There are hundreds of performance criteria to measure your carrier performance. For a company, it is essential to maintain a measure of performance to be assured that you are making the best value for what you’re spending. These metrics can also help you to identify opportunities for your business.

KPIs To Measure Your Carrier Performance:

Below we count down a few performance KPIs.

Cash Flow:

On-time payment is a good indicator for different business factors. Cash flow can be measured by dividing your on-time payments by your total payments. If the number comes below 90, you need to improve it.

EDI Or API Invoices:

Switching from paper-based invoices to EDIs and APIs can give you several advantages. You can enjoy increased accuracy, efficiency, and savings. These invoices are 35% less expensive than the regular paper ones.

Capacity Issues:

Several problems can occur if your carrier cannot handle your shipments. These issues include late deliveries, pickups, and unsatisfied customers.

To measure performance for this area-specific KPIs can calculate cost per order, cost per item, and the number of perfect shipments.

Tenders Accepted Vs. Tenders Declined:

This will inform you if your carriers are complying with their contract terms. If a carrier declines many tenders, the cost for the shippers may increase. They may go out of budget in many cases. Carriers have different reasons for rejections, so you need to identify ways to improve this situation.

Monitor Driver Performance:

When you are evaluating carriers, you can choose the highest-performing drivers. This performance indicator can be measured by assessing factors like drug and alcohol testing, having the appropriate equipment, and showing up for all pickups.

Selecting the suitable carrier with the best driver performance can ensure that your freight goes where it needs to at the right time.

Transportation Utilization:

Remember that space is just a waste. You can elevate the value of your business by switching from LTL to a full truckload. This will raise the minimum quantity for orders and combine different shipments with going out at one time.

Some other KPIs worth mentioning:

Accessorial as a percent of freight: this indicator evaluates inefficiencies. By dividing your fuel charges and permits with total freight expenditures for a period, you need to re-evaluate your operations if there is an increase. 

Invoice accuracy: For a manufacturer, it is essential to count the number of accurate invoices and categorize the inaccurate ones based on the carrier and reason. If you encounter repeated incorrect invoices, it is due to inefficient performance. 

FAQs:

Q1- What is a carrier scorecard?

Carrier scorecards are used to compare carriers’ qualitative and quantitative attributes and analyze their performance. They offer a way to evaluate carriers through KPIs objectively.

Q2-What is KPI in transportation?

Key performance indicators (KPIs) refer to the targeted goals that rely on metrics to provide a snapshot of the health of your operation. To ensure the system works efficiently, supply chain managers need to know which KPIs of a transportation management system to track. 

Conclusion:

KPI is a great way to evaluate the performance of your carrier providers. They help you make the right decisions for your business operations.

Also Read: 5 Tips For Getting The Best Freight Rates