Professor Procyon Mukherjee discusses the various nuances of logistics in cement, from freight optimisation to revenue management.

For decades, the cement industry has asked a relatively simple logistics question: How do we move a tonne of cement from the plant to the customer at the lowest possible cost? The next question could be far more powerful:
What is this tonne worth to us, here and now, given the opportunities and constraints across our entire network?
That shift—from cost optimisation to value optimisation—could fundamentally change the way cement is sold, priced and distributed.
The cement industry is entering a new chapter in logistics. It is not simply about artificial intelligence (AI), control towers, GPS-enabled trucks, rail, coastal shipping or automated despatch. These are the building blocks. The real opportunity is to combine them with commercial intelligence and create something analogous to revenue management in aviation: a system that continuously evaluates demand, capacity, network constraints, customer requirements and opportunity cost to determine the most valuable way to allocate every tonne.
In other words, cement logistics could become a pricing engine.

The airline lesson
Airlines provide perhaps the clearest analogy.
An airline does not price a seat simply by calculating the cost of flying one additional passenger. The seat is a perishable piece of capacity. Once the aircraft departs, an unsold seat has zero value. Therefore, the airline continuously balances current demand against expected future demand and the remaining capacity of its network. Modern revenue management combines forecasting, capacity control, network optimisation and dynamic pricing. IATA describes the underlying logic in terms of evaluating the contribution from selling now against the opportunity cost of not selling—essentially, what the capacity might be worth if allocated differently.
Cement is obviously not an airline seat. But the economic principle is surprisingly transferable.
A cement company’s capacity is also constrained, although the constraints are distributed across a much more physical network: kiln and grinding capacity, inventory, silos, trucks, rail rakes, vessels, terminals, loading slots, unloading capacity and delivery windows.
And unlike an airline, a cement company can often change the route by which the product reaches the customer.
That makes the opportunity potentially even more interesting.

From cost-to-serve to value-to-network Consider a simple example.
A customer wants 1,000 tonnes of cement delivered tomorrow.
The traditional approach calculates the cost of producing and transporting those tonnes and adds the appropriate margin. But the real economic answer depends on what is happening across the network at that particular moment.
Perhaps Plant A has spare capacity and 30 trucks are returning empty to the region where the customer is located. The order could be extremely attractive because it fills an otherwise unproductive capacity.
Now consider another customer in a different market. That customer also wants 1,000 tonnes, but fulfilling the order tomorrow would require diverting trucks from a market where demand is rising sharply. Rail capacity is constrained and a coastal shipment is already committed.
The second order may have a much higher network opportunity cost, even if its physical distance from the plant is shorter.
The question therefore cannot simply be: What does it cost to deliver this order?
It should be: What economic value do we create by accepting this order rather than using our constrained capacity elsewhere?
That is the foundation of Cement Network Revenue Management.

Dynamic pricing does not mean surge pricing This distinction is important.
Dynamic pricing in cement should not mean changing the price every hour in an Uber-like fashion. Nor should it become a mechanism for simply charging more whenever logistics costs rise.
The more sophisticated proposition is network-value pricing.
The system could continuously calculate:
Optimal price = market value + service
value + logistics cost + network opportunity cost – network benefit
The final term is particularly important.
Suppose a truck is sitting idle near a plant. A customer willing to accept a particular delivery window could utilise that truck and avoid an empty return journey. The network benefit may allow the cement company to offer a more competitive price while still earning a superior contribution.
Conversely, if fulfilling an urgent order consumes scarce rail, truck or terminal capacity that could serve a more valuable market tomorrow, the opportunity cost rises.
The system should therefore be capable of moving prices both up and down. This is not simple surge pricing. It is optimising the value of the network.

Building the required architecture

The exciting part is that this is no longer purely theoretical.
Indian cement companies are already investing in many of the capabilities required for such a model.
Ambuja Cements, for example, reports a multimodal logistics network covering road, rail and sea, real-time source matching, AI-enabled fleet management, network optimisation and a central Cement Intelligent Network Operations Centre. Its FY2025-26 reporting describes real-time order routing and cost-based source selection, alongside a growing network of terminals and GPS-enabled trucks.
Indian Railways is also changing the physical economics of cement distribution. Its November 2025 reforms introduced rationalised charging for bulk cement in specialised containers and a policy for bulk cement terminals, explicitly targeting seamless door-to-door logistics. By February 2026, the Railways reported strong industry interest and a further reduction in the GTKM charge to 85 paise per tonne-kilometre, with CONCOR facilitating silo infrastructure.
These developments matter because dynamic pricing cannot exist in isolation. It requires
options. If every order has to move by the same road network from the same plant, there is limited scope for network optimisation.
But if the system can choose between multiple plants, road corridors, rail rakes, tank containers, coastal vessels and terminals, the network starts behaving like an economic portfolio. Every tonne has alternatives. And alternatives create the possibility of optimisation.

China: Scale creates the network advantage
China offers another important lesson.
Its enormous cement industry has developed around a much broader logistics ecosystem, including extensive inland waterways and digitally enabled logistics platforms. Companies such as Anhui Conch have developed digital platforms supporting waterborne logistics and online tendering, illustrating how
physical logistics and digital market mechanisms can increasingly interact.
The Chinese lesson for India goes beyond ‘use more waterways.’
It is that the value of a transport mode depends on the ecosystem surrounding it—terminals, silos, vessels, digital visibility, scheduling, customer density and network connectivity. Once those components are connected, logistics stops being a series of individual movements and becomes a network that can be continuously optimised. That is exactly what revenue management requires.

Moving toward the digital foundation
The global industry is also building the technology layer.
Holcim’s Transport Analytics Centre operates across 50 markets, covering around 1.4 billion kilometres of routes annually and tracking more than 60,000 trucks. Its newer AI initiatives go further:
Holcim Foresight combines demand and inventory forecasting with fleet and network utilisation, while optimisation engines can simulate alternative network configurations considering demand, transport capacity, cost and emissions.
The significance is not simply that AI can find a cheaper route. It is that the system can increasingly understand the economic consequences of different network decisions. That is the bridge between logistics optimisation and revenue management.

The missing link is commercial integration
The greatest barrier may therefore not be technology. It may be organisational thinking.
Today, sales often determine the price, supply chain determines the source and logistics determines the movement. Each function optimises its own part of the equation. The future requires these decisions to converge.
Imagine a customer placing an order. Before the price is confirmed, an intelligent network engine evaluates: current and forecast demand, plant availability, inventory position, production constraints, truck availability, rail and coastal capacity, terminal utilisation, delivery urgency, customer value, competitive pricing, expected future demand and the opportunity cost of consuming network capacity.
The system then recommends not just how
to fulfil the order, but whether the order should be accepted at that price. That is a fundamentally different commercial model.

From network operations to revenue management
The next logical step may therefore be the emergence of a new organisational capability: Revenue and Network Management.
Its mandate would sit between sales, supply chain and logistics.
Its questions would be simple, but transformational:
Where should the next tonne go? When should it go? Which plant should produce or supply it? Which mode should carry it? Which customer creates the greatest network value? And what is the right price for that opportunity?
The objective would not be to maximise the price of every tonne.
It would be to maximise the contribution of the entire network. That distinction is critical.
A lower-priced order can be more profitable if it utilises otherwise stranded capacity. A high-priced order can destroy value if it consumes scarce capacity that has a better alternative. A customer willing to accept flexible delivery could become more valuable than one demanding immediate delivery—even at the same nominal price.
This is precisely the kind of decision-making that modern optimisation and AI can make at scale.

The new competitive advantage
The cement industry has spent decades becoming better at manufacturing. It has progressively optimised kilns, grinding units, energy consumption, capacity utilisation and product formulations.
The next frontier may be different. It may be
the ability to optimise every tonne after it leaves
the production system and ultimately before it is even produced.
The companies that succeed will not necessarily be those with the cheapest individual freight movement. They will be those capable of seeing the entire network in real time and understanding the economic value of every available option.
The future cement supply chain could therefore move through three stages. First, logistics optimisation: move cement at the lowest cost. Second, end-to-end network optimisation: decide the best plant, inventory position, mode, terminal and route. Third, network revenue management: dynamically decide which demand to serve, through which network configuration, at what time and at what price. That is the real meaning of moving from plant to project.

About the author:
Professor Procyon Mukherjee, ex-CPO Lafarge-Holcim India, ex-President Hindalco, ex-VP Supply Chain Novelis Europe, has been an industry leader in logistics, procurement, operations and supply chain management. His career spans 38 years starting from Philips, Alcan Inc (Indian Aluminum Company), Hindalco, Novelis and Holcim. He authored the book, ‘The Search for Value in Supply Chains’. He serves now as Visiting Professor in SP Jain Global, SIOM and as the Adjunct Professor at SBUP. He advises leading Global Firms including Consulting firms on SCM and Industrial Leadership and is a subject matter expert in aluminium and cement.