When every mile has a dollar worth, businesses need to track several details to keep them on a profitable course. This is why it is important that all shipping businesses keep track of their carrier metrics.
The most common question when talking about transportation metrics is that how does one measure the performance and logistics efficiency when you’re already doing the best you can? The answer is simple: “the best you can do” is not enough anymore.
You need to use transportation metrics in order to improve your logistics operation if you want a better, favorable outcome. Only focus on those metrics which mean the most to your business and learn all the ins and outs related to every metric. Make sure to immediately implement corrective action and monitor your results continuously.
When you start tracking your transportation metrics, you can easily view all your performance stats over the period. This also helps in how to optimize your supply chain and logistics operations for maximum efficiency. Management is also able to easily identify and fix any problem arising in the processes. To top it off, transportation metrics can also help you compare yourself to other companies through industry benchmarking.
Different metrics have different definitions which are widely accepted. On the other hand, you may need to customize and create metrics for the industry you are working in or for your unique business model.
Another thing you need to remember is that measuring your transportation metrics alone is not enough to patch up your weak areas. You need to identify and understand weak points and take corrective action against it. You can do this by either changing your processes or making system improvements. The metrics should be used to judge the improvements you have made and track all your efforts in the business. Try to make the head of transportation metrics someone who is responsible enough to meet the targets. The head will also need to make sure that all managers are adopting well to change, and are encouraging and supporting all process and system changes which have been made in order to meet the desired target results.
It is essential for every shipping business to track each and every transportation metric to bring a positive and profitable change to the business. The most important metrics to consider are as follows:
- On time pickups
- Amount of carriers per shipment
- Visibility and traceability percentage
- Truck turnaround time
- Mode selection VS optimal selection
- Truckload capacity utilized percentage
- Accessorials as a percentage of the total freight
- Freight bill accuracy
- Claims as the percentage of freight cost
- Total transit time
- Inbound freight costs as a percentage of the total purchases
- Outbound freight costs as the percentage of total sales
- Freight cost per unit
Keeping in consideration all these transportation metrics, you will be able to track all your weaknesses and this will also help you in patching up those weaknesses and turning them into strengths.
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