In The News

CEO pleased with XPO's performance

XPO Logistics Inc., the parent company of Express-1 Expedited Solutions Inc. , last Tuesday released its fourth-quarter and year-end earnings statement for 2011.

Although the report reflected a net loss of  $1.5 million for the fourth quarter, Chief Executive Officer Bradley Jacobs said in an interview with Expediters Online that he was pleased with the company’s performance from an operational standard.

Jacobs and his equity company, Jacobs Private Equity LLC, purchased a majority share of XPO Logistics in September, investing $150 million.

“I think the quarter from an operational perspective was solid,” Jacobs said.

Express-1 generated total revenue of $20.3 million in the fourth quarter of 2011, an increase of 10.1 percent over the fourth quarter of 2010. Much of the growth was attributed to an increase in cross-border business into Mexico and temperature-controlled transactions. Express-1’s operating income nearly doubled for the quarter, increasing by 94.2 percent to $1.8 million.

Jacobs was very optimistic about the future of Express-1.

“It’s all about recruiting more owner-operators,” he said. “We are really trying to give more miles to the owner-operators we have, and looking to add more good owner-operators. ... We do want to grow in expediting. We are going to compete even more aggressively.

“We know the success of our business depends on the owner-operators.”

XPO Chief Operating Officer Sean Fernandez said the company’s existing owner-operators have had positive reactions to the transition, and the company expects to improve its recruiting and retention with rate increases and other incentives.

Express-1 is looking to add owner-operators in all segments, particularly straight trucks and teams.

In addition to a solid operational performance by Express-1, XPO also saw a 27.2 percent increase in total revenue from its freight brokerage business in the fourth quarter, to $8.3 million. Operating income for the freight brokerage segment was $496,000 for the quarter, an increase of 42.9 percent from the fourth quarter of 2010.

Overall, XPO had total revenue of $44.1 million and gross margin was $7.2 million for the fourth quarter of 2011, increases of increases of 6.1 percent and 11.6 percent, respectively, year-over-year.

The company’s net income was skewed by significant costs associated with building an executive team and infrastructure after the September purchase.

“These are strategic investments that should return significant benefits as we further execute our plan,” Jacobs said in a press release.

XPO also announced the opening of five new locations for its truck brokerage and freight forwarding segments, as well as the appointments of several field managers at various locations.

The company is scheduled to unveil the first phase of a new IT platform in March.

Jacobs said the company’s strategy will be to continue growing through a combination of cold starts and acquisitions.

“Our cold starts are off to a good start,” Jacobs said. “As far as acquisitions, we don’t have anything to announce yet, but we are in discussions with a number of different companies.”