GXO leaders urge joint warehouse‑transportation cost analysis
GXO’s senior vice president of business operations Jamie Saucedo and senior director of transportation Mike Swenson said companies should evaluate warehouse and transportation costs together to avoid hidden expenses. They warned that lowering transportation rates alone can shift costs to warehousing, labor or delivery miles, creating a misleading picture of performance.
Saucedo noted that a decision that looks good in one budget often appears as an expense elsewhere, such as a warehouse location that adds distance or inventory costs. Swenson illustrated the point with the metaphor of jumping over a dollar to pick up a penny, where a seemingly cheap carrier rate leads to higher overall logistics spend. He gave an example: a firm considering warehouses in California and New Jersey enjoys favorable transportation rates but faces higher warehousing costs due to local labor and real estate prices. Alternatively, locating facilities in Tennessee and Nevada could reduce warehousing expenses while keeping transportation impacts minimal, though labor availability and delivery speed must be weighed. The trade‑off also affects customer experience, as a warehouse that seems inexpensive on its own can force longer delivery times if transportation is considered separately.
“The cost of a decision is sometimes showing up on someone else’s budget,” Jamie Saucedo, senior vice president of business operations, GXO said.
“jumping over $1 to pick up a penny,” Mike Swenson, senior director of transportation, GXO said.
Transportation costs are climbing across parcel, brokerage and dedicated fleet operations, putting pressure on companies to find savings wherever they can. While those moves can help, they can miss a larger source of raised costs.
What we know
Jamie Saucedo, senior vice president of business operations with GXO
Mike Swenson, senior director of transportation with GXO
Company wants to operate warehouses out of California and New Jersey
More advantageous option could be to operate out of Tennessee and Nevada