KPI has quickly become a buzz word in the freight industry as shippers look to more effectively measure their transportation operations. Previously, freight benchmarking was a simple process. If the carrier delivered the freight on time and damage-free, it was a success. However, as the market becomes more saturated and as shippers continue to develop their network with “smarter” carriers, determining what goals carriers need to meet on a weekly or monthly basis will ultimately lead to a more optimized supply chain and the ability to more easily control costs. After evaluating numerous shipper scorecards, the following list represents the most important areas to monitor.
On-Time Pickup & Delivery
Getting product from Point A to Point B on time is the most commonly measured KPI. Delivering product later than expected could be detrimental to many shippers’ operations. However, being transparent with what “on-time” means is especially important for carriers. For some, on-time means within a 30-minute window, while for others it could mean same day.
While rates may look great on paper, tender acceptance is key. When carrier partners continuously reject loads, anticipated savings are quickly negated as shippers will need to continue to move down their routing guide and will ultimately pay a premium. Carriers with high primary acceptance should be moved to “primary” within the routing guide in order to maximize efficiency and cost effectiveness going forward.
Transparency has become one of the most important attributes in today’s marketplace. Track & trace capabilities allow for all parties to effectively communicate updates and eliminate manual processes. Many shippers are now requiring their carrier partners to have some form of tracking solution whether that be ELD integration, AI-powered check calls, or tracking sensors.
The more a carrier is communicating, the better. Many shippers require for pickup and delivery appointment times to be inputted within 24 hours after a load is sent over via their TMS. This helps to showcase which carriers have the best handle on the status of their loads.
Invoicing Accuracy & Claims Percentage
Excess problems and inaccuracies in billing can begin to pile up. Measuring which carriers tend to exhibit the greatest number of errors will help to save money across the board. Same goes when determining which carriers have the fewest claims. Of course claims are bound to happen, but if they are consistent, this could indicate process or packaging problems that need to be improved upon.
Accessorials Per Load
Accessorial charges can vary greatly amongst carriers, therefore, shippers should have a clear understanding on what their accessorial charges will be in every instance. As accessorials are tracked, it’s important to identify the challenges that carriers consistently have when picking up and delivering so these issues can be mitigated in the future.
Of course each shipper is unique, so it’s important to determine what benchmarks are most important to your supply chain. If you aren’t currently utilizing scorecards to send to your carriers, they are something to highly consider implementing. Keep in mind that you should set obtainable goals for your carriers. Scorecards with a combination of regularly scheduled check-in meetings will help to better identify opportunities for performance improvements and to focus on building long-term, stable relationships with your core carriers.