Coworking is a weekly segment where we talk to CFOs and other leaders in the finance space about their experiences, their companies, and the larger economy. Let us know if you are—or you know—a CFO we should interview.
Kyle Wismans is CFO of XPO, one of the largest providers of less-than-truckload (LTL) shipping in North America. A public company headquartered in Greenwich, CT, XPO employs 22,000 people and makes more than 12 million shipments per year. Wismans spoke with CFO Brew about his role, and about the investments he plans to make to help grow his company’s capacity.
This interview has been lightly edited for length and clarity.
What's something that other CFOs might not know about the shipping industry?
People sometimes think of transportation as putting something on a truck and moving it from point A to point B. But it’s much more than that. It’s really a data driven business. We have to know how to optimize our routes so we can get the freight moved for our customers at the best possible price. If you think about the US, there are over 41,000 zip codes, and we service 99% of them. A customer pricing agreement could have 50,000 lines of data based on all those zip code combinations. Our ability to optimize that vast amount of data is how we’re able to run efficiently and get the right results for our customers.
What do you see on the horizon for your business in 2024?
We’ll keep investing regardless of the cycle because we have high ROIC. In LTL, we typically invest in two major things: rolling stock—that’s going to include tractors and trailers—and more facilities. So right now we’re investing about 8% to 12% of revenue into capex. That’s our kind of medium-term target, and about 70% of that is rolling stock.
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The reason we’re doing that is to grow our capacity. There’s been some disruption in our space that took about 10% of capacity out of the market. A lot of investments we made in the last couple years have allowed us to pull in some of that capacity into our network. And as our service products improved a lot in the last couple years, there’s more demand for our services.
What advice would you give somebody who aspires to become a CFO?
Go deep. Pick one of the subdisciplines within finance. I spent over a decade in FP&A. That helped me understand businesses, both here at XPO and in my prior jobs, and that’s how I became adept at looking at a lot of data, identifying trends, thinking through what needed to happen. That helped me become a more proactive leader.
Second thing I’d say is, you’ve got to get in the field. You’re not going to learn as much behind the desk as you will being in the field with your team. Building those connections is how you become a strong, not just CFO, but leader of a company.
If you weren’t a CFO, what would you be?
A chef. Cooking is a hobby for me and something I do on the weekends. Unlike work deliverables, which typically extend for a long period of time, there’s something very satisfying about getting in the kitchen, making dinner, and you’re done.