XPO Logistics Launches New Distribution Model for Retail and E-Commerce

XPO Logistics, a top global provider of supply chain solutions, has launched XPO Direct, a new, nationwide shared-space distribution model for omnichannel retail and e-commerce customers.

Here’s how it works: The company’s warehouses and last mile hubs serve as flexible stockholding sites and cross-docks utilized by multiple customers at the same time. Transportation needs are supported by the company’s brokered, contracted and owned capacity. XPO’s broad North American footprint can position goods within two days’ delivery of 95% of the U.S. population and in close proximity to retail stores for inventory replenishment.

Bradley Jacobs, chief executive officer of XPO Logistics, said, “Retailers and e-tailers are looking for new ways to position goods more efficiently to shorten delivery transit times without adding overhead. XPO Direct offers customers industry-leading flexibility by sharing our technology, trucks and workforce at over 100 sites, with hundreds of additional sites at the ready. In essence, we’re renting out our scale and disrupting traditional thinking about the capital-intensive, regional distribution model.”

The omnichannel trend is a challenge for many brick-and-mortar retailers as they seek to broaden their reach through e-commerce. The prohibitive fixed cost of adding distribution centers can result in a trade-off of price versus speed, compromising customer service and damaging brand reputation. XPO Direct is a highly responsive solution designed to increase service quality at a fraction of the usual cost.

Mario Harik, chief information officer of XPO Logistics, said, “XPO Direct uses our proprietary technology to link multiple sites with cross-network visibility. Our algorithms analyze customer data to identify patterns in consumer behavior and seasonality. We use this information to predict when and where to place products by SKU number, and reflow goods to other sites as needed.”

The numbers are big: XPO invests more than $450 million in technology annually. Recent innovations include XPO’s industry-first voice integration with Amazon Echo and Google Home to track last mile deliveries of heavy goods, the XPO Connect digital freight marketplace with multimodal infrastructure, and WMx, the company’s cloud-based, mobile warehouse platform that creates cutting-edge logistics solutions by integrating advanced automation.

Category: Connected Fleet News, General Update, News