by Chris Bahn
Posted 4/29/2013 12:00 am
Updated 12 months ago
ROGERS — J.B. Hunt and his wife, Johnelle, sat down for a meeting with their accountants one day in the mid-1970s. Johnelle Hunt can’t recall the exact date, but she remembers plenty of other details from that day as they evaluated the future of J.B. Hunt Transport.
Reality simply wasn’t matching the dream Hunt had when he borrowed money to start the trucking portion of his company in 1969.
Bills were being paid, but not without creditors occasionally providing some leniency on a due date.
Shutting down the trucking aspect of his business, founded as a poultry industry-related operation in 1961, seemed to be the safest, most logical option. “Johnnie,” Johnelle recalls, told those in attendance that he would turn his attention away from trucking if the business couldn’t turn a profit during the next quarter.
Following the meeting, Johnelle Hunt typed up what her husband had just told the room. She took a copy of the document into his office, looking for a signature. Instead, he handed it back to her unsigned and immediately turned his attention to other matters on his desk.
”He just handed it back to me, and that was that,” Johnelle Hunt told Arkansas Business in a recent interview at her Rogers office. “It was never mentioned again. We just knew we needed to get back to work and work harder.”
Motivated by the possibility of failure, bolstered by innovative thinking and energized by promising young hires who would work their way to the top of the company, J.B. Hunt Transport eventually matched — and exceeded — J.B. Hunt’s vision for what the business could become.
By 1983 J.B. Hunt was successful enough to be taken public. By 1993 its revenue had eclipsed $1 billion.
When shareholders gathered for the 2013 meeting on April 25, they were set to hear how the company planned to improve on the $5.1 billion in revenue for 2012. (J.B. Hunt’s performance moves it to second place on the list of largest trucking companies in Arkansas, just behind FedEx Freight.)
Despite the difficulty of the early struggles, Johnelle Hunt, 81, enjoys looking back at where the company began.
Her late husband, Johnnie Bryan Hunt Sr., died in December 2006 at age 79 from head injuries suffered in a fall, and she is no longer on the board of directors.
However, Johnelle Hunt, who handled collections for the business in its early days, remains its biggest stockholder with a 17 percent stake, totaling about 19.95 million shares.
Those holdings are worth more than $1.4 billion.
She is still very active in the northwest Arkansas business community through Hunt Ventures and is asked on occasion by J.B. Hunt leadership to share with current employees her recollections of the firm’s hardscrabble beginnings.
“It didn’t just all fall from the sky one day,” Hunt said, laughing. “People need to know the struggles. And it should give them hope when they do hear the stories from the past. It shows them what is possible.”
Stockholders received a joint letter from President and CEO John Roberts and Chairman of the Board Kirk Thompson earlier this year. In it, Roberts and Thompson celebrated the success of the previous year, while outlining their hopes for the future.
“We are pleased with the journey so far,” Thompson and Roberts wrote. “Still, there is ample room for improvement on many fronts. ... We remain confident that we will find the right blend of assets and services to present a compelling and viable answer to the asset-based truckload needs of our customers.”
Both men have helped map out significant portions of the J.B. Hunt journey so far. Both have grown into leadership roles from low-level jobs.
Roberts, 48, joined J.B. Hunt in 1989, working as a manager trainee.
From there, he worked as a services coordinator, marketing manager for intermodal and vice president of market strategy for the company. He was named president and CEO two years ago.
Thompson, 59, has a long history with the company.
He was hired to help in accounting in 1973, eventually working his way from vice president of finance to executive vice president and CFO and then president and CEO in 1987.
Johnelle Hunt described hiring the then 19-year-old Thompson as one of the most significant moments in the history of J.B. Hunt Transport.
She explained that she interviewed him primarily as a courtesy to a friend and, prior to meeting him, had her doubts that Thompson would be a fit for what she needed.
“I don’t know what it was about him,” Hunt said. Something clicked. Before he walked out, I was asking him when he could come to work.”
“Kirk earned his way up,” she added. “So many of our top employees came to us young. I give the credit to those people. They were young. They were eager. They were energetic. They didn’t know a thing about trucking, but they came in with fresh, new ideas.”
Continuity has been key to success and growth after her husband stepped down as chairman of the company in 1995, Johnelle Hunt said.
Among the company’s nine executive officers — not including Roberts or Thompson — only one has fewer than 19 years of experience at J.B. Hunt.
Thompson agreed with Johnelle Hunt’s assessment that the culture of promoting from within had a positive impact on company growth.
Handing over the reins to Roberts in 2011 was seen as a move that could continue the success.
“I have noticed throughout my career that companies tend to develop a personality and certainly a culture,” Thompson said in an email exchange with Arkansas Business.
“That personality is an amalgamation of the people who make up the company. Often it is uncomfortable to try to infiltrate that culture/personality if you are coming from the ‘outside’ where you most likely have adopted or been part of your previous culture.
“When you basically grow up in a company as most of our leadership team have, you ‘fit’ better, understand the important tenets of the culture, embrace the goals, accept ‘the way we do it here,’ and know where the bones are buried, so to speak. Not that outside opinions [and] experience aren’t valuable, but when you’ve been with the same team for a long time you do generate a cohesiveness and, as you mentioned, continuity.”
A willingness to embrace fresh ideas is one of the most consistent parts of the J.B. Hunt culture that Thompson speaks of.
Not being afraid to try something new was responsible for a nearly $290 million bump in revenue over a four-year span from 1990-94.
Intermodal proved to be an innovation that had a significant impact for J.B. Hunt and the rest of the transportation industry.
J.B. Hunt and the entity that is now BNSF Railway were the first to fully embrace the idea that collaboration between one-time shipping industry competitors could be beneficial.
From a trucking standpoint, using intermodal helps stabilize costs by eliminating some dependency on fuel prices, reducing maintenance needed for trucks and eliminating some of the lengthy drives that lead to driver turnover.
Revenue for J.B. Hunt grew from just under $10 million to $297 million in the early 1990s, thanks largely to the new strategy that married trucking and other forms of transport, especially railroads.
“Our decision to investigate the possibilities around Intermodal transportation was truly a watershed event for the company,” Thompson wrote in the email, in which he referred to the company by its stock ticker symbol, JBHT.
“Many in the trucking and rail industries have had a contentious relationship through the years. One of the cultural elements … that is basic to the JBHT philosophy is to be open-minded and innovative. Sometimes that hasn’t always worked.
“But in the case of Intermodal, we identified the advantages for our customers and the possibilities for us, and then embraced the concept wholeheartedly, resulting in it becoming our largest and most profitable segment and giving JBHT the clear leadership position in the industry.”
Dedicated Contract Services, which specializes in customer-specific supply chain services, has emerged as the second-largest segment of the company, and Thompson describes it as “a big piece of our growth trajectory.”
DCS, which accounted for $279 million of the company’s $1.2 billion in first-quarter revenue, is another example of the company looking for ways to expand beyond the five-truck, seven-trailer operation it began as more than four decades ago.
Intermodal, though, continues to lead the way for the company.
It accounted for $796 million in first-quarter revenue, an increase of 15 percent over last year.
Intermodal has become a staple of success for the company, though it was once seen as an outside-the-box idea from the company’s founder.
And J.B. Hunt, his wife recalled, was never short on ideas about how to grow the business.
Even when he was a truck driver himself, J.B. Hunt was developing ideas for how to create “a better life for his family,” Johnelle Hunt said. Not all of the ideas worked, but Johnelle Hunt laughed when describing how intermodal became the “golden goose.”
BSNF, the original rail partner in J.B Hunt Transport’s intermodal operation, moved 1 million loads in 2012.
Johnelle Hunt was presented with recognition for that milestone on Feb. 28 of this year. It would have been her husband’s 86th birthday.
“I wish he could have been here to see it,” she said. “He’d be so proud. He would be thrilled. And he’d say, ‘Didn’t I tell you this would happen?’”