E-commerce logistics: transport KPIs

KPIs or performance indicators are used to measure the overall effectiveness of an implemented strategy. They can be used on a one-off basis for a specific campaign, or on an ongoing basis.

To make the right decisions for your e-commerce business, you need accurate, relevant data to improve your business performance.

The post-purchase experience involves meticulous monitoring of logistics, transport and customer satisfaction.

By knowing all theindicatorsyou need to track, you can analyze your data in detail to detect which improvements can boost your performance, and which pitfalls to avoid before they happen.

Transport service quality

This is one of the key indicators when it comes to transport. Quality of service (QS) represents the ability to meet delivery performance targets.

The most common calculation method for this KPI is : Number of shipments delivered on time / Number of shipments delivered. A good SQ rate is at least 95%.

As far as carriers are concerned, the date that starts the countdown to delivery is often the date on which the package is first scanned. This action usually takes place at the carrier’s collection point. This is referred to as QS vision carrier.

The delivery time countdown stops at a “clock stop”, the event that marks the end of the carrier’s responsibility for delivery. This clock stop can take several forms:

– The actual handover (possession) of the parcel to the recipient.

– A presentation: the delivery driver arrived at the recipient’s home, but the recipient was absent.

– The arrival of the parcel at a collection point when this mode of transport has been chosen.

– An event beyond the carrier’s control: strike, weather, traffic ban, unknown address, etc.

In the case of e-commerce QS, the date on which the delivery time is counted most often corresponds to dispatch, the date on which the packages are physically handed over to the carrier.

Processing time

Ideally, the carrier QS and the e-commerce QS should be identical. In fact, the shipping date for the e-merchant (date of physical delivery to the carrier) should correspond to the date of the first scan of the package on the transport side. However, reality is sometimes different, and some parcels may be scanned on D+1 or D+2, or even later. This period of time corresponds to the pick-up time. In principle, this time should be equal to 0.

If it is higher, it indicates problems that may be occurring at the :

• IT: the shipping date given is not correct. For example, the date indicated corresponds to the label edition and not to shipment.
• Operational: the organization of parcel collection is not optimal.
• Conjunctural: during peak periods, not all parcels may be scanned at branches or collection hubs on the day of delivery.

Apart from IT problems, it is likely that an acceptance time higher than 0 will have an impact on delivery time. This affects delivery performance, QS and ultimately customer dissatisfaction. This delay is therefore something to keep a close eye on.

First-time delivery rate

As its name suggests, this rate represents the percentage of deliveries that have been handed over to the recipient on first presentation by the delivery driver.

SQ is one of the first indicators to watch out for, but when it comes to home delivery, it’s not enough. The most important thing for the customer is to have his parcel in his hands, not that the delivery driver has shown up at his address. If an e-tailer has a good SQ rate but a low first-time delivery rate (less than 70%), this is likely to generate customer dissatisfaction. However, this rate needs to be put into perspective, depending on the type of product or transport service: a letterbox delivery will have a better rate than a delivery against signature.

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Pending proceedings

In the event of non-delivery on first presentation at home, the carrier may reroute the parcel to a collection point. In this case, the parcel is placed on hold because it has been placed on hold, and not because the customer has chosen to have it delivered. When the customer has decided to have the parcel delivered to a collection point, this is referred to as a “chosen delivery”. In this case, it is important to monitor 2 indicators:

• The reallocation rate, i.e. the rate of parcels made available at a different collection point from the one requested by the customer. This rate usually rises during peak periods when collection points are saturated, or during vacation periods when they are closed.
• The rate of returned parcels, i.e. parcels that have not been collected by the customer before the end of the holding period. These parcels are returned to sender, generating costs (returns processing, reshipment, refunds) and customer dissatisfaction.

Time limit for first appointment attempt

For delivery by appointment, the QS no longer depends on the delivery time, but on compliance with the day and time originally scheduled for the appointment.

If the appointment is made by the carrier, another indicator to keep a close eye on is the time taken to make the first appointment attempt. It’s on this indicator that you’ll animate this type of carrier. Your customers’ satisfaction therefore depends on the speed with which the appointment is made, as well as on the respect of this time slot.

Delivery problems

Delivery problems require special follow-up. We must ensure that their rates do not exceed 1 or 2%.. Here are the main delivery problems:

• Address problem. This does not necessarily prevent delivery, but it can delay it.
• Damage reported for the carrier or the customer.
• Return initiated by carrier.
• Customer refusal.

All these delivery management KPIs and many more are available natively in WelcomeTrack.