1 Transportation & Sustainability September 2015

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Transportation & SustainabilitySeptember 2015

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What is Sustainability?

4 “Meeting the Needs of Society Today Without Compromising the Ability of Future Generations to Meet Their Needs”

Economic Prosperity

Triple Bottom Line

Social ResponsibilityEnvironmental

Stewardship

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Sources of U.S. Greenhouse Gas Emissions

4 Transportation is responsible for 27% of U.S. greenhouse gas emissions

4 About 20% of transportation sector emissions are caused by heavy-duty vehicles

2013 Greenhouse Gas Emissions by Sector

Source: Remarks by the President on Fuel Efficiency Standards of Medium and Heavy-Duty Vehicles, 2014.

Source: EPA, Sources of Greenhouse Gas Emissions, 2013.

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Transportation Sustainability?

4 Freight transportation is growing

• It is 92% petroleum-based

Source: RITA BTS Transportation Services Index, July 2014.

Source: EIA Annual Energy Review, 2013.

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What to do?

“Climate change poses clear, catastrophic threats.

We may not agree on the extent,

but we certainly can’t afford the risk of inaction.”

Rupert Murdoch

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Increase Transportation Energy Efficiency

4 Minimize the energy used and waste created while safely delivering J.B. Hunt services

Cost Reduction

Reduced consumption of resources

Risk Management

Lessen dependency on fossil fuels

Innovation

Leader in transportation services

Customer Value

Simple methods of reducing transportation carbon emissions

Shareholder Value

Developing new services & cost reduction strategies

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How? J.B. Hunt’s Transportation Carbon Diet

1. Know your network footprintThen, attack it by:2. Eliminating miles

- Network re-alignment- Route optimization

3. Increasing payload- Maximize cube & weight

4. Converting to energy-efficient, cost-effective modes- Rail is better than truck; truck is better than air

5. Using efficient carriers- FleetSmart members & SmartWaySM partners

Reduced Costs Means Reduced Emissions!

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Step 1: Measure Carbon Emissions

4 N2O (nitrous oxide) & CH4 (methane) are also emitted4 Taking into account the global warming potential of N2O & CH4, 22.9 lbs

of CO2e (carbon dioxide equivalent) are emitted

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Step 2: Eliminate Miles

Which distribution center should service my customers?

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Step 3: Increase Payload

4 Minimize packaging

• Utilize lightweight equipment

• Build efficient loads

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Step 4: Pick the Best Mode

Water 4x > Rail Rail 4x > Truck Truck 8x > Air

Less Carbon Intense More Carbon Intense

In 2014, 71% of J.B. Hunt’s loaded miles were via Rail.

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Intermodal as “Carbon-Lite Transportation”

50% less carbon;

1.5 fewer tonnes

Estimated carbon emissions for an 1,800 mile truckload shipment based on Raven Ridge Resources, Inc. methodology for calculating carbon emissions for truckload shipments via highway and intermodal service. See: http://www.ghgworks.com/pdf/JBHTIntermodalVerificationReport.pdf

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• Proprietary J.B. Hunttool calculates customer’s carbon footprint & identifiesintermodal conversion opportunities

CLEAN Transport™

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Step 5: Use Efficient Carriers• SmartWay program identifies efficient carriers

• Carrier partners are scored on relative efficiency performance.• 5 performance ranges based on 8 emissions metrics

J.B. Hunt Multimodal in top 20-40% of CO2, NOx and PM grams/mile metrics

Carrier Excellence Awards 2008-2015

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DeliverGreen™DeliverGreen™ is a business initiative to meet customers’ demand

for more energy-efficient services and provide long-term, sustainable growth opportunities for the J.B. Hunt Transport.

Ensure J.B. Hunt drivers, managers, and technicians are

fully trained and capable of

consistently operating fleet

equipment in the most fuel-efficient

manner.

Compare and evaluate

equipment technology investment

options.

Provide high quality, low-cost

fuels to power J.B. Hunt fleets.

Establish energy-efficient

engineered solution blue

prints for each fleet operation.

Keep J.B. Hunt abreast of and

cost-effectively in compliance with all

energy and emissions

regulations impacting the

trucking industry.

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J.B. Hunt’s 1st Green Fleet Solution• Freightliner Cascadia Truck• Auxiliary Power Unit• Truck Skirting • Trailer Belly Fairing • Trailer Gap Fairing • Wide-Base Tires• Truck Inflation Monitoring

System• Trailer Automatic Tire

Inflation System• Lightweight Duraplate Trailer• Biodiesel Fuel (B20)

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J.B. Hunt & Biodiesel• J.B. Hunt uses biodiesel at a variety of bulk and retail locations

• In total, over 120 million gallons of biodiesel fuel annually• Pure biodiesel equates to 1.3% of J.B. Hunt’s total fuel usage, or

about 20.6 million gallons of pure biodiesel

• Biodiesel blends utilized range from a B2 to a B20• B11 is the most common

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Fuel Efficiency Factors

Source: Kenworth Truck Company “Fuel Economy White Paper” August 2008

Drivers

Attitude

Compensation

Vehicle

Alignment Maintenance Practices

Environment

Traffic Pattern EducationConsistency

Idle TimeJack UsageHabits

Electronic ControlsConfiguration Parasitic LoadsAerodynamics Terrain Road Surfaces Weather

Temperature

Operations

Load Speed

Fuel Quality

% of Time LoadedRoute

Documentation

Systems

Baseline

Testing

Electronic

Measurement

Fuel PurchasesFlow Meter

Tires

Construction Type/Size

State of Wear

Air Pressure

Tread Depth

Retread

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• The EPA and DOT’s National Highway Traffic Safety Administration (NHTSA) is developing the next phase of heavy-duty vehicle fuel efficiency and GHG standards to be implemented by March 2016

• This second round of standards will build on the first standards for model years 2014-2018.• Estimated savings for vehicle owners and operators is $50 billion in fuel costs and 530 million

barrels of oil.

Next Round of Fuel Efficiency Standards

• J.B. Hunt continues to test fuel efficient equipment to ensure future compliance.

• The low pressure area at the rear of trailers contributes 25% of a tractor trailer’s aerodynamic drag.

• In 2014, we deployed a Ridge Corporation Green Tail on a new Wabash 53’ Duraplate LS trailer for testing. We combined it with a Green Wing trailer skirt for greater trailer aerodynamics.

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Corporate Sustainability

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Recycling at J.B. Hunt

22Thank you.

•J.B. Hunt continues to strive to positively impact the triple bottom line, to create social, environmental, & economic value

•We are willing to share our knowledge regarding sustainability, & eager to learn from others’ experiences

Please contact us with any questions or opportunities:

Gary WhickerSenior V.P. of Engineering(479) [email protected]

Joe FritzjunkerLogistics Engineer (479) [email protected]

Documents

1 Transportation & Sustainability September 2015