A logistics quote is a fixed price for an uncertain outcome. Fuel may move, the lane may congest, the shipment may need recovery, capacity may spike exactly when the freight is tendered. When an operator prices at expected cost plus target margin, it has written its customer a free insurance policy against every one of those risks. The premium for that policy shows up nowhere on the quote and everywhere in the year-end variance analysis, labeled as "operational issues."
The asymmetry is structural. Costs surprise upward more than downward: there is a floor under how well a shipment can go and no ceiling on how badly. Pricing on the mean of an asymmetric distribution guarantees the realized margin sits below the planned one. Multiply by every quote issued and the leak becomes the difference between the margin the commercial team believes it earns and the one the P&L reports.
Pricing the distribution
The corrective is to quote off the cost distribution, not its center. For each request: what is the spread of plausible landed costs on this lane, at this service level, in this season and regime? The price then carries an explicit variance premium sized to the tail. Stable lanes earn sharp prices, which wins good business. Volatile lanes earn honest premiums, which either compensates the risk or politely loses freight that was never profitable to carry.
The buffer you add and the deals you lose.
Price above uncertain cost, then see both sides of the tradeoff.
Too little buffer and you win losers. Too much and you lose winners. The curve has a top.
The competitive dynamic
Operators fear that pricing risk honestly loses volume to naive competitors. In the short run it does, and this is the mechanism working as intended: the naive competitor is buying loss-making freight, and the winner's curse collects from them on schedule. Over a cycle, the operator that understands its own cost distributions holds the customers worth holding, at margins that survive contact with reality. Underpricing risk is not a growth strategy. It is a delayed invoice, and it always arrives.