J.B. Hunt will acquire the brokerage operations of BNSF Logistics, which provides third-party logistics services for trucking operations, the companies announced today.
A unit of BNSF Railway, BNSF Logistics handles logistics services for full truckload, flatbed, temp-controlled, drayage, expedited, and less-than- truckload movements to a large group of the railway’s customers. Not included in the deal: The warehouse, retail specialty, heavy-haul and project services that BNSF Logistics provides.
“As we continue to work with BNSF Railway to develop solutions that drive value for customers, we recognized a unique opportunity to combine the companies’ efforts to serve the transportation market with 3PL services and leverage the investments J.B. Hunt has made in our technology platform, J.B. Hunt 360°,” J.B. Hunt CEO John Roberts said in a statement. “This acquisition is another step forward in our mission to create the most efficient transportation network in North America.”
The move is the latest step in the companies’ efforts to tighten their relationship.
“This agreement with J.B. Hunt reflects our companies’ shared commitment to provide industry-leading intermodal service to our customers,” BNSF CEO Katie Farmer said in a statement. “This continues more than 30 years of partnership between BNSF and J.B. Hunt and builds on our [March 2022] announcement to further integrate our joint services.”
Following the closing of the transaction, the brokerage operations of BNSF Logistics will roll into J.B. Hunt’s Integrated Capacity Solutions. The transaction will be funded using J.B. Hunt’s existing cash balance and is expected to close before year-end. Terms of the deal were not disclosed.
“BNSF Logistics has shown strong performance in serving customers of all sizes,” said Brad Hicks, executive vice president of people and president of Highway Services at J.B. Hunt. “Complemented with our best-in-class intermodal and J.B. Hunt 360box power-only service offering, this acquisition will provide a compelling value proposition for customers, growth opportunities for J.B. Hunt and greater service capabilities for BNSF Logistics’ employee and agent model.”
Upon closing the transaction, BNSF Railway and J.B. Hunt will enter into a long-term service agreement whereby J.B. Hunt will continue to provide third-party logistics services for BNSF Railway.
BNSF Logistics had revenue of $685 million last year, according to the railway’s annual report.
BNSF Logistics operates as a carrier-neutral firm, to varying levels of success. BNSF Logistics is headquartered in Arkansas and operates independent of the railroad. Take a wait-and-see approach if this is significant or is actually unloading a portion of a business to a friendly partner.
Curious how other asset-based, BNSF 3PL’s view this enhanced partnership.
Ask Schneider National… They moved all their coast to coast containers to UP because they got tired of being the back-end of the milk cow, to J.B. Hunts COZY relationship with BNSF. And now its even cozier.
This is exactly what NTEC said when they tried to move extra coal to port and BNSF said “oh no, that extra business is promised to a competitor because they were willing to pay a guaranteed (higher) price for guaranteed service,” same as Hunt did. The difference is that NTEC (and others) are being held hostage because the are all on a BNSF single line out of the north end of the Powder River Basin. This is not a case of BNSF saying, Okay but it will cost you… No, this is a case of BNSF saying you got what we agreed to so that door is shut on anymore coal out of your mine because we owe that extra to another mine. End of story.
Perhaps some day in the future we will see BNSF Trains with only a few key customers aboard and nobody else. I’m sure the other railroads will be happy to pick up that business where they can, but if you are on BNSF track, so sad, too bad… Of course this is all theoretical becuase they really haven’t done any of that yet… or have they?
Inquiring minds would like to know…
Mr. Saunders seems to be extremely confused here. First, domestic rail intermodal has been totally deregulated since 1980 just like the trucking industry has. Both are subject to 100% Open Access. Rail carload like NTEC traffic is still subject to regulation under the Staggers Act and subsequently the ICC Termination Act. Provisions of both are administered by the Surface Transportation Board. You are comparing apples and oranges Mr. Saunders and making virtually no sense at all.
The reason that Hunt and Haverty did the original 1989 deal was that both wanted exactly the same thing, a true strategic partnership that went well beyond the typical commercial relationship of the day. As Mr. Hunt so eloquently put it, we both needed to have ” equal amounts of skin in the game.”
Mr. Haverty still claims he was vilified in the railroad industry by virtually all of his peers after the original deal was announced.
The JB Hunt deal probably helped save the Santa Fe from oblivion. And as the old saying goes, “you dance with the one that brung you”. By the way, I know all of this because I was there at time.
BTW, Brian Schmidt has a manuscript on this desk that helps explain all this in more detail.
Mr Giblin, I only gave an opinion based on an article printed in fact by Trains Magazine just a few months ago that spelled out the difficulties between BNSF and many of its customers because of relationships like this one. I am not confused at all. Just giving an opinion.
You may have “been there” and I don’t dispute that. But Mike Haverty said it himself as you repeated, “Mr. Haverty still claims he was vilified in the railroad industry by virtually all of his peers after the original deal was announced.” Yes, and he did what he had to do to in his mind to save his railroad although UP and BN were both trying to buy Santa Fe at the time so Santa Fe would have lived on in any case. Just not as Santa Fe, But my point is that this all or nothing approach is hurtful to shippers everywhere who are BNSF customers up to a point. That point occurs when new business conflicts with established BNSF contracts to corporations like J.B. Hunt, and if they have nowhere else to go, they are being told to “take a flying leap” because we can’t give you any more service because of these private agreements. Apparently the STB agreed saying if BNSF was going to be a common carrier, they had a legal obligation to act like one and granted NTEC’s request for an emergency order to haul their coal in spite of their contract with another mine in a J.B. Hunt-esq type of contract. (Currently in litigation) Yes Schneider National had other options as did HUB Group and the other major container players and they took them. But NTEC may not have that option because of the one railroad monopoly in their area and the same deal to a mine that Hunt has.
Yes the two cases may be apples to oranges in the commodity but not in the execution of the strategy that says yes to one company but no to others because of their “special relationship.” And despite your mentioning the Staggers Act and the ICC Termination Act, (both of which I am very familiar) this kind of exclusivity is going to end up with re-regulation of the railroads via open access rules to give equal access to all shippers who are being told “No, you are not special enough for us so pound salt.” This is exactly the kind of stuff the Democrats in Congress are looking to get their hands on, to re-regulate for the little guy…
If BNSF wants to be beholden to J.B. Hunt, fine. But don’t say to everyone else that you can’t give them any service in specific lanes because of these special contracts when you have hundreds of locomotives and extra freight cars sitting idle and its not convenient for you. In the end it will be bad for everybody… That is my opinion and that is all I was trying to say.
Wrong again Mr. Saunders!!! If you had read Rob Krebs’ excellent autobiography, you would learn the facts which are that Krebs was trying very hard to sell the railroad in 1989. The problem was that no one in the industry was interested and Rob was not interested in conducting a fire sale. Sounds (and felt like) close to oblivion to me (since I was there).
Five years later the same people who turned Krebs down were knocking at the door. But this was after Krebs and his management team (with a lot of help from J.B Hunt) completed the greatest turnaround in America railroad history.
Mr. Giblin, you keep believing what BNSF tells you in many ways and I will keep believing what the railroad industry and annalists keep producing in the media avenues available to anyone. Case closed.
And to think it all started with a handshake in the back a Santa Fe business car on the back of the Q-NYLA as it rolled through Galesburg….
“Out of sight, out of mind…” Maybe?