When you place an order on an e-commerce platform expecting next-day or even same-day delivery, have you ever wondered about the forces powering this efficiency? The pandemic has accelerated e-commerce penetration while highlighting the growing importance of contract logistics. As XPO Logistics prepares to spin off its global contract logistics division into the independent GXO Logistics, we spoke with Malcolm Wilson, CEO of XPO Logistics Europe and incoming CEO of GXO Logistics, about market trends, pandemic challenges, and GXO's future.
GXO's Preparation and Daily Operations
"Business is moving in the right direction with a strong start to 2021," Wilson stated. "The outlook remains very optimistic, evidenced by our steady stream of new clients."
Regarding GXO's formation, Wilson explained: "We're building a strong C-suite team while leveraging our existing strengths to help clients navigate today's complex logistics environment. Transformative trends like outsourcing continue to gain momentum as more companies recognize its critical role in supply chains."
"E-commerce adoption has become permanent," he added. "These factors combine to create tremendous demand for automation - exactly where GXO excels. This is truly an exciting time."
Economic Outlook for Contract Logistics
Reflecting on the pandemic's impact, Wilson noted: "The contrast between early 2020 lockdowns and today's vaccine-driven recovery is dramatic. Many XPO clients - future GXO customers - now better understand logistics' strategic importance, accelerating outsourcing trends."
"E-commerce has delivered extraordinary growth," Wilson continued. "What we projected for 2025 arrived years early. This benefits GXO tremendously as e-commerce fulfillment and returns management represent core competencies."
The CEO highlighted automation's growing role: "Consumer expectations for rapid delivery require different warehouse solutions. When processing tens of thousands of daily orders, automation enables faster, more accurate processing during peak volumes. In 2020, we processed five times more goods through automation than 2019 - exponential growth."
"Goods-to-person robots boost productivity 4-6x, while collaborative robots double output," Wilson explained. "Combining these technologies explains why clients demand more automation - a perfect scenario for GXO as an early adopter with extensive experience."
Managing the "Never-Ending Peak Season"
Addressing the pandemic's "permanent peak season" phenomenon, Wilson said: "We're already preparing for 2021's holiday season. E-commerce fulfillment became the primary retail channel during lockdowns, and this trend will persist."
"We anticipate significantly higher volumes similar to 2020's holiday period," he added. "Our approach involves close collaboration with clients, analyzing their forecasts and historical data through our intelligent software suite to precisely allocate resources."
Wilson emphasized proactive planning: "We're engaging clients 2-3 months earlier than pre-pandemic timelines, applying lessons from 2020 to better manage this year's peak season."
Global Logistics Risk Management
Regarding recent disruptions like the Suez Canal blockage, semiconductor shortages, and port congestion, Wilson commented: "Such events occur periodically. The Suez incident minimally affected us because most clients are large enterprises with multiple supply chain options."
"We continuously monitor these situations," he added. "Clients provide updates and we jointly develop contingency plans to maintain service levels for their customers. Protecting clients' reputations remains fundamental to our relationships."
The Competitive Landscape
As GXO prepares to become the world's second-largest standalone contract logistics provider, Wilson shared his competitive perspective: "We're unique as a pure-play logistics company serving clients making long-term decisions. Building an automated warehouse often takes two years, with contracts typically lasting 5-10 years."
"Few competitors match our global footprint," he noted. "Whether in Mexico, France or New Jersey, clients experience identical culture, services, and IT systems. Many regional or vertical specialists can't provide equivalent support outside their specialties."
Wilson concluded: "Our scale, global presence, and automation expertise create tremendous advantages. With a robust pipeline of client projects, we're extremely optimistic about GXO's future."
Industry Challenges
On current concerns, Wilson acknowledged: "The pandemic isn't over. Fortunately, with operations across North America and Europe, most countries are managing vaccinations effectively. While we hope the worst has passed, we remain vigilant about new variants."