Calculated by dividing total freight costs by number of units shipped per period. Useful in businesses where units of measure are standard (e.g., pounds). Can also be calculated by mode (barge, rail,ocean, truckload, less-than-truckload, small package, air freight, intermodal, etc.).
Where a business is shipping a large range of SKU’s, would it be meaningful to simply calculate:
Total freight cost / Value of stock shipped?
Obviously as this ratio increases, profit decreases.
But at the end of the day, it’s a matter of finding a mechanism to drive improvements in an area where different stakeholders often have competing interests (example sales vs distribution).
Popularity ranking of KPIs is expressed by little green horizontal bars. The more green the bar is, the more populair the KPI is. Popularity of a KPI is calculated based on usage by the community.
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