The freight forwarding industry faces many uncertainties that overwhelm its operations. Every detail impacts supply chains, from fluctuating freight rates to complex structures, container shortages to port delays, labor shortages to political turmoil, convoluted paperwork to unpredictable demand. For a business to survive these harsh conditions and be profitable, tracking key statistics, or Key Performance Indicators (KPIs) reflecting performance is vital. Here are the top 10 KPIs & metrics every freight forwarder should track, for a successful freight forwarding company.
Time and Tracking KPIs and Metrics
On-Time Deliveries
Digital tracking enables forwarders to easily monitor client shipments and estimated arrival times (ETAs). The on-time delivery rate shows the percentage of orders delivered by or before the ETA. A subset is DIFOT (Delivery In Full On Time) which only considers full, on-time deliveries. This helps forwarders understand if they met supplier expectations and advise clients on reliable routes and liners. It's the key metric clients use to select a forwarder.
Average Wait Time
This is the time a shipper takes to load cargo into a truck, calculated in minutes/hours from the truck's arrival to departure. As constant intermediaries, forwarders must know delay-prone areas. Carriers charge premiums for long waits, so forwarders should anticipate this in quotes.
Order Accuracy
The ratio of undamaged, issue-free deliveries shows the degree of problems from order to delivery. Return shipping doubles costs, so it interests customers. Shippers can discover insights on potential delivery issues to make transportation safer.
Lead Conversion Time
This is the time from a sales lead identification to a sale. Reported in days, it shows how long acquiring business takes and sales agent efficacy. It helps management spot delays (quoting, pricing) to improve with technology and measure productivity.
Freight Rates KPIs and Metrics
Average Freight Cost Per Tonne Shipped
With volatile, increased spot rates, customers want forwarders' expertise on cost-effective routes. Calculating freight costs per route and season helps forwarders advise clients and know industry trends.
Ratio of Value-Added Costs
Freight costs add numerous surcharges. Forwarders should minimize customer exposure. Tracking surcharge ratios helps win and retain clients. It can be total freight costs or absolute currency amounts.
Average Margin
This key business metric is profit percentage of total customer price. To understand overall profitability, varying customer margins over time are averaged. Although standard margins are used, they require tweaking to retain/win customers, so tracking is essential.
Internal Operations KPIs and Metrics
Quote Conversion Ratio
This is the rate of quote acceptance. It determines pricing team quote acceptance rates. Rejections can be analyzed by reason and shipment to improve efficiency and conversion ratios.
Number of New Sales Leads
Sales can track leads traditionally or digitally. Lead volume and conversion rates indicate future business health and where marketing efforts are needed. It is a point-in-time whole number.
Shipment Volume and Capacity Utilization
Logistics container/truck space utilize this measurement. 100% utilization is ideal, so any unused capacity has monetary impact and indicates inefficiencies. Forwarders can use trends to better advise clients and liners on maximizing utilization.
As part of a global logistics network, Freyt World members are spread across various countries, offering diverse services and catering to a wide range of clients. However, one constant is that KPIs measure performance over time toward specific objectives, aiding business operations and fostering success. These KPIs & metrics every freight forwarder should track provide targets for teams to aim for, milestones to measure progress, and insights that enable people throughout the organization to make better decisions."