XPO Logistics achieves ‘robust’ growth in Q3
01 / 11 / 2018
US-based XPO Logistics saw its third-quarter revenue increase by 11.5% over the same three months of last year, to $4.3bn.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose from $369.6m in the third quarter of 2017 to $414.9m for the same period of this year.
The Connecticut-headquartered company’s logistics segment generated revenue of $1.52bn for the quarter, a 13.1% increase from the same period in 2017.
Growth in this segment was attributed to rising demand for e-commerce logistics globally, as well as the consumer packaged goods and food and beverage sectors in North America and the fashion sector in Europe.
Operating income for the logistics segment decreased to $59.5m, compared with $67.3m for the same period in 2017.
XPO said this was primarily due to a $15.6m charge related to a customer bankruptcy, and to a record number of contract start-ups over the course of the year to date: 46 in Europe and 44 in North America.
Its transportation segment benefited from increases in freight brokerage and last-mile demand in North America, as well as dedicated truckload transportation in the UK and France; revenue for this segment was up 10.5% year on year at $2.85bn.
Noting the company’s “robust organic growth”, chairman and chief executive Bradley Jacobs said: "Companywide, we again grew profitability faster than revenue, despite the impact of a customer bankruptcy.
"Our disciplined investments in growth over the past 18 months are gaining traction. We closed $918m of new business in the quarter, up 43% from last year, due in large part to our expanded sales organisation and proprietary technology.”
Jacobs went on: “In contract logistics, we implemented a record 90 customer contracts through September, enabled by intelligent automation. And in North American brokerage, we used dynamic freight-matching algorithms to realise 18% revenue growth and 370 basis points of margin improvement with fewer people. This is the same technology used by XPO Connect, our digital freight marketplace."
Jacobs is confident that XPO’s leading positions in sectors such as e-commerce, as well as its capacity for innovation, should keep it growing faster than the industry average.
Furthermore: “We’re continuing to explore acquisition opportunities that will further accelerate our trajectory," he added.