Case Study: International Shipping Canal achieves profit-maximizing transit pricing with Mather Economics

International Shipping Canal Company - Customer Case Study

Mather Economics worked with International Shipping Canal to determine a profit-maximizing pricing strategy for canal transit slots ahead of a pending ownership transition. The canal’s previous operators had used a break-even pricing approach with only minimal variation from the standard transit slot price, so the client needed a better way to set prices based on customer demand and economics.

Mather Economics analyzed customer segments, transit demand, alternatives to canal use, and the cost of delays to different customer groups to model differentiated pricing options and recommend the best strategy. Following implementation of the new pricing system, the canal generated USD $2 billion in revenue in 2016 against costs of only USD $600 million, showing a major financial improvement.