J.B. Hunt Transport Services will invest $500 million in technology over the next five years in a move to better match carriers with shippers, rather than partnering with Silicon Valley startups that have similar software.
On Thursday (April 20), John Roberts, president and CEO, announced the investment to improve the carrier’s operating systems, develop cloud-based infrastructure and create innovative and disruptive technologies, and he also announced details of the matching technology “Marketplace,” as a part of the carrier’s J.B. Hunt 360 transportation management system. Roberts made the announcement at the carrier’s annual shareholders meeting at its corporate office in Lowell.
“These companies that are trying to build these technology services in Silicon Valley all they have is software,” Roberts said. “We have the customers, we have the carriers and we have the assets. So we believe by putting that brand online we can make a difference.”
Marketplace uses technology to connect shippers to carriers in a single e-commerce platform. It uses “real-time data and artificial intelligence to match freight with capacity, pairing the right load with the right carrier to create efficiency and cost savings,” according to a news release. Carriers will “make instant offers on available loads” while “shippers will be provided true market pricing of shipments. The system will automate carrier selection based on preference, ratings and reviews.”
Marketplace started as a pilot program in January with select companies and expanded in February to more customers. Now, it’s available as part of the J.B. Hunt 360 system.
“Today, we’re averaging about 500 offers a week,” Roberts said. “And we’re accepting about 100 of those offers every week. These are offers that are coming into us without people making phone calls in or out. Pricing is being agreed to without people getting involved. The artificial intelligence behind the scenes is helping run those algorithms to make that pairing work.”
The $500 million investment will be split three ways: $223 million for creative innovation and disruptive technology, $141 million to improve existing infrastructure, and $136 million to enhance operating systems. As part of the investment plan, the company has doubled the number of employees in its engineering and technology departments to more than 900.
The J.B. Hunt 360 system was launched in 2014 and will continue to be built upon throughout 2017 and will include interactive voice-command/response, real-time load recommendations and automation tools for shippers and carriers. The system will also provide more precise delivery times.
“Customers are demanding greater visibility and information into their supply chain in real time,” Roberts said. “J.B. Hunt 360 is our comprehensive solution to meet that demand, combining J.B. Hunt’s 55 years of operational excellence with the latest technology available in the industry.”
So far, 12,000 carriers and 4,500 shippers have signed in to the system.
Also at the shareholders meeting, a proposal failed regarding how the carrier would report political contributions. The proposal was supported by the International Brotherhood of Teamsters General Fund, but J.B. Hunt’s board of directors was against it. Less than 25% of shareholders supported the proposal.
Items approved included the reelection of the 10 existing board members and executives’ pay packages and the company’s management incentive plan.
The company reported first-quarter earnings April 17, and in the quarter that ended March 31, the company saw earnings rise 2% to $102.70 million, or 92 cents per share, from $100.09 million, or 88 cents per share. Revenue rose 6% to $1.62 billion.
Also Thursday, J.B. Hunt said it will pay a 23-cents per share cash dividend on May 19 to stockholders of record as of May 5. It’s the second consecutive quarter the company has paid a 23-cent per share dividend.
Also, the company adopted a new share repurchase program, allowing the repurchase of an additional $500 million of the company’s common stock. When and how much of the stock will be repurchased will depend on market conditions, cash flow and securities law restrictions.
Shares of J.B. Hunt (NASDAQ: JBHT) were trading at about $89.50, up more than 50 cents Thursday afternoon. In the past 52 weeks shares have traded between $102.38 and $75.71.