XPO posts revenue warning as US factory slump slows freight demand
CONNECTICUT's XPO Logistics has posted a revenue warning for 2019 blaming an 'industrial recession' caused by demand for US freight transportation
CONNECTICUT's XPO Logistics has posted a revenue warning for 2019 blaming an 'industrial recession' caused by demand for US freight transportation.
Bloomberg reports the company expects revenue to fall four per cent this year, down from the previous prediction that the decline would be no more than one per cent
XPO, a major provider of short-haul trucking, has suffered a slowdown at US factories. Even if the US and China reach an agreement to ease a tariff war, freight demand would take most of a year to recover, said XPO chief executive Brad Jacobs.
'The industrial economy has been challenging for over a year now,' Mr Jacobs said. 'We're way past the point of figuring out if it's an industrial recession or now. It has been an industrial recession for a while.'
Besides the impact of weak trucking demand, XPO's sales have taken a hit after Amazon.com pulled US$600 million of business in December.
XPO announced 10 initiatives in August to add as much as $1 billion to profit by 2022 through cost cuts and efforts to win new business. The company, which has been hiring salespeople to help attract business, said its pipeline for contract wins was more than $4 billion for three quarters in a row.