Hub Group Reports $3.95 Billion Revenue for Fiscal Year 2024, Down 6% from 2023

Hub Group, Inc. reported a total operating revenue of $3.95 billion for the fiscal year ending December 31, 2024, a decrease of 6% from $4.20 billion in 2023. The decline was primarily driven by a 10% drop in revenue from the Intermodal and Transportation Solutions (ITS) segment, which generated $2.24 billion, attributed to a 15% decrease in intermodal revenue per load. Despite a 5% increase in intermodal volumes, lower prices and fuel surcharges impacted overall revenue. The Logistics segment, however, remained stable with revenue of $1.83 billion, reflecting growth in final mile services following the acquisition of Forward Air Final Mile (FAFM) in December 2023.

Profitability also took a hit, with total operating income falling to $140.3 million, down from $212.2 million in the previous year. The operating income margin decreased to 3.6% from 5.1%. The ITS segment's operating income dropped to $57 million, while the Logistics segment reported $83 million, both reflecting the pressures of lower customer rates and increased operational costs. The company’s net income for 2024 was $104 million, compared to $167.5 million in 2023, resulting in diluted earnings per share of $1.70.

Strategically, Hub Group has been active in expanding its service offerings through acquisitions. The company acquired a controlling interest in EASO, a Mexican logistics provider, for approximately $55 million in October 2024, enhancing its intermodal capabilities and cross-border services. The FAFM acquisition for $257.2 million has also allowed Hub to broaden its final mile delivery services. These acquisitions are expected to contribute positively to revenue streams in the future, although they have temporarily increased operational costs.

Operationally, Hub Group's headcount rose to approximately 6,500 employees by the end of 2024, up from 5,956 in 2023, largely due to the integration of EASO. The company operates a fleet of about 2,300 tractors and 3,200 employee drivers, with 73% of drayage services provided by its own fleet. The company also reported a significant increase in its warehousing capabilities, with access to approximately 7 million square feet across North America. Looking ahead, Hub Group anticipates challenges from inflation, rising healthcare costs, and potential economic slowdowns, but expects improvements from a return to typical shipping demands and a stronger used tractor market.

In summary, while Hub Group faced a decline in revenue and profitability in 2024, strategic acquisitions and operational expansions position the company for potential growth in the coming years. The management remains focused on enhancing customer relationships and diversifying service offerings to navigate the competitive landscape of the logistics industry.