XPO Courts Big Shippers With Trucking Appointment
XPO Logistics Inc. on Wednesday appointed Tony Brooks, a veteran transportation executive with some of the country’s largest shippers, to run its recently acquired trucking fleet, a move that analysts said signaled the company’s intent to land bigger customers.
The company also reported a net loss of $35.4 million in the third quarter, or $0.94 a share, after markets closed, its 16th straight quarterly loss. Gross revenues more than doubled from a year earlier to $2.4 billion.
XPO acquired Con-way Inc. last month for $3 billion, giving the logistics provider one of the largest less-than-truckload fleets in the U.S. So-called LTL fleets pack loads from multiple customers into a single truck.
XPO Chief Executive Bradley Jacobs has said Con-Way, as well as a French trucking company acquired earlier in the year, would help XPO court large shippers. Mr. Brooks comes from that world, joining XPO from food distribution giant Sysco Corp. He has also run the transportation networks at Dean Foods, Sears Holdings Corp., and PepsiCo/Frito-Lay.
“He has very, very good relationships with some of the biggest shippers in North America,” Mr. Jacobs said in an interview. “He brings a lot to the table on that front.”
XPO, which has been on a debt-fueled acquisition spree over the last two years, has been punished recently by investors for its failure to turn a profit. XPO’s stock is down more than 40% since hitting a record in May.
Investors are closely observing how XPO, which in the past owned few physical assets, will handle the acquisition of Con-way and its large fleet of trucks.
In a press release, the company said its net loss included $25.3 million in transaction and integration costs.
The company said profitability in the company’s logistics segment is improving, with operating income last quarter of $36 million, compared with $4.5 million a year earlier.
XPO’s recent acquisitions have gained the company a foothold in a wide array of logistics and transportation services. Mr. Jacobs, who previously “rolled up” companies in the equipment rental and garbage disposal industries, has said he seeks to create a one-stop shop for logistics services so he can reel in large global shipping customers.
Read more here.