Dive Brief:
- XPO’s core LTL business achieved a nearly 50% year over year increase in operating income to $175 million in Q1, the carrier announced in an earnings report Friday.
- A 9.8% increase in yield, excluding fuel surcharge, contributed to the surge in operating income and improvement of the unit’s operating ratio to 85.7%, the company reported.
- Customer contract renewals with pricing increases in the high single digits helped, too, Chief Strategy Officer Ali Faghri told Trucking Dive in an interview. XPO rebooks about 25% of its contracts each quarter.
Dive Insight:
XPO’s increased LTL yield, shipments and tonnage contributed to its overall operating income of $138 million in the quarter, up from $58 million in Q1 2023.
Tonnage per day was 2.6% higher than in the first quarter of 2023, with 4.7% more shipments per day.
“As you saw in our results, our LTL 2.0 plan is firing on all cylinders,” CEO Mario Harik said during an earnings call Friday.
XPO’s $870 million in terminal acquisitions from Yellow Corp. and service improvements have made price increases more palatable for customers, and the company’s investments in its high-yield local customer base and premium services are already paying off, Faghri said.
Those premium services include trade show trucking, Mexico cross-border service and a retail store rollout service that has added dozens of customers since its launch in Q4, the chief strategy officer said.
“It's been a few different factors that have been translating to that strong pricing growth, and our expectation is that it's going to continue here into the second quarter and through the balance of this year into 2025,” Faghri said.
