News / ‘Customers should be customers of each of our business lines’, says Geodis chief

© Sylvain Robin

France’s Geodis is looking to increase its operating income (EBIT) margin from 3.8% to 6% of global revenue over the next three years, despite only stable or even declining sales which are a far cry from the peaks reached by ocean and air freight rates during the exceptional 2021-2022 period.

The plan forms part of the SNCF-owned logistics group’s recently presented Ambition 2027 strategy.

Geodis reported an 8.6% drop in revenue in the first half of the current year to €5.54bn ($5.72bn).

In an interview in the French media, CEO Marie-Christine Lombard elaborated further on the objectives of the Ambition 2027 strategy, comments confirmed to The Loadstar by a Geodis spokesperson.

“Our sales are set to grow and the volumes recovered must be transformed into higher earnings”, she said.

To achieve this, Geodis will focus on working with key customers, to understand their supply chain strategies, anticipate changes and adapt the offering accordingly, Ms Lombard noted.

However, this will be no easy task given US president-elect Donald Trump’s plans for tariffs on products made in China, Europe or Mexico, which could lead to a reconfiguration of international trade flows.

Geodis has four core business lines: global freight forwarding; global contract logistics; distribution & express transport; and European road haulage.

In the medium term, freight forwarding should grow faster than average, Ms Lombard observed, “provided we can offer end-to-end solutions, and not just from one port to another, or a product between two airports”.

She revealed that while Geodis’ database totals 120,000 customers, and 82,000 of them active, only 47 call on all four of the group’s business lines.

“This represents €2bn in sales out of a total of €12bn. Our customers should be customers of each of our business lines, but that’s not the case. So it’s up to us to keep on winning new business.”

The Ambition 2027 strategy also encompasses the implementation of new digital tools aimed at improving the efficiency of Geodis’ 2,000 sales staff, with new software solutions developed by US cloud-based software company, Salesforce.

“We have been lacking a [digital] platform that enables users to navigate across our service offering, but now we have one with mygeodis.com, which makes it possible to request and obtain quotes in real time, and allows us to sell the group’s various business lines more effectively”, Ms Lombard added.

As for Geodis’ international development, this has been pursued through targeted or bolt-on acquisitions – the most recent examples being US contract logistics and last-mile delivery firm Need it Now Delivers and Germany’s Trans-o-flex, a specialist in controlled-temperature transport for pharmaceuticals.

Such purchases have enabled Geodis to serve customers more effectively with fewer sub-contractors and with more direct control over pre- and post-shipment activities.

Further M&A of this kind is likely to continue but the transformative acquisition that Geodis had been mulling some years ago, to propel it into a place among the world’s top five logistics providers, appears to be no longer on the agenda.

This year, long-standing French rival, Bolloré Logistics, was sold to CMA CGM and merged with Ceva Logistics, to create a combined entity significantly bigger than Geodis, and was followed by the mega takeover of DB Schenker by DSV.

Contacted by The Loadstar in the autumn to comment on such consolidation at the top of the sector and whether Geodis risked being marginalised as a result and its market share threatened, the group was tight-lipped.

However, on the prospect of SNCF following Deutsche Bahn’s example, with regard to Schenker, and putting Geodis up for sale, the response from France’s state-owned railway was unequivocal: “Geodis is a highly strategic subsidiary”.