Zone-Based Pricing Architecture for a Regional Logistics Firm

This reflects the type of challenge our consultants are built to solve, drawn from real industry experience. The company priced all 14 routes on a uniform cost-plus basis. A route-level P&L analysis, which had never been done before, showed that 4 routes were operating at negative contribution margin when fuel, driver overtime, and vehicle wear were properly allocated. Meanwhile, 3 high-demand routes were priced 17-23% below what competitors were charging for the same lanes. The company was simultaneously over-delivering on some routes and undercharging on others, and had no idea.

Three weeks building a route-level P&L from scratch, the kind of analysis that sounds straightforward but requires Finance and Operations to agree on how to split fixed costs, which is rarely a quick conversation. Market-rate benchmarking used shipper rate cards from 6 comparable firms and 4 tender responses. Price changes were introduced in two tranches: the underpriced high-density routes first, four weeks before the loss-making routes. That sequencing mattered: it gave the team real elasticity data before they raised prices on the routes where customers had the fewest alternatives.