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Companies have too little focus and not enough guidance when it comes to pricing

Global Logistics Pricing Study 2017

Dr. Philipp Biermann Kornelia Reifenberg Sven Wengler Marko Kraljev

March 2017

Boston office One Canal Park Cambridge, MA 02141, USA Tel. +1 617 23145 00 [email protected]

Cologne office Gustav-Heinemann-Ufer 56 50968 Cologne, Germany Tel. +49 221 36794 00 [email protected]

Simon-Kucher & Partners at a glance

Strategy

Sales

Marketing

Pricing

Growth and competitive strategies

Product portfolio (re-)design

Pricing excellence

Customer relationship and customer value management

Sales strategies and sales channel optimization

Global presence

Best consultancy in marketing and sales

> 3,000 projects in the last 3 years

World leader in giving advice to companies on how to price their products

Pricing strategy specialists

The world's leading pricing consultancy

In pricing you offer something nobody else does

BusinessWeek The Economist

Professor Peter Drucker The Wall Street Journal

World leader in pricing

Source: manager magazin survey of top managers in Germany, August 2007 and 2011/IMB

Source: brand eins Thema/Statista survey of approx. 1,500 partners and project leaders from consulting firms and approx. 1,500 C-level managers from German companies, May 2014, 2015 and 2016

Marketing and sales Marketing and pricing Sales and CRM

brand eins Thema manager magazin

Simon-Kucher & Partners

Boston Consulting Group

McKinsey & Company

1 2

3



33 offices worldwide, 1,000 employees, €240m revenue in 2016

McKinsey & Company


McKinsey & Company


Amsterdam Atlanta Barcelona Beijing

Bonn

Boston Brussels Cologne Copenhagen Dubai Frankfurt Geneva Hamburg Istanbul London Luxembourg Madrid

Milan Mountain View Munich

New York

Paris

San Francisco Santiago de Chile

São Paulo Singapore

Stockholm Sydney

Tokyo Toronto Vienna Warsaw

Zurich

OH_034008_Global Logistics Pricing Study.pptx 2

Broad track record in logistics and supply chains

Parcel, Express & Postal Services Road & Rail Freight Air & Sea Freight

Azkar

CHEP

DB Schenker

Delovye Linii

Deutsche Bahn

Geodis

hasenkamp

Hellmann

Hoyer

Kuehne+Nagel

Logwin

MXD

Noerpel

OBB

Palletways

SBB Cargo

SNCF

TFG Transfracht

Virgin Trains

WLC

British Airways World Cargo

Borusan

DHL Global Forwarding

Etihad Airways

Envirotainer

Fiege

Fraport

Geodis

Hapag-Lloyd

Hellmann

Kuehne+Nagel

Köln-Bonn Airport

Lufthansa Cargo

Maersk Line

Port of Antwerp

Spirit of Tasmania

U.N. Ro-Ro

Virgin Atlantic Cargo

Belgian Post

Canada Post

Chilexpress

Chronopost

Correos

Deutsche Post

DHL Express

Die Post

DX

Hermes

La Poste

Österreichische Post

Parcel Force

Suoramainonta

Taxicolis

time:matters

TNT Express

TNT Post

trans-o-flex

Not exhaustive


In recent years, Simon-Kucher has conducted projects for the logistics/transportation/postal industry across the globe

Austria

Belgium

Denmark

England

Australia

China

Hong Kong

Malaysia

New Zealand

Singapore

UAE

Argentina

Brazil

Canada

Chile

Panama

USA

Asia-Pacific/ the Middle East

Europe

Americas

Finland

France

Germany

Ireland

Italy

Poland

Scotland

Spain

Sweden

Switzerland

The Netherlands

Turkey


* Net Promoter Score Source: Global Logistics Pricing Study 2017

Executive summary: Companies have too little focus and not enough guidance when it comes to pricing

Pricing strategy

Objectives: More than 60% of the pricing strategy is driven by objectives other than profitability

NPS*: More than 50% of all respondents are not sure about Net Promoter Score tracking

Price setting

Tool/guidelines support: Majority of respondents have no tool or guideline support for price setting

Price drivers: 70% of respondents' pricing decisions do not consider willingness to pay criteria as key price drivers

Price implementation

Price increase transparency: Majority of respondents are unsure about historical price increases

Margin development: More than 30% of managers experience decreasing margins in their companies

Pricing power Parcel/express is overall outperforming in pricing, followed by air freight

I

II

III

IV


Other

62% Profit 38%

Survey question: What is the main objective of your pricing strategy? Source: Global Logistics Pricing Study 2017 (n = 270)

More than 60% of the pricing strategy is driven by objectives other than profitability

I

Parcel/express segment has the highest focus on profitability (~50%)

Rail freight/ intermodal segment has a key focus on capacity utilization

Customer satisfaction is rated particularly high in the trucking and ocean freight segments, as well as in Southern Europe (compared to other regions)

12%

15%

16%

19%

Marketshare

Revenue

Capacityutilization

Customersatisfaction


Not sure

58%

5%

18%

19%

* Net Promoter Score Survey question: How often do you track your NPS (net promoter score)? Source: Global Logistics Pricing Study 2017 (n = 270)

More than 50% of respondents are not sure about Net Promoter Score tracking

Only 19% of respondents measure the NPS value and derive implications from it

Parcel/express segment has the best knowledge and application of NPS

I

NPS* tracked…

...regularly and measures for improvement derived

...regularly

...but no knowledge of frequency

Net Promoter Score (NPS) measures the willingness of customers to recommend

a company's products. It is used as a proxy for gauging the customer's overall

satisfaction. The NPS is calculated by Promoters (%) − Detractors (%).


Survey question: When setting a price/margin (or a tariff) for a customer, on how many occasions (in %) do the following measures influence the pricing decision? Possible answers: Fixed prices; human decision-making; supporting tools/guidelines for human decision-making; fully automated pricing decision Source: Global Logistics Pricing Study 2017 (n = 270)

Majority of respondents have no tool or guideline support for price setting

European and Asian logistics companies still have more human-based price setting than in the Americas. Ocean and air freight industries are the least advanced when it comes to price setting tools

II

56%

46%

46%

39%

Americas

NorthernEurope

SouthernEurope

Rest ofthe world

Example:

56% of respondents in the Americas set prices supported by a tool/ guidelines or have fully automated pricing

37%

38%

41%

46%

50%

57%

64%

Air freight

Ocean freight

Rail freight/intermodal

Ports/airports

Trucking

Supply chain/warehousing

Parcel/express

Ø 48% Ø 48%


Costs 48%

10%

10%

10%

22%

* Willingness to pay criteria include hard customer characteristics, soft customer characteristics, and deal characteristics Survey question: To what extent is the final price decision of your tools/guidelines/pricing team based on the following factors? Source: Global Logistics Pricing Study 2017 (n = 270)

70% of respondents' pricing decisions do not consider willingness to pay criteria as key price drivers

In almost 50% of all pricing decisions, costs are the primary driver

Global pricing decisions (e.g. global tenders) have the highest focus on willingness to pay criteria*

Example:

In 10% of all pricing

decisions, deal

characteristics are the

primary price driver

Competition prices/ benchmarks

Deal characteristics

Soft customer characteristics

Hard customer characteristics

II


Survey question: How well do you know about your company's achieved price increase for last year? Source: Global Logistics Pricing Study 2017 (n = 270)

Majority of respondents are unsure about historical price increases

No significant differences in price increase transparency across geographic regions

Small customers

50%

15%

25%

22%

4%

13%

25%

63%

58%

47%

44%

41%

38%

38%

Big customers

Ø 47% Ø 23%

Parcel/express

Trucking

Rail freight/ intermodal

Ocean freight

Supply chain/ warehousing

Ports/airports

Air freight

Example:

63% of respondents in parcel/ express state they know the last year's individual price increase for big customers

III


* Only segments listed with n>= 25 (~10% of respondent base) Survey question: How high was last year's achieved price increase in comparison to your cost increase? Source: Global Logistics Pricing Study 2017 (n = 270)

More than 30% of managers experience decreasing margins in their companies

5%

Don't measure price and/or cost increases at all

39%

Price increase more or less

covered the cost increase

32%

Price increase below cost

increase

24%

Price increase above cost

increase

42% 40%

19% 16%

7%


Trucking Parcel/express

Oceanfreight


Example:

7% of all supply chain/

warehousing respondents

experienced a higher cost

increase than their price

increase last year

% of respondents whose companies experienced decreasing margins (by segment*)

III


Parcel/express segment is overall outperforming in pricing, followed by air freight

IV

1 Pricing score calculated by Simon-Kucher based on survey results; 2 Net promoter score; 3 Based on Simon-Kucher & Partners project experience and secondary research; 4 Based on North American companies. European companies with avg. margin of 1-3%; 5 Margins of forwarders slightly higher than carriers 6 Segment not comparable to other segments due to extreme variance and the fact that most ports/airports are owned by the state; Source: Global Logistics Pricing Study 2017 (n = 270)

58 56

50 49 49 48

39

Parcel/ express

Air freight

Rail freight/

inter-modal

Supply chain/ ware-

housing

Ocean freight

Trucking Ports/ airports

Ø net income margin3

10-12% 5-6% 6-9%4 3-5% 2-4%5 3-5% n/a6

Parcel/express segment has the highest knowledge of price increases and NPS2 and tools to support human pricing decisions

Parcel/express is also the most profitable segment

No significant differences in pricing score between geographic regions

For domestic business (e.g. trucking, rail) margins in America are higher than in Europe within the same segment

Example:

Pricing power score1 of

parcel/express is 58 out of 100


Set-up and methodology of the Global Logistics Pricing Study

Global online survey, translated into 9 languages

11 questions on company set-up, pricing practices, and pricing performance

February 2017

Over 20 countries, mainly from Europe and the Americas

53% management executives, 41% sales and pricing executives

More or less even split between logistics segments, with trucking slightly overrepresented and ports/airports slightly underrepresented

270 valid responses

Methodology

Timing

Respondents

Sample size

Source: Global Logistics Pricing Study 2017 (n =270)


Source: Global Logistics Pricing Study 2017 (n = 270)

Conclusion: Still large room for pricing improvement for logistics companies

Pricing strategy: Stronger focus on a profit-oriented pricing strategy can help logistics companies to boost their margins

Net promoter score: Systematic tracking and understanding of NPS is important for market positioning

Price decision: Considering willingness to pay for price setting increases profit margins for logistics companies significantly

Price setting: Tools and guidelines in price setting speed up the pricing process and minimize gut-feeling, thereby further improving response time/hit rates and profitability

Price transparency: Full transparency of price increase information helps logistics companies to better assess the pricing potential in the future

Margins: A systematic process for regular price increases significantly improves outcomes in logistics and achieves price increases much higher than cost increases

Pricing power: Although the parcel/express segment slightly stands out from the rest, all logistics segments still have large room for pricing improvement


Your contacts

Dr. Philipp Biermann Partner Head of Logistics Practice Center

Gustav-Heinemann-Ufer 56

50968 Cologne Germany

Tel: +49 221 36794 300 [email protected] www.simon-kucher.com

Kornelia Reifenberg Senior Director Logistics Practice Center

Willy-Brandt-Allee 13 53113 Bonn,

Germany

Tel: +49 228 9843 369 [email protected] www.simon-kucher.com

Back up


Germany 96

United States 35

Global* 34

Spain 18

France 10

Great Britain 10

Italy 10

Austria 8

Netherlands 5

Mexico 4

Poland 4

Switzerland 4 Turkey 4

Rest of the world 28

Geographic and industry distribution

Over 20 countries From all major industries

Industries % of total

Trucking 33%

Ocean freight 17%

Parcel/express 12%

Supply chain/ warehousing

10%

Rail freight/intermodal 10%

Air freight 7%

Ports/airports 3%

Other** 9%

* Global = global role/responsibility ** Especially respondents who are active in more than one segment Source: Global Logistics Pricing Study 2017 (n = 270)


Management 53%

[CATEGORY NAME] 18%

Pricing 23%

Operations 4%

Procurement 2%

Profile of respondents and their companies

Source: Global Logistics Pricing Study 2017 (n = 270)

Position in the company

Asset-light 51%

Asset-heavy 49%

Distribution of asset-light vs. heavy companies

Target market/region

3%

13%

16%

17%

51%

Rest of theworld

Global role

Americas

SouthernEurope

NorthernEurope


Agenda

Segment split

Regional split

Asset split


* "Other" segment exluded from the graph Survey question: What is the main objective of your pricing strategy? Source: Global Logistics Pricing Study 2017 (n = 270)

Importance of pricing strategy objectives*

High profit is the primary objective, especially in the parcel/express segment

Over 60% of logistics companies don't have profitability as a primary objective

Customer satisfaction is especially important in the ocean freight segment

13

%

14

%

20

%

10

%

19

%

13

%

19

%

16

%

8%

9%

17

%

12

%

18

%

11

%

10

%

16

%

15

%

15

%

14

%

16

%

26

%

47

%

40

%

37

%

36

%

34

%

32

%

28

%

13

%

21

%

19

% 22

%

21

%

22

%

17

%

Parcel/express

Trucking Supply chain/warehousing

Ocean freight Air freight Ports/airports Rail freight/intermodal

Revenue Market share Full capacity utilization Profit Customer satisfaction (e.g. NPS)

Percentage of respondents in the specific segment


* Net Promoter Score ** "Other" segment exluded from the graph Survey question: How often do you track your NPS (net promoter score)? Source: Global Logistics Pricing Study 2017 (n = 270)

Frequency of NPS* tracking**

Parcel/express has the highest level of NPS* tracking

Knowledge of NPS tracking is very low, with on average 58% of companies not tracking the NPS* frequency

NPS* tracking knowledge is the lowest in the trucking and supply chain/ warehousing segment

66

%

63

%

63

%

60

%

58

%

44

%

44

%

7%

13

%

9%

4%

6%

15

%

15

%

13

%

16

%

27

%

17

%

25

%

12

%

22

%

13

%

16

%

12

%

33

%

25

%

Trucking Supply chain/warehousing

Ports/airports

Ocean freight Rail freight/intermodal

Air freight Parcel/express

Not sure NPS tracked but no knowledgeabout frequency

NPS regularly tracked NPS tracked regularly andmeasures for improvement derived

OH_034008_Global Logistics Pricing Study.pptx


21

15

%

8%

32

%

14

% 1

9%

22

%

19

%

22

%

35

%

22

%

36

%

42

%

38

%

44

%

56

%

49

%

43

%

43

%

33

%

33

%

32

%

7%

8%

3%

7%

5%

8%

6%

Parcel/express


Ports/airports

Trucking Ocean freight Rail freight/intermodal

Air freight

Fixed prices Human decision making Supporting tools/guidelines forhuman decision-making

Fully automated pricing decision

* "Other" segment exluded from the graph Survey question: When setting a price/margin (or a tariff) for a customer, on how many occasions (in %) do the following measures influence the pricing decision? Source: Global Logistics Pricing Study 2017 (n = 270)

Measures that influence the pricing decision*

Companies in parcel/express are most advanced in terms of price setting

Majority of companies are not using tool or guideline supported price setting methodologies

Rail freight/ intermodal and air freight are the least advanced segments in terms of price setting



22

* "Other" segment exluded from the graph Survey question: To what extent is the final price decision of your tools/guidelines/pricing team based on the following factors? Source: Global Logistics Pricing Study 2017 (n = 270)

Factors that determine the final price decision*

Costs are especially important for pricing in the supply chain/warehousing segment

Costs are the most important factor to influence the pricing decision

In the ocean and air freight segments, costs are least important for the final price decision (in comparison to other segments)

60

%

56

%

53

%

47

%

42

%

38

%

36

%

17

%

26

%

18

%

25

%

29

%

27

%

30

%

6%

4%

9%

10

%

10

%

13

%

13

%

7%

9%

10

%

9%

11

% 15

%

8%

9%

5%

10

%

8%

9%

8%

13

%


Ports/airports

Trucking Parcel/express


Ocean freight Air freight

Costs Competition prices/benchmarks

Hard customer characteristics (e.g. industry segmentation) Soft customer characteristics (e.g. relationship)

Deal characteristics (e.g. urgency)



23

* "Other" segment exluded from the graph Survey question: How well do you know about your company's achieved price increase for last year? Source: Global Logistics Pricing Study 2017 (n = 270)

Knowledge of last year's price increases*

Price increase knowledge is highest in the parcel/express and rail freight/intermodal segments

3%

12

%

12

%

0%

13

%

13

%

66

%

27

%

58

%

56

%

41

%

42

%

50

%

50

%

19

%

17

% 2

2%

15

%

40

%

50

%

63

%

58

%

47

%

44

%

41

%

38

%

38

%

50

%

15

%

25

%

22

%

4%

13

%

25

%

Parcel/express


Trucking Air freight Supply chain/warehousing

Ocean freight Ports/airports

Not (fully) aware oflast year's price increase

Knowledge of total accomplished priceincrease last year

Knowledge of individual priceincreases per product category

Knowledge of individual priceincreases for most/all big customers

Knowledge of priceincrease for small customers

Price increase knowledge for small customers is the highest in parcel/ express segment (50%)

The trucking and ocean freight segments have the highest share of respondents who are unaware of last year's price increase



24


* "Other" segment exluded from the graph Survey question: How high was last year's achieved price increase in comparison to your cost increase? Source: Global Logistics Pricing Study 2017 (n = 270)

Last price increase in comparison to cost increase*

Margin deteriorated for 42% of all rail freight/intermodal companies

Only one out of four logistics companies managed to increase prices higher than costs last year

2%

11

%

11

%

8%

0%

28

%

38

%

35

%

38

%

63

%

31

%

25

%

56

%

31

%

18

%

18

%

11

%

8%

0%

6%

19

%

30

%

16

%

7%

42

%

50

%

6%

6%

0%

0%

11

%

6%

9%

18

%

4%

12

%

25

%

Air freight Parcel/express

Trucking Ocean freight Supply chain/warehousing


Ports/airports

Not sure/don't measure price and/or cost increase Price increase more or less covered cost increasePrice increase above cost increase Price increase was below cost increasePrice increase significantly above cost increase Price increase significantly below cost increase


25

33%

17%

12% 10% 10%

7%

3%

Trucking Ocean freight Parcel/express



Air freight Ports/airports

* "Other" segment exluded from the graph Survey question: What is the main (most important) logistics segment that YOU work in? Source: Global Logistics Pricing Study 2017 (n = 270)

Distribution of companies by segment*

Majority of respondents are from the trucking segment (33%)

The remaining segments, with the exception of air freight and ports/ airports, are all similarly represented

Percentage of respondents


* "Other" segment exluded from the graph Survey question: What is the share of your owned assets (vs. third party assets) in %? Source: Global Logistics Pricing Study 2017 (n = 270)

Asset ownership by segment*

Parcel/express has the highest share of owned assets

The ocean freight segment has the lowest share of asset ownership

Parcel/express and rail freight/intermodal have the highest share of asset ownership

9%

13

%

22

%

4%

15

%

12

%

28

%

13

%

36

%

27

%

30

%

30

%

44

%

16

%

25

%

11

%

19

%

11

%

17

%

6%

41

%

25

%

24

%

23

%

22

%

18

%

11

%

22

%

38

%

7%

27

%

22

%

22

%

11

%

Parcel/express

Ports/airports

Ocean freight Rail freight/intermodal


Trucking Air freight

Don't own any assets at all Most assets NOT owned Own about half of total assets

Own the majority of assets Own (almost) all assets



27

Agenda

Segment split

Regional split

Asset split



Importance of pricing strategy objectives

Profitability is most important in the Americas and the rest of the world

Although high profit is the main pricing objective, over 60% of logistics companies don't have profitability as a primary objective

Especially in Southern Europe, customer satisfaction is rated very high

9%

18

%

14

%

16

%

16

% 1

9%

11

%

10

% 1

4%

14

%

14

%

14

%

16

% 19

%

16

%

41

%

41

%

40

%

35

%

31

%

16

%

17

% 20

%

16

%

24

%

Rest of the world Americas Northern Europe Global Southern Europe


Percentage of respondents in the respective region



Frequency of NPS* tracking

All regions have a low level of knowledge of NPS* tracking frequency

Just marginal differences in NPS* tracking knowledge across regions

Companies in the Americas are slightly better at NPS* tracking

62

%

60

%

60

%

57

%

56

%

2%

11

%

14

%

6%

18

% 22

%

15

%

14

%

18

%

21

%

16

%

15

%

14

% 2

0%

Global Americas Southern Europe Rest of the world Northern Europe





30

Survey question: When setting a price/margin (or a tariff) for a customer, on how many occasions (in %) do the following measures influence the pricing decision? Source: Global Logistics Pricing Study 2017 (n = 270)

Measures that influence the pricing decision

Companies serving clients in the Americas are most advanced in terms of price setting support

Northern Europe and Southern Europe are the least advanced regions in terms of tool/guideline supported price setting

In the Americas, prices are mainly set with tool support

15

%

13

%

19

%

15

%

18

%

29

%

35

%

35

% 39

% 4

4%

52

%

46

%

40

%

35

%

33

%

5%

6%

6%

11

%

6%

Americas Global Northern Europe Southern Europe Rest of the world

Fixed prices Human decision-making Supporting tools/guidelinesfor human decision-making




31

Survey question: To what extent is the final price decision of your tools/guidelines/pricing team based on the following factors? Source: Global Logistics Pricing Study 2017 (n = 270)

Factors that determine the final price decision

Costs are the most important pricing factor in every region

Especially Northern Europe has a high focus on costs

Competition prices/benchmarks are most important in Southern Europe

51

%

49

%

47

%

41

%

40

%

21

% 2

5%

26

%

23

%

19

%

8%

8%

11

%

13

%

16

%

10

%

10

%

9%

14

%

11

%

10

%

9%

7%

9%

14

%

Northern Europe Americas Southern Europe Global Rest of the world

Costs Competition prices/benchmarks Hard customer characteristics

Soft customer characteristics Deal characteristics



32


Knowledge of last year's price increases

No significant differences in price increase knowledge across geographic regions

Companies serving clients in the rest of the world have the highest knowledge of individual price increases for big customers

Price transparency in general is very low

4%

13

%

11

%

12

%

29

%

43

%

46

%

62

%

56

%

14

%

36

%

30

%

20

% 26

%

86

%

51

%

50

%

40

%

38

%

29

%

30

%

25

%

22

%

9%

Rest of the world Southern Europe Northern Europe Americas Global


Knowledge of total accomplishedprice increase last year

Knowledge of individualprice increases per product category

Knowledge of individualprice increases for most/all big customers

Knowledge of price increasefor small customers



33

Survey question: How high was last year's achieved price increase in comparison to your cost increase? Source: Global Logistics Pricing Study 2017 (n = 270)

Last price increase in comparison to cost increase

Especially companies in Southern Europe were unable to improve their margins

The Americas has the lowest share of respondents with deteriorated margins

Southern Europe and the rest of the world have the highest share of respondents who state that their margins deteriorated

6%

4%

11

%

43

% 4

7%

21

%

40

%

40

%

29

%

9%

32

%

22

%

20

%

29

%

26

%

24

%

22

%

18

%

4%

3%

3%

4%

15

%

15

%

9%

7%

Rest of the world Southern Europe Global Northern Europe Americas

Not sure/don't measure price and/or cost increase Price increase more or less covered cost increase

Price increase above cost increase Price increase was below cost increase

Price increase significantly above cost increase Price increase significantly below cost increase



34

Survey question: Which countries are most of your clients from? Source: Global Logistics Pricing Study 2017 (n = 270)

Distribution of companies by region

Majority of respondents have clients in Northern Europe

Rest of the world is only marginally represented

51%

17% 17%

13%

3%

Northern Europe Southern Europe Americas Global Rest of the world

Percentage of total respondents


Survey question: What is the share of your owned assets (vs. third party assets) in %? Source: Global Logistics Pricing Study 2017 (n = 270)

Asset ownership by segment

Ownership of assets is higher in the Americas than in Europe

Southern Europe has the lowest share of asset ownership

For global companies, the share of respondents who state that they do not own any assets is the lowest

16

%

6%

15

%

17

%

14

%

29

%

29

%

31

%

26

%

57

%

7%

15

%

13

%

21

%

14

%

20

%

26

%

23

%

21

%

29

%

24

%

18

%

15

%

14

%

Americas Global Northern Europe Southern Europe Rest of the world

Don't own any assets at all Most assets NOT owned Own about half of total assets

Own the majority of assets Own (almost) all assets



36

Agenda

Segment split

Regional split

Asset split



Importance of pricing strategy objectives

No significant difference in pricing objectives between asset-heavy and asset-light companies

Asset-light companies have a marginally higher focus on profit and customer satisfaction

15% 14% 15%

13% 12%

10%

22%

16% 14%

34%

38% 39%

16%

19% 21%

Balanced Asset-heavy Asset-light


Percentage of respondents in the respective segment



Frequency of NPS* tracking

Knowledge of NPS* tracking frequency is low in both asset-heavy and asset-light companies

No significant difference between asset-heavy and asset-light companies with regards to NPS* tracking

65%

58% 57%

5% 6% 5%

14%

18% 19% 16%

18% 19%

Balanced Asset-light Asset-heavy





39

Survey question: When setting a price/margin (or a tariff) for a customer, on how many occasions (in %) do the following measures influence the pricing decision? Source: Global Logistics Pricing Study 2017 (n = 270)

Measures that influence the pricing decision

No significant difference in the pricing decision process in terms of asset split

Asset-heavy companies have a slightly more automated pricing process

13%

17% 18%

31% 33%

38%

48%

44%

38%

8% 6% 7%


Fixed prices Human decision-making Supporting tools/guidelinesfor human decision-making




40

Survey question: To what extent is the final price decision of your tools/guidelines/pricing team based on the following factors? Source: Global Logistics Pricing Study 2017 (n = 270)

Factors that determine the final price decision

No significant difference in pricing decision factors in terms of asset split

No significant difference in terms of pricing factors between asset-heavy and asset-light companies

52% 49%

47%

23% 22% 23%

9% 8%

11%

8% 11% 10%

8% 11%

9%

Balanced Asset-light Asset-heavy

Costs Competitionprices/benchmarks

Hard customer characteristics(e.g. industry segmentation)

Soft customer characteristics(e.g. relationship)

Deal characteristics(e.g. urgency)



41


Knowledge of last year's price increases

Asset-heavy companies have slightly higher price transparency

No significant difference in terms of pricing transparency between asset-heavy and asset-light companies

5%

9%

14%

51% 51%

46%

30% 30%

27%

43%

52%

45%

22%

27%

21%



Knowledge of total accomplishedprice increase last year

Knowledge of individual priceincreases per product category

Knowledge of individual price increasesfor most/all big customers

Knowledge of priceincrease for small customers



42

Survey question: How high was last year's achieved price increase in comparison to your cost increase? Source: Global Logistics Pricing Study 2017 (n = 270)

Last price increase in comparison to cost increase

Asset-light companies were able to increase their margins slightly more than asset-heavy companies

No significant difference between asset-heavy and asset-light companies with regards to the price/cost increase

4%

7%

38%

41%

38%

11%

17%

28%

24% 24%

20%

3% 4%

3%

24%

10%

6%


Not sure/don't measure price and/or cost increase Price increase more or less covered cost increase

Price increase above cost increase Price increase was below cost increase

Price increase significantly above cost increase Price increase significantly below cost increase



43

Survey question: What is the share of your owned assets (vs. third party assets) in %? Source: Global Logistics Pricing Study 2017 (n = 270)

Distribution of companies by asset ownership

Almost equal share of asset-heavy and asset-light companies

14%

42% 44%


Percentage of respondents


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