Case Study


Northwest Airlines logo
NWA Cargo
Route profitability assessment


Objective

To investigate the profitability of routes for which there was anecdotal evidence of unprofitability. While the client understood profit at the station level, gaining insight into cost at the shipment level remained a challenge.


Approach
  • Developed a methodology to allocate cost on an individual shipment basis
  • Applied methodology to individual shipments on a number of suspect routes
  • Developed an excel-based model to provide the client with an effective pricing tool

Outcome
  • Discovered opportunities for improving client profitability by:
    • Improving pricing based on shipment type and routing
    • Maximizing flow through lower cost lanes
    • Identifying unprofitable customers
    • Optimizing network planning