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XPOLogistics adapts to the post COVID-19 world

XPO Logistics, Inc., a global provider of supply chain solutions feels 2020 will be a lost year from an earnings growth prospective in the industry with 2021 looking much better year, and it will get better from there.

In a letter to its stockholders, Bradley S. Jacobs, chairman, and CEO of XPO Logistics, Inc., said their first priority is to keep their employees out of harm’s way.  Second is their duty as an essential provider of transportation and logistics services.

Jacobs described what they are experiencing leading up to the COVID-19 crisis. “We had ears to the ground from day one in Asia, where we have about five million square feet of logistics space, including a footprint in Wuhan, China. Our Chinese logistics sites are all back up and running at about 90% of prior levels. Our European operations saw the impact next, starting with Italy and followed by Spain and France at roughly the same time; then the UK and other parts of Europe. North America was the most recent, and the most rapid, escalation.”

Bradley Jacobs headshot

Bradley Jacobs

“From a demand standpoint, January was very good and February and early March were reasonably good. The last half of March declined sharply as large sectors of the economy came to a near halt. Our industry is a leading indicator, so we felt the pain early, and we’ll be at the forefront of the rebound when the world returns to work. We expect that to happen in fits and starts in the back half of the year, as extreme social distancing winds down.” added Jacobs.

The management at XPO Logistics believes that some of the behaviors reshaped by the pandemic may become economic tailwinds in our industry. For example, e-commerce growth, which was already at a double-digit rate, could accelerate in the post-pandemic world. Millions of consumers have become more accustomed to online shopping for food, household goods, pet supplies, health and beauty products, furniture, and appliances without leaving their homes. If this proves to be secular, it will drive even more demand for e-fulfillment, omnichannel retail, reverse logistics, and last-mile logistics.

More immediately, they are adapting to current demand, moving medical products, personal protective equipment, food and beverages, telecommunication devices, household staples, and business supplies. The crisis has made partners of fierce competitors in our industry. We’re working together to get all types of goods to the people who need them.

Jacobs said, “COVID-19 is also teaching us how to be an even more unified, forward-looking team. We’re adapting all the time and documenting practices we can use in the future. XPO has never been a company of silos, but what few silos there were have disappeared. There’s more collaboration, more empathy for others, and more smiles in voices on the phone.