Brad Jacobs feels bullish about logistics
CEO of the multibillion-dollar logistics provider XPO Logistics gives optimistic message of growth at CSCMP EDGE conference.
When Brad Jacobs visited the facilities of Norbert Dentressangle after his company, XPO Logistics, purchased the European transportation provider for $3.53 billion in 2015, he made the assembled managers tell him the word for “growth” in their own first language. He then had them shout that word for two straight minutes. “In future conversations, it became clear that many did not remember much else that was discussed that day, but everyone remembered that exercise,” he told those who tuned into hear his keynote session at the Council of Supply Chain Management Professionals (CSCMP) EDGE conference.
Jacobs did not ask attendees of the conference, which was held virtually this year, to repeat that exercise. But it was clear that the XPO CEO felt they should all be brimming with similar optimism about the future of the logistics and transportation space. “This is an amazing industry,” Jacobs declared. “It’s the pulse, the heart, of our whole ecosystem of commerce.”
E-commerce (and as a result reverse logistics) has, of course, been a big driver of growth in the logistics space recently. But Jacobs insists that the potential for growth is “almost peanut butter spread” across XPO’s entire business. “Customers are increasingly outsourcing their supply chains,” he said.
Jacobs is hopeful about peak season, saying that customers are forecasting “the mother of all peaks.” As a result, XPO is planning to hire and extra 25,000 seasonal employees as a result.
At the start of the year, XPO had looked to break up its business by either selling or spinning off one or more of its units. The company reversed that decision in March, when the markets took a turn for the worse. Jacob’s said today that he did not know whether XPO will revisit the decision to break up the business, but it’s clear that he continues to feel that Wall Street is undervaluing XPO compared to its competitors.
XPO also recently surprised some by announcing a deal to acquire a major part of Kuehne + Nagel’s U.K. contract logistics business. In today’s session, Jacobs predicted more consolidation in the contract logistics space.