KPIs: Measuring improvement in fleet operations

Jan. 9, 2017

There is an old saying in business: “it is difficult to improve what you do not measure.” That philosophy has lead many fleets to develop KPIs — Key Performance Indicators.

What exactly are KPIs? They are standards of performance that are used as objective measurements of how well a fleet is doing.

There is no one right answer about which KPIs you should set for your business.  Most are formed around items that drive cost in an operation. Here are a few examples:

  • Total cost per mile
  • Parts cost per mile
  • Tire cost per mile
  • Fuel cost per mile
  • Miles per gallon
  • Idle time percentage

You can even develop KPIs around:

  • Cost per case delivered
  • Cost per delivery
  • Cost per cube
  • Cost per pound of product delivered

Or set KPIs that measure performance that have an indirect effect on cost. Some examples are:

  • On-time delivery rate
  • DOT accident frequency
  • OSHA accident frequency
  • Maintenance facility audit scores

Once you decide what you want to measure, then you need to determine what standard of performance is acceptable. Let’s look at idle time percentage as an example (measured in terms of idle when parked vs. idle when being driven). Is 10 percent acceptable to you? Seven percent? Five percent? Depending on the type of haul, terrain, detention time at docks, etc., you will have to determine what is realistic for your fleet given your specific circumstances.

And you’ll need to do this for each KPI you’ve identified as critical to your fleet’s success.

About the Author

Joseph Evangelist

Joseph is a seasoned transportation executive with domestic and international experience in sales, operations, mergers and acquisition with heavy emphasis on post-acquisition assimilation planning to maximize new growth and business combination opportunities.

He joined Transervice in 2007 and currently serves as executive vice president with sales, operations and staff responsibilities. He is also heavily involved in new business development and account management.

Previously he was president of LLT International, Inc., an international transportation consulting firm with operations in the U.S. and the Far East. He oversaw the maintenance and fleet management of a 2,000-vehicle cement distribution fleet in Indonesia.

Joseph was also president and CEO of Lend Lease Trucks Inc., a truck rental, leasing and dedicated carriage firm with operations throughout the U.S.

He also was vice president/general manager of The Hertz Corporation – Truck Division, a subsidiary of The Hertz Corp. While there he participated in the acquisition and successful integration of the Canadian licensee operations.

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