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Performance Metrics Used by Freight Transport Providers - page 4 / 35





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W. Cottrell

Cal Poly Pomona

Kennedy International Airport is the largest air freight gateway in the U.S., and is the busiest freight terminal (the Ports of Los Angeles and Long Beach are the second busiest). The “smallest” freight sector, local messenger and delivery services, involves bicycles, motorcycles, and other small delivery vehicles – generally in the core areas of large cities. The industry earned a not-insignificant $7.9 billion in 2006.

Performance measurement in the freight transport industry has attracted two realms of interest: that of the public sector, and that of the providers. The public sector is keenly interested in measures that justify policy decisions, such as asset productivity, total shipments, total flow, and so forth. The public sector is also interested in measures that indicate how well regulations and standards are being met. These would include environmental and safety measures, such as total fleet emissions of criteria pollutants, employee injuries, and fatalities. The providers have an interest in economic measures, such as aspects of financial performance, along with equipment, load, haul, employee, and customer service measures. The two realms cross over in only a few areas; for example, productivity, load and haul are all related, are of interest in the public and private sectors. Otherwise, there are significant distinctions. For example, while the public sector is interested in fatalities, injuries and spills, the freight providers seem to be more interested in the effects of these incidents on insurance costs, tort and liability.

There is little uniformity in performance measurement in freight transportation, particularly across the five modes. Some measures, by necessity, are pertinent to only one or two modes, such as “barrels per day” in the oil pipeline industry, and “carloads originated” in the railroad industry. Also, there is little agreement on the “best” or “most critical” performance measures, even among individual providers. One motor carrier, for example, was using about 300 measures to represent different aspects of its operations and resources. For many of the providers, a large number of measures are financial, with multiple versions of revenue, expenses, and revenue-related ratios, along with the before and after effects of taxes, interest, depreciation, insurance and other costs. Despite the lack of uniformity and consensus, six measures seem to be represented in all five of the freight transport modes:

  • Average length of haul

  • Operating ratio

  • Revenue per ton-mile

  • Tonnage (total, all loads)

  • Ton-miles or barrel-miles

  • Terminal dwell time or empty miles factor

The average length of haul is a measure of productivity long-distance shipments. Increases in this measure may

that is useful for separating short-distance from be indicative of expansion, and possibly service

optimization. operating ratio

The operating ratio is one of the is simply the total expenses divided

simplest measures of financial performance. The by the total revenue. Revenue per ton-mile, tonnage

and ton-miles (or barrel-miles) are all load- and haul-related measures. Ton-miles are used as a key benchmark of freight movement activity in private industry and government. The four main freight modes – trucks, railroads, ships and pipelines – are surprisingly well balanced in the U.S. in terms of their
















incorporating supported by

all modes, would aim for a load-haul balance. (It is possible that such a system might be a well-developed performance measurement system). Terminal dwell time and the empty

miles factor are measures of “non-productivity.” Freight transport measures, as a means of improving efficiency and productivity.







The literature on freight transportation and logistics is extensive. Many of the authors suggest how certain aspects of goods movement could be optimized. Some of the authors also recommend measures that could serve as optimization criteria. Optimization is often associated with idealized spatial distributions of activity, which may be difficult to apply in practice. Similarly, many of the recommended measures are theoretically sound, but are difficult to compute or replicate with existing data collection strategies. It is anticipated that the NCFRP Project 03 will be a major step forward in the understanding of freight transport performance measurement, and data collection.


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