JESSUP, MARYLAND — XPO Service Center Manager Chad Hilton paused during a tour of his facility in February to point out a wooden crate of red ratchet straps, each labeled “Property of XPO.”
To secure customers’ freight and ensure it arrives damage-free, workers need the proper equipment, Hilton said.
He credited COO David Bates for an influx of straps and door air bags across the carrier’s network over the past year.
“He’s given us the tools to do the job,” Hilton said. “There are so many straps in the system right now.”
Bates has fit in “like a glove” during his first year at XPO, CEO Mario Harik told Trucking Dive, driving dramatic service improvements since arriving from Old Dominion Freight Line last April.
“Dave has been a fantastic addition to our team,” Harik said in a February interview. “He’s had a great contribution so far.”
The Carolina Freight Carriers alumnus has overseen the execution of XPO’s LTL 2.0 plan, using his decades of experience to help his new company pursue its goal of becoming the best in the industry. XPO, which is racing to reopen 28 terminals it acquired in Yellow Corp.’s bankruptcy, reported banner earnings results in Q1.
“The foundation for being industry best has been here since back in the Con-way days,” Bates said an interview with Trucking Dive. “Con-way, in their heyday, were industry best, and we're getting back to that point.”
Fine-tuning small things
Bates has overseen the installation of air bags at half of XPO’s service center doors, Harik said.
LTL competitors ArcBest and Estes Express Lines have also invested recently in trailer loading and unloading equipment.
If freight straps and air bags don’t seem like revolutionary innovations, consider XPO’s progress toward one of its goals of achieving the industry-leading 0.1% damage claims ratio that Old Dominion boasts.
XPO has managed to lower its ratio from a previous mark of 1.2%.
“And now we want to get from a 0.3% claims ratio down to a 0.1% claims ratio,” Harik said.
Bates characterized the efforts as “a matter of fine-tuning some of the small things,” such as how workers use safe stack and load trailers.
“If we're not loading with intention, and loading to make sure that that freight is going to go from point A to point B, and be in the same condition when it arrives there,” he said, “you lose customers.”
Introducing premium services
Bates has ushered in premium services at XPO, such as Must Arrive by Date and trade show shipments, Harik said.
The carrier, which rebooks about 25% of its contracts each quarter, increased prices by a percentage in the high single digits in Q1.
“He’s had a big impact on pricing,” the CEO said.
The pricier premium services are popular with customers who wanted XPO to provide them, as well as the carrier, given the increased profits they generate, Harik said.
“It's a win-win between us and the customer,” he said.
Focusing on phenomenal culture
Bates said he spent most of his first year at XPO traveling to facilities around the country. After a terminal ribbon-cutting in Maryland last week, he was headed to another former Yellow site his company acquired in Carlisle, Pennsylvania.
His key takeaway since joining XPO?
“The people are phenomenal,” Bates said.
Helping them grasp the benefits of operating as a pure-play LTL carrier was a critical challenge Bates said XPO overcame during his first year.
“Our employees are now bought into that,” Bates said. “We have goals to be the LTL industry best. And we have a culture here at this company that strives for excellence and superior service.”
