Details anonymised at client request.
Business Situation
The company operated a uniform cost-plus pricing model across all active transport routes despite significant differences in route economics, shipment density, and operating costs across the network. A route-level profitability review identified multiple routes operating below contribution margin once fuel, overtime, and vehicle-wear costs were fully allocated, while several high-demand corridors remained materially underpriced relative to prevailing market rates. Leadership lacked clear visibility into route-level profitability and pricing performance across the network.
What the Consultant Did
An independent pricing-strategy consultant conducted a route-level profitability analysis alongside external market-rate benchmarking across comparable transport corridors. The engagement included pricing segmentation, contribution-margin analysis, commercial benchmarking, customer-impact assessment, and phased implementation planning for revised route pricing structures. Particular focus was placed on balancing margin improvement, customer-retention risk, and pricing elasticity across high-volume and lower-density routes.
What Changed
The revised pricing structure improved route-level profitability visibility and increased realised pricing across underpriced transport corridors while maintaining low customer attrition during the transition. The company also established a more structured framework for future route-pricing decisions and commercial reviews.
Evidence, not adjectives.
The measurable changes recorded during or following the engagement.
Average realised shipment pricing increased by 9.3%
Gross margin improved from 12.1% to 17.6%
Customer attrition limited to 3 of 51 shippers
Route-level profitability visibility established across the network
