Your customers are more data-driven than ever, and your success or failure in the eyes of those customers is partly determined through logistics metrics that measure your performance. It is therefore important that you have a firm handle on your customers’ key performance indicators (KPIs) as well as your ability – or that of your 3PL – to meet or exceed those KPIs.

While there is no shortage of metrics to track, this article will identify some of the most commonly used KPIs in the logistics industry. If you’re buttoned up on these, you’ll likely be in very good standing with the companies that rely on your performance.

“The Numbers Don’t Lie”: 7 Essential Logistics KPIs

Transportation metrics

• On-Time Final Delivery – This metric shows a carrier’s ability to deliver successfully on their scheduled arrival date and/or appointment time. Missing an appointment is not only financially costly (in the form of retailer chargebacks), it also adds time to the delivery as you’ll likely need to schedule a new appointment, which could be several days out. If your current transportation provider is performing below 98% with this metric, then an operations review should look for process improvements and efficiencies.

• Cost Per Pound – This metric measures gross net with total weight moved each month/quarter to show the buying and usage patterns of your customers. The trends revealed in cost-per-pound performance can help you and your customers to buy smarter and save money by not over- or under-buying product.

Warehousing metrics

• Inventory accuracy – One of the most important metrics, this warehousing KPI measures the accuracy of orders pulled from the warehouse. ‘Accuracy’ refers to SKUs being in their correct location and the quantity of units matching inventory reporting. High accuracy scores show that the correct products in the correct quantities are going to the correct customers. Low inventory accuracy can create angry customers, result in additional costs to fix orders, and negatively impact order Fill Rates and On-Time Shipping.
• Yard/Dock to Stock – While much attention is paid to outbound order cycle time, inbound cycle time is just as important to your supply chain. The yard/dock-to-stock KPI measures the time from the arrival of an inbound container/trailer at the warehouse yard (the physical receipt of an order) to the time that it is put away. Fast yard/dock-to-stock times boost the efficiency of inbound activities and ensure that product is ready for resale as quickly as possible.
• On-Time Shipping – Shipping speed is vital in both the B2C and B2B worlds, and this metric shows the percentage of shipments that left the warehouse on time. Of course, “on time” can vary between those two worlds. B2C orders generally need to ship the same day (up to a cutoff time), while B2B orders have more of a set cadence with retailers (e.g., retailer may give advance notice of 48 hours, 72 hours, or even a week). Failure to ship on time can result in disappointed customers and can decrease the likelihood that B2B shipments make it to store shelves prior to a holiday surge or big promotion weekend (e.g., Valentine’s Day and “Back to School” season)
• Order Accuracy – Customers – both B2C and B2B – not only expect orders to ship in a timely manner, they expect to receive exactly what they ordered. This metric records accuracy (%) in terms of the number of orders filled correctly. When orders are filled incorrectly, chargebacks and delays are the likely result (e.g., Walmart’s On-Time-In-Full [OTIF] policy made a splash years ago by announcing significant penalties for both late and incorrect orders).
• Fill Rate – Fill rate measures the ability of a warehouse to fill orders from a specific distribution center, without having to ship from multiple locations. For a 3PL, high fill rates result when the warehouse inventory count for each SKU matches the figure in the customer’s internal system. When these numbers don’t match up, retailers can accept more orders than they can fill with current inventory – resulting in backorders, delays and potential chargebacks. The solution here is to perform an adequate number of syncs between warehouse and customer systems and to do cycle counting to ensure inventory accuracy.

Customize Logistics Metrics with Your 3PL Partner

When partnering with a 3PL, it’s crucial to remember that expensive systems and advanced automation don’t always translate into exceptional operational performance. The real value lies in how effectively your 3PL can capture, manage, and continuously improve the KPIs that matter most to your supply chain—and to your customers.

Customization for Success

For instance, if sustainability is a key focus for your business, your 3PL may be able to provide data to support your environmental initiatives. Alternatively, if your industry is heavily regulated, your 3PL might track and report on your performance against key guidelines and metrics.

Additionally, for companies focused on customer satisfaction, your 3PL could provide detailed reporting on order accuracy, delivery times, and return rates, helping you refine your customer service strategies. By offering flexibility in their reporting capabilities, the best 3PLs ensure they meet the specific needs of your business, no matter how unique.

Continuous Improvement

Discussions with your 3PL partner should cover not just the KPIs you need to master but also the steps that will be taken if operations fall short. Regularly reviewing and adjusting KPIs ensures that your logistics operations remain aligned with changing business needs and market conditions. By engaging in continuous improvement practices, your 3PL can proactively address any issues, refine processes, and ensure that performance consistently meets or exceeds expectations.

Weber Logistics: Tailoring Metrics to Your Needs

At Weber Logistics, we specialize in aligning our integrated supply chain capabilities with the metrics that matter most to your business. By customizing our reporting and continuously optimizing our processes, we help you stay ahead in a competitive market. Whether it’s ensuring on-time deliveries, maintaining high inventory accuracy, or advancing your sustainability initiatives, we provide the insights and performance you need.

To learn more about Weber’s agile logistics solutions, contact us today.