XPO Logistics

XPO Logistics, Inc. is an American corporation headquartered in Greenwich, Connecticut. It is a non-asset, third-party logistics provider of freight transportation services, including freight brokerage, expedited ground and air services, and freight forwarding.^[2]

Formerly known as Express-1 Expedited Solutions Inc., the company was renamed XPO Logistics in September 2011, after corporate consolidation entrepreneur and investor Bradley S. Jacobs led a team that agreed to invest up to $150 million in cash in the company.^[3][4][5][6] Jacobs became the company’s largest shareholder, and assumed the positions of chairman and chief executive officer.^[7] XPO is one of the ten largest air and expedited surface transportation carriers in the United States and Canada.^[8][9]

History

Express-1 Expedited Solutions was founded in May 1989 by Michael R. Welch and Keith Avery, with a focus on transportation of time-critical, high-value shipments.^[10] The company was purchased in August 2004 by the transportation firm Segmentz, Inc., a public company that subsequently went through a restructuring to close unprofitable business units. In 2006, Segmentz changed its name back to Express-1 Expedited Solutions, and began trading its stock under the stock symbol XPO.^[11][12] In May 2003, the company’s business unit Express-1 Dedicated, Inc. was awarded a contract to provide dedicated transportation services to Ford Motor Company, a contract that would yield approximately 90 percent of the business unit’s revenue.^[13] Ford announced in November 2008 that it was ending the contract, and the business unit ceased operations in February 2009.

Express-1 acquired Concert Group Logistics, Inc., a non-asset based freight forwarder, in January2008^[14] Two months later, it launched Bounce Logistics, Inc., a business unit providing freight brokerage services. In February 2009, the firm acquired First Class Expediting Services, Inc. to strengthen its operations in the Midwest.^[15] In October of that year, the firm expanded its international services with the acquisition of LRG International, Inc., a global forwarding company.^[16][17]

In June 2011, Express-1 became the vehicle for Bradley Jacobs’ entry into the truck brokerage industry, an industry that Jacobs viewed as ripe for consolidation, with only 15 percent of trucking currently outsourced to third-party logistics brokers.^[5] Jacobs in the 1990s had spearheaded the consolidation of the waste management and equipment rental industries in North America through an aggressive strategy of cold starts of greenfield locations as well as acquisitions.^[18] With the $150 million investment in the company, including up to $135 million from his investment firm, Jacobs Private Equity LLC,^[4] Jacobs gained ownership of about 71 percent of the company.^[19][20] He announced plans to move the headquarters from Michigan to Greenwich, Connecticut, with the name changed to XPO Logistics, trading under the symbol XPO on the New York Stock Exchange. On October 12, 2011, Jacobs rang the bell to open the Exchange.^[21]

The company announced plans to open its national operations center in Charlotte, N.C., and began operating the facility in March 2012.^[3][22][23] XPO selected Charlotte in part because of as much as $4.3 million in state incentives. North Carolina’s Economic Investment Committee awarded XPO a Job Development Investment Grant, making it eligible to receive a maximum benefit package of $3.22 million. Another $1.07 million would come from the state’s utility fund for infrastructure improvements.^[24]

On March 12, 2012, XPO announced an underwritten public offering of 6 million shares of common stock.^[25] Three days later, the company increased the offering to 8 million shares, at $15.75 per share.^[26] The IPO closed at 9.2 million shares of common stock, with net proceeds of roughly $136.7 million.^[27] On May 8, 2012, the company completed the purchase of Continental Freight Services, Inc., a $22 million freight brokerage firm in South Carolina.^[28][29] XPO Logistics listed its shares on the New York Stock Exchange on June 14, 2012.^[30]

XPO Logistics completed the purchase of Kelron Logistics, Inc., a $100 million truck broker based in Canada in May 2012.^[31][32] This was followed in October 2012, with the purchase of BirdDog Logistics, LLC, a $7 million freight brokerage operation in North Carolina.,^[33] and also the purchase of Turbo Logistics, Inc., the freight brokerage division of Ozburn-Hessey Logistics, LLC for $50 million.^[33][34] At the end of November 2012, Bradley Jacobs confirmed that there was "about $265 million on the balance sheet" to fund "maybe 3,4,5 acquisitions a year".^[6]

The company's first purchase of 2013 was the February 8th acquisition of East Coast Air Charter, Inc., a $43 million expedited air charter brokerage firm in North Carolina.^[35] The second acquisition in February was announced on the 22nd when the company acquired the operating assets of Covered Logistics & Transportation LLC, a non-asset, third party freight brokerage business with 2012 revenues of approximately $27 million.^[36]

In March 2013, Gov Pat McCrory's office announced that XPO Logistics was to expand its Charlotte operations center, bringing 287 new jobs by the end of 2014.^[37][38]

XPO announced in July 2013 that it entered into a definitive agreement to acquire all of the common stock of 3PD Inc.. in a transaction valued at approximately $365 million. 3PD is the largest non-asset, third party provider of heavy goods, last-mile logistics in North America.^[39] This purchase was completed on August 16, 2013.^[40] August 2013 also saw XPO announcing the closing of a registered underwritten public offering of 9,694,027 shares of common stock, at a price to the public of $22.75 per share.^[41] In November of this year the company announced it had rebranded its formerly named Concert Group Logistics (CGL) division as XPO Global Logistics, to "better reflect the role of freight forwarding" within the company’s broader service offering.^[42]

XPO acquired Optima Service Solutions, LLC, a leading non-asset provider of last-mile logistics services for major retailers and manufacturers in the United States. The cash purchase price was $26.6 million, announced on November 15, 2013.^[43][44] On December 28, 2013 XPO completed the acquisition of NLM from Landstar System, Inc. The company has rebranded the NLM operations as XPO NLM. This acquisition makes the company the largest manager of expedited shipments in North America. The company funded the $87 million cash acquisition through its ABL facility and available cash, including approximately $13.4 million of cash acquired on closing. ^{[45] [46]}

In a deal that would reportedly boost their annual revenue to about $2 billion from about $1 billion, on January 6, 2014 XPO announced that it would be purchasing Pacer International (NASDAQ: PACR) in a deal valued at $335 million. The combined company will continue to trade on the New York Stock Exchange under the symbol XPO. Pacer, founded in 1997, facilitates approximately 10 percent of all domestic intermodal freight movements, and is the largest provider of intermodal services between the U.S. and Mexico.^[47] Under the terms of the reported deal, Pacer shareholders would receive $6 in cash and $3 of XPO common stock for each Pacer share.^[48]According to Thomson Reuters, the cash portion of the purchase deal was to be financed through the utilization of cash reserves, and a portion of the proceeds from a registered underwritten public offering of 15,000,000 shares of XPO common stock. The offering was set to close on February 5, 2014.^[49]

Operations

XPO Logistics is a North American provider of transportation logistics services in freight brokerage, last-mile logistics, expedited transportation and freight forwarding, with growing businesses in less-than-truckload and intermodal. The company’s freight brokerage division primarily facilitates the shipment of goods carried by truck, including the last-mile delivery of heavy goods such as appliances and home electronics. Its expedited transportation division places urgent shipments with ground and air carriers, and its freight forwarding division focuses on global export and domestic shipments.^[2] XPO Logistics serves over 9,500 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors, with 90 locations in the U.S. and Canada and more than 23,000 carrier relationships. The company’s operations are part of the SmartWay Transport Partnership, a program administered by the U.S. Environmental Protection Agency under which freight shippers, carriers and logistics companies collaborate to voluntarily achieve improved fuel efficiency and reduced emissions.^[50]

XPO is currently ranked as the fourth largest freight brokerage provider in North America on the Transport Topics 2013 list of Top 25 Freight Brokerage Firms and is ranked at number 45 on the 2013 list of Top 50 Logistics Companies.^[51]

Awards and Recognition

• National Shippers Strategic Transportation Council Expedited Carrier of the Year Award – 2009, 2010^[52][53]
• Inbound Logistics Top 100 Motor Freight Carrier – 2010^[54]
• Great West Casualty Co. National Safety Awards Program Gold Award – 2010^[55]
• Whirlpool Special Services Supplier of the Year Award – 2011^[56]
• UPS Urgent Services Carrier of the Year Award – 2011^[57]
• SupplyChainBrain Great Supply Chain Partner – 2011^[58]
• TT News Top 25 Freight Brokerage Firms – 2012^[59]

References

External links

• Official website