October 2015 | Case Studies | LeaderSHIP

An Acquiring Mind

Tags: 3PL, Logistics, Third-Party Logistics, Careers

Bradley S. Jacobs, Chairman & CEO, XPO Logistics. (Mark Conrad/Hearst Connecticut Media)

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Brad Jacobs is not one to rest on laurels. Rather, a restlessness within keeps him searching for bigger and bolder challenges. Jacobs built a reputation consolidating disparate companies into industry juggernauts. He kindled his career in oil and gas (Amerex and Hamilton Resources), moved on to waste management (United Waste Management), then dug into the equipment rental sector (United Rentals). His latest venture, XPO Logistics, based in Greenwich, Conn., is taking the supply chain by storm.

In 2004, Jacobs gathered the vestiges of expediter Express-1 and began reinventing the wheel—first as a freight brokerage, then gradually acquiring complementary pieces along the way. In little more than five years, the rebranded XPO Logistics has swallowed a Who's Who of specialized players—Concert Group Logistics, Kelron, 3PD, Pacer International, New Breed, Bridge Terminal Transport, Norbert Dentressangle, and Con-way—on its way to becoming a multibillion-dollar global third-party logistics (3PL) provider.

In the same manner that XPO Logistics seeks to achieve leadership status in the supply chain, Jacobs has followed a similar path. His roll-up acquisitions strategy has become the stuff of C-level legend. It's predicated on understanding the demands of the market and marrying that recognition with a roll-up-the-sleeves work ethic and determination that attracts investors and eschews middlemen. Jacobs' hands-on approach extends to even the mundane. Corporate press releases are emailed from the man himself. "I like being the chief spokesperson for the company," he explains.

Inbound Logistics recently caught up with the chief spokesperson to talk about his vision for XPO Logistics, and to share insight into what it takes to be a successful leader in today's business world.

IL: What motivated you to invest in third-party logistics?

It is the long-term trend. Transportation and logistics is the last big industry that has not yet been consolidated—but it should be, and it will be. Customers want higher levels of service, but at lower cost. Scale will be necessary to quench their thirst for efficiency. Our industry will likely evolve like other more mature industries, with two or three world-class companies sharing the majority of the market. We're committed to XPO being one of those companies.

IL: XPO Logistics' M&A growthover the past several years has been considerable. As you add complementary pieces to the core, what's your vision for the company?

We want to be the number one or two provider of every key supply chain service. We're a few decades late to achieve that in parcel, and the rails have been consolidated even longer. But for most other parts of the supply chain, we've achieved—or aim to achieve—leadership status. We want to be top-of-mind and the first call for transport and logistics customers worldwide. The quality of our people and technology will always be world-class. We want every customer interaction to be a breath of fresh air.

IL: How has your background in the oil, waste management, and equipment rental industries shaped your approach to acquiring and consolidating logistics companies?

It's not so much about M&A as it is about how some industries just work better when they're less fragmented. Equipment rental and waste management need a highly integrated network—the larger the better, because density improves asset utilization.

IL: Has the logistics sector presented any unique challenges?

Not really. The issues that I deal with every day are the same ones that CEOs in other industries tackle. They mainly center on people. How do you make sure you have the right people at all levels of the organization, and that they keep their heads in the game and are aligned with the interests of customers and shareholders?

IL: Have any specific lessons you've learned in your professional life left an indelible mark?

My mentor, Ludwig Jesselson (a longtime commodity trader and philanthropist), once told me that if you genuinely enjoy solving problems, then you should choose business as a profession. Otherwise, take a different path. You have to adopt a mentality that problems are good things; that they give you an opportunity to use your creativity to find solutions.

IL: Knowing what you know today, what advice would you share with your 20-something-year-old self?

There will never be a time when you have absolutely everything figured out. So don't take yourself too seriously and don't be rigid. Be flexible, agile, and open to change. I've gained a large measure of humility through life's experiences, but if I could go back in time, I'd save young Brad some battle scars.

IL: That said, how would you counsel young professionals starting a career in transportation and logistics?

Think much, much bigger. Stay focused, yet be entrepreneurial. They're not mutually exclusive. You can give your full attention to the job in front of you and still keep your mind open to how it might be done differently or better. If the company you start your career with doesn't appreciate entrepreneurial thinking, find one that does. It's important that you greatly enjoy your job and the people you work with.

IL: What qualities make an effective leader?

Humbleness, courage, fairness, caring, clear thinking, decisiveness, cognitive flexibility, intense energy and focus, and a willingness to sacrifice your personal life for the sake of your employees. You also need the ability to rally the organization around a single, coherent vision; and hire people who are more talented than you are in what they bring to the table.

IL: What leaders inspire you?

Futurist Ray Kurzweil is an inspiration as a thought leader, particularly in the area of artificial intelligence. He can look at contemporary trends and envision the outcomes one decade or one century into the future. Kurzweil also puts his brain to practical use as an inventor. And, like many great thinkers, he's fearless about being proven wrong. It's a powerful mix.

IL: If you channel your inner Ray Kurzweil, what disruptive innovations will have the greatest impact on logistics?

Artificial intelligence is much closer to practical application than most people realize. It has huge implications for almost every industry, but particularly for service industries that require nuanced decision-making. Nanotechnology is another potentially disruptive innovation that can alter the flow of manufactured goods, and eventually the contract logistics process. In the long-term, genomics will affect supply chain patterns as we better understand the genetic drivers of health, lifestyle, and even retail preferences.






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