I think the leverage part of the equation is about to change in a significant way. Historically, warehousing cost of a retailer can be 3-8% of sales, and a poorly managed warehouse that cost 7% of sales is not that big of a deal compared to a well managed warehouse that costs 4% of sales (and thus the warehousing industry remains majority insourced).
The delta is about to shift in a major way, giving significant leverage to GXO and GXO only. Automation + multi-tenant (added benefit of early onboard for smaller customers) + value-add services (reverse logistics) + scale (organic & inorganic growth) will drive GXO's warehousing cost to perhaps 2-3% of sales from the POV of a retailer. While inflation, lack of suitable workforce, and increasingly complex logistics & supply chain may push non-GXO warehousing solution cost to 10%+ for retailers.
I don't see why GXO can't grow topline at 15% and bottomline at 20-25% for the next 30 years.
I think the leverage part of the equation is about to change in a significant way. Historically, warehousing cost of a retailer can be 3-8% of sales, and a poorly managed warehouse that cost 7% of sales is not that big of a deal compared to a well managed warehouse that costs 4% of sales (and thus the warehousing industry remains majority insourced).
The delta is about to shift in a major way, giving significant leverage to GXO and GXO only. Automation + multi-tenant (added benefit of early onboard for smaller customers) + value-add services (reverse logistics) + scale (organic & inorganic growth) will drive GXO's warehousing cost to perhaps 2-3% of sales from the POV of a retailer. While inflation, lack of suitable workforce, and increasingly complex logistics & supply chain may push non-GXO warehousing solution cost to 10%+ for retailers.
I don't see why GXO can't grow topline at 15% and bottomline at 20-25% for the next 30 years.