Q&A: Jay Silberkleit, CIO, XPO

LM Group News Editor interviewed Jay Silberkleit, CIO, for Greenwich, Conn.-based national less-than-truckload (LTL) services provider XPO, in a leadership session at the SMC3 Connections conference in Colorado Springs, Co. this week. Silberkleit provided an overview of how XPO approaches and views the role of technology within LTL operations, including things like using AI, data analytics, and vetting emerging new techologies, among others. 

LM: Can you please provide an overview about your team and its mission at XPO?

Jay Silberkleit: We always say that when XPO started it was always a technology-first sort of organization and wanted to fuse technology into transportation. Over the years, we have grown the company and are now a North American LTL provider. In terms of strategy, a few years back we asked ourselves how can we simplify our strategy to make things easier for us. What we came up with was a very simple formula, and it starts with service.

LM: Where did it go from there?

Silberkleit: We are a customer-loving organization. And delivering world-class service is our goal. Just to give you an example, we look at other measures to [gauge] service, which we view as our game-changer. And when we started LTL 2.0 two years ago, our damaged claims ratio was at 1.2%. And now as of Q1, we're at 0.3%. Another pillar that we have is investing in our network, so the way that you're able to deliver our service is to make sure that you have the capacity. To that end, over the last two years, we've built and invested in another 12,000 trailers and 4,000 tractors and we also purchased 28 new service centers in the last year. Another pillar is how to improve our yields. We're doing that through premium service offerings and to premium services like a must arrive by date, a trade show offering, retail rollouts, and our Mexico cross-border premium services. The final category is cost optimization, in terms of optimizing costs for these things across our network.

LM: How does XPO utilize things like data technology and analytics to project and also mitigate future disruptions?

Silberkleit: LTL is complicated, and it is also a network- based business. It's almost like every event is dependent on the previous event, and that produces a lot of data. We produce a massive amount of data. If you think about all the trackers and the telematics we have that record data, we've got all of our dock workers and drivers carrying handhelds that are providing data—and we have all sorts of structured and unstructured data. I am a big fan of all data—whether it is good data, structured data, unstructured data—all data tells you something and obviously there's a massive amount of it. And, so, we need people to sift through that data and find patterns and get an understanding of what is going on. It's really important to us as something we do to leverage technology. It is also about being able to analyze the various tasks in the network and being able to analyze the various shipments we’re developing. And to make those optimizations, we are leveraging a lot of AI, machine learning, and computer vision. We're constantly evaluating the flow of the network to be able to improve those processes in order to be more effective.

LM: How does XPO navigate the ongoing emergence of new and emerging technologies and then subsequently decides which ones to go forward with or integrate?

Silberkleit: Our technologists have a term for this, and it is called framework fatigue, something that came up a little while back, as programming languages evolved, and people started delivering and producing all kinds of new frameworks and proper Javascript. And it is also about being able to look at things like that and think commercially, and where can we apply things like that and where it makes sense in our organization, in our network, or our business, and where does it fit? Does it fit in with our technology pillars? What's the ROI? And ROI doesn't necessarily have to be monetary. It could be customer satisfaction. It could be a cost savings, or it could be a way to drive yield or services. When we're thinking about how we apply AI and technology, it is generally around those sorts of abilities.

LM: As a CIO, how do you ensure that the IT strategy remains aligned with the company's overall business objectives?

Silberkleit: If something does not fit in with one of our core technology pillars, that's not something that we want to consider. Another thing is being able to empower those communications in daily communications…so we can then see some of the potential problems with better optimizations, because the greatest thing about technology and transportation is when you think about it is, in reality, they are a perfect match. So, when I look at this industry, there's so many opportunities for us to be leveraging technology, but at the same time, we need to be able to educate the business on what is possible and for everyone to have that imagination, to be able to understand how we can solve things differently. One of the things in transportation is that there are a lot of things that have been done the same way for a long time, and getting people to see it from a different angle or see something new that could potentially help them in evaluating ROI or assessing a task.

LM: Looking ahead to next year, 2025, what would be viewed as some of your top priorities? And how are you approaching tech investments and R&D efforts?

Silberkleit: R&D is super important, and the technology landscape is rapidly evolving. Trying to keep up with it is possible, but trying to figure out where you should focus—and what is going to be helpful—and having that R&D mentality is absolutely paramount. One of the things that we do around this is hire the right people that are able to operate from the abstract. These are people that have big imaginations and are able to improvise really well. We have also launched initiatives around savings and how we look at labor spend. We have talked about optimization, for things like loading trailers and the sequencing when loading a trailer. If I am going from Boston to Miami, I don’t want to go through all of the Miami freight in the back of the trailer because that means at every stop you are going to have to unload all of the freight to get to what you need and then put it all back. That introduces a metric that we watch closely, which is really important. The more times you are handling shipments, the higher the likelihood that you’re going to damage something. Reducing that number and being able to optimize the sequencing on how we load trailers [and other efforts] is based on improving the customer experience and doing it in a cost-effective way. Another key aspect is making sure all of these efforts come together and are as automated as possible.