XPO’s damage claims ratio as a percent of LTL revenue remained at 0.7% in Q2, holding steady from Q1 and improving from 0.9% YoY.
The improvements follow several of the carrier’s recent internal upgrades, including both new uses of technology and incentive-based compensation initiatives, CEO Mario Harik said on a Q2 earnings call last week.
“Over the last year and a half we tied incentive compensation plans to improvements in service,” Harik said on the earnings call.
The company also added a rating system, in which each time an XPO worker loads a trailer, they will take a picture and rate it on a scale of one to five for how well it’s loaded, Chief Strategy Officer Ali Faghri told Transport Dive Friday. That same process is repeated when a trailer is unloaded and the company can use that data to evaluate areas for improvement and coaching opportunities, Faghri said.
Those changes have made a difference. “In the month of June, our damage claims per shipment came in at the best in over seven years,” Harik said.
The damage claims ratio had been at or above 1% for most of 2020 and 2021. But under its LTL 2.0 improvement plan, the carrier reached a low point of 0.6% in Q4 of last year.
“In early 2022, we made several changes in the organization,” Faghri said, noting that its LTL 2.0 plan effectively started in the second half of 2021. “And they were designed to drive improved service quality.”
To continue those gains, XPO is rolling out more tools, such as a new airbag system, storage racks and higher-quality straps, executives said. “We're also improving how we are operating training and loading procedures for our dockworkers to further improve service,” Harik added.
“Our long-term goal is to get the claims ratio of 0.1%,” Harik said, noting it make take a “number of years” to get there.
