Key trucking KPI's to track to get the best out of your business
Importance Of Measuring KPIs For Your Trucking Business
So, you’ve decided to upgrade to a digital transport management system; now, for the fun part – running reports and analysing metrics. If you’re new to your trucking TMS, it’s likely you haven’t explored its full range of features yet. So, where should you start? What trucking KPI metrics should you be tracking? Well, the short answer is – it depends.
There are literally hundreds of different transportation KPIs that you can measure and analyse through the MyTrucking app. Before diving in, start by deciding what information is most important or valuable to your business, then go from there. After all, you don’t want to become distracted by figures and statistics that aren’t relevant to you yet.
Although we can’t tell you the best trucking KPIs to track without speaking to you about your challenges and goals, we can offer some broad advice based on our experience with trucking companies in New Zealand and Australia.
KPI dashboards won’t directly impact your bottom line, but they will help to identify areas where you can cut costs and will help you to boost ROI through effective transport management. Do you need to reduce costs? Or perhaps you’re struggling to retain customers? The metrics that we’d look at with these objectives are quite different.
Financial KPIs To Track For A Trucking Business
A transportation KPI dashboard can help you overcome challenges to transport systems of old, cutting costs and increasing revenue. In fact, we typically find that companies who move from manual planning to a TMS are able to reduce their fleet operating costs by 10-30%. What would a saving of 20% of your fleet’s annual kilometre costs mean to your business?
Ready to start saving? Here are some transportation KPI examples to get you started:
- Profit One of the most important metrics to track, your profit, gives a snapshot of how successfully your business is performing from a financial perspective. Look at both your gross and net profit margins for a good overview of your current position.
Cost per kilometre Understanding your operational costs at a per-kilometre level can help you manage your expenses more efficiently and ensure you’re charging the right amount to your customers. Calculating your business’s cost per kilometre is a straightforward task with TMS software.
Revenue Monitoring the discrepancies between your projected revenue and your actual revenue can help you better understand how your fleet is performing.
Day sales outstanding (DSO) DSO is a straightforward calculation that should be looked at on a regular basis. It is a measure of the average length of time it takes your company to collect on its invoices after a sale has been made. While it may feel as if this is out of your control, by having all the information, you can be more proactive in reducing your payment window.
Tracking Customer Metrics In A Trucking Business
We all know that simply running an efficient hauling business isn’t enough to keep the wheels of your business turning. Without a steady stream of loyal customers, your fleet is worthless. For this reason, when looking at transportation KPI metrics, we suggest all trucking businesses also take a close look at their customer data.
Customer acquisition cost While KPI transport logistics and tracking metrics usually centre around increasing revenue and decreasing cost, they often miss out on one crucial point – how much does it cost your business to get one new customer? To find this figure, divide your total cost of acquisition, including marketing, sales etc by the number of new customers you secured over a fixed period. From this information, you’ll better understand the most effective marketing techniques for your business and the cost of investment to bring on a new client.
Customer lifetime value (CLV) CLV is the prediction of the total profit you can expect to receive from a client over the course of your working relationship. This KPI is helpful when looking into channels that can bring you new customers or help retain your existing pool. You may also find ways to improve customer experience with TMS software, maximising the value you receive from each new client.
Distance KPIs That Need Tracking
When we look at transportation KPI metrics, the efficiency of routes is a major indicator of where any company can improve. Distance is a key KPI for truck transport businesses, and a TMS can help identify areas that are costing you money. Once you know how your business is tracking in terms of distance KPIs, you can look to improve shipping speed with a transport management system.
Average length of haul The most essential KPIs, according to popular belief, are tracking fuel prices and the balance of freight between spot and contracted trips. However, by tracking the average length of haul, you can get new insight into total load profitability. After all, more shorter hauls may result in larger profits than fewer longer hauls. Everything hinges on the availability of equipment and resources, including drivers.
Kilometres driven per truck Another carrier freight KPI that will bring value is the kilometres per truck each week. To find this figure manually, divide the total kilometres driven by the number of trucks used – then divide that number by the number of weeks in the month. The result is your average kilometres driven per truck per week. Of course, a TMS can do all the sums at the click of a button and allow you to save the results for later comparison.
Percentage of empty kilometres In addition to your weekly driven kilometres, all trucking companies should be aware of what they’re losing in empty kilometres. You can find the percentage of empty kilometres by subtracting your revenue kilometres from your total kilometres and then dividing this figure by your total kilometres. Multiply the result by 100, and you’ll have the percentage of empty kilometres your business is currently spending money on.
Use MyTrucking TMS To Organise Your Entire Business
MyTrucking TMS has been designed for truckers by truckers. Created to offer the technological improvements of a digital transport system to small and medium businesses across New Zealand and Australia, it’s easy to use and includes all the features you’d want from a TMS. From custom reports on kilometres travelled per vehicle to route planning, it has everything you need in one place.
Whatever KPIs you choose to track, they should be aligned with your company’s strategy and objectives. Make sure to look at as many performance indicators as possible to find the KPIs that are right for your business. Once you’ve chosen them, update your figures regularly to get a clear overview of your business.
Learn more about selecting the best TMS for your business.
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