Key performance indicators (KPIs) are essential to maintaining a successful logistics operations. They connect data and metrics to show if your operations perform as expected and highlight what strengths or weaknesses may exist. But deciding which logistics KPIs to track isn’t always straightforward. Many logistics organizations have different goals — whether to reduce shipping costs or improve service performance. But goals may change over time, so the logistics KPIs you choose to track often are a moving target.
Using a Logistics Scorecard to Monitor KPIs
At GlobalTranz, we believe in taking a personalized approach to measuring and tracking performance. To do that, we work with shippers to identify goals and create a logistics scorecard that will help monitor success and detect areas for improvement. This scorecard is a report used to show performance across a number of categories, often compared against industry benchmarks. Our transportation management system (TMS) is organized to make sure it is collecting the data you need in easy-to-use dashboards, while our team of experts turn that data into actionable insights.
Below, we’ve included some of the most common goals we see in the industry and paired them with the core logistics KPIs that GlobalTranz can help you track so you can reach your goals.
Goal 1: Reduce overall shipping costs
Logistics managers are often tasked to reduce overall shipping costs. But there are a number of variables and related strategies you can implement, including bringing on a transportation management system. To know which strategy is right for you, you must first understand your overall freight spend. It will include operational costs, packing, shipping, employee pay, TMS fees, fleet maintenance and other fees related to the transporting of freight.
Additionally, there are KPIs that help prove the value of a TMS as well as identify other methods for reducing your costs. GlobalTranz will work with you to evaluate your logistics program and identify the KPIs that will help you meet your goal to reduce shipping costs.
Cost indicator KPIs
- Freight cost for each unit shipped
- Outbound freight costs compared to total sales
- Inbound freight costs compared to purchases
- Accessorial compared to total freight costs
- TMS cost per unit
- TMS cost versus cost avoidance
- Year over year cost increases as a percent of total revenue
- Quote to invoice accuracy
- Average cost per skid or order
Goal 2: Manage freight rates
To get the full picture of your logistics costs, it’s important to properly manage and track your freight specific rates. These freight rate management KPIs should be part of your logistics scorecard. GlobalTranz makes managing freight rates easier by including these necessary KPIs in our analysis of your program.
Freight rate management KPIs
- Fuel efficiency rate
- Detention & delays
- Average transportation cost per mile
- Accessorials as percentage of freight
- Perfect order percentage
Goal 3: Improve service performance for your logistics operations
Ensuring quality service performance will have positive ripple effects and can help you meet other goals including improving customer experience and satisfaction. Service performance KPIs are the standard for logistics managers looking to measure the success of their operations. At GlobalTranz, we can help you not only track these metrics, but put them to use to identify areas of improvement and create action plans for your logistics operations.
Service performance KPIs
- Labor productivity
- On-time pickup and delivery
- Delivery on-time-in-full (OTIF)
- Damage rate or cargo loss
- Claims percentage for freight costs
- Average loading and unloading times
- Average dwell time
- Planned time in transit vs. actual
- Revenue yield by specific units
Goal 4: Manage carrier and inbound vendor compliance
Carrier and inbound vendor compliance programs can go a long way in helping reduce shipping costs and reduce the risk of supply chain discrepancies. Poor compliance puts your business at risk of financial repercussions, delayed shipments, damaged freight, and more.
GlobalTranz can help ensure you are tracking the right metrics and hitting your goals when it comes to compliance. Some factors we include in our tracking are unsafe driving, hours of service (HOS), vehicle maintenance, driver fitness, hazardous materials compliance, ELD compliance and more. By enforcing carrier compliance KPIs, our customers can have some control over carrier performance.
Carrier and inbound vendor compliance KPIs
- Freight billing accuracy
- Percent trucking capacity per use
- Reports sent versus reviewed
- Load acceptance / rejection rate
- Carrier rate benchmarking by lane
- Routing guide compliance
- Miles that are driven outside of a predetermined route
Goal 5: Reduce carbon footprint
When it comes to reducing carbon footprint, the logistics KPIs you should be tracking aren’t always as straightforward as they are with other goals. Many of the KPIs we listed above can also help measure sustainability efforts. GlobalTranz can identify and monitor the right metrics to track and analyze how they impact your carbon footprint and support sustainability efforts.
Additionally, our solutions team helps customers analyze their networks and design and identify distribution center locations to meet sustainability targets and goals. And our TMS can help analyze data to identify opportunities for increased operational efficiency.
Sustainability KPIs and methods:
- Fuel efficiency rate
- Routing guide compliance
- Route optimization
- Fuel usage
- Transportation miles
- Idle time
- Carbon emissions
- Shipment consolidation
- Network analysis
GlobalTranz is your partner for tracking and monitoring logistics KPIs
KPIs are an essential piece of a successful logistics program. We rely on them to track success and identify areas for improvement. In order to run a successful program and meet your goals, you have to do more than track these metrics. In fact, it’s essential to understand how to put them to use to make a difference.
GlobalTranz is committed to helping shippers not only track these logistics KPIs, but also turn them into actionable insights by taking a personalized approach to reporting and scorecards. Our transportation management system equips you with the data, and our team can help put that data to use. We are industry experts with experience across many supply chain fields that can help actively manage key performance indicators and spearhead improvement opportunities. We create logistics scorecards that are specific to your business objectives so you can continually grow and improve your logistics operations.
Source: https://www.globaltranz.com/logistics-kpis-you-should-be-tracking/