How XPO Beat Expectations in a Weak Freight Market

Here at Supply Chain Digital, we believe freight is the backbone of global trade.

When trucks stop rolling and ports slow down, it’s often a signal of deeper economic strain. That’s why investors and analysts are watching companies like XPO Logistics so closely.

Although the equity markets are showing optimism, freight tells a different story — one of persistent weakness in the movement of goods. XPO, on the other hand has delivered better-than-expected results in the third quarter of 2025. 

 XPO's numbers sit against the backdrop of what some industry experts now label a sustained freight recession.

“Freight data is often telling the story of the broader economy long before traditional indicators catch up,” says Craig Fuller, CEO at FreightWaves.

He points to high-frequency data from the SONAR platform, which shows that “the US economy is entrenched in a goods recession.”

In simple terms, physical products aren’t moving like they used to. While services spending holds steady, goods transport is still slow, putting strain on logistics operators across the board.

A freight slowdown with lasting effects

To understand what’s going on, it helps to look back.

The 2019 overcapacity crisis was met with a spike in demand during the pandemic, before post-pandemic trade changed everything. 

Now, tender volumes, the number of loads offered and rejected by shippers, show major fluctuations -- but overall are below their peak, with accepted tenders falling year-on-year. 

This means freight companies face difficult choices; to cut costs, reduce fleet size and improve efficiency. 

For XPO, the answer lies in selective pricing, tech-led productivity and strong capital management -- enabling the company to stay ahead of market expectations, even as the wider sector continues to struggle.

Why XPO is outperforming 

XPO delivered a revenue of US$2.11bn in Q3 2025, slightly ahead of Wall Street’s estimate of US$2.07bn.

CEO Mario Harik highlights the performance, saying: “We continued to exceed expectations in the third quarter, delivering adjusted EBITDA of US$342m and adjusted diluted EPS of US$1.07, both up year-over-year in a soft freight environment.

“Our intense execution is resulting in record service quality and margin expansion at the trough of the cycle.” These results come despite continued softness across freight markets, showing the importance of cost control and operational focus.

North American Less-Than-Truckload (LTL), which handles smaller shipments without requiring full trailer loads, also remains solid - climbing to US$1.26bn. The adjusted operating ratio improves to 82.7%, which Mario calls “significantly outperforming seasonality.”

Freight recession reshapes strategy 

XPO strength is a clear sign of its resilience, but it could also reflect the caution that comes with a slow freight environment.

That said, Mario highlights “profitable share gains in the local channel” and “AI-driven productivity improvements” as tools that help the business perform despite freight headwinds.

By focusing on high-yield shipments and avoiding overextending its network, XPO chooses density and quality over volume.

Meanwhile, sector-wide dynamics remain uncertain as regulation, enforcement and financial pressures could force some smaller or low-margin carriers out of the market -- bringing capacity and demand into balance. 

Pricing power in LTL remains firmer than in long-haul truckload, which supports XPO’s model. Yet, even here, gains are modest and require discipline.

Freight is not rebounding quickly and any hopes for a near-term shift depend on macroeconomic demand catching up to capacity.

XPO shows what steady execution looks like in a freight recession, but as the larger market still grapples with weak volumes, soft rates and the aftershocks of oversupply the future remains uncertain.