Facing trade uncertainty, rail giants strengthen capacity controls

Global Logistics News

The largest domestic rail operator in the United StatesJ.B. Hunt Transportation Services, a peak season surcharge has been initiated for some customers shipping from Southern California starting July 13, up to a maximum of per container$1,500 USD。 The move shows that the company is actively managing its efforts to respond to potential demand fluctuations in the fourth quarter.

🎯 Important points for shippers to know

• Who will be affected?
  If customers exceed their weekly scheduled Southern California shipment volume (via multiple BNSF Railway, J.B. Hunt's exclusive railroad partner in the American West), a surcharge will be charged.
• How is the surcharge calculated?
  The surcharge applies only to the portion allocated beyond the peak season. For example, if a customer originally ships 100 containers per week and the peak season quota is increased to 120, the portion over 120 will be subject to a surcharge.
• Execution period:
  The surcharge runs from mid-July through December, although internal J.B. Hunt estimates that this year's peak season will not last until the end of the year.

📉 Poor rail traffic, causing industry doubts

Many shipowners expressed dissatisfaction with the surcharge and questioned its reasonableness. The following are the trends observed by the industry:

• BNSF Rail Traffic:
  Data shows 7th consecutive decline this year from May to June end, but rebounded in the week of July 4th 5%。 But this increase comes mainly fromInternational Joint，Domestic Transport remains weak。
• Overall market softening:
  Peak season traffic this year may be lower than the same period in 2024, according to data from the North American Rail Joint Transit Association (IANA).
• Weak sea freight demand:
  Immediate freight rates from Asia to the US have continued to decline since early June due to weaker demand and tariff uncertainty.

🚛 Strategic pricing? Or is it profitable before making up?

Spencer Frazier, executive vice president of sales and marketing at J.B. Hunt, said the surcharge was designed to maintain operational flexibility and service stability during peak periods:

“In order to pre-allocate momentum, we are discussing peak season surcharges with our customers starting in July.”

But some traders speculated that J.B.Hunt's earlier offer was too positive, and the fee increase was to make up for earlier losses.

📦 Follow-up Observation Highlights

With J.B. Hunt leading the launch of peak season fees, the market is watching closely to see if other unionized carriers follow suit, includingSchneider National、HubGroup、SwiftIntermodal andSTG Logistik etc.

There are other signs thatUnionPacific RailroadSmaller surcharges may also be instituted for self-driving fleets to prevent J.B. Hunt and BNSF shipments from being transferred to the UP system.

📌 How should global shippers respond?

J.B. Hunt's move highlights the need for commodity owners to act immediately:

• Take a closer look at peak season quotas and actual shipment planning
• Evaluate alternative routes and carrier options
• Continuous tracking of rail and sea freight price changes
• Projecting Potential Volatility in Q4
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This surcharge policy is revealed even if the overall market appears to be flatA signal that momentum is tightening early。

Source: https://www.joc.com/article/jb-hunt-hits-some-shippers-with-big-surcharges-in-southern-california-6043454

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