As traditional logistics giants pivot toward transformation, the light-asset model appears to be gaining industry consensus. The spin-off of XPO Logistics' truck brokerage and asset-light transportation division officially marks the independent operation of RXO. This pure-play, technology-driven truck brokerage company now faces the challenge of distinguishing itself in a competitive market and potentially setting new benchmarks for the logistics industry.
The New York Stock Exchange welcomed RXO's debut today, commencing independent trading for the company. As the fourth-largest full-truckload freight brokerage in the U.S., RXO employs approximately 7,400 people. Its technology-powered brokerage connects shippers across industries with about 100,000 independent carriers operating more than 1.5 million trucks. The company is headquartered in Charlotte, North Carolina.
RXO CEO Drew Wilkerson stated in a release: "Today marks a milestone in our company's journey. The creation of RXO represents the birth of an independent, technology-enabled pure-play that will thrive in any market. RXO is well-positioned to unlock value for our stakeholders."
Earlier this year, XPO indicated that the spin-off would create a leading North American technology-enabled truck brokerage platform, highlighting its industry-leading record of revenue and profit growth, efficient freight marketplace, and access to vast truck capacity. RXO will also offer asset-light services including last-mile logistics, managed transportation, and global freight.
Exclusive Interview with RXO CEO Drew Wilkerson
With RXO now officially launched, what comes next?
"First, we'll have a management team entirely focused on RXO. At XPO, we've always emphasized career development, encouraging good ideas and understanding overall operations. Previously, I might attend LTL monthly reviews or European transport reviews. Now, my team and I will focus exclusively on RXO. The key lesson from the past decade is maintaining flexibility and agility to respond to markets. We have strategies for different market conditions that we've executed well over eight years. The truck brokerage industry is growing rapidly—from 2013 to 2021, it saw over 9% CAGR, while we achieved 27%, nearly triple the industry average."
"Our path is organic growth—expanding market share profitably through strong customer relationships and industry-leading technology."
What is RXO's greatest advantage?
"Our RXO Connect platform (formerly XPO Connect) connects with over 100,000 carriers—this proprietary technology leads our industry. We can access 1.5 million trucks. Last quarter alone, we added 10,000 carriers to our network. The platform's stickiness comes from simplifying workflows and helping carriers earn more—75% return within a week. For small trucking companies, their next load likely comes from RXO."
How do you view market conditions through Q1 2023 given recent spot rate declines and stable contract rates?
"We have strategies for all market conditions. When we saw capacity easing in Q1/early Q2, we anticipated spot price drops. Our 73% contract business provides protection—we maintain contract rates while reducing transportation costs. Recently, spot prices have stabilized (not necessarily bottoming). For 2023 contract rates, we're in one of RXO's busiest cycles—expecting 5% to double-digit declines."
With 73% contract business, how are retail/other verticals performing, especially peak season?
"This peak season will be muted compared to the last two years which felt like perpetual peak seasons. However, all non-retail/e-commerce verticals show year-over-year volume growth. Even with a soft peak, we expect Q4 volume growth—still achieving expansion post-pandemic highs."
How might inflation, Fed rates, fuel prices, and mortgages impact H1 2023?
"We monitor macroeconomic trends closely and maintain constant customer dialogue. Despite uncertainty, we're confident in outperforming the industry. Our technology enables superior margins—19% in Q3, 21% in Q2 (both industry-leading). In declining markets, transportation costs fall faster than customer rates. In tightening markets, we maintain contract volumes while gaining higher-margin spot business as asset carriers prioritize profitability and smaller brokers reject contracts."
What are RXO's capex, hiring, and technology strategies?
"Capex is under 1% of revenue—mostly efficient tech investments. Projects must clearly boost volume, margins, or productivity. Our technology differentiates us by driving profitability. We maintain broker staffing to instantly increase volume 15-20%. Hiring continues at a moderated pace with current staffing supporting growth. We're positioned for market share gains in 2023."
Will M&A be part of RXO's strategy given XPO's acquisition history?
"We track market dynamics but believe organic growth is our best path—nearly 100% of our growth the past three years came organically. We'll evaluate complementary, niche vertical, or managed transportation acquisitions only if they create clear shareholder value."
What technology areas is RXO prioritizing?
"Technology creates our moat—more volume/data makes our algorithms harder to replicate. Ten years of transactional data informs our success/failure patterns across lanes and verticals. Continued tech investment will drive market share expansion."
What do clients seek from asset-light brokerage services?
"Clients want cost-effective, faster delivery to end consumers. Our technology optimizes routing, shipment timing, consolidation, and circular routes to save time/money. They also prioritize service quality—we match any asset carrier in on-time performance. Solutions like power trailers, drop-and-hook, and cross-docks leverage our 100,000-carrier network for unlimited capacity."