Tech-First Consolidation Play

“While the rental industry overall was slow to computerize, the larger regional players were more tech-savvy. By 1997, nearly all of them, including Hertz, were running on software developed by a company called Wynne Systems. This told me that the software was capable of managing hundreds of thousands of pieces of equipment flowing on and off jobsites. I bought Wynne. Owning Wynne accomplished two things. We had an industry-best platform that we could continue to develop internally for our own use, and the acquisition gave us access to aggregated, anonymized data on macro-trends across the industry. This gave us a high-level view of emerging market trends, such as equipment gluts or shortages in the making. We could proactively adjust our pricing and asset management, while the rest of the industry was being reactive. For example, if our data flagged an instance of too much equipment of a certain type in the Southeast, we’d lower the rental rate there and target customers who wanted the machine for several months, rather than just days or weeks. In other words, we were able to manage our rental rates efficiently based on equipment utilization to get the best return.”

“XPO’s tech team created a fully automated, digitally enabled transportation network that spans a nationwide, virtual freight marketplace with a single repository of information, facilitating transactions in a private cloud. Huge amounts of data flow into the platform in real time, giving the sales and carrier procurement teams the exact same visibility into loads and trucks moving around the network. This high-profile platform is in use today as RXO Connect® in North America and XPO Connect® in Europe. Ten years ago, zero percent of XPO’s truck brokerage loads were created or covered digitally. Today, 96 percent of loads tendered by RXO—the brokerage business we spun off in 2022—have a digital component, and many of them are touchless transactions through direct digital connections with customer systems.”