XPO Logistics announces major investment into its LTL network

XPO Logistics, a Greenwich, Conn.-based global provider of freight transportation and logistics services said earlier today that it will make a significant investment into XPO Freight, its less-than-truckload (LTL) group.

The investment comes in the form of roughly $90 million, which, XPO said, will go towards 770 new tractors over the course of the remainder of 2018, during which time the units will be integrated into the XPO LTL fleet.  These tractors will both replace, and add to, the existing fleet, with the current total number of tractors now at approximately 8,000 in North America, according to XPO.

XPO also noted that these tractors will feature 15-liter engines and 12-speed transmissions, which will take the place of older models with 13-liter engines, and are expected to provide what XPO said is a “more optimal blend” of fuel performance, fuel economy, emissions characteristics, and engine life that is in line with the XPO LTL network. And the company also noted that the tractors will include the most up to date safety technologies, including lane departure, warning systems, adaptive cruise control, and collision mitigation systems to assist drivers.

“We’re committed to giving our LTL drivers the latest technologies for comfort and safety,” said Troy Cooper, president of XPO Logistics, in a statement. “These new tractors also reflect our commitment to the environment by providing improved fuel efficiency and reducing emissions.” 

XPO Freight is currently the second-largest North American-based provider of LTL services.

In the first quarter of this year, XPO’s North American LTL net revenue rose 4.5% to $920 million, with the operating ratio for the segment at 87.8%, for an improvement of 120 basis points.

What’s more, the 87.8 operating ratio represents its best one for the first quarter in the last 18 years, dating back to when XPO LTL was still part of Con-way.

“This is an acceleration of 60 basis points [in OR] from the fourth quarter, with our full-year OR on track to improve by 100-to-200 basis points better than 2017,” said XPO Chairman and CEO Brad Jacobs in a recent interview.

Jacobs said XPO is the market leader in 1-day and 2-day shipments on the premium side, with XPO positioned at the number two LTL carrier in the market behind only FedEx Freight.

LTL revenue per shipment in the first quarter was up to $291.84 from $263.47 in the first quarter, with gross revenue per hundredweight, includig fuel surcharges, up to $20.08 from $18.92 a year ago.