January 22, 2015

Hub to install tracking systems on most of its U.S. container fleet by year's end

More than 22,000 boxes to be equipped with devices, supply chain head says.

By DC Velocity Staff

Hub Group Inc., one of the the nation's leading intermodal marketing companies, plans to install container tracking technology on 80 percent of its 28,000 53-foot domestic boxes by year's end, Hub's chief supply chain officer said yesterday.

About 1,800 of Hub's containers are already outfitted with the tracking systems, which not only monitor the equipment's location but also detect if the container's door has been opened or closed and if the box is empty or loaded, David L. Marsh told the SMC3 annual winter meeting in Atlanta. The latter feature will allow Oak Brook, Ill.-based Hub to do a more effective job of matching drivers with available containers, he said. Hub employs 2,800 intermodal drivers, up from 600 a decade ago, Marsh said.

Hub uses the 53-foot boxes in domestic intermodal service.

Separately, Marsh said rail reliability—which took a major hit in 2014 due to bad winter weather that paralyzed large portions of rail network and a lack of equipment and crews—has improved in recent weeks, but "not to the levels we'd like to see." In September, Hub said in a Securities and Exchange Commission filing that "worse than anticipated" rail service levels slowed its equipment fleet utilization by 1.7 days in July and August compared with the same period a year ago. Slower rail service prevented Hub from utilizing more of its own containers, on which it earns higher margins than on equipment supplied by the railroads, it said in the filing. Hub added that it incurred higher operating costs to add assets to service intermodal users.

Hub said at the time that its 2014 per-share earnings would be reduced by 4 to 6 cents due to higher operating costs to service intermodal users, it said. Hub releases its fourth quarter and full-year 2014 results after the financial markets close on Feb. 4.

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