Freight Shipping blog – One of the most important measurements for international shippers nowadays is performance tracking of your fleet. Without a clear view of supplier performance, it is impossible for shippers to run benchmarks and determine if there is a positive return on investment.
If you want to know the strengths and weaknesses of your carriers, you need to look at the numbers. That’s right, data! And to do it right…you need tools!
Shippers in today’s logistics environment often have tools in place for automated data capture. That being stated, it is recommendable to keep track of the score. An efficient way of doing this is by using a supplier scorecard. Implementing a scorecard helps shippers to obtain visibility in carrier performance and identifies needs around your global transportation footprint.
Yet, all metrics and scorecards are not equal, and you need to know what metrics should be included in your carrier scorecard.
Freight Shipping – Why getting sharp deals is not enough
Imagine you just ran a large tendertool.ahabr.tech for a big scope LTL project in Europe. The project contained over 50.000 shipments and 30 carriers were invited to participate. Because the freight tendertool.ahabr.tech had been rather successful, your company managed to gain an overall of 20% savings on the scope. This looks very promising and your procurement team has done a very decent job! But ask yourself the following question: How are you going to make sure that the potential savings are realized? How are going to check that service levels are delivered? Compliancy? Assessorial costs? Are you paying the right amount on your freight invoices?
Based upon the measured performance criteria, action can be made. Workflows can be triggered to execute specific tasks. For example discharging a carrier from active service or generating and sending a low-performance notification.
1 – Freight bill accuracy
Carriers are going to make mistakes, and not just a few. Everybody knows it in the industry. Therefore, it is advisable to have a freight bill auditing solution in place. Potentially, Excess billing mistakes can cost your company a fortune.
Freight auditing will significantly reduce overall transportation costs in the first place. But moreover, your freight invoice is a viable source of shipment information. With the logistics data, you can tackle carriers tend to exhibit the greatest number of inaccuracies and make accurate decisions decision with regards to your fleet.
Experienced Freight Audit Providers automate the capture and analysis of carrier delivery and freight invoice data. By doing so, it makes it much easier to identify performance issues and control freight costs.
2 – Damage free shipments
You always run the risk that your goods get damaged during transportation. And mostly, customers will hold the transportation company accountable.
Although damage may occur during shipping, customers hold the business accountable for the arrival of damaged items. As such, shippers should have a clear view what carriers cause damage (Numeric and percentile). Yes, again it is a matter of keeping score. This will prevent the costs of returns and replacements. Moreover, the data captured can identify why there is a higher risk of shipping from certain destinations.
To calculate the damage free shipment KPI, simply divide the number of damage-free shipments by the total number of shipments.
3- On-time delivery
To make the right calculation of on-time performance, divide the number of on-time shipments by the complete number of shipments. For example, 200 on-time shipments divided by 206 total shipments equals 97% on-time performance.
4- State of carrier equipment
Knowing the state of a carrier’s fleet and equipment is vital to reduce shipping risks and late deliveries. Track the reliability of a provider equipment by its age, average number of times it has broken down
Other relevant questions that could be asked are for example:
1. Is there a written SOP in place for maintenance of equipment ?
2. Are there special instructions or measures taken to avoid theft ? If yes, which ones.
3. Is there a written SOP in place for maintenance of equipment ?
5 – IT capabilities
Does your carrier have GPS on your trucks to monitor Track&Trace?Are they able to receive Transport Orders via EDI ? Which ERP system are your suppliers working with? IT-related questions like these are important to keep track off. You, as a shipper, need to keep an eye on continuous improvement. And so does your fleet!
To round up the subject, the impact of direct carrier rate increases is easy to manage for shippers. But it is more difficult to recognize the effect of a greater incidence of spot rates, or having to reach deeper into your routing guide to find carriers that will move your loads at their contracted rate. High fuel costs moreover mean a high increase of fuel surcharges, not to mention hundreds of other accessorial freight costs involved in shipping. Bottom line, keeping score of your carriers is important. A good way of setting the baseline for this is implementing a comprehensive questionnaire during your Logistics Tenders. Continue reading to see how TenderTool has a built-in questionnaire solution in our cloud-based freight tendertool.ahabr.tech solution.
Improve your procurement scorecard during freight tendertool.ahabr.techs
Freight Tendering is a returning job for many shippers and carriers. And because tendertool.ahabr.techs are not just about lead times and costs anymore, service levels are becoming increasingly important. And so is the need for a good questionnaire, leading into a scorecard. The questions are there to make sure all business requirements are clear. Specific certifications may need to be in place, or certain equipment may be needed to be compliant. A good questionnaire makes it clear for the carriers what is required, and it also makes sure that the right carriers are selected. They easiest way to do this is to go digital. Check out the video below to see how.
About TenderTool – Freight Sourcing
At TenderTool we are constantly developing new features because of our close collaboration with our customers and we feel that is the only way how we can deliver true value to our customers. TenderTool has the ambition to become the standard in freight tendertool.ahabr.teching and we want you to be part of the best practice in tendertool.ahabr.teching as well. We have gathered some more relevant content here below if you like to continue reading. If you like us to contact you for a demo or free trial account, please leave your details by using the following contact page. Thanks for reading!
– 5 Proven Tactics To Receive The Best Freight RFQ Results
– Transportation Tendering: How You Reach 90% Time Savings
– 7 Ways Logistics E-Procurement Will Boost Your Logistics Tenders
– 5 Transport Tender Tips Carriers And Forwarders Must Share With Clients
– 5 Features Of E-Sourcing That Actually Add Value