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XPO sees logistics sector 'disrupted' by technology over long term

XPO Logistics CEO Bradley Jacobs believes that in the long-term the whole logistics industry will be disrupted by significant advances in technology.

Mr Jacobs said that his company spends US$400 million a year on technology and has 1,100 IT staff on its payroll in order to "stay at the cutting-edge" of advances in technology, reported Lloyd's Loading List.

"With respect to Silicon Valley, there are a lot of start-ups, mostly around truck brokerage but in other parts of the industry as well," he noted. "None of them have gotten a whole lot of traction yet, even though some of them have been around for a while and some of them attracted some high-profile money.

"We see quite a large percentage of them sooner or later, because it's a little bit of a chicken and egg for them in that they really can't get going until they've got either a network or they've got capacity or they've got freight. And a lot of them have technology and an idea, but they can't quite get one foot ahead of the other, so they need to team up with someone like us.

"We haven't seen anybody doing anything that's new or different or better than what we're doing. And a lot of the things that are being touted as revolutionary, we, and frankly, one or two of our competitors, have been doing for quite a number of years."

He concluded: "So, we don't see a big disruptive threat in the near-term. Long-term, whether it's the current crop of Silicon Valley start-ups or a next wave, I think the whole industry is going to get disrupted, as are most industries, primarily by significant advances in technology."

With online commerce expected to grow at a compound annual rate of 18 per cent to 21 per cent worldwide through at least 2018, XPO said it was "well positioned to expand our last-mile operations in North America and our e-fulfilment platform in Europe to capture this growth."