With industries embracing faster, more reliable, transparent, and digitally-driven logistics operations, the significance of logistics service providers (LSPs) is growing exponentially. At the beginning of the decade, the global logistics service provider industry recorded a revenue of USD 961.8 billion and is projected to exhibit a growth rate of 10.7% CAGR until 2030.
However, the ever-changing landscape of the logistics industry is teeming with disruptions like same-day deliveries, next-day deliveries, and ultra-fast deliveries within 30 minutes. These trends are pushing businesses in various sectors to adopt multiple carrier partnerships to leverage the specialized capabilities and expansive networks of different carriers to meet the growing expectations of customers for faster and more flexible delivery options.
However, measuring individual performance and ensuring seamless management across all the carriers in a multi carrier ecosystem is a challenge of exponential complexity. Owing to the disparate logistic components and siloed data, businesses are unable to set reliable metrics for performance evaluation and measure the KPIs for each carrier partner. As a result, businesses struggle to obtain accurate insights and comprehensive visibility into the performance of their carrier network, hindering effective decision-making and optimization efforts.
Below, we share five best practices businesses with multiple carrier partners should follow to track KPIs and avail reliable and comprehensive performance assessment.
The foremost thing to do is to consolidate the operations. With different carrier partners, businesses find it difficult to gather all the operations data in one place and end up juggling multiple software interfaces for multi carrier management. This breeds inefficiencies and confusion, leading to errors and higher operational costs owing to the lack of data-driven optimization.
On the other hand, smart multi carrier management platforms help businesses consolidate their operations in one place and manage all the carrier partners from a single dashboard. All the consignment statuses, field events, and carrier tags are standardized, which means businesses have a highly refined data repository at their disposal.
Setting KPIs is not enough, it is important that these KPIs are SMART, namely – Specific, Measurable, Achievable, Relevant, and Time-bound. Now, every multi-carrier ecosystem varies owing to the type of business model, transportation requirements, the scale of operations, and other such criteria. Hence, setting the right KPIs for specific tasks is essential to ensure that performance evaluation is thorough and relevant.
Setting the right KPIs also enables businesses to control and manage all operations in a better manner and improve multi carrier management via strategic business understanding. Further, it is important to note that processes and operations can evolve, which means that their KPIs should also change from time to time. Hence, setting the right KPIs and updating them as the business evolves is the key to successful KPI benchmarking.
Every carrier partner has its unique strengths and service offerings. Hence, setting the KPIs with random variables that are not consistent across all the partners would produce unreliable results. Therefore, it is important to set KPIs keeping the variability of standard cost and operation functions across all the carriers.
We recommend creating KPIs based on three core business verticals, namely – serviceability (service offerings of a carrier partner), costs, and delivery requirements. This would ensure sticking to the most crucial performance indicators, such as fuel consumption rates and percentage of online deliveries, instead of random KPIs, such as the number of deliveries completed.
Tracking KPIs for multi carrier management requires a comprehensive understanding of the overall trends and effects of a particular process or operation on profitability or efficiency. This means businesses need actionable insights and rich visualizations that help answer business-related questions rather than pure numbers that still require professional analysis for business intelligence.
Intelligent multi carrier management platforms offer in-built data analytics and advanced reporting functionalities that help businesses make sense of all the KPI data accumulated over time. Further, smart capabilities such as automated incident management ensure effective KPI measurement and monitoring by sending alerts for missed KPIs, vulnerable KPIs, etc.
Setting customer-facing KPIs is as crucial as setting KPIs for business partners and field operations. Collect customer feedback proactively and identify the red flags, such as the most frequently cited non-delivery reasons in a city, which can indicate the most prevalent cause of non-deliveries. Further, checking customer feedback also helps businesses identify any new KPIs that they should be measuring to ensure greater customer satisfaction.
This discussion makes it quite evident that without having a reliable and advanced technological platform for multi-carrier management, it is impossible to set, track and measure the right KPIs. Intelligent multi carrier management platforms come with in-built carrier management modules, such as vendor selection, carrier prioritization, cost-efficient and rule-based order allocation, and automated KPI assessment for improved performance. Hence, investing in such platforms is a must to get the best value out of multi carrier partnerships and unlock improved operational efficiencies and business profitability.