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Hub Group Drops Port Trucking Operation, Cites Driver Costs

Hub Group Trucking has closed its Southern California terminal serving the ports of Los Angeles and Long Beach just over a year after converting its local fleet from independently-contracted drivers to full-time employees.

In an emailed announcement to customers last week, Hub Group Inc. Chief Executive David Yeager said the company will now employ “a core group of high-service outside carriers” to bring container loads from the ports to nearby warehouses and rail yards, a service known as drayage.

Since shifting its business model to use company employees as drivers 16 months ago, Mr. Yeager wrote, Hub’s costs “have been unsustainable and substantially higher than our outsourced core carriers’ costs.”

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Source: Wall Street Journal

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