(PHOTO: JIM ALLEN/FREIGHTWAVES)
One of the most frequent questions I get asked is, “What are the best KPIs that we/I should be tracking in my/our business?”. The answer can be dramatically different depending on your operating mode and model. To exacerbate the problem, from a benchmarking (comparison) point of view, many of the denominators we use is building Key Performance Indicators have a varying degree of subjectivity involved. Those include Miles, Truck Count and Driver Count. The most nebulous of these are miles.
Based on our work over the past five years, there are twenty-eight (28) ways in which TPP participants are calculating miles internally. This has led us to establish a standard of using IFTA miles to account for the slight differences in the reporting values. Similar nuance can be attributable to driver counts (e.g. part-time vs. full time, FEL etc). Our preference is to not have to choose a favorite, but that true standard operating stat has eluded us (and the industry)…until now.
Although almost all TPP participants have been ELD / Electronic log compliant for many years, we’ve never really paid attention to jackpot of data sitting right there in front of us. For TPP, we are always looking for standardized data, common to all (or most) participants. Data that provides true ‘apples to apples’ benchmarks for all. In late 2018, our members started reporting summary ELD Data for the purposes of benchmarking. Those summary data points include:
- On-Duty Driving Hours – Company Fleet
- On-Duty Not-Driving Hours – Company Fleet
- On-Duty Driving Hours – Owner Op Fleet
- On-Duty Not-Driving Hours – Owner Op Fleet
Based on our early work, we discovered that many fleets are not using this data internally to measure performance (operational or financially). This is changing very rapidly! Here are some examples of the KPIs that can be established for your business:
- (On-Duty Driving Hours) / (On-Duty Not Driving Hours + On-Duty Driving Hours)) * 100 = % of Total On-Duty Hours Driving
- (Linehaul Revenue) / (On-Duty Driving Hours) = Revenue per On-Duty Driving Hour
- (Accessorial Revenue) / (On-Duty Not-Driving Hours) = Accessorial Revenue per On-Duty Not Driving Hour
- (Driver Wages & Benefits) / (On-Duty Driving Hours + On-Duty Not-Driving Hours) = Driver Wages & Benefits per On-Duty Hours
- (Total Miles) / (On-Duty Driving Hours) = Miles per On-Duty Driving Hours
These are literally a small sample of the KPIs that are (potentially) at your finger-tips, which will drive (pardon the pun) new insights into the operational and financial efficiency of your business. Based on early feedback, some ELD providers make this data readily available for extract, while others require you to use a log auditing tool (e.g. RAIR or DISA) to obtain. Not sure why this isn’t a default reporting function for all ELD providers?? This data has the ability to change the way trucking companies measure their performance, and among others things provide the necessary data to support changes to driver compensation (hourly or salary), hold shippers accountable with respect to detention time (another one that will improve the quality of life for professional drivers).