Building a carrier performance metric program is crucial for assessing the effectiveness of your ecommerce logistics operations. By focusing on essential key performance indicators (KPIs), you can have a direct impact on your business’s financial health. In this way, you can keep track of costs and maintain both financial and operational stability. Thanks to accurate and consistent data collection, shippers are empowered to make informed decisions that optimize performance, reach, and cost efficiency. Here are the most important metrics to achieve delivery success.
Delivery transit time
Are your transit times competitive enough? There is one way to know for sure!
Commonly known as “transit time to distance”, delivery transit time is an essential metric that tracks the number of business days a shipment takes to travel from origin to delivery destination. In logistics – and last-mile delivery especially -, speed greatly influences customer satisfaction but also the financial health of a business. In fact, a good delivery transit time rate helps to reduce shipping costs and operational expenses. How?
Customer retention: satisfied customers who receive their orders quickly are more likely to become repeat customers, increasing sales and building a stronger customer base.
Reduced inventory costs: faster delivery times mean there is an efficient turnover, thus reducing the need for stocking large amounts of inventory, which ties up capital and raises storage costs.
Competitive advantage: providing speedy deliveries represents a competitive advantage in the ecommerce market. Such reliability can become a key differentiator, attracting more customers who prioritize fast service.
Lower shipping costs: efficient logistics and quick deliveries can potentially lower operational costs, as they allow for more efficient resource utilization.
Increased sales opportunities: fast and efficient delivery encourages last-minute purchases.
The First Attempt Delivery Rate (FADR)
First impressions count, so how often do your deliveries succeed on the first try?
The First Attempt Delivery Rate (FADR) reflects the effectiveness of last-mile delivery efforts. It tracks the percentage of deliveries that are completed successfully on the first attempt. Industry standards suggest that an excellent FADR should be above 90%, with rates over 95% being particularly outstanding.
On-time pick ups and deliveries
Are your schedules as tight as they could be?
Remember, punctuality always wins, as it creates an overall positive brand image, retaining customers and attracting new ones. Also, meeting delivery timelines is extremely important to reduce returns, which are very expensive for an online business.
The average on-time pickup rate in the industry is 96%, which is considered good. However, more than 40% of companies meet their on-time performance targets, with achievements ranging between 95% to 100%.
Average dwell time
Is waiting time eating into your profits? If it is, you should know!
The average dwell time metric tracks how long carriers wait during pickup or deliveries. Long dwell times have a huge impact on supply chain dynamics with significant cost implications. In fact, dwell time is notably one of the top challenges in the logistics industry, causing delayed deliveries, increased holding costs, and disruptions in carrier operations—all of which can diminish both business profitability and efficiency.
