Where to Start With Logistics Performance Metrics

It’s easy to imagine that a big and global industry like logistics has a standard set of performance metrics for measuring and analyzing performance. The challenge is that the logistics industry is anything but informed, and depending on the area of the supply chain a business focuses on, the categories of goods and services delivered, and the type of customers being served, the definition of success changes.

There is a wide array of logistics metrics available to any business seeking quantitative indicators of performance. It’s easy to get lost in the noise—but the key is to understand what success means to you and to work backwards from there. Instead of reviewing and cherry-picking all of the logistics key performance indicators (KPIs) that you have in front of you, take an introspective look into your business and the strategic objectives you’ve set. 

There’s no one-size-fits all approach to logistics KPIs, but there are best practices that can help you get the most out of your data. 

Define the Logistics Metrics That Matter to YOUR Business

Unless you’ve got problems in every corner of your operation, it’s smart to strategize and home in on the areas that present persistent challenges. There are simply too many metrics to examine—it’s easy to get lost.

For example, one of the most common logistics KPIs the industry focuses on is the on-time delivery rate, or the percentage of deliveries made within the promised time window. If your on-time delivery rates are looking solid, you may be tempted to say your delivery operations are performing just fine.

But what if one of your strategic objectives for the year is to improve efficiency—not just getting it there on time, but doing so using the fewest resources possible? In that case, your definition of success hinges on efficiency metrics such as:

• Deliveries per hour/day: How many deliveries can your fleet handle in a day?
• Distance traveled per delivery: Total miles driven divided by the number of deliveries.
• Deliveries per route: How many deliveries can you fit in a single route?
• Time spent per stop: How long at each stop? Is there one that’s particularly long?

On the other hand, let’s say your strategic objective isn’t about efficiency but instead centers around driver behavior. Then it may be more helpful to focus on logistics KPIs that measure driver performance, such as:

• Delivery completion rate per driver: Successful deliveries ÷ assigned deliveries.
• Damaged packages per driver: Sometimes it’s unavoidable; sometimes it’s a pattern.
• Customer complaints per driver: If you track these, you may want to identify trends in poor customer service
• Customer communication response time: For drivers who message customers during deliveries—were they responsive? If not, missed deliveries may just be waiting to happen.

It’s fair to say that all metrics matter to a business, and you can keep all of them updated and available for review. But to gain the most relevant insights, hone in on the logistics metrics that align with your strategic objectives.

Common Denominators That Any Business Should Review

Even with this level of freedom in defining your own set of logistics metrics that matter to your business, there are certain data points that should always be monitored and highlighted in any KPI dashboard that you customize. This is especially true in light of the realities of the modern logistics industry. With the increasing pace of digital transformation, changes in economic dynamics, and new players constantly entering the market, there are some common insights that all businesses should be tracking:

The term “logistics KPI” might conjure images of highly technical operations and processes that are measurable and analyzable. While that’s often an accurate picture of reality, every logistics company should also reserve a set of KPIs focused on the customer’s perspective.

It’s tempting to focus solely on operational performance and efficiency insights, but ultimately, customer happiness is the true indicator of success. If your customer is not happy, no amount of operational KPIs will matter. Having a strong pulse on your customer experience has become a mandatory requirement in logistics. Some useful KPIs to consider include:

• Customer satisfaction score (CSAT): Measured via post-delivery surveys (e.g.  “How satisfied were you with your delivery, select 1-5?”)
• Net promoter score (NPS): Measures the likelihood that the customer will recommend your service
• Repeat customer rate: What percentage of your customers are repeat buyers? Is that trending upward?
• Common feedback themes: Use sentiment analysis to identify recurring praise—or complaints.
• Customer support rate per 100 deliveries: How many customer issues arise?
• Resolution time for customer issues: How fast are these issues resolved?

Another often overlooked set of logistics metrics revolve around visibility into the economics of logistics, particularly the transport costs for each delivery. This includes labor hours, fuel, and amortized equipment costs—allocated and measured accurately for every order.

Why is this important? Because in an increasingly competitive industry, the businesses that survive will be those that make smart financial decisions and focus on profitability with delivery. Consider these KPIs:

• Cost per delivery: Total delivery costs (labor, fuel, vehicle, etc.) divided by the number of completed deliveries.
• Cost per stop: Like above, but for multi-stop routes. Helps you identify which stops are wasting the most time and money.
• Fuel and maintenance cost per route: Track by driver to pinpoint inefficiencies.
• Fuel cost per delivery: Connects vehicle efficiency directly to your cost model.

Stick With It and Track the Right Logistics Performance Metrics over Time

Define your success but stick with it. Don’t change metrics just because the numbers didn’t move the way you wanted them to. Feel free to define your own metrics but stick with it and don’t change the goal posts too much. Your logistics performance metrics should be flexible enough to evolve with the business—but not so fluid that they lose meaning entirely.

And finally, while you may be tempted to benchmark your KPIs against fellow competitors in your industry, consider this: many businesses may already be falling short of what today’s customers expect. Matching your competitors might bring you to industry parity, but that’s not the same as leading.

Measuring yourself against your competitors can be misleading—there’s no substitute for a laser focus on your own data and operational realities. The benchmark that really matters? The level of service that convinces your customers that you are the best choice in the market for their business.