- XPO Logistics grew its last-mile revenue by 11% in Q3, YoY, CEO Bradley Jacobs said in the company's earnings release. Revenue was helped by consumer demands for exercise equipment and do-it-yourself wares, likely in need as many Americans work from home. XPO officials credited its software and apps in boosting its truck brokerage, which grew 27% YoY, with a 13% increase in net revenue per load.
- Cost control was crucial for XPO in Q3, the LTL firm reported. As its North American LTL segment focused on yield, service and efficiency, XPO's Q3 operating ratio improved to 81.7%, "the best operating ratio of any quarter in the history of our LTL operation," Jacobs said.
- XPO credited a strong rebound across its global markets in Q3 for helping revenues rise 1.6% YoY, the LTL company reported on Friday, during a call with investors and analysts.
As the global economy recovers from COVID-19 shutdowns, the jump in business has not just changed consumer behavior. Jacobs said many shippers are outsourcing their supply chain to firms such as XPO. E-commerce is also helping push XPO's revenues up and away from the doldrums of Q2, during which the shutdowns slowed XPO's revenue growth.
Last-mile business was strong for XPO in Q3, with consumers buying heavy goods and asking for delivery, the company reported. Such goods include mattresses, appliances and fitness equipment. Last-mile business also boosted XPO in uncertain times in Q2.
On July 31, XPO officials said in their Q2 earnings release they expected the COVID-19 pandemic to roil markets in Europe and North America. But even as pandemic woes snagged XPO in Q2, the boom in e-commerce helped the company grow. Revenue from XPO's Last Mile segment jumped 3% in Q2, YoY.
XPO is the No. 1 firm in last-mile delivery of heavy goods, the company said. And many of XPO's LTL competitors want in on e-commerce business and direct delivery to consumers, in which people buy a bulky item online and have it delivered and sometimes installed by the LTL carrier.
FedEx Freight has been steadily growing its home-delivery operations, according to John Smith, FedEx Freight CEO, speaking during the company's quarterly earnings report on June 30.
There is apparently plenty of such business to go around, as Jacobs said e-commerce and last-mile are pulling the LTL carrier back to revenue normality.
"There's a lot of wind to our back," said Jacobs.
Correction: In a previous version of this article, XPO Logistics' size was misidentified, and the company's operating ratio was mischaracterized. XPO is the No. 1 firm in last-mile delivery of heavy goods, and its operating ratio in Q3 was the best in company history.