The coronavirus pandemic has affected just about every facet of the logistics industry over the past two years. Some of these impacts – including decreased service spending and various shortages – are beginning to return to normal with the introduction of vaccines and elimination of widespread lockdowns. Other impacts – like the stark uptick in online shopping – appear to be more or less permanent.
E-commerce is so sticky because consumers started embracing online shopping long before the coronavirus pandemic spread across the globe in 2020. The pandemic simply sped up an existing trend. Still, this swift rise in online shoppers has stressed an already-taxed industry, increasing the demands on less-than-truckload (LTL) carriers significantly.
“Retail analysts expect U.S. e-commerce sales to exceed $1 trillion for the first time this year. That milestone wasn’t expected until 2024,” XPO Logistics Senior Market Strategist Kevin Sterling said. “LTL is becoming more central to the consumer ecosystem as the growth of e-commerce creates more demand for the staging of smaller quantities of goods closer to consumers.”
Pandemic-fueled headwinds – including capacity constraints and delivery delays – have put a premium on service and reliability in the LTL space. A decade ago, the carrier with the lowest rates was all but guaranteed a shipment. Today, it’s all about service.
XPO is focused on meeting the growing demand for LTL capacity without sacrificing service. The company plans to expand its North American door count by 900 doors – or 6% of its total door count – by the end of 2023. XPO already opened one new terminal in October 2021 and two new terminals in January 2022, demonstrating its commitment to expanding its footprint in strategic markets.
Additionally, XPO is working to confront the ongoing industry-wide equipment shortage by relying on its own internal initiatives to grow its fleet.
“Our biggest need is around trailers. We have a major edge and competitive advantage because we have a company-owned trailer manufacturing facility in Arkansas,” Sterling said. “We’re investing in that facility to significantly increase our production capacity, and we believe we can nearly double the number of trailers we’re going to produce in 2022.”