What is a Carrier Scorecard?
Published on: August 18, 2023
Updated: September 11, 2023
A carrier scorecard is a tool that evaluates logistic service providers’ (LSPs) and third-party logistic providers’ (3PLs) performance by tracking key performance indicators (KPIs) and the health of your carrier relationships. Scorecards help brands make decisions that lower risks, differentiate themselves, and identify areas for improvement.
Today, some carrier scorecards are completed through a manual process that can be time-consuming. It has become a common practice for retailers and carriers to go through siloed information in spreadsheets or documents which can make it difficult for some to execute timely decisions. However, retailers and shippers can leverage software to make this process streamlined because when done properly, it can be extremely beneficial.
What are the benefits of leveraging a carrier scorecard?
Carrier scorecards can be an effective way to measure the performance of carriers and determine which carriers work best for a retailer’s needs. Some of the advantages retailers can see are:
- Stronger relationships – Based on the key performance indicators that retailers want to measure, the information can be used to define strengths and weaknesses that can be relayed back to the carrier so they can improve.
- Evaluating cost vs service: Determine whether it is worth spending additional money to improve performance for certain carriers, figure out how much rejected tenders and late shipments are costing, and find out who the best carriers are.
- Increased ROI: Identify which one of the carriers perform the best and leverage that carrier for more cost-efficient and effective shipments.
- Resilient supply chains: Retailers can better prepare during uncertain times by learning which carriers can meet their needs when it matters most.
- Improved performance visibility: Gain insights from the details gathered by carrier scorecards that can help improve the business.
Ultimately, a carrier scorecard should help improve trust between logistic service providers which results in a more productive and efficient delivery process.
What are some carrier scorecard examples?
A carrier scorecard can vary based on the metrics retailers want to report on. It can include any of the key performance indicators that align with their vision and goals. An example carrier scorecard would be comprised of six columns:
- Carrier name – Depending on how many carriers, this can be a running list that compares one carrier to the others.
- Total shipments – It is important to understand the number of shipments your carriers handle. This way, retailers have visibility into the capacity that certain carriers deal with, and they can determine if they need to diversify further to prevent future bottlenecks.
- On-time performance – All retailers should strive to get their shoppers their order on time. Sometimes a promised delivery date can be delayed due to weather, traffic patterns, civil unrest, etc. Unfortunately, there are times when carriers keep delivering orders late which results in lost clients and sales for retailers. To enable business continuity plans when problems occur, it is good to be aware of the other carriers that can be leveraged to ensure orders are delivered in a timely manner.
- Billing accuracy – When retailers look at invoice accuracy, it can provide leverage for contract negotiation and help to make decisions on which carriers to use for large or important shipments. If invoices are wrong or duplicated, it can have a negative impact on the business. It wastes time, money, technology, and resources. As retailers track this data, it is a valuable form of measurement to improve processes in the long term.
- Damage-free shipments – Being able to evaluate carriers based on the amount of shipments that they damage is imperative for retailers who want to find weak points in their processes and fix them. It is not only important to measure the amount but the percentage as well. This way, retailers can determine what percentage are the carriers unsuitable for the business to continue using them for a certain amount of orders.
- Responsiveness to resolution – Measure how long it takes for the carrier to respond when they’re contacted and the willingness to help remedy an issue.
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