News / Interview with Marie-Christine Lombard: Geodis eyes expansion and investment around the world, but eyes it calmly

It’s a haven of calm on the Geodis stand at Munich’s Transport Logistic show. Busy, but calm. Elsewhere there’s unrelenting chaos and noise.

As ever with the large logistics companies, rumours are rife through the halls. Who will buy whom? How’s their technology? Which customers have been lost – or found?

The top rumour du jour is again about CEVA – this time, is Geodis buying? CEVA confirms to The Loadstar that it is just a rumour – and that no doubt in a few months, there will be another one circulating.

Geodis, meanwhile, declines to comment on specifics, but it is no secret that its pockets are sufficiently deep for further acquisitions. And now OHL is fully integrated as Geodis Americas (“it’s gone very well”), where is it eyeing the next opportunities?

“We are an €8bn turnover company; we could be interested in reinforcing some platforms in the world,” says CEO Marie-Christine Lombard. “Especially in the US. It offers a lot of opportunities and our European customers want us to follow them there. We do want to invest in the US, whether it’s through acquisition or organically.

“China is also key – it’s not just the plant of the world now, but a dynamic market in itself. Customers need well-organised supply chains in China.”

She is also looking closer to home, in a country which most European logistics companies seem to want greater exposure to currently: Germany. She admits it’s a competitive market, but is not put off.

“We’d like to strengthen our German platform. Germany is very important and our presence is still too low. There is always a way to enter a market if you have new ideas. Our portfolio is unique, and we have opportunities to do it. It’s a difficult market, but nothing is impossible when you focus.”

“Of course,” she adds, “any acquisition has to fit the portfolio, and fit culturally. We want to invest in our operations and be best in class.”

The OHL acquisition, she notes, gave Geodis a greater depth in the Americas.

“We were interested in contract logistics in the US, with the complementary business of freight forwarding. We integrated the forwarding part into our network, and it enriched the entire offer.

“There were new customers and new vertical markets, and it gave us a unique offering and a stronger offering in the US. We’ve got a team of pros, not just in the US, but in Latin America. Geodis is present in Mexico, but by combining both offers, there is a lot of development potential.”

It is well-known in forwarding that when two companies announce a merger, rivals surround customers like vultures, hoping to pick up any which fall by the wayside in the integration process. But Ms Lombard explains there is nothing riskier about an integration than a normal day in logistics.

“They are many risks when you merge. There is restructuring and recalibration, but customer retention is not just about when you integrate. It’s always about quality of service, lines of business, and you want to constantly improve on that. You lose business in this sector if you don’t. Customers trust us to deliver their most valuable asset, which is their business. There is risk all the time.”

Geodis, she explains, is constantly looking for a holistic approach to the way it works for its customers.

“Geodis is a supply chain operator. We design and manage the supply chains of our customers. It is quite clear that supply chains are getting very complicated – especially with things like multi-channel distribution.

“We need to bring value to our customers, with last-mile flows, air and sea, customs. There are five different parts of the business. By orchestrating them we can build efficient solutions. More than 50 global accounts are managed centrally.

“We need to orchestrate the ability for customers to trade in many different lines of business, with a salesforce that is front end and able to build supply chain solutions. We’ve made great progress. That’s where things are going. It’s not just last-mile, the customer wants an end-to-end approach to the flows.”

For this end-to-end approach, technology is of course critical. Geodis has a system called IRIS, a “constant work in progress”, which has been developed with its customers in mind.

“You need to get visibility of the flows and structure the data so you can give it back. It is unique in that it has an operational level and a customer interface. There is no loss of information, and it’s real time.”

Several logistics companies have begun to label themselves as ‘technology companies which move freight’ and disrupters are on their way, eyeing legacy business. But Ms Lombard finds nothing new in this – technology alone will not fulfil the logistics brief, and there are obstacles to disruption in this sector.

“To grow you need logistics experts. The supply chain is about value creation, and it must be well-managed.  You need key enablers to do that well. You can’t subcontract everything. If you do subcontract, you need to manage it very well and know the KPIs. And then take full responsibility.

“We are watching the new companies with interest. IRIS has a lot of features the new companies have, but what is important is to get the volumes. The obstacles to disruption are the complexities. Customers want someone to take responsibility. It’s complex, there are risks – it’s not as simple as it looks. But there are forces we are taking into account, to make it easier to do business, and to lower the total cost in the supply chain.

Geodis invests some 3-4% of revenue – some $280m – on technology each year, she says.

“Customers have real-time information. It’s complex to get to that transparency. You need to have a strategy that gives visibility, but hook it on to a backbone. Each line of business is different, so there is a unified front end and operational backend. Once that is designed, you need robust systems to deliver. You need to invest constantly.”

The company has an innovation director and strategy, which has seen it invest in the internet of things (IoT). In the warehouse, for example, it uses robotics for pick and pack and technology to help with processes such as inventory counting which otherwise, says Ms Lombard, is “a nightmare”.

“We don’t want to waste time. We want things to be clear. We bring out best practices and they are cascaded throughout the company.

“We also keep an eye on breakthroughs, such as IoT and drones, and apps that could help our business. And we partner with tech companies.”

On the more prosaic issue of transport, and in particular the previous day’s blame game as the shipping lines indicated that any detriment in their service was the fault of badly paying customers, Ms Lombard is clear.

“If you sell a a service that adds value to the chain; it’s up to those that sell it to defend the value of that service. Defend the service and you’ll defend the price. If the person is bending over backwards, without limitation on pricing, and then accepts that the freight doesn’t turn up, who is at fault?

“The forwarders have to defend their service, and can’t do all sorts of things on pricing. The right service at the right price – that’s the equation.

“The industry is very fragmented and that could create some irrational pricing strategies. The pricing went up and we couldn’t pass that on to customers. But that can’t last very long. Everyone has to take responsibility for defending the value of their service.”

Something that Geodis appears to do, and well. The next question will be, of course, whose services they choose to acquire next.