XPO Logistics expects 750,000 European home deliveries for 2018

[February 15, 2018]   By Eric M. Johnson

SEATTLE (Reuters) - XPO Logistics Inc <XPO.N> said on Thursday it expects to make or manage 750,000 deliveries of bulky goods like flat-screen televisions and furniture to homes in Europe in 2018, as the U.S.-based company dips its toe into a crowded and fast-growing market.

The Greenwich, Connecticut-based delivery and warehousing company is the largest provider of "last-mile" deliveries from warehouses direct to homes in North America, handling or managing some 13 million drop offs in 2017. Last week XPO said it was taking that service to Europe, but did not disclose expected volume.

The company told Reuters its projected volume ahead of an announcement on the service expected later on Thursday.

"That's more volume than people would have expected in year one," said Stephens Inc analyst Jack Atkins. "I don't think it's material for the profitability of the company, but it's a nice start."

XPO has used rapid-fire acquisitions to grow from a $175 million truck brokerage company in 2012 to a $15.38 billion freight and logistics behemoth, but its European expansion, for now, is being built organically.

In Europe, XPO hopes to capture a bigger slice of a deeply fragmented market where, similar to U.S. trends, consumers are increasingly demanding delivery of unwieldy or intricate products they buy online or in stores, ranging from refrigerators to servers for data centers.

Christmas decorations are seen in the windows of a Zara clothing store at the Bahnhofstrasse shopping street in Zurich, Switzerland November 27, 2017. REUTERS/Arnd Wiegmann/File Photo

Seko Logistics, which competes with XPO in the United States on deliveries of large and bulky items, is also expanding its home delivery business in Europe for products that require extra installation like medical devices or golf simulation machines.

"The opportunity is immense across Europe, in the multi-multi billion-dollar range," said Seko spokesman Brian Bourke.

XPO declined to name any new customers or quantify investments in new hubs, trucks and employees. It already counts Swedish furniture brand IKEA and Zara, Inditex SA's <ITX.MC> clothes retailer, as customers, and has been building its delivery network of trucking contractors on the continent.

The expansion comes after XPO began testing its direct-to-household service in the United Kingdom, Ireland, and Netherlands in 2016, and has moved to Spain and France.

(Reporting by Eric M. Johnson in Seattle; Editing by Lisa Shumaker)

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