XPO Logistics: Description of Its Key Services

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Introduction

International logistics is essential to the globalization of economies around the world. Shippers and receivers alike must find ways to move products from one side of the world to another. How do these companies choose the right transportation partner to move their product? Just picking a company out of the yellow books is neither the proper method nor asking your competitor the correct way. Companies need to find ways to move their product in an efficient and cost-effective manner. DHL Express, United Parcel Service, Royal Mail, FedEx Corporation, Americold Logistics, Werner Enterprises, and Kenco Group are companies that focus on moving products around the world (Burnson par. 3). Companies that have spent many years learning and developing technology that will give shippers the ability to transport and track products in the supply chain. In the modern business world, it is not only about the capacity of a company to give the best quality of products but also to deliver them to market with minimal disruptions in the supply chain (Rasmussen et al. 15). The analysis of the nature of operations offered by XPO Logistics can guide to shippers in choosing the appropriate supply chain.

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Established in 1989 as an American company called Express-1 Expedited Solutions, XPO Logistics has grown and expanded its networks across the world. In the last decade, XPO Logistics experienced tremendous growth because it started to trade the New York Stock Exchange, acquired significant companies, and managed to get listed in Fortune 500 (Rasmussen et al. 8). Through the acquisition, XPO ventured into new markets in North America and Western Europe, which improved its competitiveness in aerospace, e-commerce, transportation, and logistics. Currently, XPO Logistics ranks among the leading ten companies in the transport and logistics industry in the United States and across the world due to its robust integration of technology, people, and infrastructure (XPO Logistics). The adoption and use of technology have made XPO Logistics be a market leader in the transport and logistics industry globally (Thrower par. 2). Key technologies consist of automated operations, artificial intelligence, collaborative robots, real-time tracking, and pricing algorithms.

The analysis of operations shows that XPO Logistics focuses on transportation and logistics as two key sectors. In the transportation sector, XPO Logistics offers freight brokerage by linking customers with appropriate carriers with the capacity to ship products across the globe. Moreover, the company provides intermodal transport comprising of rail and road for drayage services for local and internal clients (XPO Logistics). Other transport services are the last mile for home deliveries and small freight services of less-than-truckloads. Global forwarding is the central part of the transportation sector because it entails international freights by the ocean, air, and ground. In the sector of logistics, XPO Logistics has specialized in the provision of warehousing, distribution, handling, and inventory management in the supply chain (XPO Logistics). In this view, it is apparent that XPO Logistics is an established company that offers updated transport and logistical services to diverse clients in various segments and markets. Therefore, a detailed description of global forwarding, ocean freight, air freight, warehousing, drayage, and supply chain management highlights the services of XPO Logistics in the transport and logistics industries.

Global Forwarding

As an international company, XPO Logistics is a dominant market leader in the international arena. In global forwarding, the company has dedicated itself to ensuring that there is efficiency transport of freight across borders of countries and continents through ground, sea, and air (XPO Logistics). XPO Logistics can ship products of any measure and weight from one country to another across the world. To improve the accessibility of its services in the global market, XPO Logistics has opened offices in various regions of the world, namely North America, South America, Europe, Asia, and Australia. These offices are in over 32 countries strategically located to support international operations. In both air and ocean forms of transport, XPO logistics provide global forwarding services, such as cargo insurance, custom clearance, documentation, project services, and foreign-to-foreign clearance (Burnson par. 2). Moreover, XPO has dedicated strategic offices in undertaking operations of global forwarding and boost competitiveness. Hence, global forwarding operations of XPO Logistics are highly competitive in the global markets as it has numerous offices situated in strategic regions and countries.

Global forwarding focuses on the import and export services of diverse clients around the world who ship different products. International, cross-boarders, and domestic shipments are major avenues through which XPO Logistics targets in its global forwarding operations. XPO Logistics has not invested heavily in global forwarding because it operates about 1% of the market, and agents own some of its offices (Rasmussen et al. 13). Offices across the world are connected with the integrated network for effective shipment of freight. In its leading global forwarding operations, the company uses XPO Connect, which is an integrated digital platform, to provide real-time management of data. XPO Connect assigns shipments to specific carriers, depending on details of customers such as geographical location, nature of goods, mode of transport, price, weather conditions, market demand, and traffic status (Fortuna par. 15). Furthermore, with XPO Connect, the management exploits a single portal in accessing inventory, checking order details, tracking products, and filing custom forms. Since XPO Logistics is one of the leading companies in the United States and across the world, a considerable proportion of importers and exporters seek forwarding services from it. The use of technology has made XPO Logistics an attractive company in the provision of global forwarding services.

Ocean Freight

XPO Logistics offers ocean freight services to its customers across the world. As the cheapest means of shipping products in international markets between countries and continents, the ocean freight service enables XPO Logistics to offer efficient and timely delivery of goods. The analysis of infrastructure indicates that XPO Logistics has an elaborate network of ocean transport and strategic location of officers in various global regions. Ocean services consist of full container load, less-than-container consolidation, lift-on and lift-off loads, roll-on and roll-off vehicles, vessel charter, and bulk load (XPO Logistics). With these ocean services, XPO Logistics can meet the unique needs of diverse customers in the global markets. When compared to other logistics companies, the diversity of services in ocean freight offers XPO Logistics a competitive advantage worldwide.

To provide superb ocean services, XPO Logistics implements numerous strategies to ensure that customers achieve satisfaction in shipping their products. To overcome the challenge of breakage, XPO Logistics consolidates products in containers to guarantee safety and protection. XPO Logistics offers ocean guaranteed services characterized by day-definite and reliable offers. Ocean guaranteed services are safe, efficient, integrated, assured space, faster transit times, cost advantage, and greener option (XPO Logistics). Ocean services have enhanced reliability due to automated inventory and shipment operations to ensure day-specific delivery. At the same time, the use of distinct identification details such as phone, invoice, and destination promotes the efficiency of shipping products. The presence of an integrated network of transport allows seamless movement of products, whereas assured space enables customers to ship their products to any destination of their choice (Stinson par. 3). XPO Logistics registers 99% on-time performance and offers discounts of 20% when shipment delays. Ocean freight is advantageous because it is 75% cheaper than airfreight and reduces carbon emissions by 75%.

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Air Freight

In the transport and logistics sector, XPO Logistics provides air freight services to customers globally. Air charter, on-board courier, direct flight, and consolidated schedules are primary air freight services offered by XPO Logistics. To undertake air freight globally, XPO Logistics has received accreditation and certification in Brazil, Belgium, Chile, Hong Kong, France, Germany, Ireland, Netherlands, Spain, United States, United Kingdom, and Russia (XPO Logistics). These countries are strategic for air freight to get seamless multimodal transport services to various destinations and promote the timely delivery of products. With offices in over 32 countries, XPO Logistics operates flight schedules between and within these countries, depending on the demand for freight services. To remain competitive in the air freight industry, XPO has increased its investment from $500 million in 2018 to $650 million in 2019 (Thrower par. 5). The increased investment has boosted the capacity of XPO Logistics to offer air freight services and become competitive.

To expand its global operations in air freight, XPO acquired cargo planes and shares in major airlines. In 2012, XPO Logistics purchased East Coast Air Charter and acquired 67% shares of Norbert Dentressangle in 2015, making it a competitive company in air freight globally (Rasmussen et al. 12). Moreover, in collaboration with major cargo airlines around the world, XPO Logistics has boosted its freight capacity. Airline freight services are not only efficient but also time-sensitive and critical in the transportation of goods across the globe. Air charter services entail those with dedicated aircraft to transport specific goods from one country to another. The next-flight-out ensures the delivery of freight within the best time feasible for customers to receive them. Other services provided by air freight are day-specific deliveries, which vary according to the urgency of customers, are morning arrival, afternoon arrival, next-day delivery, and business day delivery (Rasmussen et al. 6). XPO Logistics provides these alternatives for customers to have a wide range of services that meet their urgency as well as costs.

Warehousing

XPO Logistics has made considerable investments in warehousing because it has a high capacity to offer contract logistics to customers in various regions across the world. Warehousing is an integral aspect of contract logistics provide by XPO Logistics to customers in over 32 countries and over 1500 locations (Rasmussen et al. 3). The storage capacity of XPO Logistics is more than 800 warehouses with 100 million square feet in the United States and Asia, and another 100 million square feet in Europe (XPO Logistics). Services of warehousing entail inbound and outbound logistics e-commerce, predictive analytics, cold chain, supply chain optimization, and omnichannel retail. The majority of clients of warehousing are in the agricultural, e-commerce, retail, and technology industries. In storage, XPO Logistics serves both models of business-to-business channels (B2B) and business to consumer networks (B2C). With strategic stores, XPO Logistics can afford more than 14 million deliveries annually to customers in various destinations globally (XPO Logistics). Warehousing gives a competitive advantage to XPO Logistics by allowing it to provide last-mile deliveries effectively.

Technology plays a central role in the implementation of operations of XPO Logistics in contract logistics of warehousing. Owing to considerable experience in contract logistics, the company came up with an innovative service of storage called XPO Direct (Stinson par. 10). This service permits the sharing of space by customers in the retail industry who undertake e-commerce and omnichannel businesses. With the use of XPO Logistics, customers share warehousing facilities, ensure optimization of storage areas, as well as reduce associated costs. Tools of artificial intelligence employed in warehousing identify storage patterns of consumers and the flow rate of merchandise over time and apply them in optimizing the sharing of spaces (XPO Logistics). Additionally, XPO Logistics has an elaborate process of reverse logistics, which ensures that both manufacturers and customers achieve their objectives in business (Rasmussen et al. 11). Reverse logistics delivers proper handling of goods through the process of inspection, repair, disposal, recycling, warranty clearance, and compensation of retailers.

Drayage

XPO Logistics offers drayage as a form of intermodal transport in ocean shipment, air freight, and railroad movement of goods. Drayage is a critical element of transportation and logistics because it ensures timely delivery products to various destinations and warehouses (Rasmussen et al. 4). XPO Logistics provides drayage services ocean ports, rail termini, airports, and warehouses where it has established its offices across the world. In the shipment of cargo using containers, XPO Logistics offers drayage services as intermodal transport. XPO Logistics have more than 2,400 operators and 25,000 drayage trucks dedicated to the movement of intermodal containers in their respective ocean ports, rail terminals, airports, and warehouses (XPO Logistics). To ensure quality delivery of drayage services, the company vets contracted owners of fleets and their drivers.

In the provision of drayage services, XPO Logistics has incorporated technologies to provide efficient intermodal transport (Thrower par. 6). Drayage services are seamless since XPO Logistics employs an elaborate network, which gives real-time tracking and communication between the company and its customers. The integration of Rail Optimizer (RO) into the drayage system creates a command point where ocean ports, rail terminals, and shippers communicate with drayage operators in various offices across the world (XPO Logistics). RO system has an integrated electronic data interchange device that records and report drayage operations for XPO Logistics to monitor shipments. This system allows customers to track and trace their merchandise during movement from couriers into intermodal transport and warehouses.

In improving the efficiency and profitability of drayage services, XPO Logistics has come up with numerous technologies called less-than-truckload optimization (LTLO). Four techniques of LTLO are linehaul bypass model, load-building through artificial intelligence, dynamic route optimization, and pricing algorithms (XPO Logistics). The linehaul bypass model focuses on enhancing the efficiency of drayage transporters by limiting the number of stops and inconveniences (Kurtz par. 2). The load-building technology applies artificial intelligence in ensures the loading of pellets in a sequence that allows efficient off-loading during delivery (Kurtz par. 3). The dynamic route optimization technology enables drayage transporters to pick and deliver goods based the demand, traffic, and obstructions, resulting in augmented utilization of assets (Kurtz par. 4). In the technology of pricing algorithms, XPO Logistics employs machine learning in the analysis of market conditions in response to supply and demand forces, as well as the drayage capability (Kurtz par. 5). Moreover, pricing algorithms use historical data and customer requests in forecasting market trends for adequate provision of drayage services.

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Supply Chain Management

XPO Logistics is a significant player in the supply chain management of blue-chip companies around the world. Its elaborate network of inbound and outbound logistics has made XPO Logistics an outstanding in the United States and global markets. The analysis of outbound logistics indicates that the company has warehouses in over 32 countries and more than 1500 offices backed by an elaborate network of ocean, air, and ground freights (Rasmussen et al. 3). Moreover, in the management of warehouses, XPO Logistics undertakes inbound logistics of receiving orders, processing requests, and delivering products to customers via the infrastructure if outbound logistics. These outbound logistics enhances the capacity of XPO Logistics to serve customers from remotest regions in the world.

A notable technology employed by the company is Ship XPO, which offers a digital experience to customers and improve their level of satisfaction with services of the supply chain management. Ship XPO is web-based technology designed to help consumers access numerous tools of supply chain management, especially those relating to last-mile delivery (XPO Logistics). Since customers in the e-commerce industry require online services and door-to-door delivery of goods, Ship XPO provides an appropriate solution and gives satisfactory outcomes. Through Ship XPO, customers can purchase their products online and schedule for shipment from various locations to destinations of choice globally. Consumers place orders, track their shipment, select activities on the online calendar, and reschedule delivery times and locations (Fortuna par. 12). In shipping, customers can track their goods using Google Assistant, Amazon’s Alexa, or Google Search website on their computers or smartphone (XPO Logistics). Ship XPO has improved customer experience by providing a seamless supply chain management for e-commerce customers.

The efficiency of supply chain management is high because XPO Logistics has incorporated automation, intelligent technologies, and robotics in various operations. Automated vehicles improve the effectiveness of the supplying chain by hastening drayage operations. Artificial intelligent technologies such as XPO Direct have ensured that there is a seamless order, delivery, tracking, and consistent supply of products through the supply chain to meet the demand of customers. In warehouses, XPO Logistics utilizes robotics in the arrangements and packaging of materials in line with the inbound logistics of respective customers. In the management of labor, the company uses the XPO Smart system to monitor employees and boost productivity.

Conclusion

The analysis of XPO Logistics reveals that it is an established company that offers domestic and international solutions to the transport and logistics industries. In the transport industry, XPO Logistics provides ocean freight, air freight, global forwarding, drayage, and supply chain management services to diverse clients across the world. Warehousing is an aspect of the contract logistics that XPO Logistics provides to customers in the manufacturing, production, and retail industries. XPO Direct, robotics, less-than-truckload optimization, artificial intelligence, XPO Smart, Ship XPO, machine learning, automation, tracking, and inventory management are some of the critical technologies that the company uses in its operations globally. Overall, all these technologies have increasingly enhanced the competitive capacity of XPO Logistics in local and global markets.

Works Cited

  1. Burnson, Patrick. “Top 25 Freight Forwarders 2017: Digitization & E-Commerce continue to reshape the marketplace.” Logistics Management, 2017. Web.
  2. Fortuna, Nick. “It’s Faster and It’s Fancier. It’s the 2020 Supply Chain: Nine Technological Advances Reshaping Supply Chains.” Material Handling Industry Solutions, 2020. Web.
  3. Kurtz, Erin. “XPO Logistics Announces Four New Technology Initiatives for Less-Than-Truckload Optimization.” XPO News, 2018.
  4. Rasmussen, Drew, et al. “XPO’s Future is Bright.” The University of Iowa, 2018. Web.
  5. Stinson, Jim. “XPO Installs Two Tech Platforms to Meet Freight Challenges.” Transport Topics, 2019. Web.
  6. Thrower, Ben. “Traditional Freight Brokers Investing Millions To Stay On Top.” Freight News, 2020. Web.
  7. XPO Logistics: About Us. XPO Logistics, Inc., 2020. Web.

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