Hub Group Cements Position as Industry Leader with Strong Q4 Performance
Hub Group, a leading supply chain solutions company, has solidified its position as an industry leader following a strong fourth quarter in 2024. Despite challenges posed by excess capacity and balanced demand, the company executed a remarkable turnaround, delivering significant momentum at year-end.
"I am proud of our execution at Hub Group and how we closed the year with significant momentum," said Phil Yeager, President, Chief Executive Officer, and Vice Chairman of Hub Group. "We focused on controlling what we can to effectively manage costs and execute efficiency enhancements across our organization while utilizing our value proposition of service and savings to deliver for our customers and shareholders."
Key highlights from the quarter include a year-over-year improvement in adjusted operating margins, driven by ITS segment performance, which saw a 50-basis point increase due to network beneficial growth, peak season surcharges, and efficiency enhancements. Intermodal volumes also surged 14% year-over-year, with local East up 25%, local West up 11%, and significant growth in Mexico.
Revenue per load declined 9% year-over-year in Intermodal, but was up 4% sequentially due to peak surcharges and an extended average length of haul. The company anticipates year-over-year revenue per load will improve as it moves through this season and has more balanced network growth.
In Dedicated, Hub Group delivered year-over-year earnings growth and met the surge in demand from customers, increasing revenue per truck per day by 13% while improving its cost structure and search capabilities. The company also invested in future growth through a joint venture with EASO.
Logistics segment performance saw a 20-basis point improvement in year-over-year operating margins due to excellent performance in Final Mile and e-commerce businesses, offsetting headwinds in brokerage and managed transportation services.
The company's focus on enhancing its cost structure and efficiency is expected to drive improved revenue and earnings in 2025. With capacity continuing to exit and the consumer remaining resilient, Hub Group is well-positioned for growth this year.
"We are optimistic about the trends in the broader industry with capacity continuing to exit and the consumer remaining resilient while inventories have become more balanced," said Phil Yeager. "These trends and the actions we have taken to improve our cost structure, maintain excellent service levels, and improve growth across all of our offerings will lead to improved revenue and earnings in 2025."
Hoping to return nearly $100 million to shareholders through share repurchases and dividends, Hub Group has demonstrated its commitment to delivering value for both customers and investors.
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