XPO Logistics evaluates new mergers, acquisitions

Dive Brief:

The CEO of America's fastest growing transportation company told a supply-chain management conference in Chicago Thursday that XPO Logistics is actively seeking "smaller, strategic" deals and larger deals with other logistics companies in Europe and North America.
According to the Wall Street Journal, CEO Bradley Jacobs told the conference that these deals are still in "the early, early stages," and didn't indicate which companies XPO is eyeing or when a deal might be announced.
XPO Logistics has acquired 17 companies since 2012, the most recent being Con-way. The company's aggressive buying spree belies an intention to become a world-class logistics company that oversees and manages supply chains from start to finish.

Dive Insight:

Logistics professionals shouldn't be surprised by Jacobs' announcement at Chicago's 3PL & Supply Chain Summit — those who follow XPO's exploits will remember that in October 2015, Jacobs told the JOC Inland Distribution Conference that XPO will continue to acquire new companies over the next five years, and in September 2015 he said he expects a capacity shortage within the industry, but whoever controls assets will thrive.

Jacobs' plan for XPO has been quite clear from the start: He plans to grow the company using a series of strategic acquisitions to consolidate and streamline the freight industry and increase industry capacity in the long run. Since the freight industry is struggling with low demand and high competition, Jacobs' strategy makes sense. As XPO continues to buy and merge with other companies, demand will increase but competition will decline, and XPO will come out on top because it will control most — if not all — assets.

Logistics professionals will note there are several things going on here: XPO is not only streamlining and consolidating the freight industry, but also transforming logistics and supply chain management by acquiring other logistics companies along with the trucking companies. Eventually, XPO will control the supply chain of the freight industry from start to finish. This will not only drive down costs, but also increase efficiency.

Supply chain managers, logistics professionals and other companies in the freight industry will eventually reckon with XPO Logistics — by learning from XPO's example, or joining XPO in its freight and logistics takeover.