J.B. Hunt Transport Services Inc. (NASDAQ:JBHT) has imposed a peak-season surcharge on its intermodal shipments to recoup the network costs of returning empty containers from inland points to the West Coast to prepare for increases in pre-holiday volumes, according to two sources familiar with the operation.
The surcharge is an annual event typically announced during the late August time period, one source said. Hunt’s big intermodal customers that work under contracts with the company will pay surcharges based on the number of boxes allocated to them, the source said.
“If it’s August, it must be peak surcharges,” the source said.
The surcharges will take effect wherever Hunt, which is arguably the best at allocating its intermodal resources, feels the costs of shutting its boxes back to the West Coast, justify it, the source said.
Hunt did not respond to a request for comment.
The surcharge is not a reaction to projected volume surges that may leave Hunt short-handed on boxes, the sources said. Intermodal volumes through July have been volatile on a month-over-month basis, but settled at levels where it started the year, according to the trade group Intermodal Association of North America. Trans-pacific volumes into the U.S. spiked at the end of 2018 as consignees pulled forward inventories ahead of tariffs on Chinese imports that were scheduled to take effect January 1. This siphoned off traffic that would otherwise have moved into the U.S. during early 2019.
In addition, the ongoing U.S.-China tariff war has reduced Chinese exports into the U.S. Eastbound trans-pacific box rates have been flat to down recently, at a time when demand increases should be pushing up the rates.
Dale Dunlop
Uh
D R
Not sure if anyone’s “at the wheel” with respect to the losses shipping is experiencing due to the trade war?
I understand the desire for a trade war, however, are American manufacturers actually starting up? That’s the long term solution, right? Greedy American businesses shipped all their manufacturing to cheap labor and now that that cow has come home, the only solution to competing with foreign cheap labor is ….. wait ….. here it comes ….. American Cheap Labor! What? ACL, makes for a good Union name? The American Cheap Labor Union of America! ACLUA!
American firearms manufacturers and retailers may want to increase their prices, quick! The ACLUA will be beating plowshares into swords, soon.