Monday, February 1, 2016

Freight and Logistics Giant Cuts Staff at US LTL and Multimodal Acquisition

Rationalisation Will Affect Forwarding and Trucking Employees Alike
Shipping News Feature
US – Almost inevitably the takeover of major player in the fields of Less than Trailer Load (LTL) and road freight, the giant Con-way Inc, by XPO Logistics, which we reported last year, has now led to a raft of redundancies at the carrier as the new owners get down to ‘rationalising’ operations. All Con-way functioning departments, including the Multimodal Division and the freight forwarding arm Menlo, are now integrated into the parent company and bear its identity. Tony Brooks, president of LTL for XPO Logistics, said:

"Our plan for LTL is very much on track for our near-term and long-term goals. The integration of Con-way has given us the opportunity to engineer a leaner, more results-oriented LTL operation while improving on our industry-leading customer service levels. We plan to double the number of strategic account managers over the next few months. Our focus is on growing LTL by expanding our service capabilities and cross-selling LTL to XPO's full customer base.

"Our new organisational structure is based on clearly delineated P&L (profit and loss) responsibilities and customer service accountability at the field level. We're also optimising our footprint to increase the efficient use of our capacity, improve transit times in key lanes and make our entire network more productive."

In this latest move approximately 160 non-sales positions have been eliminated, most of the jobs being in administrative, management and back office functions, and XPO says this impacts on less than 1% percent of the LTL workforce in North America. Another 30 positions were eliminated in other parts of the company, primarily to address redundancies created by the acquisition.

Collectively, the actions are expected to reduce annual costs by more than $20 million against a targeted operating profit improvement of $170 million to $210 million over two years. To date, XPO claims approximately $50 million of expected annualised savings have been achieved in the three months since the company acquired Con-way on October 30, 2015.

XPO Logistics now claims to be the second largest LTL provider in North America, plus the leading LTL provider in Western Europe following the acquisition of French group Norbert Dentressangle last year. It says the company's LTL business in North America now services 99% of U.S. postal codes, and offers more next-day and two-day lanes than any other carrier. XPO Logistics has global transportation capacity of approximately 19,000 owned tractors and 46,000 owned trailers, with another 10,000 trucks contracted through independent owner-operators.