GXO Logistics, Inc. Morgan Stanley's 14th Annual Laguna Conference
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Great. Next up, we have longtime friends of Laguna, GXO, and very happy to welcome CFO Mark Suchinski, and Chief Strategy Officer Kristine Kubacki. Thank you so much for being here.
Thank you. Thank you. It has been an interesting 12 months for everybody, especially for you guys, lots going on.
Obviously with macro, kind of idiosyncratically, with you guys as well. Maybe you can start by just giving us an update on business trends, and how they have trended versus your expectations, especially since the last time you spoke with us on the Q call.
Yeah, thanks. Things really haven't, I think, materially changed since our last earnings call. We started the year with the assumptions that volumes would be flat. As we've progressed throughout the year, at least through the first half of the year, what we've seen is maybe B2B a bit stronger Okay than we had anticipated.
B2C, maybe a little bit softer than we had anticipated. But overall, I would say, when you think about the breadth of our customers, 30% of our customers are blue-chip Fortune 100. We've got a very diversified customer base.
We have a lot of our customers in certain sectors that are growing very strongly, like aerospace and defense, like data centers. There's a little bit of a natural hedge as it relates to how diversified our business is and how global we are. We're in 27 different countries. We're in the U.S., the U.K., and continental Europe. Overall, I think volumes, and from a market backdrop, we feel pretty good about where our plans are. I would say, overall, when we think about our business, it's longer cycle in nature. Typically, our contracts are 5 years Yep in length.
As well as I think when you look at our business over the last 5 years, you don't see the type of cyclicality you see in some transport areas. We don't go as high as some, we don't go down as low.
Yep. It's a little bit more resilient and I would say that as we move into the peak season here, I would expect those trends to continue where B2B is a little bit stronger, a little bit softer.
But obviously, with the macro going on and the conflicts in the Middle East and where fuel prices are, it's something we continue to keep an eye on.
Got it. That's super helpful. Maybe to unpack that a little bit, any particular color around the strength in B2B and the weakness in B2C? Especially weakness in B2C, it feels like e-commerce is doing reasonably well. Do you think it's idio to you guys, or do you think it's marketplace?
Any color there? No, I think you're right.
I think e-commerce continues to do quite well, right? That continues to be fairly resilient. I think that the consumer continues to be fairly resilient.
Even in light of where fuel prices are.
Yep. It is not just our higher growth verticals like aerospace and defense and data centers and some other industrials.
We are seeing other parts of our business continue to be fairly resilient, and I think that is a great testament to the strength of the customers that we have and the book of business that we have built over the last five years.
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