As Europe’s leading all-cargo airline, Cargolux serves a global network of 14,000+ routes and manages 75+ commodities across multiple service levels. With nearly half of its business driven by ad hoc or spot pricing, the airline needed a faster, more dynamic way to maximize revenue, improve efficiency, and prevent leakage—while preparing for the future.
In this customer spotlight, Iris Van Goethem, Vice President of Revenue Management and Pricing at Cargolux, and Kavitha Rajan, Senior Director of Professional Services at PROS, share the airline’s transformation journey. Beginning in 2018, Cargolux modernized its pricing structure and change management processes, deployed PROS Smart CPQ and Pricing solutions in just 90 days, and quickly expanded from internal sales to customer APIs, eCommerce, and marketplaces. Today, with dynamic pricing, guided quoting, and AI-powered workflows, Cargolux has achieved remarkable results: $60M in additional annual spot-market revenue, $2M in recovered leakage, and quoting time cut from 20 minutes to just 5.
Video Highlights
- 0:50 – Introduction to Cargolux
- 3:33 – Cargolux’s History with PROS
- 6:28 – Cargolux’s Business Challenges
- 7:24 – PROS Solution to Maximize Revenues for Spot – Internal Sales
- 10:29 – PROS Solution to Create Efficiency and Time to Market
- 11:14 – PROS Solution to Eliminate Revenue Leakage Through Itemized Services
- 12:14 – The Benefits of PROS
Full Transcript
Good morning, everyone. I hope to keep you awake a little bit with this short introduction and our success story with PROS as a company, Cargolux, as Gavita introduced. Thank you, I’m Iris Woodham.
I have been working for a company for ten years. Actually, tomorrow is my anniversary with Cargolux. So I’m very happy about that. Thank you.
Cargo Luxe, what is that? Cargo speaks for itself. What is Luxe? Some people ask me, what do you transport?
Just luxury goods? The answer is no. It stands for where we are based. Luxe is in Luxembourg, in Europe.
And to introduce our company a little bit, what we do and how we do it, we have a very short video. So enjoy.
So now that you know what we’re doing, we’re very still proud of our thirty, seven four sevens that we have with their nose load. They’re very unique, but they are disappearing. So, yes, we are also renewing our fleet for the moment. So how has PROS helped us and how did we start our journey with PROS? Back in twenty eighteen, we were ready for new things.
We were ready to modernize. We signed contracts with PROS in December.
Before that, we laid the groundwork already within our company to change process, to make sense of data, to organize our pricing structure, to have measurements in place, and yes, to start already the change management tool at that point. Yeah. Because we knew it was going to come. Contract signed, two thousand nineteen, ninety days after signing of the contract we launched.
So that was very fast. Yeah. It was very successful also. We used the CPQ, smart CPQ from PROS, but also pricing PROS control and pricing PROS guidance.
So with that, this we did it in stages. We started with our internal sales first. Right? We wanted to make sense on how we understand that was all going to work, what the reaction was from our customers in order to take it one or two years later to the next level that was, ecommerce.
So from the internal sales and what we learned from it and the logic we had built up in the pricing and the trust in it, we now extended it to customer API, customer portal, and ultimately also marketplaces.
Right? That was the second phase. We had a little hiccup in between, not with PROS, but we had to change cargo management system ourselves, which was a huge undertaking for actually two years, which was launched last year.
So that took a little bit of internal work, but meanwhile we advanced also our PROS guidance.
And what does that mean? We had PROS guidance already, but we did it based on products.
Now each product group has several commodities underneath, so we wanted to refine that pricing on our commodity level also, and that is what we advanced with PROS guidance. So now we are there in twenty twenty five with all the new things that you’re doing. Obviously, we have been following very closely. We are now this year launching the Gen four. Yeah. And, what we have learned also in the conference also, trying to start exploring more on the AI and the agents that you’re so much advertising here.
So reflecting on your journey, Iris, what was the impetus in moving in this direction? What were the pain points that you were looking to solve? And how was the PROS platform going to drive value for you?
Absolutely.
I have made three pain points that I wanted to set in colors today. One was, maximise our revenues in terms of ad hoc business. Our business, you see, our aircrafts parts of the aircrafts are sold under contracts, which are mid long term contracts, and these are at fixed pricing.
Yeah. Contractual pricing. Rest of that business is sold on a free market. If you want, we call it spot or ad hoc.
That part of the business, we wanted to introduce more real time dynamic pricing, and it represents approximately fifty percent of our business. So it’s huge. Second part was, as anyone out there, how do we bring efficiency in our workforce but also time to market? Yeah.
And the customer experience on the way we quote. And last but not least, also as our colleague here from BASF has indicated, how do we prevent certain revenue leakages. So let’s have a
look first at the first one, maximizing revenues of spots. Here you see the CPQ configuration of an internal sales user putting in data on a quote request from a customer, whereby the system will generate available capacity on certain routes at many different price points.
Again, this is not what our customer sees. This is what the internal sales people will see. They have a guided quoting and we offer up until twenty available capacities on the routes that they are requesting for the commodity that they are requesting.
Yes? Now to indicate a little bit the magnitude of this, so if you take our network, there are about close to fourteen thousand different root combinations already.
This with seventy five different commodities, with twenty different route options and in three different service levels. So it’s quite big. So if you take a single O and D, there is for a single commodity, there might be sixty different pricing points already.
Now if you expand that to the network, you get over sixty two million pricing points. So it’s not that simple to do. But let’s have a look on the internal users and, what they now offer to our customers. So in the past, you get a quote, you make an offer, you see what happens. Today, they have, of course, the choices to pick multiple options for that customers, not one flight, but the second flight, depending how time sensitive they are, and at different price points.
So with that, we take the negotiation away. This ping pong, oh, can I get fifty cents off? But this and this. The offer goes out, it’s a bookable options with different price points at different service levels.
In the next one, we then see also that we trust our sales people in their capabilities still.
In the beginning it was, ah, you’re gonna dictate our prices and you don’t trust us to sell anymore, etcetera.
Absolutely not. They are the experts in the field, they know the customer, They know the market. The system provides what we call a floor. Yeah? And the floor is not necessarily a low price, by the way. Yeah? The floor is steered by the expectations of the fulfillment of the flight on a forecast.
So in order to give the salespeople freedom still in their selling points, so they don’t have to come every time to us and ask for an approval, we don’t want that work either. We give them a pricing corridor saying yes, you still can go up, you can go up all the time, but you still can go below without questions.
So pricing corridor, once they go below that floor, then we trigger a workflow.
And you see that in the next one,
and this is what creates already our internal efficiency also. One stop shop, very different workflows, just one example on how the approval is triggered to the RM department and in just a few clicks away, it is approved and the offer goes out to the customer. Other workflows, examples are, as you saw, we don’t carry only boxes, we carry very complicated stuff that require professional revision. Let’s say engineering.
Is the shipment loadable? Do we need strapping? Do we need cranes? Do we need all kinds of things?
Also here these workflows are triggered so that technical drawings, when needed, can be provided with a price attached to it.
Okay. Third one I mentioned was revenue leakages. Right? And here, PROS offers us what we call services.
When a quote is provided, you have a specific commodity, let’s say pharmaceuticals, which require specific handling, let’s say cooling, services are triggered with the applicable charge to it, either automatically or you can do it also manually because you pick an additional service on request of a customer. Let’s say, customer wants to take a picture of my cargo. That exists, believe me. So these services, that is called picture and can be added to any quote and creates a transparency internally, but also to the customer.
With that, when the booking comes, with the booking API, services and their charges are automatically in that booking, so they cannot be forgotten.
Oh, sorry. You share? Yes. Very good.
You had a very clear vision, Iris, in terms of what you wanted to get out of the solution with your objectives and your KPIs were very well defined. How did that translate into what you saw once you rolled the solution out?
Thank you. Kavita is all about the money. Right? Well, it is about the money. So let’s see how we measured part of our successes, mainly maximized revenues, efficiency to market, and then the third one, leakage.
How did we maximize revenues on the ad hoc parts, parts part that we sell? One measurement, bottom line is a zero line, is the market price, if you want. We call it yield. We took the we took our part that we steered through the CPQ and the dynamic pricing and measured that over time against that market.
And you see the orange line, how it has accelerated, and that’s fifty percent of our business.
With that, we also have a strategy saying, if a market is healthy, if our flights are still full, that’s the second KPI, of course, they go hand in hand, then we can potentially increase the share of that spot market to capitalize on the higher price. And that brought a fantastic result. You will see that in a minute.
Second part, as we mentioned, efficiency is very hard to, to measure. Yeah? But we measure that in many ways, time to market.
We measure our salespeople on their offers. Yeah? They have a guided rate, what do they offer can be higher than that guided rate, and they’re free to do so as long as they win the business, and as long as the flights are still full. If there is a pattern of certain sales groups that do offer higher prices but have low win rates, we can immediately action that.
It might tell another story internally for ourselves also as our embers and pricers. If the prices are too high, then the win rate is also automatically low. So either it’s a behavioral issue in the field, or it is your own pricing methodology behind it. So you look at both. Same as the approvers that come to us, as I said, we don’t want to be busy with approving stuff, but if these approvers increase over time, we know we have an issue, and some action immediately needs to be taken. So that creates efficiency, visibility, and action.
Time to market, how did we measure that? Let’s say our European market does thirteen thousand quotes in one week. That’s quite a lot. Right? Okay. Now before CPQ, they spent on average, let’s say, twenty minutes, per quote, depending how complex it was. Yeah?
With CPQ, they spent only five minutes per quote on average. Some of them go in one minute, some go some of them go in three minutes. So that saved us fifteen minutes per quote, freeing up for the entire seer force about force about twelve hours in one week for one person.
What does that mean, that we fire people? No. We didn’t. Yeah? We took the time to reskill people, to learn and develop, but also to learn how to deal with analytics and take all actions of of these analytics.
Because now we have a wealth of information where you can do a lot with it, right, with those analytics.
Last but not least, revenue leakage. We said services are added automatically, semi automatically.
This is an example of the booking offer to the customer itself.
In this case, two bookable options with the link proceed to booking, but also a very clear indication where these additional charges are coming from and how much they are. Right? And with this, we have no disputes after the fact. There is no missing revenue either.
And the benefits in numbers, finally, yeah, that’s what everyone wants to hear, Spot market, spot steering, CPQ dynamic pricing brought us in one year over sixty million dollars in additional revenue. Now that’s amazing, right, for a company our size. Secondly, thank you, efficiency and time to market. As I said, we have wind rates, we have adjustments of behaviors, we have adjustments of strategies on the spot.
Any disruptions, and we have a lot, in our industry can be actioned immediately.
And last but not least, the revenue leakages through services in one year was also over two million euros So we’re quite happy to accomplish that. We’re happy with our partners Afroze. We are here to stay for a long, long time. And thank you for coming and listening to our story.
Thank you, Iris. I think what you’ve achieved here is truly impressive. And the time it took to get this live, I think if I have any of my other cargo customers here, I might be having some difficult conversations.
But, thank you very much.
I think I know that from our experience in implementing with you, your attention to the user experience and change management was key and was was really an eye opening experience for us.
So thank you very much, and we look forward to continuing to innovate with you.
