XPO Logistics, Inc. (NYSE:XPO) Q3 2023 Earnings Call Transcript

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Kyle Wismans: Hey, Scott, it’s Kyle. So as we mentioned earlier, this year, we think we’re going to be in that 12% to 13% range. And if you think about the investments we made in the last 18 months, that includes over 2,000 tractors and 10,000 trailers, that’s really helped enable the share gains in recent disruption. So if you think about more specifically what’s — what we’re investing in right now put us above that 12% range, really two things I can point to. One, we’re going to produce more trailers at our Searcy facility. Initially in the year, we’re thinking 6,000. We’re not going to produce more about 7,000 trailers, and the second thing is something we mentioned earlier on the call, our sleeper cab initiative. So we’re going to bring about 100 tractors in the network to do that.

For us, it’s going to do a couple of things. It will help us accelerate line haul in-sourcing, there’s obviously a service benefit and a cost benefit there. But both of these efforts are really pull forward of capacity investments for us. And if you think about the investments we make in total, in general, we expect very high returns from our LTL investments in upwards of 30%. So we think this is the right place for us to be investing in the company.

Scott Schneeberger: Great. Thanks. I appreciate that. Go ahead.

Kyle Wismans: Yes, I was going to say, the only thing to touch on from your question was Europe. So Europe is about 10% of our gross CapEx in general. That’s been about pretty consistent for the business and will remain there.

Scott Schneeberger: All right. Thanks, Kyle. I appreciate that. For my follow-up real quick. Just you mentioned at the top of the call, the eight percentage points of on-time improvement year-over-year. That sounds impressive. I’m sure that goes into helping you interact for your sales folks on new business wins. Just curious if you could put that a little bit more into perspective, how is that trending? Is that something that’s now that you’ve seen the first month of the fourth quarter? Is that something that you’re going to continue to see trending very well here through the end of the year?

Mario Harik: Yes. Absolutely. When you look at all of our service metrics here in the month of October, we’ve seen a step-up from where we were in the third quarter as well. I mentioned earlier, for example, I mean, on time continues to do really well and our network fluidity best it’s been in a long, long while, which is great to see. And our customers appreciate that. And similarly on the damages side in terms of damage frequency, we’ve seen a further improvement from September was a company record, dating back to 1996, and October was even better than September.

Operator: Thank you. We’ve reached the end of the question-and-answer session. I’ll now turn the call over to Mario Harik for closing remarks.

Mario Harik: Thank you, operator, and thank you all for joining us today. As you saw from what we reported this morning, we’re in a strong position as we begin our second year as a standalone LTL business in North America. Our solid momentum is driven by continued execution of our LTL 2.0 plan and expands our entire business from revenue, earnings and yield growth to significant service improvements, operating efficiencies and market share gains. We’re still in the early innings here, and there’s a lot more we’ll achieve. We look forward to speaking with you all on our next call. Thank you.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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