You’ve heard it before: delivery efficiency and customer satisfaction are more important than ever before, and your company needs to keep up to stay ahead.
This statement is likely repeated enough times that it sounds like business as usual for dispatchers and fleet managers. But consider this: with over 150 billion packages shipped each year, no business can afford to be inefficient.
What grand statements about efficiency and satisfaction don’t dig into is the importance of delivery performance in the last mile of delivery. More specifically, how do you measure performance in a way that helps your business thrive?
At a glance, we’ll be defining what a “delivery performance KPI” is and then exploring the best metrics for measuring and improving how efficient your deliveries really are.
What Are Delivery Performance KPIs?
A delivery performance KPI, or key performance indicators, are measurable metrics that offer insights into the true efficiency of your delivery business. The right KPIs allow you to monitor and evaluate different aspects of your overall performance, which can help identify strengths to sustain and weaknesses to improve upon.
By tracking these KPIs, you’ll be empowered to make smart, data-driven decisions that lead to greater delivery efficiency and happier customers as a result.
8 Best KPIs For Measuring Delivery Performance
To effectively measure delivery performance, it's crucial to track key performance indicators that provide deeper insights into the business. But if you don’t know where to start, how can you identify areas for improvement?
Let’s take a look at 8 essential KPIs and how you can easily track them for your business.
1. Number of Deliveries
The Number of Deliveries KPI is essential for tracking a company's performance and evaluating its ability to handle customer demand effectively. By monitoring this metric, delivery companies can assess their capacity to process orders, manage logistics, and meet customer expectations regarding timely deliveries.
To calculate the Number of Deliveries KPI, you simply count the total number of successful deliveries made during the defined period. This includes all completed deliveries, excluding any unsuccessful attempts or canceled orders.
2. On-Time Delivery Rate
To calculate the On-Time Delivery Rate, you need to compare the number of deliveries made on time with the total number of deliveries attempted during a specific period. The formula for calculating OTDR is as follows:
OTDR = (Number of Deliveries Delivered on Time / Total Number of Deliveries) x 100
For example, if a delivery company made 500 deliveries during a month and 450 of them were delivered on time, the OTDR would be:
OTDR = (450 / 500) x 100 = 90%
A high OTDR indicates that the delivery company consistently meets or exceeds delivery deadlines, which is a positive indicator of its operational efficiency and customer satisfaction. Conversely, a low OTDR may indicate inefficiencies in logistics, routing, or other areas that need improvement.
Tracking the On-Time Delivery Rate over time allows delivery companies to identify trends, measure the impact of operational changes, and set benchmarks for improvement. It also helps in identifying areas where delays are more common, enabling targeted improvements in those specific processes or routes.
3. First Attempt Delivery Rate
The calculation of the First Attempt Delivery Rate involves comparing the number of deliveries completed on the first attempt with the total number of deliveries attempted during a specific period. The formula for calculating FADR is as follows:
FADR = (Number of Deliveries Completed on First Attempt / Total Number of Deliveries) x 100
For example, if a delivery company made 1,000 deliveries in a given month and 900 of them were successfully delivered on the first attempt, the FADR would be:
FADR = (900 / 1,000) x 100 = 90%
Monitoring the First Attempt Delivery Rate over time allows delivery companies to identify areas for improvement, such as addressing common reasons for failed deliveries, optimizing routing strategies, or providing additional training to delivery personnel. By improving the FADR, delivery companies can enhance customer experiences, reduce operational costs, and strengthen their competitive edge in the market.
4. Out-Of-Route Miles
To calculate the Out-Of-Route Miles, you compare the actual distance traveled by the delivery vehicles with the planned or optimal route distance. The formula for calculating OORM is as follows:
OORM = Total Distance Traveled - Planned Route Distance
For example, if the planned route distance for a set of deliveries is 500 miles and the actual distance traveled by the delivery vehicles is 550 miles, the OORM would be:
OORM = 550 miles - 500 miles = 50 miles
A lower OORM indicates that the delivery company is effectively following the planned routes and minimizing detours or deviations. This implies better routing efficiency, improved fuel consumption, reduced vehicle wear and tear, and overall cost savings.
Tracking the Out-Of-Route Miles over time allows delivery companies to identify areas where deviations are occurring more frequently, helping them identify potential inefficiencies in their routing strategies or driver behaviors. By optimizing routes, providing clear instructions, and utilizing route optimization software, delivery companies can aim to minimize out-of-route mileage and increase operational efficiency.
5. Average Time Per Delivery
To calculate the Average Time Per Delivery, you divide the total time taken for all deliveries by the total number of deliveries completed within a specific period. The formula for calculating this KPI is as follows:
Average Time Per Delivery = Total Time for Deliveries / Total Number of Deliveries
For example, if the total time taken for all deliveries in a day is 10 hours and 50 deliveries were completed, the Average Time Per Delivery would be:
Average Time Per Delivery = 10 hours / 50 deliveries = 0.2 hours or 12 minutes
By monitoring this KPI over time, delivery companies can identify trends, benchmark their performance against industry standards, and set targets for reducing delivery time. They can also analyze factors that contribute to longer delivery times, such as inefficient routing, delays in order processing, or challenges in the last-mile delivery process.
6. Average Cost Per Delivery
To calculate the Average Cost Per Delivery, divide the total cost associated with deliveries by the total number of deliveries completed within a specific period. The formula for calculating this KPI is as follows:
Average Cost Per Delivery = Total Cost of Deliveries / Total Number of Deliveries
The total cost of deliveries includes various factors such as transportation expenses (fuel, vehicle maintenance, driver wages), packaging materials, order processing costs, and any other direct costs associated with the delivery process.
For example, if the total cost of deliveries in a month is $10,000 and 500 deliveries were completed, the Average Cost Per Delivery would be:
Average Cost Per Delivery = $10,000 / 500 deliveries = $20
By monitoring this KPI over time, delivery companies can identify trends, compare their costs to industry benchmarks, and implement strategies to improve efficiency and reduce costs. They can analyze factors that contribute to higher costs per delivery, such as inefficient route planning, excessive fuel consumption, or high labor costs.
7. Vehicle Utilization Rate
To calculate the Vehicle Utilization Rate, you divide the total time that vehicles are utilized for deliveries by the total available time for the vehicles, and then multiply by 100 to get the percentage. The formula for calculating this KPI is as follows:
Vehicle Utilization Rate = (Total Time Vehicles Used for Deliveries / Total Available Time for Vehicles) x 100
The total time vehicles are used for deliveries includes the time spent on actual deliveries, including loading and unloading, while the total available time for vehicles is the time during which the vehicles are expected to be in operation.
For example, if the total time vehicles are used for deliveries in a week is 50 hours, and the total available time for the vehicles in that week is 60 hours, the Vehicle Utilization Rate would be:
Vehicle Utilization Rate = (50 hours / 60 hours) x 100 = 83.33%
By monitoring this KPI over time, delivery companies can identify periods of high or low utilization and make informed decisions about fleet size, route optimization, and resource allocation. They can also identify opportunities to increase vehicle utilization, such as exploring additional delivery services, optimizing routes, or coordinating delivery schedules more efficiently.
8. Customer Satisfaction Score (CSAT)
CSAT is typically measured through customer surveys or feedback mechanisms, where customers rate their satisfaction on a scale or provide qualitative feedback. The scores are then aggregated to calculate an average CSAT score. The formula for calculating the CSAT score varies based on the rating scale used (e.g., a 5-point scale or a percentage-based scale).
For example, if a delivery company conducts a CSAT survey and receives ratings from customers on a scale of 1 to 5, the CSAT score is calculated by averaging the ratings and converting it to a percentage. If the average rating is 4.5 out of 5, the CSAT score would be:
CSAT Score = (Average Rating / Total Possible Rating) x 100 = (4.5 / 5) x 100 = 90%
Monitoring the CSAT score over time helps delivery companies track customer satisfaction trends, identify patterns, and make informed decisions for service improvements. It enables the company to address any potential issues, enhance customer experiences, and build long-term relationships with satisfied customers.
Improve On Your Delivery Performance KPIs With Onfleet
Onfleet provides key features that enable users to excel in their delivery operations KPIs. These include auto assignment, route optimization, proof of delivery, customer communications and driver tracking, feedback collection, and analytics and reporting.
Auto assignment automatically allocates tasks to drivers based on availability, location, and capacity, saving time for dispatchers and optimizing resource utilization.
Route optimization calculates the most efficient delivery routes considering factors like traffic, distance, and time windows. This reduces fuel consumption and improves delivery speed.
Proof of delivery allows drivers to capture electronic signatures, photos, and notes, ensuring accurate record-keeping and providing transparency to customers.
Customer communications and driver tracking enable real-time communication between drivers and customers through SMS notifications or a branded tracking page. This keeps customers informed and allows businesses to monitor driver locations for accurate updates.
Feedback collection allows customers to provide valuable insights through customized surveys, helping businesses improve their operations continuously.
Analytics and reporting tools generate comprehensive reports on metrics such as delivery times, completion rates, and customer satisfaction scores. These insights support data-driven decision-making and optimization of operations.
With these features, Onfleet empowers businesses to streamline their delivery processes, increase efficiency, and deliver an exceptional customer experience.
See How The Guardsmen Saved Time and Money While Delighting Customers
Discover how Onfleet's powerful features revolutionized delivery operations for The Guardsmen, a renowned nonprofit organization, on our blog. Learn how auto assignment, route optimization, proof of delivery, customer communications and driver tracking, feedback collection, and analytics helped The Guardsmen achieve exceptional performance on their key performance indicators (KPIs). Dive into the case study here.