Customer case

Profitability insight at Danpilot

The Danish pilotage company DanPilot will in the future be subject to competition in areas where it currently has a monopoly. With the introduction of activity-based costing, ABC, they have got a better overview of the profitability and at the same time laid the foundation for future decisions.


"The process is time consuming and extensive, but once the knowledge is there, you can’t do without an ABC model."
Simon Madsen, Business Controller, DanPilot


DanPilot is Denmark's largest pilotage service provider with around 150 pilots. It originated from a merger of the last three Danish pilotage companies in January 1, 2007 and then, on December 4, 2013, it transformed into an independent public company.


The overall objective of this ABC-project is to provide an overview of profitability in each business area and, at the same, time establish the basis for future pricing.



Transit pilotage - (in transition to open market); transiting through Danish waters (do not enter Danish ports) part of this is Ship-to-ship and Bunkering.

Port Pilotage (competition); piloting either to or from Danish ports. 


Politically, it has been decided that transit pilotage as a business segment must be gradually liberalized so that there is effective competition by 2020. DanPilot will remain committed to delivering pilotage services under the public service obligations in both business areas. 


The project was initiated by the CFO and Head of Business Support (Steering Committee) in order to provide input into the strategic processes regarding the liberalization of transit pilotage, and partly in preparation for adaptation to the future competition.



Phase I "Deliver a prototype model 2014 that demonstrates how ABC can be utilized at DanPilot"


Phase II "Update prototype for a final model 2015"


Phase III "Update 2015 model to a monthly model in 2016"


A Project Initiation Document was prepared for all three phases. The end product was defined as a fully implemented ABC model, a monthly update rate on the aforementioned model, and lastly a subset of demands as to what questions the model should be able to answer.


Each phase transition was completed with an evaluation and a decision to either stop the project or advance the project to the next level.


The project was organized with a steering committee, a project manager and the people resources in the organization contributing to the project. The models were developed in close cooperation with DanPilot's business controllers and consultants from CES and Prodacapo.


The objectives were clearly defined, resources to be applied were determined, and the time frame for the expected completion of Phase I was 3 months, the results a completed prototype. The idea was to get started so as to be ready when the need for such a model should arise.


The main risks in this project were speculated to be obtaining accurate data, and lack of acceptance of the pending results, should these results conflict with either previous assumptions or political agendas. These risks were addressed in the project by additional controls, reconciliations, and documentation.


Changes to the project were handled on a day-to-day basis, by submitting information to the steering committee, who then commented and approve accordingly.