13 KPIs to Track With a Transportation Management System

Key performance indicators (KPIs) are assigned benchmarks for evaluating progress toward your company goals. For shippers, using your transportation management system (TMS) to establish and track KPIs is crucial to understanding the strengths and weaknesses of your shipping operations and optimizing for the future.

Deciding which KPIs to track can be difficult. That’s why GlobalTranz, a leading third-party logistics (3PL) provider that offers a full suite of shipping solutions, has created a list of the most important TMS platform metrics you should be monitoring and detail why they are important to your company.

Freight Shipping KPIs To Analyze in Your TMS

Transportation Management SystemAny effective transportation management system provides shippers with the information necessary to make informed decisions and determine the viability of current operations. Transportation management KPIs identify areas of system efficiency and uncover those that need improvement. Understanding KPIs can help shippers know exactly what changes need to be made to improve operations and decrease costs. The core KPIs to track include:

Freight cost for each unit shipped

This KPI is calculated by dividing the total costs for freight shipping by the number of units shipped during a defined time period. This metric is critical to understanding the average per-unit freight spend for your organization.

Outbound freight shipping costs compared to total sales

To determine this metric, shippers must divide outbound freight costs by net sales. This allows your company to differentiate between inbound and outbound freight costs.

Inbound freight shipping costs compared to purchases

Calculating this metric is nearly identical to the outbound freight costs mentioned above. However, in this case, you would divide inbound freight costs by net sales.

Transportation time

Transit time tracking can help you compare the expected shipping time and the actual delivery time for your shipments. This will allow you to make adjustments to your shipping strategies to ensure packages are delivered on time.

Claims versus freight costs

Dividing total loss due to freight shipping claims by overall freight costs helps measure safe delivery for each shipper and carrier. Higher numbers allude to opportunities for improvement, and lower numbers may validate current tactics.

Freight shipping billing accuracy

This KPI is computed by dividing accurate freight bills by the number of freight bills in the period. The goal of this metric is to help you understand whether and how often you are being charged too much for freight services.

Accessorial fees compared to total freight costs

Failure to track accessorial charges inhibits freight shipping management capability. Keep accessorial fees as close to zero as possible and create processes that offset these charges in the first place.

Percent trucking capacity use

Understanding how much capacity you utilize compared to available space on trucks can be determined by dividing the shipment weight by available shipping capacity. This gets tricky with more extensive, volume-based shipping, but it is possible. Bottom line, shippers should understand if utilizing more truck space would save them money.

Mode selection compared to optimal use

Mode selection is another tricky KPI. Focus on the shipments sent via optimal mode by total shipments sent. Obviously, shippers must know what the optimal shipping method is for each item, so it is best to evaluate the lowest-cost shipping mode over a set period of time.

Dwell time per shipment

This KPI measures wait and load times. This is important since you can be assessed dwell time fees by carriers. Extensive dwell time can also cause your shipments to be delayed. There are many ways to measure this, but shippers can simply create a benchmark and make note of the number of shipments above that number. This will give you a concrete data point indicating how often your shipments surpass acceptable dwell times.

Number of redeliveries

Carriers can assess a fee if they must attempt a delivery more than once. Measure the number of times your shipments were assessed a redelivery fee compared to the overall number of shipments to get a health check on the accuracy of your bill of lading (BOL) and other processes.

Damage in transport

Products that are damaged during transport may need to be replaced and redelivered — a compounding effect that will increase expenses. Determine how many products are damaged compared to overall shipments to identify the need for better packing procedures, new carriers or other solutions.

On-time deliveries

Determine what percentage of shipments are delivered on time compared to the overall number of shipments. This is an imperative metric. It will force you to analyze your entire freight shipping operation and your carrier and freight service selections.

Enhance Shipping Efficiency With Transportation Management System Data

Shipping efficiency relies on making the best decisions possible. A transportation management system enables that function. When done properly, KPIs established for your TMS shipping technology can help you make data-driven decisions, eliminate uncertainty by auditing system performance and determine further if operational efficiency is resulting in expected gains.

A Third-Party Logistics Provider Like GlobalTranz Can Help You Track Impactful KPIs

GlobalTranz is an industry-leading 3PL services company, providing best-in-class supply chain optimizationmanaged transportation (including LTL and FTL freight shipping) and shipping technology solutions to businesses of all sizes across the nation.

The GlobalTranz TMS software empowers shippers to maximize productivity and streamline operations in one easy-to-use shipping platform. Our cloud-based interface allows shippers to rate and shop carriers across multiple modes, optimize routing, create shipping documents, track and tender, and manage the shipment lifecycle from creation through delivery.

Our team of logistics experts will help you set up and analyze KPIs for optimal outcomes to save money, increase efficiency and stay ahead of logistics trends.

Are you ready to work with an industry-leading third-party logistics partner? Contact Us