Shipping KPIs: 15 Important Metrics to Monitor

November 19, 2020

Shipping KPIs: 15 Important Metrics to Monitor

The shipping industry has increasingly used automation in recent years to move more effectively. In fact, companies are now using a variety of methods and digital solutions to track performance and streamline operations.

Recent advancements in monitoring, mobility, data sharing, and artificial intelligence (AI) all make it possible to drive improvements in areas where it was previously difficult or even impossible to do so before.

In order to do that, you first need to understand which key performance indicators (KPIs) to measure and optimize.

Why Monitor KPIs for Shipping?

The main reason companies are automating their processes and tracking key performance indicators (KPIs) has to do with the customer experience (CX). Today KPIs are quickly becoming one of the most critical business drivers. Rising customer expectations are forcing businesses to perform faster and more efficiently, and with fewer mistakes. All these skills are critical when it comes to attracting and retaining customers.

Tracking KPIs is also important for maintaining smooth operations. By keeping a close watch on KPIs, managers can reduce the chances of a facility getting shut down for compliance violations. They can also reduce the chances of employees getting hurt or sick and prevent teams from running out of supplies in the warehouse.

In addition, KPI monitoring is necessary for ensuring stability and efficiency across an entire supply chain. When all partners work together and track KPIs, it results in a system that is more profitable and efficient for everyone.

15 Shipping KPIs to Track

With all this in mind, here are some of the top performance metrics that managers and administrators should be tracking.

1. COVID-19 Protocol

The outbreak of COVID-19 has had a drastic impact on the way that transportation teams and warehouse crews operate. Now, teams need to maintain social distancing and comply with strict back-end safety requirements.

This is critical for avoiding shutdowns and preventing the spread of the disease. As such, companies must carefully track safety metrics to maintain compliance and ensure that employees are meeting protocols.

2. Check In vs. Check Out Time

It’s important to track how long it takes drivers to check in and check out of a customer’s loading dock on average.

Managers need to understand average turnaround times in order to identify customers that typically take longer to service. This way, managers can account for more time when planning shipments, identifying where potential bottlenecks may occur and adjusting routes accordingly.

3. Appointment vs. Check-In Times

Suppose a driver has a 12:30 p.m. check-in time but arrives at the destination at 1 p.m. Management needs to receive a notification about this and then investigate why the driver was late.

Of course, a variety of questions will ensue, like local traffic conditions, whether the driver made a stop, if a mechanical failure caused a delay, or whether another customer kept the driver longer than they should have, among other things.

For managers, the trick is to track check-in times at scale to identify trends that may be causing check-in times to be continuously late. This is critical for keeping customers happy.

4. Customer Complaints

Often, customer complaints wind up falling into a black hole where they disappear forever. This, in turn, results in a situation where bad drivers can continuously make violations and mistakes without any repercussions. Unfortunately, this is one of the top reasons for poor CX ratings.

Managers need to carefully track and follow up about complaints to identify problems and prevent them from becoming ongoing issues.

5. Number of Shipments

What’s more, managers also need to keep careful track of which drivers are making shipments. On one hand, drivers can be competitive about routes—especially if they’re getting paid by individual shipments. In addition, failure to balance shipments can lead to contract violations and union grievances.

The easiest way to avoid these issues is to automate and monitor shipments, ensuring that all drivers receive fair treatment.

6. On-Road Hours

Drivers also need to adhere to strict federal rules governing how much time they are allowed to be on the road. These metrics need to be carefully tracked in order to ensure federal compliance and prevent fines and penalties from accruing.

Keep in mind that drivers are just one part of the equation when managing a fleet. Clerks also play an integral role in keeping items moving. That being the case, bosses need to monitor on-road hours for performance.

7. Order Accuracy

Clerks play a big role in making sure that the right items go onto trucks. They need to make sure that all shipments are proper and include the right bill of lading. When inaccurate orders start piling up, administrators need to find out quickly.

8. Average Demurrage Fees

Shipping teams must ensure that proper receiving parties are in a position to unload items at their port in a timely manner. When items sit too long at their destination, they can move into a state of demurrage, which can result in hefty fees.

It is therefore necessary to keep a close watch on how often demurrage fees are piling up. If you start noticing a lot of fees, you need to make changes before they become a frequent occurrence.

9. Damaged Items

Another key KPI to monitor is how often items become damaged during deliveries.

If large numbers of items are continually getting damaged en route to their destinations, warehouse clerks should be able to provide insight as to why this is occurring and what can be done to reduce problems.

10. Inventory Stock

Inventory needs to be carefully tracked and reported to maintain efficient operations. When warehouses start running low on items, shipping delays are right around the corner. This makes customers angry and leads to lost profits.

Warehouse teams therefore need to keep careful track of inventory and inform purchasing managers when they need to obtain more of certain items. This is one of the most important metrics to watch out for.

11. Number of Loads at Capacity

Warehouse managers also need to track load performance. This helps them understand how fast their teams are capable of working at capacity—which is necessary for preventing bottlenecks.

By determining how fast and efficiently warehouse teams can pull, load, and unload items, it becomes easier to schedule and communicate with delivery crews.

12. Average Time to Load

In order to determine the number of loads at capacity, managers also need visibility into average time to load.

By measuring average time to load, managers can also benchmark progress and determine whether their teams are working as hard as they should be.

13. Sustainability Efforts

Shipping companies today are expected to carefully control sustainability efforts.

Some metrics to look out for include average idle times, daily fuel consumptions, and weight loads.

14. Fuel Pricing

Fuel prices fluctuate constantly, and companies need to track them for budgeting purposes.

Some companies are now using artificial intelligence (AI) to monitor changing fuel prices. This makes it easier to plan and allocate funds to cover expenses.

15. Time to Pay

Let’s face it: Not all customers like to pay on time. Payments can vary drastically from company to company and from industry to industry.

Managers should track average time-to-pay metrics to identify variations and call out customers when they exceed average durations.

How Vector Can Help You Automate Shipping Metrics

Vector offers a variety of tools and mobile solutions that shipping teams can use to track progress and share KPIs.

With Vector, it’s possible to achieve a state of advanced automation and monitor drivers’ workflows—resulting in a much more efficient way of doing business.

Falling behind in your KPI tracking capabilities? Check out Vector’s mobile billing solutions to learn more.

This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling.

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