Logistics

Margin recovery for a regional freight forwarder

Revenue up three years running. Profit down two of them.

A freight forwarder moving steady volume on established lanes had convinced itself it had a cost problem. It didn't. It had a pricing problem hidden by an average: a handful of large accounts were being quoted at rates that hadn't been revisited since fuel and handling costs moved underneath them, and the profitable lanes were subsidising them invisibly.

An aerial view of a container port stacked with shipping containers

Client: Regional freight forwarder, ~90 staff
Engagement: 14-week diagnostic and implementation
Market: Gulf and South Asia lanes
Delivered: 2024

The situation

What we walked into

01
Revenue had grown three years running while net profit fell in two of them.
02
Quoting was done from a rate sheet nobody had rebuilt since costs shifted.
03
Nobody could say which lanes or accounts made money at the shipment level.
04
Leadership assumed the answer was headcount reduction.

The approach

What we actually did

01
Rebuild the unit economics
We rebuilt eighteen months of shipments into a per-lane, per-account contribution model: landed cost against realised price, with handling, demurrage, and rework allocated where they actually occurred rather than smeared across the book.
02
Find where the money leaked
Four accounts, all long-standing and all considered strategic, were being served below cost. Two lanes carried the entire book. The rate sheet had drifted roughly eleven percent behind cost without a single deliberate decision.
03
Re-price without losing the book
Rather than a blanket increase, we sequenced renegotiations by account leverage and contract date, with a walk-away number set in advance for each. Leadership rehearsed the difficult conversations before having them.
04
Make it stick
Quoting moved into the CRM with cost floors enforced at entry, so a below-floor quote now requires a deliberate override with a name attached rather than happening by accident.

The result

What changed

+9.4pts
Gross margin recovered: 96%
Of the book retained through re-pricing: 0
Redundancies required: 14 wks
Diagnostic to implemented pricing

Margin recovered without the headcount cut leadership had assumed was coming.
Per-shipment contribution visible to the commercial team at quoting time.
Below-cost quotes became an explicit, attributable decision rather than a default.
Two loss-making accounts exited deliberately, with the capacity redeployed to profitable lanes.

Client identities are withheld under confidentiality. These case studies are representative of the engagements we run and the results they produce; figures illustrate typical outcomes rather than a specific audited account. We're happy to discuss specifics, and arrange references, on a call.

Services involved