XPO Logistics Expands Last Mile Network
A new XPO Logistics facility in the Chicagoland area has doubled the capacity of the company's market delivery center to nearly 100,000 square feet, and will serve some of the nation's most well-known retailers, e-commerce companies and manufacturers of heavy goods.
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XPO Logistics, Inc. (NYSE: XPO) is a top ten global provider of cutting-edge supply chain solutions to the most successful companies in the world. The company provides services for truckload brokerage and transportation, last mile logistics, engineered supply chain solutions, high-value-add warehousing…
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Company officials said this new facility doubles the capacity of XPO’s Chicago-based market delivery center (MDC), which serves large retailers, e-commerce service providers, and heavy goods manufacturers, to almost 100,000 square feet.
XPO defines the MDC as a facility that receives product, schedules product, and, as needed prepares and assembles product at that site before it heads out to delivery.
It also takes care of customer service issues, and conducts a “check in” of product that comes off of trucks for reverse logistics products that need to go back to a retailer or manufacturer for any reason.
Forward stocking is also part of its offerings, as is necessary for customers, as well as other services customers may require, including installation services and assembly services that it can initiate from an MDC location.
XPO has 46 U.S.-based MDCs ranging from 20,000 to 200,000 square feet, with more than 62 percent of the U.S. population living within 75 miles of an XPO MDC and 77 percent living within 125 miles of one.
In an exclusive interview with Logistics Management, Charlie Hitt, president of XPO’s last mile business unit, said that Chicago is one of XPO’s three busiest and fastest-growing markets nationwide.
“We need to invest in what our customers are having happen in the growth of their business, particularly in e-commerce, it is exciting that we can do that and that they can come to us, as their business grows, we grow with them.”
The impact of a rapidly growing e-commerce market on the last mile sector, especially for heavy goods, is something that cannot be overstated, stressed Hitt.
For XPO, he said, that e-commerce activity, in terms of client relations, continues to grow.
“We have had 15-20 percent growth in the last quarter alone in e-commerce business,” Hitt noted.
“Traditional brick and mortar retailers are expanding out with more e-commerce offerings, and what we see as that happens is that the services that are provided to customers when they were doing traditional brick and mortar in the past is that they now want the same kind of services. They want it to be seamless and want it fast, which is the same thing that has happened with brick and mortar growth for years. E-commerce keeps accelerating, and people are getting more and more accustomed to buying products online.”
From an XPO perspective, he explained this has resulted in the company investing a lot of effort and capital into its IT efforts, especially for its last mile group. And as its customers grow, the ability to get information out faster creates a situation of need that is answered for the retailers by enabling information to come faster and clearer to the consumer.
Prior to this announcement, the Chicagoland MDC was roughly 50,000 square-feet and handled last mile for retailers, as well as business that came in from Internet sales than can plug into the XPO system.
The previous facility had about a dozen staffers in management, warehouse worker, and customer service associate positions, with another dozen coming on board with this expansion. And Hitt said an additional 5-6 staffers will be added to help with customer service support on a regional basis across the upper Midwest region.
The XPO Chicagoland facility handled roughly 55,000 consumer deliveries per year, and with this expansion Hitt expects that to grow to around 100,000 per year.
“We think this business will grow 30-40 percent next year [in Chicago], but it could be more and we are going to be opportunistic about that if that happens,” he said. “We are excited about it. Our customers are growing, and they want more services and consumers want more.”
He explained this is reflective of an ongoing “do it for me” theme among consumers in that they don’t want to do something like pick up a TV at a store and hook it up on their own.
“Now, they want someone to take the old TV or washer and dryer away or have it done for them,” he noted.
“That is what they want; they want things to be simple. We are ready and poised to handle it though installation and assembly services. When we look at our nationwide last mile footprint there is a consistency in which we can provide those services. We have capacity capabilities that nobody else has and are seven times larger than our largest competitor and invest a lot of money in IT. We can provide service for a large retailer on the East Coast and do the same service for them on the West Coast or in Chicago or Miami.”
Other types of goods handled in this manner, cited by XPO, include furniture, cabinets, appliances, fitness equipment, electronics, medical equipment, and “goods that are notoriously difficult to handle.”
XPO facilitates more than 12 million last mile deliveries on an annual basis.
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Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman