KPIs for Transport and Logistics: Types, Examples and How to Use Them

Transportation KPIs are numerical indicators used to analyse performance in the different areas in which LSPs operate. They are the starting point both for measuring the evolution of logistics activity over time and for detecting friction and implementing corrective action. A fundamental mechanism in continuous improvement methodologies such as lean logistics, they are an effective way of boosting LSPs’ profits and monitoring innovation projects.

Within the cost structure of any product, logistics carries significant weight. In this article, we will detail some key transport and logistics kpi examples.

The value of transportation KPIs: What are they and what is their purpose?

Logistics indicators or KPIs for transport and logistics are data or sets of data used to:

• Measure the evolution of a process or activity objectively.
•  Compare what is actually happening to the established business objectives.
• Make data-informed decisions.

KPIs for transport and logistics usually come in the form of a percentage, ratio or a specific figure and are always calculated in relation to a certain period of time.

Transportation KPIs are organised according to the main areas of logistics: supply, storage and transport, and goods distribution. In addition, as they are used to measure objectives, they are related to:

• Operational cost: generating products at the lowest possible cost.
• Time: saving time in processes.
• Productivity: producing more with fewer resources.
• Service quality or level: fulfilling customers’ expectations.

How is performance measured in logistics and transportation?

There are four main steps:

1. Defining business objectives and areas: this first step sets the reference framework for transportation KPIs, as objectives establish the goal to be worked towards in a specific period of time.
2. Selecting indicators: this involves establishing how the KPIs will be calculated (formula and information sources), their names and how they will be represented (a percentage, a number, etc.). Responsibilities are defined and a logistics KPI dashboard is usually used to display the metrics.
3. Implementation of the KPI system: this step is where the KPIs are put into practice, in a way that suits each work area.
4. Monitoring of KPIs for transport and logistics: performance in each area is monitored in order to compare and see the evolution of the activity over time.

Logistics KPI examples and types

Transport key performance indicators can be related to a certain process or a set of processes. Let’s look at examples of the most common KPIs for transport and logistics:

Supply or purchasing KPI examples

• Order confirmation time: this measures LSPs’ speed. The formula is as follows: time elapsed between reception of order and confirmation / target order confirmation time
• Lead time: this calculates the time that passes between the customer placing an order and it arriving at the warehouse. Formula: date order is received - date purchase order is issued
• Complaints: this measures how effective the LSP is at sending goods. Formula: number of satisfactory products / number of products received

Transportation KPI examples

• On-time delivery: this measures how many deliveries have arrived on time as a percentage. Formula: number of on-time deliveries / total number of deliveries made × 100
• Damage and loss: this measures service quality. Formula: number of goods damaged or lost during transport / total number of goods transported × 100
• Cost per kilometre: this is a common KPI for recurring shipments. Formula: total order cost / total kilometres covered
• Urgent shipments: this measures the percentage of unplanned shipments compared to the total. Formula: number of unplanned shipments / total number of shipments × 100

Storage KPI examples

• Order preparation quality: number of correct orders / total number of orders × 100
• Inbound and outbound throughput: this helps to measure efficiency in the reception and dispatch of goods. For example: reaction time upon reception = time between reception and availability / target reception time
• Total space use: this calculates how much space is occupied in the warehouse. Formula: warehouse space used / storage space available in theory × 100

Green logistics KPI examples

The environmental impact of logistics can also be measured, though this area of performance measurement is less developed than others. At Ontruck, we have developed a calculation system for KPIs relating to logistics sustainability. These transportation KPIs require a more advanced calculation than the above logistics KPI examples, as they take several variables into account:

• Reduction of empty kilometres: the number of kilometres vehicles cover when empty is compared to the sector average.
• Kilograms of CO2 saved: by monitoring each shipment closely, we estimate the amount of CO2 we prevent from being emitted into the atmosphere.
• Equivalent number of trees: this is an effective indicator for communicating the above KPIs, as it expresses the number of trees that would be required to absorb the amount of emissions prevented. On average, a tree absorbs 22 kg of CO2 per year.

Step up your transportation KPI measurement with Ontruck AI Tech

Over the course of this article, we have looked at some examples of KPIs for transport and logistics, but there are plenty of other indicators out there, as they need to be adapted to each company, business area and logistical process or subprocess. That is why it is so important to carry out a study before implementing a KPI system.

In the case of freight, Ontruck has selected the main transportation KPIs and automated their calculation in a report we provide to our customers free of charge.

We gather the data from our integrated ecosystem and process them, thus offering data updated every hour. On top of that, they can be downloaded as a CSV file to be processed. Our goal is to make life easier for traffic managers, and we want to do so through complete transparency.

If you would like us to show you how to harness the power of data to optimise your logistics operations, please get in touch and request a personalised demo. You will discover our transportation KPI measurement module, our advanced capacity forecasting and so much more!