Freight and Logistics
PCG have led the thinking on revenue management in the logistics industry for global competitors. Our ability to provide our clients with clear insight into profitability has delivered millions of dollars to the bottom line.
Our team have delivered projects in Australia and the UK across a number of different clients. Our work changed the way they understand their customer base and deepened their understand of their network utilisation.
- Revenue management
- Customer profitability
- Market segmentation
- Network utilisation
- Overhead reduction
Parcel Express business doubles profit
A parcel express business had enjoyed 5 years of margin growth, suddenly experience a significant drop in profits. PCG were asked to assist in a turnaround.
The revenue earned from delivering a parcel is usually determined by a combination of the urgency of delivery, the distance a parcel must be moved and the weight of that parcel.
While the revenue earned for delivering a 2kg parcel and a 20kg parcel between the same locations is very different, the cost of completing these two deliveries is almost identical.
Where the company was relying on revenue to evaluate customers, the underlying profitability could be very different.
PCG recommended that the lack of understanding of profitability meant that management did not know if their decisions were adding or destroying value.
PCG developed a detailed profitability model at the consignment level. This enabled the business to understand profitability by customer, lane and product.
This allowed PCG to identify the profitable segments of the business. We were also able to identify areas of revenue leakage.
PCG assisted in the implementation of a number of initiatives relating to :
- Yield management
- Customer segmentation
- Churn reversal
- Pricing and contract negotiations
These initiatives led to a doubling of the EBITDA within 8 weeks.