J.B. Hunt Transport Services, Lowell, Ark., will separate its intermodal operations from its truckload van business in an effort to minimize the impact of continuing rail service failures.
Separating the truck business from the intermodal unit, along with the recent decision to convert its truck fleet to conventional tractors, should enable Hunt to improve its profitability to "acceptable industry standards," the company said in a statement released Sept. 17.
Rail service outages, delays and other problems associated with recent railroad mergers have resulted in reduced customer confidence and lower intermodal revenue growth than planned, J.B. Hunt said.
Separating the units operationally will help insulate the truck business from similar disruptions in the future, the company said.
In a related development, J.B. Hunt said higher maintenance expenses associated with its older cabover trucks and higher fuel costs will result in lower earnings in the current quarter. J.B. Hunt said it expects to earn between 14 and 18 cents per share in the three months ending Sept. 30, compared with 30 cents a share in the same period a year ago.
J.B. Hunt said it will begin reporting truck and intermodal as separate segments beginning in the first quarter of 2000.
