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Performance Metrics Used by Freight Transport Providers - page 17 / 35

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W. Cottrell

Cal Poly Pomona

Lai, et al. (2002) separated the supply chain process into two segments: “customer facing” (i.e., customer service) and “internal facing” (i.e., operations). The primary concerns of customer facing were identified as reliability, flexibility and responsiveness, while the main concerns of internal facing were costs and assets. Their suggested performance measures were:

  • Customer facing: delivery performance, order fulfillment performance, and perfect order fulfillment (reliability); supply chain response time and production flexibility (flexibility and responsiveness).

  • Internal facing: total logistics management costs, value-added productivity, and return processing cost (costs); cash-to-cash cycle time, inventory days of supply, and asset turns (assets).

Lai, et al. (2004) extended this discussion by adding measures related to shippers’ needs, as well as the needs of consignees. Holguin-Veras, et al. (2004) developed an experimental economics approach to urban goods modeling. To evaluate their model, the following measures were used: number of tours required to meet freight needs, total profits, total number of stops, profits per tour-hour, profit per tour per unit freight, and profit per tour-hour per unit freight. A “tour” included the travel, loading and unloading time of a pickup and delivery.

Finally, Jones & Sedor (2006) summarized the efforts of the FHWA to facilitate the development of reliability measures for freight travel. The authors pointed out the Department of Transportation’s recognition that the “timely and reliable movement of freight is critical to the Nation’s economy.” Hence, the FHWA effort concentrated on reliability. The following measures were proposed: fill rate, delay, travel time, travel time reliability (speed & buffer time index), profitability, and return on investment. The latter two measures did not pertain to reliability per se, but recognized the importance of solvency to the freight industry. Fill rate was defined as the percentage of orders delivered on time (i.e., no later than the delivery day requested by the customer).

INDUSTRY PERFORMANCE MEASURES AND CONCERNS

A key distinction between the performance measures “suggested” in the literature, and those actually

applied in practice, is the availability of data to compute the measure.

Another distinction is the

performance measure that can be “influenced by the public sector,” and the measure that is “meaningful to stakeholders in the private sector” (Jones and Sedor 2006). Performance measurement experts have also noted that the measures of interest depend on the role (i.e., users, shippers, carriers, authorities) and the geographic scale. The FHWA has ascertained that speed of travel and travel time reliability are two measures that are of interest to both the private and public sectors, particularly for highway-based modes. Several research efforts have addressed these two measures, as well as the technology needed to track the location of trucks; the vehicle location technology is needed for the compilation of travel speeds and times. Another factor is the extent to which the measure addresses a critical industry issue. The following discussion reviews freight performance measures, by mode, that are found in readily-available publications, or that are implied by discussions in industry-related documents.

Commercial Trucking and Multimodal

The use of performance measures in the trucking industry, and perhaps in all freight modes, is vast and extensive. For example, USA Truck, an FTL carrier, indicated that their annual self-assessment involved the use of performance measures in “300 statistical areas.” Some performance measures are common to many carriers – regardless of mode – while others are common to carriers within a specific mode. Still other performance measures are customized to one or a few carriers, although many of these are derivatives of a common base (such as “revenue” or “load”). A review of one FTL carrier (USA Truck), one LTL carrier (US Xpress), and one carrier offering both FTL and LTL services (Frozen Food Express)

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