16 Transportation Metrics that Matter
Here are the metrics shippers monitor to make sure the right freight gets to the right place at the right time.
When it comes to transporting goods, shippers want to know if the right freight is getting to the right place at the right time. And because transportation ranks at the top of operational expenses for many shippers, they want this to happen as cost-effectively as possible.
Shippers, third-party logistics (3PL) providers, and carriers alike can now use technology to monitor the transportation metrics that matter the most. But relying on technology alone to ensure accountability is a mistake. Building relationships with carriers and working together to identify cost-effective routes as well as minimize disruptions are also effective strategies.
It's important to select carriers that will be partners. "If there's a conversation to be had on why a metric isn't being met, if it's a true partnership, both sides will have a point," says Andrew Lynch, president of Zipline Logistics, an Ohio-based 3PL. For example, if a delivery didn't reach its destination on time, it could be because the product wasn't ready in time to meet that goal.
Looking at the best ways to work together has an impact on metrics, too. "You have to arrange shipping patterns so carriers and drivers are in a position to succeed, which attracts them to your freight," Lynch adds.
Most shippers and carriers review data on metrics at least quarterly to better understand root causes behind successes or failures. Here are the 16 key metrics they pay attention to:
1. BILLING ACCURACY
"We know what rates we've contracted for," says Stephen Smith, senior vice president of global operations at PFS, a Texas-based3PL.
2. CARBON FOOTPRINT
As shippers continue to reduce their carbon footprints, they want carriers and other supply chain partners to do the same. With a goal of optimum fuel efficiency, they're examining equipment age and maintenance.
"Route optimization so they aren't driving a lot of empty miles along with transportation mode selection are also important," says Ronald Greene, who handles security and intelligence at supply chain technology company Overhaul in Texas.
How reliably does the carrier deliver an order intact? "Shock and vibration can damage highly sensitive electronics while temperature and humidity are a concern for pharmaceutical products," says Chris Wolfe, chief executive officer at PowerFleet, a New Jersey-based tracking and monitoring technology provider. The company's new LV-710 FreightCam photographs cargo before departure and after arrival to document any in-transit damage that leads to claims.
4. DOCK CONGESTION
Because dock congestion can lead to detention, which, in turn, impacts drivers' electronic log requirements and on-time delivery, shippers and carriers monitor dwell time at the dock.
"There's a downstream effect when dock congestion causes delays," says Lynch. "If I miss a delivery at Walmart tomorrow, they might not be able to take me for another four to five days."
5. EQUIPMENT CONDITION
This is often about age, interior cleanliness, and security. "Some shippers won't accept equipment that's older than 10 years," says Greene. Cleanliness is an issue for food and pharmaceutical products in particular.
As COVID-19 has shown, supply chains need to be able to adjust quickly as circumstances change. Wolfe is concerned that supply chains have become so specialized that it's hard to pivot when necessary.
He cites food processors that struggled to redirect shipments to channels that were still operating when restaurants and event venues shut down.
7. NETWORK STABILITY
Shippers and carriers want commitments honored. "Shippers complain about carriers reneging and carriers complain that shippers don't give them the volume they've committed to," says Ahmad El-Dardiry, chief revenue officer and general manager of shipping solutions at Transfix, a digital freight marketplace in New York City.
When COVID-19 challenged network stability, solid shipper-carrier relationships made a difference. "Good shippers tried to make sure their carriers remained buoyant and got volume, even if it was soft," he adds.
8. ON-TIME DELIVERY
This is particularly important with just-in-time manufacturing industries such as automotive. Technology helps soften the impact of delays by updating receivers quickly so they can adjust accordingly.
"EDI used to be the standard, but there's now a push to use APIs that provide a more frequently updated link into the carrier's system so we get information faster," says Mike McClelland, senior vice president of transportation at 3PL Kenco.
9. ON TIME IN FULL
For retail and consumer packaged goods segments, on time in full is "the king of all metrics," says Lynch. Miss this requirement and you'll be fined a fee based on percentage of overall sales.
"Consumer products companies attribute hundreds of thousands of dollars in lost sales to stores being out of stock because a truck didn't make it to the distribution center in time to hit a sale," he says.
10. ON-TIME PICKUP
Like on-time delivery, a late pickup creates a ripple effect in the entire delivery timeline. "This is especially important for bigger operations with a limited number of doors," says Smith. "If the order isn't picked up on time, it causes dock congestion and other problems. It's a flow metric."
11. OUT-OF-NETWORK SHIPMENTS
Out-of-network shipments originate from points that are less than optimal. That means they can be expensive and inefficient.
"We spend a lot of time working with multifacility organizations to identify the optimal shipping location for each destination," says Lynch.
While safety on the road is important to all shippers, Wolfe says it's particularly important in certain situations.
"With dedicated, private-label hauling offered by third-party logistics providers such as Ryder and Penske Logistics, the trailer might have the brand's name on it, so safe operation is crucial," he explains.
Security is especially important to companies shipping cargo that might be at higher risk for theft—pharmaceuticals or consumer electronics, for example.
In addition to requiring equipment that can be properly secured and drivers avoiding high-risk routes, "In North America, the rule is drivers go four hours without stopping because that helps minimize cargo theft," says Greene.
While using GPS devices for tracking driver and freight location is standard, "We now have technology that's affordable enough for shippers to track their own freight," says Wolfe. Companies attach tracking devices to pallets to monitor everything from trailer temperature to vibration and shock.
El-Dardiry adds that Transfix uses technology to help carriers optimize loads and deliver goods on time. "We need to monitor where carriers are on the previous load—are they on track? If not, they won't be on track for the next load, so we know to dispatch another truck for that so we deliver on time," he says.
15. TRAILER UTILIZATION
Is a trailer loaded to 100% capacity? If not, it's costing the shipper more.
When Zipline Logistics hauls consumer packaged goods going to different destinations, it often consolidates orders into one trailer that delivers to several locations. "Increasing the number of pallets in a trailer can affect landed cost per unit by double-digit percentages," says Lynch.
16. VENDOR COMPLIANCE
An increasing number of companies issue requirements about how vendors need to package and label merchandise so it moves through their supply chains as efficiently as possible. "Without correct labeling on the master carton, scanners can't read labels correctly, which delays shipment," says Smith.
When this happens, the buyer issues a chargeback to the vendor.