Transport KPIs: We Explain Everything!
As a business owner, you must ensure that products are transported smoothly and on time from your production site to their destination. In the realm of goods transportation, several variables can impact the success of logistics, including transport KPIs. In this blog article, we will delve into why KPIs are crucial for successful transport management, along with some common examples to consider when adapting your own tracking system. Keep reading for more information!
- Transport KPI Definition
- Different Types of Transport KPIs
- Transport KPIs: How to Choose the Right Indicators?
- How to Improve Business Performance Through KPIs?
Transport KPI Definition
Transport KPI Definition
In the field of logistics and transportation, Key Performance Indicators (KPIs) are key performance indicators that measure the quality and efficiency of operations and processes. KPIs in transportation are essential tools for businesses looking to enhance profitability and productivity by closely monitoring their performance. Through these indicators, companies can gauge the performance of equipment, operators, routes, delivery timelines, and various other crucial aspects of transportation and logistics activities. Therefore, it’s crucial for industry players to have a strong understanding of KPIs and their utilization to remain competitive in the market.
Different Types of Transport KPIs
In the realm of transportation and logistics, it is crucial to measure the performance of each activity. There are numerous and varied types of KPIs in transportation and logistics.
Tracking Transport Operations
This KPI represents the chronological summary of operations carried out by the company, as well as its formalities. It includes the acquisition of goods and different signatures for logistics contracts. Relevant transport KPIs include:
- Fuel consumption / 100 km;
- Average duration of transport operations;
- Average cost of transport operations;
- Real-time vehicle tracking.
To facilitate the work of drivers, optimizing their delivery routes is necessary. For this, you have transport KPIs to monitor:
- Time taken by the driver based on distance traveled;
- Average duration of operations per driver;
- Rate of disputes per driver;
- Average fuel consumption based on your activity per driver.
Please note that these KPIs are not meant to spy on the driver, but to find ways to enhance performance.
Vehicle performance in logistics is essential to ensure swift and reliable goods delivery. Here are the KPIs:
- Number of owned vehicles;
- Vehicle service quality;
- Validity of transport documents;
- Empty distance traveled;
- Loaded distance traveled;
- Total cost of ownership;
- Failure rate.
These data help identify improvement opportunities to optimize operational efficiency.
Eco-responsible management in logistics is a increasingly adopted professional approach. It aims to reduce the environmental impact of logistics activities. For this purpose, there are transport KPIs to follow:
- Carbon footprint;
- Use of biofuels;
- Number of electric trucks;
- Number of hydrogen-powered trucks.
A customer satisfied with their delivery is more likely to return to a company, and this applies to the logistics field as well. Here are the KPIs to monitor:
- Adherence to delivery deadlines;
- Dispute rate;
- Driver and vehicle service rate;
- Vehicle fill rate;
- Empty transport rate.
Transport KPIs: How to Choose the Right Indicators
To choose the right Key Performance Indicators (KPIs) for measuring transport performance, it’s important to consider several factors such as:
Defining the company’s transportation objectives is crucial to selecting KPIs that measure performance in relation to these goals.
Having the necessary data to measure the selected KPIs is essential. Setting up data collection systems may be necessary to obtain the required information.
Relevance of KPIs
Selecting relevant KPIs for transportation is essential. For example, measuring customer satisfaction may be more relevant than measuring staff turnover rate in certain cases.
How to Improve Business Performance Using Transport KPIs
Transport KPIs can greatly enhance the performance of your operations. Here’s how:
Enhance Supply Chain Visibility
Utilize your transport KPIs to measure supply chain visibility and identify areas that need improvement. Indicators such as on-time delivery rate, order delay rate, and stockout rate can help you identify weak points in your supply chain.
Optimize Transport Costs
Use KPIs to measure and optimize your transport costs. Indicators like cost per kilometer, vehicle fill rate, and empty kilometers rate can help you reduce transport expenses and enhance your business’s profitability.
Efficient Inventory Management
Indicators like inventory turnover rate, stock accuracy rate, and out-of-stock rate can help you enhance inventory management efficiency and thereby reduce storage costs.
Measure Supplier Performance
Ensure you work with top-performing suppliers. Indicators like on-time delivery rate, order accuracy rate, and product quality rate can assist you in evaluating supplier performance and making informed supply chain management decisions.
In conclusion, transport KPIs are valuable tools for enhancing and optimizing the logistics performance of businesses. By carefully measuring these indicators, you can improve supply chain visibility, cut transport costs, and efficiently manage your inventory.