GeoLogistics restructures domestic business

By Staff -- Logistics Management, 4/1/1999

GeoLogistics, the non-asset-based logistics-services provider chaired by former U.S. Secretary of the Treasury William E. Simon Jr., has restructured in hopes of stemming losses incurred in the fourth quarter by its North American freight-forwarding operations. The company reported a preliminary, unaudited loss of $12 million in 1998 on revenues of $1.5 billion.

The problem appears to be in GeoLogistics' domestic operations. For that reason, the reorganization focuses on splitting domestic and international business into two independent operating units, which will allow the company to isolate the source of its financial problems. Company executives will scrutinize domestic operations as they proceed with a planned re-engineering designed to improve pricing, purchasing, and business processes.

In a statement announcing the restructuring, Chief Executive Officer Roger Payton emphasized that GeoLogistics, which operates in 75 countries, has been profitable everywhere except in North America. Two weeks later, the company announced new international logistics-management agreements with major multinational corporations, including telecom giant Ericsson Sweden, Toshiba America Electronic, and General Electric. GeoLogistics also announced that it had signed on as a "business partner" with Lufthansa Cargo, which will allow the two companies to jointly develop new business in six vertical markets.