GXO Logistics is positioning North America as its central growth engine in 2026, betting that reshoring, tariff-driven supply chain redesign and accelerating automation will fuel margin expansion and free cash flow gains.
The Greenwich, Connecticut-based contract logistics provider reported fourth-quarter 2025 adjusted earnings of approximately 87 cents per share on $3.5 billion in revenue last week.
The fourth-quarter results beat Wall Street expectations, while reflecting continued top-line momentum as GXO invests in growth and automation.
In an interview with FreightWaves, CEO Patrick Kelleher said those investments are designed to position the company for expanded margins and stronger growth in the U.S., Canada and Mexico.
“North America is a top priority for us for organic growth,” Kelleher said. “North America is about a third of our business, and we think could be substantially bigger. I see North America as about a $250 billion contract logistics market for us and growing.”
Related: GXO sees stable North American freight demand, cautious on volumes in 2026
Tariff-driven shifts fuel outsourcing demand
Trade uncertainty and evolving tariff policy briefly slowed some customer decision-making, Kelleher said, but supply chain redesign is now picking up pace — creating opportunity for outsourced logistics providers.
He said decision-making “was paused almost as a result of some of the tariff decisions and the changing landscape around trade,” but activity is now thawing.
“The changing trade landscape is, I think, having a very positive impact on the contract logistics industry, and especially GXO and the pipeline of opportunities that we’re chasing,” Kelleher said.
GXO Logistics (NYSE: GXO) is one of the largest pure-play contract logistics providers in the world. It has more than 970 facilities totaling approximately 200 million square feet, with a global workforce of more than 130,000 people.
GXO operates 67 free trade zones and bonded facilities globally and is rethinking its North American footprint to support reshoring and nearshoring activity, including along key U.S.-Mexico trade corridors.
Kelleher pointed to aerospace and defense, industrial technology and life sciences as verticals with above-GDP growth potential in North America.
Automation as margin lever
Automation and robotics remain central to GXO’s long-term margin strategy.
The company has more than 20,000 robots deployed globally and is piloting humanoid robots in live warehouse environments, with a production-ready demonstration expected this year in California.
“Humanoids are going to be one of those technologies. I think it’s game-changer technology for the supply chain industry,” Kelleher said.
GXO is also rolling out its centralized data and AI platform, GXO IQ, across more than 1,200 operations globally to standardize tools, improve labor planning and drive productivity gains.
2026: Margin expansion, free cash flow, disciplined capital allocation
Despite near-term EPS pressure tied to growth investments, Kelleher said GXO expects margin expansion of roughly 20 basis points in 2026.
The company is targeting improved free cash flow conversion while continuing to invest in automation, digital marketing and operational execution.
“We’re focused on forecasted improvement in free cash flow conversion in 2026 over what we delivered in 2025,” Kelleher said
GXO is simultaneously paying down debt — currently around 2.5x leverage with a goal of closer to 2x by year-end — creating flexibility for potential M&A in North America and targeted strategic sectors.
As reshoring, nearshoring and trade realignment reshape freight flows, Kelleher said volatility favors GXO’s outsourced model.
“When customers change, we play a big role in helping our customers thinking through and making those changes,” he said.
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