For many organisations across Australia and New Zealand, transport is one of the largest, least transparent and most difficult-to-control components of the cost base. It is also one of the most exposed to disruption.

Fuel volatility, labour shortages, carrier consolidation, capacity constraints and rising service expectations have fundamentally changed the transport landscape. At the same time, customers and internal stakeholders expect faster delivery, greater flexibility and more visibility, often without a willingness to absorb higher costs. In this environment, transport performance is no longer just an operational issue. It is a strategic capability.

Yet despite its importance, transport strategy is often fragmented. Network design decisions are made independently of carrier strategy. Technology investments are disconnected from operating models. Benchmarking is done sporadically. Rate negotiations are reactive rather than structured. The organisations that perform best take a very different approach. They view transport as an end-to-end system, where network design, carrier models, technology, commercial strategy and governance are deliberately aligned.

This article explores what a modern transport strategy looks like, from network design, through TMS implementations, to benchmarking, go-to-market processes and sustainable rate reductions.

Why transport strategy has become a board-level issue

Historically, transport was treated as a variable cost that could be managed through periodic tendering and carrier negotiations. That model no longer works in isolation.

Several forces have driven transport strategy up the executive agenda:

• Freight cost inflation has been persistent rather than cyclical
• Service expectations have increased, particularly in retail, healthcare and FMCG
• Supply chain disruption has exposed network fragility
• Sustainability and emissions reporting now include transport impacts
• Transport decisions increasingly shape customer experience

Transport is now tightly linked to revenue, reputation and resilience, not just cost.

Transport as a system, not a line item

One of the most common mistakes organisations make is treating transport as a collection of independent decisions:

• Warehouse locations decided without transport modelling
• Carrier contracts negotiated without understanding network implications
• Technology implemented without clear process design
• Benchmarking used only to pressure rates

In reality, transport performance emerges from the interaction of:

• Network structure
• Freight volumes and profiles
• Carrier strategy
• Technology and data
• Commercial terms
• Operational discipline

Optimising one element in isolation often creates cost or service issues elsewhere.

Network design the foundation of transport strategy

Transport outcomes are heavily influenced by network design decisions that may only be revisited every few years, if at all.

Key questions include:

• How many distribution points are required?
• Where should inventory be positioned?
• What service promises are realistic by region?
• How should linehaul and last-mile flows interact?

Poor network design decisions lock in:

• Excessive linehaul kilometres
• Inefficient last-mile delivery
• High reliance on premium freight
• Poor service in regional or remote areas

Effective network design balances transport cost, inventory, service and resilience, rather than optimising any single dimension.

Understanding freight profiles and demand patterns

Before meaningful transport optimisation can occur, organisations need a clear view of what they are actually moving.

This includes:

• Shipment volumes and frequency
• Weight, cube and pallet profiles
• Lane variability
• Seasonal peaks
• Service-level requirements

Without this visibility, carrier negotiations and TMS configurations are largely guesswork.

Carrier strategy and operating models

Carrier strategy is about more than choosing the cheapest provider.

Key considerations include:

• Core versus spot carrier mix
• Single versus multi-carrier models
• In-house versus outsourced transport
• Use of national, regional and niche carriers
• Alignment between carrier capability and freight profile

An effective carrier strategy balances:

• Cost competitiveness
• Capacity security
• Service reliability
• Operational simplicity

Over-fragmentation increases complexity and administrative cost. Over-consolidation increases risk.

Transport management systems enabling, not leading

TMS implementations are often seen as the centrepiece of transport transformation. In practice, they are an enabler, not the strategy itself.

A TMS can support:

• Carrier selection and rating
• Route optimisation
• Freight visibility and tracking
• Cost capture and accrual
• Performance reporting

However, many TMS implementations underperform because:

• Processes are not clearly defined first
• Master data is poor
• Carrier onboarding is underestimated
• Users are not trained in decision-making, only system navigation

The most successful TMS programs are grounded in a clear transport operating model and realistic adoption expectations.

Aligning TMS design to the transport network

A common failure point is misalignment between network complexity and TMS capability.

For example:

• Highly complex multi-leg networks implemented on simple systems
• Over-configured systems for relatively simple freight profiles
• TMS workflows that do not match how planners actually work

Technology should reflect the right level of sophistication for the organisation’s scale and maturity.

Benchmarking using data to inform, not just pressure

Transport benchmarking is a powerful tool when used correctly.

Benchmarking can provide insight into:

• Rate competitiveness by lane and mode
• Cost-to-serve by customer or region
• Structural cost drivers
• Service versus cost trade-offs

However, benchmarking is often misused as a blunt instrument to force rate reductions without understanding context.

Effective benchmarking considers:

• Freight profile differences
• Service commitments
• Network structure
• Volume volatility

Used well, it informs smarter decisions about where and how to intervene.

Go-to-market strategies for transport

One of the most effective levers for transport cost reduction is a structured go-to-market process. This goes beyond issuing a generic tender.

A strong transport GTM includes:

• Clear definition of scope and service expectations
• Clean, credible freight data
• Well-structured pricing mechanisms
• Thoughtful lane and bundle design
• Transparent evaluation criteria

The objective is not just lower rates, but:

• Better alignment between cost and service
• More sustainable commercial outcomes
• Improved carrier engagement

Designing rate structures that hold over time

Headline rate reductions often erode quickly if commercial structures are weak.

Key considerations include:

• Fuel surcharge mechanisms
• Indexation and escalation clauses
• Minimum volume commitments
• Peak period pricing
• Accessorial charges

Well-designed rate cards reduce surprises and disputes, improving both cost control and relationships.

Rate reductions versus cost reductions

One of the most important distinctions in transport strategy is between rate reduction and true cost reduction.

Rate reductions achieved through aggressive negotiation may be offset by:

• Declining service
• Increased accessorial charges
• Capacity withdrawal during peaks

True cost reduction is achieved through:

• Network efficiency
• Better planning
• Reduced variability
• Improved utilisation

Great transport strategies focus on sustainable cost outcomes, not just short-term wins.

Performance management and governance

Once transport strategy is implemented, ongoing governance is critical.

This includes:

• Clear KPIs covering cost, service and compliance
• Regular performance reviews with carriers
• Exception management processes
• Continuous improvement forums

Without governance, savings leak and service degrades.

Sustainability and transport strategy

Transport is a significant contributor to emissions.

Modern transport strategies increasingly consider:

• Mode optimisation
• Route efficiency
• Load consolidation
• Alternative fuels and vehicles
• Emissions reporting

Sustainability and cost efficiency are often aligned, particularly when waste and inefficiency are addressed.

Common pitfalls in transport transformation

Across Australia and New Zealand, similar issues appear repeatedly:

• Over-reliance on annual tenders
• Technology implemented without process clarity
• Benchmarking without context
• Savings targets disconnected from service reality
• Poor data quality undermining decisions

Avoiding these pitfalls requires discipline and end-to-end thinking.

How Trace Consultants can help

Trace Consultants supports organisations to design and deliver end-to-end transport strategies that are practical, defensible and sustainable.

Our support commonly includes:

• Transport network design and optimisation
• Freight data analysis and cost-to-serve modelling
• Carrier strategy and operating model design
• Independent TMS selection and implementation support
• Transport benchmarking and performance assessment
• Go-to-market strategy design and tender support
• Rate card and commercial structure design
• Governance, KPI and performance management frameworks

We work across sectors where transport is critical to cost and service outcomes, bringing a commercial, operational and execution-focused lens.

As an independent advisor, we help organisations make decisions that stand up to scrutiny and deliver real outcomes, not just theoretical savings.

Bringing it all together

Transport strategy is no longer about choosing a carrier or implementing a system in isolation.

High-performing organisations treat transport as an integrated system, aligning:

• Network design
• Carrier models
• Technology
• Commercial strategy
• Governance

Those that do this well achieve:

• Lower and more stable costs
• Improved service reliability
• Greater resilience to disruption
• Stronger sustainability outcomes

In a freight environment that is unlikely to become simpler or cheaper, transport strategy has become a core competitive capability. The organisations that succeed will be those that move beyond reactive rate negotiations and invest in deliberate, end-to-end transport design.

Is your transport strategy delivering control, or just coping with volatility?‍

If costs feel unpredictable, service trade-offs are increasing, or technology hasn’t delivered the clarity you expected, it may be time to step back and reset the system. At Trace Consultants, we help organisations design end-to-end transport strategies that align network design, carriers, technology and commercial models. Practical decisions that hold up in the real world.

Start a conversation with Trace to understand where transport is leaking cost or resilience, and how a more deliberate strategy can deliver sustainable performance.

Measuring DIFOT Effectively

On-time, in-full delivery performance sits at the heart of supply chain service. For decades, organisations across Australia and New Zealand have relied on DIFOT – Delivered In Full, On Time – as the primary measure of whether supply chains are doing what they are meant to do.

Yet despite its widespread use, DIFOT is frequently misunderstood, inconsistently measured, and poorly applied. In many organisations it has become a headline number that looks reassuring on dashboards but fails to drive better decisions or behaviours. In others, it is weaponised in commercial conversations without a shared understanding of what it actually measures.

Measured poorly, DIFOT obscures problems rather than exposing them. Measured well, it becomes one of the most powerful tools for improving service reliability, prioritising improvement efforts, and holding internal teams and external partners accountable.

This article explores what DIFOT really means, why organisations often struggle to measure it effectively, and how to design DIFOT metrics that genuinely support better supply chain performance.

What DIFOT is – and what it is not

At its core, DIFOT measures whether a customer receives what they ordered, when they expected it.

Simple in theory. Complex in practice.

DIFOT is not just a logistics metric. It reflects the combined performance of demand planning, inventory management, procurement, warehousing, transport, customer service and supplier management. When DIFOT fails, the root cause is rarely confined to one function.

Just as importantly, DIFOT is not a single universal definition. What “on time” and “in full” mean varies significantly by industry, customer type and operating model. Treating DIFOT as a generic, one-size-fits-all KPI is one of the most common sources of confusion.

Why DIFOT matters so much

For customers, DIFOT is often the clearest indicator of service reliability. Consistently delivering in full and on time builds trust, reduces downstream disruption and strengthens commercial relationships.

For organisations, DIFOT has a direct link to:

• Revenue protection and growth
• Customer retention and satisfaction
• Inventory efficiency and working capital
• Transport and expediting costs
• Internal productivity and rework
• Reputation and brand perception

Despite this, many organisations focus on improving DIFOT scores without addressing the underlying drivers, leading to short-term fixes and long-term frustration.

Common problems with how DIFOT is measured

Vague or inconsistent definitions

One of the most frequent issues is a lack of clarity around what constitutes “on time” and “in full”.

Questions that often go unanswered include:

• Is “on time” measured against the customer request date, confirmed date, or promised date?
• Is there a tolerance window, and if so, how wide is it?
• Is “in full” measured by line, order, carton, pallet, unit or value?
• How are partial deliveries treated?

Without clear definitions, DIFOT becomes subjective and open to interpretation.

Measuring DIFOT at the wrong level

Another common issue is measuring DIFOT only at an aggregated level, such as monthly or network-wide performance.

High-level DIFOT figures can mask significant variability:

• Certain customers consistently underperform
• Specific SKUs drive a disproportionate number of failures
• Particular sites or routes create recurring issues

Effective DIFOT measurement requires visibility at the right level of detail to enable action.

Blending root causes into a single number

A single DIFOT percentage tells you very little about why performance is good or bad.

Late delivery due to transport issues, short supply due to inventory constraints, and order errors due to master data problems all show up as the same outcome. Without separating these drivers, improvement efforts lack focus.

Using DIFOT as a lagging indicator only

DIFOT is inherently backward-looking. It tells you what has already happened.

Organisations that rely solely on historical DIFOT reporting often struggle to anticipate problems before they impact customers. Leading indicators are essential to complement DIFOT if service is to be managed proactively.

Defining DIFOT properly for your organisation

There is no single “correct” DIFOT definition. The right definition is the one that aligns with customer expectations and internal decision-making.

Key principles to consider include:

Customer-centric definitions

DIFOT should reflect what matters to the customer, not what is most convenient to measure internally. This may require different definitions for different customer segments or channels.

For example, what constitutes “on time” for a retail distribution centre may be very different from what is acceptable for a direct-to-consumer delivery or a hospital supply chain.

Clear, documented rules

DIFOT definitions should be explicit, documented and consistently applied. This includes:

• Time tolerances
• Treatment of partial shipments
• Handling of customer-driven changes
• Cut-off times and lead time assumptions

Ambiguity erodes trust in the metric and undermines accountability.

Alignment across functions

Sales, customer service, supply chain and finance should all be working from the same DIFOT definition. Misalignment leads to unproductive debate and finger-pointing rather than improvement.

Measuring DIFOT at the right level of detail

Effective DIFOT measurement balances simplicity with insight.

Order, line and unit-level views

Different views answer different questions:

• Order-level DIFOT highlights customer experience
• Line-level DIFOT exposes SKU and availability issues
• Unit or quantity-based DIFOT shows the scale of impact

Relying on only one view can distort priorities.

Customer and channel segmentation

Not all DIFOT failures are equal. Losing service with a strategic customer or critical channel has very different implications to missing a low-volume order.

Segmented DIFOT reporting helps organisations focus effort where it matters most.

Site, route and supplier visibility

Breaking DIFOT down by site, route, carrier or supplier enables targeted operational improvement rather than blanket initiatives.

Understanding why DIFOT fails – root cause analysis

Measuring DIFOT without understanding why it fails limits its usefulness.

High-performing organisations classify DIFOT failures into meaningful root cause categories, such as:

• Forecast error or demand volatility
• Inventory availability or policy issues
• Supplier performance
• Warehouse picking or packing errors
• Transport delays or capacity constraints
• Order capture or master data errors

Over time, this builds a fact base that guides improvement investment.

Complementing DIFOT with leading indicators

To manage service proactively, DIFOT should be complemented by leading indicators that signal risk before delivery occurs.

Examples include:

• Inventory coverage versus target
• Backorder levels and ageing
• Supplier OTIF performance
• Warehouse backlog or throughput constraints
• Transport capacity utilisation

These metrics allow teams to intervene earlier and protect DIFOT outcomes.

DIFOT and behaviour – getting the incentives right

One of the biggest risks with DIFOT is how it influences behaviour.

Poorly designed DIFOT metrics can drive unintended consequences, such as:

• Overbuilding inventory to protect service
• Expensive expediting or freight upgrades
• Prioritising easy wins over systemic improvement
• Disputes over attribution rather than problem-solving

To avoid this, DIFOT should be part of a balanced performance framework rather than a standalone target.

Internal accountability versus external accountability

Holding internal teams accountable

Internally, DIFOT should encourage cross-functional collaboration. Failures should prompt investigation and learning, not blame.

Clear ownership of root causes – not just outcomes – helps teams focus on what they can control.

Holding suppliers and partners accountable

Externally, DIFOT and OTIF metrics are often embedded in supplier and carrier performance management.

To be effective, these metrics must be:

• Fair and transparent
• Based on agreed definitions
• Supported by reliable data

Without this foundation, DIFOT becomes a source of dispute rather than improvement.

The role of systems and data quality

Accurate DIFOT measurement relies on high-quality data across order management, inventory, warehousing and transport systems.

Common challenges include:

• Inconsistent timestamps
• Manual overrides
• Poor master data
• Lack of integration between systems

Before refining DIFOT definitions, organisations often need to address underlying data and process issues.

Using DIFOT as a decision-making tool

When measured effectively, DIFOT becomes a powerful input into strategic and operational decisions, including:

• Inventory policy and safety stock settings
• Network and capacity planning
• Supplier selection and development
• Transport strategy and carrier mix
• Customer service models and segmentation

This is where DIFOT moves from being a report to being a management tool.

How Trace Consultants can help

Trace Consultants works with Australian and New Zealand organisations to design, implement and embed effective DIFOT measurement frameworks that drive real improvement rather than superficial reporting.

Our support typically includes:

DIFOT definition and framework design

Helping organisations define DIFOT in a way that aligns with customer expectations, operating models and decision-making needs.

Data and reporting review

Assessing data flows, system limitations and reporting structures to ensure DIFOT metrics are accurate, reliable and actionable.

Root cause and performance analysis

Supporting structured analysis of DIFOT drivers to prioritise improvement initiatives based on evidence rather than intuition.

KPI and governance design

Embedding DIFOT into broader performance frameworks with clear ownership, escalation and review processes.

Independent, practical advice

Trace is not aligned to technology vendors or logistics providers. Our advice is independent, solution-agnostic and focused on outcomes.

When should organisations revisit how they measure DIFOT?

Common triggers include:

• DIFOT scores that look “good” but customer complaints persist
• Ongoing disputes about what DIFOT actually means
• Repeated service failures with the same customers or products
• Limited insight into why performance fluctuates
• Increased complexity from growth, new channels or new partners

These are often signs that DIFOT is being measured, but not managed.

Final thoughts

DIFOT is one of the most powerful service metrics in the supply chain – but only when it is defined, measured and used properly.

Effective DIFOT measurement requires clarity, discipline and a willingness to look beyond the headline number. It demands an understanding of customer expectations, operational realities and behavioural impacts.

For Australian and New Zealand organisations navigating cost pressure, service expectations and increasing complexity, getting DIFOT right is not about chasing a percentage point. It is about building a supply chain that is reliable, transparent and accountable.

‍

Transport Networks and Finding the Right Transport Providers

Benchmarking & KPI Management for Success

Transport is one of those supply chain functions that only gets attention when something goes wrong.

A delivery misses a cut-off and a customer escalates. A distribution centre runs out of dock space because linehaul arrives late. Freight invoices spike without explanation. One carrier performs brilliantly in metro areas but struggles in regional lanes. Suddenly, transport is no longer a background function—it is the business.

Across Australia and New Zealand, freight networks are becoming harder to manage. Costs are rising, service expectations are tightening, and disruption is more frequent. Many organisations are also dealing with more complex delivery profiles: e-commerce fulfilment, store replenishment, direct-to-site deliveries, bulky items, time-window commitments, reverse logistics and heightened compliance requirements.

In this environment, the difference between average and excellent transport performance often comes down to three things:

1. A transport network designed to suit your demand and service promise
2. Transport providers selected objectively, based on capability and fit (not familiarity)
3. Benchmarking and KPI management embedded into day-to-day operations and governance

This article walks through how to build a transport network that performs, how to select the right providers, and how to manage success using benchmarking and KPIs—without turning the function into a spreadsheet contest. It also outlines how Trace Consultants can help organisations in Australia and New Zealand improve transport outcomes with practical, independent support.

Why Transport Networks Matter More Than Ever

Transport is not just a cost line. It is a service engine, a risk exposure and, increasingly, a brand experience.

When transport networks are designed and managed well, organisations can achieve:

• Lower freight cost per unit without sacrificing service
• Higher DIFOT (Delivered In Full, On Time) and fewer customer escalations
• Better capacity certainty through seasonal peaks
• Reduced damage and claims
• Improved dock and warehouse flow (less congestion and rescheduling)
• More reliable inventory positioning and replenishment cycles
• Better data and visibility for decision-making

When networks are not designed or managed well, the opposite happens: operational workarounds grow, costs become opaque, service performance erodes, and the organisation becomes dependent on a few “hero operators” who keep things moving through sheer effort.

Transport networks deserve structured attention because they shape performance outcomes for years. Yet many organisations treat transport as something to “shop” every few years on rates alone, rather than designing a model that can sustain service and cost performance long term.

What Is a Transport Network, Really?

A transport network isn’t just which carrier moves freight from A to B. It is the complete set of decisions and structures that determine how freight flows through the business.

A transport network includes:

• The lanes and flows (DC to store, DC to customer, supplier to DC, inter-DC, returns)
• Service tiers (standard, express, timed, same-day, regional, remote)
• Mode choices (linehaul, courier, parcel, rigid/tautliner, containerised, dedicated fleet)
• Consolidation and deconsolidation points (cross-docks, hubs, metro depots)
• Cut-offs and lead times (how transport interacts with warehouse operations)
• Provider mix (single carrier, multi-carrier, primary/secondary, specialist providers)
• Governance and accountability (who owns decisions, escalation, improvement)
• Commercial structure (contracts, rate cards, minimums, fuel, accessorials)
• Performance management (KPIs, reporting cadence, claims process, root cause)

When these elements are aligned to the business strategy, transport becomes predictable. When they are not aligned, transport becomes a daily negotiation.

The Most Common Triggers for Reviewing a Transport Network

Organisations don’t usually set out to redesign their network for fun. It happens when pressure builds. Typical triggers include:

1. Cost Growth Outpaces Sales or Volume

Freight costs rise due to:

• accessorial charges creeping in
• poor consolidation
• inefficient lane allocations
• under-utilised vehicles
• non-compliant bookings
• fuel or surcharge complexity

Cost blowouts are often symptoms of network design and governance issues, not just carrier rates.

2. Service Performance Has Become Unreliable

Service declines show up as:

• late deliveries
• missed timed windows
• increased damaged freight
• rising customer complaints
• higher re-delivery costs

This often indicates capability mismatch between service requirements and provider model.

3. Growth, Channel Shift or SKU Complexity

New product ranges, new customer segments, and growth in direct-to-consumer fulfilment often break legacy networks.

4. Carrier Dependency Risk

Relying heavily on one provider can become a strategic risk, particularly during peak periods or industrial disruptions.

5. M&A, Footprint Changes or Network Moves

Warehouse moves, new facilities, or acquisitions often require lane redesign and provider reallocation.

When these triggers appear, the right approach isn’t to “retender everything immediately.” It’s to start by understanding the network and defining what “good” looks like, before going to market.

Finding the Right Transport Providers: Start With Fit, Not Familiarity

Provider selection in transport can be surprisingly subjective. Many organisations default to the carriers they know, or those that have “always been there.” But transport markets have evolved. Capability, technology, footprint, fleet profile and service models differ widely.

Selecting the right transport providers starts with a clear definition of:

• Your customer promise (what you must deliver, and when)
• Your freight profile (pallets, parcels, bulky, hazardous, temperature-controlled)
• Your lane structure (metro vs regional vs remote, density, frequency, variability)
• Your operational realities (dock constraints, cut-offs, packaging, loading)
• Your risk appetite (single source vs multi-carrier, contingency requirements)

Only once these are clear does “who is the best provider” become an objective question.

The Provider Selection Process That Actually Works

A strong provider selection process is structured, comparable and evidence-based. In practice, it usually includes these steps:

Step 1: Segment Your Freight and Lanes

Not all freight is equal. A good selection process segments:

• parcel vs pallet
• metro vs regional vs remote
• fast-moving vs low-frequency
• high-value vs low-value
• fragile vs robust
• timed vs standard

This segmentation enables targeted selection rather than forcing a single provider to do everything.

Step 2: Define Service Standards in Plain Language

Service definitions must be unambiguous, including:

• lead times by lane
• time window compliance requirements
• POD requirements
• claims and damage thresholds
• escalation processes
• booking cut-offs
• exception notification expectations

If you can’t describe service clearly, you can’t select providers fairly—or manage them effectively later.

Step 3: Run a Capability Assessment (Not Just a Rate Comparison)

Rates matter. But capability mismatch costs more than a higher linehaul rate.

Capability assessment should cover:

• network footprint and depot coverage
• linehaul schedules and frequency
• fleet profile and equipment availability
• subcontracting models and governance
• peak capacity approach
• safety and compliance maturity
• claims performance and handling processes
• technology and visibility capability
• customer service model and escalation response

Step 4: Align Commercial Structure to Behaviour

Commercial terms should encourage the behaviours you want:

• incentives for service and compliance
• clear treatment of accessorials
• transparent fuel mechanisms
• controls for rate variation over time
• clarity on minimums and volume commitments

Many transport relationships deteriorate not because a provider “gets worse,” but because the contract structure creates constant friction.

Step 5: Validate Through Lane Modelling

Where possible, compare providers on:

• total cost-to-serve across representative lanes
• service feasibility against your cut-offs
• operational constraints (dock hours, trailer swap models, equipment)

This moves the evaluation beyond rate cards.

Transport Benchmarking: What It Is (and What It Isn’t)

Benchmarking is one of the most powerful tools for improving transport performance—when done properly.

Benchmarking is not:

• asking a carrier if your rates are “competitive”
• comparing your rate card line-by-line with another organisation without context
• using generic industry averages that don’t reflect your lane mix

Good benchmarking is:

• a structured comparison of cost and performance relative to similar networks
• adjusted for volume density, distance, freight profile and service requirements
• used to identify improvement opportunities, not just negotiate harder

What to Benchmark in a Transport Network

Cost benchmarking can include:

• cost per pallet / carton / consignment
• cost per kilometre by lane
• cost-to-serve by customer segment or region
• accessorial and surcharge incidence
• claims cost and redelivery cost

Service benchmarking can include:

• DIFOT by lane and service tier
• on-time pickup performance
• damage rates
• exception rates (missed scans, lost freight)
• POD compliance times
• customer complaint incidence
• rework and rescheduling frequency

Operational benchmarking can include:

• dock-to-dispatch cycle time impacts
• trailer utilisation and cube utilisation
• consolidation rates
• booking compliance and despatch discipline

Benchmarking should lead to a short list of actionable initiatives, not a “report that sits on a shelf.”

KPI Management: Where Transport Relationships Win or Lose

Once providers are selected, performance management is where value is either realised or lost.

Many organisations have KPIs, but not KPI management. They produce reports, but don’t drive improvement. Or they manage performance through blame, which degrades relationships and encourages defensive behaviour.

High-performing transport organisations treat KPI management as a structured operating rhythm.

The Anatomy of Strong KPI Management

1. Choose KPIs That Influence Behaviour

Too many KPIs dilute focus. A strong set typically includes:

Service KPIs

• DIFOT (or on-time delivery) by lane and tier
• on-time pickup
• scan compliance / milestone visibility
• proof of delivery time compliance

Quality KPIs

• damage rate
• claims turnaround time
• loss incidence

Cost KPIs

• cost per unit (with clear unit definitions)
• accessorials as a percentage of spend
• invoice accuracy and dispute rate

Responsiveness KPIs

• exception notification timeliness
• time-to-resolution for escalations
• customer service response times

2. Define KPIs Precisely

A KPI that can be interpreted two ways will be argued two ways.

Define:

• time measurement basis (dispatch time vs booked time vs pickup time)
• what counts as “on time” (grace period, business hours, customer availability)
• what constitutes a “delivery attempt”
• how damages are attributed
• how exceptions are classified

Precision reduces friction and increases accountability.

3. Build a Cadence of Reviews

A strong cadence often includes:

• weekly operational reviews for exceptions and immediate fixes
• monthly performance reviews for trend analysis and root cause
• quarterly business reviews for strategic improvement and contract alignment

Without cadence, KPIs are just numbers.

4. Separate Root Cause from Blame

Performance problems are rarely caused by one party alone.

A missed delivery window could be:

• late linehaul
• poor booking data
• warehouse dispatch delays
• customer site constraints
• packaging failures

KPI management should drive joint root cause investigation and improvement actions.

5. Tie Performance to Commercial Outcomes (Carefully)

Incentives and penalties can work, but they must be:

• measurable
• fair
• controllable by the provider
• balanced

Overly punitive models drive gaming and degrade collaboration.

Building a Provider Portfolio: Single Carrier vs Multi-Carrier

There is no universally correct model. The right approach depends on network complexity, volume density, service requirements and risk appetite.

Single Carrier Models

Pros

• simplicity
• fewer interfaces
• consolidated negotiation

Risks

• dependency
• limited competitive pressure
• reduced flexibility in peak periods

Multi-Carrier Models

Pros

• resilience
• best-fit capability by segment
• competitive tension

Risks

• complexity
• governance burden
• risk of inconsistent customer experience

A common high-performing approach is:

• one or two primary carriers per segment or region
• secondary carriers for contingency and peak cover
• specialist providers for niche requirements (remote, bulky, temperature-controlled, timed)

This model balances simplicity and resilience.

The Hidden Value: Linking Transport KPIs to Warehouse and Customer Outcomes

Transport doesn’t exist in isolation. Some of the biggest gains come from aligning transport with warehousing and customer service.

Examples include:

• improving despatch discipline to reduce missed pickups
• adjusting cut-off times to improve linehaul performance
• slotting and loading practices that reduce damage
• packaging standards that reduce claims
• load building that improves utilisation and reduces cost per unit

When transport KPIs are linked to upstream warehouse metrics and downstream customer experience metrics, improvement becomes far more powerful—and far less political.

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to design transport networks, select transport providers objectively, and implement benchmarking and KPI management that drives sustainable outcomes.

We help clients move from reactive transport management to structured performance and cost control—without adding unnecessary bureaucracy.

Independent, Vendor- and Carrier-Agnostic Support

We are not a carrier, broker or software vendor. That independence allows us to:

• assess options objectively
• challenge assumptions
• focus on what fits your operation and service promise

Transport Network Review and Strategy

We can help define:

• the right transport network structure for your lanes and demand profile
• segmentation strategies for freight and service tiers
• risk and resilience approaches (capacity, contingency)
• service promise alignment and feasibility testing

Provider Selection and Go-To-Market Support

Trace Consultants can support:

• market scanning and capability assessment
• tender design and evaluation frameworks
• commercial structure design (including accessorial controls and governance)
• contract and KPI schedule development
• transition planning and implementation governance

The goal is not just to pick “the cheapest carrier,” but to build a provider portfolio that performs.

Benchmarking and Cost-to-Serve Analysis

We help clients benchmark:

• rates and cost drivers in context
• accessorial incidence
• lane density and utilisation opportunities
• cost-to-serve by segment and region

This provides a fact base for negotiation and improvement—without relying on generic industry averages.

KPI Management Operating Rhythms

We support clients to implement practical performance management including:

• KPI definition and measurement design
• reporting and dashboarding requirements
• weekly/monthly/quarterly review cadences
• root cause and continuous improvement frameworks
• escalation pathways and governance structures

This is where savings and service improvements become “sticky.”

Building Internal Capability

Sustainable transport improvement requires internal capability. Trace Consultants can help uplift:

• transport governance maturity
• team capability and role clarity
• operating procedures and decision rights
• performance management routines

This reduces reliance on individuals and creates a repeatable approach.

Final Thoughts

Transport networks and provider relationships succeed when they are designed and managed deliberately.

Benchmarking gives organisations a fact base. KPI management turns that fact base into action. Provider selection determines whether capability matches your service promise. And network design sets the foundation that everything else sits on.

For organisations across Australia and New Zealand, the opportunity is significant:

• transport is often a major spend line
• performance is highly visible to customers
• small improvements compound quickly over time

The best outcomes come when organisations stop treating transport as a periodic procurement event and start treating it as an operating system: designed, governed, measured and improved continuously.

If your transport costs feel opaque, your service performance feels inconsistent, or your provider relationships feel reactive, it may be time to step back and redesign the way transport is managed—starting with the network, the provider portfolio and the KPIs that drive success.

‍