News

Jan 25, 2024

XPO transport company builds its own trailers at Searcy plant

XPO Inc. is another one of those Arkansas businesses that operate without much

XPO Inc. is another one of those Arkansas businesses that operate without much notice but produce big results.

The transportation company's Searcy manufacturing facility, which produces all the trailers used by the less-than-truckload carrier nationwide, provides a distinct competitive advantage that boosted the company after the pandemic took hold, when global supply lines tangled and essential parts and equipment deliveries stalled.

Headcount at the 26-acre facility on Benton Avenue has exploded to 400 workers, jumping more than 200% since 2020. XPO added a second production line in January 2022 and a third line in December to keep up with demand. Company forecasts call for producing 6,000 trailers at the Searcy plant for the company's fleet this year.

So far, the facility has exceeded the ambitious forecast by delivering more than 1,800 new trailers in the first quarter. XPO is the only carrier in the nation that manufacturers its own trailers and the 200,000-square-foot Searcy plant is one of 418 tractor-trailer producers in America. The company says it is the 13th largest manufacturer in the industry.

"It's a competitive advantage for us," Chris Carter, vice president of maintenance and manufacturing at XPO, said of in-house manufacturing. "Trailers are one of the necessities of trucking -- it's where the freight goes, it's based on what the customer needs."

Production supports fleets that deliver from 294 XPO terminals, providing coast-to-coast coverage that blankets the country.

Manufacturing will remain a key growth component of the company, Carter noted, and will help boost further market expansions. Production is nimble enough to build customized trailers per customer requests.

Nationwide, trailer-production backlogs are at the highest level in two years, with more than 200,000 trailers on order, according to FTR Transportation Intelligence, which analyzes the industry. Trailers being manufactured today are based on orders placed a year ago.

XPO is able to sidestep the logjam because the Searcy plant produces all the trailers the company needs. "We have the capacity in-house to meet our needs for trailer demand," Carter says. "We've been able to increase production at a time when you can't find and buy that capacity."

Company officials note Searcy is an ideal location for the manufacturing operation because of Arkansas' central location in the U.S. and the state's strong transportation infrastructure.

The trucking industry is a cornerstone of the U.S. economy -- every major industry relies on trucking to maintain its supply chain. Trailer manufacturing is an essential part, with a market estimated to have generated $11.9 billion last year, according to IBISWorld, which analyses the industry.

The less-than-truckload market is projected to expand by $103.05 billion through 2027, a compound annual growth rate of 7%, according to an industry analysis.

Less-than-truckload shipments typically deliver goods between 150 and 15,000 pounds and trailer capacity ranges from a 16-foot container that holds about 800 cubic feet to 26-footers that carry 1,400 cubic feet.

Those shipments allow companies to share trailer space and reduce shipping costs and accommodate business needs with more frequent deliveries of goods, parts and equipment so companies can avoid burdensome inventory costs.

XPO, based in Greenwich, Conn., operates 29,000 trailers and handles 18 billion pounds of freight every year.

BANKS TIGHTEN LENDING

Bankers are telling the Federal Reserve Board they tightened loan standards in the first quarter of the year and weathered weaker demand for loans.

Senior loan officers at 65 of the nation's top banks and at 19 foreign offices operated by U.S. banks reported lower demand for all categories of loans -- business, real estate, auto, residential and home equity. The survey was conducted after three large bank failures earlier in the quarter. Bankers also projected strict lending will remain in place, and could tighten even more, for the rest of 2023.

"That will starve firms and households of credit and help push the economy into recession in the second half of this year," Michael Pearce, lead U.S. economist at Oxford Economics, said in a research note.

Deposits remain a key focus for investors and regulators, and the banking analysis team at Stephens Inc. cited data from the Federal Reserve Bank in reporting last week that there are "no notable differences in large bank and small bank deposit trends" so far in the second quarter, which ends June 30. Prior Fed reports indicated deposits were shifting to larger banks.

Deposit costs, however, continue to rise and will pressure industry earnings, Stephens said.

The loan outlook is upbeat. "On the loan side, the growth trends remain solid as we observe resilient positive trends in most loan categories," Stephens said in the research note.

CREWS IN NYC

Crews & Associates of Little Rock is expanded into New York City with a new branch in midtown Manhattan to widen its customer reach. Crews also intends to broaden its talent pool of fixed-income experts.

The Manhattan office is led by Dan Mulholland and is staffed with fixed-income trading and sales specialists with decades of experience in taxable and tax-exempt products.

"Our team of industry professionals has deep relationships and understands the needs of hedge funds, mutual funds, investment managers, central banks and pension funds," Mulholland said in making the announcement last week. "Under the guidance of a fixed income strategist, the team uses a highly analytical approach to develop targeted, executable trading strategies across the term structure of interest rates."

Crews is a full-service investment firm that is a wholly owned subsidiary of First Security Bancorp of Arkansas and has branches in Arkansas, Alabama, Georgia, Louisiana, Mississippi, New York, Tennessee and West Virginia.

SEED-FUNDING SEMINARS

The nation is celebrating Seed Fund Week and the Arkansas Small Business and Technology Development Center is offering four seminars beginning Monday to help small businesses attract more capital in the early stages.

The virtual events will connect startups and small businesses working on advanced technologies to America's Seed Fund, the nation's largest source of early-stage funding. The fund delivers more than $4 billion annually so businesses can develop and take their technologies to market.

Seminars will highlight the fund's evaluation process and teach business owners how to work with federal agencies that need technological innovations.

Online sessions begin at 1 p.m. Monday, Tuesday and Wednesday. Hourlong seminars also are available starting at 1 p.m. and 3 p.m. Thursday.

More information and registration is available asbtdc.org.

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