Logistics turned in a strong performance for XPO in the first quarter with revenue up 3.2 per cent on last year at $1.49 billion.
The growth was led by e-commerce, food and beverage, consumer packaged goods and aerospace verticals, partially offset by the adverse impact of foreign currency exchange, the group said in its Q1 results.
Adjusted EBITDA in Logistics was up 0.9 per cent at $113m but operating income slipped from $48m to $46m reflecting higher depreciation expense related to prior capital investments in new business wins.
XPO’s Transport business saw revenue fall from $2.77bn to $2.66bn, while operating income was down from $139m to $128m. The group said the figures reflected “lower freight brokerage and last mile direct postal injection revenue from the company’s largest customer, as well as the adverse impact of foreign currency exchange, partially offset by growth in North American less-than-truckload and European transport”.
Chairman and chief executive Bradley Jacobs said: “In the first quarter, we delivered on expectations and beat on adjusted EBITDA and free cash flow. We also closed a record $1.1 billion of new business, up 15 per cent year-over-year. Our sales pipeline stands at more than $4 billion of active bids – a new high-water mark for us.
“In our logistics segment, we generated significant growth in our e-commerce, food and beverage, consumer packaged goods and aerospace verticals. We’re using our XPO Smart labour productivity tools in our logistics operations, including the 23 contract start-ups we implemented in the first quarter.
“In transport, we increased freight brokerage net revenue by 9.5 per cent year-over-year and grew our net revenue margin by 420 basis points. We’re automating key touch points in brokerage on our XPO Connect digital platform, with large upsides to customer service and productivity. We’ve rolled out XPO Connect in Europe, and last month we launched new capabilities for last mile on the platform.”