J.B. Hunt (NASDAQ: JBHT) issued an unexpected profit warning at a Morgan Stanley investor conference. The news is bad, don’t get me wrong; higher costs are never good, but the market has completely mispriced the situation. J.B. Hunt's profit warning is driven primarily by higher driver costs, including incentives, wages, benefits, and retention efforts, signaling a structural shift in market dynamics.
There is a massive shortage of drivers—safe, reliable, compliant drivers. Tighter regulation has increased barriers to entry, reduced availability, and, most importantly, created a structural capacity deficit. And it won't end soon.
