J.B. Hunt to Acquire BNSF Logistics’ Brokerage Assets

(Bruce Kelly Photograph)

J.B. Hunt Transport Services Inc. has entered a definitive agreement to purchase the brokerage operations of BNSF Logistics, LLC, an affiliate of Class I railroad BNSF, the companies reported Sept. 14. Railway Age Contributing Editor Jim Blaze weighs in.

The move, J.B. Hunt said via LinkedIn, “will scale our digital freight matching platform, J.B. Hunt 360°®, and build on our company’s long-term view to improve efficiencies across all modes.”

BNSF Logistics, LLC provides 3PL (third-party logistics) services for the movement of full truckload, flatbed, temperature-controlled, drayage, expedited, and less-than-truckload services to customers through both an employee and agent model. It also provides warehouse, retail specialty, heavy-haul and project services, which are not included in the transaction, BNSF and J.B. Hunt said in the announcement.

Upon closing the transaction, BNSF Logistics’ brokerage operations will roll into J.B. Hunt’s Integrated Capacity Solutions (ICS) for segment reporting purposes, and BNSF and J.B. Hunt “will enter into a long-term service agreement whereby J.B. Hunt will continue to provide those services for BNSF Railway,” according to J.B. Hunt. The transaction will be funded using J.B. Hunt’s existing cash balance and is expected to close before year-end.

“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 during the announcement.

Added Brad Hicks, Executive Vice President of People and President of Highway Services at J.B. Hunt: “BNSF Logistics has shown strong performance in serving customers of all sizes.”

“This agreement with J.B. Hunt reflects our companies’ shared commitment to provide industry-leading intermodal service to our customers,” said BNSF President and CEO Katie M. Farmer, Railway Age’s 2023 Railroader of the Year. “This continues more than 30 years of partnership between BNSF and J.B. Hunt and builds on our announcement to further integrate our joint services.”

In 1989, J.B. Hunt and the railroad now known as BNSF “disrupted the transportation industry … by developing a double-stack shipping solution that would complement both rail and trucking services, a first for modern transportation,” according to the companies.

In March 2022, J.B. Hunt and BNSF launched a joint capacity expansion initiative to accommodate new intermodal container services and “meet the expanding needs of current customers.”

J.B. Hunt, which has handled more than four million container loads since 2020, planned to add up to 150,000 containers to its existing fleet during the next three to five years, a 40%-plus increase from its year-end 2021 count, “based on current and projected trends.” The company was also to add supporting chassis “based on market need.” 

“Over the years, both companies have invested billions of dollars to ensure intermodal’s ability to grow with customers and meet the increasing demand for intermodal services,” the partners said in March 2022.

BNSF reported at that time that it would complement J.B. Hunt’s equipment ramp-up with “increased capability at multiple intermodal facilities. To further integrate our joint service product with J.B. Hunt, BNSF is providing several property locations around key intermodal hubs in Southern California, Chicago and other key markets to increase efficiency at terminals. Additionally, BNSF will bolster its railcar equipment to accommodate the anticipated increase in container capacity, which will support efficient throughput and strong service performance.”

Earlier this year, Katie M. Farmer told Railway Age Editor-in-Chief William C. Vantuono that the 2022 agreement with J.B. Hunt, BNSF’s “largest service provider and our partner … [is] a big leap forward for our intermodal product, a commitment to bring additional capacity to the marketplace while continuing to evolve our joint service product. It’s going to ensure that customers have a more seamless experience in the future with BNSF and J.B. Hunt’s intermodal product. And it’s going to be a big differentiator for us in the marketplace and facilitate our continued growth for years to come.”

Jim Blaze’s Take on the BNSF Logistics Deal

“BNSF will use J.B. Hunt services instead after this transaction,” Railway Age Contributing Editor Jim Blaze commented after the announcement. “A sale and service buyback deal? Possibly. Sometimes a rigid top-down military-like corporate structure like railways can’t be as two-way oriented for the external customer as was originally intended by BNSF Logistics. I have seen this corporate behavior before over my long career, with a lot of years in trying inside a railway (Conrail) to implement higher skilled outside/looking back in supply chain skills. A practice that sometimes conflicts with the railroad’s view of next-best movement actions. Nice to see BNSF try a different approach. But, what about carload traffic? Now we wait. Watch. Measure?”

Blaze is an independent railway economist, who has been in the railroad industry for well over 40 years. Trained in logistics, he served seven years with the Illinois DOT as a Chicago long-range freight planner and almost two years with the USRA technical staff in Washington, D.C. Jim then spent 21 years with Conrail in cross-functional strategic roles from branch line economics to mergers, IT, logistics and corporate change. He followed this with 20 years of international consulting at rail engineering firm Zeta-Tech Associates. Jim serves as Second Vice-Chair of the Senior Citizens and Disabled Residents Transportation Advisory Committee (SCDRTAC) at New Jersey Transit.

Further Reading:

J.B. Hunt Adds Washington State, Texas Operations

J.B. Hunt to Expand Container Count