Tracking the right key performance indicators (KPIs) is crucial for optimizing transportation performance. These metrics provide valuable insights that help companies evaluate their carriers effectively. By monitoring these KPIs, businesses can improve efficiency, reduce costs, and enhance decision-making.
In this article, we'll highlight the top 15 KPIs you need to start tracking for better carrier performance.
What Is a Carrier Scorecard and How Does It Help with Supply Chain Optimisation?
A carrier scorecard helps companies measure how well their transportation carriers perform. By using a structured approach, businesses can track key performance indicators (KPIs) to see how effective and efficient their carriers are based on logistics standards. A typical carrier scorecard includes important metrics like on-time delivery, claims, compliance, and costs. Companies can compare and rank carriers using these KPIs. This makes it easier to choose carriers, negotiate contracts, and optimize the supply chain. Now, let's look at how a carrier scorecard can improve your supply chain.
8 Advantages of Analyzing Carrier Scorecards
- Standard Performance Evaluation
The scorecard provides a clear and consistent way to assess key shipping performance indicators (KPIs). For example, you can check carrier safety through crash ratios, compliance with regulations, and training certifications. This standardized approach makes it easier to see where carriers can improve their safety.
- Informed Decisions
Carrier scorecards give you objective data to help you make smart choices. For instance, shippers can use high-scoring carriers for important shipments and focus on low scorers for improvements. The data also helps shippers renegotiate contracts or switch carriers for certain routes.
- Supply Chain Optimization
Evaluating performance across various metrics helps identify problems and inefficiencies in the supply chain. For example, the analysis might reveal delays at regional distribution centers caused by a few slow carriers. With this information, you can target specific areas for improvement in your logistics processes.
- Transparent Collaboration
Carrier scorecards foster transparency and accountability between companies and carriers. Shippers can set clear expectations for performance, creating a basis for working together to solve issues like route optimization and staff training through open communication.
- Trend Analysis
Carrier scorecards show data over time, making it easy to spot trends and patterns. For instance, you might notice seasonal changes in delivery times or find underperforming carriers quickly. This enables shippers to address service issues with real-time analysis, helping maintain high standards.
- Risk Management
Shippers often face challenges in meeting safety and regulatory requirements. Carrier scorecards establish clear metrics for accident rates, compliance, and driver training. This helps reduce the risk of legal issues and allows companies to create effective emergency plans for handling accidents or safety breaches.
- Enhanced Customer Satisfaction
Imagine running your supply chain with reliable carriers who have high on-time delivery scores, low damage rates, and great customer feedback. By quickly resolving shipment issues, you build trust with customers. This connection leads to improved customer satisfaction, as carrier scorecards help boost carrier performance while facilitating a strong feedback loop with customers.
- Benchmarking Against Industry Standards
Carrier scorecards allow companies to compare their performance against industry benchmarks. This comparison can reveal whether a carrier is performing at, above, or below industry standards, helping shippers make more competitive decisions.
Now, let's look at the key performance indicators (KPIs) that a carrier scorecard evaluates to help shippers make better decisions.
What KPIs Are Included in a Carrier Scorecard?
A company can choose its own key performance indicators (KPIs) to assess carrier performance. The selected KPIs can differ based on the industry, logistics strategy, and specific goals. Yet, here are some common KPIs that are frequently included in carrier scorecards.
- On-time Delivery: This shows the percentage of shipments that arrive on time according to the agreed schedule.
- Transit Time: This is the average time it takes for a carrier to deliver shipments from the pickup location to the final destination.
- Freight Damage and Loss: This indicates the percentage of shipments that were damaged or lost while under the carrier's care.
- Claims Ratio: This measures the number of freight claims filed against the carrier compared to the total number of shipments. It reflects how responsible the shipper is for damaged or lost goods.
- Cost and Pricing: This compares each carrier's pricing and fees to industry standards. It helps shippers find cost-effective carriers.
- Invoice Accuracy: This score assesses how accurate and clear the carrier's invoices are. It looks at factors like whether the quoted rates match the agreed amounts, services provided, and any applicable discounts or extra charges.
- Customer Service Responsiveness: This KPI shows how quickly a carrier responds to inquiries about orders or issues. A higher score means better customer service.
- Communication and Visibility: This evaluates how timely and accurately a carrier shares shipment tracking details. It also indicates whether the carrier is proactive about potential delays or problems.
- Safety Performance: This measures the carrier's safety record against standard regulations and best practices. A good score ensures that goods are handled and transported safely.
- Compliance with Service Level Agreements (SLAs): This assesses a carrier's ability to meet the agreed SLAs with the shipping company, such as delivery time windows and special handling needs.
- Carrier Capacity and Reliability: This KPI looks at a carrier's ability to handle different shipment volumes over time. It helps companies find carriers that can meet large demands during peak times.
- Overall Customer Satisfaction: This is based on feedback regarding the carrier's performance and service quality from customers and internal teams.
- Onboarding and Training Efficiency: This measures how quickly and effectively a carrier trains new drivers or staff. A shorter onboarding process indicates a commitment to quality service.
- Environmental Impact: This assesses the carrier's carbon footprint and sustainability practices. It helps shippers make eco-friendly choices.
- Technology Integration: This evaluates how well a carrier uses technology for tracking and reporting. Carriers that use technology effectively typically provide better visibility and service.
Transform Your Carrier Performance Tracking with eLogii
eLogii's logistics platform changes how shippers assess carrier performance. It offers advanced analytics and tracking tools that automate the carrier scorecard process. This provides real-time insights into carrier performance. As a result, companies can make informed decisions that improve on-time delivery, shipment accuracy, and budgeting.
With eLogii, holding carriers accountable is easier. The platform automates many manual tasks with smart technology. Shippers also gain complete visibility of their supply chain. This helps them identify top-performing carriers and address issues with underperformers using accurate data. Overall, eLogii enhances carrier evaluation and simplifies supply chain management.