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A Deep Dive into XPO’s LTL and TL Transportation Business

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XPO’s LTL operations

XPO Logistics’ (XPO) LTL (less-than-truckload) business is an asset-heavy business, as the company operates a fleet of trailers and tractors for the pickup and delivery of freight and line-haul. XPO also has a network of terminals in North America. The company provides transcontinental, day-definite regional, and interregional LTL freight services in North America.

This Connecticut-based road carrier is also the second-largest less-than-truckload carrier in the United States. XPO has an LTL network of 283 facilities in the country and 12 in Canada. The company utilizes nine border crossing points between the United States and Canada, the highest among the LTL carriers. In Europe, XPO Logistics provides LTL services in France, Spain, and the United Kingdom.

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XPO’s LTL business versus its peers

XPO Logistics’ acquisition of Conway, a premier less-than-truckload transportation provider in North America, has propelled XPO into the top three LTL players in the US on a revenue-earned basis. We’ll discuss XPO’s growth strategy through acquisitions later in this series.

XPO’s peers FedEx (FDX) and United Parcel Service (UPS) utilized less-than-truckload operations in their freight segments. In FedEx’s fiscal 3Q18 results announced on March 20, 2018, FedEx Freight reported revenues of $1.7 billion, up 14.0% year-over-year. 

The rise in revenues for FedEx Freight was largely driven by an 8.1% increase in LTL revenues per shipment and a 6.1% rise in average daily LTL shipments.

In contrast, United Parcel Service’s (UPS) supply chain and freight operations had freight LTL revenues of $2.6 billion in fiscal 2017, up 8.9% year-over-year. As another major XPO peer in the less-than-truckload (IYJ) sector, Old Dominion Freight Lines (ODFL) posted revenues of $3.3 billion in fiscal 2017, up 12.2% year-over-year.

XPO’s full truckload services

XPO’s full truckload transportation services are mainly centered in Europe and are an asset-based business. In Europe, XPO provides transportation services for bulk and packaged goods and high-cube products. Until last year, XPO was a leader in Europe with respect to full truckload transportation services.

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