GXO is the largest pure-play contract logistics provider in the world, and a leader in cutting-edge warehousing and distribution, including ecommerce logistics. It was the global logistics segment of XPO Logistics and was spun-out of XPO on August 2, 2021.
GXO is led by best-in-class management talent. We serve a highly diversified, blue-chip customer base characterized by long-term contractual relationships that provide visibility into future revenue and earnings. Although we have 869 warehouse locations in 27 countries and about 94,000 team members, we hold only a 5% share of the fast-growing $430 billion potential addressable logistics market in Europe and North America. This gives us a vast runway for expansion through organic growth and M&A.
GXO benefits from three massive tailwinds that are propelling our growth: the secular increase in ecommerce orders and returns, customer demand for advanced warehouse automation, and the increasing trend toward outsourcing supply chain services.
Ecommerce: The secular growth of ecommerce, which has substantially outpaced growth in the broader economy for years, accelerated during the recent shift in consumer behavior to online buying. GXO is a global leader in ecommerce logistics, with the largest outsourced ecommerce platform in Europe and an expansive platform in North America providing order fulfilment and reverse logistics. We serve a range of customers in this space, including pure-play e-tailers, omnichannel retailers and direct-to-consumer manufacturers.
Automation: Warehouses are becoming increasingly automated for speed, cost-efficiency and safety. Applications of robots, cobots, goods-to-person systems, automated sortation and wearable technologies are transforming logistics. We’re a global leader in integrating scalable software solutions for warehouse management, intelligent automation, predictive analytics, labor productivity and other capabilities valued by logistics customers. In 2020, we shipped about five times more product units using robots than we did in 2019.
Outsourcing: Supply chains are becoming more complex to meet demanding end-customer expectations for speed and precision. In addition, in 2020, many companies realized that supply chain management was not their core competency; this served to heighten the longstanding outsourcing trend. Rather than expose their in-house supply chains to vulnerabilities, companies are increasingly seeking to de-risk by using large third-party providers that have superior technological resources and know-how, such as GXO.
Our success with long-term, blue-chip customer relationships is due in large part to the mission-critical nature of the solutions we provide; they position us as a strategic partner, rather than merely a supplier. Our top 20 customers have, on average, partnered with us for 15 years. Our average contract length is about five years, and typically renews. Recently, our contract lengths have been growing longer as customers look to lock in future predictability for their supply chains.
One of our strongest competitive advantages emanates from our proprietary technology suite, which encompasses warehouse management, labor management, order management and demand management. We developed software tools that use machine learning to drive significant labor productivity in our warehouses, achieving a 5-7% productivity gain on average. The digital connectivity between our solutions and third-party automation enables us to stand up sophisticated operations quickly at scale, and flex them as needed. These are all critical differentiators that underpin our high profit margins.
We’re also differentiated by our diversity of expertise and the quality of our customer base. Our customers include many household names and market leaders—we collaborate with them on planning and forecasting, and we can provide assistance with supply chain optimization to meet specific goals, such as sustainability metrics. This multidisciplinary, consultative approach has led to many of our key customer relationships extending for years and growing in scope.
GXO has a world-class leadership team with a pedigree of strong organic growth, outstanding reputational value, disciplined capital allocation and successful M&A transactions. The following executives serve in GXO leadership positions:
- Malcolm Wilson, chief executive officer
- Baris Oran, chief financial officer
- Mark Manduca, chief investment officer
- Karlis Kirsis, chief legal officer
- Richard Cawston, president, Europe
- Eduardo Pelleissone, president, North America and Asia Pacific
- Bill Fraine, chief commercial officer
- Neil Shelton, chief strategy officer
- Maryclaire Hammond, chief human resources officer
- Sandeep Sakharkar, chief information officer
- Meagan Fitzsimmons, chief compliance officer
- Angus Tweedie, senior vice president, strategy
The bios for GXO’s leaders are available here.
In addition, Brad Jacobs, XPO’s chairman and CEO, serves as chairman of the GXO board of directors.