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XPO, Inc.

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XPO Logistics, Inc
Company typePublic
NYSE: XPO
PredecessorExpress-1 Expedited Solutions Inc.
Key people
Bradley S. Jacobs (Chairman & CEO)
ServicesSupply chain services provider of freight transportation and logistics services - freight brokerage, intermodal, drayage, contract logistics, last mile logistics, ground and air expedite, global freight forwarding, managed transportation
Revenue$15 billion (pro forma for 2015 acquisitions) [1]
Divisionstransportation and logistics[2][3]
Websitewww.xpo.com

XPO Logistics, Inc. is a US corporation and a provider of supply chain services in 32 countries. The company has annual revenue of approximately $15 billion, with more than 1,450 locations and a workforce of over 84,000 employees. Its corporate headquarters is located in  Greenwich, Connecticut USA, and its European headquarters is in Lyon, France. The company serves customers in the retail, e-commerce, manufacturing, food and beverage, high tech, healthcare, aerospace, telecom, agri-business and chemical sectors, among others. [4]

Globally, XPO Logistics is the second largest freight brokerage firm by net revenue; and the second largest contract logistics provider by square footage of facility space. [5]The company is a major provider of managed transportation services, with approximately $2.8 billion of freight under management for shippers that outsource their transportation planning and execution, including carrier procurement. Additionally, the company has a global freight forwarding business that arranges freight movements to or from North America, Europe and Asia.

In North America, XPO Logistics is the largest provider of home delivery and installation of heavy goods, known as last mile services; and the largest manager of urgent shipments, known as expedited services. The company is the second largest provider of less-than-truckload (LTL) transportation in North America; the third largest provider of domestic intermodal services; and a leader in cross-border Mexico intermodal. Intermodal transportation is the movement of long-haul, containerized freight by rail, often with a drayage (trucking) component at either end. The company operates one of the largest drayage networks in the United States, with capacity provided by independent carriers. In Europe, the company has the largest owned truck fleet; and the largest platform for outsourced e-fulfillment; as well as the largest palletized (less-than-truckload) network in Western Europe. [6]

The company’s transportation and logistics operations include facilities for warehousing, e-commerce fulfillment, reverse logistics, packaging and other supply chain management functions; and cross-dock terminals and service centers that are utilized by its less-than-truckload, truckload, last mile, drayage and expedite networks. The company’s owned transportation assets include 19,000 tractors, 46,000 trailers, 11,000 intermodal containers, [X,XXX] container chassis, and [X,XXX] double-stack railcars. The company generates approximately one-third of its revenue from its asset-based operations.

XPO Logistics began as a public company formerly known as Express-1 Expedited Solutions Inc. and traded as AMEX: XPO. The company was renamed XPO Logistics in September 2011, following an investment of up to $150 million in cash led by American businessman Bradley S. Jacobs.[7][8][9][10] Jacobs became the company’s largest shareholder, and assumed the positions of chairman and chief executive officer. As of June 14, 2012, XPO Logistics transferred the listing of its common stock to the New York Stock Exchange and retained the symbol XPO.[11][12][13]


History

Express-1 Expedited Solutions was founded in May 1989 by Michael R. Welch and Keith Avery, with a focus on the transportation of time-critical, high-value shipments.[14] The company was purchased in August 2004 by the transportation firm Segmentz, Inc., a public company that subsequently went through a restructuring to close unprofitable business units. In 2006, Segmentz changed its name to Express-1 Expedited Solutions, and began trading its stock under the symbol XPO.[15][16] In May 2003, one of the company’s business units, Express-1 Dedicated, was awarded a contract to provide dedicated transportation services to Ford Motor Company, a contract that would yield approximately 90 percent of the business unit’s revenue.[17] The Dedicated unit ceased operations in February 2009 following the conclusion of the Ford contract.

Express-1 acquired Concert Group Logistics, Inc., a non-asset based freight forwarder, in January 2008[18] Two months later, Express-1 launched Bounce Logistics, Inc., a business unit providing freight brokerage services. In February 2009, the firm acquired First Class Expediting Services, Inc. to strengthen its operations in the Midwest.[19] In October of that year, the firm expanded its international services with the acquisition of LRG International, Inc., a global freight forwarding company.[20][21]

In September 2011, Express-1 became the vehicle for Bradley Jacobs’ entry into the transportation logistics industry, an industry that Jacobs viewed as ripe for consolidation.[9] Jacobs had previously spearheaded the consolidation of the waste management and equipment rental industries in North America through an aggressive strategy of cold-starts of greenfield locations as well as acquisitions.[22] By leading an investment in the company of up to $150 million, including up to $135 million from his investment firm, Jacobs Private Equity LLC,[8] Jacobs gained ownership of approximately 71 percent of the company.[23][24] He announced plans to move the headquarters from Michigan to Greenwich, Connecticut, and changed the company's name to XPO Logistics, trading under the symbol XPO on the NYSE AMEX Exchange. On October 12, 2011, Jacobs rang the bell to open the Exchange.[25]

To support its plans for growth, XPO opened a national operations center in Charlotte, N.C., in March 2012.[7][26][27] XPO selected Charlotte in part because of as much as $4.3 million in state incentives. North Carolina’s Economic Investment Committee awarded XPO a Job Development Investment Grant, making it eligible to receive a maximum benefit package of $3.22 million. Another $1.07 million would come from the state’s utility fund for infrastructure improvements.[28]

On March 12, 2012, XPO announced an underwritten public offering of 6 million shares of common stock.[29] Three days later, the company increased the offering to 8 million shares, at $15.75 per share.[30] The IPO closed at 9.2 million shares of common stock, with net proceeds of roughly $136.7 million.[31] On May 8, 2012, the company completed the purchase of Continental Freight Services, Inc., a $22 million freight brokerage firm in South Carolina.[32][33] On June 14, 2012 XPO Logistics listed its shares on the New York Stock Exchange and Jacobs again rang the bell to open the Exchange.[34]

XPO Logistics completed the purchase of Kelron Logistics, Inc., a $100 million truck broker based in Canada, in May 2012.[35][36] This was followed in October 2012, with the purchase of BirdDog Logistics, LLC, a $7 million freight brokerage operation in North Carolina.,[37] and also the purchase of Turbo Logistics, Inc., the freight brokerage division of Ozburn-Hessey Logistics, LLC for $50 million.[37][38] At the end of November 2012, Bradley Jacobs confirmed that there was "about $265 million on the balance sheet" to fund "maybe 3,4,5 acquisitions a year".[10]

The company's first purchase of 2013 was the February 8 acquisition of East Coast Air Charter, Inc., a $43 million expedited air charter brokerage firm in North Carolina.[39] The second acquisition of 2013, also in February, was XPO's purchase of Covered Logistics & Transportation LLC, a third party freight brokerage business with 2012 revenues of approximately $27 million.[40]

In March 2013, Gov Pat McCrory's office announced that XPO Logistics was to expand its Charlotte operations center, bringing 287 new jobs by the end of 2014.[41][42]

Four months later, in July 2013, XPO announced that it entered into a definitive agreement to acquire all of the common stock of 3PD Inc. in a transaction valued at approximately $365 million. 3PD was the largest third party provider of last mile logistics for heavy goods in North America.[43] This purchase was completed on August 16, 2013, giving XPO Logistics North American leadership of the heavy goods home delivery sector.[44]

That same month, XPO announced the closing of a registered underwritten public offering of 9,694,027 shares of common stock at a price to the public of $22.75 per share.[45] In November of 2013, the company announced that it had rebranded its formerly named Concert Group Logistics (CGL) division as XPO Global Logistics, to better reflect the role of freight forwarding within the company’s broader service offering.[46]

On November 15, 2013, XPO announced that it had acquired Optima Service Solutions, LLC, a leading provider of last mile logistics services for retailers and manufacturers, for a cash purchase price was $26.6 million.[47][48]

On December 28, 2013, XPO completed the acquisition of NLM from Landstar System, Inc. The acquisition made the company the largest manager of expedite shipments in North America with the addition of industry-leading transportation management technology for expedite load assignment. The company funded the $87 million cash acquisition through its ABL facility and available cash, including approximately $13.4 million of cash acquired on closing. [49] [50]

On March 31, 2014, XPO became the third largest intermodal provider in North America with its acquisition of Pacer International, Inc. in a cash and stock transaction valued at approximately $335 million. XPO financed the cash portion of the acquisition and related fees and expenses through a combination of cash on hand and a portion of the net proceeds of a $414 million public offering of common stock. Intermodal refers to a combination of freight transportation by rail, with a truck component at either end, and is viewed favorably by some shippers as an alternative to trucking for long-distance freight movement. XPO facilitates approximately 10 percent of all domestic intermodal freight movements and is the largest provider of intermodal services between the U.S. and Mexico.[51][52][53]

On July 28, 2014, XPO acquired last mile logistics provider Atlantic Central Logistics (ACL) for a cash purchase price of $36.5 million. At the time of acquisition, ACL provided last mile logistics through approximately 200 contracted carriers and 160 employees at 14 East Coast locations. The ACL network focused on serving the burgeoning demand for e-commerce fulfillment by facilitating the time-sensitive, local movement of goods between distribution centers and the end-consumer. These operations have been integrated as part of XPO's last mile business.

On September 2, 2014, XPO Logistics acquired New Breed Logistics, a preeminent U.S. provider of highly engineered contract logistics solutions for blue chip customers. The acquisition expanded XPO’s 2014 operations to 203 locations and approximately 10,400 employees. XPO financed the $615 million cash purchase price with the proceeds from its August 2014 private placement of $500 million of senior notes and available cash on hand. With the acquisition of New Breed, XPO gained specialized, technology-enabled services for omni-channel distribution, reverse logistics, transportation management, freight bill audit and payment, lean manufacturing support, aftermarket support and supply chain optimization. These services are concentrated in industries with high-growth outsourcing opportunities, including telecom/technology, retail/e-commerce, aerospace and defense, medical equipment and select areas of manufacturing.[54][55]

On September 11, 2014, XPO announced that it had entered into a definitive agreement with PSP Investments, GIC, which is Singapore’s sovereign wealth fund, and Ontario Teachers’ Pension Plan to invest $700 million in XPO to accelerate the company’s growth strategy.[56]

XPO furthered its growth strategy in 2015 by announcing, in February, the $59 million acquisition of UX Specialized Logistics, a North American provider of heavy goods last mile logistics services for major retail chains and e-commerce companies. UX had approximately 700 employees and contracted capacity of over 1,600 independent carriers and installers. XPO also gained a large courier service for same-day and next-day deliveries in the New York metro area. All of the former UX services now operate as part of XPO's last mile network. [57]

On April 28, 2015, XPO announced a $3.53 billion (3.24 billion euros) deal to acquire major French logistics group Norbert Dentressangle. The acquisition, completed on June 8, 2015, gave XPO global scale as a top ten worldwide logistics company with approximately 52,000 employees serving over 30,000 customers, and 863 locations in 27 countries. XPO became a leading European e-fulfillment provider and gained European platforms for freight brokerage, palletized (LTL) transportation, managed transportation, dedicated and owned truckload services, and global freight forwarding. XPO also became the second largest contract logistics provider in the world based on square footage: over 120 million square feet of facility space. [58][59] XPO holds an 86.25% controlling interest in Norbert Dentressangle SA. The remaining Norbert Dentressangle stock is traded as GND on Euronext Paris / Euronext London - Isin FR0000052870.

In May 2015, XPO Logistics acquired Bridge Terminal Transport (BTT), a leading U.S. provider of drayage services with a network of 28 terminals and approximately 1,300 independent owner operators. With BTT, XPO gained approximately 250 employees and 1,800 customers, including many multinational customer relationships that span nearly two decades. The acquisition significantly expanded XPO's drayage capacity on the East Coast and enhanced its intermodal offering. [60]

On October 30, 2015, XPO acquired national transportation provider Con-way Inc., a major transportation and logistics provider, in a transaction valued at approximately $3 billion.[61] [62][63] The acquisition made XPO the second largest less-than-truckload (LTL) provider in North America; increased the company’s contract logistics facility space to over 151 million square feet worldwide and expanded its managed transportation, freight brokerage and truckload services. On November 4, 2015, XPO named veteran trucking executive Tony Brooks as president of its LTL business.[64]

By acquiring Con-way, XPO further diversified its ground transportation model in North America to include brokered, owned and contracted capacity, similar to its transportation network in Europe. The company’s truck assets include approximately 19,000 owned tractors and 46,000 owned trailers.[65] Additional capacity is provided to customers through 10,000 trucks contracted through independent owner operators, and access to more than 50,000 independent carriers.[66]

Operations

XPO Logistics is a leading global provider of transportation and logistics services, with a broad supply chain offering that includes truck brokerage and transportation, less-than-truckload, contract logistics, intermodal, drayage, last mile logistics, expedite, global freight forwarding and transportation management. XPO’s freight brokerage business primarily facilitates the shipment of goods carried by truck, including the last mile delivery of heavy goods such as appliances and home electronics. Its expedite business places urgent shipments with ground and air carriers, and its freight forwarding division focuses on global export and domestic shipments.[2] In addition, XPO is the second largest contract logistics service provider globally, based on its 151 million square feet of warehouse space. XPO serves more than 50,000 customers with a highly integrated network of over 84,000 employees and more than 1,450 locations in 32 countries. The company’s operations are part of the SmartWay Transport Partnership, a program administered by the U.S. Environmental Protection Agency under which freight shippers, carriers and logistics companies collaborate to voluntarily achieve improved fuel efficiency and reduced emissions.[67]

Awards and recognition

  • National Shippers Strategic Transportation Council Expedited Carrier of the Year Award – 2009, 2010[68][69]
  • Inbound Logistics Top 100 Motor Freight Carrier – 2010[70]
  • Great West Casualty Co. National Safety Awards Program Gold Award – 2010[71]
  • Whirlpool Special Services Supplier of the Year Award – 2011[72]
  • UPS Urgent Services Carrier of the Year Award – 2011[73]
  • SupplyChainBrain Great Supply Chain Partner – 2011[74]
  • TT News Top 25 Freight Brokerage Firms – 2012[75]

References

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  2. ^ a b "Profile:XPO Logistics Inc". reuters.com.
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