Logistics at foggy bottom. (Despatch Agency) (Logistics Management)

Little-known U.S. Despatch Agency is State Department's in-house logistics arm. It's a hybrid of government, commercial practices, and is supposed to make a profit.

A little-known State Department unit with an old-fashioned name is a rare bird among government shipper agencies: It is supposed to make a profit from its operations.

The U.S. Despatch Agency, the State Department's in-house logistics arm, doesn't operate entirely like a private company: Its profits need be only enough to cover costs, and the agency is forbidden to compete against private-sector companies.

But the profit motive goes far to sharpen the practices of the Despatch Agency, said Lewis Wolkofsky, who heads the agency's New York office.

Although the Despatch Agency is part of the State Department, there is no legal imperative for any government agency, including even the State Department itself, to use the agency.

The Despatch Agency, whose title retains the old-fashioned spelling common when the agency was created in 1830, has as its primary mission the supply of goods and services to the 240 overseas U.S. embassies, consulates and other offices of the State Department.

This entails supplying items to remote areas of the world and work that sometimes must be accomplished in the context of political crisis.

"They move a lot of sensitive stuff all over the world," one Sea-Land account executive said of the Despatch Agency. "They've been doing it for a long, long time. Their people are very good at what they do. I think they were probably the original logistics professionals."

In addition to moving State Department cargo, the Despatch Agency acts as third-party provider to other government entities. Such customers include the …