XPO Logistics rolls out RXO as the name for its planned Q4 spin-off

Earlier today, Greenwich, Conn.-based freight transportation services provider XPO Logistics said it has established a new name for its truck brokerage and asset-light transportation units, in the latest step of its spin-off processes over the last several months.

The new company will be named RXO, which XPO said will reflect its commitment to providing shippers with “reliability multiplied by outperformance,” with a corporate tagline of “Massive capacity. Cutting edge technology.”

This development follows a March announcement made by XPO in which it said it planned to plans to spin off its North American truck brokerage from its less-than-truckload business, in order to “unlock value” for its stakeholders. This spin-off is expected to become official by the fourth quarter.

“Our spin-off now has a name—RXO—bringing it one step closer to becoming a standalone industry leader,” said XPO Logistics Chairman and CEO Brad Jacobs in a statement. “Our best-in-class truck brokerage business will be the keystone of RXO’s asset-light platform, poised to continue to take share of a growing market.”

Jacobs said in March that the company’s 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. And he added that XPO believes that by separating these businesses through a spin-off, it can significantly enhance value creation for its customers, employees and shareholders, as it did with its successful spin-off of GXO Logistics in 2021.

XPO said that the spin-off would represent a leading platform for North American tech-enabled truck brokerage services, citing its history of industry-best revenue and margin growth, a highly-efficient freight marketplace and access to a large amount of truckload capacity, in addition to its asset-light services, including last-mile logistics, managed transportation, and global forwarding.

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.

The corporate headquarters for its truck brokerage and asset-light services and LTL business will be in Charlotte, N.C. and Greenwich, Conn., respectively.

An XPO spokesperson told LM that these moves will transition one great company into two great companies.

“We learned from the GXO spin that when you have companies that are more focused and fit for purpose with a management team doing one thing, you can drive outsized growth,” she said. “There's a large universe of investors who want to invest in a pure-play like the third-largest LTL provider in North America that's asset-based with a high return on capital and levered to the industrial recovery. We’ve managed the business very well, generating over $3 billion in cash since we bought the business, and it’s going to be even more focused post-spin, with significant upside potential. There's also a separate and distinct universe of investors who want to invest in an asset-light, tech-enabled truck brokerage platform that the spin-off will be. Our best-in-class truck brokerage business has first-mover tech advantage and grew at three times the rate of the industry from 2013 to 2021.” 

In early June, XPO filed a confidential Form 10 registration statement with the United States Securities and Exchange Commission (SEC), regarding the planned spin-off of the company’s North American truck brokerage business.

XPO said that its truck brokerage business represents the largest component of the spin-off, through its complementary brokered services for managed transportation, last mile logistics, and global forwarding, which collectively make up XPO’s North American Transportation division, which is led by Drew Wilkerson, whom will serve as CEO for the spin-off.

“The new brand embodies our competitive positioning of reliable outperformance, propelled by multiple tailwinds. RXO will launch with a widely adopted digital platform that gives shippers and carriers the automation they demand,” said Wilkerson in a statement. “I’m excited to lead our team to even greater achievements as a tech-enabled pure-play.”