The leadership of J.B. Hunt Transport Services Inc. of Lowell isn’t being coy about its goals for the company.
Earlier this year, CEO John Roberts announced a new mission statement, which was short and to the point. The company wanted “to create the most efficient transportation network in North America.”
Roberts and Shelley Simpson, the chief commercial officer of J.B. Hunt, participated in FreightWaves’ virtual fall conference earlier this month and gave some color to how the company’s technological pursuit led to its newfound success. The company reported revenue of nearly $10 billion last year, and its revenue through the first three quarters of 2020, nearly $6.9 billion, is about 3% ahead of the same portion of 2019.
“It took us 60 years to get to $10 billion,” said Roberts, who has been CEO since 2010 after joining the company in 1989. “It feels like $20 billion shouldn’t take us nearly as long, but we don’t need to prescribe that.”
One of the significant changes J.B. Hunt has undergone during the past several years is its embrace of technology. Simpson said the digital transformation of J.B. Hunt has been “front and center” for the company.
In 2017, the company launched its Marketplace 360, a digital platform designed to match businesses with carriers to maximize freight distribution. J.B. Hunt said the marketplace generated $839.8 million in revenue in 2019; in 2017, it had generated $125.8 million.
The pursuit of the Marketplace 360 platform sprang from a marketing meeting in the early 2010s, Simpson said, when an executive mentioned companies looking for freight business had visited a hard-to-find page on the company’s website more than 1 million times in the past year. “That was an ‘Aha!’ moment,” Simpson said.
Roberts took leadership from there, encouraging the company to examine how to disrupt itself. Roberts said that decision has proved to be as important as the addition of intermodal services in 1989.
The company had focused on strict adherence to its business model, but that was in conflict with the need to innovate. J.B. Hunt announced in 2017 that it would invest $500 million in “disruptive technology” during the next five years, hired Stuart Scott as the company’s CIO and built a technology and innovation center on the Lowell campus.
“Disruption is a great theory; it’s wonderful to read about and watch from the sidelines,” Roberts said. “What we have learned together is it is a lot harder to do.
“That, to me, was the breakthrough, that discussion where we found ourselves able to embrace this idea that we needed to go do something that was uncomfortable. Quite frankly, it was more uncomfortable than I ever thought it would be. That’s where the magic happens in disruption, being able to hold on long enough.”
The pursuit of the Marketplace platform made business sense after J.B. Hunt released “660 Minutes,” a white paper that showed the inefficiencies of the supply chain system. Of the 11 hours on-road time drivers were allowed each day — 660 minutes — Simpson said approximately one-third was wasted because of inefficiencies.
Even improving drive time by just one hour, as the company has done, can have significant financial effects. Drivers make more money driving more miles, businesses get freight delivered more quickly, and carriers can adjust their rates because they don’t have to budget for the waste.
“We are seeing it now,” Roberts said. “That one hour a day is a winner for the shipper, for the career and for the people who can facilitate the coming together of those parties. I am absolutely convinced because it is a win-win-win scenario that we will be able to demonstrate picking up that hour.”