Phillip D. Yeager never gave serious thought to walking away from the family business. He’s part of the third generation to work at Hub Group, Inc., the Chicago area-based transportation management company with current revenues of nearly $4 billion.

Recently named president and chief operating officer, Phil is the grandson of Phillip C. Yeager, who founded the company in 1971 as a booker of rail services for intermodal shippers. His father, David Yeager, became chief executive officer in 1995 and chairman in 2008.

Phil, 32, grew up in the business, starting out in the mailroom and moving through positions in accounts payable, dispatch and analytics. His initial stay continued through college. “I always thought this is where I’d want to work,” he says.

Looking to broaden his skills, Yeager broke off from the company for a few years to work in investment banking, mergers and acquisitions, and consulting. He returned in 2011, to help with Hub’s acquisition of Exel Transportation Services, which was subsequently renamed Mode Transportation, then sold off to private investors in 2018.

Yeager is keen to bring “a new generational perspective” to a company that has already undergone multiple transformations over the years. In keeping with changes in industry nomenclature, Hub has morphed from a shipper’s agent to an intermodal marketing company to a third-party logistics (3PL) provider. Along the way, it picked up CaseStack, Inc., a consolidator, warehouser and freight brokerage serving the retail industry. Throughout, however, it has retained its focus on the intermodal segment of the supply chain.

Just what Hub Group is today can be hard to pin down. “We’re a 3PL,” Yeager says, “but we back it up with assets.” It maintains nearly 40,000 intermodal containers and employs 4,600 drivers. The company’s truck and trailer fleet has grown significantly over the last couple of years. (Another acquisition was that of Comtrak, Inc., a provider of drayage and other services to the intermodal sector, in 2006.)

The flurry of purchases and identity shifts has left little breathing room for a publicly traded company that must satisfy investors’ demands for quarterly results. In addition, the company has been buffeted in recent years by both slowing intermodal volumes and periods of network congestion. More recently, results have once more been on the rise, with Hub Group posting record results for the second quarter of 2019.

Yeager acknowledges the pressure that a public company feels to meet investors’ short-term targets, even as it invests heavily in new assets. “We take a long-term perspective,” he says. “That’s a lot of the reason why people hold our stock, and why they like us as a company.”

Hub Group has resisted the urge to go private. Yeager says the company prefers having access to public markets, retaining a status “that gives customers a level of trust and transparency.” At the same time, it is protected somewhat from outside pressures by a dual-class share structure, ensuring that the family remains firmly in control.

Like nearly every provider in the commercial trucking sector, Hub Group has faced stiff challenges in attracting and retaining drivers. That has meant doling out healthy pay increases and sign-on bonuses in the most competitive markets, especially around Chicago and other parts of the Midwest. The company enjoys one recruiting advantage in that its trucking services are limited to local and regional markets, allowing drivers to get home every night, Yeager notes. As a result, turnover remains in the low 40-percent range, “much better than the industry [rate].”

Still, the company has had to weather the ups and downs of the intermodal business, with shippers regularly switching between trains and trucks according to market conditions of the moment. With a tightening of truckload capacity over the past year, intermodal has acquired substantial market share, although the first quarter of this year saw a lull in volumes. Over the long term, Yeager says, Hub Group believes intermodal growth will outpace that of U.S. gross domestic product.

Still, the future holds a number of potential obstacles to success. One is continuing uncertainty around last-mile delivery, which is becoming an ever more essential link due to the exponential growth of e-commerce. Especially tricky is the need to keep current with the vast array of technology that can boost operational efficiencies and help the company meet growing customer demands for rapid service.

Yeager says Hub Group sees an opportunity to increase exposure to mid-sized clients, with spend in the $50 million to $100 million range. Like other big 3PLs, its has depended mostly on the business of Fortune 500 or 1000 companies, which are keen to outsource functions that fall outside their core competencies. The company is also venturing into international transportation, having recently obtained a license as a non-vessel operating common carrier.

In the more immediate term, Hub Group and its new generation of managers are grappling with seesawing capacity and demand, the vagaries of global trade, tighter regulation, and the need to continue acquiring physical assets. “We’re going to keep investing,” says Yeager. “We’re in the fortunate position of being well-capitalized.”