Recent years have seen supply chains put under strain by a myriad of different disruptions.
Amid these challenges, logistics optimisation has very much been in the spotlight – making it more important than ever for companies to ensure they have the right carrier partners. This brings us to the topic of carrier performance monitoring, and how businesses can effectively harness technology and data to choose the right carriers.
How is carrier performance being tracked, and how can companies use this data to select the best carriers that meet their needs?
To find out, we spoke to Johan Hellman, Vice President of Product & Carrier Management at nShift, whose delivery & experience management (DMXM) platform is built on unified data from a huge carrier library.
Why carrier performance monitoring has come to the forefront
First off, we quizzed nShift’s Vice President of Product & Carrier Management on why carrier monitoring is becoming increasingly more important.
According to Hellman, poor carrier performance can have a direct business impact, especially for companies shipping to their customers.
“Poor carrier performance has a direct business impact, especially for companies shipping to their customers. For these shippers, carriers are the link to the customer and the performance of the carrier is a key part of the overall customer experience. It’s a critical element of offering outstanding delivery and experience management (DMXM), which streamlines processes, reduces costs and turns delivery into a competitive advantage,” Hellman told Trans.INFO.
Hellman added:
“Carrier performance is also important for companies collecting goods and shipping internally between sites as under performing carriers will have a negative impact on material availability and often have to be compensated with increased buffer stocks.”
Utilising tech to monitor carrier performance
So, how can the performance of carriers be effectively monitored?
Hellman told Trans.INFO that the key to effective carrier performance monitoring today lies in technology, particularly in the tracking of events throughout the parcel’s journey.
“Tracking events are the key source of information in the parcel business. A parcel moves through a network of trucks and terminals and it’s possible to follow these movements through tracking events. Tracking events can be retrieved through carrier provided interfaces such as APIs and webhooks or through file transfer. Each carrier has its own way to structure and classify tracking events. This is why most shippers use a delivery management system to help normalise these events and track multiple carriers in a uniform format,” said nShift’s Vice President of Product & Carrier Management.
Challenges in carrier performance monitoring
The process of monitoring the performance of several carriers is not without its challenges, however.
One of the most common issues businesses face is the difficulty in capturing and normalising tracking events across multiple carriers. Hellman believes visibility is crucial here when it comes to comparing and contrasting performance.
“Capturing and normalising tracking events across multiple carriers is often a problem unless the business uses a delivery management system to help them. Indeed, for ecommerce companies today, it is vital to maintain visibility over carrier data and compare carrier performance to identify areas of improvement and enable a frictionless, end-to-end customer experience,” said Hellman.
Key metrics that can be used here, according to Hellman, include on time delivery, damages and the amount of returned parcels.
“Typical metrics for evaluating carrier performance include OTD (on time delivery – delivery within the agreed SLA) or a variant of this such as transportation lead time. It is also becoming increasingly common to measure exceptions such as damages/losses and returned parcels. Pallet shippers, whose work involves groupage – where goods are grouped together and dispatched by several different companies into the same load – and combinations of part and full loads, will also have to measure pick-up performance. This is because truck availability tends to be an issue during high demand periods.”
Best practices for evaluating new carrier partners
When considering potential new carrier partners, Hellman advises businesses to establish clear expectations beforehand:
“The best approach is to have clear expectations on the service levels expected up-front, including which metrics to track and how to track them. This will help the shipper and the carrier align on expectations and will set the foundation for a collaborative approach once the carrier has been taken into use.”
Another issue is that the interpretation of performance data is not always straightforward.
Hellman warns of the risk of misjudging a carrier’s performance due to issues originating from the shipper’s side, such as poor address data or late handovers:
“There is a risk that issues assumed to be caused by the carrier are actually caused by the shipper. Such instances include; poor address data, late handover to the carrier and use of incorrect carrier services. This is why having a delivery management system that enables this degree of transparency and insight is key. It’s important that performance monitoring is done in a collaborative manner, with a joint ambition to improve,” nShift’s Vice President of Product & Carrier Management told Trans.INFO.
Customising carrier performance reports
Customisation of carrier performance reports is another area where businesses can tailor their monitoring to reflect their specific needs and priorities.
As for how companies go about this, Hellman told Trans.iNFO:
“Some will focus on speed, others sustainability. Ultimately, the objectives and targets will be agreed with the carrier at the outset.”
Emerging trends and innovations in carrier performance management
What are the current industry trends as far as carrier monitoring is concerned? In Hellman’s view, there is a growing focus on sustainability and emissions measurement in carrier performance management:
“Sustainability and emissions measurements are becoming more important for many shippers. We’re seeing some use emissions reporting on a delivery as a point of difference and an opportunity to build closer connections to those customers who care deeply about the environmental impact of how their goods are delivered.”
Finally, with regards to innovations in carrier management, Hellman revealed that nShift is exploring advancements in how tracking data is shared and utilised.
“Full access to complete, correct and timely tracking data is key for successful performance monitoring and nShift is working proactively with carriers to improve how tracking data is shared to nShift and its customers. The scope of data provided by carriers is also constantly extended in order to allow for new types of metrics, including emissions data,” concluded Hellman.