Eyes On Express-1

jelliott · Aug 31, 2011

OntarioVanMan said:
Well Xiggi..those truckload tractor trailers conform nicely into expedite tractors pretty quick when there is a need....

We operate all the divisions to the same service level. Much like how Panther has a truckload group or a Specialized group. Most all of our business is expedite/JIT.

OntarioVanMan · Aug 31, 2011

jelliott said:
We operate all the divisions to the same service level. Much like how Panther has a truckload group or a Specialized group. Most all of our business is expedite/JIT.

Well there ya go..straight form the horses mouth...

OntarioVanMan · Aug 31, 2011

My quandry is...Mr Welch claims they did not cut freight rates in 08/09....what he does not say is they cut O/O's rates....to make up for the margins...goes to show just who you'll be dealing with when the going gets tough....he talks about respecting the value of the O/O's??? what a crock of crap...

mcavoy33 · Aug 31, 2011

A-Team,

Do you havean idea at all what perxentage of E1's revenue come from theExpedite division?

mcavoy33 · Aug 31, 2011

A-Team,

Do you havean idea at all what perxentage of E1's revenue come from theExpedite division?

OntarioVanMan · Aug 31, 2011

mcavoy33 said:
A-Team,

Do you havean idea at all what perxentage of E1's revenue come from theExpedite division?

Their quarterly stock report breaks it all down...

Moot · Aug 31, 2011

OntarioVanMan said:
Sorry Mr Welch...O/O's want quality paid miles, I believe..
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Ken, I know you and I and a few others want to make more and drive less. Reading these very forums makes me believe we're in the minority. Most want more miles not more dollas.*

*tj

cheri1122 · Aug 31, 2011

E1 has cut rates to O/Os, and is now talking about offering more miles - sounds like the new motto will be "Drive more, make less."
That may be good for the 'shareholders', but it's needlessly wearing on the vehicles and drivers. I'm sticking to the opposite plan, thanks.

Bruno · Aug 31, 2011

Moot said:
Ken, I know you and I and a few others want to make more and drive less. Reading these very forums makes me believe we're in the minority. Most want more miles not more dollas.*

*tj

Moot I'm with you on this too. Why put 100000 miles on a truck for 1.00 a mile when you can do 62,500 for the same amount of money? The truck will last 16 year instead of 10 years if you take care of it.

ATeam · Aug 31, 2011

mcavoy33 said:
A-Team,

Do you havean idea at all what perxentage of E1's revenue come from theExpedite division?

52% according to the most recent quarterly report. However, that number will become an item of historic interest tomorrow. After Jacobs kicks in up to $150 million and takes charge, only time will tell what the company will look like, what percentage of revenue will come from which operating unit and how many operating units will exist in the future. He plans to acquire companies. What companies will be acquired and how they will be folded (blended, shoe-horned, merged, whatever) into the larger organization is unknown at this point.

More food for thought regarding XPO in this article.

(Full disclosure: Diane and I own shares of XPO)

Moot · Aug 31, 2011

xiggi said:
No one really knows if it is even expedite they will focus on. Acquisitions could lean more to other types of logistics companies.

Exactly! As expediters we often think the world of motor freight revolves around us. It doesn't. Expedited freight is a miniscule piece of the trucking pie. I doubt Mr. Jacobs could build a multi-billion dollar company relying heavily on the expedite market.

mcavoy33 · Aug 31, 2011

Moot said:
Exactly! As expediters we often think the world of motor freight revolves around us. It doesn't. Expedited freight is a miniscule piece of the trucking pie. I doubt Mr. Jacobs could build a multi-billion dollar company relying heavily on the expedite market.

I agree and that was a sense that I got when you read between the lines. Yea he talked about expediting quite a bit but I think that was largely because he was being interviewed by an expediting magazine.

His statements about the trucking industry as a whole and the opportunity for consolidation speaks to him goingafter the biggermarket.

Thereason I askedabout E1's expediting revenue was because I couldn't see a logical reason for picking a rinky dink sized company to start with.

But if you wantto build a full service company, it makes sense to start with a specialize core as your base instead of tryingto fit it in afterwards.

It would be interesting to see Jacobs buy up some of theLTL companies that sub out their expedite work to his competitors and steal customers that waybut I don't think he's considering putting that much money on the table yet.

ATeam · Sep 1, 2011

mcavoy33 said:
Thereason I askedabout E1's expediting revenue was because I couldn't see a logical reason for picking a rinky dink sized company to start with.

But if you wantto build a full service company, it makes sense to start with a specialize core as your base instead of tryingto fit it in afterwards.

It would be interesting to see Jacobs buy up some of theLTL companies that sub out their expedite work to his competitors and steal customers that waybut I don't think he's considering putting that much money on the table yet.

The exciting part of the XPO story to me is not the particulars about which company he will buy next or why he chose to begin his consolidation strategy by taking over Express-1. It is the longer-term, big-picture story in which a guy with his track record and available capital is taking the actions and announcing the plans he is.

With some time invested in reading and search engine work, you can find a number of comments by Jacobs and disclosures by Express-1 about how the deal came together and why Jacobs is doing what he is doing.

Beyond what he told Expedite NOW, Jacobs has said little about the future of expedite division of XPO. It seems that the first of many acquisitions he plans to make will be on the brokerage or freight forwarding side. Once he becomes the CEO and actually owns controlling interest in the company, we will likely hear much more about the company's future. It's going to be fascinating to watch.

(Full disclosure: Diane and I own shares of XPO.)

ATeam · Sep 2, 2011

The deal was approved by shareholders. Here's what the company says about itself now:

About XPO Logistics, Inc.

Founded in 1989, XPO Logistics, Inc. is a non-asset-based, third-party logistics services provider that uses a network of relationships with ground, sea and air carriers to find the best transportation solutions for its customers. The Company offers its services through three distinct business units: Express-1, Inc. (expedited transportation solutions), the fifth largest U.S. expedited freight service provider, according to The Journal of Commerce; Concert Group Logistics, Inc. (domestic and international freight forwarding); and Bounce Logistics, Inc. (premium truckload brokerage). The Company serves more than 4,000 retail, commercial, manufacturing and industrial customers through six U.S. operations centers and 23 agent locations. In 2010, the Company completed more than 144,000 transactions for customers and generated revenues of approximately $158 million. xpocorporate.com

SOURCE: XPO Logistics, Inc.

(Full disclosure: Diane and I own shares of XPO)

jelliott · Sep 2, 2011

If you took the top ten expedite companies in the US, you would not derive a total of one billion in sales. So that pretty much tells you the goal of a billion plus dollars of revenue per year will not be built primarily in the expedite market.