05 Improve capacity utilisation
AirFreight Cargo Co (ACC), is seeing its Total Network Average Capacity Utilisation falling to 62%, which is below its minimum target of 65%. This shortfall is negatively impacting their Yield Per Kilo and thus their Net Contribution Margin. It needs to increase its capacity utilisation to at least 65%. Different routes yield variable percentage capacity and efforts to boost its lower yield routes through pricing policy have not had the desired effect. The goal is therefore to increase the yield on their higher volume routes, which are also the most competitive.
ECO Capacity Exchange Client Success team is working with a global IT hardware company (ITHC) that manufactures all of its equipment in the US and needs to ship its goods around the world. Due to a downturn in laptop computer sales, ITHC is coming under financial pressure. ITHC has previously earned ECO by selling via the Exchange, enabling ECE to proactively broker trade discussions between the two parties where specific routes are targeted utilising ECO for payment. ACC propose an aggressive ECO price, which is hidden from the cash market, to win the business.
ACC improved its capacity utilisation by increasing demand via ITHC, leading to a projected rise of Total Network Average Capacity Utilisation to 66% over 12 months.