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XPO Logistics CEO Bradley Jacobs Talks Innovation in Technology with Jim Cramer

By 24/7 Staff / www.supplychain247.com / May 10th, 2018

It’s a rising supply chain player that's delivering serious gains – up 500% over the past five years, but can XPO Logistics keep on trucking? Jim Cramer gets an exclusive take from CEO Bradley Jacobs.

XPO Logistics CEO: Enabling e-commerce growth

Amazon may be growing at an astonishing 45 percent clip, but under-the-radar players like XPO Logistics enable that expansion, XPO Logistics Chairman and CEO Brad Jacobssaid Wednesday.

"We have Amazon as a customer. We have many other e-commerce players as customers. We're facilitating their growth," Jacobs told Cramer in an interview.

With a new service called XPO Direct, Jacobs' shipping giant will open its network of 75 facilities to clients, allowing e-commerce companies to leverage XPO's warehouses, last-mile hubs and hybrid services for smaller shipments.

Read the Article: How Bradley Jacobs Turned A $63M Bet Into A $12 Billion Transportation Empire

"The problem that we're solving for them is they're now closer to the customer," the CEO said.

"They're within 95 percent of the whole population within one or two days. It's very, very big." Click on the video to the right to watch the full interview.

XPO Logistics first quarter 2018 revenue was up 18.4% annually to $4.19 billion, and quarterly net income came in at $66.9 million, or $0.50 per share, which was ahead of net income of $19.5 million, or $0.16 per share a year ago and also ahead of Wall Street expectations by 7%.

XPO Logistics Launches New Flexible Distribution Model for Omnichannel Retail and E-Commerce Customers

XPO Logistics XPO Direct is a new, nationwide shared-space distribution model for omnichannel retail and e-commerce customers.

XPO warehouses and last mile hubs serve as flexible stockholding sites and cross-docks utilized by multiple customers at the same time.

Transportation needs are supported by the company’s brokered, contracted and owned capacity. XPO’s broad North American footprint can position goods within two days’ delivery of 95% of the U.S. population and in close proximity to retail stores for inventory replenishment.

Bradley Jacobs said, “Retailers and e-tailers are looking for new ways to position goods more efficiently to shorten delivery transit times without adding overhead. XPO Direct offers customers industry-leading flexibility by sharing our technology, trucks and workforce at over 100 sites, with hundreds of additional sites at the ready. In essence, we’re renting out our scale and disrupting traditional thinking about the capital-intensive, regional distribution model.”

The omnichannel trend is a challenge for many brick-and-mortar retailers as they seek to broaden their reach through e-commerce. The prohibitive fixed cost of adding distribution centers can result in a trade-off of price versus speed, compromising customer service and damaging brand reputation. XPO Direct is a highly responsive solution designed to increase service quality at a fraction of the usual cost.

Mario Harik, chief information officer of XPO Logistics, said, “XPO Direct uses our proprietary technology to link multiple sites with cross-network visibility. Our algorithms analyze customer data to identify patterns in consumer behavior and seasonality. We use this information to predict when and where to place products by SKU number, and reflow goods to other sites as needed.”

XPO invests more than $450 million in technology annually. Recent innovations include XPO’s industry-first voice integration with Amazon Echo and Google Home to track last mile deliveries of heavy goods, the XPO Connect digital freight marketplace with multimodal infrastructure, and WMx, the company’s cloud-based, mobile warehouse platform that creates cutting-edge logistics solutions by integrating advanced automation.

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