A useful trucking metric must do more than sound encouraging: it should point to specific actions, withstand inspection of its underlying data, and connect directly to profit and sustainability.
Trucking companies move from crisis to crisis and naturally look for reassuring signs. That is how vanity metrics gain prominence. Revenue and miles are especially common because they are easy to calculate and can reinforce the story leadership wants to hear.
“Miles per truck per week” is a typical example. A carrier may believe it is doing well whenever the number exceeds a target. But the metric does not reveal how many miles were empty, the revenue and cost associated with them, whether the truck stayed in the core network, or what more profitable opportunity was lost.
In the absence of clean, accessible, and meaningful measures, a leadership narrative will fill the void.
Outline Clear Actions for Making Improvements
When an employee sees a measurement, that person should be able to identify actions that could improve it.
For margin per day, the levers include:
- Increasing revenue through price or volume
- Reducing costs
- Reducing transit time
- Selecting different freight, even when that choice includes a longer deadhead or appears counterintuitive at first
Each lever can be broken into additional actions.
Miles per truck per week communicates only that more miles are better. It may correlate with profitability when price, cost, time, and network are all managed well, but it does not tell the team what to do beyond “get more miles.”
Provide Easily Accessible Data for Inspection
Trust requires access to the data behind the metric. Users should be able to see the raw elements, the equation, and the business logic.
KSMTA's Trucking Analytics Council has repeatedly emphasized the need for a data dictionary. Unlike many standard operating procedures, which are written after a process is established, analytics documentation should be developed alongside the hypothesis, testing, and launch of a new measure.
The documentation should explain each data element and formula and, most importantly, why the measurement is important. Users should also be able to drill from the final result to the underlying values and their sources. That visibility supports transparency, trust, and adoption.
Document Best Practices for Different Scenarios
Launching a KPI does not guarantee improvement. The company must record the actions taken in response to the measure and determine whether those actions actually worked.
In KSMTA's FreightMath practice, possible actions are identified before the monthly review. During the review, the team considers whether each action is realistic given the freight market, shipper relationship, and other blockers. A team member is then assigned responsibility and reports the outcome, whether positive, negative, or neutral.
The continuing value comes from iteration. Over time, the company builds a run book of tested methods for improving network profitability. The process may also expose that a supposedly useful metric is not valid and should be revised or retired.
The yardsticks used to judge performance should ultimately translate into profit and sustainability. They should also help employees understand how the number was built and what action can change it.