Businessmodel of J.B. Hunt

Customer Segments

J.B. Hunt provides logistics and supply chain services to a range of commercial customers, principally medium and large businesses that include supply chain management as an integral part of their business strategies.

The Company provides services to customers across a number of business sectors, including:

• Automotive, for which its transports parts and products;
• Consumer Goods and Retail, for which it transports products such as clothes and electronics;
• Food Service, for which it transports food and beverage products;
• Manufacturing and Industrial, for which it transports resources and materials; and
• Plastics and Chemicals, for which it transports ingredients and resources. J.B. Hunt’s principal market is its native US, which accounts for the majority of its business. The Company also serves clients across Canada and Mexico.

Value Propositions

J.B. Hunt provides value to its customers in the following ways:

• Its industry standing, with the Company one of the most established operators of its kind in the US, with a track record for providing reliable services;
• Its extensive distribution infrastructure and equipment, with the Company employing various transportation methods, both through its own fleet of vehicles and through third-parties;
• Its broad portfolio of service offerings, with the Company providing a range of service offerings, with services tailored to suit the needs of clients across multiple industries;
• Its safety and security policies, with the Company employing various processes and technologies to ensure that its services are delivered safely and securely; and
• Its environmental sustainability, with the Company dedicated to creating more sustainable supply chain solutions for its customers. ### Channels

J.B. Hunt operates a website at www.jbhunt.com, through which it provides information on its various services, carrying methods, and fleet. The Company also operates an online customer portal at www.jbhunt.com/360, through which they are able receive quotes, tender shipments, and review shipment information.

J.B. Hunt deals directly with its clients through its in-house sales and service teams, which are organised by segment and by geographic region, and operate across a network of offices in the US, Canada, and Mexico. The Company delivers its services through its own multi-channel fleet, comprising trailing equipment, cube containers, chassis, contractor trucks, and tractors.

Customer Relationships

J.B. Hunt makes a number of service offerings available to its customers on a self-service basis, through its 360 customer portal. This online channel allows customers to receive service quotes, tender shipments, manage transactions, and review shipment histories without interacting with members of the Company’s sales and service teams.

J.B. Hunt’s sales and service teams work closely with customers, consulting over a period of time to agree the details of service contracts. The Company works with customers to provide services that suit their individual needs, with the Company offering a variety of transportation methods, seeking to establish long-term relationships.

J.B. Hunt provides various support services to its customers, including online resources such as white papers, news articles, and company reports. New and existing customers are also able to contact the Company’s various departments and offices over the phone or by post. The Company also operates several social media accounts – including with Facebook, Twitter, LinkedIn, YouTube, and Google+ - through which it is able to interact directly with customers.

Key Activities

J.B. Hunt operates as a holding company for a number of operating companies engaged I various logistics and supply chain services. Through its subsidiaries, J.B. Hunt provides surface transportation and delivery services to commercial customers across the continental US, Canada, and Mexico. J.B.

Hunt operates through four business segments: Intermodal, which provides intermodal services, relying on third-party national rail carriers for the linehaul movement of its equipment between rail ramps; Dedicated Contract Services, which provides design, development, and execution of supply chain solutions; Integrated Capacity Solutions, which provides traditional freight brokerage and transportation logistics solutions; and Truck, which provides full-load, dry-van freight services over roads and highways.

Key Partners

J.B. Hunt partners with a range of companies and organisations across its four operating segments. These partners include:

• Supplier and Vendor Partners, comprising suppliers of tools, equipment, technologies, and services, which support the Company’s operations and in-house services;
• Distribution and Transportation Partners, comprising third-party distributors and logistics companies that extends the reach and capabilities of the Company’s proprietary fleet of vehicles;
• Joint Venture Partners, comprising various international logistics and transportation providers with which the Company provides services through mutually owned entities; and
• Strategic and Alliance Partners, comprising companies with which the Company shares resources and collaborates on joint projects. J.B. Hunt is also a participant in the SmartWay program, a voluntary partnership between the US government and the transportation industry to develop and implement methods to improve air quality and reduce greenhouse gas emissions in transportation.

Key Resources

J.B. Hunt’s key resources are its logistics infrastructure and equipment – including its fleet of vehicles and transportation units, its IT and communications infrastructure, its sales and distribution channels, its partnerships, and its personnel.

J.B. Hunt operates an extensive infrastructure system and fleet. This includes 78,957 pieces of trailing equipment – comprising a chassis fleet of consisting of 68,076 units and corresponding cube containers, more than 5,000 tractors, 6,762 company-owned trucks, as well as operating contractor and customer-owned trucks.

Cost Structure

J.B. Hunt incurs costs in relation to the development and maintenance of its logistics infrastructure and equipment, the management of its fleet – including the acquisition of fuel, the acquisition of rented equipment and services, the maintenance of its online platform and IT infrastructure, the operation of its sales and distribution channels, the management of its partnerships, and the retention of its personnel.

In 2015 J.B. Hunt’s largest expense related to rents and purchased transportation, which amounted to $2.99 billion, representing 48.4% of the Company’s revenue for the year. The Company also incurred significant personnel costs – including the payment of salaries and benefits to its workforce of 21,562 employees – which totalled $1.39 billion, or 22.5% of total revenue. The Company’s fuel and tax costs were $313.04 million, representing just over 5% of the Company’s revenue.

Revenue Streams

J.B. Hunt generates revenue from the movement of freight from shippers to consignees, the provision of customised labour and delivery services, and the provision of general logistics and supply chains services. The Company’s revenue is derived from fees collected in relation to:

• The provision of intermodal freight solutions;
• The design and implementation of supply chain models;
• The provision of freight brokerage and transportation logistics solutions; and
• The provision of ground freight services. In 2015 J.B. Hunt generated $6.19 billion in operating revenue, up marginally on the $6.17 billion recorded by the Company in 2014. The majority of the Company’s revenue was generated by its Intermodal segment, which generated $3.66 billion for the year, representing around 59% of the Company’s total revenue. The majority of the Company’s remaining revenue was generated by the Company’s Dedicated Contract Services segment, which recorded an annual revenue of $1.45 billion.