Let's talk a little about yield, or the trucking measurement for revenue per hundredweight. How does a company maximize it?
Hiring a senior exec who focuses on yield management is one way, as Con-way Freight is doing right now. It works if the exec has a plan to cut across the firm and gets buy-in from every business unit. This hire had better have an excess of charisma and networking ability.
Product focus helps. Limiting your freight to stuff that commands a premium - like perishables - means you've staked out a niche in a channel where customers absolutely must pay to have something delivered on time. It also means you deliberately prune away low-cost business lines using your hand-dandy BCG growth-share matrix.
Tiered pricing helps. Charge more for rush deliveries. Don't eat costs like bridge tolls if you can compete on non-price service metrics like timeliness. If you have to pass on fuel surcharges to your customer, don't count them towards yield. Fuel costs are mostly out of a company's control although they can be partially hedged with energy futures.
Reader, your thoughts are always welcome. There must be plenty of people out there with relevant wisdom.
Hiring a senior exec who focuses on yield management is one way, as Con-way Freight is doing right now. It works if the exec has a plan to cut across the firm and gets buy-in from every business unit. This hire had better have an excess of charisma and networking ability.
Product focus helps. Limiting your freight to stuff that commands a premium - like perishables - means you've staked out a niche in a channel where customers absolutely must pay to have something delivered on time. It also means you deliberately prune away low-cost business lines using your hand-dandy BCG growth-share matrix.
Tiered pricing helps. Charge more for rush deliveries. Don't eat costs like bridge tolls if you can compete on non-price service metrics like timeliness. If you have to pass on fuel surcharges to your customer, don't count them towards yield. Fuel costs are mostly out of a company's control although they can be partially hedged with energy futures.
Reader, your thoughts are always welcome. There must be plenty of people out there with relevant wisdom.
