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XPO Announces 4 New Tech Initiatives, LTL Optimization

Logistics giant XPO Logistics, Inc. (NYSE: XPO) has announced its four new technology initiatives at the core of its LTL 2.0 optimization plan.

The company, which recently reported the best third quarter operating ratio in 30 years for its LTL unit, expects to generate approximately $100 million in incremental operating profit over the next two years from proprietary technology.

"Our technology is spurring growth across all the services we offer. We`ve pinpointed four high-impact areas where we can lead the LTL industry in transforming traditional approaches to serving customers,” said Mario Harik, chief information officer. “Two of these innovations - dynamic route optimization and linehaul bypass - are already in pilot. Given our capacity for innovation, our opportunity for creating value in LTL is nearly limitless."

The four new technology initiatives include:

  • Linehaul bypass model. The company is piloting new algorithms to assemble truckloads dedicated to direct movements of LTL freight. The linehaul bypass model improves the efficiency of company trucks and trailers and purchased linehaul services by reducing multiple stops to a single destination. 
  • Load-building through artificial intelligence. AI tools and computer vision technology for cross-dock operators to help ensure that inbound pallets are loaded in the optimal trailers, and in the right sequence inside the trailers, for the greatest possible efficiency during delivery.
  • Dynamic route optimization for pickup and delivery. The company is piloting proprietary AI tools that set the sequence of each LTL driver`s pickups and deliveries and adjust routes in real time based on traffic, road construction and other impacts to efficiency.  
  • Pricing algorithms. The company is developing machine learning capabilities to predict LTL price elasticity. The technology is being designed to forecast market conditions for future dates based on real-time supply and demand, as well as historical data and XPO capacity levels.

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