The truck brokerage and third party logistics company XPO Logistics on Wednesday reported a net loss of $17.4 million in the second quarter, despite revenue rising 151.4 percent to $137.1 million.
The company said the loss reflected “the positive impact of acquisitions from prior periods and significant organic growth, offset by planned strategic investments in long-term value creation, transaction-related costs and litigation costs.”
“Our freight brokerage business achieved robust organic growth of 65 percent, driven in large part by the traction of our eight brokerage cold-starts,” said XPO Logistics Chief Executive Officer Brad Jacobs. “These locations are barely a year old on average, but they’re already generating a combined revenue run rate of over $90 million and sequential improvements in gross margin percentage. We’re in the process of opening a new mega-branch in Cincinnati with a highly experienced leader to scale it up. And our acquisition pipeline remains very active, with a current list of about 100 targets.
“Our expedited business saw pressure on margin throughout the quarter, as demand for expedited services remained soft. Capacity tightened somewhat in early July, however, and margins have expanded in recent weeks. Our freight forwarding business is outpacing industry growth by capturing more international business,” he added.
XPO’s freight brokerage business has been growing significantly, thanks to acquisitions and cold starts, with a 587.2 percent increase in revenue in the second quarter to $95.4 million. The brokerage business suffered a $5 million operating loss, due to increased “sales force expansion, technology and training.” - Eric Johnson