From Home Furnishing Business
XPO Direct Uses Shared Network Capacity to Speed Shipments
2018 by Jason Schneider in Business Strategy, Industry
XPO Logistics (NYSE: XPO) has launched XPO Direct, a new, nationwide shared-space distribution model for omnichannel retail and e-commerce customers.
With XPO Direct, XPO 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 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.
“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,” said Bradley Jacobs, CEO. “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 vs. speed, compromising customer service and damaging brand reputation.
“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,” said Mario Harik, chief information officer. “We use this information to predict when and where to place products by SKU number, and reflow goods to other sites as needed.”