J.B. Hunt, Railroad Will Arbitrate Revenue Split

J.B. Hunt Transport Services Inc. of Lowell on July 9 said the company received a notice of intent to begin arbitration regarding the revenue split between itself and Burlington Northern and Santa Fe Railway of Fort Worth.

“A joint service agreement between the two companies provides that the revenue division shall be a negotiated provision determined by the parties and reviewed quarterly for its fairness,” the trucking company said in a news release. “BNSF has requested that the fairness of the revenue division be reviewed by an arbitrator.”

Late July 7, J.B. Hunt filed a lawsuit with the Benton County Circuit Court seeking a declaratory judgment on the status of the parties under the joint service agreement, the release said. The amount of revenue in dispute has not been disclosed.

“It is JBHT”s position that the parties are partners, and BNSF has disagreed with that characterization,” the release said.

J.B. Hunt said a court ruling as to the status of the parties to the agreement would be necessary to clarify contractual language before arbitration.

Carol Harris, civil clerk with the court, said the original complaint had been sealed and an amended complaint had been filed.

J. B. Hunt’s attorney Jennifer Hendren of Fayetteville’s Shemin & Hendren PLLC, did not return phone calls for a comment.

Last year the carrier reported operating income of $185.6 million. The intermodal segment made up $91.2 million of that, or 49 percent. The intermodal segment was up 67 percent from 2002’s operating income of $54.6 million.

The following statement was found under the header “risk factors” in the carrier’s 2003 annual report: “While we have agreements with various Class I railroads, the majority of our business travels on the Burlington Northern Santa Fe Railway and the Norfolk Southern Railroad. The inability to utilize one or more of these railroads could have a materially adverse effect on our business and operating results.”

A Burlington Northern Santa Fe Corp. subsidiary, BNSF Logistics, is headquartered in Springdale. BNSF Logistics is a third-party logistics company that matches carriers with shippers.

J.B. Hunt contributed its 2003 logistics business to Transplace of Plano, Texas, which was formed in 2000 by the merger of logistics business units of J.B. Hunt Transport, Covenant Transport Inc., M.S. Carriers Inc., Swift Transportation Co., U.S. Xpress Enterprises Inc., and Werner Enterprises Inc.