Fuel Prices Haven't Shifted Shippers to Intermodal Yet, J.B. Hunt Says

Key Details Despite a 30% surge in diesel prices since the Iran conflict began, shippers are not yet converting freight from trucks to rail, according to Darren Field, J.B. Hunt's president of intermodal. Field spoke at the J.P. Morgan Industrials Conference, noting that most customers don't view current energy market spikes as structurally permanent. Why It Matters Intermodal currently costs 22.8% less than truckload service - well above the typical 10-15% savings range. Even with this significant advantage, the fuel price increases haven't prompted the mode shifting that typically occurs during cost spikes. This suggests shippers remain optimistic about fuel price normalization. Operational Focus J.B. Hunt's intermodal unit achieved an 8.8% operating margin in Q4, moving closer to its 10-12% long-term target. Rather than chasing volume at any cost, the company is prioritizing network efficiency and revenue quality. Field emphasized the importance of customer flexibility with pickup and delivery schedules to improve drayage utilization. Market Outlook The intermodal bid season remains highly competitive as industry players protect market share ahead of the potential Union Pacific-Norfolk Southern merger. With customer inventory levels still low despite tight freight markets, any demand recovery could quickly expose supply chain vulnerabilities and shift shipper behavior.