XPO Names New Tech Brokerage Company RXO
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XPO Logistics’ new tech-enabled brokerage platform that is set to begin operations in the fourth quarter will be called RXO, the company announced July 12.
In March, XPO announced it planned to spin off its brokerage platform into its own separate, publicly traded division. The company now has its own website, RXO.com, where visitors can register to receive news about upcoming milestones and leadership appointments.
“Our spinoff now has a name — RXO — bringing it one step closer to becoming a stand-alone industry leader. Our best-in-class truck brokerage business will be the keystone of RXO’s asset-light platform, poised to continue to take share of a growing market,” Brad Jacobs, chairman and CEO of XPO Logistics, said in a statement.
The spin-off now has a name — RXO — reliability multiplied by outperformance. We’re one step closer to creating a standalone industry leader in asset-light transportation. @rxoinc https://t.co/FaWDwWAnWo — XPO Logistics, Inc. (@XPOLogistics) July 12, 2022
RXO will be based in Charlotte, N.C.
During the March announcement, XPO said it will separate its asset-based less-than-truckload business from its asset-light brokered transportation company, creating two independent companies with “vast growth prospects in North America.”
The company said RXO’s largest component will be its truck brokerage business with complementary brokerage services for last-mile logistics, managed transportation and global freight forwarding.
We're combining massive capacity and technology to help customers navigate today's dynamic freight transportation environment. Our own Drew Wilkerson joined @BW last week to discuss how we’re meeting the demand from our customers: pic.twitter.com/OPoNrF7uTx — XPO Logistics, Inc. (@XPOLogistics) July 11, 2022
“The new brand embodies our competitive positioning of reliable outperformance, propelled by multiple tailwinds,” said Drew Wilkerson, who was named CEO of the new company.
Wilkerson, also XPO’s North American Transportation president, added, “RXO will launch with a widely adopted digital platform that gives shippers and carriers the automation they demand. I’m excited to lead our team to even greater achievements as a tech-enabled pure play.”
In the past 18 months Jacobs and XPO have been exceptionally busy.
In early June, the company filed a confidential Form 10 registration statement with the U.S. Securities and Exchange Commission for the planned spinoff of its tech-enabled brokered transportation platform, the company announced.
The move represents a significant milestone in the transaction process. Filing the form enables the securities to have the potential for trading, experts told Transport Topics.
On May 9, XPO reported the highest revenue of any quarter in its history for the first quarter.
The firm posted net income of $488 million, or $4.22 a diluted share, for the three months ending March 31. That compared with $118 million, $1.02 a share, during the same time the previous year. Total revenue increased by 16% to $3.47 billion from $2.99 billion.
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On May 4, GXO Logistics Inc. recorded higher net income and revenue in the first quarter.
The contract logistics business posted earnings of $38 million, 32 cents a diluted share, for the three months ending March 31. That compared with $17 million, 12 cents, during the year-ago period, when the company was operating within XPO Logistics. Total revenue increased by 14% to $2.1 billion from $1.8 billion.
GXO launched as an independent company on Aug. 2, 2021, and split its contract logistics operations into its own stand-alone business in what the company said was an opportunity to take advantage of tailwinds related to e-commerce, automation and outsourcing.
While XPO’s leadership remains bullish on its growth, there are signs of growing concern about the state of the U.S. economy and a possible economic slowdown.
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Jacobs said that the transportation-specific economy remains strong but is slowing. During a presentation to the Economic Club of New York, Jacobs on April 13 noted that international events, including Russia’s invasion of Ukraine, and the possibility of a slowing U.S. economy, higher interest rates and rising inflation, are causes for concern.
“Fasten your seat belt and tighten up. We’re in a place where the future is not very clear what is going to happen,” he said. “In the supply chain, you look at truckload rates, what’s the price to transport a full truckload of freight from point A to point B, and they’re down 30% in the last month.
“That’s a huge move in a few weeks. There’s been a shift in supply and demand. There are still elevated prices, but it’s not as strong as it was 30 days ago.”
To assist with the spinoff process, XPO has retained, BofA Securities, Goldman Sachs & Co. and Morgan Stanley & Co. as its financial advisers. Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Wachtell, Lipton, Rosen & Katz are its legal advisers.
XPO Logistics ranks No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 6 on the Transport Topics Top 100 Logistics companies.
GXO Logistics ranks No. 8 on the TT100 logistics list.
Staff Reporter Connor Wolf contributed to this story.