New Organizational Structure at XPO Logistics

XPO Logistics, Inc. today announced further progress with its previously announced plan for synergies in its less-than-truckload (LTL) business acquired from Con-way Inc.

Approximately 160 non-sales positions have been eliminated as the company continues to migrate to a more efficient LTL organization.

Most of the reductions were in administrative, management and back office functions, and impacted less than 1% percent of the LTL workforce in North America.

Another 30 positions were eliminated in other parts of the company, primarily to address redundancies created by the acquisition.

Collectively, the actions are expected to reduce annual costs by more than $20 million against a targeted operating profit improvement of $170 million to $210 million over two years.

To date, approximately $50 million of expected annualized savings have been achieved in the three months since the company acquired Con-way on October 30, 2015.

“Our focus is on growing LTL by expanding our service capabilities and cross-selling LTL to XPO’s full customer base”Tony Brooks, president of LTL for XPO Logistics

Tony Brooks, president of LTL for XPO Logistics, said, “Our plan for LTL is very much on track for our near-term and long-term goals. The integration of Con-way has given us the opportunity to engineer a leaner, more results-oriented LTL operation while improving on our industry-leading customer service levels. We plan to double the number of strategic account managers over the next few months. Our focus is on growing LTL by expanding our service capabilities and cross-selling LTL to XPO’s full customer base.”

Brooks continued, “Our new organizational structure is based on clearly delineated P&L responsibilities and customer service accountability at the field level. We’re also optimizing our footprint to increase the efficient use of our capacity, improve transit times in key lanes and make our entire network more productive.”

In related news, XPO Logistics has also dismissed three executives from former Menlo Worldwide Logistics, the global contract logistics arm of the former Con-Way Inc., which XPO Logistics last year for $3 billion.

Robert Bianco, the former Menlo’s president, Gary Kowalski, the former unit’s chief operating officer, and Bob Bassett, the former unit’s vice president, sales and marketing, have all left the company.

Gary Frantz, director of corporate communications at XPO Logistics, said Bianco’s and Kowalski’s departures were part of a broad effort to “eliminate redundancies” in the organization. “We’re integrating the former Menlo operations into our global supply chain organization, where we already have a seasoned executive team in place in North America and Europe,” Frantz said.

XPO Logistics is the second largest LTL provider in North America and the leading LTL provider in Western Europe. The company’s LTL business in North America services 99% of U.S. postal codes, and offers more next-day and two-day lanes than any other carrier.

XPO Logistics has global transportation capacity of approximately 19,000 owned tractors and 46,000 owned trailers, with another 10,000 trucks contracted through independent owner-operators, and access to more than 50,000 independent carriers.

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