How To Measure Carrier Performance

In order to make informed decisions when choosing carriers to transport your freight, various criteria should be used to assess carriers. Measuring carrier performance will ensure that you are receiving the service you are paying for. Any failures to your service must be taken into account. Below are five important factors to use when measuring carrier performance.

On Time Performance

Measuring on time performance is one way to ensure you’re getting the best service from your carrier.  Whichever option your company chooses to measure on time performance should be shared with the carrier so they know the expectations by which they are being measured. The most common logic is comparing the scheduled pickup to the actual pickup date; deliveries can be measured the same way.  Keeping track of this metric month after month can reveal trends that may be damaging to your supply chain.

Communication and Responsiveness

Does your carrier reply to you when you have an issue? How long does it take for them to get back to you with a resolution? These requests need to be measured to ensure you’re receiving the customer service both you and your company deserve.  Keeping an action tracker of when an item is addressed with your carrier and their response time will allow you to measure their communication, responsiveness, and follow up. No matter how good their pricing may be, a carrier is only as good as their response time.

Invoice Accuracy

Invoice auditing is important when taking carrier performance into consideration. Measuring the accuracy and efficiency of carrier invoicing is beneficial for a multitude of reasons. Auditing invoices will allow for the elimination of billing errors. More specifically, you will be able to determine if contracted pricing is being met and if the invoices are being billed to the correct party. In addition, this procedure will ensure that all of the required supporting documentation is being provided for payment, which will help with efficiency. Verifying that invoices are being properly issued will help to determine if a carrier is meeting service standards.

Claims Management

Examining a carrier’s freight claims is essential when assessing carrier performance. Carriers should be able to report claims statistics. It is necessary to measure the amount and types of claims filed and to analyze the timeliness of claims filing. Using these metrics for carrier freight claims will provide great insight when evaluating carriers.

Supplier Business Reviews (Supplier Scorecards)

The above mentioned measurements will not be useful if they are never shared with your carrier. Thus, the final way to measure your carrier is through supplier business reviews (SBR’s). These reviews can be held in person or via web conference and are a great way to keep the lines of communication flowing freely.  The performance of a carrier will be presented through the use of a Supplier Scorecard. Make sure to provide any data that will be reviewed a few days prior to the meeting so the carrier can have an active discussion on the problem areas.  Seeing as though communication goes both ways, be sure to take the time during these meetings to present areas for improvements and ask for feedback on what your company can do better to help your carrier improve.

Allyn International has a sourcing and consulting department that can help your organization manage your carriers’ performance to meet and exceed expectations. If this is something you’d like help with, contact Allyn Logistics Sourcing Group (AllynLogisticsConsulting@allynintl.com) for assistance related to measuring carrier performance.

Contributors: April King and Cleve George

References:

http://www.inboundlogistics.com/cms/article/measuring-carrier-performance/