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O.C. BUSINESS PLUS

GeoLogistics Moves Itself and HQ Jobs to New O.C. Home

Shipping: Proximity to LAX and two major ports draws the hauling and warehousing company to Santa Ana.

May 11, 2000|GREG HERNANDEZ | TIMES STAFF WRITER

Giant cargo mover GeoLogistics Corp. has moved to Santa Ana, joining the ranks of Orange County's billion-dollar businesses and bolstering the region's reputation as a sophisticated center for transporting goods.

The move, from Golden, Colo., and other sites will bring 100 headquarters jobs to Santa Ana.

The company, which has 6,000 employees worldwide and logs annual sales of $1.5 billion, is among the logistics providers drawn to the area by two major ports and Los Angeles International Airport, as well as its proximity to major trading partners in the Pacific Rim.

Logistics companies, which are involved in trucking, warehousing, freight forwarding and other distribution duties, form one of the region's fastest-growing industries, said Jack Kyser, chief economist at the Los Angeles Economic Development Corp.

The industry now employs about 424,000 in the region, nearly triple the employment level about three years ago.

"We have become a major international shipping distribution hub, especially in the last three to four years," Kyser said.

Logistics, a word borrowed from military supply lines, is the intricately planned movement of goods--from raw materials to finished products--to accommodate just-in-time manufacturing and delivery.

Businesses can keep their inventories lean by precisely timing and tracking shipments but can stick to managing their core businesses by contracting out their logistics to companies such as GeoLogistics and BAX Global Inc., a public air transportation and logistics company based in Irvine. Electronic commerce has also increased the demand for reliable logistics cservice.

"It has become extremely sophisticated with heavy use of computers," Kyser said. "Very complicated and very, very technical. You've seen the evolution of distribution into logistics. Distribution was viewed as being dumb whereas logistics is viewed as being quite sophisticated."

In moving to Santa Ana, privately owned GeoLogistics becomes one of the county's largest dozen or so businesses when measured by revenue.

The company is consolidating a number of corporate functions that have been spread out in Golden, its former headquarters, as well as in Georgia and Illinois.

GeoLogistics, formerly known as International Logistics, was formed in 1996 as a global provider of logistics and transportation services for manufacturers and distributors in industries such as technology, communications, medicine, aerospace and defense.

Los Angeles investor William Simon Jr.'s family company and other investment partners bought the residential mover Bekins Co. and LEP International, a freight forwarder, that year and combined them as International Logistics.

Two years later, those operations and others, including Matrix International Logistics, were combined under the banner of GeoLogistics Corp., which now operates in 32 countries, predominantly in North America, Europe and Asia.

The company has been losing money since its inception five years ago, largely because of unprofitable domestic business. Last year alone, the company lost $49.7 million, including $30 million in one-time charges stemming from a restructuring that eliminated 660 workers. It is placing more emphasis on increasing its international business.

Chief Executive Officer Bob Arovas said Wednesday that relocating to Orange County will help the company because of "the proximity of California to some major trade flow markets, primarily the Pacific Rim, as well as the skilled work force here in transportation and advanced technology."

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