Two well-known asset-based players, Lowell, Ark.-based J.B. Hunt Transport Services, a subsidiary of Lowell, Ark.-based trucking and intermodal services bellwether J.B. Hunt, and Fort Worth, Texas-based Class I freight railroad BNSF Railway announced today they are collaborating on a new intermodal service offering.
The companies said that the new service, entitled Quantum, accommodates what they called the service-sensitive highway freight needs of customer supply chains. And they added that the main objective of the service is on providing the consistency, agility, and speed required to move service-sensitive highway freight via rail, with a specific customer focus on service expectations, transit requirements, and operational procedures.
They also explained that the Quantum service is comprised of J.B. Hunt and BNSF operators working out of the same location, at the recently-opened Intermodal Innovation Center at the BNSF Fort Worth, Texas headquarters, where the “workflow is integrated at every step of the intermodal shipping process—from planning to execution and oversight to exception management.”
Key service elements of Quantum highlighted by J.B. Hunt and BNSF include:
In an interview with LM, Darren Field, president of intermodal, at J.B. Hunt, explained the driver for Quantum stems from, J.B. Hunt and BNSF, for decades, having executed pricing exercises with shipper customers and talking to them about the value proposition of intermodal versus highway, going back to 1989, when J.B. Hunt and Santa Fe Railway, BNSF’s moniker at the time, introduced a service also called Quantum, which was comprised of 150 trailers, and was at the early stages of myriad intermodal innovations, including: double-stacking containers; creating company-owned chassis; and adding onsite terminals and express gates.
“And still today through our bid process, proposal process, through all sorts of data analytics that we do with customers, there's somewhere between 7 million to 11 million loads that we think intermodal can and should be the right answer,” he said. “But those customers are hesitant to provide that business to intermodal for a host of reasons.”
Among those reasons was the perceived risk of intermodal being too great to those shipper customers, he noted. That led, he said, to the companies thinking about the steps they could take to produce a product in a design and customized answer in a way that gives those customers confidence, provides value and an appropriate alternative to highway use, for all of the benefits that intermodal provides to the shippers, as well as sustainability benefits.
“That is really what drove us here,” he said. “[BNSF CEO] Katie Farmer challenged both companies, J.B. Hunt, and her own BNSF, at an executive session more than a year ago, and asked what do companies want to buy that they cannot get anywhere else? And we believe the collaboration we're doing here is so unique and so embedded, that it's hard to picture any other railroad, or individual provider, executing it the way that we're doing it. We think it's unique and an enormous opportunity.”
Tom Williams, group vice president of consumer products at BNSF, explained that what BNSF and J.B. Hunt have seen over time, through various data inputs, is that the J.B. Hunt team gets visibility on the volume of cargo that is moving in lanes that could convert to intermodal—but has not—is very significant.
“Like Darren said, it is 7 million to 11 million loads annually,” said Williams. “And as we start to get into that database and understand what's keeping those cargo owners from making the decision to use intermodal, that's really a key driver of what we're trying to accomplish with Quantum. We're going to bring that intermodal value to a significant portion of that additional volume that's out there.”
When BNSF’s Farmer asked what else could be done, in terms of a better and collaborative intermodal service offering, Spencer Frazier, executive vice president of marketing and sales at J.B. Hunt, said that provided the opportunity for the companies to acknowledge they have listened to their customers and want more of their freight moving via intermodal—with the caveat they want it to be more consistent across J.B. Hunt’s four business lines, intermodal, dedicated contract services, integrated capacity solutions, and truckload, which is a key focus.
“There were also opportunities for them to take advantage of the unique value proposition, efficiency, and sustainability for their customers’ freight,” he said. “We put our teams together, both from alignment with strategy and then our operations and tech teams, and then start mapping out [the idea of] what if we created something not only with very consistent service but also agility to manage any potential disruption in a customer supply chain? And whether that's incremental demand, production issues, loading issues, or issues from an intermodal perspective, how do we have agility in our SOPs, our decision trees, and operationally to give them that consistent level of service. Our service design teams really started spending a lot of time over the last year and in the early summer, we started talking to a few customers to get them to come alongside us to help create a customized service specific to their needs.”
Along with the original Quantum service rolled out by J.B. Hunt and BNSF in 1989, which was comprised of 150 trailers, and at the early stages of myriad intermodal innovations, including—double-stacking containers; creating company-owned chassis; and adding onsite terminals and express gates, more recently, in March 2022, the companies rolled out a joint intermodal initiative focused on augmenting service efficiency and meeting customers’ expanding needs, which included JBH planning to increase its intermodal capacity by as much as 150,000 containers in the coming years. What’s more, in September 2023, J.B. Hunt purchased the brokerage operations of BNSF Logistics, an affiliate of BNSF Railway Company.
This strong relationship, with BNSF being the only Class I railroad J.B. Hunt works with out West, does not come with any type of pending expiration date, nor is it a typical railroad-shipper relationship, consisting of executing on a contract, followed by renegotiating, according to JBH’s Field.
“We have a longstanding relationship that is very unique, and it provides us both sort of a safe backdrop to talk about the art of the possible, or what can we do that nobody else can do,” he said. “That is part of the story here and even part of the name Quantum, which is a call back and a look back and a nod to the history and the founders of the relationship [Johnnie Bryan Hunt, J.B. Hunt founder, and Mike Haverty, former president of Santa Fe Railway].”
BNSF’s Williams said the two companies have a uniquely strategic relationship, rather than a tactical one. And he explained that due to that long-term strategic alignment, the first thing it does is enables them to invest with confidence and the hard assets to deliver past scale with agility, as well as to put people together in a trusting environment and to plan on behalf of their customers to build a better product.
“I would expect us to continue to try to peel the layers back on what we can do that is unique associated with this strategic relationship we have together,” he said.