LOS ANGELES, May 2 (Reuters) - XPO Logistics Inc on Thursday said price increases on less-than-truckload shipment contract renewals decelerated in the first quarter, sending shares in the shipping and warehousing company down as much as 4.8 percent on Thursday.
The news comes as Connecticut-based XPO is fighting to replace significant revenue from its top customer, Amazon.com Inc, which moved in-house $600 million worth of business with XPO.
Less-than-truckload, which handles relatively small freight shipments, is the biggest piece of XPO’s core transportation business, which brought in $2.66 billion in the first quarter.
“Our price increases on contract renewals were 3.7 percent... down from 4.9 percent in the fourth quarter. So there is some deceleration of the contract renewals,” Matthew Fassler, XPO’s chief strategy officer, said on a conference call with analysts on Thursday.
XPO built its less-than-truckload business with the purchase of trucking company Con-way for $3 billion in 2015.
XPO in February disclosed that its largest customer canceled two-thirds of its business with the company, forcing it to cut its 2019 profit forecast for the second time in two months.
Current and former XPO employees, as well as industry insiders, have told Reuters that the customer was Amazon, which is spending billions of dollars to build its own transportation infrastructure to contain swelling shipping costs. XPO and Amazon have declined to comment.
Shares in XPO were down $2.04, or 3.02%, to $65.09 in morning trading after earlier falling to $60.87.
Reporting by Lisa Baertlein in Los Angeles; Editing by Dan Grebler