J.B. Hunt Transport Services, Inc.

Ladies and gentlemen, thank you for standing by and welcome to J.B. Hunt's third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press the star 0. I would now like to hand the conference over to your speaker for today, Brad Delco, Vice President of Finance and Investor Relations. Thank you. Please go ahead.

Good morning and thanks for joining us. Before I introduce the speakers on today's call, I'd like to take some time to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risk and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K, and other reports and filings with the Securities Exchange Commission. Now, I would like to introduce the speakers on today's call. This afternoon, I'm joined by our CEO, John Roberts, our Interim CFO, Chief Accounting Officer, Controller, and SVP of Finance, John Kulo, Shelley Simpson, our Chief Commercial Officer and President of Highway Services, Nick Hobbs, President of Dedicated and Final Mile Services, and Darren Field, President of Intermodal. At this time, I'd like to turn the call to our CEO, Mr. John Roberts, for some opening comments. John? Thanks, Brad.

Well, we are all learning to live with the changes that have been presented by the virus. When we began in mid-March, the response to a very sudden change in how we do business was incredible. From day one, we had to pivot to a new normal on the go, and we are so proud of our teams across the country for the different ways we have found to make it work. As noted, we set out our priorities to deal with the situation clearly and from the start, take care of the health and safety of our people, and work hard to honor the commitments we have made to our customers. Initially, the adrenaline pushed us through, but over time, we start to see why we work together in person, the benefits of being together and collaborating, Building on our culture, solving problems as a team, and sharing time with each other show their value to us more now than ever. This reality has prompted good work to find ways to begin coming back together, particularly in our corporate offices, very slowly and very carefully. We should also call out that due to the nature of the business, 75% of our people in the field have been effectively in position since day one of the crisis. our drivers, and so many of the people that support them. We are extremely grateful to all of our employees, both at corporate and in the field, and thank them for their commitment. The third quarter showed us some new opportunities in spiking customer demand across all businesses that I don't recall seeing in the past. At different points, we regrettably had to turn away business that was offered but not built into our original network plans and commitments. The supply side of the equation, our carriers and our rail providers all experience pressure and congestion during the quarter. Also, due to what we believe is a labor shortage at our customers causing unloading delays, we have not been able to turn our trailing equipment as well as we have been able to in the past. Topping off the list is an abnormally high demand to hire company drivers for both replacement and growth. Currently, we are entering the typical annual bid cycles with more uncertainty about capacity and demand. We are actively discussing directional ideas for the next 12 to 18 months internally and with our customers, including support for fleet expansion in intermodal and highway services training equipment. ROIC has long been our guiding principle when it comes to determining where to allocate capital. We ask ourselves, What does the customer need and can we generate a proper return on the investments to serve those needs? How can we advance the agreements and relationships we have with customers to better align our deal cycles with our equipment cycles? Personally, I think annual jump ball bids are dated and not good for the customers. We can't jump ball our equipment every year. Encouragingly, we have seen some progress in modernizing the business models in intermodal and highway services. We hope that will continue. I'll ask our business leaders to cover the segments. For the overall current state of our business, let me just say that I continue to be encouraged with the work being done in our digital transformation with 360 Marketplace, not only within our brokerage business, but also as a tool set for us to use with other asset and non-asset services. I'm also encouraged with the progress so far in developing our big and bulky final mile services, This includes the performance of our acquisitions before COVID and also the organic growth we have experienced. Both of these key plays were called to help the company evolve several years ago, and as with any difficult business, we need time to reveal the progress. We will continue to lean into both of these channels going forward. Our more established lines, Intermobile and Dedicated, give us a solid base to work from, and we believe that both of these businesses present sound growth and return profiles going forward. Let me close by saying that during the past eight months, I have witnessed a true test of what I have long believed to be a culture at J.B. Hunt that is centered on people, a commitment to each other, and our duty to serve our customers. We see that duty as a privilege and know that we need each other to get the job done. I have seen true leadership from our executives in every aspect of running the company, and I look forward to building out our 2021 and 2022 plans together with this great team. With that, I will turn the call over to John Kulow.