Could a change of job be at the heart of Amazon's $ 600 million decision to shut down XPO? – FreightWaves



It seems strange that one of the most powerful companies in the world is disintegrating after the departure of one of its leaders. But Kenneth Wagers was not a leader, and he had not gone to a company.

At Amazon.com, Inc. (NASDAQ: AMZN), Wagers, nicknamed "Kenny" by almost everyone, managed a large portfolio. As the company's chief financial officer for the company's global transportation operations, Wagers led the financial operations of the "Amazon Fresh" (last mile, mid-kilometer, Amazon China), air and sea, and "Prime" food operations. Now. " day operation. Given Amazon's deep transition from a simple e-commerce model to a complex model focusing on transportation and logistics, it would be difficult to imagine an Amazonian leader whose skills and knowledge would be more sought after by transport and logistics professionals.

To complicate matters, Wagers was courted by Amazon by transportation and logistics giant XPO Logistics, Inc. (NYSE: XPO), whom he had joined last April as operations manager, adding acting head of his incomplete loading unit. in June. XPO has created a service called "XPO Direct", which integrates contract logistics, medium and last mile transport into an end-to-end network for businesses that do not want to manage the process themselves. This service is similar to Amazon's Fulfillment by Amazon (FBA), where it provides merchants with an online storefront, warehousing, order processing, distribution and delivery. FBA accounts for more than half of Amazon's sales.

In this case, Amazon is an XPO Direct user, presumably for heavier shipments. XPO does not handle parcels, which still account for the vast majority of Amazon's traffic.

Executives move from one company to another. Since the bets did not sign a non-compete contract with Amazon, he was free to go elsewhere. Thus, his decision may not have aroused further discussion. Last Thursday, XPO revealed that its biggest customer – which he would not have identified, but everyone knew to be Amazon – would draw $ 600 million in traffic, two-thirds of Amazon's total annual spend with XPO. The first segment, valued at $ 200 million, was withdrawn at the end of December and impacted XPO's mail injection business (transports goods from distribution or fulfillment centers up to the end of December). at postal centers for final delivery). The remaining $ 400 million will disappear in the first half of 2019 and will be split between several transportation functions. The remaining $ 300 million of Amazon's activities with XPO are bound by long-term contracts and will remain unchanged for the time being.


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