hobbs: Thanks, operator. Hey, guys. How are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts from, at least early on, from the Montgomery decision, both looking at ICS as well as the asset-based side? If you haven't seen it thus far, what are you expecting down the road, from both a capacity as well as an insurance cost standpoint?

Jason Seidl: Thanks, operator. Hey, guys. How are you doing? Impressive quarter. Wanted to ask you, have you seen any impacts from, at least early on, from the Montgomery decision, both looking at ICS as well as the asset-based side? If you haven't seen it thus far, what are you expecting down the road, from both a capacity as well as an insurance cost standpoint?

Nick Hobbs: Yeah, I would just say. This is Nick. I'll jump in on that.

Nick Hobbs: Yeah, I would just say. This is Nick. I'll jump in on that.

Jason Seidl [Managing Director, Industrials: Hey, Nick.

Jason Seidl: Hey, Nick.

Nick Hobbs: I would say that we've seen more carriers come to our platform and more carriers getting approved. I think we have seen carriers migrating from small brokers, is our speculation on that, trying to go to higher ground. Plus, we have a lot of freight. As we've talked about, our volumes are way up. I think we have a lot of opportunity. From our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility. We already exceeded the federal minimums, and we have dynamic monitoring going on. No risk exposure increase there for us because we think we've been doing a really good job for many years with our safety focus. We think we have seen more carriers migrate over to our platform because of that.

Nick Hobbs: I would say that we've seen more carriers come to our platform and more carriers getting approved. I think we have seen carriers migrating from small brokers, is our speculation on that, trying to go to higher ground. Plus, we have a lot of freight. As we've talked about, our volumes are way up. I think we have a lot of opportunity. From our standpoint, the Montgomery decision, it's just increased a lot of focus in the carrier selection and broker responsibility.

Nick Hobbs: We already exceeded the federal minimums, and we have dynamic monitoring going on. No risk exposure increase there for us because we think we've been doing a really good job for many years with our safety focus. We think we have seen more carriers migrate over to our platform because of that.

Brad Hicks: I might just add, too. This is Brad Hicks. From a Dedicated standpoint, in my prepared remarks, I talked about record pipeline. How much of that is directly related to the outcome of that ruling is hard to say. I certainly think that along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner, and I do think that's a factor. It's really hard to pinpoint to what extent. I do think that that is showing up to some degree.

Brad Hicks: I might just add, too. This is Brad Hicks. From a Dedicated standpoint, in my prepared remarks, I talked about record pipeline. How much of that is directly related to the outcome of that ruling is hard to say. I certainly think that along with the other regulatory enforcement and the pressure on drivers, I do think there are examples where shippers want to ensure that they are partnered with the right reliable supply chain partner, and I do think that's a factor. It's really hard to pinpoint to what extent. I do think that that is showing up to some degree.

Shelley Simpson: Jason, Shelley. I would just add that in the driver market, there are specific markets that are as tight as we have ever seen. You're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers. It is a challenge in the market. I think it's a welcome challenge for us.

Shelley Simpson: Jason, Shelley. I would just add that in the driver market, there are specific markets that are as tight as we have ever seen. You're facing several markets where you're hearing customers come to us, but also really an advantage for us being on the asset side, thinking about how we attract, recruit, and retain the best drivers. It is a challenge in the market. I think it's a welcome challenge for us.

Operator: The next question will come from Brian Ossenbeck with J.P. Morgan. Please go ahead.

Operator: The next question will come from Brian Ossenbeck with J.P. Morgan. Please go ahead.

Nick Hobbs: Hey, Brian.

Nick Hobbs: Hey, Brian.

Brian Ossenbeck: Hey. Afternoon, everybody. Maybe just two follow-up questions on capacity. Shelley mentioned some of the markets are really tight in terms of the driver side, tight as ever seen. Darren, is that a cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would. Is that something where if you're already at the top end of productivity, maybe that becomes a little bit more of a challenge? If you can just talk through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while. Really peak season discussions are already underway. What are you thinking about managing that stack and maybe bringing some of that more to market? Thanks very much.

Brian Ossenbeck: Hey. Afternoon, everybody. Maybe just two follow-up questions on capacity. Shelley mentioned some of the markets are really tight in terms of the driver side, tight as ever seen. Darren, is that a cause for concern on the drayage side? I know you have a lot in-house, so everybody else probably feels it more than you would. Is that something where if you're already at the top end of productivity, maybe that becomes a little bit more of a challenge?

Brian Ossenbeck: If you can just talk through a little bit more about the pulling back some of the containers off of the stacks because I know you're over about 90% right now for the first time in a while. Really peak season discussions are already underway. What are you thinking about managing that stack and maybe bringing some of that more to market? Thanks very much.

Darren Field: Well, certainly, any time there's a challenge with the driver supply, all parts of the supply chain that hire professional truck drivers are going to face some amount of challenge. I think the third-party intermodal drayage capacity out there has been under some pressure, and so I do think we have an advantage against our competition given the amount of insource, the amount of company drivers we use. We do partner with outside carriers, though, and have had a lot of success for a number of years to do that, and that will remain an important part of our strategy. As we see specific markets that are most challenged, we feel that as well, and it just sends customers looking for an intermodal conversion opportunity from the highway that much faster in those markets.

Darren Field: Well, certainly, any time there's a challenge with the driver supply, all parts of the supply chain that hire professional truck drivers are going to face some amount of challenge. I think the third-party intermodal drayage capacity out there has been under some pressure, and so I do think we have an advantage against our competition given the amount of insource, the amount of company drivers we use. We do partner with outside carriers, though, and have had a lot of success for a number of years to do that, and that will remain an important part of our strategy.

Darren Field: As we see specific markets that are most challenged, we feel that as well, and it just sends customers looking for an intermodal conversion opportunity from the highway that much faster in those markets.

Darren Field: It just contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers, and we'll continue to work on that. Obviously, we manage forecasts with customers. We manage expectations. We have a network plan around our volumes. As we see new opportunities come at us, we're going to look for how much capacity do we need to bring out of storage. That's been an ongoing process for us for well over a decade now. It's just been more visible with the amount of equipment we've had in storage over the last few years. I don't think that our behavior around when to bring containers into the market is any different today than it ever has been.

Darren Field: It just contributes to even more pressure in those markets where we're trying to onboard and hire and grow our driver base so that we can grow with customers, and we'll continue to work on that. Obviously, we manage forecasts with customers. We manage expectations. We have a network plan around our volumes. As we see new opportunities come at us, we're going to look for how much capacity do we need to bring out of storage. That's been an ongoing process for us for well over a decade now. It's just been more visible with the amount of equipment we've had in storage over the last few years.

Darren Field: I don't think that our behavior around when to bring containers into the market is any different today than it ever has been.

Darren Field: Certainly, I can understand and appreciate the question.

Darren Field: Certainly, I can understand and appreciate the question.

Shelley Simpson: Ray, I would say, in intermodal, it's a strategic advantage for us. If you just think about what the market looks like today, it is very, very tight markets. Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the intermodal market. We continue to have strong service performance. I believe that's the operational excellence that's happening inside our intermodal business, and that includes how much that we actually insource with our own professional drivers.

Shelley Simpson: Darren, I would say, in intermodal, it's a strategic advantage for us. If you just think about what the market looks like today, it is very, very tight markets. Our customers are coming to us, and that's a direct correlation to the service that they're receiving in the intermodal market. We continue to have strong service performance. I believe that's the operational excellence that's happening inside our intermodal business, and that includes how much that we actually insource with our own professional drivers.

Operator: The next question will come from Jacob Lacks with Wolfe Research. Please go ahead.

Operator: The next question will come from Jacob Lacks with Wolfe Research. Please go ahead.

Jacob Lacks: Hey. Afternoon. Hey. Thanks for your time. Maybe just to follow up on that, how much capacity for incremental growth do you think you have today within intermodal, how do you think about balancing volumes versus pricing going forward? Is the competitive backdrop in transcon improving at all? Thanks.

Jacob Lacks: Hey. Afternoon. Hey. Thanks for your time. Maybe just to follow up on that, how much capacity for incremental growth do you think you have today within intermodal, how do you think about balancing volumes versus pricing going forward? Is the competitive backdrop in transcon improving at all? Thanks.

Darren Field: First of all, on the volume front, how much excess capacity? I don't know. I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Darren Field: First of all, on the volume front, how much excess capacity? I don't know. I think for the last couple of years, we've said we've had over 20% available capacity for growth.

Brad Delco: We grew 10, so.

Brad Delco: We grew 10, so.

Darren Field: Grew 10, so good point.

Darren Field: Grew 10, so good point.

Brad Delco: We'll settle on 10.

Brad Delco: We'll settle on 10.

Darren Field: As it relates to the comparison of price versus volume, look, we're in this business and own these assets to generate a return on those investments. We certainly balance our pricing opportunity, the volume growth opportunity around how it can contribute to our network and add value and expand our margin. Those decisions are going on every day with the opportunities and will continue to come through the door like that. I think in the transcon competitive space, I do think it has behaved a little bit different than normal, and would have expected a little bit more pricing strength there than what we've seen. That has just shown up. A lot of rail-owned, asset-based I'm sorry. The rail control competition that we face has been a little more aggressive than what we've seen in the past.

Darren Field: As it relates to the comparison of price versus volume, look, we're in this business and own these assets to generate a return on those investments. We certainly balance our pricing opportunity, the volume growth opportunity around how it can contribute to our network and add value and expand our margin. Those decisions are going on every day with the opportunities and will continue to come through the door like that.

Darren Field: I think in the transcon competitive space, I do think it has behaved a little bit different than normal, and would have expected a little bit more pricing strength there than what we've seen. That has just shown up. A lot of rail-owned, asset-based I'm sorry. The rail control competition that we face has been a little more aggressive than what we've seen in the past.

Darren Field: There's times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow. We're not losing share in transcon, but it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that. Our prices are up year over year in the transcon. It's just that the truckload capacity market is not as big of an influencer on that market as it is in the East.

Darren Field: There's times when we've been able to use our service quality and our ability to provide benefits to our network to defend that, to win more, to grow. We're not losing share in transcon, but it has been a little bit more difficult pricing environment there. Our prices are improving. I want to make sure everyone hears that. Our prices are up year over year in the transcon. It's just that the truckload capacity market is not as big of an influencer on that market as it is in the East.

Operator: The next question will come from Ken Hoexter with Bank of America. Please go ahead.

Operator: The next question will come from Ken Hoexter with Bank of America. Please go ahead.

Ken Hoexter: Hey. Great. Good afternoon, nice job on handling the double-digit intermodal load growth into flowing into results. Brad or Darren, if utilization up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment? Can you detail a bit more on the rail service level comments that you made? Are you concerned this is a cap on your growth rates near term? Is there any particular region or market feeling more pain? Thanks, guys.

Ken Hoexter: Hey. Great. Good afternoon, nice job on handling the double-digit intermodal load growth into flowing into results. Brad or Darren, if utilization up to 90% and you've got 10% excess capacity, where does utilization get to before you start buying equipment? Can you detail a bit more on the rail service level comments that you made? Are you concerned this is a cap on your growth rates near term? Is there any particular region or market feeling more pain? Thanks, guys.

Brad Delco: Yeah, Ken, let me start with maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity," the simple math of saying we grew 10 would suggest 10. I think there's still opportunities, particularly, I'll let Darren support this comment. When we're growing in the East, we have opportunities to turn those boxes faster. A load isn't necessarily a load in every instance. With the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster. I don't recall there ever really being a time when we put out an earnings report and you see a length of haul in intermodal below 1,600 miles. I think we've had two consecutive quarters of that.

Brad Delco: Yeah, Ken, let me start with maybe not necessarily correcting my statement, but I think just going back in history and saying, "Hey, we have 20% capacity," the simple math of saying we grew 10 would suggest 10. I think there's still opportunities, particularly, I'll let Darren support this comment. When we're growing in the East, we have opportunities to turn those boxes faster. A load isn't necessarily a load in every instance. With the growth we're seeing in the East, I think there would be opportunities for us to turn this equipment faster.

Brad Delco: I don't recall there ever really being a time when we put out an earnings report and you see a length of haul in intermodal below 1,600 miles. I think we've had two consecutive quarters of that.

Brad Delco: The 31% two-year stack growth in the East, if that trend continues, there's probably opportunity to get more productivity on that container. Let's not just get too set in viewing that we only have 10% capacity. Darren, I'll let you take over from there.

Brad Delco: The 31% two-year stack growth in the East, if that trend continues, there's probably opportunity to get more productivity on that container. Let's not just get too set in viewing that we only have 10% capacity. Darren, I'll let you take over from there.

Darren Field: Well, I think on the rail capacity front, look, when you start throwing the amount of growth that has come at those teams in pretty short order, everybody needs a minute to sort of build their plan, understand their resource planning. I'm not at all concerned about rail service moving forward, especially just the commitment to growth capacity and having the people available for our rail providers to operate. That's universal amongst all of our rail providers. Everyone is very focused on maintaining the right levels of their headcount and their equipment, just all of their ability to do that. Will there be blips along the way if growth shows up unexpected, or if we and our customers are unable to forecast it and communicate what's coming? That's what makes me concerned.

Darren Field: Well, I think on the rail capacity front, look, when you start throwing the amount of growth that has come at those teams in pretty short order, everybody needs a minute to sort of build their plan, understand their resource planning. I'm not at all concerned about rail service moving forward, especially just the commitment to growth capacity and having the people available for our rail providers to operate. That's universal amongst all of our rail providers.

Darren Field: Everyone is very focused on maintaining the right levels of their headcount and their equipment, just all of their ability to do that. Will there be blips along the way if growth shows up unexpected, or if we and our customers are unable to forecast it and communicate what's coming? That's what makes me concerned.

Darren Field: I think we're doing a really good job of highlighting information we need and the ability to forecast how much volume is going to come at us, and how do we communicate that with the rail providers, and everybody is very receptive, and the teams have never worked more closely than they are today in preparing for this growth.

Darren Field: I think we're doing a really good job of highlighting information we need and the ability to forecast how much volume is going to come at us, and how do we communicate that with the rail providers, and everybody is very receptive, and the teams have never worked more closely than they are today in preparing for this growth.

Shelley Simpson: Hey, Ken, just to add, we are going to challenge ourselves on our turns on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that you move and how efficient is the freight that you move. We'll have an opportunity to really get more efficient on our current boxes, and then we still have thousands that are still available and ready for growth. Between those two, we will not put in capital plans until we get confident what our turns can move up to with our base fleet first.

Shelley Simpson: Hey, Ken, just to add, we are going to challenge ourselves on our turns on our boxes. If you think about a market that we have entered, you do get the opportunity to think about the type of freight that you move and how efficient is the freight that you move. We'll have an opportunity to really get more efficient on our current boxes, and then we still have thousands that are still available and ready for growth. Between those two, we will not put in capital plans until we get confident what our turns can move up to with our base fleet first.

Operator: The next question will come from Richa Harnain with Deutsche Bank. Please go ahead.

Operator: The next question will come from Richa Harnain with Deutsche Bank. Please go ahead.

Brad Delco: Hey, Richa.

Brad Delco: Hey, Richa.

Richa Harnain: Thanks, team. Hi. See, zooming in on some things. First, Darren, I think you said pricing was positive in transcon. The intermodal pricing that we saw reported ex fuel going positive for the first time since 2022, that's not just driven by mix, right? It's driven by some real same-store pricing growth. I wanted to clarify that. Regarding a little more than normal transcon competition, it was encouraging to hear you're still able to defend share in the market despite that. We're just trying to understand if there's anything changing that would prohibit intermodal's ability to narrow its gap to TL rates over the next several quarters. You reminded us that could be a very attractive pricing opportunity over time given how wide the spread is.

Richa Harnain: Thanks, team. Hi. See, zooming in on some things. First, Darren, I think you said pricing was positive in transcon. The intermodal pricing that we saw reported ex fuel going positive for the first time since 2022, that's not just driven by mix, right? It's driven by some real same-store pricing growth. I wanted to clarify that. Regarding a little more than normal transcon competition, it was encouraging to hear you're still able to defend share in the market despite that.

Richa Harnain: We're just trying to understand if there's anything changing that would prohibit intermodal's ability to narrow its gap to TL rates over the next several quarters. You reminded us that could be a very attractive pricing opportunity over time given how wide the spread is.

Richa Harnain: Wanted to see if there's any significant opportunity for JBI or if the competitive environment has changed to make that more or less likely. Thanks.

Richa Harnain: Wanted to see if there's any significant opportunity for JBI or if the competitive environment has changed to make that more or less likely. Thanks.

Darren Field: Well, more than anything, I want to make sure 1% positive price on revenue per load, ex of fuel is what we reported and is accurate. As you heard, our Eastern growth is up 16%, where transcon was +5%. That's a negative to mix. The positive pricing that's out there has been material for us to overcome a negative from the mix. As we grow in the Eastern network, those loads are lower revenue per load units than a transcon load is. That doesn't mean it works at a worse margin. That's not at all what I'm saying is it's all contributing to positive benefits inside our network. Prices in the transcon, I absolutely believe will absolutely continue to close the gap back to what is their historical norm against truckload over time.

Darren Field: Well, more than anything, I want to make sure 1% positive price on revenue per load, ex of fuel is what we reported and is accurate. As you heard, our Eastern growth is up 16%, where transcon was +5%. That's a negative to mix. The positive pricing that's out there has been material for us to overcome a negative from the mix. As we grow in the Eastern network, those loads are lower revenue per load units than a transcon load is. That doesn't mean it works at a worse margin.

Darren Field: That's not at all what I'm saying is it's all contributing to positive benefits inside our network. Prices in the transcon, I absolutely believe will absolutely continue to close the gap back to what is their historical norm against truckload over time.

Darren Field: It hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in transcon is just a smaller percentage of the opportunities. There's not as much of that business for us to go convert today as there is in the East. That's where you see a greater opportunity to impact price mid-cycle with new opportunities that present itself. It's just stronger in the East than it is transcon. As we move into next year's mid-cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well.

Darren Field: It hasn't moved as fast because the amount of business that comes to us to convert from the highway to rail in transcon is just a smaller percentage of the opportunities. There's not as much of that business for us to go convert today as there is in the East. That's where you see a greater opportunity to impact price mid-cycle with new opportunities that present itself. It's just stronger in the East than it is transcon. As we move into next year's mid-cycle, I fully anticipate the opportunity to talk and work with our customers around inflationary cost and generate positive improvements in our margins on that business as well.

Brad Delco: I want to add, hey, Rich, it's Brad. I want to add something to that and reiterate points that Darren made in some of his prepared comments, but also take a step back and think about our broader portfolio. In cycles past, everyone sort of understands that intermodal pricing lags truckload pricing. Pricing is typically what drives improvements in financial performance. I want to just make sure to reiterate, this team has executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, then obviously giving you guys the update on our cost to serve initiative.

Brad Delco: I want to add, hey, Rich, it's Brad. I want to add something to that and reiterate points that Darren made in some of his prepared comments, but also take a step back and think about our broader portfolio. In cycles past, everyone sort of understands that intermodal pricing lags truckload pricing. Pricing is typically what drives improvements in financial performance.

Brad Delco: I want to just make sure to reiterate, this team has executed extremely well on being very disciplined on cost, controlling what we control, being operationally excellent on safety and service, then obviously giving you guys the update on our cost to serve initiative.

Brad Delco: With our two largest segments, both intermodal and Dedicated, that don't really have as quick of a movement in transactional pricing as what we've seen in ICS, I think what we'll see in the coming quarters with JBT, our financial performance has largely been driven by what we can control with the benefits of what is happening in the market still to come. I fully anticipate Dedicated, intermodal, JBT, ICS, that all of the businesses will have the benefit of seeing improved pricing opportunities. What you've seen executed from the team over the last several quarters has largely been what we can control. I know pricing is a big topic. We look forward to what the market presents us for opportunities to price to the value we create. Truckload pricing has moved up a lot.

Brad Delco: With our two largest segments, both intermodal and Dedicated, that don't really have as quick of a movement in transactional pricing as what we've seen in ICS, I think what we'll see in the coming quarters with JBT, our financial performance has largely been driven by what we can control with the benefits of what is happening in the market still to come. I fully anticipate Dedicated, intermodal, JBT, ICS, that all of the businesses will have the benefit of seeing improved pricing opportunities.

Brad Delco: What you've seen executed from the team over the last several quarters has largely been what we can control. I know pricing is a big topic. We look forward to what the market presents us for opportunities to price to the value we create. Truckload pricing has moved up a lot.

Brad Delco: We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing, we'll just see how supply and demand play out in the industry. I think that there will be opportunities for us to take advantage of what the market presents.

Brad Delco: We haven't even really seen truckload providers print results yet that show a meaningful movement in contract pricing, we'll just see how supply and demand play out in the industry. I think that there will be opportunities for us to take advantage of what the market presents.

Operator: The next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.

Operator: The next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.

Brad Hicks: Hey, Jordan.

Brad Hicks: Hey, Jordan.

Jordan Alliger: Yeah. Hi. A couple of things. One, I'm just curious, just coming on talking about Dedicated, in the context of what you mentioned on the pipeline and against the startup timing and how do you think about that modest EBIT growth that you talked about? I don't know if you provided an update around that or sort of the progression as we think from here. I just wanted to come back to a volume question again. I think you had mentioned the shape of the peak could look similar, and I just wanted to understand if you mean similar to 2025 as we went from Q2 to Q3 and into Q4. Thanks.

Jordan Alliger: Yeah. Hi. A couple of things. One, I'm just curious, just coming on talking about Dedicated, in the context of what you mentioned on the pipeline and against the startup timing and how do you think about that modest EBIT growth that you talked about? I don't know if you provided an update around that or sort of the progression as we think from here. I just wanted to come back to a volume question again. I think you had mentioned the shape of the peak could look similar, and I just wanted to understand if you mean similar to 2025 as we went from Q2 to Q3 and into Q4. Thanks.

Brad Hicks: Jordan, this is Brad. I'll start with Dedicated and maybe flip it over to Spencer to reiterate comments on peak. One thing, we've certainly seen the pipeline grow. It's at record levels, even higher than we saw at the peak of COVID. I do think that demand for professional Dedicated solutions is peaking. Is that a factor of the driver market and the pressure that people are seeing? Yes. Is it a factor on what we're seeing in the one-way rate market and the pressures that shippers are seeing? Yes. I commented already that Montgomery probably plays a role as well. We can't forget that it's often a long sales cycle in Dedicated. Historically, that's 12 to 18 months. There are times when shippers are motivated to go a little faster, to introduce those solutions and the value that those solutions create.

Brad Hicks: Jordan, this is Brad. I'll start with Dedicated and maybe flip it over to Spencer to reiterate comments on peak. One thing, we've certainly seen the pipeline grow. It's at record levels, even higher than we saw at the peak of COVID. I do think that demand for professional Dedicated solutions is peaking. Is that a factor of the driver market and the pressure that people are seeing? Yes. Is it a factor on what we're seeing in the one-way rate market and the pressures that shippers are seeing?

Brad Hicks: Yes. I commented already that Montgomery probably plays a role as well. We can't forget that it's often a long sales cycle in Dedicated. Historically, that's 12 to 18 months. There are times when shippers are motivated to go a little faster, to introduce those solutions and the value that those solutions create.

Brad Hicks: Hard to say if at this point, if we're seeing that speed up decision-making. We're really excited about not only where we sit with the pipeline, but really just the great performance that our team has had through execution, our safety performance of our professional drivers, and really the great work of our field operations and execution supporting our customers and driving value. A lot of our growth historically has been organically, there are numerous conversations and opportunities inside that pipeline growing with customers that we already have. We certainly are always motivated and driven to grow our customer count and grow with new customers. There's a fair amount of those opportunities inside of our pipeline as well. We're really optimistic about where we sit, really excited about our performance coming through Q2.

Brad Hicks: Hard to say if at this point, if we're seeing that speed up decision-making. We're really excited about not only where we sit with the pipeline, but really just the great performance that our team has had through execution, our safety performance of our professional drivers, and really the great work of our field operations and execution supporting our customers and driving value. A lot of our growth historically has been organically, there are numerous conversations and opportunities inside that pipeline growing with customers that we already have.

Brad Hicks: We certainly are always motivated and driven to grow our customer count and grow with new customers. There's a fair amount of those opportunities inside of our pipeline as well. We're really optimistic about where we sit, really excited about our performance coming through Q2.

Brad Hicks: If you really think about close to 100 basis point headwind or pressure on what fuel did coming in at 100 operating ratio in terms of how our fuel surcharge mechanisms work, puts us fundamentally inside of our target margins. Just barely, but we're excited that we made that step. I'll turn it over to Spencer.

Brad Hicks: If you really think about close to 100 basis point headwind or pressure on what fuel did coming in at 100 operating ratio in terms of how our fuel surcharge mechanisms work, puts us fundamentally inside of our target margins. Just barely, but we're excited that we made that step. I'll turn it over to Spencer.

Spencer Frazier: Yeah, hey, Jordan. I think to your question, I would answer that it would be similar to 2025, also as our volumes move from Q2 to Q3 to Q4, when I talk about shape and timing.

Spencer Frazier: Yeah, hey, Jordan. I think to your question, I would answer that it would be similar to 2025, also as our volumes move from Q2 to Q3 to Q4, when I talk about shape and timing.

Operator: The final question will come from David Vernon with Bernstein. Please go ahead.

Operator: The final question will come from David Vernon with Bernstein. Please go ahead.

David Vernon: Hey, good afternoon. Thank you. Just a quick call back on driver wages. I mean, Shelley or Nick, could you maybe put some numbers around what kind of wage increases are you seeing out in the marketplace? A little bit about how you guys are positioned to the rest of the broader industry. If you're talking to a generalist and you're seeing this sort of supply-demand problem with labor, if wages go up, where is the industry going to get this labor from in this kind of market?

David Vernon: Hey, good afternoon. Thank you. Just a quick call back on driver wages. I mean, Shelley or Nick, could you maybe put some numbers around what kind of wage increases are you seeing out in the marketplace? A little bit about how you guys are positioned to the rest of the broader industry. If you're talking to a generalist and you're seeing this sort of supply-demand problem with labor, if wages go up, where is the industry going to get this labor from in this kind of market?

Brad Hicks: Hey, David, you kind of were coming in and out. I think we understand it to be a driver wage question and where do we think the supply of drivers would be coming from? I'll let Nick handle that.

Brad Hicks: Hey, David, you kind of were coming in and out. I think we understand it to be a driver wage question and where do we think the supply of drivers would be coming from? I'll let Nick handle that.

Nick Hobbs: Yeah, I would just say we are seeing some pressure on driver wages. There are certain markets where we've had higher sign-on bonuses, and those are increasing. The locations are increasing where we have sign-on bonuses. The driver market is clearly getting tighter, but that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers. We think it sets us up very well across pretty much every segment. We're really excited about that. The second part of the question, I think it'll pull some people that maybe have left the industry previously come back into the industry. I also think there'll be some good training opportunities for young people, but that's nothing quick that's going to solve that.

Nick Hobbs: Yeah, I would just say we are seeing some pressure on driver wages. There are certain markets where we've had higher sign-on bonuses, and those are increasing. The locations are increasing where we have sign-on bonuses. The driver market is clearly getting tighter, but that really flows into our sweet spot with our corporate driver personnel and our ability to hire drivers and attract drivers. We think it sets us up very well across pretty much every segment. We're really excited about that.

Nick Hobbs: The second part of the question, I think it'll pull some people that maybe have left the industry previously come back into the industry. I also think there'll be some good training opportunities for young people, but that's nothing quick that's going to solve that.

Nick Hobbs: I think we're in for a longer-term answer to get the capacity where it needs to be. I think there's always a good source of maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military. There's some good sources out there, but there's not a good quick solution tomorrow. I think that means capacity will remain tight for a while, which that means sets everything up for more intermodal conversions while we get that sorted out on the capacity side.

Nick Hobbs: I think we're in for a longer-term answer to get the capacity where it needs to be. I think there's always a good source of maybe a lot more military folks come in and some government getting involved on providing some training for people leaving the military. There's some good sources out there, but there's not a good quick solution tomorrow. I think that means capacity will remain tight for a while, which that means sets everything up for more intermodal conversions while we get that sorted out on the capacity side.

Brad Hicks: Hey, David. I was just going to expand on one of Nick's comments around our corporate driver personnel. I think we've talked about this over the years, but we have tremendous experience. We believe that it is a competitive advantage for us, and we believe that we are positioned to outperform the market with respect to attract, recruit, and retain drivers. While this pressure is felt across the entire industry, we think that we're best positioned to succeed when that pressure exists, and I think that we've proven that in our history in the past. I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now.

Brad Hicks: Hey, David. I was just going to expand on one of Nick's comments around our corporate driver personnel. I think we've talked about this over the years, but we have tremendous experience. We believe that it is a competitive advantage for us, and we believe that we are positioned to outperform the market with respect to attract, recruit, and retain drivers. While this pressure is felt across the entire industry, we think that we're best positioned to succeed when that pressure exists, and I think that we've proven that in our history in the past.

Brad Hicks: I think that we're already seeing signs of being able to win in this environment that we find ourselves in right now.

Shelley Simpson: Yeah, that's exactly what I was going to say, Brad. Just a couple of comments. This has been a long time coming, so very welcoming to be in this part of the cycle. If you look at our performance over the past decade and look at when the periods of tightness occurred, you will see the organization thrives during those periods because our customers get constrained, Spencer talked about that, and they come to who they trust, and they trust our people. What makes it great for us to work with our customers is we can help them with conversion in intermodal, we can build their fleets for them, and we have plenty of capacity to help them on the highway and Final Mile side. I think we are best set up and positioned to do very well in this cycle.

Shelley Simpson: Yeah, that's exactly what I was going to say, Brad. Just a couple of comments. This has been a long time coming, so very welcoming to be in this part of the cycle. If you look at our performance over the past decade and look at when the periods of tightness occurred, you will see the organization thrives during those periods because our customers get constrained, Spencer talked about that, and they come to who they trust, and they trust our people.

Shelley Simpson: What makes it great for us to work with our customers is we can help them with conversion in intermodal, we can build their fleets for them, and we have plenty of capacity to help them on the highway and Final Mile side. I think we are best set up and positioned to do very well in this cycle.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Ms. Shelley Simpson for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Ms. Shelley Simpson for any closing remarks.

Shelley Simpson: This quarter was a great example of what we do best. Our team stayed focused. We executed, we're serving our customers, operated safely, and just made great disciplined decisions. That strengthened our business. That will happen even over time, you'll see more strengthening. The results reflect the strength of the foundation we've been building and the work we've done. We've improved our efficiency, we've lowered our cost to serve, and the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe, we are seeing the benefit and will only continue to see more benefit going forward. They've made us a stronger company, not just for this cycle, but for any cycle.

Shelley Simpson: This quarter was a great example of what we do best. Our team stayed focused. We executed, we're serving our customers, operated safely, and just made great disciplined decisions. That strengthened our business. That will happen even over time, you'll see more strengthening. The results reflect the strength of the foundation we've been building and the work we've done.

Shelley Simpson: We've improved our efficiency, we've lowered our cost to serve, and the decision to retain our talent through one of the most prolonged freight recessions our industry has experienced, I believe, we are seeing the benefit and will only continue to see more benefit going forward. They've made us a stronger company, not just for this cycle, but for any cycle.

Shelley Simpson: Because of the work of our 31,000 people, we're entering the H2 of the year with momentum and clear focus on creating long-term value for our customers and our shareholders. Thanks for your time, continued support, and can't wait to update you next quarter.

Shelley Simpson: Because of the work of our 31,000 people, we're entering the H2 of the year with momentum and clear focus on creating long-term value for our customers and our shareholders. Thanks for your time, continued support, and can't wait to update you next quarter.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.