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The earnings season has arrived, and executives of publicly-traded transportation businesses are reporting their first-quarter results. They also provide updates on current market circumstances and their predictions for the future. J.B. Hunt, the industry's largest domestic intermodal player, was the first to announce earnings. Earnings were good, as expected, with revenues increasing year over year on the back of 7% volume growth in the intermodal segment. Domestic loaded intermodal numbers, which compete with truckload volumes, have held up well, indicating that many shippers are taking advantage of the lower rate and slower service. As consumers continue to reduce their spending on products, much of the time-sensitive character of freight has vanished.

J.B. Hunt's intermodal division, as well as Dedicated Contract Services and Integrated Capacity Solutions, the company's brokerage arm, account for 86 percent of the company's revenue and 91 percent of its operating income. When asked about the softening freight market, Shelley Simpson, Hunt's Chief Commercial Officer, said that the spot market is affecting small carrier capacity rather than the asset side of the company.

The year started off well for smaller carriers that participate in the spot market, with spot prices reaching new highs. The national dry van all-in rate per mile on hit $3.83, the highest in the dataset's history. At the same time, rejection rates were still hovering around 20%, and volume was still high.

The calendar then changed to March. March is usually one of the busiest shipping months of the year, but this year was different. Tender volume levels fell by more than 10% throughout the month, marking the greatest dip in a non-holiday month since the outbreak began. The downward trend has persisted into April, with tender volumes down 9% since the beginning of the month.

The Outbound Tender Reject Index, which evaluates relative market capacity through rejection rates, has also dropped, implying that the spot market is contracting. Rejection rates have been above 20% for the past 20 months as carriers have used their flexibility to shift goods from the spot market at higher prices.


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