A Carrier Scorecard is a mechanism used by a shipper to drive visibility, accountability and performance with their freight carrier partners. Shippers and carriers align and agree on baseline KPI’s, such as on-time performance, billing accuracy, damages, responsiveness, and more. The carrier scorecard acts as a management tool and is often leveraged throughout the duration of a partnership to aid in continuous improvement projects. Here’s 4 more advantages you might find valuable:
Scorecards can act as a differentiator and competitive advantage for your business and sales strategies. Analyzing KPIs through the use of scorecards helps you manage carrier performance, and provides visibility so you can make proactive decisions. Developing a scorecard with the KPIs you want to measure only helps you make the best decisions for your carrier network. Grading the performance of carriers can help with long-term operational and financial stability for your company.
2. Leverage your scorecard to hold your carrier network accountable.Possessing objective evidence to support your assessment will propel your negotiation efforts. By using scorecards, you get insights into how carriers are performing which ultimately helps you make carrier decisions. Learning carriers’ strengths and weaknesses is very important and can really make an impact when choosing a carrier for your jobs. By choosing the correct carrier you are going to increase your on-time delivery, reduce damaged shipments which can be costly, and strengthen your partnership which has many benefits such as increasing your ROI.
3. Use as an aid when performing an internal audit of your operations.Your scorecard will assist in driving compliance with carrier requirements and SOPs which ultimately lead to a healthier relationship with your partners. A healthy relationship with your carrier partners ensures greater efforts in key areas like; on-time delivery performance, customer service, and damages. It’s important to look into your current carrier network and identify issues or challenges you’ve had by using a carrier scorecard. By doing an audit of this you will start learning where improvements could be made that are beneficial to you. Once you have an understanding of where your operations stand today this will help you make adjustments to better your network and transportation spend going forward.
4. Execute a Root Cause Analysis.Being lean with your time results in financial gains. Having visibility into carrier performance means spending time in the right places which results in increasing cash flow. By identifying which carriers perform well in certain areas and which do not, you will save time and money in the long run. Learning what issues your carriers has is important. You need to determine where you need improvement and make those adjustments so you can get the best ROI through your transportation spend.
Don’t know where to start? Contact ODW Logistics and learn how!