Complexity and precision data within the transportation and shipping industry require refinement in measuring and recording metrics. That is where multimodal metrics that leverage transportation data can make all the difference. According to Supply Chain Quarterly, “Amid this complexity is the growing influence of consumers who expect a personalized, consistent, and seamless experience across retail, online, and mobile environments. As major retailers like Amazon meet or exceed these expectations, speed and responsiveness have become the new keys to success. This means that more companies are exploring ways to make the entire supply chain more flexible, agile, customer-focused, and profit-driven. In short, stability has given way to agility as a key driver in supply chain development.” With that in mind, shippers need to know the top multimodal metrics to maximize the productivity of multimodal shipping and recapture more revenue from freight spend.
The multimodal metrics here involve estimating how many shipments could be handled with a multimodal method instead of a traditional line. The number of total shipments may be 10,000, but an average of 6,000 could be shifted to a multimodal shipping method. Using automation in logistics to enable this shift can save on time and costs for every load and order and increased ROI for every order.
Calculating this ratio for multimodal metrics is easy and simply involves comparing the multimodal method rates with the rates of traditional shipping lines. That ratio helps shippers see what the cost/saving difference is. This calculation can be made for seasonal, quarterly, or annual comparisons and would reveal one method’s total costs compared to the other.
It is easier to monitor the freight spend with a simple formulation that could be as simple as X number of total shipments than Y number of shipments sent via multimodal methods. Seeing bottom lines, ROIs, and overall costs and profits are easier when tracking and analyzing the multimodal metrics for the shipping loads that go out every day.
As is the case with any chosen shipping methods, tracking the multimodal costs and expenses means keeping close tabs on delivery windows and delivery success and failure. Too many late arrivals can offset any monetary value gained with the multimodal approach, as it can damage customer satisfaction and retention.
Likewise, missing, lost, or damaged parcels also need to be considered when considering how the multimodal metrics are being read. Isolating these problem orders can help you see a clearer picture of possible problem areas that need to be addressed. For example, if $50,000 of shipments end up losing $5000 in damages, that is an issue that needs to be addressed.
Tracking and analyzing the multimodal metrics for various shipping lines can provide valuable information to all team members. This metric can easily be calculated by isolating problem orders and seeing what percentage they are of the total number of orders being calculated. If out of 10,000 orders, 9,000 are delivered on time, that 10% late delivery rate may signal a flaw in the process.
Multimodal simply means more than one shipment method has been used, so there could be two, or there could be four or more. Estimating the average number of modes used compared to the average number of shipments provides insight into whether additional modes may reduce freight spend.
Another critical multimodal metric to use looks at the percentage of total multimodal shipments that end up being transferred into the intermodal category at some point during shipment. This shift occurs when the load changes hands to another carrier. That amount divided by total shipments derives the KPI that shippers will want to monitor closely.
Dwell time for the KPI analysis is when a trucker spends waiting for his turn to unload or load freight in the yard. This downtime is the time that eats at the delivery timeline and adds to costs and rate fees. If three out of every 24 hours spent on a delivery from the time the truck pulls out to the time the order is offloaded are lost to dwell time, that highlights the supply chain’s inefficiencies.
This is a multimodal metric that can help streamline end to end transit and delivery timing. Determining this analytic piece takes the transit time divided by distance covered, or the total miles of transportation considered. This information can help streamline the process and highlights areas where backlogs and inefficiencies in handoff may occur.
Regardless of whether your annual freight spend is $10 million or $500,000, multimodal is the best way to lower operating costs and optimize freight management. And it all begins with using an advanced TMS to leverage and understand data, track performance, and continuously improve.
To subscribe to our blog, enter your email address below and stay on top of things. We'll email you with a confirmation of your subscription.
Send this to friend