Data center capacity is on track to triple by 2030, and GXO Logistics — the world's largest contract logistics provider, spun off from XPO Logistics in 2021 — is positioning its supply chain services to capture that surging demand well into the next decade, according to Patrick Kelleher, CEO of the $13 billion contract logistics company.

Speaking on FreightWaves Today, Kelleher said GXO's data center business — which spans both the forward build and the maintenance and sustainment of facilities — is already experiencing what he described as "substantially accelerated growth." He expects that momentum to persist through at least 2027.

The longevity of data center demand remains a closely watched question among freight professionals, given ongoing debate over power constraints and the potential for overbuilding. The buildout is being driven by enterprise adoption of generative AI tools and rapid expansion of cloud providers' GPU fleets, both of which require dramatically more compute density than traditional workloads. Kelleher pointed to Nvidia's half-trillion-dollar investment commitment as evidence that capital continues to pour into the sector.

"I don't see the demand for data center capacity diminishing even into 2030, 2035," he said.

GXO has developed an offsite rack assembly and wiring process that shifts that labor from the confined data center floor into a production-line environment. The approach enables the company to stand up facilities in as little as 30 days and service multiple data centers from a single facility.

"I subscribe to the statistics that are out there that data center capacity is going to triple by 2030. I believe that because if I look at GXO as just a small $13 billion revenue organization that is part of a bigger economy, our focus on AI and the application of AI in our business is one of our top priorities, and I only see it accelerating as we go forward." — Patrick Kelleher, CEO, GXO Logistics

Warehouse Robotics: Humanoid Costs Projected to Decline

On the robotics front, Kelleher disclosed that GXO has completed more than 45 humanoid pilots — including work with Agility Robotics' Digit platform — with an additional pilot scheduled to launch in Europe during the second half of this year. He projected that the cost of a humanoid unit will be halved within two years. Operating costs — currently running $10 to $15 per hour — should drop below $10 per hour over the same period, while total operating costs are expected to reach $15 to $20 per hour within two years, a threshold Kelleher described as necessary to achieve return on investment.

GXO currently deploys humanoids successfully picking cosmetics and apparel. Power consumption has not proven to be a limiting factor, according to Kelleher; 40% of GXO's warehouses already carry high robotics fit-outs, and improvements in battery technology are keeping energy demand manageable.

Aerospace and Defense Expansion

Kelleher identified aerospace and defense as a high-growth vertical for the company. In February, he formed a defense advisory board staffed with former senior military officials from the supply chain side. GXO also announced a UK partnership — branded Taurus — with Amentum and Maersk to pursue contracts with the British government.

Kelleher confirmed that GXO is targeting a total addressable market tied to the U.S. defense bill that has been cited at $1.5 trillion.

"That's the number we use," he said. "And that's a good TAM."

Consumer Verticals and Reindustrialization

On the consumer side, Kelleher said GXO's retail, CPG, and e-commerce verticals have been "relatively flat on volume" in aggregate, though the company expects to be "at or better than last year" for peak season based on current customer behavior.

He also highlighted reindustrialization as a tangible shift reshaping warehouse location strategy. Federal incentives such as the CHIPS and Science Act and the Inflation Reduction Act have accelerated domestic manufacturing investment, and as manufacturers bring production onshore, optimal warehouse locations are migrating away from coastal ports toward interior markets. Kelleher specifically cited Texas, Georgia, Florida, Phoenix, Salt Lake City, Indianapolis, Louisville, and Columbus, Ohio as markets experiencing accelerated activity. Intermodal transport is gaining relevance, he noted, as raw materials — rather than finished goods — increasingly move through West Coast ports.

Life sciences rounded out GXO's positive demand outlook, with Kelleher characterizing volume in that sector as "very solid." Taken together, he said the company holds "a really positive outlook to the end of the year" across its industry verticals.

Source: FreightWaves