Brad Jacobs will step down from the CEO’s office at XPO Logistics after the conglomerate spins off its brokerage platform in the fourth quarter this year, bringing an end to an era that has seen him consolidate a powerful swath of transportation interests into a powerhouse logistics provider and then break them up again in search of more profitable returns.
Jacobs will remain with Greenwich, Connecticut-based XPO as executive chairman, and will become non-executive chairman of the spin-off, the company announced today.
In his place, Mario Harik will succeed Jacobs as XPO CEO and join the board of directors. Harik has held various executive slots at the giant company in recent years, including chief information officer and acting president of its less-than-truckload (LTL) unit. He will now drop the “acting” prefix and assume the mantle of LTL president, taking on the leadership role as the company becomes a pure-play LTL transportation provider in North America by completing both the brokerage spin-off and the divestiture of its European business, XPO said. The company also previously spun off its contract logistics arm, GXO Logistics Inc., and its North American intermodal business, both in 2021.
“The opportunity ahead for XPO is enormous,” Harik said in a release. “We have a high-[return on invested capital] LTL business in an industry with substantial barriers to entry, durable end-market demand, secular tailwinds, and strong pricing dynamics. Our network has a robust technological infrastructure and a highly engaged team with many long-standing customer relationships. In the seven years that we’ve owned the business, we’ve improved our adjusted operating ratio dramatically — now, our new growth strategy has created fresh momentum.”
Harik comes to his new job as the global economy is groaning under the weight of challenges like the pandemic rebound, congested ports, persistent inflation, rising interest rates, and an increasing need to boost wages to attract sufficient labor for warehouse and truck driving jobs.
However, XPO said that Harik has recorded strong results in his first nine months as head of North American LTL, improving the company’s operating efficiency to a record level in the second quarter of 2022. XPO said that Harik also enhanced pricing (excluding fuel impact) and accelerated the growth strategy, doubling production run-rate at the company’s in-house trailer manufacturing facility and opening five new terminals, adding 345 net new doors toward a goal of 900 net new doors by year-end 2023.
In a statement, outgoing CEO Jacobs praised his successor. “Mario has been key to XPO’s success since our earliest days, working side-by-side with me to build the company into an industry leader and innovation powerhouse,” Jacobs said. “He has a deep understanding of our business, and he’s the architect of our industry-best technology platform. I’m confident that we’ll have a seamless transition from Mario’s current role as LTL president to his leadership of XPO as a standalone LTL company.”
The announcement came the same day that XPO released its quarterly earnings report for the second quarter, posting revenue of $3.23 billion, compared with $3.19 billion for the same period in 2021. Based on that cash flow, net income from continuing operations attributable to common shareholders was $141 million for the second quarter, compared with $113 million for the same period in 2021, XPO said.