19 June 2008 authored by Sam Miller – Cargoes and the efficiency of delivery should be measured. This is only made possible by using an Air Freight KPI—a set of standards that should be observed.
People can now send as much cargo as they want with at least 24 hours delivery turnaround time. This is made possible because of the existence of airplanes and cargo planes. Without these, everyone will have to wait for days, and even weeks, if ships are still the only way to travel across the seven continents of the world. However, there will still be problems that will occur in freight services even with technology around. It is therefore important to have standard air freight KPI scorecards to measure how effective this service is.
Key Performance Indicators or KPI's
Key Performance Indicators or KPIs are measurable metrics that are incorporated into company scorecards. These are used to measure not only the financial aspects of the company’s performance but also customer satisfaction and the actual efficiency of the activities and processes. This is applied in any industry and the metrics measured are not the same, even for companies that belong to the same industry. This is precisely because each management has a different perspective of what is important and what is not.Let us say that an air freight company has 90% accuracy in delivering the right package to the right recipient. This may sound good, but in reality, it is not. 90% accuracy means that for every one million packages, 100,000 of these are incorrect. This is an alarming number, and for this very same reason, air freight companies should develop ways to reduce the chances of errors. This can only be done if things are measured effectively.
Always remember that one thing cannot be managed if it cannot be measured. And if something is not manageable, it cannot be improved.So, what are the KPIs that should belong to the scorecard of an air freight company? Actually, there are many. And as mentioned earlier, these metrics may vary from one company to another.
However, there are common metrics that are measured and one of these is booking.Booking includes the flight time. This should be identified right away—and flawlessly executed—so customers know when their cargos will be sent out. Part of booking is the efficiency in tagging these packages whether they should belong to this flight number or the other. There will be serious delays if a package intended for flight number one was sent to flight number two instead. The standard here should be 100% accuracy. The way it is measured is through taking the time the package was taken against the time the package was agreed to be taken.
Another metric that is all too common is Received as Agreed on Time. This is called RAT. This means that if the promised delivery is within a 24-hour period, the recipient of the package should receive the package without the specified timeframe and no longer than that. Otherwise, it is considered a defective service. This has something to do with booking, too. If the booking is not accurate, there will be a certain delay in the cargo delivery. Of course, the air freight KPI equivalent for RAT is also 100%.