Top 10 Key Metrics for Tracking and Managing Freight
If freight and freight costs are a significant part of your business, then how you manage that freight is where efficiency and profitability are made or broken. With logistics playing such a critical role in operational success, knowing which metrics to focus on can determine whether your business thrives or struggles.
Based on industry best practices, this article explores the top ten key metrics every logistics operation should track - complete with real-world use cases and actionable examples to help you become a more data-led freight strategist.
1. On-time delivery (OTD) and delivery in full (DIFOT)
What they measure:
- OTD: The percentage of shipments delivered within the agreed timeframe.
- DIFOT: The percentage of orders delivered complete and without missing items.
Why they matter:
These metrics are essential for maintaining customer satisfaction and service reliability. Low scores often point to inefficiencies in scheduling, inventory management, or carrier performance.
Key use case:
Tracking OTD and DIFOT helps pinpoint weaknesses in the supply chain, supporting improvements in carrier selection or warehouse operations.
Example scenario:
An eCommerce company experiences complaints about late deliveries and incomplete orders. After analysing OTD and DIFOT metrics, they discover the issues are caused by inconsistent inventory levels at their distribution centres. By improving inventory forecasting and strengthening communication with carriers, the company boosts OTD and DIFOT by significant percentages.
2. Cost to serve each customer
What it measures:
The total cost of servicing individual customers, including transportation, handling, and additional services.
Why it matters:
This metric reveals high-cost customers or inefficient service models. Understanding this can lead to order consolidation, optimised service offerings and better supplier negotiations.
Key use case:
Identifying customers with disproportionately high costs allows businesses to explore strategies such as bundling shipments or restructuring delivery schedules.
Example scenario:
A wholesaler realises one customer is quietly draining resources with frequent, piecemeal deliveries to multiple locations. By consolidating shipments and setting minimum order thresholds, the wholesaler reduces transportation costs and improves delivery efficiency, maintaining profitability without compromising service quality.
3. Freight spend as a percentage of revenue
What it measures:
The proportion of overall revenue allocated to freight expenses.
Why it matters:
This metric provides insight into the financial impact of logistics. A declining percentage suggests improved cost efficiency, while an increase might indicate rising costs or inefficiencies.
Key use case:
Comparing freight spend to revenue over time can help businesses benchmark their performance and ensure competitiveness in their industry.
Example scenario:
A manufacturing company grows concerned as freight expenses begin to consume a larger share of their revenue. The culprit? A surge of last-minute expedited shipments driven by tight deadlines. By shifting strategy – to re-negotiate delivery timelines and opt for more cost-effective shipping methods - they successfully bring costs back in-line to protect their margins
4. Emissions measurement
What it measures:
The environmental impact of freight operations, particularly CO₂ emissions from transport.
Why it matters:
As sustainability becomes a priority, tracking emissions helps businesses identify opportunities for greener logistics practices to meet rising customer expectations.
Key use case:
Regularly monitoring emissions allows businesses to take action, such as adopting fuel-efficient routes or integrating electric vehicles. A company can also use this data to support environmental initiatives that neutralise the impact of their freight.
Example scenario:
A retailer aiming to highlight their sustainability credentials finds emissions data missing from their reports. By adopting an FMS with emissions measurement, they track CO₂ output by shipment type and route. Armed with this data, they are able to adopt greener practices, including electric vehicle deliveries, boosting their environmental credentials.
5. Carbon estimate at booking
What it measures:
The estimated carbon footprint of a shipment at the time of booking.
Why it matters:
Providing visibility into carbon impact empowers customers to make eco-conscious choices and supports corporate sustainability goals.
Key use case:
Businesses can use this feature to offer customers low-carbon options and differentiate themselves as sustainability leaders.
Example scenario:
A logistics provider adds a carbon estimate feature to their booking system, offering customers eco-friendly options. A client notices the difference, choosing a slightly slower but greener route for their shipments. The provider earns goodwill and positions itself as a sustainability leader in the market.
6. Cost per kilometre (CPK)
What it measures:
The average cost of transporting goods per kilometre. CPK can vary depending on your freight types e.g. parcel freight vs oversized.
Why it matters:
This metric highlights transportation cost efficiency. By monitoring CPK businesses can optimise routes, improve fuel usage, and refine operational strategies to reduce costs.
Key use case:
A sudden increase in CPK might indicate inefficient routing or rising fuel expenses. Businesses can act quickly by re-evaluating logistics strategies or renegotiating carrier contracts.
Example scenario:
A retailer discovers their CPK has crept upward over the last quarter. Digging deeper, they find that drivers are taking detours around road construction, driving up fuel costs and delivery times. By re-evaluating and optimising routes using traffic data, the retailer reduces both fuel consumption and CPK, saving thousands of dollars annually.
7. Order cycle time
What it measures:
The time taken from order placement to delivery.
Why it matters:
This metric identifies bottlenecks in fulfilment, such as slow picking, packing or shipping. Reducing cycle time improves both customer satisfaction and operational efficiency.
Key use case:
By analysing order cycle time, businesses can determine if delays are caused by internal processes or external factors, enabling targeted improvements.
Example scenario:
An online retailer struggles with slow deliveries, losing repeat customers to competitors. Analysing order cycle time reveals bottlenecks in the picking and packing processes. By automating warehouse operations and reorganising workflows, they slice hours off the cycle, improving fulfilment times and the customer experience.
8. Transit time variability
What it measures:
The consistency of transit times for shipments.
Why it matters:
Variability disrupts planning and creates inefficiencies in inventory and delivery processes. Reliable transit times are crucial for customer satisfaction and operational predictability.
Key use case:
Monitoring transit time variability can help identify carriers or routes that consistently cause delays, allowing businesses to make better choices.
Example scenario:
A logistics manager is facing challenges with inconsistent shipment arrivals, disrupting schedules and creating uncertainty. An analysis of transit time variability highlights a persistently unreliable carrier. Swapping them out for a carrier with a stronger track record restores consistency, allowing the manager to plan confidently and meet delivery promises.
9. Freight bill accuracy
What it measures:
The percentage of invoices that match agreed-upon rates and services without discrepancies.
Why it matters:
Accurate billing ensures tighter financial control and reduces time spent resolving errors.
Key use case:
Frequent discrepancies flagged by this metric can prompt a review of carrier contracts or auditing processes.
Example scenario:
An audit flags that a company’s freight invoices are riddled with errors, costing them thousands. By introducing automated freight bill validation, the company ensures that only accurate invoices are paid. This results in a significant reduction in disputes and healthier financial controls.
10. Claims ratio
What it measures:
The ratio of freight claims (for loss, damage, or other issues) to the total number of shipments.
Why it matters:
A lower claims ratio indicates better freight handling and operational quality, while a high ratio can expose inefficiencies or mishandling.
Key use case:
Businesses can use this metric to identify problematic carriers or operational weak points, reducing claims and improving service quality.
Example scenario:
A food distributor faces frequent complaints about damaged goods. A rising claims ratio points to rough handling during transit. By introducing more robust packaging and switching to a carrier with better damage records, they are able to reduce claims and regain customer trust.
Drive new efficiencies by tracking key freight metrics
These metrics will provide a clear and actionable view of your freight management performance, helping you pinpoint inefficiencies, uncover cost-saving opportunities, and deliver exceptional service across the board.
By consistently monitoring and analysing these indicators, you can make far more informed, data-driven decisions that drive efficiency, optimise operations, and ensure your logistics strategy remains both agile and effective.
Let Cario help improve your supply chain
When it comes to tracking freight in Australia, Cario is the leading freight management system. It has established its reputation as a reliable smart shipping software that automates shipments and transforms how a business manages its distribution. With Cario, freight tracking is easy, convenient, and accurate.
Contact Cario today to discover how you can track your shipments accurately at all times.