XPO Logistics announces plan to add more LTL dock doors

Greenwich, Conn.-based freight transportation services provider XPO Logistics said today it is opening up two new less-than-truckload (LTL) terminals in the second quarter, which are located in Adelanto, Calif. and Conley Ga.

A company spokesperson told LM that with these new terminals, XPO is adding capacity in two strategically important areas, as well as moving XPO closer to one of its stated five-point LTL action plans: to open 900 doors by the end of 2023. With the two new openings, XPO said it will have added 345 cumulative net new doors under the plan.

“We’re making strategic investments to optimize our network for the long-term,” said Mario Harik, acting president, less-than-truckload, and chief information officer of XPO Logistics, in a statement. “In California, demand is on the rise from manufacturing and retail expansion in the High Desert area. Atlanta is one of the largest LTL regions in the South, and a freight gateway into Florida. We’ll continue to add capacity where it will be most effective in driving efficiency, growth and returns.”

XPO offered up specifics on these new terminals, including:

• the Adelanto, California terminal will expand XPO’s footprint in San Bernardino County, where an influx of business development is driving demand for LTL services, adding that the 51,500 sq. ft. facility includes 99 doors and a freight assembly center, and is expected to open this month; and
• the Conley, Georgia terminal will be a sister site to XPO’s existing terminal and freight assembly center in Atlanta, adding pickup-and-delivery capacity in a high-volume metropolitan area, saying that the 55,000 sq. ft. facility has 97 doors and is expected to open in May

XPO noted that today’s initiatives represent the company’s progress with its five-point LTL action plan that was introduced in October 2021, which focuses on: continuously improving network efficiencies to best serve customers; continuing to deploy proprietary pricing technology; increasing the annual graduate count in the company’s national truck driver training network; increasing production at the company’s trailer manufacturing facility in Arkansas; and adding 900 net new doors to the network by the end of 2023.

XPO’s Chief Investor Relations Officer Tavio Headley told LM in February of this year that in looking back at the fourth quarter, coupled with XPO beating expectations and issuing strong 2022 guidance that the company’s LTL five-point action plan has also been working very well.

“What we saw from an operational standpoint is as we went through the quarter, we gained momentum on a slew of metrics and that momentum carried over into January,” he said.

Addressing LTL, Headley observed that quarterly yield, excluding fuel, was up 11% annually, representing its highest annual quarterly growth rate, going back to when it acquired Con-way Freight in 2015, to launch its LTL operations, nearly doubling the previous record set in the third quarter. The fourth quarter LTL operating ratio, excluding real estate, came in at 87.5%, a degradation of 300 basis points annually.

When XPO implemented its five-point LTL action plan in October 2021, within weeks of the implementation, Headley said XPO saw significant improvements in network fluidity, on-time transit, yield, employee satisfaction, and customer satisfaction. And, in terms of additional capacity, he said XPO is on track to add about 900 net new doors by the end of 2023, a 6% increase over current levels.

In March, XPO said it plans to spin off its North American truck brokerage from its less-than-truckload business, as well as its related asset-light businesses. What’s more, XPO also announced it plans to divest its XPO Europe business and is also in exclusive negotiations with a buyer for the sale of its North American intermodal business.

Upon the completion of these initiatives, which are expected to be done by the fourth quarter of this year, XPO officials said that it will create two focused, publicly-traded companies at the top of their industries.

“Our two core businesses of North American less-than-truckload and tech-enabled truck brokerage are industry-leading platforms in their own right, each with a distinct operating model and a high return on invested capital,” said Brad Jacobs, chairman and chief executive officer of XPO Logistics, in a statement. “We believe that by separating these businesses through a spin-off, we can significantly enhance value creation for our customers, employees and shareholders, as we did with our successful spin-off of GXO last year.”

On the LTL side, XPO said the when the spin-off is official it will be a “pure play LTL industry leader” and the third largest provider of domestic and cross-border LTL freight shipping, with a competitively advantaged network of transportation assets managed by proprietary technology.