XPO Logistics – the second largest provider of less-than-truckload (LTL) transportation in North America – has announced four new technology initiatives at the core of its less than load (LTL) 2.0 optimization plan.
The company expects to generate approximately US$100m in incremental operating profit over the next two years from proprietary technology underlying LTL 2.0.
The four models include the linehaul bypass model. The company is piloting new algorithms to assemble truckloads dedicated to direct movements of LTL freight. The linehaul bypass model improves the efficiency of company trucks and trailers and purchased linehaul services by reducing multiple stops to a single destination.
The load-building through artificial intelligence model uses AI tools and computer vision technology. This is utilized for cross-dock operators to help to ensure that inbound pallets are loaded in the optimal trailers – and in the right sequence inside the trailers – for the greatest possible efficiency during delivery. Intelligent load-building technology also helps limit damage.
The model for dynamic route optimization for pick-up and delivery has led XPO to pilot proprietary AI tools that set the sequence of each LTL driver’s pick-ups and deliveries and adjust routes in real time based on traffic, road construction and other impacts to efficiency. This has increased the number of delivery and pick-up stops per hour, improving asset utilization.
Pricing algorithms is the fourth technology initiative that has been launched. The company is developing machine learning capabilities to predict LTL price elasticity. The technology is being designed to forecast market conditions for future dates based on real-time supply and demand, as well as historical data and XPO capacity levels. This will help enhance the speed and accuracy of responses to customer RFPs.
Mario Harik, chief information officer of XPO Logistics, said, “Our technology is spurring growth across all the services we offer. We’ve pinpointed four high-impact areas where we can lead the LTL industry in transforming traditional approaches to serving customers.
“Two of these innovations – dynamic route optimization and linehaul bypass – are already in pilot. Given our capacity for innovation, our opportunity for creating value in LTL is nearly limitless.”
XPO develops its technology within a cloud-based ecosystem, supported by an annual investment of more than US$450m.