AR Data Sciences
Q&A with Stuart Scott
EVP and Chief Information Officer,
IF YOU THINK you know how a trucking company works, think again. At J.B. Hunt—full name J.B. Hunt Transport Services, Inc.—the business of transporting freight from point A to point B is being totally reinvented through data science. And the man charged with leading this transformation is Stuart Scott, J.B. Hunt’s executive vice president and chief information officer, who joined the company in 2016. Prior to J.B. Hunt, Scott held executive positions at such companies as GE, Microsoft, and Tempur Sealy. We sat down with Scott at J.B. Hunt’s gleaming new (three weeks old!) Training and Technology Center on the company’s corporate campus in Lowell, Arkansas. At J.B. Hunt, the future is definitely here.
You’ve got a big job here. Can I assume that you were a techno-nut from the get-go?
Actually, no. During high school, I was a mechanic in a motorcycle shop, in Louisville, Kentucky, and I didn’t even plan on going to college. My dad felt that college was a waste of time. He was in construction, and I had worked construction during the summers as I was growing up. My dad wanted me to be an electrician or a plumber because they made the most money.
For a guy who didn’t plan on going to college, you certainly took to it—you have a Bachelor’s and a Master’s in Engineering, from University of Louisville, and an MBA from Vanderbilt. What happened to change your mind about college?
Two things. First, I got interested in computers right about the time I was looking at what I was going to do after high school. At the motorcycle shop there was a techno-nut in the front office who had started putting everything on computers—he had a suitcase‑size laptop that he lugged around, and I started being curious about what he was doing.
At about the same time, one of my high school teachers saw that I wasn’t planning to take the ACT because I wasn’t going to college, and this teacher encouraged me to go ahead and take the ACT. I did pretty well on it, so our high school counselor encouraged me to really think about college. I really didn’t know anything about it.
Based on my ACT scores, I was advised to go into engineering, so I went over to the university and spent a day talking to people. One person there told me I should go into chemical engineering, and I actually started that. But pretty quickly I moved toward computers. My curriculum was really engineering, mathematics, and computer science, so it was a double major.
What did your folks say when you came home that day and said you were going to college?
I had to do it all on my own. At that point I moved out of my parents’ house and went to school, working full time to pay my way through. Actually, by the time I graduated I was also married, and we had our first child. My wife was also a student, so we made it through with student loans and everything else. I went to school during the day, and she worked nights. So, I took care of the baby at night while she worked.
That’s a hard way to do it.
Yes, it is, but I love my parents and they gave me a very strong work ethic—they’ve always been supportive. It’s just that college wasn’t part of their experience.
Well, let’s talk about your career. What was your thinking about getting both the computer science and business degrees? Were you already planning to have this job?
No, I never envisioned myself in this type of job. While I wasn’t someone who tinkered with technology in high school or before going to college, I came out of college really loving technology, loving programming, loving circuit board design and some other things I was doing.
But you saw the business benefits—or didn’t you?
Well, I got my MBA about five years into my career after I had led a business project at GE appliances, basically giving technology to all our sales force. We had a very progressive sales leader who really wanted us to separate GE from our competitors by becoming a technology leader. At that point—I worked at GE in 2004-2005—this was very revolutionary. In fact, after the project I spent quite a few months going around to all the other GE businesses explaining what we had done and trying to help them do the same thing, because its success was recognized across the company.
This gave me more interaction with business and salespeople, and I saw how technology can change peoples’ lives for the better. Up to then I had been in the bowels of the technology—in the data centers, writing up the software development, doing a lot of back-office type things but not really interacting directly with the business. Now it was eye opening to me how what I would consider even basic technology can be very revolutionary if applied in the right way.
What do you mean?
In this case, we outfitted all of our salespeople with essentially multimedia laptops. We created training videos and supplemental sales materials. We created sales dashboards talking about sales pipeline and what opportunities were in there in that sales funnel. We created customer specific profitability statements so the salespeople understood how to price things and whether we were making money or not.
These are so common today that it seems funny to talk about them as being new, but at that point giving salespeople laptops and giving them access to sales projections and sales results and margin, even just their compensation plans and knowing kind of how they’re doing and how they’re going to get paid, was very motivational to them.
Again, we had a very progressive sales leader. He went on to run the business for GE for a while, and he’s run a number of other companies since then. When I was hired, he looked at me and said, “I want you to go sell.” “Okay,” I said. “Do you mean you want me to go visit some sales offices?” “No, you’re going to go sell,” he said. “You’re not going to help tell my organization how to be better until you’ve walked in their shoes.” So I spent a couple of months out selling, just doing the job.
How did you like that?
I freaked out! I hated it because I’m an engineer, I’m an introvert, and I just wasn’t set up for that. But what was so amazing was being out there, doing what they did, seeing what they had to do and how hard it was for them to get customer information, to know where their sales opportunities were, where the new models of our products would best fit—you know? It was eye opening. It was like, wow, this is so much harder than it should be.
So I’ve applied that everywhere I’ve ever gone, in every job I’ve had since then. Regardless of the industry, regardless of the product or service we were providing, it all comes down to understanding the role of the people in the company and what’s important to their job, and to look at it from the perspective of what I understand. They understand selling ten times better than I ever will. But I know technology, and I understand what technology can do to help them. Every company has the same opportunities, but the application of technology is different.
That seems like a good segue to J.B. Hunt. What was your mission when you were brought in?
It was to transform our technology. Our CEO uses the word “disrupt.” While J.B Hunt is an excellent company and we know transport better than anybody, he understood that we needed to inject some outside thinking. Our industry needed to go through a technology transformation. It’s an industry that, quite honestly, has really lagged behind other industries.
So where was trucking or transport when you got here? You’ve been computerized a long time, right?
Well, yes, we were one of the first to implement a computer system back in the ’80s, but it was all for internal use. What really disrupts an industry is when technology is made to be universally applied, what’s called a platform; if you think about Facebook and eBay, these are platforms where the more people that use them, the more value there is to that technology.
Each time someone adopts that technology, not only does that person benefit but everyone in that ecosystem benefits in some way, and that’s really what needed to happen in transportation—the creation of a digital ecosystem.
So I was brought in to modernize our internal system, and we’re still in the process of that huge undertaking. We have more than 36 million lines of code in our legacy environment that we have to change.
Beyond updating infrastructure, how is J.B. Hunt building technology that tackles challenges facing the industry?
There are around three million drivers on the road in the U.S. today, and almost a million carrier companies. The majority of these carriers are individuals or small companies that own ten or fewer trucks.
With this many trucks and shipments in the market, we have a variety of pickup and delivery models. Some involve the tractor and the trailer, so they’re looking for a load/unload situation. There are other companies that just own a tractor so they’ll do what we call drop and hook. The industry is extremely fragmented, and of course there are millions of shippers too, right? That’s where data science and data analytics come in because it is extremely complex, and almost every situation is unique.
So we have to develop our platform not only for the load, but also for carrier needs and behaviors. They want to optimize their revenue, so the more time that they’re driving and carrying a load, the better. They’ll have a more enjoyable experience if they’re not stressed about where their next load is going to come from.
Ultimately, we’re trying to create a more efficient supply chain for everyone. Today, carriers are only utilizing about 68 percent of the time that they’re working, because they’re hauling freight. The rest of the time is wasted. They’re driving empty to go pick up their next load somewhere, or they’re still looking for their next load. So here we have a trillion-dollar industry that is 32 percent inefficient—that’s billions of dollars in waste, and that waste comes from lack of visibility of opportunities.
This is where a platform can reduce the anxiety of wondering about their next load. Using predictive analytics, our platform can push loads to carriers based on data location, facility characteristics, historical load activity, and personal preferences. If we can do that, we can put more time back in their day, create greater efficiency in the supply chain, and perhaps book loads they otherwise may not think to find.
How far ahead can you know what loads are ready to be picked up and where they are?
In this industry, we don’t have the forward planning or forecasting that I’m used to in other industries. For us to know what loads are going to be picked up two weeks out is phenomenal, but one week out is good. Shippers don’t know exactly when they’re going to have the manufacturing done, because there are hiccups in manufacturing processes. So it’s not unusual for loads to be ready on a few days’ notice.
I read that J.B. Hunt is open 24/7—I guess because you’ve got all those trucks out there and somebody has to be here for them?
This is where technology plays as well—smartphones have really changed the game. When I came here three and a half years ago, most drivers were still on flip phones. Today, 90 to 95 percent have smartphones, so we can always communicate with them when they aren’t driving.
If it’s our own tractor, then we have an onboard computer that we’re always in touch with. We know exactly where the truck is at any point in time. If it’s our trailer, it has what they call an IoT device on it, so we know where it is. It’s pinging us every 15 minutes, so again we can project and predict delivery times. If it’s a third-party carrier, we have a mobile app called Carrier 360 that we ask them to download. Then we have the ability to communicate with them and track them through that mobile app.
Lately I’ve been seeing the word “Intermodal” on your trucks, and I didn’t remember that from before. Intermodal has been around a long time but is that part of this whole push to aggregate the industry?
It is. By the way, J.B. Hunt pioneered modern intermodal transportation, and that’s our largest business. You can put two boxes to a train car, so you’re getting two trailers basically in one slot on a train. The train is much more cost effective and efficient. It takes extra time, though—it doesn’t get there as soon as a driver over the road. But for shippers that can make use of it, it’s much more economical.
Our focus is to provide the best solution for a customer’s needs, regardless of mode. This approach, which we believe is where the industry is moving, allows us to utilize all our service capabilities and develop a solution that adds value and generates efficiency for the customer’s business.
For example, we can provide backhaul solutions to customers that use J.B. Hunt as their private fleet, preventing trucks from driving with empty trailers. We can also drive cost savings through our team of 100-plus engineers doing network design and network management. We can go to customers and show them how to optimize their fleet through a designed network—“If you put a warehouse here and change some inventory planning over there, we can further optimize and reduce your costs even more.” We do a lot of that now. A main part of our sales value is efficiencies and design.
You’ve been a big part of the technology transformation at J.B. Hunt. How has that been perceived within the company?
Our company culture has always centered on innovation. Mr. Hunt founded the company by realizing the value in rice hulls, which required trucks, and over the past five decades that innovative mindset has led to the constant expansion of our services, including intermodal, dedicated, and final mile. We evolve alongside our customers’ needs and, in some instances, develop new solutions before the customer even realizes their need.
Technology is reshaping the industry. J.B. Hunt recognized this potential disruption several years ago, and I was lucky enough to join the company to lead our technology initiative. The company wanted fresh perspectives and experiences, and they have fully embraced the growing influence that technology has on our services. Today, technology is ingrained in everything we do. We’re transforming the company and our industry, and we’re doing it not by walking away from who we are, because we’re a very entrepreneurial company; what we’re doing is adding leadership in technology to that equation.