Bradley S. Jacobs, the Chief Executive Officer of XPO Logistics, Inc. (XPO): a Wall Street Transcript Interview

Wall Street Transcript

67 WALL STREET, New York - September 21, 2012 - The Wall Street Transcript has just published its Transportation and Logistics Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: FMCSA CSA Regulations - Regulatory Issues in the Trucking Industry - Trucking Pricing & Capacity Dynamics - Retail and Industrial Transportation Demand - Truckload, LTL, Parcel, Rail and Intermodal - Capacity Constraints Result in Pricing Power

Companies include: Express-1 Expedited Solutions (XPO) and many others.

In the following excerpt from the Transportation and Logistics Report, the CEO of XPO Logistics discusses the outlook for his company for investors:

TWST: Please start by introducing our readers to XPO Logistics with a brief company history and an overview of its operations today.

Mr. Jacobs: XPO Logistics is a non-asset-based transportation services provider in the logistics industry. We don't own any trucks, airplanes or ships. We're a middleman between shippers and carriers who outsource their logistics to us as a third-party broker. We reported $177 million of revenue in 2011, and we expect to reach our target of a $500 million revenue run rate by year end.

Since taking control of XPO last September, we've put a strategy in place to grow the company to several billion dollars in revenue over the next few years with brokerage as our main focus. Our strategy has three prongs, all of which are in progress. Number one is acquisitions. We'll continue to acquire attractive truck brokerage operations that are scalable.

Number two is cold starts. We'll continue to open greenfield locations, mainly truck brokers, throughout North America. And third, we are optimizing our existing operations.

In eight months, we've completed two acquisitions and 12 cold starts, seven of which are in truck brokerage, and we've grown our existing operations in our three business segments of freight forwarding, expedite and truck brokerage. We've also put together a management team whose skill set matches this ambitious plan.

TWST: Would you talk a bit more about the company's most recent acquisition, Kelron Logistics, in terms of why that was an attractive acquisition target and a good fit for XPO?

Mr. Jacobs: We purchased Kelron Logistics in early August. It's a $100 million revenue truck broker based in Canada with offices in Toronto, Vancouver, Montreal and Cleveland. Kelron has built up strong relationships in the industry over 20 years.

The first thing we did was to connect the Kelron team to our national operations center in Charlotte, which is providing them with access to more trucks. We're using this additional capacity to help grow our share of wallet with Kelron's long-term customers.

Next, we'll migrate them to our technology platform, and then we're going to grow the business by adding salespeople at each of their locations. We expect Kelron's relationships and history to enhance the entire XPO system both in terms of pricing and finding trucks.

TWST: I believe it was in the spring that XPO Logistics had a common stock offering. How well was it received by investors, and more broadly, would you describe the company's access to capital and its strategy for financing growth and acquisitions?

For more from this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers, and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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