Geodis expands US capabilities with OHL acquisition

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Geodis is acquiring US 3PL Ozburn-Hessey Logistics (OHL) for an undisclosed amount, saying the addition of the US$1.3 billion turnover company “enhances its freight forwarding and contract logistics offering in the US”.

Although it declined to disclose the purchase price, observers estimate Europe’s fourth-largest European supply chain group could be paying around US$800 million for the US-based forwarding and logistics operator.

OHL’s annual revenue is reported at €1.2 billion (US$1.3bn), with the company operating more than 120 value-added distribution centres in North America with more than 3.5 million sqm of warehouse space, and providing integrated global supply chain management solutions including transport, warehousing, customs brokerage, freight forwarding, and import and export consulting services.

Geodis said that freight forwarding accounted for around 25% of OHL’s €1.2 billion annual turnover, with contract logistics making up 55% and the final 20% coming from transport management activities. It said OHL had a global network spanning North America, Europe, Australia and Asia, but that Geodis sees OHL’s greatest strength in North America.

It said the acquisition will also immediately increase Geodis’ contract logistics business by 66%, from today’s total of €1.2 billion.

The addition of OHL is set to greatly increase European group’s North American capability. Of Geodis’ annual revenues of €6.8 billion, around 12% – or around €800 million – was in the Americas, including its activities in Brazil and Mexico. Less than half of that, €350 million, was in North America, meaning the addition of OHL is a genuine step-change in Geodis’s presence there.

Geodis’ chief marketing officer Thomas Kraus said: “Many of Geodis’ European customers need a US logistics provider and many of OHL’s US customers will be excited about Geodis’ network across Europe, Asia and Latin America. Combining the strengths of Geodis and OHL allows both companies to provide an expanded portfolio of capabilities to their existing customers.”

Employing over 8,000 transport and fulfillment professionals, Geodis said OHL has “unparalleled experience in direct-to-consumer fulfillment, serving a wide range of business sectors from specialty retail to manufacturing”. It said OHL specialized in the sectors of apparel, electronics, healthcare, food and beverage, and consumer packaged goods.

Earlier this year, Geodis unified its offering under one unique brand, with OHL also set to be rebranded Geodis in due course.

Geodis is Europe’s fourth-largest logistics provider and consists of five divisions: Supply Chain Optimization, Freight Forwarding (air and sea), Contract Logistics, Distribution & Express, and Road Transport). It has over 30,000 employees in over 67 countries.

As a global freight forwarder, Geodis Freight Forwarding (until recently known as Geodis Wilson) stands at number 11 in the world in both air freight and ocean freight, by volume, with forwarding revenues making up around 39% of Geodis’ €6.8 billion turnover in 2014 – meaning annual forwarding revenues of around €2.89 billion.

Geodis is known to be targeting growth in four markets that it regards as particularly important and where it is focusing much of its investment: Brazil, India, China, and the US. However, it is still principally a European player at its heart, with France alone accounting for 44% of Geodis’ revenues and 31% coming from other European activities. Its business in the Americas makes up 12%, Asia-Pacific 11%, China makes up a further 5%, Brazil 2%, and 2% in Middle East and Africa.