XPO Logistics, Inc. (NYSE: XPO) today announced that Mario Harik
will succeed Brad Jacobs as chief executive officer of XPO and join
the board of directors following XPO’s planned spin-off of its
tech-enabled brokerage platform in the fourth quarter. Jacobs will
remain with XPO as executive chairman, and will become
non-executive chairman of the spin-off.
XPO further announced that Harik has been named president,
less-than-truckload (LTL) effective immediately, after serving as
acting LTL president since October 2021. The company plans to
become a pure-play LTL transportation provider in North America by
completing the brokerage spin-off and the divestiture of its
European business.
Brad Jacobs, chairman and chief executive officer of XPO
Logistics, said, “Under Mario’s leadership, we’ve made major
advances in transforming our LTL business, as demonstrated by the
strong second quarter results we announced today. Since taking over
LTL last fall, Mario has driven marked improvements in operating
ratio, pricing and network fluidity, as well as customer
satisfaction and employee engagement.”
Jacobs continued, “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. 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.”
In his first nine months as head of North American LTL, Harik
improved the company’s operating efficiency to a record level in
the second quarter of 2022. Over the same period, he enhanced
pricing, excluding fuel impact, from a year-over-year gain of 6% to
10.6%, rebalanced the network and spearheaded high-impact
technology deployments. In addition, Harik 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.
Harik said, “The opportunity ahead for XPO is enormous. We have
a high-ROIC 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. I’m
excited to continue working with Brad and the team to create a
world-class LTL carrier.”
Less-Than-Truckload Business Profile
XPO will move forward from the spin-off with significant
advantages of scale as one of only a few publicly traded LTL
companies offering truly national US coverage. In addition, the
business has unique competitive positioning with company-specific
avenues for value creation, such as 130 commercial driver training
school locations, in-house trailer manufacturing and comprehensive
proprietary technology.
As of June 30, 2022, XPO’s North American LTL business had an
integrated network of 294 terminals, equipment assets of
approximately 8,200 tractors and 27,000 trailers, and 25,000
accounts in diverse verticals served by approximately 22,000
employees, including 13,000 professional drivers.
For the full year 2021, XPO’s North American LTL business
generated $4.1 billion of revenue and $618 million of operating
income, as well as the second best adjusted operating ratio of all
publicly traded LTL carriers in the industry. For the full year
2022, the company expects to nearly triple the adjusted EBITDA
generated by LTL from the time it acquired the North American
business in 2015.
About Mario Harik
Harik has been instrumental in establishing XPO as a
transportation leader during his tenures as chief information
officer and chief customer officer, positions he held from 2011 and
2021, respectively, until his appointment as president, North
American LTL. As CIO, he led XPO’s global technology strategy and
organization, including the creation of the company’s flagship
brokerage platform, which continues to drive the outperformance of
XPO’s North American truck brokerage business. For LTL, Harik
oversaw the development of proprietary technology that is
transforming the company’s network operations, pricing management
and customer service.
Prior to XPO, Harik was chief information officer with Oakleaf
Waste Management, chief technology officer with Tallan, Inc., and
co-founder and chief architect of web and voice applications with
G3 Analyst. He holds a master’s degree in engineering, information
technology from Massachusetts Institute of Technology, and a
bachelor’s degree in engineering, computer and communications from
the American University of Beirut in Lebanon.
About XPO Logistics
XPO Logistics, Inc. (NYSE: XPO) is a leading provider of
freight transportation services, primarily less-than-truckload
(LTL) and truck brokerage. XPO uses its proprietary technology,
including the cutting-edge XPO Connect® automated freight
marketplace, to move goods efficiently through supply chains. The
company’s global network serves 50,000 shippers with approximately
749 locations and 43,000 employees, and is headquartered
in Greenwich, Conn., USA. Visit xpo.com and europe.xpo.com for
more information, and connect with XPO on Facebook, Twitter,
LinkedIn, Instagram and YouTube.
Forward-looking Statements
This release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements relating to the planned spin-off of our
tech-enabled brokered services platform and the sale or listing of
our European business, the expected timing of these transactions
and the anticipated benefits of these transactions; succession
plans related to XPO and the planned spin-off company, growth
strategies and our full year 2022 financial targets of North
American LTL adjusted EBITDA. All statements other than statements
of historical fact are, or may be deemed to be, forward-looking
statements. In some cases, forward-looking statements can be
identified by the use of forward-looking terms such as
“anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,”
“may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,”
“objective,” “projection,” “forecast,” “goal,” “guidance,”
“outlook,” “effort,” “target,” “trajectory” or the negative of
these terms or other comparable terms. However, the absence of
these words does not mean that the statements are not
forward-looking. These forward-looking statements are based on
certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions that may cause actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause or contribute
to a material difference include our ability to effect the spin-off
of our tech-enabled brokered services platform and meet the related
conditions of the spin-off, our ability to complete the sale or
listing of our European business, the expected timing of the
completion of these transactions and the terms of the transactions,
our ability to achieve the expected benefits of the transactions,
our ability to retain and attract key personnel for the separate
businesses, the risks discussed in our filings with the SEC, and
the following: economic conditions generally; the severity,
magnitude, duration and aftereffects of the COVID-19 pandemic,
including supply chain disruptions due to plant and port shutdowns
and transportation delays, the global shortage of certain
components such as semiconductor chips, strains on production or
extraction of raw materials, cost inflation and labor and equipment
shortages, which may lower levels of service, including the
timeliness, productivity and quality of service, and government
responses to these factors; our ability to align our investments in
capital assets, including equipment, service centers and
warehouses, to our customers’ demands; our ability to implement our
cost and revenue initiatives; the effectiveness of our action plan,
and other management actions, to improve our North American LTL
business; our ability to benefit from a sale, spin-off or other
divestiture of one or more business units, and the impact of
anticipated material compensation and other expenses, including
expenses related to the acceleration of equity awards, to be
incurred in connection with a substantial disposition; our ability
to successfully integrate and realize anticipated synergies, cost
savings and profit improvement opportunities with respect to
acquired companies; goodwill impairment, including in connection
with a business unit sale, spin-off or other divestiture; matters
related to our intellectual property rights; fluctuations in
currency exchange rates; fuel price and fuel surcharge changes;
natural disasters, terrorist attacks, wars or similar incidents,
including the conflict between Russia and Ukraine and increased
tensions between Taiwan and China; risks and uncertainties
regarding the expected benefits of the spin-off of our logistics
segment or a future spin-off of a business unit, the impact of the
spin-off of our logistics segment or a future spin-off of a
business unit on the size and business diversity of our company;
the ability of the spin-off of our logistics segment or a future
spin-off of a business unit to qualify for tax-free treatment for
U.S. federal income tax purposes; our ability to develop and
implement suitable information technology systems and prevent
failures in or breaches of such systems; our indebtedness; our
ability to raise debt and equity capital; fluctuations in fixed and
floating interest rates; our ability to maintain positive
relationships with our network of third-party transportation
providers; our ability to attract and retain qualified drivers;
labor matters, including our ability to manage our subcontractors,
and risks associated with labor disputes at our customers and
efforts by labor organizations to organize our employees and
independent contractors; litigation, including litigation related
to alleged misclassification of independent contractors and
securities class actions; risks associated with our self-insured
claims; risks associated with defined benefit plans for our current
and former employees; the impact of potential sales of common stock
by our chairman; governmental regulation, including trade
compliance laws, as well as changes in international trade
policies, sanctions and tax regimes; governmental or political
actions, including the United Kingdom’s exit from the European
Union; competition and pricing pressures; and the impact of the
brokerage spin-off on our businesses, our operations, our
relationships with customers, suppliers, employees and other
business counterparties, and the risk that the businesses will not
be separated successfully or that such separation may be more
difficult, time-consuming or costly than expected, which could
result in additional demands on our resources, systems, procedures
and controls, disruption of our ongoing business, and diversion of
management’s attention from other business concerns.
All forward-looking statements set forth in this release are
qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by us
will be realized or, even if substantially realized, that they will
have the expected consequences to or effects on us or our business
or operations. Forward-looking statements set forth in this release
speak only as of the date hereof, and we do not undertake any
obligation to update forward-looking statements to reflect
subsequent events or circumstances, changes in expectations or the
occurrence of unanticipated events, except to the extent required
by law.
Where required by law, no binding decision will be made with
respect to the divestiture of the European business other than in
compliance with applicable employee information and consultation
requirements.
Investor Contact
XPO Logistics, Inc.Tavio
Headley+1-203-413-4006tavio.headley@xpo.com
Media Contact
XPO Logistics, Inc.Joe
Checkler+1-203-423-2098joe.checkler@xpo.com
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