Profit Analysis Example Distribution Sector DHL Margins Pricing Tools UK

Profit Analysis in the Logistics and Distribution Sector

Realising the Benefits of Profit Analysis through Margin Management & Improved Pricing

DHL is the global market leader in international express, air and ocean freight, overland transport and logistics and in 2004 had annual revenues of nearly EUR 24.5 billion.

Identifying the Need

The major markets in which DHL operate have been becoming increasingly competitive. Growth rates for the logistics industry were growing but margins were falling and DHL realised that it did not have the visibility it needed to maintain its market leader position.

Why Introduce Profit Analysis?

DHL recognised that the reduction in margins was being caused by fundamental changes in the company's product destination and customer mix and a profit analysis project was initiated with the objective of gaining a better understanding of margins within the different sectors of the business in order to implement a more competitive pricing structure.

What are the Benefits of Profit Analysis?

Information generated from the profit analysis project is a key part of the DHL global yield management programme and is now linked to sophisticated pricing tools, which are deployed globally.

The increased understanding of margins as a result of the profit analysis has been critical to DHL's remaining profitability in the face of increasing competition.