GREENWICH, Conn. – Logistics and trucking giant XPO posted second quarter revenue of $1.92 billion, a 6% decline from last year and a 1% increase from last quarter. EBITDA grew 15% from last quarter to $244 million but fell 16% year-over-year.
In less-than-truckload, the company’s primary segment, revenue was down 8% from last year and up 1% from last quarter. The company attributed “almost all” of the decline to a lack of fuel surcharge revenue. Excluding fuel, revenue was down 1% year-over-year and up 4% from last quarter.
Weight-per-shipment declined 4.7% for the quarter, while overall tonnage fell per day by 2.8%. Positively, the company reported a 1.9% in shipping count and 15% growth in local sales.
In an earnings call, the company highlighted its effort to reduce costs, which helped offset the reduced demand seen across the trucking industry.
“In the second quarter, we reduced our purchased transportation costs by 35% year-over-year,” said Mario Harik, CEO. “We continue to reprice contracts with third-party carriers to capitalize on favorable market conditions. This aligns with our plan to achieve a 50% reduction in purchased transportation costs as a percent of revenue by 2027.” Corporate expenses declined by 71%, or $24 million.
The company is also working to reduce costs in labor. LTL salaries and wages were up 4.6% over last year, primarily due to wage increases. Still, the company reports some success. “Our headcount and labor hours were down year-over-year for the quarter while shipment count was up,” said Harik.
Unsurprisingly, the company said demand remains below historical levels.
“Our gains and cost efficiencies in LTL were offset by the aggregate impact of the current operating environment, namely lower surcharge revenue, tonnage, wage inflation and lower pension income,” said Kyle Wismans, incoming chief financial officer.
The company remains positive, telling investors that tonnage has been improving as of late.
“Our shipments per day were higher than a year ago, driven by our quality of service, with yield growth getting stronger as the quarter progressed,” said Harik. “Our momentum continued into July, when we moved more volume through our network, accelerating year-over-year growth in tonnage and shipments per day to 4% and 9%, respectively. Our yield growth also continued to improve in July, driven by our pricing initiatives.
“We remain confident in achieving our long-term targets.”