GXO Logistics has secured a six-year extension of its UK contract with BAE Systems, marking the third decade of collaboration between the two companies. Under the renewed agreement, GXO will continue to provide warehousing, materials handling and integrated logistics solutions at BAE’s Scotstoun and Govan shipyards in Glasgow. The expansion follows GXO’s recent acquisition of Wincanton and represents the firm’s first major defence contract in its enlarged portfolio. BAE Systems has signaled its confidence in GXO’s tech-enabled supply-chain expertise, which has supported the construction of the Royal Navy’s Type 26 frigates since 2018.

The new deal incorporates GXO’s 4PL Control Tower to coordinate inbound and outbound transport operations across multiple sites in Scotland’s Central Belt. Leveraging real-time inventory tracking, automated yard-management systems and advanced analytics dashboards, the partnership aims to reduce materials-handling cycle times by up to 15% and cut stock-reconciliation errors by 25%. Integrated RFID tagging and IoT sensor networks will deliver end-to-end visibility, enabling BAE Systems to forecast component shortages and optimize just-in-time delivery for critical ship-building modules.

BAE Systems’ Naval Ships division projects that enhanced logistics throughput will accelerate the delivery schedule for the first four Type 26 frigates by an estimated six months, boosting the programme’s overall efficiency. The agreement supports the UK Ministry of Defence’s National Shipbuilding Strategy, which targets at least 25% productivity gains across the supply chain by 2030. With GXO now responsible for more than 200,000 square feet of bonded warehousing and cross-dock operations in Scotland, BAE Systems anticipates a 20% improvement in parts-pick accuracy and a 10% reduction in landed material costs over the contract term.

Following its Wincanton acquisition, GXO has positioned itself as a leading aerospace & defence logistics provider across North America, the UK and Ireland. The company operates over 30 A&D-focused sites worldwide and employs a dedicated team of more than 1,200 defence-cleared specialists. By integrating automated storage and retrieval systems, collaborative robotics and AI-driven demand-planning tools into its defence offering, GXO aims to capture a larger share of the global defence-logistics market, which is forecast to exceed $85 billion by 2028.