Arbitrators have handed down a decision in a dispute between J.B. Hunt Transport Services Inc. and BNSF Railway Co. Hunt says BNSF provides a “significant amount of rail transportation services” for its intermodal service.
The two companies said Wednesday the arbitration award was handed down last week.
Hunt said the details of the arbitration are confidential, but added it will result in “an $18.3 million pre-tax charge in the third quarter 2018, related to certain charges claimed by BNSF for specific services requested for customers from April 2014 through May 2018.”
BNSF said there are still matters to be finalized by the arbitration panel, but said that it was “pleased with the decision which, when final, should result in favorable revenue division adjustments to BNSF for historic periods and going forward, resulting in payments to BNSF and improving the efficiency of our joint service product. With the key issues resolved, BNSF looks forward to working with JBHT to finalize the award and implement its directives.”
Hunt also said it was “pleased with several determined components of the interim award.”
“The parties are required to submit additional information requested by the arbitrators over the next several months to decide the remaining unresolved matters,” Hunt said. “While the parties disagree on the other financial implications from the interim award, we believe such implications will not be fully determined until the arbitrators issue additional award(s) following their review of each party’s requested additional submissions.”
In an unrelated matter, Hunt said it “has settled two lawsuits with current and former drivers who alleged claims for unpaid wages, failure to provide meal and rest periods, and other items (class settlements) and adjusted its reserves on other specific pending legal matters in the third quarter 2018 incurring a pre-tax charge to insurance and claims expense for $18.1 million. The class settlements are subject to pending court approval.”
Together with a $2.6 million pre-tax charge due to a customer bankruptcy filing in the third quarter 2018, J.B. Hunt said it expected to incur in the third quarter the total pre-tax charges of $39 million ($18.3 million plus $18.1 million plus $2.6 million). That is expected to lower after tax earnings by approximately $28.9 million in the third quarter.”