How to Measure with Meaning: Identify Parcel Performance Indicators
As parcel shipping evolves, so too are the metrics and indicators we use to measure its performance. A job well done is no longer defined as simply moving products from point A to point B. It’s also about delivering on time and under budget. And as the industry continues to shift, the future of how we manage parcel shipping will demand more data – which means you’ll need to identify and track more parcel performance indicators.
A need for new and relevant parcel shipping metrics.
From the number of steps we take in a day to the number of users who clicked on an online ad, technology allows us to measure both our personal and professional worlds. We’re in a measurement craze right now, which can make it hard to know how to intelligently sift through the plethora of available data analytics and Business Intelligence.
So, when it comes to measuring parcel shipping performance, knowing where to start can be a daunting task. It’s best to look at your own parcel shipping ecosystem first, and ask yourself the following questions to start to understand what metrics are available – and important:
- Which carrier services are we using?
- How do we know whether our carriers are performing the services under contract?
- How do we know we’ve selected the most efficient shipping option based on delivery deadlines, package destination, carrier rates, performance and other mission-critical factors?
- What is my net landed cost of goods per parcel?
- What percentage of my net landed cost of goods is comprised of accessorial charges?
- Which accessorial charges occur most often? Is there a trend?
- Residential surcharge?
- Fuel surcharge?
- Bad-address penalty?
- Extended area surcharge?
- Third-party account number penalty?
- Large package surcharge?
- What is my average parcel size?
- What are my most frequent shipping lanes?
- How often are my parcels late, lost, or damaged?
And if you’re shipping internationally, there are additional considerations:
- Which surcharges and fees occur most often with cross-border shipping? Is there a trend?
- Cross-border processing fees?
- Brokerage fees?
- Additional insurance fees?
A Clearer View of Your Logistics
Every logistics leader wants to know that carrier procurement is aligned with strategy and that they’re receiving the delivery outcomes for which they’ve paid. Questions like these provide insight into your current parcel shipping environment: what your company ships, how your company ships, how much your parcels weigh, where your parcels go, how long it takes, and how much it costs – to name a few! They’ll also give you a clearer view of what’s happening inside of your organization: what you need to fix and where you’re winning already. You may find you have to adjust course if you want to position your operations to seamlessly scale during the next peak season, or you may discover that if you just stay on path, you’ll continue to optimize your transportation spend and deliver on your customer promise.
Simplify the Complexity of your Parcel Shipping Data Capture
If you’re feeling overwhelmed by the sheer number of indicators we’ve listed, start small and just pick two to begin. As stated by our V.P. of Business Intelligence, Mike Eisner, “When businesses begin to connect the data from shipping… complex decisions and tasks get simpler.”
If, however, you’re feeling overwhelmed because you don’t have immediate access to this kind of data, then you need to consider whether it’s time for a Transportation Management System (TMS) for parcel shipping – complete with Business Intelligence – to give you the insight you’re seeking. A TMS for parcel shipping with Business Intelligence will connect your data from carrier selection… to parcel shipping execution… to carrier invoice payment, and then synchronize it for reporting. Suddenly, you’ll have a 360-degree view of your shipment operation and you can ask sophisticated questions of your data to drill down into those performance indicators to get insights that make sense. Even better: you’ll create a data-driven culture in your shipping environment, where everyone can answer their own questions and make more informed, data-driven decisions.
Don’t Get Left Behind
According to Salesforce, approximately 89% of all American businesses are investing in data and data analytics processes. With so much data being captured, it stands to reason there will soon be a very definite segregation between those businesses leveraging the benefits of business intelligence, and those that do not.
To learn more about how you can leverage a TMS for parcel shipping in your organization, download our e-book, Quick Guide: Critical Capabilities of a TMS for Parcel Shipping.