How to Measure Carrier Performance
As a freight brokerage operation, Trinity arranges the transportation for approximately 18,000 shipments per month. When it comes to monitoring the service levels of a trucking company, we've heard and seen it all (and lived to tell about it)! Our freight management clients benefit from this hard earned expertise when Trinity helps guide their carrier performance measurement process using our transportation management system (TMS). However, even if you don't have a web based visibility tool such as ours, it's important to create some sort of system in which you are able to track not only the factors, but also the monetary impacts of them. Here are some of the factors you should consider when organizing your own structure. These will help ensure you're seeing an accurate portrayal of your selected providers' service in order to make the most informed decisions when routing freight.
Do they own a clock?
How much did you have to fork out in overtime pay to dock workers when the truck showed up past shipping hours for the pickup? Think about when that delivery you were expecting for your "just-in-time" facility came in so late that your assembly line was shut down. How much labor and lost production was wasted waiting on the truck? Tally up the revenue lost when your customer cancelled the order they'd been waiting too long on. Don't forget the dollar figures associated with your customer's satisfaction, especially if you've actually lost customers due to a trucking company's problematic reliability. It will hurt to see it, but go ahead and calculate the lifetime value of that client and factor that into your metrics when measuring shipping services.
The invoice says how much more?
You agreed to a price, but the invoice arrives, and guess what? It's different than what you agreed upon! Hidden fees, overcharges, and billing errors are often overlooked as metrics used to analyze a carrier performance, but they are important to monitor. If a carrier has provided a rate sheet or a quote which positions them deceptively lower than the competition only to hit you with extra accessorial fees, you may have been better off working with the other carrier who submitted a higher price, delivered on time, and submitted a correct invoice. Don't panic if you lack the structure to perform freight bill audits, there are reputable companies out there who can perform this service for you, often at a percentage of savings cost. Trinity's Customized Logistics division can audit freight bills utilizing our TMS, generating customized reports as needed to show where discrepancies are occurring.
How many different types have you heard? "I can't deliver today because our truck is in the shop, we have to repower it" or "It's snowing too hard, we can't get over there today" or "The driver is sick, we'll have to reassign the load". What would you consider to be a "service failure"? A breakdown, a missed pickup, a slipped delivery appointment, damaged product? All of the above? It's important to define what your company considers to be a true failure in a trucker's service record. Once you define it, you can measure it. That means when you are selecting the provider for a critical shipment, you'll be able to see a proven record of success or failure, choosing accordingly to ensure the highest chance for a successful delivery to your customer, no excuses required.
You'll get more flies with sugar
Your brand is a promise, and the people you hire to deliver the product are extensions of the promise, and extensions of your brand. That's why the professionalism and courtesy of the shipping service provider you choose is paramount to the successful delivery of your brand's promise to your customer. Anyone who shows up on behalf of your company can leave an impactful impression in the way they carry themselves. If they're pleasant, appreciative for the freight opportunity, and eager to serve the needs of both your staff and those they meet during delivery to your customer, that behavior should be rewarded with more of your business. Track positive feedback on drivers as much as you track negative remarks, each carry significant weight in the end score.
Cracked, leaking, or plain out busted
Overages, shortages, and damages to the product aren't always the transportation provider's fault. Bear in mind, these comments are only directed when the driver is to blame after you've investigated all evidence. Whether it is inbound materials for your facility or outbound from your facility, it's never good to receive product that's been damaged by actions of the driver. By tracking the instances, you can spot trends with specific drivers and the motor carriers they represent. By learning who travels with the most special care of your "precious cargo," you can make better decisions about who's getting your business.
For more information on measuring carrier performance, contact Trinity Logistics at (866) 603-5679. Allow us to take a load off your mind, literally!