With a keen last mile focus, XPO opens up 8 new hubs

XPO Logistics, a provider of global freight transportation and logistics services, is taking further steps to cement its position as the largest last mile logistics services provider in North America, with today’s announcement that it has completed the opening of eight last mile logistics hubs in advance of Black Friday on November 24.

These new XPO hubs are based in Birmingham, Ala.; Buffalo, N.Y.; Jacksonville, Fla.; Los Angeles, Calif.; Milwaukee, Wisc.; Savannah, Ga.; Tulsa, Okla.; and Washington, D.C., bringing the total number of the XPO’s North American last mile network hubs to 53, with plans to add another 30 next year

XPO said these new hubs represent part of plans it announced to expand its last mile footprint to 85 hubs by late 2018. XPO’s last mile service facilitates more than 13 million deliveries on an annual basis. 

“We’re anticipating strong demand this holiday season, as more people are purchasing heavy goods online,” said Troy Cooper, XPO chief operating officer, in a statement. “Our last mile expansion is directly related to the rapid growth of e-commerce and omnichannel retail. The scale of our network speeds fulfillment, while our technology gives retailers, e-tailers and consumers control over the shopping experience. These are critical components of ensuring consumer satisfaction with digital purchases.”

In an interview with Logistics Management earlier this year, Charlie Hitt, president of XPO’s last mile business unit, said that XPO needs to invest in what its customers are having happen in the growth of their business, particularly in e-commerce.”

The impact of a rapidly growing e-commerce market on the last mile sector, especially for heavy goods, is something that cannot be overstated, added Hitt.

In May, XPO announced its plans to expand its last mile network in the Greater Chicago area through the expansion of its “Chicagoland” facility in Bolingbrook, Ill.

This new facility doubles the capacity of XPO’s Chicago-based market delivery center (MDC), which serves large retailers, e-commerce service providers, and heavy goods manufacturers, to almost 100,000 square feet. Chicago is one of XPO’s three busiest and fastest-growing markets nationwide.

XPO defines the MDC as a facility that receives product, schedules product, and, as needed prepares and assembles product at that site before it heads out to delivery. It also takes care of customer service issues, and conducts a “check in” of product that comes off of trucks for reverse logistics products that need to go back to a retailer or manufacturer for any reason. Forward stocking is also part of its offerings, as is necessary for customers, as well as other services customers may require, including installation services and assembly services that it can initiate from an MDC location.

XPO has 46 U.S.-based MDCs ranging from 20,000 to 200,000 square feet, with more than 62 percent of the U.S. population living within 75 miles of an XPO MDC and 77 percent living within 125 miles of one.

In early October, XPO said it plans to roll out a new interactive last mile technology in November, which, it said, will help consumers manage retail home deliveries. 

XPO said that this web-based offering is geared towards meeting what it called the unique requirements of heavy goods bought by consumers via e-commerce and traditional, or bricks-and-mortar stores. And it added that the main objective of this new offering is to provide consumers with personal visibility and control over the delivery of heavy goods, appliances, and furniture. These types of shipments, it added, typically require a person to be available in order to take the delivered item into a residence, as opposed to package shipments that can be dropped off. 

Some examples of the features that this last mile technology offers consumers, cited by XPO, include managing orders in real time, rescheduling delivery times electronically, integrating calendars and opting to receive weather and traffic alerts, as well as providing consumers with the flexibility to set their preferences like notifications through e-mail, text message, or voice.

On XPO’s third quarter earnings call last week, XPO Chief Strategy Officer Scott Malat said that XPO is currently seeing a growth rate of 10%-15% for its heavy good last mile offerings over the next 12-to-18 months.

“You have to understand the different pieces of last mile,” said Malat. “One is dedicated, which is the more common type of last mile business where we're delivering off the dock of a retailer. The larger growth aspect is in the e-commerce network, which is comingled freight, which is using the hubs. What we see over time is a lot more of that volume shifting over from a dedicated business to comingled freight that flows through our hubs, and that's why you are seeing us double our hubs. So what that does is improve the amount of service we can provide to the large retailers that once had – that might be decreasing the size of their footprint. But more importantly, it allows us to provide a national presence for e-commerce customers and grow that business.”