J.B. Hunt, Norfolk Southern agree to intermodal deal

The multi-year agreement is designed to further establish the parties as the leading providers of transcontinental and local intermodal service in the eastern half of the United States, according to a JBHT statement.

The Trucker Staff

11/6/2009

LOWELL, Ark. — J.B. Hunt Transport Services Inc. has reached an agreement with Norfolk Southern Corp. to develop a new intermodal transportation contract to provide both parties a platform to accelerate the conversion of traditional truck traffic to “cost effective, environmentally friendly” intermodal transportation, the company said Thursday.

The multi-year agreement is designed to further establish the parties as the leading providers of transcontinental and local intermodal service in the eastern half of the United States, according to a JBHT statement.

“Given the enormous confidence we have in the Norfolk Southern’s ability to provide the best intermodal service in the Eastern half of the U.S. and the obvious commitment NSC has made by the significant investments in their corridor development, we are delighted to have the opportunity to elevate our joint services into the future,” said Kirk Thompson, CEO of JBHT. “This new agreement will provide unparalleled intermodal service and value for U.S. shippers. The conversion of highway freight to the more efficient, cost effective, safer and more environmentally friendly services that we jointly provide, will not only benefit shippers and the general public, but JBHT and NSC shareholders alike.”

The railroad offered a similar assessment.

“Our new services with J.B. Hunt will provide shared incentives to grow volume and revenues by converting substantial volumes of freight from highway to rail,” said Norfolk Southern CEO Wick Moorman in a statement. “This strengthened relationship between NSC and JBHT will offer significant benefits to shippers, communities, states and the country by reducing highway congestion, fuel consumption and emissions.”

Stephen’s Inc. analyst Jack Waldo said in a note to investors that the company was “fairly cryptic” on specifics in announcing the agreement.

“We expect the agreement has many similarities to the BNSF contract in terms of service and financial returns,’ Waldo said. “With this agreement in place, we expect accelerating intermodal volume growth, particularly in the East, setting the stage for substantial earnings growth (and improving capital returns) when the pricing pendulum finally swings back to JBHT’s favor.”

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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