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XPO Logistics' CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: XPO

Kelron’s built up strong relationships in the industry over 20 years. They serve more than a 1,000 customers, with about 2,500 carriers. With the addition of Kelron’s relationships and lane history, there should be a positive effect on the whole XPO system, both in terms of pricing and in finding trucks. We’re giving the Kelron team access to our carrier capacity in Charlotte, and moving them onto our IT system. We expect this to create efficiencies that will pay off as we add sales people to each of their locations.

This is the same model we implemented with Continental Freight Services, which we purchased in May. The Continental team has been a great addition to XPO. Continental has already integrated on to our IT and accesses our carrier capacity on a daily basis. This is working exactly like we anticipated. For example about a third of the loads originating at the Continental branches are being covered through our operation center in Charlotte, the majority of these loads are ones that Continental would not have been able to cover before the acquisition, so it’s incremental business. We expect to continue to see a significant increase in the number of continental’s loads flowing through Charlotte from continental in the third quarter.

In May, we hired Drew Wilkerson to run continental. Drew was Strategic Sales Supervisor at the Columbia office of C.H. Robinson, and he is off to a great start. The plan is to triple the head count and revenue at continental over the next several years. So, our acquisitions are moving along nicely, and we’re very much on track with our target of acquiring $250 million of revenue this year.

Now, let’s talk about the cold-starts. We announced six new locations last night, foreign truck brokerage, one in expedite and one in freight forwarding. All of our brokerage locations are run by industry veterans with strong track records. As you may recall, our original projection was to open five new truck brokerage locations by the end of 2012. Our four latest truck brokerage cold-starts bring us up to seven.

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