Trailer telematics provide valuable data for fleet managers to track KPIs in transportation operations. Analyzing metrics like on-time deliveries, transportation costs, and truckload capacity is essential for efficient transport management and business success. Tracking key indicators can improve customer satisfaction, reduce costs, and optimize overall fleet performance.
Adobe Stock photo
Information gleaned from combining trailer telematics with truck data can create performance indicators that can measure performance and growth from nose to tail.
Data-driven decisions are key to the success of any contractor's business. When it comes to heavy transport, the metrics you value indicate more than just a successful delivery. Analyzing the right data can help you fine-tune your operations for efficient transport management. Deciding which key performance indicators (KPI) to focus on can be tricky, but it comes down to how you want to run your transport business.
Adobe Stock photo
"The global trucking industry runs on fuel, but it relies on data," said asset tracking system provider Orbcomm.
Fleet managers use truck sensor data to drive revenue, boost productivity, minimize costs, increase retention and more, the company blogged. However, data points that are often overlooked — and can provide great value — are those generated by trailers.
"Once dismissed as nothing more than ‘dumb' containers, trailers are proving to be an asset that can do far more than just move cargo," said Orbcomm.
In fact, driven by new capabilities, trailer telematics has grown from providing rough location estimates and other basic data to delivering myriad information. Live pinpoint asset tracking, real-time capacity, mileage data, detention monitoring, tire pressure, cargo and door status are a start.
Investing in and combining trailer telematics with truck data, fleet managers can create KPIs that can measure performance and growth from nose to tail. Further, they can analyze performance data within specific areas of interest such as maintenance, cargo security, productivity and utilization, said Orbcomm.
These insights will "bring fuller visibility and accountability to fleet management," said the company. "They'll also help fleet managers make data-informed business decisions and address top concerns specific to their fleet."
Those concerns could be anything from CSA violations and vehicle uptime to driver satisfaction and maintenance costs, said the company.
Transporting goods is more than moving from Point A to B, said TransVirtual. A key factor is monitoring your KPIs.
KPIs "help you track various angles of your operations," wrote Jill Quijano, marketing of the logistics software provider.
Which KPIs are most critical to your operations? Once you determine what you should be monitoring daily, you'll have the answer.
Adobe Stock photo
"In transport operations, KPIs are commonly used to track progress by quantifying efficiency and performance," said Quijano. "They're also a great strategy for identifying where the problem lies and what other departments are impacted by it."
Are you seeing a high number of failed deliveries over a period? Find the root cause before it impacts other operations, she said.
"Monitoring transport KPIs manually can be time-consuming and prone to errors" from collating data from multiple sources, leading to discrepancies.
Plus, Quijano points out, manual tracking lacks real-time insights, making it a challenge to identify trends or anomalies. To effectively track KPIs you need to align them to your business goals and customer needs and review and update them regularly.
Finally, said Quijano, you need to automate your tracking function with a transport management system (TMS).
"A TMS simplifies KPI monitoring by consolidating data from various sources and consolidating them in one place," she said. "Moreover, you get real-time visibility of shipments, deliveries, delays and incidents in easy-to-read formats and reports."
A TMS also allows you to compare KPIs across different areas in the business and alerts you to any issues.
Where, How to Start Analysis
Regardless of whether you monitor operations manually or with a management program, here are Quijano's pick of seven KPIs to start with:
1. Must-Arrive-By-Date or On-Time Deliveries
On-time deliveries or must-arrive-by-dates is a metric that assesses if your business is meeting its promised delivery times.
"If you want a more detailed look at why deliveries are late, break down the KPI into different metrics," said Quijano. Those include
- Time in fulfilment: This covers the entire order fulfilment process; from the moment an order is placed to shipping.
- Delivery time variance: The difference between the actual delivery time and the scheduled delivery time of each shipment.
- Truck turning rate: The time spent on site for each delivery.
- Route efficiency: This measures the effectiveness of transport routes in terms of minimizing distance, time and costs.
- Diving into these numbers helps you reduce lead times and meet promised shipping dates to boost customer satisfaction and loyalty.
"Companies in highly competitive industries should strive for a 99 percent to 100 percent on-time delivery rate," she said.
But in general, a rate of 95 percent and above indicates that a business delivers its goods within an acceptable time frame.
"At the end of the day, set a benchmark that matches your operational capabilities, industry standards, and customer expectations," added Quijano.
2. Delivery in Full, On Time (DIFOT)
As the name suggests, DIFOT measures how many orders were delivered on time, in totality, and with exactly what was ordered.
"It's a KPI commonly used for measuring delivery efficiency," said Quijano. "However, it's common for teams to apply it throughout the supply chain too."
DIFOT scores vary per sector or industry, she said, but your business would want to strive for 95 percent and higher.
3. On-Time Pickup
On-time pickup covers the portion of pickups completed within a set time window, showing carrier efficiency and operations and customer service impacts.
"According to the Supply Chain Consortium, the average on-time pickup is 96 percent across several sectors, a feasible industry standard," said Quijano.
4. Transportation Costs
"Like any business, your goal is to remain efficient while keeping costs down," she said. "It's essential you determine the total costs borne from transporting goods."
These costs, which include operating costs, maintenance charges and fixed costs, should be measured alongside your monthly gross income.
"Not only does it help with calculating your profit margins, it's also helpful when sending quotations to customers or partners," said Quijano.
When calculating transportation costs consider the following:
- Operating costs: Fuel cost per kilometer, fuel surcharge
- Fixed costs: insurance, driver wages, depreciation, insurance
- Maintenance costs: As the name implies, these are expenses for maintaining your fleet
"Your overall goal is to decrease transportation costs while maintaining delivery quality," she said.
But "for obvious reasons, there's no industry benchmark for transportation costs," added Quijano.
Factors such as intermodal transportation, distance travelled, fuel prices and market conditions influence your costs over time, she said.
"However, you can compare your monthly costs against competitors to identify opportunities to optimize" costs.
5. Truckload Capacity
Simply put, this metric tracks the percentage of space utilized on your truck — and every inch of truckload capacity is a revenue opportunity.
"Unused space means a loss on fuel costs, extra wear and tear for your fleet, you name it," said Quijano.
To ensure you're maximizing the potential of your trucks over a given period, divide shipment weight by the available shipping capacity.
"Of course, the greater the overall weight, the greater the savings are for businesses and customers alike," said Quijano. "The goal is to then add as much weight as possible but be mindful to stay within the legal and safety shipment standards."
6. Billing Accuracy
Avoid incurring unnecessary costs by tracking billing accuracy. "Keep a sharp lookout for incorrect pricing, invoices, and inaccurate weight," said Quijano.
You can calculate billing accuracy by dividing the number of error-free freight bills by the overall freight bills during a given period. You can do this for each carrier or in total to gain insights into charges that might have gone unnoticed, reduce transportation costs and increase net profit. Your billing accuracy should come in at least 95 percent to 98 percent — 100 percent should always be your goal, said Quijano.
"Invoices should accurately reflect the services provided, rates, and surcharges," she said. "You don't want to end up overcharging — or undercharging — your customers or partners."
Make sure you train staff involved and consider investing in technology solutions if you don't have confidence in your manual tracking system.
7. First Attempt Delivery Rates (FADR)
"In transport, the first delivery attempt matters more than you think," said Quijano. "But they are not exactly an anomaly."
Failure to obtain a signature, incorrect addresses or miscommunication can result in failed delivery attempts. Failing a delivery attempt, especially your first one, significantly impacts your logistics costs and reputation, she said. Every extra mile hits your profits.
"Moreover, you're likely not charging customers extra for a redelivery attempt," said Quijano. "So, every additional delivery is a loss for your company."
Calculate first delivery attempts by dividing the number by the total number of deliveries (and multiplying it by 100 to obtain a percentage), she suggested.
She believes companies look to maintain an FADR of 90 percent to 95 percent. "Anything from 95 percent and above is considered excellent," she said.
Scratching Surface
This list, said Quijano, is not all encompassing. In fact, there are hundreds of transport KPIs that can be used to measure and analyze operations.
"Before deciding on the metrics you want to start tracking, decide on the data that would be most relevant to your business," she said. "The last thing you need is to be distracted by numbers irrelevant to your operations or long-term goals." CEG
This story also appears on Truck and Trailer Guide.
Lucy Perry
Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.
Read more from Lucy Perry here.
Today's top stories
