RXO sees advantage as freight broker regulations shift

(RXO)

Drew Wilkerson, CEO of RXO, said Aug. 6 that his company is well positioned for the emerging regulatory pressures that freight brokers are facing.

Freight brokers have been weathering a dramatic shift in the legal and regulatory landscape. Jury verdicts against the industry are increasingly large. And the U.S. Supreme Court in May ruled that federal law does not block “negligent hiring” lawsuits in state courts against freight brokers.

RXO is among the brokers that have navigated the upheaval by presenting their quality of service as a key differentiator in the current market.

“We serve large enterprise shippers with complex needs and a strict standard, and we do not compromise on the quality of carriers,” Wilkerson said during an investor call. “Shippers are becoming more selective about their partners, not only selecting providers based on their scale and service, but also on their rigorous carrier vetting process and financial stability.”

Wilkerson also said he believes the company is better positioned than the broader industry as insurance providers put more emphasis on the quality of broker procurement and carrier vetting. He views this as a defining strength of the brand and why it has been able to attract large customers.

RXO 2026 Q2 Press Release

“In brokerage, we’re gaining share, winning lucrative spot opportunities and achieving significant increases in gross profit per load,” Wilkerson said. “In managed transportation, we have a robust sales pipeline, and are winning new customers, and expanding with existing customers, which in turn will fuel outperformance and brokerage.”

RXO has also been pursuing the adoption of tools and technologies to support new business opportunities, improve its carrier network and reduce the time it takes for people to handle routine tasks. Wilkerson reported that these efforts have been helping to free up time that has allowed for more attention to be spent strengthening customer relationships.

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Wilkerson 

“We’ve seen all of the key brokerage trends, including volume, spot mix and gross profit per load, continue into July,” Wilkerson said. “Managed transportation also won another $100 million in freight under management in July. Those results give us confidence in our third-quarter outlook.”

Wilkerson added that this outlook includes continued growth in brokerage volume and gross profit per load. But he also noted weakness in last-mile operations. This comes amid broader market trends that are influencing results, like the supply-driven recovery.

“When regulatory enforcement began last fall, we said it was a structural change to the market, and that’s proving to be true,” Wilkerson said. “This structural change will improve the safety of the industry, help combat theft and fraud, and set the market up for a multiyear recovery once there is a sustained improvement in demand.”

The Department of Transportation accelerated an existing decline in capacity by tightening enforcement of driver qualification standards starting last year. This has involved non-domiciled commercial driver licenses and English-language proficiency. The move follows a prolonged freight downcycle that was driven by an oversupply of capacity.

“Capacity continues to leave the market, spurring a supply-driven recovery, and we’re clearly in the early innings of it,” Wilkerson said. “Any increase in overall demand will result in even more outsized growth for RXO. We haven’t hit normalized earnings for RXO yet. We’re not even close, but the path is visible and achievable.”

Wilkerson made his comments while discussing second-quarter financial results. The Charlotte, N.C.-based asset-light transportation provider posted a net loss that was virtually unchanged from the previous year at $9 million, or negative 5 cents a diluted share, for the three months ending June 30. Total revenue increased 25% to $1.77 billion from $1.42 billion.

“The cost of purchased transportation continues to rise due to the capacity exits, but the contract rates are not rising fast enough to fully offset the increase in cost,” Wilkerson said. “In this environment, shippers turn to their most trusted partners to get their freight covered.”

RXO has been working with customers to optimize service, volume and price to cover spot projects and mini-bids. Wilkerson said this freight has a higher gross profit per load. He added that volume, profitability and market share are growing despite soft demand.

RXO ranks No. 11 on the Transport Topics Top 100 list of the largest logistics companies in North America.