Q&A: Ali Faghri, Chief Strategy Officer, XPO

Logistics Management Group News Editor Jeff Berman recently interviewed Ali Faghri Chief Strategy Officer at Greenwich, Conn.-based national less-than-truckload (LTL) carrier XPO. Faghri provided Berman with a detailed overview of the LTL market, economic conditions, and how XPO is leveraging AI, among other topics, in the interview below.

Logistics Management (LM): How would you describe the current state of the freight economy? 

Ali Faghri: The freight economy remains soft, with LTL volumes well below pre-Covid levels. That reflects the weakness in the industrial economy, which is the core customer base for LTL carriers like XPO. When industrial manufacturing picks back up, which could be spurred by a lower interest rate environment and legislation like the Big Beautiful Bill, we expect LTL volumes to rebound. 

LM: How do you view the impact of tariffs and U.S. trade policy on the LTL market?

Faghri: Tariffs should be a long-term tailwind for the LTL market as more manufacturers will shift production to the U.S. When a factory moves stateside, both raw materials and finished goods move on American trucks, not just the final product. Domestic production also encourages faster cycle times, with manufacturers incentivized to get products off their premises quickly for the working capital benefit. This leads to smaller, straight shot shipments which are ideal for LTL. Increasing clarity on tariff policies should accelerate these trends, as shippers have held back on capital spending. 

LM: As a follow-up, how would you describe some of the key differences in the market between what happened during the pandemic and now in this current uncertain market (adjusting to shifts in trade policy etc.)” 

Faghri: When the pandemic hit in early 2020, manufacturing and consumer goods activity fell sharply before roaring back. That surge drove record demand for LTL freight transportation, and many carriers didn’t have the doors, trailers, or people to keep up. The current freight recession has been more prolonged, and further capacity has exited the industry during this time. When industrial activity picks up and LTL volumes rebound, there is a very short list of carriers with the necessary capacity in place. 

At XPO, we’ve invested throughout the downcycle to be ready when the market turns. We currently have around 30% excess door capacity, which is the sweet spot for an LTL carrier at the bottom of the cycle. We’ve opened more than two dozen new service centers in key freight markets and built over 18,000 new trailers at our in-house manufacturing plant since late 2021. We’ve also added nearly 6,000 tractors resulting in our lowest fleet age ever. This positions us to support our customers when demand rebounds and the industry faces another capacity crunch. 

LM: How do you view the impact of e-commerce on the LTL market? 

Faghri: E-commerce has driven new demand for LTL freight transportation, while raising transit time expectations of both shippers and consumers alike. Retailers have redesigned their distribution models to keep up with demand, and need carriers that can handle smaller, more frequent shipments with speed and precision, while providing end-to-end visibility. XPO has benefited from this shift because our network, technology, and service quality align well with what e-commerce shippers value most. 

LM: How did XPO prepare for the recent National Motor Freight Classification (NMFC) changes that went into effect earlier this year? 

Faghri: When the recent NMFC changes were proposed, our focus was helping customers navigate the transition smoothly. Education played a major role. Our sales team met with customers to review their freight mix, discuss possible classification changes and reinforce best practices around packaging and BOL (bill of lading) completion. 

 We also made updates to our internal processes to ease the transition. For example, we added a section on our BOL template for freight sub-item numbers and integrated the NMFTA’s ClassIT+ into our website so customers can easily determine their commodity’s NMFC item number, density, and class. As a result, the transition has been smooth for our team and our customers.

LM: What are your thoughts on the 2025 Peak Season?

Faghri: For many shippers, especially in retail, the holiday season is make-or-break. Freight needs to arrive on time and damage-free, with no margin of error. We’ve seen strong demand for our Premium Services this peak season to help meet these critical timelines and retailer requirements. More companies are using our Rollout Service to get seasonal displays into stores, while others are relying on our Grocery Consolidation Delivery service to position freight in grocery warehouses ahead of the holiday rush. These services are built for high-stakes shipments and offer priority handling, dedicated support and strong on-time performance.

LM: How do you view the current LTL pricing environment?

Faghri: Pricing remains constructive. LTL is a cost inflationary business, and customers understand that we need to invest in our people, network, equipment, and technology to deliver world-class service. The industry is also capacity constrained, with fewer terminals and doors than before the pandemic. Customers understand this dynamic and want to partner with carriers like XPO that will have the capacity and service to support them today and when the cycle starts to turn.

LM: How would you describe the current state of LTL service?

Faghri: In a soft demand environment, service matters more than ever. At XPO, we’ve invested heavily in our service quality over the past few years. This includes rolling out new tools for our employees in the field to secure freight, enhancing training to further improve loading and introducing new incentive programs to reward teams who achieve rigorous quality targets. In the third quarter of 2025, we reduced damages to the best level in our history and improved on-time performance for the 14th consecutive quarter.

LM: What are your shipper LTL customers telling you, in terms of what their biggest pain points are, or needing most from a carrier like XPO?

Faghri: Shippers want an LTL carrier they can trust as an extension of their team. That starts with consistent, damage-free, on-time service, but it also includes solving more complex shipping challenges. Over the past year, we’ve seen rising demand for our Premium Services that help customers meet critical operational needs. These range from our Retail Solutions and Rollout Service to Grocery Consolidation Delivery and enhanced cross-border transportation with XPO Mexico+. Whatever the shipping challenges, we have the network and team to solve them.

LM: Are you seeing AI-driven offerings impact, or influence, the LTL market? If so, how and in what ways?

Faghri: AI is changing the way that nearly every industry operates, and LTL is no exception. At XPO, our fully cloud-based technology stack has enabled us to integrate proprietary AI solutions faster than our peers.  

Our AI-powered models are improving how freight flows through our network by reducing diversions and empty miles. This has resulted in productivity improvements across our linehaul, pickup-and-delivery and dock operations. 

We’re also using AI to make our sales team more productive. We built a proprietary lead scoring tool that analyzes hundreds of thousands of potential shippers to pinpoint the best fits for XPO. And because our salespeople spend most of their time on the road visiting customers, we created a tool that helps them optimize their schedules and routes. 

Overall, we’re excited about the impact AI is already having on our operations and customers, and we expect it to keep growing in importance in the years ahead.