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

We expect these new branches to perform like the first three, which are scaling up as projected. We are seeing steady sequential improvement. Revenues are growing, and what’s more important is that the gross margin percentage generated by our first three cold-starts increased every month in the second quarter.

And in July, their margin was significantly above where it was in the second quarter. The margin improvement in our cold-starts is largely a function of the success we’re having with carrier procurement at our national operations center in Charlotte.

We now have roughly 15,000 carriers in our network, up from about 8000, when we took over XPO last September. Our people are doing a better job every day at finding the right truck for each load, and this is at the heart of our long-term strategy. We have 64 people in Charlotte now providing shared services and carrier procurement and this includes a team of 41 people solely focused on carriers. We plan to have over a 100 people by year-end, developing carrier capacity in Charlotte, and we intend to triple that number over the next three years.

We also opened an expedite cold-start in Birmingham last week. This will serve as the southeast regional hub for our Express-1 division, and will tap into the manufacturing sector as production continues to shift to the Southern states.

We already have customers and owner operators working with us in Birmingham, and we are moving loads. AT CGL, our freight forwarding business, we opened the Los Angeles branch in April. This is obviously a major market with the ports of LA and Long Beach representing an important international opportunity for our network.

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