Hub Group, Inc. (HUBG): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear map of the forces shaping Hub Group, Inc. (HUBG) right now, and honestly, the landscape is complex-a mix of macroeconomic headwinds and self-help opportunities. We need to cut through the noise to see the real risks and the actionable levers. As a seasoned analyst, I see Hub Group navigating a late-2025 environment where demand remains soft but operational efficiency is paramount. For example, analyst consensus estimates Hub Group's full-year 2025 revenue to land around $4.5 billion, a slight contraction from peak years, but with diluted Earnings Per Share (EPS) projected near $5.00, showing strong cost control. That's the quick math. Here is the PESTLE breakdown, which translates these big-picture forces into concrete factors for your strategy.

Hub Group, Inc. is navigating a tricky 2025: soft freight demand means revenue is projected around $4.5 billion, but their operational discipline is holding up diluted EPS near $5.00. The real strategic pivot isn't just the economy; it's the political and technological forces-think stricter Department of Transportation (DOT) rail safety rules, the contentious independent contractor debate, and the push into AI-driven logistics. To make a smart investment or strategy call, you need to see how these macro-pressures (Political, Economic, Sociological, Technological, Legal, Environmental) map directly to Hub Group's core intermodal business. Let's dig into the forces that will defintely shape the next 18 months.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Political factors

Stable US-China trade tariffs, but potential for new restrictions on specific goods

You need to understand that the US-China trade relationship is anything but stable in 2025; it's a major source of volatility for Hub Group. While the initial, extreme tariff hikes from early 2025-which saw duties on Chinese imports surge as high as 145% by mid-April-have been walked back, the new framework still creates a massive headwind. A tentative agreement in June 2025 set the headline duty at 55% on Chinese imports and 10% on U.S. exports.

This uncertainty directly hit Hub Group's transactional service lines. For instance, the company reported that its total revenue for Q2 2025 decreased by 8.2% to $905.6 million, a decline attributed, in part, to tariff-driven effects and a weak freight market. Also, a new restriction took effect on May 2, 2025: the elimination of the de minimis exemption for low-value e-commerce shipments from China and Hong Kong, meaning more shipments are now subject to full duties, which slows down the parcel logistics business.

Here's the quick math on the revenue impact:

Department of Transportation (DOT) focus on rail safety and service reliability post-derailments

The Federal Railroad Administration (FRA) and the Department of Transportation (DOT) have significantly tightened rail safety regulations in 2025 following high-profile derailments. The goal is to improve reliability and reduce risk, which is critical for Hub Group's intermodal segment. One major regulatory change is the final rule issued in January 2025 on Train Crew Size Safety Requirements, which generally mandates a two-person crew for all freight trains. This federal rule codifies staffing requirements, but it also increases labor costs for the Class I railroads that Hub Group partners with, a cost that can be passed down to logistics providers.

Simultaneously, the FRA is pushing capital investment to improve infrastructure safety:

• The Railroad Crossing Elimination (RCE) Grant Program awarded over $1.1 billion in January 2025.
• This funding is for 123 rail projects across 41 states, aiming to build overpasses and underpasses to improve safety and reduce congestion.
• New versions of the Railway Safety Act introduced in the House in February 2025 seek to mandate federal standards for wayside defect detectors and impose greater penalties for safety violations.

These actions, while increasing short-term operational complexity for rail carriers, defintely promise a more reliable, safer rail network over the medium term, which is a net positive for intermodal efficiency.

Infrastructure Investment and Jobs Act (IIJA) funding slowly reaching rail and road networks

The Infrastructure Investment and Jobs Act (IIJA), signed in late 2021, is a multi-year investment, but its impact on the ground for logistics is still uneven by late 2025. The law allocated $66 billion for passenger and freight rail systems and $110 billion for roads, bridges, and major projects. However, four years in, the ground transportation capital investment uptick is heavily concentrated in highway projects.

The rail side, particularly freight-focused improvements, has been slower to materialize in large-scale projects, with an Urban Institute analysis in November 2025 noting that rail projects have seen a net decline in spending compared to pre-IIJA trends. This hides the fact that specific competitive grants are flowing: the FRA awarded over $2.4 billion in Consolidated Rail Infrastructure and Safety Improvement (CRISI) Program funding in October 2024 alone. Hub Group, which relies on both road (trucking) and rail (intermodal), benefits from the highway focus but still waits for the full, promised efficiency gains from a modernized national rail network.

Pressure on Congress to address the contentious independent contractor classification debate

The ongoing legal and political battle over classifying truck drivers, especially drayage drivers who move containers between ports and rail yards, is a major risk. The U.S. Department of Labor (DOL) new rule, which took effect in March 2024, made it easier to classify independent contractors as employees under the Fair Labor Standards Act (FLSA). This is a huge deal because industry groups estimate this rule could threaten to force the reclassification of over 80% of intermodal drayage drivers.

Reclassification would force logistics companies like Hub Group's partners to pay minimum wage, overtime, and offer benefits, significantly increasing purchased transportation costs. The political situation became even more complex in May 2025, when the DOL announced it would not enforce the new rule, instead relying on the older, more subjective 'economic realities' test. This non-enforcement decision, while offering temporary relief, creates a dual, confusing legal framework for employers, increasing the risk of costly litigation and back pay claims. You need to keep a close eye on state-level actions and court challenges; one clean one-liner: classification uncertainty is a direct labor cost risk.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Economic factors

Estimated full-year 2025 Revenue near $3.6 billion to $3.7 billion, reflecting soft freight volumes

You are seeing the clear impact of a sluggish freight market on the top line, which is why Hub Group's full-year 2025 revenue guidance is set between $3.6 billion and $3.7 billion. This is a significant revision from earlier, more optimistic projections and reflects the reality of soft freight volumes across the industry. The Cass Freight Index, a key measure of North American freight activity, remained in mild contraction territory, down around -3% as of the second quarter of 2025, signaling that a decisive rebound has not yet materialized. This soft demand environment means pricing power is limited, and the traditional holiday peak shipping season in late 2025 was described as virtually non-existent. You simply cannot charge premium rates when the market is oversupplied with capacity.

Diluted EPS for 2025 projected around $1.80 to $1.90, indicating strong cost management

Despite the revenue headwinds, Hub Group's projected diluted Earnings Per Share (EPS) for the full year 2025 is a range of $1.80 to $1.90. This is lower than the peak earnings of the pandemic-era boom, but it demonstrates the company's strong focus on cost management and efficiency. For context, this guidance was narrowed in late October 2025, reflecting management's confidence in their ability to control costs even as demand remains muted. The company has been effective in reducing purchase transportation and warehousing costs, and they are targeting an additional $50 million in cost savings on a run-rate basis by the end of the year. That's the kind of operational discipline that separates resilient logistics providers from the rest.

Persistent inflationary pressure on fuel, parts, and labor, squeezing margins

While freight rates are soft, the underlying cost structure remains a serious challenge. You are facing a persistent, multi-faceted inflationary squeeze that directly pressures operating margins. Labor costs, particularly for skilled technicians and drivers, are still rising. Year-over-year labor expenses in the trucking sector were up around 1.2% in the second quarter of 2025, driven by the need for technician retention. Plus, while general inflation may be cooling, certain critical line items continue to hit record highs.

• Truck/Trailer Payments: Rose 8.3% between 2023 and 2024.
• Insurance Premiums: Increased by 3.0% in 2024, reaching a record high of $0.102 per mile.
• Fuel Volatility: Energy prices for final demand surged 3.5% in September 2025, with gasoline prices spiking 11.8%.

Here's the quick math: when your core operating costs like labor and equipment financing are climbing, but your revenue per load is flat or declining due to soft demand, your margin gets defintely compressed.

High interest rates (e.g., Federal Reserve target rate near 3.75%-4.00%) slowing capital expenditure plans

The high-interest-rate environment, orchestrated by the Federal Reserve to combat inflation, is directly impacting capital expenditure (CapEx) decisions. The Federal Funds Rate target range was set at 3.75%-4.00% as of late October 2025. This level of borrowing cost makes financing new equipment-like containers, tractors, and trailers-significantly more expensive. Hub Group has responded to this reality and the soft demand by projecting capital expenditures for 2025 to be less than $50 million. This cautious approach conserves cash but also signals a slowdown in fleet modernization and expansion plans compared to previous growth cycles. High rates mean you pay more for everything from fleet financing to working capital, forcing a conservative stance on growth investment.

Consumer spending shifts from goods back to services, impacting freight demand

The post-pandemic structural shift in consumer spending is a primary economic headwind for the freight sector. Following the goods-buying boom of 2020-2022, consumers are now redirecting discretionary income back toward experiences and services-travel, dining out, and entertainment. This trend directly translates to lower demand for the movement of physical goods, which is Hub Group's core business. The result is a prolonged period of sub-seasonal demand in the transportation sector, characterized by soft volumes and rate pressure. This shift is expected to continue capping freight volumes through the end of 2025.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Social factors

Ongoing severe shortage of qualified truck drivers and logistics personnel.

The persistent labor crunch is a critical social factor directly impacting Hub Group's operational costs and capacity. Honestly, this isn't a new problem, but it's reached a new level of urgency in 2025. The American Trucking Associations (ATA) estimates the driver shortage will be over 80,000 drivers by the end of the 2025 fiscal year, a gap which continues to drive up wages and recruitment costs. This isn't just about long-haul truckload, either; the shortage extends to the logistics back-office.

For context, approximately 76% of US employers in the transport and logistics sectors report struggling to fill roles, according to a recent industry report. The issue is retention, not just recruitment, with annual turnover at many large carriers remaining stubbornly high, often exceeding 90%. Hub Group, as a major intermodal and dedicated trucking provider, must continually invest in driver pay and benefits just to maintain its fleet capacity. That's a direct headwind to margin.

Here's the quick math on the labor challenge:

• Lack of qualified applicants is cited as the biggest challenge by 45% of U.S. freight businesses.
• The industry needs to hire over 1.2 million new drivers over the next decade just to replace retirees and manage churn.
• The median pay for heavy and tractor-trailer drivers in 2025 is over $55,000 per year, a figure that continues to climb to attract new entrants.

Increased consumer demand for fast, transparent, and sustainable final-mile delivery.

Consumer expectations have fundamentally changed the final-mile delivery landscape, which is a key segment for Hub Group's Logistics division. Customers now demand speed, visibility, and a clear commitment to environmental, social, and governance (ESG) factors. For instance, 66% of shoppers now expect same-day delivery, making the final mile a critical differentiator for e-commerce retailers.

This demand for speed and transparency directly translates into higher operational complexity and cost, as the last mile accounts for up to 53% of total shipping costs. Plus, this is where brand loyalty is won or lost: 98% of consumers say the delivery experience impacts their loyalty to a brand. On the sustainability front, 66% of global consumers factor environmental impact into their purchase decisions, pushing companies like Hub Group to invest in electric vehicles (EVs) and route optimization software to reduce carbon emissions.

Growing investor focus on supply chain transparency and ethical sourcing practices.

As a publicly traded company, Hub Group faces intense scrutiny from the investment community on its supply chain governance. ESG criteria are no longer peripheral; they are central to capital allocation. Recent data confirms that nearly three-quarters of investors rate supply chain governance as 'very' or 'extremely important.' This focus is driving real-world investment decisions.

We're seeing a clear risk of capital exclusion for companies lacking visibility. To be fair, this is a global trend, but it impacts U.S. logistics providers directly through customer contracts and investor relations. For example, 60% of US investors have canceled deals based on ESG findings tied to supply chains. Hub Group's intermodal and brokerage services must provide verifiable data on ethical sourcing (e.g., adherence to the Uyghur Forced Labor Prevention Act) and environmental impact (e.g., carbon emissions per mile) to maintain its valuation and access to capital.

Labor union negotiations with Class I railroads impacting intermodal service reliability.

The stability of intermodal service, which is the backbone of Hub Group's business, is highly sensitive to labor relations at the Class I railroads. The most significant near-term social factor is the proposed merger between two of Hub Group's primary rail partners, Union Pacific and Norfolk Southern. While Hub Group's CEO, Phil Yeager, has expressed optimism that the merger will drive opportunities for increased intermodal conversion, the labor response is a major risk.

Major rail unions have signaled strong opposition to the merger, warning of potential job cuts and service disruptions. The possibility of worker strikes or slowdowns remains a constant threat to network fluidity, which directly impacts Hub Group's ability to deliver on its service commitments. Any slowdown in the rail network immediately pushes freight onto the already constrained truckload market, driving up costs. Hub Group's Intermodal and Transportation Solutions segment showed an 8% intermodal volume growth in Q1 2025, underscoring its reliance on a stable rail network.

The table below summarizes the core social risks and opportunities:

Finance: Monitor Purchased Transportation and Warehousing costs, which increased 8% to $684 million in a recent quarter, as a direct proxy for labor and capacity constraints by Friday.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Technological factors

You're looking at Hub Group's technology stack and wondering where the real money is going, and honestly, the answer is in visibility and automation. The company is focusing its capital expenditures (CapEx) on digital tools and data science that directly cut costs and improve service, which is the only way to win in a tough freight market.

For the 2025 fiscal year, Hub Group is guiding for total capital expenditures of less than $50 million, with a significant portion dedicated to technology projects. This investment is not about flashy new hardware; it's about making their core business-moving freight-faster and smarter, especially when total revenue is projected to be between $3.6 billion and $3.7 billion for the year. That's a focused tech spend of about 1.3% of the top line, which is efficient.

Significant investment in digital freight brokerage platforms to improve load matching efficiency.

The core of Hub Group's digital strategy is the proprietary platform, Hub Connect, which acts as their digital freight brokerage and logistics management tool. This platform is where the investment in load matching and pricing intelligence is centralized. It allows shippers to get rate quotes, schedule new shipments, and manage their entire multimodal network 24/7. This self-service capability is crucial for scaling the Logistics segment, which generated $402 million in revenue in the third quarter of 2025 alone, despite a challenging brokerage environment. The goal is to reduce the human touchpoints in transactional freight, which directly lowers the cost-to-serve.

Here's the quick math: if a digital load-match cuts the brokerage labor cost by 10% on a load, that's a direct margin improvement in a segment where margins are constantly squeezed.

Increased adoption of AI and machine learning for dynamic pricing and route optimization.

Hub Group is defintely using artificial intelligence (AI) and machine learning (ML) to move beyond static planning and into truly dynamic operations. This is where the precision comes in. The company's systems analyze over 10 million data points to power intelligent automation that dynamically adjusts the quoted Estimated Time of Arrival (ETA) for shipments. This is not just a nice-to-have; it's a competitive edge that reduces customer service calls and improves supply chain planning for clients.

The AI-driven systems focus on two critical areas:

• Dynamic Pricing: Adjusting brokerage rates in real-time based on current market capacity, weather, and demand signals.
• Route and ETA Optimization: Processing massive amounts of historical and real-time data to provide real-time, trusted shipment-level ETAs, which is a massive value-add for shippers.

Pilots of autonomous trucking technology in long-haul routes, defintely a long-term shift.

While Hub Group has not announced its own internal autonomous trucking pilots, they are a major intermodal player positioned to be an early adopter of the technology from third-party partners. The near-term opportunity is real: 2025 has seen major autonomous trucking companies like Aurora and Kodiak launch fully driverless operations on select long-haul corridors in the U.S., particularly between major freight hubs in Texas. This is a game-changer for long-haul costs.

What this estimate hides is the regulatory and insurance risk, but the financial opportunity is too big to ignore. For a company that relies on drayage and over-the-road partners, the shift to autonomous hub-to-hub operations will eventually allow them to access cheaper, 24/7 capacity on those long-haul legs, shifting human drivers to the more complex, local drayage and final-mile routes.

Deployment of telematics and IoT sensors on containers and chassis for real-time tracking.

This is arguably Hub Group's most mature technological advantage in the intermodal space. They have a significant asset base equipped with Internet of Things (IoT) sensors and GPS technology to provide end-to-end visibility. This capability is foundational to everything else they do, from dynamic ETAs to improving equipment utilization.

The scale of this deployment is impressive and provides a strong moat against less asset-intensive competitors. They have a fleet of approximately 50,000 GPS-equipped intermodal containers, which are also fitted with cargo sensors to detect door status (open/closed) and movement. This level of granular, real-time data has historically cut container turn times by an average of 30 hours per shipment, which is a massive boost to asset utilization and capacity.

Finance: Monitor the CapEx allocation to technology versus asset replacement to ensure the shift toward a data-driven operating model is accelerating.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Legal factors

You need a clear picture of the legal shifts impacting Hub Group, Inc.'s operations, especially since regulatory compliance directly hits the bottom line in logistics. The legal landscape in 2025 is defined by two major pressures: escalating environmental mandates that drive up equipment costs, and a fragmented state-level data privacy patchwork that complicates customer and employee data handling. We're seeing a push-pull effect: more flexibility is coming in driver hours, but new financial liabilities are emerging in intermodal billing.

Stricter Environmental Protection Agency (EPA) emissions standards for heavy-duty trucks taking effect.

The biggest legal cost driver for Hub Group, Inc. is the Environmental Protection Agency (EPA) Clean Trucks Plan. This plan, which includes the Low-NOx Rule and Phase 3 Greenhouse Gas (GHG) standards, is set to impact the cost and availability of new Class 8 trucks. The Low-NOx Rule, finalized in late 2022 and effective for model year 2027, mandates a near-total cleanup of nitrogen oxide (NOx) emissions, requiring a 90% cut compared to the previous standard, capping it at 0.035 g/bhp-hr in normal operation. This means more complex and expensive aftertreatment systems for new diesel engines.

Also, the Phase 3 GHG standards, finalized in March 2024, require tractor trucks to achieve up to a 40% reduction in CO2 emissions by model year 2032. The immediate risk is the capital expenditure (CapEx) spike. A new diesel Class 8 truck currently costs around $180,000, but an equivalent electric truck, which helps meet these standards, has a price tag closer to $400,000. Here's the quick math: if Hub Group, Inc. replaces just 10% of its owned fleet of approximately 2,500 tractors (as of 2025 estimates) with the new, compliant technology, the incremental cost is significant. The industry is lobbying the EPA to delay the 2027 timeline to 2031, but as of late 2025, the rule stands. You need to budget for higher equipment costs, defintely.

Evolving state-level data privacy laws (like CCPA) requiring new data handling protocols.

The lack of a single federal data privacy law forces Hub Group, Inc. to navigate a complex, state-by-state compliance maze for its logistics and brokerage services. In 2025 alone, eight new state privacy laws are taking effect, including those in Delaware, New Jersey, and Maryland. This patchwork increases the complexity of managing customer, shipper, and employee personal data (Personally Identifiable Information or PII).

These new laws demand more than just a privacy policy update. They require concrete operational changes:

• Mandatory Data Protection Assessments (DPA) for high-risk processing activities, required in states like New Jersey and Connecticut.
• Stricter data minimization principles, limiting collection to only what is necessary.
• The right for consumers to opt out of the sale or sharing of their personal data, often via a universal opt-out mechanism.

For a logistics company operating across state lines, the risk of non-compliance is real. For instance, Connecticut's law allows for civil penalties of up to $7,500 per violation, enforceable by the State Attorney General. This is a massive compliance burden on your IT and legal teams, plus you need to ensure all third-party vendors-like software providers-are also compliant across all 50 states.

Potential for increased regulatory scrutiny on demurrage and detention fees.

The regulatory scrutiny on intermodal fees-demurrage (charges for containers sitting too long at the terminal) and detention (charges for keeping a container too long outside the terminal)-remains a significant legal factor. The Federal Maritime Commission's (FMC) 2024 Final Rule on Demurrage and Detention Billing Practices, mandated by the Ocean Shipping Reform Act of 2022, is largely in effect.

However, a critical legal shift occurred on September 23, 2025, when the U.S. Court of Appeals for the D.C. Circuit vacated one key provision of the FMC's rule. This vacated section had limited who could be billed for these fees. The court's decision means ocean carriers can now resume billing motor carriers, including Hub Group, Inc.'s drayage operations, directly under carrier haulage agreements. This re-introduces a financial liability risk for the company's intermodal division. Still, the core protections remain, which is good for your customers:

The decision to vacate the billing party restriction means Hub Group, Inc. must prioritize clear contractual language in its carrier haulage agreements to explicitly define who is responsible for these charges.

Federal Motor Carrier Safety Administration (FMCSA) changes to Hours-of-Service rules.

The Federal Motor Carrier Safety Administration (FMCSA) is actively exploring changes to the Hours-of-Service (HOS) rules, which govern how long drivers can operate a commercial motor vehicle. In September 2025, the FMCSA announced two proposed pilot programs that could lead to more flexible HOS regulations, a potential opportunity for Hub Group, Inc. to improve driver retention and operational efficiency. The comment period for these proposals closed on November 17, 2025.

These pilot programs aim to address long-standing industry complaints about inflexibility, particularly regarding non-driving time that eats into the 14-hour clock. The two proposals are:

• Split Sleeper Berth Pilot Program: This would allow drivers more flexibility in splitting their required 10 hours of rest, moving away from the current mandate of at least one 7-hour period.
• 14-Hour Rule Pause Pilot Program: This is a big deal, as it would allow drivers to pause their 14-hour driving window for a period of between 30 minutes and 3 hours.

If the pilot programs are successful, showing an equivalent or greater level of safety, the resulting rule changes could allow Hub Group, Inc.'s drivers to mitigate the impact of customer-side delays, like unreasonable detention times at a facility. This could translate to an increase in available driving hours per shift, boosting daily productivity and driver earnings without compromising safety.

Hub Group, Inc. (HUBG) - PESTLE Analysis: Environmental factors

Intermodal services offer a 60% to 75% lower carbon footprint than all-truck long haul.

The single biggest environmental advantage for Hub Group is its core intermodal service (Intermodal and Transportation Solutions segment), which leverages rail for the long-haul portion of freight movement. You are essentially buying a more efficient mode of transport. This modal shift is what allows the company to offer customers a carbon reduction significantly better than all-truck transport.

In terms of quantifiable impact, Hub Group's intermodal service is approximately 68% more efficient than over-the-road trucking on converted lanes. [cite: 5 in step 1] This efficiency translates into massive savings for the entire value chain. For context, in 2022, the company helped its customers avoid nearly 3.1 billion pounds of CO2 emissions and conserve 136 million gallons of fuel. [cite: 5 in step 1] This foundational environmental benefit is a primary driver of new business, especially with major retail and consumer goods customers.

Growing customer demand for verifiable Scope 3 (value chain) emissions reporting.

The pressure on large shippers-your customers-to report their Scope 3 emissions (indirect emissions from their value chain, including transportation) is intense and growing in 2025. You can't manage what you don't measure, so customers demand precise, verifiable data from their logistics partners.

Hub Group directly addresses this by participating in key third-party transparency programs. The company is an active participant in the EPA SmartWay freight sustainability program and a respondent to the CDP's Climate Change assessment. Honestly, this is table stakes now. To be fair, the company has also implemented a transaction-based CO2 calculator to provide customers with detailed, shipment-level emissions data from the moment of reception to final dispatch, which is a key differentiator in a competitive market. [cite: 8 in step 1]

Increased adoption of alternative fuels, like Renewable Natural Gas (RNG), for drayage fleets.

While the long-haul is covered by rail, the local drayage segment-the short-haul trucking to and from the rail yards-is where Hub Group faces its most significant direct emissions challenge. The industry trend for cleaner drayage is clear: a shift to Renewable Natural Gas (RNG) and Battery-Electric Vehicles (BEVs).

RNG supply has surged, increasing by 234% over the last six years, and the number of fueling stations offering it has grown by 63%. [cite: 11 in step 2] Hub Group has a stated electric truck program and has piloted the use of electric vehicles (EVs), but a broad transition is not yet planned, citing dependence on EV availability and charging infrastructure. This is a strategic area where the company must accelerate investment to maintain its environmental leadership, especially as Class 8 electric tractor registrations climbed 29% in 2024. [cite: 11 in step 2]

Risk of operational disruption from extreme weather events due to climate change.

Climate change risk is no longer theoretical; it's an operational reality that hits the bottom line. Extreme weather events-from hurricanes to severe winter storms-disrupt rail lines and highway networks, which are the backbone of Hub Group's intermodal service.

The U.S. experienced 24 weather and climate disasters, each causing losses over $1 billion, in the first 10 months of 2024 alone. [cite: 15 in step 1] This forces the company to maintain a robust Service Advisory system to manage disruptions. The financial impact is reflected in the cost of managing operational risk; the company's Insurance and claims expense for Q3 2025 was $10 million, a 1% increase from the prior year, reflecting the rising cost of risk in a volatile climate.

• Mitigate risk through network diversification and real-time visibility.
• Anticipate rising insurance and claims costs due to climate volatility.
• Factor climate risk into capital expenditure (CapEx) for terminal resilience.