Fast Adaption Is The Key To Survival
This year has proven to us how fast adaptation can be the key to survival. Being so focused on the aviation industry made me think about how we could explore other sectors. Moreover, I thought about how we can share beneficial actions that might apply to other similar industries.
Additionally, during this crisis, we have learned to look more into other activities, their behaviors, and especially the similarities within, to implement successful actions. For example, in the case of cargo transportation, we can see that different transport modalities are currently struggling with the effects of COVID-19. These modalities are air, rail, maritime, and road cargo.
In my latest online orders, I’ve received, on many occasions, the warning that delivery times can be affected due to Corona. But, of course, this can be due to several other reasons — for example:
- Reduced staff hours
- Reduced production hours
- Increase of border restrictions
- Increased border controls
- Lockdown extensions
- Etc.
Consequently, based on the current situation, we have identified 6 Transportation KPIs that are always important for cargo transport companies. On top of that, they are even more relevant during this specific crisis.
Border Controls And Restrictions Are Playing An Important Role!
Transportation KPI #1 — Border Delays
Many external factors can influence this transportation KPI. For example, random inspections at international borders, paperwork revisions, and road transportation, high traffic can increase the risk of delay.
In Corona, it is vital to have identified the different requirements and processes for each country based on biosecurity regulations for incoming products to avoid additional delays. If possible, have a validation with each border authority to understand the new estimated times, facilitating a more accurately scheduled delivery.
Customers expect their shipment to arrive on time, but they also expect their cargo load delivered in the best condition.
Transportation KPI #2 — Perfect Shipments Measurements
This Transportation KPI measures the percentage of orders without any errors. With this KPI, it is possible to track the proportion of orders free of damages and facilitate the identification of errors or damages reasons.
For example, the KPI becomes of enormous relevance for food supplies or medicines and the delays due to COVID-19. These goods require specific temperatures, specific packaging, as well as a particular and limited lifetime.
Therefore, for transporting these types of products in the current crisis, the time should be accurate to reduce the number of foods and medicines that perished in the transport phase.
Now, imagine a load whose location is of a different origin outside the regular network. What could be the measuring indicator for this case?
Transportation KPI #3 — Out-of-Network Shipments
This is an interesting Transportation KPI, as it involves collaboration between different transport modes. Usually, companies have their predefined network and routes. However, in some cases, the freight is located or delivered outside the predefined route network.
Imagine an airline having to transport a load from Frankfurt to Dubai. However, a percentage of the cargo load originates in the city of Heidelberg. The company requires a second transport mode to take the cargo load from Heidelberg to Frankfurt.
Even though out-of-network shipments are not ideal for companies, they can happen. Therefore, companies need to be prepared and understand the behavior of these types of loads to have a contingency plan that helps mitigate the inefficiencies and costs generated by this additional effort.
On the other hand, it is also relevant that the internal processes are aligned and fulfill all requirements. Therefore, we wanted to bring another KPI into the table that should be considered as it can have a high impact on the delivery times. This KPI corresponds to the loading process.
Transportation KPI #4 — Loading and Unloading Time
This measurement has an impact on On-Time delivery. If this process is longer than expected, it can cause a general delay in the entire supply chain. On the other hand, if there’s a specific station where delays are continually happening, tracking this indicator will allow us to identify the root of the problem and implement an optimal solution. Staff training, communication processes, loading equipment, improvement of the physical facilities are examples of possible solutions to improve the loading/unloading times.
On-Time KPIs Will Always Play A Key Role In Cargo Transportation…
Unlike what we have seen regarding COVID-19 and the impact on passenger transport, on-time performance KPIs are still and will always be relevant for goods transport. In the case of food and medicines, products need to be delivered on time to reduce the shortage risk of essential resources for the population.
Transportation KPI #5 — On-Time Delivery Adherence
This KPI corresponds to the must-arrive-by-date, indicating suppliers must have deliveries to the store within a specified delivery window. Moreover, the KPI puts a high delivery accuracy pressure on transport companies, as if the delivery date is not met, there are usually penalty fees charged. Currently, this measure is critical, as companies need to have all possible delays on the scope before committing to a final delivery date with the customer.
Transportation KPI #6 — On-Time in Full (OTIF)
This KPI contains two challenging aspects. This case corresponds to a perfect order (0% damages and with all ordered items), and the order was delivered on time. On top of that, the KPI can improve the reliability perception of a transport company, as it provides the products on time and with quality. It won’t help if the load is delivered on time with a high damage rate or vice versa.
By taking all this information into account, we can see how different modalities can benefit from the same measures to optimize their operations and deliver the best quality and time, even during crisis periods.
