Logistics Cost-to-Serve
In logistics, margin lives and dies at the shipment level. But most operators price on average costs. ABC / TDABC reveals the true cost of every route, client and delivery pattern – so you price to win the right business.
The Logistics Margin Problem
Logistics operators face intense price competition while managing highly variable costs. Average-cost pricing means you are simultaneously overcharging some clients and undercharging others – winning the wrong business and losing the right business.
Route Profitability Illusion
A route that appears profitable at the fleet average cost can be deeply unprofitable when loaded with its true costs: fuel variability, tolls, driver time, waiting time, return load efficiency, and customer-specific handling.
Client Complexity Hidden
Some clients generate 3x more operational activity per unit than others – multiple delivery attempts, complex paperwork, special handling, payment delays. Standard pricing ignores all of this.
Peak and Off-Peak Distortion
Averaging seasonal or peak costs across the full year means you underprice peak capacity and overprice off-peak, creating incentives that worsen your capacity utilisation.
What ABC / TDABC Delivers for Logistics
We build a TDABC model that calculates true cost-to-serve at the shipment, lane, client and service-type level. The model becomes your pricing engine and margin improvement tool.
True Cost Per Shipment
Every shipment type gets its real cost: direct vehicle costs plus all indirect costs – terminal handling, customs, administration, client management – traced by actual time and resource consumption.
Client Profitability Ranking
A complete Whale Curve of your client portfolio. Typically we find 20-30% of logistics clients are margin-negative on a full-cost basis, masked by average-cost pricing.
Activity-Based Pricing
With true costs known, you can build pricing structures that reflect actual cost drivers – distance, weight, complexity, delivery windows, special requirements – and improve margin without losing volume.
How We Engage with Logistics Operators
We work with road freight operators, third-party logistics providers, express couriers and supply chain managers across Europe. Our TDABC models integrate with your TMS and financial systems.
Profit Check
A free diagnostic to identify the routes, clients and service types where your current pricing is most likely to be misaligned with true costs.
ProfitAudit 360
A 5-25 day engagement delivering a full TDABC cost-to-serve model, client profitability Whale Curve, and an activity-based pricing framework.
Commercial Implementation
We support repricing of key client contracts, design of surcharge structures for high-complexity clients, and integration of the model into your commercial team’s decision process.
Know Your True Cost Per Shipment
Start with a free Profit Check to identify the routes and clients where your margin is most at risk.