Is Home Depot Interested in XPO Logistics?
The possibility that Home Depot might make a bid for XPO Logistics has made headlines in recent days. So much so that XPO Logistics shares spiked in response to those reports.
To clarify, the website that first reported that story stated that Home Depot had internal discussions about the prospect of an XPO takeover, citing an anonymous source. Is that something to get all that excited over? It’s also worth noting that no one from any of the three companies in question has gone on the record about the subject.
The intriguing aspect of the story is that XPO Logistics is a major logistics provider for Amazon, and the online retailing behemoth is making a move into furniture sales and delivery. XPO touts itself as the largest provider of last-mile logistics for the delivery of heavy goods. Home Depot, for its part, has pushed into the home-appliance market in recent years.
Meanwhile, in 2015, XPO acquired Con-Way Inc., making XPO the second largest less-than-truckload carrier in the United States and transforming the company from a non-asset third-party logistics company into a multi-faceted logistics and transportation provider.
Amazon in recent years has itself transformed, directly controlling much of the logistics that go into the delivery of products. Home Depot may be mimicking that development as it seeks to enhance and streamline its ecommerce operations with the acquisition of a major logistics provider. The acquisition of XPO would keep the logistics provider away from Amazon, although it’s not clear that Home Depot fancies itself a competitor of Amazon.
Ecommerce fulfillment is playing an increasingly important role in XPO’s business. The company reported recently a 24-percent increase in fulfillment volume in the US between Black Friday and Cyber Monday. XPO has also hired 6,000 seasonal workers, primarily to respond to the surge in ecommerce business.
All of this is food for thought. But the fact remains that we really don’t know if any such acquisition activity is in the offing.
Need a Logistics Provider?
Compare over 100 Instantly
Container Store expands distribution operations to Maryland