The best LTL KPI for measuring damaged shipments is simply the percentage of damage free shipments delivered.
Cost, on time performance and billing accuracy don’t mean much if the carrier damages the freight. To minimize freight damage, begin measuring it with the damage free shipments KPI.
LTL KPI – Damage Free Shipments
To calculate the damage free shipments KPI, simply divide the number of damage free shipments by the total number of shipments.
Example: 112 damage free shipments divided by 113 total shipments equals 99.1% damage free shipments.
Be sure to measure all damage not just freight claims filed. Damaged packaging, small scratches, and loose pieces are all upsetting to the receiver and the end customer so they should be documented and measured, even if there isn’t a freight claim filed.
Insights from Damage Free Shipment KPI
With LTL shipping, shippers are more likely to experience freight damage, because the freight is unloaded and loaded more than a dedicated full truck. The higher chance for freight damage drives the need for this LTL KPI.
An LTL shipment, is picked up at the shipper, unloaded at the carrier terminal and then reloaded on to another of the carrier’s truck. Then the freight is unloaded at the receiver’s dock. Depending on the pick up and delivery locations, there may be additional transfers and loading / unloading.
Freight damage should always be far less than 1% of total shipments. If freight damage is over 1%, there is something seriously wrong with the packaging, loading / unloading process or the carrier.
Additional Reading regarding LTL Freight Damage
Shipper’s Help Desk – Freight Claims
Additional Reading on LTL KPIs & LTL Carrier Scorecards
Logistics Key Process Indicators (KPIs)
White Paper: The Essential Guide to LTL Shipping Improvement: Action Plan and Metrics for Rapid Transformation
LTL Carrier Scorecard: Measuring the Things that Matter
Bottom line: Measuring damage free shipments delivered is simple and can provide some great insights into the shipping function. Armed with the damage free shipments KPI, shipping team can reduce the incidents and cost of freight damage.
Questions: Does your company measure the number of damage free shipments delivered? Does your company use the KPI described above?