E-commerce fuels XPO’s record Q1 earnings
02 / 08 / 2018
XPO Logistics saw record first quarter 2018 revenues with an 18.4% increase year-over-year to $4.19bn, led by organic growth in e-commerce demand for last mile and contract logistics.
The fast growing US-based supply chain giant also captured $972m of new business during the first three months of this year, up 36% on 2017.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said: "We’re off to a strong start in 2018, adding: “Our 11% organic revenue growth reflected a healthy diversification of customer verticals and service lines. Organic growth in last mile was 15%, and logistics was 14%, both driven by e-commerce demand.
“In our transportation segment, we grew freight brokerage revenue by 30% in a tight market. We expanded our margins in North American freight brokerage and European dedicated truckload, and improved our adjusted operating ratio in North American less-than-truckload to 87.8%."
The company’s transportation segment had revenues of $2.77bn for the quarter, a 16% increase from the same period in 2017. Revenue growth was led by increases in freight brokerage and last mile in North America, as well as dedicated truckload transportation in Europe, and “favourable” foreign exchange rates.
XPO’s logistics arm generated revenue of $1.45bn for the quarter, a 23.2% increase on 2017. The increase in revenue was led by “strong global demand for e-commerce contract logistics,” as well as gains from the industrial sector in North America and the fashion sector in Europe, particularly in the UK, Netherlands, Spain and Italy. Favourable foreign exchange rates were also a benefit to revenue.
Jacobs continued, "We’re making disciplined investments in innovation and sales to propel long-term growth. We recently introduced our digital freight marketplace, smart warehouse platform and voice integration for consumer self-service.
"In April, we announced XPO Direct, a shared-space distribution network of warehouses and last mile hubs that gives customers flexible capacity. In sales, we won a record $972m of new business in the first quarter, and our sales pipeline stands at $3.6bn.”
In April this year, XPO Logistics appointed ex-Amazon logistics executive Kenneth Wagers as chief operating officer, with responsibility for the company’s operations in 32 countries.
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