JB Hunt President: Misalignment Between Tech, Policies and Economics

May 24, 2024

For the industry to reach its overarching goal of reducing transportation-related emissions, something needs to change according to Shelley Simpson, president of J.B. Hunt Transport Services.

“We have pressures that we’re all facing, and those pressures are affecting our businesses, our decisions, and the future of our industry,” began Simpson during her keynote address at this year’s ACT Expo. “The reason that we’re feeling this tension is because there’s a misalignment of sustainable technology, policies to regulate emissions, and an economic case for incorporating emerging technology.”

A combination of rigid deadlines at both the state and federal levels in the form of the California Air Resources Board’s Advanced Clean Fleet rule and U.S. Environmental Protection Agency’s latest emission standards for heavy-duty vehicles is putting fleets in a precarious position, according to Simpson.

“When state requirements and federal requirements do not align, and they’re not consistent, it does create additional issues with interstate operations and commerce, and the innovation required to meet these regulatory requirements,” said Simpson, adding that JB Hunt recently announced an ambitious goal to reduce carbon emission intensity 32% by the year 2034. “We will get there by focusing on three key areas: alternative power equipment, biogenic fuel, and improved fuel economy. However, there are significant challenges to each of these.”

One challenge related to this move forward is the operational inefficiencies associated with battery-electric trucks, according to Simpson, which includes reduced payload capabilities, range, and charging time when compared to operating a diesel truck. These inefficiencies would result in the necessity for the JB Hunt team to add more zero-emission vehicles to perform the same amount of work that’s currently being performed with their diesel trucks.

“It’s not economically viable to incorporate zero-emission vehicles into our fleet at scale right now, but it is important that we begin to test and the pilot these technologies,” said Simpson, highlighting another concern — an inadequate charging infrastructure for commercial vehicles and the necessary power supply to support it.

Pointing to research from the American Transportation Research Institute, Simpson reported that 40% more electricity is needed than is currently being generated in the U.S. if all 276 million registered vehicles, both cars and trucks, were converted to EVs.

Currently, JB Hunt has achieved an estimated 16% reduction in its carbon emission intensity towards its goal of 32% by 2034 from a 2019 baseline, seeing the most progress from its consumption of biogenic fuel. Simpson reported that the fleet’s greenhouse gas emission intensity has gone from 120 tons per million ton-miles in 2019 to 94 tons per million ton-miles in 2023, an 18% improvement.

JB Hunt also provides transportation solutions for its customers to help them reach their sustainability goals in the most economical means possible. One such service, JB Hunt’s CLEAN Transport Carbon Calculator, is a proprietary tool that determines a customer’s carbon footprint, which is then used to educate them on best practices through what the company calls the Carbon Diet methodology. The primary components include mode conversion, biogenic fuels, route optimization, optimizing fuel efficiency of the diesel fleet, and expiration and calculated potential of the impact of alternative vehicles.

“We also offer CLEAN Transport, our carbon neutral shipping program that provides our customers a flexible method to acquire carbon offsetting credits, and that’s equivalent to the emissions produced by their shipments,” said Simpson. “However, since rolling this out nearly two years ago, we’ve had exactly zero customers interested in this program.”

Simpsons then walked the audience through a fictional example of a customer tasking her team with reducing their carbon footprint by 50% for a fleet that moves 250,000 loads annually. While there are general assumptions that were made for the example, the technology availability here was based not only on what’s currently in the market but also looking into the future when the availability of battery-electric trucks and the necessary charging infrastructure has improved.

After converting 30% of the loads to intermodal, improving operational efficiencies like improved fuel efficiency and route optimization, swapping 15% of their diesel fuel to biofuels, and changing 15% to renewable natural gas, the example reduction emissions by 40%. To reach a 50% reduction in overall emissions, the fleet would then have to convert 10% of its vehicles to battery electric (3% reduction) and purchase carbon credits to round it out, both of which would be costly, according to Simpson.

“Through this mix, we have achieved a 50% reduction for this customer, but this is a best-case scenario, as some of these solutions are not available everywhere across the country or even appropriate for certain types of freight,” said Simpson.

To put everything into perspective, Simpson concluded the presentation with a look at the power needed to create a fast-charging infrastructure for the JB Hunt fleet.

“For one electric truck, you will need the same electricity that it takes to power 600 homes. To put that in perspective, the fast-charging infrastructure needed to support JD Hunt’s fleet, if we were to be entirely electric, would be the electricity of 1.4 million households, that’s 1% of the U.S.,” said Simspon, concluding, “We should consider the level of impact and the associated cost so that we can continue to be economically sustainable in the pursuit of environmental sustainability, and this is how we drive value with sustainable transportation.”