www.simon-kucher.com
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
Simon-Kucher & Partners
Simon-Kucher & Partners
33 offices worldwide, 1,000 employees, €240m revenue in 2016
McKinsey & Company
Boston Consulting Group
McKinsey & Company
Boston Consulting Group
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
OH_034008_Global Logistics Pricing Study.pptx 3
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
OH_034008_Global Logistics Pricing Study.pptx 4
* 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
OH_034008_Global Logistics Pricing Study.pptx 5
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
OH_034008_Global Logistics Pricing Study.pptx 6
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 (%).
OH_034008_Global Logistics Pricing Study.pptx 7
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%
OH_034008_Global Logistics Pricing Study.pptx 8
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
OH_034008_Global Logistics Pricing Study.pptx 9
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
OH_034008_Global Logistics Pricing Study.pptx 10
* 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%
Rail freight/intermodal
Trucking Parcel/express
Oceanfreight
Supply chain/warehousing
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
OH_034008_Global Logistics Pricing Study.pptx 11
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
OH_034008_Global Logistics Pricing Study.pptx 12
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)
OH_034008_Global Logistics Pricing Study.pptx 13
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
OH_034008_Global Logistics Pricing Study.pptx 14
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
OH_034008_Global Logistics Pricing Study.pptx 16
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)
OH_034008_Global Logistics Pricing Study.pptx 17
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
OH_034008_Global Logistics Pricing Study.pptx 18
Agenda
Segment split
Regional split
Asset split
OH_034008_Global Logistics Pricing Study.pptx 19
* "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
OH_034008_Global Logistics Pricing Study.pptx 20
* 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
Percentage of respondents in the specific segment
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
Supply chain/warehousing
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the specific segment
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
%
Supply chain/warehousing
Ports/airports
Trucking Parcel/express
Rail freight/intermodal
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)
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the specific segment
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
Rail freight/intermodal
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the specific segment
24
OH_034008_Global Logistics Pricing Study.pptx
* "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
Rail freight/intermodal
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
Percentage of respondents in the specific segment
25
33%
17%
12% 10% 10%
7%
3%
Trucking Ocean freight Parcel/express
Supply chain/warehousing
Rail freight/intermodal
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
OH_034008_Global Logistics Pricing Study.pptx 26
* "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
Supply chain/warehousing
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the specific segment
27
Agenda
Segment split
Regional split
Asset split
OH_034008_Global Logistics Pricing Study.pptx 28
Survey question: What is the main objective of your pricing strategy? Source: Global Logistics Pricing Study 2017 (n = 270)
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
Revenue Market share Full capacity utilization Profit Customer satisfaction (e.g. NPS)
Percentage of respondents in the respective region
OH_034008_Global Logistics Pricing Study.pptx 29
* Net Promoter Score Survey question: How often do you track your NPS (net promoter score)? Source: Global Logistics Pricing Study 2017 (n = 270)
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
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
Percentage of respondents in the respective region
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
Fully automated pricing decision
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective region
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective region
32
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
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
Not (fully) aware oflast year's price increase
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective region
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective region
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
OH_034008_Global Logistics Pricing Study.pptx 35
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective region
36
Agenda
Segment split
Regional split
Asset split
OH_034008_Global Logistics Pricing Study.pptx 37
Survey question: What is the main objective of your pricing strategy? Source: Global Logistics Pricing Study 2017 (n = 270)
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
Revenue Market share Full capacity utilization Profit Customer satisfaction (e.g. NPS)
Percentage of respondents in the respective segment
OH_034008_Global Logistics Pricing Study.pptx 38
* Net Promoter Score Survey question: How often do you track your NPS (net promoter score)? Source: Global Logistics Pricing Study 2017 (n = 270)
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
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
Percentage of respondents in the respective segment
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%
Balanced Asset-heavy Asset-light
Fixed prices Human decision-making Supporting tools/guidelinesfor human decision-making
Fully automated pricing decision
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective segment
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)
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective segment
41
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
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%
Balanced Asset-heavy Asset-light
Not (fully) aware oflast year's price increase
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective segment
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%
Balanced Asset-heavy Asset-light
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
OH_034008_Global Logistics Pricing Study.pptx
Percentage of respondents in the respective segment
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%
Balanced Asset-heavy Asset-light
Percentage of respondents
OH_034008_Global Logistics Pricing Study.pptx 44