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9 Courier & Delivery KPIs to Track (+ How to Calculate)

The trucking industry sector is very competitive, requiring any courier business owner to track specific metrics (KPIs) to grow while maintaining profitability. With significant upfront capex and high operating costs, it’s even more relevant than ever for courier companies to measure and track certain KPIs to maximise growth and profitability.

From cost per mile, average time per delivery, deadhead rate, etc. this article discusses the 9 most important KPIs any courier and delivery company must track. Let’s dive in!

1. Number of deliveries

This is another critical KPI to track since you will use it to determine most other KPIs. It refers to the total number of deliveries completed over a specific period (a month for example).

This is an obvious metric to determine since it is the number of orders completed, but it is very critical in determining the effectiveness of your operations. Additionally, the KPI can be used in calculating an average number of deliveries which is a crucial metric in determining growth, particularly when order delivery lags or exceeds operational efficiencies.

The KPI is important in calculating profit margin. You may increase deliveries and generally lower delivery costs with the aid of a good delivery management system. The statistic aids in calculating the typical number of deliveries to pinpoint areas with room for expansion. 

2. Delivery in full on time (DIFOT)

This is a metric that tracks the number of orders delivered in full and on time as per schedule. It is an important KPI for tracking order delivery performance. DIFOT shows how often the company delivers what customers ordered and if it is on time.

A good DIFOT shows that the business is efficient in its operations. As a courier, you need to give customers the estimated time of delivery for an order, and when orders are delivered per schedule, that is a DIFOT success. 

To calculate the DIFOT rate, you divide DIFOT by the total deliveries:

DIFOT rate = DIFOT / Total Deliveries

where

DIFOT = Total Deliveries – Deliveries with errors

For instance, if in a month the company makes total deliveries of 500 but out of those, only 475 were delivered in full on time, then:

DIFOT rate = 475 / 500 = 95%

3. Average time per delivery 

Average delivery time is one of the crucial KPIs courier businesses should track since it helps understand how long deliveries take to complete.

In addition, the KPI provides insight into the supply chain network’s effectiveness and efficiency of scheduled delivery routes.

Tracking this metric allows you to identify areas where drivers are falling behind and enables you to make changes accordingly. Things that impact average delivery time include weather conditions, traffic and the number of stops. Knowing this information allows you to plan routes to enhance delivery time. 

Average time per delivery = total delivery time / number of deliveries

If, for instance, there are 40 deliveries made in a week and the total delivery time is 80 hours, then in a week:

Average time per delivery = 80 / 40 = 2 hours per delivery

4. Capacity utilization rate

The metric measures the vehicle’s capacity used compared to the total capacity. Measuring the metric enables you to understand the amount of space that is not used in order fulfilment. It is one of the most important fleet management KPIs for courier businesses.

If the vehicle capacity rate is high, it implies inefficiencies in the loading procedure or the need for efficient route planning. On the other hand, if it is low, it implies that the existing capacity is insufficient and needs expansion.

Capacity utilization rate = Available capacity / Total capacity

If, for instance, you have a lorry whose working load is 1,500 Kg  but the load carried is 1,250 kg, then capacity utilization rate for that vehicle is:

Capacity utilization rate = 1,250 / 1,500 = 75%

5. Cost per Mile

This is another of the important KPIs courier businesses should track since it gives the cost of hauling a shipment per mile.

If you know the cost per mile, it is easier to determine the breakeven cost by multiplying CPM by the distance of the haul and then multiplying the cost by the target profit percentage to get a bid. 

To determine CPM, you add all operating and overhead costs and divide by the number of miles covered (both empty and loaded miles). 

CPM = Total costs / Total miles covered

For instance, if your truck covers 5,000 miles in a month and total costs (variable, fixed, and driver’s wage costs) is $3,500 then:

CPM = $5,000 / 3,500 = $1.42 per mile

6. Deadhead rate

Deadhead or empty miles are the miles the truck travels without a load. This is irrespective of whether the driver will pick up a load or has dropped off one and is returning empty. Tracking this KPI is vital since the courier will use resources like fuel and driver time without generating direct revenue. 

Therefore, tracking this KPI can offer insight into the routes causing dead miles, allowing you to optimize route scheduling and resource allocation. The secret is planning carefully, so drivers travel short distances without load to minimize costs. 

Deadhead miles = Total miles – Paid miles

and

Deadhead rate = Deadhead miles / Total miles

For instance, if your drivers cover 5,000 miles in a month and only 3,000 miles are paid, then deadhead miles will be:

Deadhead miles = 5,000 – 3,000 = 2,000

and

Deadhead rate = 2,000 / 5,000 = 40%

7. Average number of stops 

This is the number of stops the driver makes during deliveries. It is vital to measure the average number of stops since it affects order fulfilment efficiency. If there are many stops in a route, the driver may take longer to complete deliveries, which runs the risk of being late. As a result, it can lead to low customer satisfaction, high operations costs and reduced profits. You can improve the metric by getting the right balance in vehicle usage, routes, on-time rates and drive time. 

You can use route optimization software for route planning to do away with unnecessary stops. Also, batching deliveries together enables drivers to make multiple deliveries at ago cutting the number of stops the driver should make. 

8. Customer complaints and returns

This is another crucial KPI courier business needs to track to understand whether customers are satisfied with their services. Customer complaints impact customer satisfaction, so the business needs to track this metric, ideally as a percentage of total deliveries.

If you want to minimize complaints and returns, ensure that orders are delivered on time and accurately and that your drivers are professional and polite. 

9. Driver idle time 

Driver idle time refers to the time when the vehicle is sitting idle, or the vehicle is not working. It involves waiting for a pickup, sitting in traffic or taking a break.

Tracking this KPI is important since it affects fuel costs and reduces profits. For example, if your drivers spend a lot of time idle, it means it will take a lot of time to complete deliveries. 

You can improve this metric by using GPS to track drivers’ activity and location, which will also enable clients to track their orders in real time. Additionally, you can communicate with drivers regarding traffic conditions and encourage drivers to take breaks during the pickup or delivery of an order.

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