XPO Logistics offloads its intermodal division to STG Logistics

March 28, 2022

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As XPO Logistics Inc. divests its North American intermodal business, STG Logistics Inc. is building up its containerized transportation network.

The sale of XPO Intermodal was announced in news releases from each of the companies on March 25.

For XPO, the sale is preparation for splitting the company into two entities.

“This divestiture simplifies our business model and moves our capital structure closer to investment-grade — two priorities in our strategic plan to unlock significantly more value for our stakeholders,” Brad Jacobs, CEO of Greenwich, Conn.-based XPO Logistics, said in his company’s news release. “We’ve completed a key step in preparing for our planned spinoff, when we’ll separate XPO into two publicly traded leaders in less-than-truckload transportation and tech-enabled brokered transportation services.”

For STG Logistics, the goal is to become North America’s leading provider of fully integrated, port-to-door containerized logistics services, including drayage, transloading, warehousing, fulfillment, rail transportation, and associated final mile distribution, according to its news release.

North America’s leading provider of seamless, fully integrated, port-to-door containerized logistics services including drayage, transloading, warehousing, fulfillment, rail transportation, and associated final mile distribution,” STG CEO Paul Svindland said in the news release.

The XPO intermodal division acquired by STG is North America’s third-largest provider of containerized transportation services, according to the STG news release. It provides intermodal drayage and rail brokerage services for retailers, manufacturers, third-party logistics providers, and other types of customers.

The network has 48 locations, 11,000 containers, 2,200 tractors, and 5,200 chassis. The division was formed through XPO’s purchase of Pacer in 2014 and Bridge Terminal Transport in 2015.

XPO reported its intermodal unit generated $1.2 billion of revenue in 2021.

CNBC reported this month that XPO also was planning to sell its European business to focus solely on its less-than-a-truckload business.

In recent months, XPO Logistics has faced pressure from drivers in Southern California trying to unionize over misclassification of port and railroad truck drivers as independent contractors. In July, drivers and dockmen at XPO Logistics terminals in Miami and Trenton, N.J., ratified contracts with the Teamsters Union.

Executive reshuffling at STG Logistics

There will be some shuffling of executive duties as STG Logistics takes over XPO Intermodal. However, Paul Svindland will remain as SG CEO, and Geoff Anderman will remain a STG president and chief financial officer.

Current STG chief operating officer Todd Larson has been tapped to lead the legacy STG operations as executive vice president of STG and chief operating officer of STG’s distribution segment.

Paul Smith, formerly president of XPO’s intermodal division, will lead STG’s intermodal operations as executive vice president of STG and chief operating officer of STG Intermodal.

STG has been owned by Chicago-based Wind Point Partners since 2016. Since Wind Point began investing in it, STG has more than quadrupled in size through organic growth and 10 add-on acquisitions, the company reports.