Interview context and focus

Logistics Management spoke with Ali Faghri, Chief Strategy Officer at XPO, about trends shaping less‑than‑truckload (LTL) freight. The discussion covers the current freight economy, trade policy, investments XPO has made during the downturn, adjustments for regulatory changes, e‑commerce impacts, peak season planning and the carrier’s use of artificial intelligence.

Current state of the freight economy

Faghri describes freight conditions as weak, with LTL volume remaining below pre‑Covid levels. He links that softness to slow activity in the industrial sector, which supplies much of LTL demand. Faghri expects volumes to recover once industrial production strengthens, a turnaround that could be helped by lower interest rates and legislation such as the Big Beautiful Bill.

Tariffs and U.S. trade policy implications

Faghri says tariffs can support LTL in the long run by encouraging manufacturers to relocate production to the United States. When factories move stateside, not only finished goods but also inputs and intermediate products travel on U.S. trucks, increasing domestic LTL movements. He also notes that closer production shortens cycle times and encourages smaller, direct shipments that fit LTL well, and that clearer tariff policy will likely speed up shipper capital spending.

How this cycle differs from the pandemic and XPO’s capacity positioning

Unlike the sharp drop and rapid rebound in 2020, the current freight downturn has been prolonged and has driven additional capacity out of the industry. That, Faghri warns, leaves relatively few carriers with the scale to handle a rebound. XPO has deliberately invested during the slowdown to be prepared when demand returns.

Key investments and capacity moves at XPO include

• maintaining about 30% excess door capacity, which the company views as appropriate at the bottom of the cycle
• opening more than two dozen new service centers in important freight markets
• building over 18,000 new trailers at its in‑house manufacturing plant since late 2021
• adding nearly 6,000 tractors and achieving the lowest fleet age in company history

These steps are intended to allow XPO to support customers when industrial activity rebounds and the market tightens again.

E‑commerce effects and peak season planning

Retail e‑commerce has raised demand for LTL and increased expectations for faster transit and visibility. Retailers have restructured distribution to handle smaller, more frequent shipments, and they need carriers that can provide speed, precision and end‑to‑end tracking.

For the 2025 peak season, XPO reports heightened demand for its priority offerings. Shippers are turning to premium services to meet tight holiday requirements and strict retailer timelines.

• Examples of premium services gaining traction include Retail Solutions and Rollout Service for seasonal displays
• Grocery Consolidation Delivery to stage freight in grocery warehouses ahead of holiday demand
• XPO Mexico+ to enhance cross‑border shipments

Response to NMFC changes and customer support

When the National Motor Freight Classification (NMFC) updates were proposed, XPO focused on helping customers make the transition. The sales team worked directly with shippers to review freight mixes, discuss potential reclassifications and reinforce best practices for packaging and bill‑of‑lading completion.

Operational changes to smooth the shift included adding a freight sub‑item section to the company BOL template and integrating the NMFTA’s ClassIT+ tool into XPO’s website so customers can look up NMFC item numbers, density and class more easily.

Pricing, service quality and operational performance

Faghri describes pricing as constructive, noting that LTL is a cost‑inflationary sector and customers accept the need for carriers to invest in people, equipment, network and technology. He also emphasizes that the industry remains capacity constrained, with fewer terminals and doors than before the pandemic, which makes reliable partners important to shippers.

XPO says it has emphasized service improvements through new tools for frontline employees, expanded training on load‑securement, and incentive programs tied to strict quality goals. The company reports that in the third quarter of 2025 it achieved its best-ever damage reduction and improved on‑time performance for the 14th consecutive quarter.

Artificial intelligence and productivity gains

XPO has leveraged a fully cloud‑based technology stack to deploy proprietary AI tools across operations more rapidly than many competitors, according to Faghri. AI models are being used to reduce diversions and empty miles, improving productivity in linehaul, pickup‑and‑delivery and dock operations.

On the commercial side, XPO built AI‑driven tools to make its salesforce more efficient. A proprietary lead‑scoring model evaluates hundreds of thousands of potential shippers to identify the best prospects, and a scheduling tool helps salespeople optimize customer visits and travel routes.

Faghri says XPO is encouraged by the early results from AI and expects the technology to play an increasingly important role for its operations and customers.