No matter what type of business you operate, Key Performance Indicators (KPIs) are crucial metrics that help monitor the strengths and weaknesses of your programs. In the logistics industry, an important point of focus is last-mile logistics.
While there are several strategies and points of focus that help logistics companies analyze programs, last-mile service is one that can be hard to measure through traditional metrics. As such, it’s important for shippers to set up a series of last-mile KPIs to monitor. These KPIs allow them to receive vital feedback from those that matter most – the customers.
However, these four KPIs will likewise help you ensure your white glove programs are well implemented.
The On-Time Delivery Rate
There are several aspects to the last mile that improves customer service – and fulfill their needs.
However, one of the most important is ensuring they receive their deliveries as promised. If a customer is promised their package by Thursday or paid for a specific delivery commitment, they need to receive it within that window of time. When the package is not delivered as committed, customers usually get frustrated with both the shipper and the brand from which they purchased.
A smart, proactive shipper will utilize advanced tracking technologies to stay on top of shipments to customers. If a delivery is going to be late – communicating this information to a customer can significantly reduce complaints.
Shipping Cost Per Mile
While customer service is crucial, it’s important to stay within your budget(s) to maintain profitability.
One of the best KPIs you can monitor is the overall cost per delivery. Since each company and product is unique, you’ll have to figure out a cost per mile that is acceptable for your business.
Likewise, you need to determine if you are going to cover shipping for the customer or if they can opt for enhanced delivery methods. If your customers are willing to pay for better last mile service, make sure to keep it affordable for them, and never, under any circumstance, be influenced to mark-up shipping costs.
Capacity Utilization or Hours in Motion
Last-mile logistics programs are not only operated by shippers. In fact, more carriers and delivery companies are actively involved in last mile service. If you’re a carrier, measuring the efficiency of your last mile logistics services will require significant reporting, planning, and fine-tuning. Many carriers focus on efficiency when delivering products to end-users by factoring the capacity utilization and hours in motion.
Capacity utilization is one of the most important last mile KPIs. This metric allows you to review the capacity of each delivery.
Hours in motion determines how many hours drivers spend in motion versus the amount of time they are stationary. This KPI helps show the performance of drivers. It also impacts the fuel—how much time is spent idling—as well as the ability to get goods delivered on time. This number is achieved by dividing the total amount of time drivers spend on the route versus the number of hours in motion.
Customer Complaints & Damage to Freight
In the end, last mile services are intended to satisfy the customer’s desire.
How many customer complaints are you receiving?
Are they centralized to one location, route, truck, or driver – and if so; why?
Complaints from customers tell you what your service looks like and where you have room for improvement. What people complain about most is where you need to develop your business.
Damages count as a complete loss for both the shipper and the business for which they’re shipping. It’s necessary to reduce the number of damages to improve the bottom line and enhance customer service.
In the end, you’ll have to determine what last mile KPIs are important for monitoring the impact of your last mile logistics program. Each company and every customer has specific needs or desires for their order fulfillment and delivery. The businesses that realize this will produce better results.