Blog · Board and management reporting · Shipping and logistics
The ten commercial KPIs a freight forwarder or shipping line should run on, each with its formula, the export it comes from and what it tells you: trade lane share per customer, volume by mode kept apart, transit time reliability per customer lane, customs hold rate and cause, detention and demurrage per customer, booking to invoice cycle, gross profit per shipment, customer concentration by gross profit, quote conversion by lane, and dormant customer lanes. Also the three measures most forwarders miss, the figures to drop, the identities, and who owns what.
A forwarder moves freight in units that do not add together, on lanes each customer splits between several providers, and earns a margin that leaks through charges nobody itemised. The measures that matter deal with each of those.
| # | Measure | Formula | Export | What it tells you |
|---|---|---|---|---|
| 1 | Trade lane share per customer | Volume moved on the lane ÷ customer's estimated volume on the lane, by mode | Shipment file; customer volumes by source grade | Lanes the customer ships with someone else |
| 2 | Volume by mode | TEU for ocean; chargeable weight for air; shipments for road; each against the same period last year | Shipment file | What the customer did, without rate distortion |
| 3 | Transit time reliability | Shipments arriving within quoted transit plus tolerance ÷ shipments, per customer lane | Milestone data; quotes | The promise against the milestones |
| 4 | Customs hold rate and cause | Entries held ÷ entries, against the lane norm; cause by correction source | Customs entry file | Holds caused by the customer's own documents |
| 5 | Detention and demurrage | Charges incurred, recharged and absorbed, per customer | Charges file; invoices | Margin leaking through free time overruns |
| 6 | Booking to invoice cycle | Median days from delivery to invoice, by customer and office | Shipment file; ledger | Revenue waiting on paperwork |
| 7 | Gross profit per shipment | (Revenue − direct costs) ÷ shipments, by customer, lane and mode | Job costing; ledger | Customers whose volume earns little |
| 8 | Concentration by gross profit | Top ten customers' share of gross profit; largest customer | Ledger | Dependence, on the figure that matters |
| 9 | Quote conversion by lane | Quotes won ÷ quotes decided, by count and value, by lane | Quote log; shipment file | Lanes where pricing or service loses |
| 10 | Dormant customer lanes | Customer lanes with no shipment in k × their own interval, by prior gross profit | Shipment file | Business that moved to another forwarder |
Every one of these is computed per account, per account manager and trade lane, and in total, and every one carries an identity that must hold before the table is shown.
Trade lane share. Revenue by customer is reported. Which of the customer's lanes you are not on is not.
Detention and demurrage absorbed. Incurred charges are paid to the line; whether they were recharged is seldom reconciled by customer.
Booking to invoice cycle. Treated as an accounts matter, though the delay is mostly operational.
A customer's ocean revenue rose 32 percent year on year. Its TEU fell 6 percent; the rise was rate. Gross profit per TEU fell from $210 to $155. Detention and demurrage of $41,000 was incurred on its containers, of which $9,000 was recharged. Invoices went out a median of 19 days after delivery, against 6 for the office's other customers. The account was reported as the year's growth story.
Revenue growth in a rate spike. Read volume and gross profit per unit instead.
Shipments handled, across modes. A parcel and a forty-foot container counted alike.
Quotes issued. Conversion by lane replaces it.
| Table | Must hold |
|---|---|
| Modes | Mode totals are never added; each ties to its own shipment count |
| Customs | Entries = cleared without hold + held; every hold has a reason code |
| Charges | Detention and demurrage incurred = recharged + absorbed + disputed |
| Gross profit | Job revenue − job cost sums to the ledger |
A table whose identity fails is a table with a row missing or counted twice. It is not shown until it is fixed.
| Measure | Owner | Reviewed |
|---|---|---|
| Transit reliability; customs holds; dormant lanes | Account managers; operations leads | Weekly to monthly |
| Detention and demurrage; booking to invoice | Operations and finance, by office | Monthly |
| Gross profit per shipment; quote conversion | Commercial director | Monthly |
| Trade lane share; concentration | Managing director | Quarterly |
A measure with no owner is a metric, not a KPI; see KPI versus metric versus measure.
Ten measures from the shipment, milestone, customs and charges files. Keep the modes apart, read gross profit per unit, and reconcile the charges that were never passed on. Covirage computes all of them from the exports forwarders already produce, files only, with the definitions stated and the identities checked. See Covirage for freight forwarders and shipping lines.
Because a TEU and a kilogram of chargeable weight cannot be added, and revenue alone is distorted by rate swings. A customer whose ocean revenue rose 40 percent in a rate spike may have shipped fewer containers. Volume by mode in its own unit, beside revenue and gross profit, shows what the customer actually did.
From the customer's stated volumes by lane, from tender documents, and from what account managers learn in reviews, each labelled by source. A customer shipping Asia to Europe with the forwarder and nothing on the transatlantic or intra-Asia lanes it is known to run is the growth list, and lane share is how it gets ranked.
The days between a shipment being booked or delivered and the invoice going out. Every day is revenue not yet billed and cash not yet collected. By customer, it usually traces to a few causes: missing documents, disputed accessorials, or an office that invoices in batches. The spread between offices is often a factor of three.