Maintaining the best possible fleet for your shipping needs requires vigilance and the tracking of specific measures across their performance. If you do not know how well your carrier performs, explains Merrill Douglas of Inbound Logistics, you cannot determine if you are actually seeing a positive return on investment. While many shippers and carriers have moved toward digital, automated data capture, it is still necessary to create a carrier scorecard, which helps you see what carriers are better suited for your needs. Yet, all metrics and scorecards are not equal, and you need to know what metrics should be included in your carrier scorecard.
1. On-Time Performance
Having your freight delivered on-time is critical to your success. A late delivery could alienate customers, and if you are paying for on-time delivery, your freight should arrive when it is supposed to. Your carrier scorecard should include a value to represent how often freight arrives on-time, including both a numeric value and a percentage of all shipments through a given carrier.
2. Billing Accuracy
Carriers are going to make mistakes, and with the sheer number of today’s freight processes, it would be impractical to expect complete and throughout accuracy in billing. However, excess problems and inaccuracies in billing can cost your company thousands, and if you can isolate which carriers tend to exhibit the greatest number of inaccuracies, you can avoid these carriers unless absolutely necessary. Moreover, you can use this score to prioritize audits for these carriers.
3. Damage-Free Shipments
Although damage may occur during shipping, customers hold the business accountable for the arrival of damaged items. As a result, you need to know what carriers cause damage in both numeric and percentile scores, which will help you avoid the costs of returns and replacements. Furthermore, this metric can help the carrier isolate why the risk seems to be higher with freight shipped from your location.
4. Driver Performance
The scrutiny of drivers’ performance is growing. Drivers that do not adhere to regulations for hours-of-service operation or Occupational Safety and Health Administration requirements for personal protective equipment (PPE) can undermine the credibility and financial stability of your organization. Moreover, your freight could end up in limbo if a driver is detained due to illegal driving. As a result, you need to know what carriers have the highest performing drivers to ensure your freight reaches its destination on-time.
5. Load Preferences Per Carrier
As discussed in our previous post, “The State of the Capacity Crunch,” today’s carriers have to make do with less space and more shipments. If you know what types of loads each carrier prefers, such as less-than-truckload (LTL) or small package, you can make your freight more attractive, promoting faster transit and delivery.
6. Responsiveness of Customer Service.
As a shipper, you will have times when you need to call customer service at your carrier. Measure the performance and capability of the customer service at each respective carrier, including the average response time, duration required to complete your request, and the willingness of the representative you speak with.
7. Ease of Access During Auditing Processes.
Audits are part of shipping, and you need to have access to the data gleaned from audits. This includes understanding how a carrier’s auditing processes work and how quickly the audit information is passed along to your organization.
8. Equipment Maintenance.
Knowing a carrier’s fleet and equipment is in good, working order is critical to preventing untimely delays. Track the reliability and dependability of your carrier’s equipment by its age, the average number of times it has “broken down” and how quickly the issues were resolved, explains Deborah Catalano Ruriani of Inbound Logistics.
9. Re-Evaluation Timeline for Updating the Carrier Scorecard.
The carrier scorecard should not be static. You should have a measure of the age of the scorecard on it to identify when re-evaluation is needed. This helps you to avoid making decisions based on old data. For example, the re-evaluation score could be the actual date when the last scorecard was created for a specific carrier. This is also vital to ensuring the equipment maintenance score stays updated to reflect improvements made by a carrier.
10. Carrier Service Levels: Movement of Freight.
Every time your freight is physically moved from one trailer to another, or any other movement, it increases the risk of lost or damaged freight. Know what types of service levels are commonly used for your freight and how it moves, especially in intermodal transportation.
11. Overall Score Per Carrier.
Each of the aforementioned scores provides a comprehensive view of the quality and attractiveness of your carriers. Rather than reviewing each score before making all freight decisions, use these scores to assign a preference ranking score to each carrier. It will help you readily identify what carriers should be used for your shipping needs. As a result, your staff can know what carriers to eliminate or “star” for future use.
You cannot fix what you do not track, and having the appropriate metrics in your carrier scorecard is critical to selecting a carrier for your freight. Start using these metrics in your carrier scorecards today, and see how your efficiency and selectiveness will change to encourage the growth of your organization.