Embracing Dedicated Fleet Metrics
Shippers who use dedicated fleet services are continuously challenged to maximize the utilization of those assets in order to leverage the fixed fees that are common in dedicated transportation solution agreements.
The most direct and obvious way a dedicated fleet solution can be more effectively utilized is by minimizing the empty miles driven by the fleet. This can be accomplished by having the fleet haul revenue-generating third party backhauls, or by picking up pallets, empty racks/containers, or even customer returns from delivery locations, and returning materials to the fleet’s origin facility.
However trite it is, the old adage of “you can’t manage what you don’t measure” absolutely holds true for dedicated operations. If a company does not track the activities described above, it will be a struggle to understand how well or poorly the fleet is being utilized.
While empty miles is one measurement to track, there are a multitude of fleet metrics or KPIs that shippers can use to monitor fleet service, cost, productivity and reliability. The most important KPIs to measure may vary depending on your specific business needs or requirements.
Measuring Fleet Productivity
Here are five critical productivity and utilization-focused KPIs that dedicated fleet managers should monitor and measure when evaluating fleet performance:
Monitoring Fleet Performance
Carrier scorecards are used by many shippers to drive visibility, accountability and performance with their dedicated fleet carrier partners. Based on the mission of the fleet, shippers and carriers align and agree on baseline KPIs during the contract negotiation and onboarding process.
Scorecards such as the example shown above enable data-driven decisions to control costs and improve service levels through regular monthly or quarterly business reviews.
Conclusion
A dedicated fleet solution can provide guaranteed capacity, improve on-time delivery, and lower delivery costs through consistent, optimized routing. However, the solution needs to be combined with carrier scorecards and data-driven KPIs to drive accountability, optimize lane performance, and keep the overall partnerships healthy and functioning.
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Fred’s first article in this series at Dedicated vs OTR: Are you using the right model for the right freight?
the second article in the series at A Shipper’s Approach to Managing Dedicated Freight Capacity
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Fred Miesch
Using Metrics to Improve Dedicated Fleet Operation
