Drew Wilkerson is the CEO of RXO, an asset-light freight broker whose services include managed transportation, freight forwarding, and last-mile delivery. A transportation industry veteran with 15 years of brokerage leadership experience, Wilkerson joined XPO, RXO’s predecessor company, in 2012 and was named CEO when RXO was spun off as a separate business in 2022. At XPO, he served as regional vice president, president of the North American brokerage business, and then as president of North American transportation. Prior to joining XPO, Wilkerson spent six years with C.H. Robinson working in sales, carrier relations, operations, and customer relations. He graduated from the University of South Carolina with a degree in public relations.
Q: How would you describe the current state of our supply chains?
A: I’d describe the current state of the supply chain as recovering and evolving. The overall supply chain experienced significant shifts over the last few years, especially in the aftermath of the pandemic. Retail and e-commerce inventory positions have improved and are currently healthy. While we have not yet seen significant restocking activity, that could materialize if consumer demand remains resilient.
We’re seeing the adoption of technology continue to rise, enhancing visibility and efficiency for customers and carriers. The use of AI [artificial intelligence] and machine learning is going to continue to drive the supply chain forward.
We’ve also continued to see nearshoring activity increase—this is a long-term secular trend. Mexico is now the United States’ largest trade partner, and trading activity between the two countries is likely to remain strong. Companies are also moving facilities to the U.S./Mexico border in hopes of preventing further disruptions of the kind they experienced during the pandemic.
Q: The transportation industry has had a rough year. When will transportation rebound?
A: I wish I had a crystal ball to predict when the industry will rebound. Our base-case scenario is for the market to recover in the second half of the year. However, that assumes an acceleration in carrier exits, which hasn’t yet materialized.
Q: RXO, along with GXO, split off from XPO a few years ago. Are there still any synergies or times when you work together with XPO and GXO?
A: We are all separate companies now—but when it makes sense, we do business together. For example, XPO is a carrier within RXO’s network.
Q: RXO is the largest provider of outsourced last-mile delivery service for heavy goods, which is a particularly challenging specialty. What makes RXO especially suited for managing these deliveries?
A: Handling heavy-goods delivery is a complex task, and RXO has a unique combination of expertise, infrastructure, and technology that sets us apart. Our extensive last-mile hub network is strategically positioned within 125 miles of the vast majority of the U.S. population.
We understand the intricacies involved in transporting and delivering these items safely and on time—as well as the importance of brand protection. With last-mile delivery, we are often entering people's homes, which comes with a higher level of responsibility for our customers. Our commitment to innovation means we’re constantly improving our processes and technologies to ensure we remain at the forefront of the industry.
In addition, we have last-mile specific technology that assists with ordering and streamlined scheduling, which includes voice and augmented-reality features.
Q: In what ways are technologies like artificial intelligence affecting freight brokerage operations?
A: AI is revolutionizing our industry, and its role is only going to get bigger. It’s all about boosting productivity and making things run more smoothly, especially in the brokerage business. At RXO, we’ve been using AI and machine learning for over a decade to refine our proprietary algorithms.
RXO’s machine learning capabilities help us predict and recommend loads to carriers, produce dynamic pricing, and manage expectations for shippers and carriers. As we input more data into our systems, our predictions continue to get more fine-tuned for the customers. AI allows our customers to optimize their spending, carriers to maximize revenue and reduce empty miles, and internal operators to be more productive.
We’ve also implemented visual AI technology within our warehouse and distribution centers, providing process improvements for gate check-ins. The visual Al technology removes the manual labor of checking in trucks, extracting the data from the trucks via video, and coordinating with the appointment scheduling program. This technology has helped reduce bottlenecks and reduced wait time at the gates by more than 30%.
I think the future of generative AI is ever-changing as well. From interfacing with customers to helping employees become more productive, we are always looking for ways to evolve our systems.
Q: Are digital freight-matching startups impacting the role of the traditional freight brokerage?
A: The foundation of RXO’s success over the last decade is rooted in the combination of people and technology. We don’t invest in our technology to replace our people—we invest in technology to enable our people. This is a relationship-based business. We’re handling important freight for some of the largest companies in the world, and it’s only by earning customers’ trust that we will grow that book of business.
While we leverage cutting-edge technology to streamline load matching, order tracking, pricing, and other critical tasks at RXO, we also focus on building long-term personal relationships with the carriers and customers that form the basis of our business. This approach has served us well, as shown by our long-term relationships with key customers. Our top 20 customers have been with RXO on average for 16 years. It’s also evident in how we handle our loads, with 97% created or covered digitally, showcasing our commitment to innovation.
To be successful, companies need to effectively innovate and adopt cutting-edge technology while also working to build strong customer relationships.
Q: Nearshoring is on the rise, especially to Mexico. How has that growth impacted cross-border freight brokerages?
A: The growth of nearshoring, particularly on the U.S.-Mexico border, has significantly impacted the cross-border freight brokerage industry. At RXO, we’ve seen a substantial increase in demand for our services, with cross-border brokerage loads growing by more than 37% year over year in the first quarter. After the pandemic and the ensuing supply chain problems, customers want to have their goods closer to the end-consumer to eliminate as many potential disruptions as possible.
Our strategic response to this trend includes expanding our infrastructure, exemplified by our new cross-border facility in Laredo, which is attracting interest from several large customers in the automotive, technology, food and beverage, and other industries. This facility is part of our commitment to support our customers’ nearshoring efforts and provide a comprehensive array of services for cross-border transportation outside of brokerage, including warehousing and customs brokerage services.
