How to Achieve 50% ROCE in Freight Forwarding: Mindset, Strategy, and Action 

Freight forwarding can be one of the most profitable businesses on the planet—when done right. Achieving 50% Return on Capital Employed (ROCE) with 5% business growth should be the standard. Industry legends like Klaus-Michael Kühne, Renato Chiavi, Peter Rose of Expeditors, and Günter Rohrmann of AEI have demonstrated this. It wasn’t the companies alone that thrived—it was their exceptional leadership that drove their success.

But why do most companies today fall short of this benchmark?

The answer lies in mindset. Many companies still see these targets as unattainable— just as many believed Roger Bannister’s 4-minute mile or Reinhold Messner’s ascent of Everest without oxygen were impossible. Yet, once these milestones were achieved, they were repeated numerous times. With the right mindset and tactics, 50% ROCE is not only possible—it should be expected.

I’ve seen it firsthand. Companies under strong, focused leadership have hit these numbers before, and with today’s technology, organizational strategies, and managerial techniques, any company can do the same. Here’s how:

1. Build a Results-Driven Mindset

If I were an owner, shareholder, or board member of a freight forwarding company, I would demand 50% ROCE and 5% growth as non-negotiable benchmarks. Anything less would be unacceptable. Management must fully commit to these targets and implement zero-defect operations and perfect data quality.

The tactics to get there are clear, and the first step is adopting the right mindset and company culture. Here are the key focus areas:

 

2. Embrace Core Industry Economics

We outlined these in our article “How to Maximize Profitability”. These principles—file profit, customer mix, and SGA management—are timeless. Modern technology enables managing them with ultimate precision.

 

3. Crystal Clear Ownership of Customer Orders

Each customer order (or file) must have a single point of ownership. One person must be accountable for the accurate processing of data, invoicing, customer service, and file profitability.

 

4. Obsess Over Gross Profit

Everything starts with maximizing the gross profit per file. This isn’t a new concept, but it’s often poorly managed in many companies.

  • Implement modern, real-time systems that help front-line operators manage gross profit with ease and accuracy.
  • Adopt the best-in-class revenue recognition standard: NO INVOICE, NO PROFIT. Don’t let accountants bog you down with complex rules like IFRS 15 or ASC 606—keep it simple and actionable. If an operator can’t understand the profit impact, you’ve lost control.

 

5. Precision in the Sales Process

Your sales process should be measured and managed with surgical precision.

  • Track and monitor key metrics like the number of customer contacts, quotes, conversion rates, and business growth by sales person and by customer.
  • Many companies invest in expensive systems like Salesforce but fail to ensure that the customer journey—from first contact to cash collection—is properly tracked. Don’t fall into that trap.

Master data management and accuracy are everything. If customer data isn’t tracked correctly, you’re creating blind spots in revenue generation and profitability.

 

6. Competence and Technology: The Twin Engines of Growth

The role of the global head office isn’t to micromanage but to design the optimal organizational, process, and data architecture. Focus on:

  • End-to-End Integration: From the first customer contact to final cash collection.
  • One Version of the Truth: Everyone in the company must work from the same set of data and metrics. No silos.
  •  Lean Organizational Design: Maintain lean branch offices close to customers, supported by highly efficient shared service centers. Cut unnecessary layers, such as regional head offices, which only create bureaucratic overhead.
  • The new normal: Manage directly from the global head office to branch offices. Don’t let middle layers dilute decision-making, slow execution, or cause miscommunication. Modern technology makes direct management faster and more efficient than ever before.

 

Technology doesn’t mean more systems—it means using the right systems wisely. Many companies think adding applications solves problems. It doesn’t. Choose a few high-quality tools and implement them intelligently.

At the core of it all is a comprehensive real-time database with high data quality and a single, integrated company data model. For more on this, refer to my article, The Detailed Path to Becoming Fully Digital.

 

7. State-of-the-Art Financial Reporting

You can’t achieve world-class performance without accurate, detailed financial reporting down to branch and department level.

The gold standard for financial reporting has been known for decades, and yet many companies still fall short in this basic area. Ensure your financial system provides visibility into profitability / productivity by branch, department, customer, and lane.

 

8. Process Automation with Human Intelligence

With the rapid evolution of technology, automation is an ongoing, never-ending task. Embrace it wholeheartedly.

But don’t fall into the trap of over-automation. Many companies try to automate everything, assuming that technology can fully replace human checks. This is a mistake—freight forwarding is highly variable, and many unexpected events require human intervention and commercial judgment.

For example, billing and file profitability management benefit from automation, but human review is still essential for special charges, exceptions, and unexpected events.

 

Conclusion: 50% ROCE Is an Achievable Standard

With the right mindset, culture, and tactics, 50% ROCE and 5% growth are not only achievable—they should be your baseline. Industry leaders like Kühne, Chiavi, Rose, and Rohrmann have proven this before. Modern technology and strategy only make this goal more accessible.

From a shareholder perspective, achieving these benchmarks is an imperative, not a luxury. Anything less is leaving value on the table.

Together, we can unlock your organization’s full potential and hit these benchmarks. We know the way and possess the solutions and technology to help you get there. Contact us now.

📩 [email protected]
🌐 www.ontegos.cloud

#FreightForwarding #LogisticsExcellence #OperationalExcellence #ROCE #BusinessGrowth #Weltklasse #ResultsDriven #OntegosCloud #DigitalTransformation #ZeroDefect

 

Data Mastery in Freight Forwarding

How to transform your freight forwarding and logistics company to compete in the digital age - A book by Oliver Gritz

Buy Ebook now for € 9.99

Buy EBook Now