CSCMP's Supply Chain Quarterly
December 15, 2017
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XPO Logistics identifies four top technology priorities

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Transportation firm details where it's likely to spend its $425 million annual technology budget

Transport and logistics provider XPO Logistics Inc. is known for growing through a series of high-profile acquisitions. It's also known for its cutting-edge technology, and in a session Monday at CSCMP's annual meeting in Atlanta, the company gave an idea where it might be investing its technology spend next. XPO's investments matter to the rest of the industry because of the company's segment-leading size and best-of-breed performance, not to mention its deep pockets.

XPO targets its $425 million annual technology budget at four broad themes: advanced warehouse automation, tracking and visibility, logistics marketplaces, and big data and machine learning, XPO chief strategy officer (CSO) Scott Malat said.

Warehouse automation is set for rapid growth, both on the distribution center floor and in the air, where flying drones can perform inventory counts by using sensors to read bar codes, radio frequency identification (RFID) tags, and optical-character recognition (OCR) inputs, Malat said. Another factor fueling warehouse automation growth is a drop in the average price per robot in North America of 16 percent in the last four years, he added.

Tracking and visibility services are seeing hot demand from logistics practitioners because they allow retailers to look more deeply into their supply chains and enable consumers to track their incoming shipments, Malat said. Logistics marketplaces, meanwhile, serve to automatically match shippers and carriers without relying on brokers, streamlining the process of purchasing transportation services and providing shippers with improved access to small trucking fleets, he said.

Finally, big data and machine learning let users deploy self-improving algorithms to forecast demand and to avoid price spikes in purchasing decisions. Those capabilities could soon allow logistics industry users to catch up with sectors such as retail that have been building their big data capabilities for years, Malat concluded.

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