XPO’s February Tonnage Up 0.2% with 150bps Q1 Margin Upside
XPO’s tonnage rose 0.2% year-over-year in February, driven by a 3% increase in daily shipments despite a 2.8% decline in weight per shipment and marking its first positive month since June 2024. Management forecasts flat Q1 tonnage but expects up to 150bps of operating-margin improvement.
1. Volume rebound in February
XPO’s tonnage rose 0.2% year-over-year in February, marking its first positive reading since June 2024. This performance reflected a 3% increase in daily shipments that was largely offset by a 2.8% decline in weight per shipment.
2. First-quarter outlook
Management maintains a forecast of flat tonnage growth for the first quarter, noting that a late-month New England blizzard likely suppressed February volumes. Excluding severe winter storms, January tonnage would have shown a 3% year-over-year gain.
3. Margin improvement initiatives
The company expects up to 150 basis points of operating-margin expansion year-on-year in Q1, driven by AI-driven efficiency gains across dock, linehaul and pickup-and-delivery operations, a reduction in outsourced miles and lower equipment maintenance costs.
4. Strategic customer additions
Last year XPO added 10,000 local accounts, expanded its grocery consolidation offerings and secured new healthcare sector deals, aiming to bolster high-margin volumes and improve overall network utilization.