The best LTL KPI for measuring on time performance is simply the percentage of on time shipments. The calculation for LTL on time performance is described below.
Most carriers will have on time performance of 90% or better, but understanding exactly how a carrier performs on your lanes will help your company make better choices.
All LTL carriers provide an estimated transit time for delivering to a specific zip code. The transit times are not guaranteed. If you need guaranteed delivery, there is an extra charge.
LTL KPI – On Time Performance Calculation
To calculate the on time performance KPI, simply divide the number of on time shipments by the total number of shipments.
Example: 40 on time shipments divided by 43 total shipments equals 93% on-time performance.
For the calculation, compare the transit time provided by the carrier to the actual transit time. To maintain integrity, it is important to track the actual transit time, rather than rely on the carrier’s data.
Insights from On Time Performance KPI
The on time performance KPI will flag the late deliveries. If the late deliveries persist, the shipper can make some adjustments. Potential adjustments include: changing to an earlier pick up time, changing carriers, asking the carrier to pay special attention to the shipment, etc.
The carrier team can often troubleshoot difficult lanes and reduce or eliminate late shipments. Other times, a new carrier is the best way to improve the on time performance.
Additional Reading regarding LTL On Time Performance
Additional Reading on LTL KPIs & LTL Carrier Scorecards
Bottom line: Measuring on time performance is simple and can provide some great insights into the shipping function. Armed with the on time performance KPI, shipping folks can drive improvements in the shipping process.
Questions: Does your company measure on time performance? Does your company use the KPI described above?