You monitor all aspects of your freight brokering business. You’ve practically memorized your targets and current numbers for revenue, margin, costs and profits. Lately, however, it seems as if your key performance indicators just don’t tell the whole story.
Revenue per load—and total revenue—will change with the price of capacity, which is heavily influenced by the price of fuel. Margin percentage is also dependent on the price of capacity. You can negotiate, but you can’t control it completely.
The best growth metrics are the ones you can control: Selling (adding new customers or getting more freight from current customers) and employee productivity. So, to get an accurate picture of your company’s growth path, here's a good metric that measures sales success combined with employee productivity:
Average Loads Per Business Day Per Employee
Don’t stop measuring everything else, but put this important element at the top of your list of key performance indicators.
Why track loads per day?
Loads per day may change seasonally, so you’ll want to compare this month’s numbers with the same month in previous years, or compare year-to-date numbers from this year to the same period last year. Look at the relationship between load volume and revenues or profits. You may learn something new about your business, and you may find ways to accelerate growth.
Loads per employee
How much can you grow your business without adding employees? Do you need to hire new brokers on the operations side, or bring in independent agents, to increase sales volume? How many people do you have in the back office? Is that the right number? Are they the right people?
Measuring success with a TMS
HOW TO MEASURE SUCCESS
If you have a TMS, create a new report that measures loads per employee per business day, and add it to the other metrics you already track. If you don’t have a TMS yet, consider DAT Keypoint®.
There is one element of business success that is irreplaceable: your time. Whatever metrics you track, you need to be able to gather and analyze the underlying data quickly in actionable reports. If you’re relying on spreadsheets, that may not be easy or quick. If you have a transportation management system (TMS), create a new report that measures loads per employee per business day, and add it to the other metrics you already track.
If you don’t have a TMS yet, consider DAT Keypoint®, which is designed specifically for freight brokers. It handles operations and accounting in a single system, and it can provide any reports you need to get an accurate picture of your company’s performance. DAT Keypoint helps your back office team to be more efficient and productive, so the same staff can continue to support your growth. It can be installed on your company’s server or accessed via a web interface by subscription, for a low monthly fee.
If you would like to learn more about DAT Keypoint, please email or call me at 800-728-7305.
Categories: Best Practices and Benchmarks