These days, thanks to the widespread availability of business intelligence solutions, transportation companies can track a staggering amount of metrics. But just because a company has the ability to monitor a metric, should they actually spend the time and effort to do so?
While there are many ways of approaching that question, in my experience, metrics worth measuring are both actionable and have an impact (direct or indirect) on a business’ bottom line. With that perspective established, below are a list of four metrics that fit the above criteria and, by extension, should be tracked by every transportation company.
On Time Delivery Percentage
When your customers place an order with you, they go into that transaction with a number of expectations. They expect the equipment they rented to be fully ready to be operated. They expect all of the assets they ordered to be included in the delivery. And above all else, because they keep tight schedules, they expect their delivery to be on time. When any of these expectations aren’t fulfilled to the tee, customers tend to become upset. Because of that, on time delivery percentage is a very effective gauge for measuring customer satisfaction.
Based on their on time delivery percentage, transportation companies can evaluate whether they have the capacity and efficiency to adequately support their customers’ demands. Lower rates of on time delivery fulfillment indicate that some force is impeding transportation operations. From there, it’s up to companies to identify the causes of their inefficiency and respond accordingly.
Average Rental Call Off to Pickup Time
The previous section of this blog post covered the importance of delivering equipment to customers on time. Well, it turns out that the exact opposite is of vital importance to transportation companies as well.
“Average rental call off to pickup time” is a fairly self-explanatory metric. To calculate it, a transportation company simply needs to determine how long it typically takes for them to recover an asset once it’s no longer by need their customers. The reason why this metric makes this list is because of how it indicates potentially risk to rental revenue and exposure to damage and theft. Simply put, the longer a called off asset languishes on a job site, the higher its risk of being harmed or stolen, and anything that can take assets out of action has the risk to diminish rental revenue. Should a company find that its average rental call off to pickup time is high, they should conduct a self-audit to identify process bottlenecks or resource shortages that might be responsible.
Internal Transfer Percentage
For transportation companies with multiple locations, striking the right fleet availability balance across their branches can be tricky. What’s more, it can often be difficult to see that assets are unevenly distributed simply because branches are primarily focused on themselves (and not as their organization as a whole).
Thankfully, internal transfer percentage is a metric that provides sheds a lot of light on this issue. A higher internal percentage indicates that equipment assigned to suboptimal locations could be leading to decreased availability and increased transportation costs.
Transportation Recovery Percentage
Finally, our last metric pertains to an aspect of transportation operations that can be easily overlooked. Moving equipment to and from customer job sites isn’t without cost, and as a result, transportation companies charge for this service. Transportation recovery percentage measures the degree to which these costs are covered by charges to customers. Lower percentages are often indicative that transportation is being given away or is being insufficiently priced. By charging more appropriately, transportation companies can offset a significant aspect of their day-to-day operations.