Logistics, when boiled down to its most basic form, is a game of numbers. These data points are the key to optimizing a supply chain, increasing profitability and reducing costs. That’s why data is such a valuable tool for managers and their teams; using the data they collect from their shipping initiatives logistics teams can finetune their strategy to increase efficiency.
There are dozens of metrics that can be collected and studied — an entire book could be written on this very topic — but there are some vital stats that should be of interest to every company that makes shipping goods one of their primary key performance indicators. Whether you have an internal team handling the warehousing, fulfillment and shipping of your goods or you outsource one or more logistics services to a third party, these are the most important metrics that should dictate your shipping success.
On-time delivery rate (OTD)
In laymen’s terms, how often are your shipments arriving when they are scheduled to (i.e., on the date and at the time they are meant to)? Late shipments sometimes result in the loss of a client, especially if the final destination is the consumer. In an era when fast and affordable shipping is in high demand, on-time delivery rates are crucial for the success of any business.
Keep in mind that on-time delivery doesn’t only mean not being late; early shipments can also create inefficiencies. However, there are times when a difference can be drawn between the promised date and the required date. The promised date is the day the shipment is supposed to arrive while the required date is the latest the shipment can arrive; it is the deadline the shipment must meet.
Damage and loss claims ratio
Whether freight arrives damaged or is lost in transit, the end result is the same: unhappy customers who have yet to receive what they have ordered. While zero damage claims is the endgame for every shipper, this number is virtually impossible to achieve. The name of the game is reducing this number to its absolute minimum, and keeping it that way. There are many ways to reduce damage and loss claims that include reducing the number of times items are handled by warehouse material handlers, implementing proper packaging procedures, and using RFID freight tracking.
Costs can range from:
- Freight costs
- Warehousing space
- Software and IT investments
- Third-party fees (carriers, logistics companies, etc.)
In an age where end users want affordable shipping (often free), reducing the amount shippers spend on sending products is the key to keeping customers happy without breaking the bank. One of the best ways to reduce shipping costs is diversifying methods of shipping. There are times when air or rail travel may be more cost effective than road. There are also times when costs can be reduced by sending freight via:
- Parcel shipping
- Less than truckload (LTL)
- Full truckload
- Partial truckload
Adopting intermodal shipping, which adapts multiple means of transportation, can often be a cost-saving method for businesses. It takes some coordination and planning but can ultimately be worth it if the freight meets certain criteria and shipping time constraints.
Optimize your supply chain today
Ready to work with a company who can optimize your shipping investment, reduce your claims ratio to as low as 0.0009%, and deliver your freight on-time? We’re ready to work with you too! Contact King Solutions to get started today.