Of course, you have KPIs… but do you have the right ones?
As a shipper, you likely set up your KPIs to monitor carrier performance, control costs, and maximize profitability.
And while most shippers understand the importance of carrier scorecards and KPIs, too often their carrier scorecard and KPIs only tell half the story.
Sure, you’re probably measuring all the important service performance KPIs including on-time pickup / delivery rate, delivery on-time-in full (OTIF), and load acceptance / rejection rates.
And these are certainly important as they measure the most important thing… service levels.
But one of the key mistakes we see shippers making is only looking at the service metrics.
There’s more to the story…
For shippers to get a holistic view of the complete relationship they should also measure KPIs related to two other categories: rate management and financial indicators.
By combining rate details, financial details, and service details, the shipper gets a full performance picture and a much better read on the relationship’s true health.
So, what are these missing KPIs?
Here you go. The list below covers the 11 most overlooked shipping KPIs.
Add them to your scorecards, use them to set standards and benchmark performance, and let the data guide your decisions.
Rate Management KPIs
- Perfect Shipment Measurement
This is the error-free rate of each stage of a shipment and should capture every step in the life of an order. It measures the errors per order line.
- Fuel Efficiency
The amount of fuel used divided by the amount of miles traveled will give you a fuel efficiency rate. This number should be as low as possible to save as much money as possible.
- Accessorials as a Percentage of Freight
Accessorial charges take up a large chunk of the cost of shipping. This rate measures the cost of accessorials divided by the entire cost of the freight.
- Average Transportation Cost per Mile / Volume / Weight
This measurement is calculated by dividing the total cost of the shipment by the number of miles, amount of product, or weight of the shipment. Every mile you can shave off the odometer adds dollars to your bottom line.
Detention is when a driver’s route is delayed at either the pickup or drop-off location for more than the agreed-upon waiting time. This is the measurement of how much longer the driver had to wait and the cost of the extra time.
- Quote to Invoice Accuracy
Compare the dollar amount on your quote to the final invoice amount, and you’ll get this number.
- Supply Chain Costs as a Percentage of Revenue
This number measures the expense incurred through all supply chain processes and procedures in relation to the total revenue generated by the company over the same period of time.
- Freight Transportation Expenses as a Percentage of Revenue
This is a measurement of the money paid towards transporting freight compared to the total revenue of a company during the same time frame.
- Average Cost per Skid / Order
If you’re using skids to load and transport cargo, it’s important to understand what you’re paying per skid or order. This is a measurement of the number of skids or orders divided by the total cost of the shipment.
- Damage Rates / Cargo Loss
Sometimes freight will arrive at its destination damaged. To understand how often this happens, you’ll need to divide the total number of damage reports by the total number of shipments made.
- Invoice Timeliness
Pretty straight forward… did your partners invoice you inside terms of agreement that were previously agreed upon?
KPIs tell a story about your business and vendors… But that story will only be valuable if you measure the right things.
While shippers regularly track important service KPIs, they often miss rate management and financial KPIs that round out the full performance picture.
Adding these 11 rate management and financial KPIs to your carrier scorecards will give you the ability to better monitor carrier performance, control costs and maximize profitability.
While KPIs can’t guarantee better, faster and cheaper… and least you’ll have the data to make those decisions.
Want to build a better scorecard?
Check out The Complete KPI Worksheet for Shippers.
It’s the gold standard for carrier scorecards.
And yes, it covers the service KPIs and all of the financial and rate management KPIs discussed in this post.
The scorecard includes the 27 most important KPIs and has a carrier scorecard template in a ready-to-print format. Get your copy here!
Of course, if you need help moving freight across North America, reach out. Our network of 54,000 carriers and 400,000 trucks is a great asset to any shipper… and our service levels are impeccable. Give us a try… Get a quote today!