“Structure follows strategy”
A new regional structure introduced in May 2018 has completed its first year in the market for Geodis. At Transport Logistic in Munich Thomas Kraus, Geodis’ CEO for North, East and Central Europe, told Christian Doepgen about the firm’s reorganisation, trends and prospects.
Mr Kraus, how does your new regional structure fit into your strategy at Geodis?
Our aim was to complete our better focus on our core business activities. We added the regional structure to our expertise in the divisions, and our customer services in vertical units. We want to the partner for growth for our customers.
What effect did this segmentation have?
Every one of our regions – they are the Americas, Asia-Pacific and North, East and Central Europe (which I manage) – grew in 2018. France, our home market with its own division, no longer enjoys as dominant a position in terms of business volumes as it used to, registering 39%. The other three regions are growing steadily.
How will clients benefit from these moves?
Our aim is to reduce overall complexity; structure follows strategy. Creating value is becoming an increasingly important element for customers, ahead of pure cost effects. Our ‘control towers’, which create comprehensive transparency concerning the flow of goods, also contribute. But there are other outsourcing trends beyond ‘managed inventory’.
What services does this involve?
It varies, depending on the industry. In the textiles segment, for example, we’ve been taking over parts of the finishing process, including labelling, stitching and fixing, for some time now. We’re also integrated into production processes.
What are the trends amongst shippers?
A general tendency towards near-shoring is on-going; it includes efforts to relocate production facilities too. Manufacturing speeds as well as cycles, including finishing processes, are constantly accelerating. It’s also be- coming increasingly important for customers to differentiate their products from those of their competitors, which also makes logistics even more complex.
What does this mean for some industries?
In retailing, for example, reliability in a fixed time frame comes first. For FMCGs, on the other hand, competition remains so highly intense that a rapid entry into markets is absolutely crucial. This also has an impact on contracts, which often contain bonus-malus incentives.
What about the markets in your region?
We’re prioritising the German market, which alone has 800 medium-sized enterprise that are global market-leaders with strong demand for a high-performance logistics partner. Our offers to bring these products to world markets are popular.
Benelux is also on your doorstep.
This is a robust sub-region. Our observations show that well-functioning goods flows from Asia to Europe via the Netherlands and Belgium have intensified in the context of the Brexit debate.
What about Scandinavia?
Wilson Logistics has its origins in the Nordic countries, which makes us one of the leaders in Sweden, with a market share that comes to approximately 25%. We’re also expanding our contract logistics activities and have benefited recently from an export upswing, which has also been spurred on by a rather weak currency.
Growth is good in Central Europe, isn’t it?
That’s right. We grew by 9% in Central and Eastern Europe as a whole last year. For Poland, the largest country in our Central Europe region, we can imagine acquisitions to accelerate our development. Romania and Hungary are growing strongly, as Western European companies accelerate their production in the region.
Are you currently thinking of making any further acquisitions?
We’d like to purchase established firms in Germany and the Netherlands, because we want to grow more strongly in 2020.
You’re a member of the Geodis Group’s management board too. What are the group’s goals for 2021 / 2022?
We want to expand our activities in contract logistics, as well as in freight forwarding, both in the Americas as well as in Asia. The presence of our uniform brand is set to grow worldwide, as are our market shares, with the overarching aim of even greater involvement in our customers’ value chains. Our overall strategy is true to my personal motto – more!
