The use of key performance indicators (KPIs) is essential to identify and attack various inefficiencies that drive up your costs.
But there are literally hundreds of transportation KPIs. So how do you select the transportation KPIs that matter most to your organization? And how do you drive KPI ownership down to the planning and dispatch level?
You’ll need to link your transportation KPIs to your company’s strategic goals and commit to measuring only the KPIs you’ve chosen. And remember that with transportation KPIs, less is more. Too many KPIs can be confusing.
Some transportation KPIs to consider for your transportation dashboard
You can design your transportation KPIs dashboard by choosing KPIs relevant to different personnel and business improvement needs.
Financial metrics analyze gross and net profit margins to determine how successful your business is at generating the desired return. The revenue vs. target metric compares projected and actual revenue generated, helping you identify how well your fleet performs. Cost-per-mile metrics allow you to manage expenses efficiently and determine an appropriate per-mile rate to charge shippers. And day sales outstanding (DSO) metrics measure the average payment days of your customers. This last metric is vital to determining your company’s cash flow and helping prevent unnecessary credit risks. It will also help you determine if/when you might want to improve cash flow and gain immediate access to working capital via invoice factoring.
Higher-level logistics KPIs can also include cost metrics like cost-per-mile, revenue-per-mile, cost-per-stop, revenue-per-stop, cost per unit/case/pallet/cube, miles-per-gallon, and engine idle time. In contrast, service metrics can include on-time delivery percent, delivered in full (DIF) percent, delivered in full, and on time (DIFOT) percent.
Process metrics enable you to analyze the number of claims filed, resolved, and resolution time and will allow you to monitor and improve customer service to build loyalty and command the best price for your service.
With dispatch and driver KPIs, you can monitor miles driven, drop sequence, number of stops made, time at each stop, and arrival and departure times. These metrics can also monitor and measure safety- and maintenance-related metrics, like DOT reportable safety incidents, speeding incidents, harsh acceleration or braking incidents, and DOT violations. Compliance-related metrics can include available hours of service (HOS), violations, and vehicles’ unassigned mileage.
Asset utilization metrics will show inactive assets for over two days, parts/tires/fuel cost per mile, preventative maintenance (PM) compliance, and PM time as a percent of all maintenance time. Productivity metrics can include time-per-drop metrics. And equipment utilization KPIs are critical to increased profitability, enabling you to measure your equipment’s usage versus idle time to determine productivity levels.
You can also take a look at incorporating customer metrics into your KPI dashboard. Customer lifetime value (CLV)—a prediction of the net profit attributed to the entire future relationship with a customer—can help you determine which channel helps acquire the best customers for the best price. And customer acquisition cost (CAC) KPIs divide your total acquisition costs by the number of new customers in the time frame you’re examining to help you determine the best channels for securing new business.
Last but not least, people metrics can help you measure driver turnover rate (DTR), dividing the number of drivers who have departed the company by the average number of drivers in your pool. If you have a high DTR, spend time examining your workplace culture, compensation packages, and benefits. You can also measure employee satisfaction through surveys, interviews, and reviews.
The Axele TMS includes operational dashboards that keep the most crucial transportation KPIs in one place. These dashboards make it easy to view actual revenue vs. target revenue, earnings per driver, dollar per mile, and loaded vs. empty miles. The dashboard also shows the number of drivers, tractors, and trailers having warning and critical issues to help with safety and preventive maintenance. Contact Axele today.