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XPO Logistics Announces Four New Technology Initiatives for Less-Than-Truckload Optimization

XPO Logistics expects to generate approximately $100 million in incremental operating profit over the next two years from proprietary less-than-truckload technologies.

Four New Technology Initiatives

XPO Logistics, Inc. (NYSE: XPO), the second largest provider of less-than-truckload (LTL) transportation in North America, has announced four new technology initiatives at the core of its LTL 2.0 optimization plan.

The company, which recently reported the best third quarter operating ratio in 30 years for its LTL unit, expects to generate approximately $100 million in incremental operating profit over the next two years from proprietary technology underlying LTL 2.0.

Bradley Jacobs, XPO Logistics Chairman and CEO said that these four categories of LTL technology innovations are important drivers to the XPO business on a long-term basis.

Linehaul Bypass Model

The company is piloting new algorithms to assemble truckloads dedicated to direct movements of LTL freight.

The linehaul bypass model improves the efficiency of company trucks and trailers and purchased linehaul services by reducing multiple stops to a single destination.

Load-Building through Artificial Intelligence

AI tools and computer vision technology for cross-dock operators help to ensure that inbound pallets are loaded in the optimal trailers, and in the right sequence inside the trailers, for the greatest possible efficiency during delivery.

Intelligent load-building technology also helps limit damage.

Dynamic Route Optimization for Pickup and Delivery

The company is piloting proprietary AI tools that set the sequence of each LTL driver's pickups and deliveries and adjust routes in real time based on traffic, road construction and other impacts to efficiency.

This has increased the number of delivery and pickup stops per hour, improving asset utilization.

Pricing Algorithms

The company is developing machine learning capabilities to predict LTL price elasticity.

The technology is being designed to forecast market conditions for future dates based on real-time supply and demand, as well as historical data and XPO capacity levels.

This will help enhance the speed and accuracy of responses to customer RFPs.

Mario Harik, chief information officer of XPO Logistics, said;

"Our technology is spurring growth across all the services we offer. We've pinpointed four high-impact areas where we can lead the LTL industry in transforming traditional approaches to serving customers. Two of these innovations - dynamic route optimization and linehaul bypass - are already in pilot. Given our capacity for innovation, our opportunity for creating value in LTL is nearly limitless."

XPO develops its technology within a proprietary, cloud-based ecosystem, supported by an annual investment of over $450 million.

Other recent innovations in XPO's global operations include the deployment of intelligent robots in warehouses, the XPO Direct shared-space distribution network, voice integration with Amazon and Google to track home deliveries of heavy goods, and the launch of the XPO Connect digital freight marketplace with the Drive XPO mobile app for carriers.

Related Article: Shippers Turn to Volume Less-than-Truckload Spot Pricing in Tight Capacity Market

Shippers Turn to Volume Less-than-Truckload Spot Pricing in Tight Capacity Market

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Article Topics
Trends   Transportation   Transportation Management   Less-than-Truckload   LTL   SMC3   All topics


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