Company veteran Drew Wilkerson will run the new, publicly traded company, which will be one of the largest freight brokers in the US
The appointment of Mr. Wilkerson, who has been president of the North American Transportation business segment at the Greenwich, Conn.-based company, marks a new step in the dismantling of a company that was built up during a decade of acquisitions into one of the largest freight and logistics operators in the US
XPO earlier spun off its contract logistics unit last year into the separate GXO Logistics Inc.,
sold its intermodal business to STG Logistics in late March and intends to sell or otherwise divest all of its European operations.
The company expects to complete the separation of the freight brokerage business by the end of the fourth quarter. It hasn’t determined how shares in the spinoff will be distributed to existing XPO shareholders and hasn’t given a name to the spinoff.
Carving off the freight brokerage will leave XPO, which in 2019 counted $16.65 billion in revenue from its range of supply chain-focused operations, primarily as an operator in trucking’s less-than-truckload sector, in which loads from multiple customers are carried on the same truck.
XPO’s freight brokerage business, which matches available loads to available trucks on the spot market, took in $4.8 billion in revenue last year and counted $226 million in operating profit and $305 million in adjusted earnings before interest, taxes, depreciation and amortization, the company’s preferred measure of profitability. The unit also counts last-mile logistics, transportation management and global freight forwarding in its portfolio.
Mr. Wilkerson has been with XPO since 2014 and before that held various positions at CH Robinson Worldwide Inc.,
the largest freight broker in the US by revenue.
Research group Armstrong & Associates measured the domestic US transportation management market, which includes freight brokerage, at more than $91 billion in gross revenue last year and counts XPO as one of the top five operators in the market.
The business is highly fragmented, however, and has been pressured lately by the growth of startups such as Convoy Inc., Transfix Inc. and Uber Technologies Inc.’s
Freight unit that are trying to use new technology to take market share by making freight operations more efficient.
Write to Lydia O’Neal at [email protected]
Credit: www.wsj.com /