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Tech Takeover: Robots Lead the Way at GXO

Warehouse automation is at the fore at GXO Logistics as robots and other high-tech touches ramp up across its facilities. 

The Greenwich, Conn.-based company said by the end of the year it expects to have about 7,600 pieces of technology up and running in its sites. That’s up more than 50 percent from the tech count in 2021.

“Generally, automation it’s rolling out more and more across our business and the last quarter was just an incredible quarter for that,” CEO Malcolm Wilson told analysts last week during the company’s quarterly earnings call. “We were up significantly in the amount of tech enablement that we pushed out into the warehouses.” 

GXO’s tech update Tuesday, counts deployment of various types of robots, vision scanners and automated guided vehicles used in warehouses. 

The company said GXO’s automated sites generate more than a third of its revenue. 

GXO, which spun off from XPO Logistics in August 2021, had revenue of $2.3 billion in the third quarter. That was up 16 percent from a year earlier. The company’s adjusted net income for the quarter was $89 million, up from the $65 million it recorded in the year-ago period. 

The logistics company had a recent market cap of $5.3 billion. 

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Wilson said last week he sees the changing economic environment as helping further make the case for tech investments among its client roster. In fashion, those customers include Kering, LVMH, Nike, Dolce & Gabbana, Lacoste, JD Sports and Zara among many others. 

“The tide of tech rollout for us is going to accelerate as we are going forward,” Wilson said. “I think it’s going to be a super exciting period for us, and we’re going to go into an even more higher tech deployment environment as we move forward, but that’s partly driven by the… challenge of the macro environment. It’s going to make automation all the more appealing to customers on the retrofit side as well.” 

The warehouse technology offers assistance in areas such as inventory management, safety, training and fulfillment accuracy and speed. 

“Whenever there is a challenging macro, it pushes people to have to do things differently than how they have done in the past,” Wilson said. “And that’s right in our wheelhouse. It’ll be a good environment for us in 2023.” 

Also helpful to GXO is the completed acquisition of Clipper Logistics. The $1.3 billion deal cleared its final regulatory hurdle in the recently ended quarter as the two companies now work to merge the businesses. 

While GXO’s sites tout high tech, Clipper—known for its adept abilities in reverse logistics—isn’t as automated as its new parent. In fact, Wilson called it a “more manual-based business” than GXO and indicated Clipper real estate is likely to see more technology implementation in the future. How soon that occurs and the specifics of those plans are unclear. 

Bill Fraine, GXO chief commercial officer, told Sourcing Journal last week the two companies will work on “learning the best of what Clipper does and the best of what GXO does” before beginning to integrate those learnings across the business.

GXO currently counts more than 200 million square feet of warehouse space across over 950 real estate sites.