There are plenty of transport and logistics companies out there, and some are always going to be better than others. Some might just be better in the abstract, others may be better at meeting your own personal needs.
The difficulty is, if you already work with one or more transport and logistics companies, how do you know if they’re really worth the money? Are you really getting the best service for your needs? In this case, it’s best to track the KPIs and see how well they’re actually performing – particularly if you have historical data to compare them against.
The KPIs You Should Track to Keep Tabs on Your Transport and Logistics Company
Consider this the bare minimum performance indicator. Your logistics company should be consistently picking up and dropping off on schedule, with few or no deviations. If you’re seeing delays and missed shipments, it’s definitely time to start shopping around.
One reason to hire a third-party logistics company that’s growing in popularity is to lower fuel use and get the best fuel rates for all shipments. Between the costs of fuel and various government initiatives to utilize more eco-friendly transportation methods, you could be saving a lot of money – but only if your 3PL is utilizing their resources wisely and getting you the best rate.
Are your shipments frequently getting held up as they cross state, provincial, or country borders? Chances are, that could be avoided if your logistics company was better at navigating the regulations. One reason to choose a 3PL is to avoid holdups at borders, so pick a company who can make that happen.
Loading and unloading is a necessary part of shipping, but it’s also a pure time and money sink. Most times the shipping department controls the load/unload time and drivers don’t handle freight directly. Watch these times carefully and understand how your 3PL partners find ways to reduce them. If they won’t or can’t, see if you can find one who has more efficient methods. A good 3PL transportation company might offer help controlling detention charges.
In a perfect world, every package would arrive in perfect condition – but nothing is ever 100% perfect. Nevertheless, damage rates should be as low as possible. In particular, watch out for spikes in damage claims. They can indicate your 3PL has room for needed improvements.
Additional KPIs used by good logistics companies are Cost per Pound, Cost per Unit or Cost per Mile. Tracking and monitoring these metrics allows you to understand and control costs over time. Finally, understanding inbound versus outbound freight costs are part of the Total Delivered Cost and efficiencies can be had on both ends.
Amstan Stands Out Among Transport and Logistics Companies