XPO Logistics completes rebranding of North American LTL business

While it has had a full-fledged less-than-truckload (LTL) fleet since shortly after acquiring Con-way in late 2015, freight transportation and logistics provider XPO Logistics said today that the former Con-way LTL business, Con-way Freight, has officially been re-branded as XPO’s North American LTL business, with this rebranding aligning the XPO North American LTL operations with its Europe-based operations.

Tony Brooks, president of XPO’s LTL business, explained in an interview yesterday that this rebranding effort ran in parallel with a material evolution of the culture and where XPO wanted to take the Con-way Freight organization.

“It is a significant project and hugely successful,” said Tony Brooks, president of XPO’s LTL business, in an interview. “It was very well coordinated and a collaborative effort across all of our teams. For a nine-month period, we took the existing Con-way Freight fleet with it more than 8,000 tractors and 25,000 trailers and put the XPO brand on them. We also put new signage on more than 300 facilities in our network and outfitted more than 14,000 of our drivers and dockworkers and mechanics with new XPO-branded uniforms. It was a major undertaking pulled off in a definitively successful way. We are very excited about where we started and where we are today. To be able to see XPO trucks roll down the highway, and it is highly inspirational to all of us.”

And he added that seeing the transition from Con-way to XPO happen is pretty remarkable. During the transition phase, he said XPO was able to improve its LTL operations in terms of service efficiency, which has never been better.

What’s more, he said to be able to rebrand and remain essentially transparent to customers is a great testimony to what the LTL team was able to accomplish.

“We are proud of the work people did here,” he said. “One of the things which is a hallmark of what we are trying to do at XPO LTL is that we believe that we are the best service provider in the industry and we are going to work on building that. We are excited about where we are going. The new clean, crisp look of our brand really does speak to our purpose of quality, efficiency, and delivering a great service to our customers.”   

XPO’s less-than-truckload segment, which is the second largest less-than-truckload provider in North America, covering 99% of U.S. zip codes and providing more next-day and two-day lanes than any other LTL carrier, had a 390 basis point operating ratio improvement at 89, with operating income up 49 percent annually at $95.5 million. The LTL segment accounts for 24 percent of the company’s gross revenue, and its projected industry growth rate is 1-1.5xGDP.

On its recent first quarter earnings call, XPO said that its LTL segment is ahead of plan to improve annual profit by $170-$210 million by late 2017, having already topped $175 million in improvement.

XPO’s LTL business saw numerous across the board annual operating metric gains in the first quarter, including:

• pounds per day up 4.8 percent at 75,221;
• shipments per day up 1 percent at 54,004;
• average weight per shipment up 3.8 percent at 1,393;
• gross revenue per hundredweight, including fuel surcharges, up 1.3 percent at$18.92; and
• gross revenue per shipment up 4.8 percent at $263.47

In a recent interview with LM, XPO Chairman and CEO Brad Jacobs said that XPO has had major success on the LTL side, with that success story continuing.

“The 49 percent gain in operating income really says it all,” he said. “And so goes the operating ratio improvement. We dramatically improved the profitability of the LTL business since we bought it in October 2015.”

As an example, he pointed out that when XPO bought Con-way, Con-way Freight had a trailing 12-month EBITDA of roughly $387 million, which XPO has improved since then to $585 million over five quarters.

“When you look at this LTL business with an OR in the mid-90s before we bought it, we have improved the OR by more than 500 basis points since then,” he added.