Hub Group is one of North America’s leading asset-light freight transportation management companies. They offer comprehensive transportation and logistics services and solutions through their Strategic Capacity Solutions and Truck Brokerage business groups. But there is often confusion around whether Hub Group operates as a broker or carrier.
What is a freight broker?
A freight broker acts as an intermediary between companies that need to ship goods and the carriers who provide the transportation services. Freight brokers do not own trucks or other transportation assets. Their role is to arrange for loads to be picked up and delivered by connecting shippers to carriers and negotiating rates and services.
Some of the key characteristics of freight brokers include:
- They do not own transportation equipment like trucks, railcars, planes, or ships
- They sign contracts with shippers to move loads but outsource the actual transport to carriers
- They make money by charging a fee or percentage margin on the shipping rate
- They are licensed by the Federal Motor Carrier Safety Administration (FMCSA)
- They act as an intermediary between shipper and carrier
In summary, a freight broker coordinates logistics but does not physically transport goods themselves.
What is a carrier?
In contrast to a broker, a carrier is a company that physically transports freight. The key characteristics of carriers include:
- They own and operate transportation assets like trucks, railcars, ships, etc.
- They have drivers and employees that operate their equipment
- They are responsible for providing the actual transportation services
- They assume liability for cargo loss/damage during transit
- They are paid by shippers or brokers to haul freight
In short, carriers own transportation assets and their personnel physically move the freight, while brokers coordinate the logistics but never take possession of the cargo.
Hub Group overview
With that broker vs. carrier distinction in mind, here are some key facts about Hub Group:
- Hub Group is headquartered in Oak Brook, IL and was founded in 1971
- They are a publicly traded company with over $3 billion in annual revenue
- They have over 4,800 employees across North America
- They offer intermodal, truck brokerage, logistics, and other transportation services
- Major customers include retailers, manufacturers, distributors and 3PLs
Hub Group operates two primary business lines:
- Strategic Capacity Solutions – Focuses on intermodal shipping, where freight is moved by rail and trucks. They offer rail, truck, and container services to efficiently coordinate intermodal freight transport.
- Truck Brokerage – Hub’s over-the-road truck brokerage division. They arrange for customer freight to be transported by truck between destinations.
Is Hub Group a broker or carrier?
With this background, we can now directly address the question – is Hub Group a broker or carrier? The answer is:
Hub Group operates primarily as a freight broker, not a carrier.
Here are some reasons supporting this:
- They own a small proprietary fleet of around 100 trucks but no rail equipment
- Over 90% of their freight is transported by third-party carriers
- Their brokerage division accounts for a significant portion of revenue
- They facilitate freight moves but rarely provide line-haul transport themselves
- They are a non-asset based 3PL focused on logistics, not transport
- They have authority as a Property Broker from the FMCSA
While Hub has some company drivers and trucks, they describe themselves as an “asset-light” business focused on freight management, not as a traditional carrier. The vast majority of their loads are executed via their network of over 40,000 third party trucks and rail partners.
Hub Group’s Services
To understand Hub Group’s capabilities, it helps to take a closer look at their range of transportation services and solutions:
Intermodal
- Rail container transport between ports, ramps, and inland locations
- Local truck drayage services
- Container yard management
- Door-to-door intermodal coordination
- Volume purchase discounts on equipment and rail
Truck Brokerage
- Refrigerated (reefer) freight transport
- Dry van cargo shipping
- Flatbed, oversized, hazmat cargo moves
- Backhaul management
- Spot market sourcing and tendering
Logistics Services
- Shipment visibility and EDI integration
- Transloading and crossdock services
- Vendor consolidation and pool distribution
- Managed transportation solutions
- Supply chain optimization
This range of services allows Hub to provide end-to-end logistics execution and optimization for customers across modes. But most of these services are executed by Hub leveraging networks of carrier partners, not their own equipment.
Conclusion
In summary:
- Freight brokers coordinate cargo transportation but do not move freight themselves
- Carriers own transportation assets and employees who operate them
- Hub Group has a small proprietary fleet but primarily contracts loads to third party carriers
- They function as a non-asset based 3PL focused on freight management
- This makes them a freight brokerage, not a traditional carrier
While Hub Group does offer some ancillary transportation services in-house, their core business model revolves around strategic freight brokerage. They secure customers, contract with carriers, and provide value-added logistics services – making them a leading freight brokerage in their industry.
Frequently Asked Questions
Does Hub Group own trucks or equipment?
Hub Group owns a small proprietary fleet of around 100 trucks but does not own meaningful transportation assets like a traditional carrier. Over 90% of their freight moves via third party rail and truck partners.
What are Hub Group’s main business segments?
Their two primary areas are: 1) Strategic Capacity Solutions division which provides intermodal logistics and brokerage, and 2) Truck Brokerage division which brokers over-the-road freight loads to carriers.
How large is Hub Group?
Hub Group is a large transportation company with around $3 billion in annual revenue. They have over 4,800 employees and 90 offices across North America.
Does Hub Group only broker freight?
No, while the majority of their business is freight brokerage, they also offer various managed transportation and logistics services to customers. However, most of the actual freight carriage is outsourced to their partner network.
Is Hub Group an asset-based 3PL?
No, Hub Group is considered a non-asset based 3PL as they do not own substantial transportation equipment. Their strength is logistics management via brokerage rather than asset ownership.
Financial Performance
Here are some key financial metrics on Hub Group’s performance as a public company:
| Financial Metric | 2018 | 2019 | 2020 |
|---|---|---|---|
| Revenue | $3.9 billion | $3.7 billion | $3.5 billion |
| Net Income | $114 million | $80 million | $138 million |
| EPS | $2.76 per share | $1.90 per share | $4.02 per share |
| Employees | 5,000 | 4,900 | 4,800 |
This shows Hub Group has maintained steady financial performance despite some macroeconomic challenges. Their asset-light brokerage model has supported continued profitability.
Leadership Team
Hub Group’s executive leadership team includes:
- Phil Yeager, President & CEO
- Geoff DeMartino, CFO
- Phillip Dane, Chief Information Officer
- Dave Yeager, Vice Chairman
- Terri Pizzuto, Executive VP, CDO
This experienced leadership team provides strategic direction as Hub Group continues evolving as a leading freight brokerage provider in North America.
Hub Group’s Broker Authority
Hub Group holds the following active broker authorities granted by the FMCSA:
| Authority Type | Reference Number | Status |
|---|---|---|
| Property Broker | MC-146358 | Active |
| Freight Forwarder | FF-146358 | Active |
This federal licensing allows Hub Group to operate legally as a transportation broker and freight forwarder.
Partnerships and Acquisitions
To expand its capabilities, Hub Group has made several key partnerships and acquisitions, including:
- Acquisition of Exel Transportation – expanded truck brokerage division
- Acquisition of CaseStack – enhanced retail logistics solutions
- Acquisition of Estenson Logistics – strengthened refrigerated services
- Partnership with Uber Freight – digital truckload sourcing
- Alliance with Waymo Via – autonomous trucking pilot
Leveraging partnerships and acquisitions allows Hub to scale its brokerage capabilities and tap into cutting-edge transportation technologies.
Technology and Innovation
Hub Group is investing in technology to improve its brokerage operations, including:
- MyHub digital brokerage platform – online load management
- Mobile Star visibility tool – real-time shipment tracking
- HubConnect API integration – seamless EDI connections
- Avantida TMS system – transportation management
- Machine learning – shipment optimization
By combining its brokerage expertise with advanced technology, Hub delivers innovative solutions to shipper customers.
