XPO to roll out four IT initiatives to support LTL unit, Jacobs says

XPO’s LTL unit will gain millions from IT improvements, Jacobs says. (Photo: Shutterstock)

XPO Logistics Inc. (NYSE:XPO) will announce tomorrow the launch of four technology initiatives for its less-than-truckload business, projects its chairman and CEO said tonight will result in $100 million in profit improvements after two years and then $100 million a year in increased profits thereafter.

The tools include the use of artificial intelligence for load-building and cross-docking improvements, advanced algorithms to strengthen the company’s line-haul network, algorithms to maximize pricing efficiency, and dynamic route optimization that functions in much the same way as digital apps like Waze which guide motorists around traffic chokepoints and accidents.

In aggregate, the features should dramatically elevate productivity for XPOs multi-billion dollar LTL business, according to Brad Jacobs, XPO’s founder, chairman and CEO.

Earlier this month, XPO rolled out a tool to strengthen bid communications between its brokerage business and its network of motor carriers. More than half of XPO’s brokered loads are offered to carriers electronically, a figure that Jacobs said demonstrates a profound change in how brokers and carriers transact business.

In addition, the Greenwich, Conn.-based company has completed the installation of automated labor management tools to improve worker productivity at 225 of its largest contract logistics facilities in the U.S. and Europe. Jacobs said he expects the systems to yield 2 to 5 percent productivity gains of between 2 and 5 percent, which over the unit’s $6 billion revenue base is a “huge” savings.

News of the I.T. initiatives comes as XPO released its third-quarter results today after the market closed. Revenue increased 11.5 percent year-over-year to $4.3 billion, with organic revenue growth of 10.5 percent outpacing the industry, according to Jacobs. Net income rose to $100 million, a $43 million gain over the year-earlier period

Revenue for the company’s North American logistics segment rose 18 percent year-over-year, the segment’s fastest year-on-year revenue growth rate in its history. The company said it closed $918 million in new business in the quarter, up 43 percent from a year ago.

The company continues to talk with prospective sellers about acquisitions, Jacobs said. Activity has perked up as valuations have eased, he said, adding that potential sellers appear more “reasonable and motivated.”

XPO, which acquired and integrated 17 companies in four years in a strategy that was unprecedented for this industry, last made an acquisition in September 2015 when it bought trucking and logistics giant Con-way Inc. for $3 billion. XPO had planned to make 1 to 2 acquisitions during 2018, and has built- a multi-billion dollar war chest to do so.

Show More

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

One Comment

  1. i wouldnt use xpo logistics. ive seen employees steal top of the line things. there weak, no control of whats going on

  2. fuck their surveillance. one camera , you kidding me. theyve been hit in many terminals.

  3. they have no one on the dock. they lie. i can give u alot of 411. i wouldnt work their if they paid me daily. i can shoot you 411 u wouldnt believe. shit happens right under their supervisors nose and they cant see it. its a blind company. the manager never comes out of his office, too busy on the phone