XPO Logistics Names CEO To Lead New Freight Brokerage Spinoff

XPO Logistics recently tapped Drew Wilkerson to head its spinoff as one of the largest industry operations undergoes significant dismantling.

“Drew is an exceptional transport executive who is passionate about creating value through our technology-based brokerage model,” XPO chairman and CEO Brad Jacobs reportedly said. “He’s a major reason why our truck brokerage revenue growth rate was three times the industry CAGR from 2013 to 2021. The spin-off is an opportunity for Drew and his proven management team to unlock greater potential with a pure-play brokerage platform.”

In 2021, wide-reaching freight and logistics organizations gobbled up smaller outfits and secured increased warehousing assets. Last year’s trend appeared to indicate industry insiders were strengthening their market positions through diversification and increased regional reach. XPO Logistics employed this strategy for upwards of a decade to build among the most prominent and diversified corporations in the freight hauling sector.

But 2022 appears to have leaders at XPO rethinking ways to drive profits. The organization sold off its intermodal STG Logistics wing in March, segregated its contract-driven GXO Logistics Inc unit, and reports indicate its European operations are on the chopping block. And even though the organization has yet to officially name its spinoff, it’s difficult to disagree with the leadership team’s business strategy.

XPO Logistics recently announced that first-quarter revenue improved to $3.47 billion, outpacing the $2.99 billion posted for the same period in 2021. And the forecast for GXO Logistics runs $2.14 billion in sales for the fiscal quarter, according to Zacks. Additionally, at least five analysts peg GXO earnings at $2.18 billion, and sales exceeding $1.88 billion, totaling a growth rate of 13.8 percent.

“Analysts expect that GXO Logistics will report full-year sales of $8.69 billion for the current year, with estimates ranging from $7.43 billion to $9.03 billion. For the next financial year, analysts anticipate that the firm will post sales of $9.31 billion, with estimates ranging from $8.02 billion to $9.75 billion,” according to Zacks Investment Research.

Wilkerson joined XPO in 2012 after holding a variety of positions at C.H. Robinson Worldwide Inc., the largest freight broker in the U.S. in terms of revenue. With the newly-minted spinoff, XPO seems to buck conventional wisdom by creating a pair of publicly traded companies while others in the sector pull assets together and build larger, singular entities.

Sources: wsj.com, barrons.com, marketbeat.com, globalnewswire.com