Hub Group, Inc. provides supply chain solutions that offers comprehensive transportation and logistics management services focused on reliability, visibility and value for customers.
The company’s service offerings include a full range of freight transportation and logistics services, some of which are provided using assets it owns and operates, and some of which are provided by third parties with whom it contracts.
The company is one of the largest freight transportation providers in North Am...
Hub Group, Inc. provides supply chain solutions that offers comprehensive transportation and logistics management services focused on reliability, visibility and value for customers.
The company’s service offerings include a full range of freight transportation and logistics services, some of which are provided using assets it owns and operates, and some of which are provided by third parties with whom it contracts.
The company is one of the largest freight transportation providers in North America. The company’s services a large and diversified customer base in a broad range of industries, including retail, consumer products, automotive and durable goods. The company’s strategy to offer multi-modal supply chain management solutions serves to strengthen and deepen its relationships with its customers and allows it to provide service solution.
The company employs sales and marketing representatives throughout North America who service local, regional and national accounts. The company’s business is seasonal to the extent that certain customer groups and their shipping demand, such as retail, are seasonal. A significant portion of the company’s revenue and earnings is related to the provision of services to customers who serve consumer end markets in North America. As such its business generally experiences a higher level of demand during the time leading up to the December holidays, as the company’s customers seek to build their inventories by moving their goods into distribution centers (both their own, as well as locations that it operates) and retail store locations in the second half of the calendar year.
The company’s service offering facilitates its customers’ desires for energy-efficient transportation and logistics solutions and assists in meeting their objectives to reduce their environmental footprint. The company’s intermodal service is significantly more fuel efficient as compared to trucking transportation, and it continually seeks opportunities to convert its customers’ transportation needs from trucking to intermodal. In addition, its logistics offering includes shipment consolidation and network optimization services that seek to maximize the amount of freight carried per mile. The company’s GPS-enabled container fleet allows for its truck drivers and third-party carriers to efficiently locate its containers without driving wasted miles.
The company is an Environmental Protection Agency (EPA) SmartWay Transport Partner, having been awarded the EPA’s SmartWay Excellence Award nine times since its inception.
Services Provided
Segments
The company operates through two segments, Intermodal and Transportation Solutions (‘ITS’) and Logistics which are based primarily on the services each segment provides.
Intermodal and transportation solutions
ITS segment offers high service, nationwide door-to-door intermodal transportation, providing value, visibility and reliability in both transcontinental and local lanes by combining rail transportation with local trucking. The company’s service offering is well positioned to assist its customers in reducing their transportation spend and achieving their carbon emissions objectives. As an intermodal provider, the company arranges for the movement of its customers’ freight in one of the company’s containers, typically over long distances of 750 miles or more. The company contracts with railroads to provide transportation for the long-haul portion of the shipment between rail terminals. Local pickup and delivery services (referred to as ‘drayage’) between origin or destination and rail terminals are provided by the company owns trucking operations and third parties with whom it contracts. The company’s predictive track and trace technology monitors the shipment to ensure that it arrives as scheduled and provides notification to its customer service personnel if there are service delays. As of December 31, 2024, the company owned approximately 50,000 dry, 53-foot containers and 900 refrigerated 53-foot containers.
As of December 31, 2024, the company’s trucking transportation operation consisted of approximately 2,300 tractors, and 4,700 trailers. The company also contracts for services with approximately 500 independent owner-operators who supply their own equipment and operate under its regulatory authority. These assets and contractual services are used to support drayage for the company’s intermodal service offering and to serve its customers who require high service local and regional trucking transportation using equipment dedicated to their needs. The company’s dedicated service operation offers fleets of equipment and drivers to each customer on a contract basis, as well as the management and infrastructure to operate according to the customer’s high service expectations.
During 2024, approximately 73% of the company’s drayage needs were provided by its own fleet, which includes the company’s drivers and tractors and owner operators with whom it contracted operating under its motor carrier authority. As of December 31, 2024, the company operated trucking terminals at 32 locations throughout the United States and Mexico, with locations in many large metropolitan areas.
Logistics
Logistics segment offers a wide range of non-asset-based services including transportation management, freight brokerage services, shipment optimization, load consolidation, mode selection, carrier management, load planning and execution, cross-docking, consolidation and fulfillment services and final mile delivery. Logistics includes the company’s brokerage business which consists of a full range of trucking transportation services, including dry van, expedited, less-than-truckload (‘LTL’), refrigerated and flatbed, all of which is provided by third-party carriers with whom it contracts. The company’s leverage proprietary technology along with collaborative relationships with third-party service providers to deliver savings and performance-enhancing supply chain services to its clients. The company’s transportation management offering also serves as a source of volume for its ITS segment. Many of the customers for these solutions are consumer goods companies who sell into the retail channel. The company’s final mile delivery offering provides residential final mile delivery and installation of appliances and big and bulky goods. Final mile operates through a network of independent service providers in company, customer and third-party facilities throughout the continental United States. The company’s business operates or has access to approximately 7 million square feet of warehousing and cross-dock space across North America, to which its customers ship their goods to be stored and distributed to destinations, including residences, retail stores and other commercial locations. These services offer the company’s customers shipment visibility, transportation cost savings, high service and compliance with retailers’ increasingly stringent supply chain requirements.
Strategy
The key elements of the company’s strategy are to deepen and diversify its customer relationships through a best-in-class customer experience across all of its service offerings; acquire and organically develop new service offerings for its customers that will diversify its revenue streams and deliver sophisticated supply chain solutions; invest in assets, such as containers and tractors, to drive organic growth; build an industry leading information technology platform to drive growth and efficiency and support future innovations; and sustain a culture that continues to enable innovation, service and teamwork.
Relationships with Transportation and Warehouse Vendors
The company utilizes an asset-light strategy that employs a combination of its company-operated equipment, as well as assets operated by third parties to transport and store its customers’ goods, which allows it to optimize its investment in equipment and facilities and reduce the level of capital it employs in its business. The company is one of the largest purchasers of rail transportation services in North America and generally have multi-year contractual agreements with the company’s railroad providers that specify the costs it pays for transportation and related services, as well as service levels and other provisions. Due to the importance of the company’s relationship, some of its railroad providers have dedicated support personnel to focus on the company’s day-to-day service requirements. On a regular basis, the company’s senior executives and its railroad providers meet to discuss major strategic issues concerning intermodal transportation.
Approximately 73% of the company’s drayage services are provided by its fleet. The company contracts with approximately 500 owner-operators who supply their own equipment and operate under its regulatory authority. The company also procures drayage services from third parties, and it is one of the largest purchasers of drayage transportation in the United States.
The company’s brokerage and logistics business lines are significant purchasers of truckload and less-than-truckload transportation from third parties. The company’s contract with a large number of trucking companies that it uses to provide these transportation services. The company’s relationships with these trucking companies are important since these relationships determine pricing, load coverage and service that it provides to its customers.
The company has relationships with several national and local operators of warehouses and cross-dock facilities who provide a range of services to its including storage, product handling and related activities. The company also operates its own warehouse locations which are leased from third-party landlords. The company’s final mile operation contracts with nearly 540 vendors across the United States who provide warehousing and delivery services.
The company requires all its trucking vendors to carry auto liability and cargo insurance. Railroads, which typically carry higher self-insured retentions, provide limited cargo protection. To cover freight loss or damage the company carries its own cargo insurance. The company also carries general and auto liability insurance with an umbrella policy to cover potential exposure from its company-owned drayage and dedicated operations.
Government Regulations
The company and several of its subsidiaries are licensed by the United States Department of Transportation (DOT) as brokers in arranging for the transportation of general commodities by motor vehicle.
The company’s trucking subsidiaries operate under DOT motor carrier authority. The company is licensed by the United States Federal Maritime Commissions (FMC) as an Ocean Transportation Intermediary authorized to provide ocean freight forwarding and non-vessel operating common carrier services, which are regulated by the FMC. The company’s business is also subject to requirements published by the United States Food and Drug Administration under the Food Safety Modernization Act regarding the use of sanitary transportation practices to ensure the safety of food transported by motor vehicle and rail.
History
Hub Group, Inc. was founded in 1971. The company, a Delaware corporation, was incorporated in 1995.