1. Best Practices Consortium
Supply Chain
Best Practices Consortium
Performance Metrics for Truck Carriers
Executive Seminar
Track 3, Session C
September, 2006

2. Scope
This session covers performance measurement strategies and trends:
Measurement Processes
Truck Load (TL) Carrier Performance
Performance Scorecards
Carrier Compliance Programs

3. On-time Performance Factors
For , on-time appointment expectations, measurement responsibility and windows for live load pickup at vendor location:
Appointment Expectations
Measured by?
On time performance, while the most common metric, is defined in various ways. Responsibility for measurement varies as well.

4. On-time Performance Factors
For , on-time appointment expectations, measurement responsibility and windows for live unload at DC:
Appointment Expectations
Measured by?
Surprisingly, about half of respondents report DCs that do not require a delivery appointment.

5. On-time Performance Factors
For , on-time appointment expectations, measurement responsibility and windows for live unload at customer/store:
Appointment Expectations
Measured by?
As expected, delivery to the store or customer is the most frequently measured on-time metric.

6. TL Carrier Performance Ratings
Selected TL carrier performance ratings over the past 3 years:
Importance: Increasing
Performance: Mixed
Target: Decreasing
Rating
Importance: Mixed
Performance: Decreasing
Target: Decreasing
Rating
Importance: Increasing
Performance: Increasing
Target: Increasing
Rating

7. TL Carrier Performance Ratings (continued)
Selected TL carrier performance ratings over the past 3 years:
Importance: Mixed
Performance: Decreasing
Target: Mixed
Rating
Importance: Mixed
Performance: Decreasing
Target: Mixed
Rating
Importance: Increasing
Performance: Mixed
Target: Mixed
Rating

8. TL Carrier Performance Ratings (continued)
Selected TL carrier performance ratings over the past 3 years:
Importance: Increasing
Performance: Decreasing
Target: Decreasing
Rating
Importance: Mixed
Performance: Mixed
Target: Mixed
Rating
Importance: Increasing
Performance: Increasing
Target: Increasing
Rating

9. Carrier Performance Scorecards
Trends for the last 3 years:
% of Shippers Using Scorecards
Frequency scorecards provided to carriers
% of Shippers Using Scorecards
1= more frequent than quarterly; 2= quarterly; 3= less frequently
It appears that use of carrier scorecards is on the rise and that they are provided more frequently to carriers.

10. Carrier Compliance Programs
Approach to carrier compliance programs ( ):
Overwhelmingly, reducing a carrier’s volume is the primary recourse for addressing performance shortcomings. Recognition programs and tying rate increases to performance follow. Financial penalties and bonuses are less frequently utilized.

11. Your Expectations What would you like to learn from this session?
Important issues?
What’s working? What’s not working?
What’s changing?
Shared good and bad experiences?
Reasonable performance expectations?

12. Potential Discussion Points
What are the top two or three factors in achieving a successful performance measurement and accountability strategy?
What techniques do you use to collect data?
To what degree do you rely on carrier reporting for metrics?
What metrics do you track to monitor your performance relative to truck carriers (i.e., equipment utilization, core carrier usage, etc.)?

13. Potential Discussion Points (continued)
How do you leverage carrier performance metrics?
What techniques do you use to hold carriers accountable?
How often do you meet with carriers to review performance?
Do you have a formal carrier recognition program?

14. Important Takeaways
Some important Benchmarking & Best Practices takeaways on performance metrics for truck carriers include:
Define objectives – Ensure that performance measures are aligned with organizational goals and are meaningful.
Establish a manageable number of metrics – Ensure that the value of key metrics is not diluted through tracking an excessive amount of performance measures.
Keep it simple – Metrics should be easy to understand and track.
Automate Tracking – Where possible, leverage internal or carrier systems to track data.

15. Important Takeaways (continued)
Expectations and accountability – Establish a periodic meeting schedule to review performance with core carriers. Develop action plans and a process to follow up on improvement commitments.
Recognize success – Establish a process to recognize excellent performance. A balanced approach of accountability and recognition will enhance core carrier relationships.
Update metrics as needed – Eliminate metrics if not meaningful or are not worth the effort required to track. Add metrics to support new initiatives.

16. Questions?

17. Benchmarking & Best Practices References
Information on strategies relating to performance metrics for truck carriers can be found in the following references: