Episode 1 - Margin under pressure: When growth doesn't mean profit

About the series

The logistics sector is navigating significant commercial change. Margin pressure, rising customer expectations, geopolitical uncertainty, technological investment, acquisition-led growth and organisational complexity are reshaping how businesses compete and grow. I am now in my 15th year at The Gap Partnership, having worked with clients across 37 countries, including 10 years supporting many of the leading organisations across transport and logistics. During that time, I have seen how difficult it can be to translate scale, capability and investment into sustainable value. This six-part series explores commercial challenges that I believe are becoming increasingly important for the sector. These are observations rather than definitive answers, reflecting choices and challenges I regularly see in the organisations I work with. A consistent theme is negotiation, not simply at the table, but the broader organisational capability to align stakeholders, understand value, manage risk, influence others and make better commercial decisions. As logistics becomes more complex, commercial advantage will increasingly come from what organisations do with their scale, technology, relationships and expertise. 

In this episode 

Growth remains a strategic priority across logistics, but scale does not automatically translate into sustainable margin. In this first episode, I explore why margin pressure is rarely solved through price negotiation alone, and how organisations can create, protect and capture greater value as they grow. Growth remains a strategic priority across logistics, yet acquisition, consolidation and international expansion do not automatically translate into sustainable margin. In my experience, margin pressure is rarely solved through price negotiation alone. The more fundamental challenge is how organisations create, protect and capture value across increasingly complex commercial relationships.

Margin under pressure: When growth doesn’t mean profit 

The problem with price 

When margins tighten, the instinct is often to increase prices reduce costs and negotiate harder. Yet negotiations frequently become anchored around positions rather than the interests behind them.

A customer demanding a price reduction may actually be seeking budget certainty, flexibility or reduced risk. Understanding those underlying interests can create options that positional negotiation cannot.

The question becomes less “How do we defend our price?” and more “How do we create, articulate and capture greater value, or solve their issues in better / different way?”

Perhaps this helps explain the growing focus on Value-Based Pricing, as organisations seek to connect price more effectively to the value their solutions create. Whilst a value-based pricing approach may sound fair and commendable, it rarely ends the commercial discussion; in reality, negotiation almost inevitably follows as parties seek to define, challenge and ultimately agree what that value is worth. 

Turning scale into value 

Acquisitions can provide customers, capability and geographic reach, but can also introduce multiple pricing models, contracts, cultures and commercial practices. Without alignment, the benefits of scale can quickly be diluted.

Global, regional and local teams need clarity around objectives, priorities, decision rights and the value they are prepared to trade. The customer negotiation starts well before anyone enters the room.

Externally, the most important relationships should create opportunities to solve problems, share risk and capture greater value, not simply repeat cycles of price-driven negotiation. 

Negotiation culture 

The objective is not simply to create tougher negotiators. It is to develop commercial leaders who can understand interests and the profit impacts of different commercial choices, challenge assumptions, manage trade-offs and flex their approach.

Sometimes that means holding a position. Sometimes collaborating. Sometimes changing the conversation entirely.

The organisations best positioned to convert growth into sustainable profitability will combine scale with commercial discipline, strategic relationships and strong negotiation capability.

Recommendations:

1. Align before you negotiate Create alignment around objectives, priorities, success criteria, trade-offs, decision rights and risk appetite.
2. Look beyond positions Companies do not negotiate with companies; people negotiate with people. Be curious, take the time to understand your counterparty’s individual and corporate priorities, motivations and KPIs behind the position that has been taken.
3. Be creative Look beyond price to service, resilience, flexibility, technology, expertise and risk to create common ground. Broaden your conversation, explore hypothetical possibilities, seek alternative perspectives.
4. Segment customers Prioritise relationships based on commercial value, strategic importance and long-term potential. Not every customer, supplier or opportunity warrants the same level of investment and treating them equally can dilute both resource and impact. 
5. Build negotiation capability Make negotiation an organisational discipline, not a specialist skill and seek help from specialist negotiators, for your most complex and strategically important deals. 
6. Flex your approach Every negotiation, even with the same counterparty, has the same dynamics; use The Negotiation Clockface and Strategic Pyramid to consider your approach, inform your behaviours, tactics, strategy and contingencies. Assess the balance of power, anticipate challenges and define alternative options and triggers. Remain agile.

Growth creates opportunity; the ability to negotiate, collaborate and execute effectively determines how much value is ultimately captured. 

Conclusion

Across Growth and scale create opportunity, but sustainable margin depends on how effectively that opportunity is converted into value. The organisations best placed to succeed will align before they negotiate, understand what sits behind customer positions and treat negotiation as a broader commercial capability rather than a battle over price. 

Next in the series: “More for less"

Customer expectations continue to rise, but willingness to pay does not always rise with them. Episode 2 explores how logistics providers can differentiate deliberately, quantify value and create stronger commercial choices beyond price.

How The Gap Partnership can help you

The Gap Partnership turns negotiation into a strategic advantage. With the scientific depth of Negotiation Academy Potsdam and the AI expertise of Passion Labs, we operate at the intersection of behavioural mastery, science and AI. We equip your teams with the skills and mindset to negotiate brilliantly, help you standardise negotiation for consistent results, and work with your leaders to build a culture where collaboration and alignment drive performance. Let us help you embed negotiation into your organisational DNA and unlock sustainable growth in every deal.

Richard Jones is a partner at The Gap Partnership and a leading expert in negotiation strategy and execution. With 15 years’ experience across a broad range of sectors, he has advised clients in 37 countries on complex, high-value negotiations. He specialises in cross-cultural negotiation, strategic partnerships and commercial strategy, helping global organizations strengthen capability, create value and achieve better commercial outcomes.