Performance Management for

Efficient Road Freight Operations

Guide
Disclaimer: While the Department for Transport (DfT) has made every effort to
ensure the information in this document is accurate, DfT does not guarantee
the accuracy, completeness or usefulness of that information; and it cannot
accept liability for any loss or damages of any kind resulting from reliance on the
information or guidance this document contains.
Foreword
Freight Best Practice is funded by the Department for Transport and
managed by AECOM Ltd to promote operational efficiency within freight
operations in England.

Freight Best Practice offers FREE essential information for the freight
industry, covering topics such as saving fuel, developing skills, equipment
and systems, operational efficiency and performance management.

All FREE materials are available to download from

www.businesslink.gov.uk/freightbestpractice or can be ordered
through the Hotline on 0300 123 1250.

3
Contents
Foreword 3
Performance Management for Efficient Road Freight
Operations 6
Who Should Use this Guide? 7

How Should this Guide Be Used? 7

Structure of the Guide 7

What Is Performance Management? 8

What Should a Key Performance Indicator Be? 8

Which KPIs Are Right for Me? 9

Measuring Overall Performance 10

Focusing on Key Components of Your Operation 12

Summary 12

How Do You Go about Measuring Performance? 14

A Step-by-step Approach to Measuring Performance 14

Selecting the KPIs 14

Setting and Reviewing Targets 15

Data Collection 15

Reviewing and Evaluation 18

Reporting and Feedback 19

External Benchmarking 21

Results 21

Improving Performance in Your Operation 24

Operational Efficiency 24

4
Telematics 26

Efficient Fuel Management 26

Improving Fuel Efficiency at Thorntons plc 27

Refrigerated Vehicles 29

Efficient People through Developing Skills 32

A Checklist for Measuring and Improving Performance

36
KPIs Used in the Freight Best Practice Fleet Performance
Management Tool and Information Needed to Calculate
them
37

5
Performance Management for
Efficient Road Freight Operations
Your freight transport operation may appear to be running smoothly, but the reality is, if you don’t
measure it, you can’t manage it.

Freight transport operations are made up of equipment, systems and people. Understanding and
monitoring the performance of each of these can be very challenging. This guide gives you, the
decision-maker, an understanding of performance management concepts in freight operations, as well
as advice on putting a performance management process in place. Along the way, we’ll give you some
examples and ideas to try out which will put you in a position to know if you can improve the way in
which you are currently measuring the performance of your operation.

The main themes covered in this guide are:

• Key performance indicators (KPIs) - performance is best measured on an on-going basis, and KPIs
which use a small number of key measures in important operational areas provide a good way to
do this

• Roles of management - for more senior managers, KPIs can be used to develop strategy, plan
and make decisions, while at the operational level they can be a day-to-day or week-to-week
management tool

• Measuring process - the process or system used to measure performance should be clear, accurate
and proportionate to the expected benefits

• Measuring tools - there are a wide range of systems, from simple paper records to comprehensive
computerised systems for data collection, that save time and effort

• Analysis of results - it is important to analyse the data correctly and make best use of the findings,
and to look out for the pitfalls that can occur during both data collection and analysis

• Benchmarking - as well as comparing your own drivers, vehicles and systems, benchmarking
your operation against the performance of other similar operations in the same or even a different
industry may reveal areas for improvement

6
• Strategies to increase performance
once you have understood your current
performance you can then develop a
strategy to identify reasons for good
and bad performance, introducing good
practice methods used by good performers,
and focusing training or investment
specifically in the worst performing areas

Who Should Use this

Guide?
This guide has been designed primarily for
managers and decision-makers operating
transport or distribution operations. Other
members of staff may also find useful information
within the guide to help them better understand
their own roles and how they might help to
contribute to improving efficiency.

How Should this Guide Be

Used?
This guide should be used as a reference
document, providing guidance on concepts
relating to performance management in freight
operations and introducing the types of key
performance indicators that can be measured in
an operation.

Structure of the Guide

• Chapter 2 looks at the benefits of
measuring performance, demonstrates
the use of key performance indicators and
shows KPIs relevant to different types of
operation

• Chapter 3 discusses the process you can

take for introducing performance measures

• Chapter 4 identifies the practical steps you

can take to improve efficiency once you
have measured current performance

7
What Is Performance Management?
If you want to make well-informed, tactical and strategic decisions about your operation, you will need to
be able to accurately measure the resources you use to deliver your services. Only then can you identify
areas for improvement and assess how effective any operational changes made have been.

The starting point for any performance improvement programme should be to understand the current
performance of your operation. This means collecting data on key aspects of your operation, and turning
this information into specific measures that can help you to identify areas for improvement - for instance,
how much it costs you to deliver products to your customers, how many miles your vehicles run empty or
the number of late deliveries you make. These measures are known as key performance indicators,
or KPIs.

A KPI on its own will not tell you much. Individual measures and data need to be turned into information
that can help you make decisions. This means setting a target, and measuring and monitoring KPIs over a
period of time to see how you perform against this target. Weekly, monthly and annual reports allow you
to monitor progress and see which areas need the greatest improvement. Producing graphs or charts will
often be the best way of showing performance progress.

Costs
Service

Measuring performance can allow you to strike the best balance between service and costs

What Should a Key Performance Indicator Be?

There are many different KPIs that can be used to measure performance in a freight transport operation
and it can be difficult to know which ones might be right for you. This section is intended to explain the
characteristics of useful KPIs that can be applied in various types of operation and by different people.
However, there are a number of things you can consider beforehand in order to decide which ones may
be right for you. A KPI should be relevant and it should also be SMART - Specific, Measurable, Achievable,
Realistic and Timed.

Specific
KPIs should be specific, simple to use and easy to understand. Complicated statistics and formulae can
lead to confusion and uncertainty about what is actually being measured in the first place. If KPIs are
specific and kept simple, they can be easily communicated across the business and there is no need for
staff to have an in-depth knowledge of the area being measured.

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Measurable
KPIs can show changes in performance over
time. For this to happen it is essential to compare
like-with-like data. It is easy to fall into the trap
of comparing two drivers on different routes for
time utilisation or miles per gallon (MPG). If one
route is more demanding than the other, this
could be misleading. Similarly, comparing drivers
when they drive vehicles of substantially different
age or vehicle type can also be deceptive.
There are ways you can get around these
problems however, such as rotating drivers onto
different vehicles and different routes and then
monitoring both driver and vehicle performance,
to spot consistently high and poor performers.
Achievable
Any targets that are set should be achievable. It
may seem beneficial to set high targets in the
hope that this leads to greater improvements
in performance, but people can become
disillusioned when they continually fall short
of the targets set for them. Regularly reviewing
performance towards targets and then resetting
the targets to encourage smaller incremental
(but cumulative) improvements may work much
better in the long run.
Realistic
Remember that decisions and management
actions will be taken as a result of the data
collected and presented, so the data collection
method needs to be realistic, reliable and
consistent. It is important that the data required
to produce the particular KPI can be collected
easily and on a regular basis, as comparison over
time forms the basis of benchmarking and then
improving performance.
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Timed
The frequency of monitoring is an important
consideration. Weekly or monthly monitoring is
recommended for many KPIs but this can depend
on the measure and the needs of a particular
business. Some information may have to be
collected on a daily basis, such as staff absences
in the warehouse, daily delivery drops or nightly
trunking volume. If certain measures are not
recorded and presented to the agreed timescales,
the risk of changes in performance going
unnoticed rises.
Which KPIs Are Right
for Me?
The size, type and management structure of a
company is likely to influence the range and
type of KPIs you might use. KPIs can be used to
help managers develop strategy, plan and make
decisions, while at the operational level they can
show clearly the areas that need improvement,
or a change in approach. The inner two rings
on Figure 1 show the strategic functions of
performance and a number of key business areas
that can all be monitored using KPIs.
An individual KPI can tell you how well you are
performing at an operational level, however,
when looked at in combination with other
measures, a picture can be provided of how
you are performing in terms of revenue and
profitability and overall fleet efficiency, and
in relation to customer service and legal
obligations. The outer ring and white text on
Figure 1, opposite, shows a range of different
KPI’s and the data required to help you monitor
performance in a range of important operational
areas. Appendix 1, on page 27, shows a list of KPIs
commonly used in transport operations and the
data required to calculate them.
Figure 1 Key Performance Wheel

The Freight Best Practice Programme offers an easy to use Microsoft Excel© spreadsheet tool called
the Fleet Performance Management Tool which allows you to measure 22 different KPIs.

Measuring Overall could be measured by the following KPIs:

Performance • Overall cost of deliveries, such as cost per

case / pallet
A director or senior manager within a company
is likely to be most interested in overall • Cost of maintenance
performance and bottom-line financial results.
For transport or warehouse operations, these • Total cost of warehouse operation

10

See the Freight Best Practice
Key Performance Indicators for:
- Next Day Parcel Delivery Sector
Customer service KPIs are also important
because they can give you an idea about how
your operation is perceived by the people that
ultimately pay you. Important customer service
KPIs could include the:

- Builders’ Merchants • Percentage of deliveries on time

- Non-Food Distrubution
- The Food Supply Chain
- The Pallet Sector
A full list of the Free Freight Best Practice
publications can be obtained from the
Hotline 0300 123 1250 or by visiting the
website at www.businesslink.gov.uk/
freightbestpractice
• Number of customer complaints
The following case study below illustrates
strategic KPIs used by Premdor.
Changing service levels can, of course, have a
direct impact on sales and ultimately profit as
improvements in service levels can result in
increased costs. Careful performance monitoring
in these areas is therefore crucial to help strike
the right balance.

Strategic KPIs Customer Service: Number of failed deliveries

at Premdor Ltd
Ryder Plc is a major third-party logistics solutions
provider which provides a dedicated distribution
operation for Premdor, one of the largest
suppliers of joinery products in the world. Each
month, Premdor requires Ryder to produce a set
of KPIs covering the following areas:
Transport Costs:
• Total cost per trip
• Total cost per drop
• Total cost per unit
• Miles per gallon
due to:
• Not loaded
• Damaged
• Driver out of time
• Product not required
• Delivery point problem
Sales/Order Process:
Premdor measures the effectiveness of its own
sales force. The costs per unit and per drop data
collected by Ryder link into sales KPIs, and the
‘product not required’ delivery failure reason
is related back to performance measurement,
assessing the effectiveness of the order process.
Benefits:
The benefits to Premdor have been increased
service levels and better value for money from
the contract. Ryder contract manager, Mark
Saville, said the benefits for Ryder were that, “KPIs
allow us to manage the business and measure
our performance and associated costs month on
month and year on year. KPIs help us forecast
resource due to the semi seasonality of the
business. We strive to constantly improve on past
performance and when we do we demonstrate
this to Premdor.”

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Focusing on Key Compliance

Components of Your Achieving high standards of compliance is a

Operation
At an operational level, KPIs can give you a
better idea of how drivers, fleets or depots might
be performing. This information can help you
compare the effectiveness of the managers at
all levels in your business. Where some parts of
an operation are consistently performing better
than others, it may be possible to use KPIs to
understand why this is the case and point to how
to improve performance where necessary.
KPIs for transport operations can be split
into 5 main areas (costs, operational, service,
compliance and maintenance), all of which could
be presented by vehicle, part of fleet or company
wide.
Costs
It can be useful to understand how overall
business revenues or business volumes change
but also how revenue from different parts of your
business fair relative to one another. Measures
under this area could be average cost per unit
delivered or average driver costs per kilometre.
prerequisite to operating an efficient vehicle
fleet with measures such as number of overloads,
vehicle traffic infringements and number of
accidents.
Maintenance
Maintenance performance is also important,
and the fleet maintenance manager might
want to look at defect report completion and
rectification, tyre wear and replacement rates,
volume of breakdowns and MOT pass rates.
Summary
Measuring performance can take time, but is well
worth the time spent if it drives efficiency gains
and improves operational performance. The
starting point for any performance measurement
system is to understand your current operational
performance, and where the strengths and the
weaknesses lie. This can be done by collecting
data relating to daily operations and costs.
Reports and presentation of weekly and monthly
data in the form of graphs can help to highlight
areas for improvement.

Operational Try to identify relevant KPIs covering different

areas of your operation. Use KPIs to measure your
overall performance as an organisation as well
Fuel represents around 30% of costs in the
as the performance of individual parts of your
majority of transport operations. Measuring and
operation. Regardless of which KPIs you choose,
monitoring fuel consumption is vital, as well
they should always be specific, measurable,
as average miles per gallon, average vehicle fill
achievable and realistic, while being monitored
and average time utilisation may be measured.
on a regular and consistent basis.
Planning efficiency could be measured by vehicle
fill, driver utilisation, levels of empty running and
kilometres per drop.

Service
Knowing how operational performance impacts
on customer service can dramatically influence
your actions, measures can include number of
late deliveries, percentage of product damage
and the number of customer complaints.

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Operational KPIs
at Premdor Ltd
In this Premdor example, the management KPIs
go to a greater level of detail than the strategic
KPIs, which the Ryder team produces for Premdor.
At the management level, Ryder is evaluating
its driver and vehicle performances in order to
improve the overall transport statistics that will
form the basis of the strategic KPIs going to
Premdor’s management each month.
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Driver Utilisation: Comparing each driver with
the scheduled time for the route.
Driver Performance:
Individual drivers can be compared to show how
efficiently they drive the vehicle in terms of mpg
and how safe they are by measuring accident and
collision rates.
Vehicle Utilisation:
Evaluating the planning function by monitoring
how well vehicles are utilised in terms of time
and vehicle fill.
Vehicle Performance:
At this level, data is collected for each vehicle in
terms of MPG and maintenance required.
Customer Service:
The number of failed and late deliveries can be
measured for each route, along with order errors.
It is then possible to see whether there is an issue
with certain customers, or drivers on particular
routes.
How Do You Go about Measuring
Performance?
Changing an aspiration to measure performance into a system that works in practice needs a well
planned and consistent approach, supported by people across your organisation. Once again, the
size and nature of the business and distribution operation will affect the way in which the plans are
implemented.

A Step-by-step Approach to Measuring Performance

Figure 2 opposite shows a basic outline of a step-by-step measuring performance process. Each stage
of the process is then further explained in this chapter.

Selecting the KPIs

Chapter 2 describes the sort of KPIs that you might choose depending on the size and nature of your
business or area of responsibility. You may already have to produce a range of performance indicators for
your company as a part of established procedures. However, it is useful to review the KPIs you currently
use. Are they specific, measurable, achievable and realistic and do they give you the information you
need? There may be other KPIs that can better measure what you need to know.

Think about what you want to know and then look at ways of measuring it. Take the example of an
own-account company that requires a transport manager to account for overall fuel spend. In order to
meet the fuel-spend target, the transport manager may decide to monitor fuel price, fleet mileage and
fuel consumption by vehicle. Armed with detailed information, effective targets can be set and action
taken to improve overall fuel efficiency.

Staff who are the subject of your KPIs need to see real value in monitoring performance levels. If they are
part of the recording process and the burden of information collection interferes with the activity that is
being measured, they are likely to lose sight of the all-important wider operation.

14
 See the Freight Best Practice publication Setting and Reviewing
Fleet Performance Management Tool
for a full range of KPI spreadsheets.
Targets
Target setting is perhaps the most important
Figure 2 The Process of Selecting and Measuring part of measuring performance. You cannot
KPIs set targets until you have measured current
performance, but until you have reviewed
performance against targets you cannot know
what action is necessary to improve performance.
Select KPIs
Once you understand your current performance,
setting realistic targets for each KPI is the next
logical step. KPI targets should be in line with the
Set and Review Targets strategic goals of your business and should aim
to move the company towards achieving those
goals.
Data Collection
Targets do not need to be perfect; the very act
of setting a target and monitoring your progress
towards achieving it is really the important
Review/Evaluation process.
(Including Benchmarking)
Always remember that monitoring and reviewing
is an on-going process and if the target was met
very easily, you need to go back and consider
Reporting & Feedback ‘raising the bar’. If you fall well short of the target,
you should try to understand why this might
have occurred and adjust your future target
levels accordingly.
Results Yes
Targets
met?
Tip
No
Targets are often discussed and reviewed on a
monthly basis. Any longer period than this can
Targets Yes mean that targets lose their relevancy.
too high?

No Data Collection
Collecting data to determine your KPIs is
Identify Strategy for
Performance Improvement
often the most difficult and expensive part of
measuring performance. Few companies will
start from scratch so reviewing your existing
process provides the first logical step. The data
Take Action can be collected manually or automatically using
Implement Strategy some form of system, and they can be analysed
within the company or outsourced.

A fuel management system is an integral part of

gathering data which can be used to measure KPIs

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A simple system with as few recording methods
as possible is the safest starting point, as the
more complex the methods you use, the higher
the possibility that there will be errors. If you
are reviewing and improving your performance
monitoring, you may well find that information
is being collected but is not fully analysed or
utilised. It makes sense to view the performance
management process in the same way as the
fleet efficiency you are trying to measure: try to
achieve the greatest output with the minimum
of input.
Manual Paper-based Data Collection
Forms can be created so that data can be
collected by drivers through filling in a daily
driver sheet, collecting data on kilometres run
and the number of cases delivered and whether
the delivery was on time. The driver would
also note down the amount of fuel put into
the vehicle to fill up the tank at the end of the
day. When the drivers return to the depot, they
hand the sheets to an administration clerk who
can capture the information into a computer
spreadsheet.
Automated Data Collection
Many companies already have systems in place,
such as warehouse management and route
scheduling systems, that can do the hard work
of collecting the data, which can then often
be presented in standardised daily, weekly or
monthly reports that will already be able to
provide useful information on your chosen KPIs.
However, it is often the case that the reporting
functions of these systems are not utilised.
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Specific Data Collection Systems
It is possible that your company does not have
any existing systems that could be used for
data collection purposes. In this case, you might
decide to buy a system with the main purpose of
measuring performance. If you decide to do this,
then make sure that the system is fit for purpose
and offers value for money.
Integrating Existing IT Systems
A company may already have systems that can
provide some of the information, but is not
able to get the most benefit because of existing
systems not communicating with each other or
not reporting in a way that allows comparisons to
be made.
There are a number of IT suppliers that focus
on bespoke systems which can link warehouse
management systems to scheduling systems
or to order systems, so that a far more effective
flow of information can take place. The cheapest
approach to improving a current situation is
to ensure that you have fully exploited the
information available from current systems. You
may find that you can collect data and report on
many of your selected KPIs.
Real-time Data Collection
Some operations may have specialised systems
that can be used for the purpose of performance
management, for instance, parcel carriers or
service-orientated businesses such as utilities
companies sometimes use hand-held terminals,
enabling the driver to key in details of drops
completed at the time. These systems can then
be used to report detailed and accurate
real-time data.
See the Freight Best Practice Guides on
Telematics and Information Technology
for Efficient Road Freight Operations
Data Collection Errors
Whether you already collect KPI information,
intend to make better use of existing data
collection systems or wish to put in place a new
data collection system,
there will always be the opportunities for data
collection errors to lead to incorrect performance
information.
Problems can result from human, machine or
system error. Often, time pressures can be the cause
of data entry errors. A conscious check on data
collected is recommended, whereby any unusual
figures can be checked for reliability. It is also
advisable to periodically monitor the accuracy of
the data entry to spot any errors.

It is important, therefore, when evaluating the

results of data collection, to consider error as
one potential reason for recorded changes in
performance.

Human error at point of delivery can cause
problems when invoicing the customer.
Tip
Good housekeeping, strong procedures and a
dedication to precision can help to reduce the
problem of errors in data collection.

The Perils of Averaging

An Example of Errors in Data Processing
By averaging MPG rather than using raw data, Company X thought that its performance was better
than it actually was. The following example of averaging the performance of six vehicles over a week
demonstrates the problem:

Vehicle Number Distance Travelled Gallons of Fuel Used Miles Per Gallon
1 742 73.2 10.14
2 626 57.6 10.87
3 1746 222.4 7.85
4 1463 173.5 8.43
5 1562 210 7.44
6 2050 265.1 7.73

Total over the six vehicles over the week = 8,189 miles and 1,001.8 gallons

Simply averaging the individual vehicle weekly MPG figures gives a result of 8.74 MPG (52.46÷6). However,
as each vehicle has run different mileages, the true fleet MPG is revealed by totalling all mileage and
dividing by all fuel used. This reveals that the actual fleet performance is 8.17 MPG (8,189÷1,001.8) - a
difference of 0.57 MPG or 7%.

17
Reviewing and Evaluation
The performance review period can take the
form of weekly, monthly and yearly comparisons.
If your business has a number of comparable
operations then benchmarking vehicles, shifts
or depots can reveal areas where performance
could be increased. For example, different vehicle
categories within a fleet can be benchmarked
against one another to show how they perform
on fuel consumption. If two similar vehicles
on similar routes undertaking similar activities
have noticeably different fuel consumption
performance levels, then this should suggest
further investigation to review both vehicle
maintenance and driver performance.
See the Freight Best Practice Fuel
Management Guide which looks at vehicles that may have been used for
vehicle versus vehicle and driver
versus driver performance monitoring
in more detail
In the Parcel Sector Benchmarking survey
undertaken in 2005 a number of leading
companies submitted data for three depots
each representing different geographical
regions of the country (North, Midlands and
South). One company’s Midlands depot was
the best at collecting parcels and bringing
them into the regional depot, having 36%
cubic fill at the end of the journey, whereas
the same company’s London depot had the
poorest performance with only 17% cubic
fill. Where there are significant differences
in performance, an understanding of the
reasons for this can help the business improve
efficiency. This might be through looking for
opportunities for back-loading, expanding the
customer base and improved route scheduling
See the Freight Best Practice Key
Performance Indicators for the
Next-day Parcel Delivery Sector
benchmarking guide.
18
When comparing one part of your operation with
another, it is important to avoid the common
pitfalls of not matching like for like, leading to
misleading conclusions:
• KPIs measuring the performance of
different parts of a delivery fleet by shift
should take into account where shifts are
not rotated and are constant nightshifts or
dayshifts - there may be efficiencies gained
by virtue of the time of day when the
vehicles run on the road, i.e. encountering
less traffic at night
• When benchmarking vehicle categories
for fuel efficiency, it is possible that the
results show the larger vehicles to be more
fuel efficient. However, it is also likely that
these vehicles may have been run on longer
distance trunking routes rather than smaller
numerous urban multi-drop deliveries
• When it comes to benchmarking depots,
the type of operation could be significantly
different. So, for example, a transport
operation could be primarily a trunking
or single-drop operation, while another
could involve multi-drop deliveries in urban
areas. The type of product carried may
differ, and in both the warehousing and
transport operations it could be that certain
products require a much longer loading
and unloading time owing to the size or
complexity of the product
• Sometimes when company takeovers or
mergers take place there is a difference
in the quality and age of equipment and,
until the equipment is replaced, there could
well be a marked difference between the
resources available at each location

In the Parcel Sector Benchmarking survey
there was the tendency for all London depots
to have poorer fuel consumption figures,
perhaps because of congestion and lower
inter-drop distance. On average, across all
participating fleets, 18 tonne rigids had fuel
consumption of 3.92 km per litre in the north
and 2.56 km per litre in the south. It would be
misleading to compare these performances
directly because of geographical and
operational differences.
For further details see the Freight Best
Practice Benchmarking Guides Key
Performance Indicators for:
• The Food Supply Cahin
• Non-food Retail Distribution
• Builders’ Merchants Sector
• The Next Day Parcel Delivery Sector
• The Pallet Sector
This has the added value of automatically
building-in previous months’ data into the report.
The reports can be designed to show actual
figures against targets set for each of the KPIs,
and from these reports, automated charts can
be produced. Often a quick view of a chart can
highlight the problem areas within an operation
far more clearly than tables of data.
The value of KPIs can be converted into efficiency
improvements only if they actually lead to
changes in the behaviour of the people in your
business. As a rule, feedback should be given to
people at all levels of the business, from strategic
to front-line
operations - this ensures that all staff members
are aware of progress and can see the benefits
of performance measurement.
In many cases, automated systems will effectively
prescribe the reporting style and it will be
up to you to take the available reports and
tailor the information, either for your own use,
for communicating with those staff whose
performance you are trying to influence, i.e.
drivers, or reporting to more senior staff.
Tip

Reporting and Feedback Clarity and comparison are important.

Remember that a picture (in the form of a
graph) can portray a thousand words.
The way you report performance information
can make a great difference to the success of
a performance management programme. This
means choosing an appropriate style and format
that interprets the data as well as reports. It will
be influenced greatly by the intended audience
- more senior managers will usually want to
deal with concise summarised information. At
operational levels within a business, a more in-
depth analysis showing a wider number of KPIs
may be necessary. The reporting system must
reflect this difference.

Reports can be set up in spreadsheet databases

to read directly from input pages (see figure 3,
taken from the Fleet Performance Management
Tool), thereby speeding up the time spent
producing reports.

19
Figure 3 KPI Cumulative Summary List (Actual v Target)

Figure 4 Pallet Sector Benchmarking Example

External Benchmarking One example of this has been in the pallet

Testing the performance of your own operation
against that of others is widely recognised as
offering excellent ‘health checks’, by comparing
operational efficiency with that of the average
and indeed best in class.
sector (see figure 4), where a Pallet Network
Benchmarking Survey measured a range of KPIs,
including degree of vehicle fill, deviations from
schedule and percentage of on-time deliveries.
Participation in benchmarking with external
organisations can be difficult to arrange and

20
time consuming to complete. Depending on
the nature of your business there may be a
benchmarking opportunity available. This is most
likely to be the case within the public sector, for
instance, within NHS Logistics or between local
authority vehicle fleets. Freight Best Practice
has also carried out a number of time limited
surveys whose results are available for you to
compare your current operational performance.
Freight Best Practice would like to hear from any
companies that would like to undertake this type
of benchmarking. If you are interested, simply
email info@freightbestpractice.org.uk
External Benchmarking
External benchmarking typically involves:
• Judging the relative performance of your
operation over time
• Comparing aspects of performance with
other practitioners
• Identifying areas for improvement in
performance
• Seeking the best approach to bring about
improvements in performance to match
or exceed best in class
See the Freight Best Practice Key
Performance Indicators for the Pallet
Sector Benchmarking Guide.
Results
Failure to Meet Targets
Where targets are not being met by individuals,
depots or by the business as a whole, but it
is known that other individuals, groups or
businesses have achieved better performance,
detailed KPIs can show exactly in which areas
performance has fallen below expectations. This
information will be vital in determining actions
for performance improvement.
21
Identify Strategy and Take Action
• Look at reasons for good and bad
performance at individual staff member,
vehicle, shift or location levels
• Report back to those underperforming and
set clear targets
• Introduce good practice methods,
disseminated from high performers to the
lower performers
• Consider providing appropriate training to
fill skills gaps
Targets Set too High?
It could be that the target has been set too high
and that it actually de-motivates individuals, thus
people feel they would never be able to meet the
target and less effort may be applied than if there
were no targets at all. In this case, the target
should be reviewed and set at an achievable
level.
Tip
Always try to set achievable targets.
Targets Achieved
It is important that you acknowledge good
performance, and that the factors that have come
together to produce the higher performance
level are recognised. A particular manager
or individual can have made a meaningful
difference and this should be recognised.
Tip
Share good practice across other operations in
the same company.
Targets Set too Low
If targets have been met easily it may be that
they have been set too low, therefore they should
be altered. This is where benchmarking against
competitors in the marketplace can provide
companies with common standards.
Internal Multi-contract
Benchmarking Example
In Ryder plc’s Dedicated Contract Carriage
division, benchmarking between different
contracts takes place. This is a good way of
comparing performance and management
styles of different operations. It is made possible
by having full access to all the data available,
unlike comparisons with competitors’ operations.
Concerns felt by companies outsourcing their
distribution to Ryder over sharing of operational
data are addressed through the non-disclosure
of financial information and the contracts being
in different industry sectors. Each operation
benefits by becoming more efficient through
using the best practice from one operation and
transferring it to another.
Each month a number of areas are benchmarked:
• Accident damage (average cost per vehicle)
• Vehicle downtime (average days per
vehicle)
• MPG - comparison of each vehicle type
• (3.5-tonne, 7.5-tonne, 18-tonne, tractor
units)
• Goods in transit
• Sickness record
• Collision frequency rate
22
Key Points to Remember when
Introducing Performance
Management into Your Organisation
• Relying on people to provide good
information can cause difficulties, so data
collection systems need to be easy to
understand and staff should be well briefed
if you need them to collect data for you
• Work with staff to decide on what
information you need to collect and how it
should be collected
• Getting support from company
management is critical - you cannot expect
people throughout your business to give
you good information if people at the top
do not consider it to be important
• Collecting data can be resource-intensive.
While continuous performance monitoring
is best, taking regular snapshots over time
can work well too. It is worth continually
asking the question, ‘How will this data
help me measure performance?’
• If no system is available for collecting
information, make your own. Simple
Microsoft Excel© sheets can be useful.
The Small Fleet Performance Management
Tool shows how, by combining a number
of spreadsheets, a comprehensive
performance measuring tool can be
produced
See the Freight Best Practice publication
Fleet Performance Management
Tool which provides a full range of KPI
spreadsheets
Understanding the Factors that
Influence Performance
Many factors affect performance; many may be
directly under your control, however, others may
not be. Understanding and accounting for the
influence of these factors is a necessary part of
gauging the success of your actions targeted at
improving performance.
When drivers leave the premises they are largely
their own boss. Gaining their buy in to performance
management is essential to your success
• Understand your current costs - you will
need to know your current costs to create
a benchmark from which you can monitor
progress
• Realistic timescale - the longer the period
of measurement, the more informative the
results will be
• Representative sample - always remember
to take into account seasonality and other
external factors when comparing ‘before’
and ‘after’ results
• Technical issues - if you are measuring the
performance of a new piece of equipment
during a trial period, make sure you have
support from the equipment or system
supplier to ensure that you can make the
most of the equipment
• Weather - to understand the effects of
weather on fleet performance it is best to
carry out your trial over a 12-month period
• Flexibility for unforeseen circumstances
- a degree of flexibility in the trial procedure
is essential to incorporate any unforeseen
factors

• Ownership of intervention - from the

outset, it is important to nominate a person
who has general responsibility for the
project

• Full participation - get everyone on board;

if performance comparisons are introduced
in the wrong way, without explanation and
supportive management, they can alienate
the drivers and lead to poor results

• Operational changes - always build into

your performance management system
the ability to record changes, such as new
vehicles or equipment

• Individuals’ behaviour - human behaviour

can always affect results, so one-off
observations can be misleading

23
Improving Performance in Your
Operation
This section looks at some of the actions you can take to improve efficiency in your own operation.
These are broken down into four key areas: operational efficiency, efficient fuel management, efficient
equipment and systems and efficient people through developing skills.

Operational Efficiency
Vehicle Routing & Utilisation
Medium-sized and larger fleets often use computerised vehicle route scheduling (CVRS) packages which
can collect and provide data to help measure performance levels and, in particular, show where certain
routes or depots are more efficient than others in terms of, for example, vehicle fill, kilometres per drop
and time utilisation.

In general, using CVRS can:

• Reduce journey times and vehicle mileage

• Improve the variety of delivery schedules
• Plan the most effective route
• Maximise the efficiency of deliveries
• Reduce the number of journeys and vehicles required

For more details, see the Freight Best Practice Guide Computerised Vehicle Routing and
Scheduling (CVRS) for Efficient Logistics.

24
Alstons Cabinets
Alstons Cabinets supplies bedroom furniture
from its base in Ipswich to over 2,000
customers across the UK. The vehicle fleet
consists of 22 rigid vehicles and trailers,
completing between 500 and 600 orders every
week.

Just a few years ago the whole order process

was carried out manually using specific
customer orders as the basis for manufacturing If you do not use a vehicle routing and
planning. The simultaneous introduction of scheduling system you can collect information
Material Requirement Planning (MRP) and by other means.
Paragon CVRS software has radically changed
the process, and improved the efficiency and
effectiveness of manufacturing planning.

Orders are now downloaded into Paragon for

routing, before being uploaded into the MRP
system for production planning. As customer
time windows and delivery preferences are
held in the CVRS system, successful planning
no longer depends on someone’s memory
when planning routes. Consequently, errors
have been reduced and orders are no longer
‘forgotten’ because of people working
under pressure. Other areas have benefited Satellite Navigation ensures drivers know their way,
from improved communication. With helping to prevent wasted time and fuel.
suitable system interfaces, the information
in electronically generated routes can be
circulated widely, quickly and accurately.
Improving Vehicle Utilisation
Better vehicle utilisation is a straightforward
These actions have drastically reduced internal
and direct way of cutting costs by making more
queries and errors, and improved the response
efficient use of vehicles and drivers’ time. One
to customer queries. There have also been a
way to increase overall utilisation is through
number of operational benefits. Better routes
‘back-loading’ - making use of spare capacity on
and more effective use of vehicles have
the return leg of a delivery. Some companies
enabled the fleet size to be reduced by 20%
regularly operate back-loading, while the nature
(from 25 to 20 vehicles), bringing with it
of other operations means that it is not possible.
reductions in running costs and revisions to
contract hire arrangements, without any
negative effect on customer service.
A Good Practice Guide to back-loading
specifically for smaller operators is available
which highlights operational benefits, ways
to find back-loads, issues affecting different
types of operation, and potential barriers and
constraints to back-loading.

25
 See the Freight Best Practice Guide
Make Back-loading Work For You.
Telematics
Telematics systems are applications that use
computers to control and monitor remote
devices or systems. The management software
in telematics systems can turn the data collected
into information that will help you to manage
vehicles, drivers and operations more effectively.
Several kinds of management software are
available, including pure reporting packages,
those with mapping and text facilities, or order-
tracking systems linked with ordering and
accounting software. The software may operate
on a single PC, on a network or via a website.
Improving Warehouse Operations
In all fleets serviced by warehouse operations,
fleet performance can be dramatically affected
by the operational efficiency of the warehouse.
Performance measures may be put in place
to help to monitor the on-going service levels
between the fleet and warehouse; this may be
internal to your company or a performance
agreement between a vehicle fleet collecting
or delivering to a third-party warehouse.
Depending on the nature and scale of
warehousing operations, performance of a range
of operational components can be measured,
ranging from individual warehouse staff to the
performance of the whole combined operation.
Measures might include productivity rates, levels
of product damage, stock rotation efficiency and
order completion i.e. meeting loading deadlines.
26
See the Freight Best Practice Guide Working
Together to Improve the Operational
Efficiency of Regional Distribution
Centres (RDCs) for more information on
efficiency in warehousing operations.
Improving Internal Communication
The actions of the order processing or sales
department can have a substantial impact on
the operational efficiency of the warehouse and
the distribution fleet. There is no substitute for a
good working relationship and communication
between operations and the sales department
but this can be helped by impartial
measurements of performance. So as well as
more typical sales-driven volume measures, more
precise measures that might affect freight fleet
efficiency can be used. These might typically
include the instances where order-taking error
leads to redelivery or the number of late orders
processed for delivery outside the agreed lead
time.
Efficient Fuel Management
Driver Training
A fuel management programme is a series of
actions you can take to better manage fuel
throughout its life at your operation - from
purchase and acquisition to storage and use. All
of these areas are important, however, research
has shown that the greatest single influence on
fleet fuel efficiency is that of the driver, in terms
of their driving style and technique.
Improving Fuel Efficiency
at Thorntons plc
Thorntons is a major UK manufacturer and retailer
of premium confectionery, with more than 4,200
employees. The company links manufacturing,
packing, warehousing and distribution operations
in one location.
A 3% improvement on fuel efficiency of the whole
fleet was achieved in one year, corresponding to a
cost saving of £7,300 per year. Staff running costs
were £4,200 per year, giving net annual savings of
£3,100.
Phase 2 introduced data loggers which could
measure the following indicators of fuel
consumption:

A fuel management programme was originally • Speed

implemented in 1995 as part of the company’s
commitment to:
• Idling time
• Harsh braking
• Reduce distribution costs
• Rapid acceleration
• Improve operational efficiency
The in-cab unit would warn drivers with a beep
• Reduce the environmental impact of its every time they moved out of pre-set parameters,
distribution operations and the violation is recorded.
The encouraging results achieved convinced
Phase 2 achieved a 5.8% improvement in fuel
Thorntons of the need to develop and refine
efficiency worth £14,500 per year. Net annual
the programme to maintain and increase
savings are £10,380, taking into account £1,040
savings and to achieve further environmental
for the production of weekly reports and £3,080
benefits. In recent years, it has invested further
for the running costs for staff and data loggers.
in computerised fuel monitoring equipment and
introduced a range of key driver performance
indicators linked to financial bonuses. The success Each driver’s performance is displayed on a
of this incentive scheme is due primarily to its notice-board, showing current fuel performance,
careful management, which allows individual last year’s fuel performance and the driver’s
drivers to raise issues and explain any under- individual target. League tables allow drivers to
performance on a weekly basis. compare performance, which allows for some
friendly competition and motivation.
Phase 1 of the fuel management programme
measured fuel consumption data with data
collected manually.

Fuel Recording Systems

Fuel recording systems can help you to measure and monitor your fuel use. The simplest fuel recording
method is to record fuel pump readings manually for each vehicle and, by combining these readings with
vehicle distance travelled, it is possible to work out the MPG. Managers should be aware that there are a
range of issues with fuelling systems that require close management - users should be aware of the risks
from data entry problems, power supply issues, leaks from the tank or pipework and even possible fraud.
Early warning of any of these issues can save the business a considerable amount of money.

27
Example of an In-vehicle
Fuel Recording System
At Premdor’s depot in Barnsley, MPG figures
are measured using the Siemens VDO system.
There is a vehicle-mounted control box which
measures the fuel going into the engine. The
advantage of this system is that it can measure
the performance of each driver in terms of
MPG. After the system was installed MPG
improved by 10% across the fleet. This worked
out as a saving of £65,000 per year on a
35-vehicle fleet. Owing to ongoing monitoring
using KPIs, the marked improvement in fuel
consumption has been maintained.
Vehicle MPG can also be measured through
pump-based systems where fuel is bunkered on
site. A vehicle key or card can be inserted and
the amount of fuel dispensed is automatically
recorded and submitted to a central system for
analysis.
Efficient Equipment and
Systems
All freight transport operations rely on the
performance of a variety of physical equipment,
from delivery vehicles to fork-lift trucks and roll
cages. It is important to understand how each
piece of equipment used in the operation is
performing and to understand whether you have
the best specification of vehicle or other piece of
equipment for the job required.
Improving Vehicle Specification
It is important to compare the performance
of different vehicles by make and model and
equipment specification. It may then be possible,
over a period of time, to see the difference that
vehicle specification makes, thus influencing
future purchases. Factors affecting efficiency
might include maximum permissible weight,
vehicle size, engine power, torque, gearbox, final
drive ratios and the aerodynamic styling of the
vehicle.
28
Tip
When buying a new vehicle, it can be tempting
to go for the least expensive option that will
‘do the job’. However, running costs add up to
far more than initial purchase costs over the
life of a vehicle. A vehicle specified to meet
your individual needs will cost you less to run
and will perform more effectively. Whole-life
costing, taking account of likely vehicle residual
costs as well as on-going operating costs, is the
key to getting vehicle specification right from
the outset.
Example of an Electronic
Fuel Pump System
Marshalls Construction is a leading UK
manufacturer of paving for landscaping
gardens, paths and driveways, as well as
walling and edging products. The company
has installed tanks with Triscan monitoring
equipment at a number of its depots. It has a
card system operated by Keyfuels which links
the fuel data for a vehicle regardless of whether
it is refuelling at a depot or at a Keyfuels site.
Keyfuels then issues each depot with a weekly
report giving fuel figures and MPG for each
vehicle. vehicle.
The system will benefit Marshalls by giving it
more control over the operation through the
ability to monitor drivers and vehicles from the
report information provided.

See the Freight Best Practice Guide Truck
Specification for Best Operational
Efficiency for more information.
Refrigerated Vehicles
Specialised vehicles such as refrigerated
vehicles impose extra purchase and running
costs, which means it is all the more important
to keep a check on the costs of maintenance,
fuel and other operating costs. Fridge units
can be powered from a number of sources
including: electricity, red diesel, white diesel,
cryogenics (liquid nitrogen) or direct drive. By
using a continuous performance measurement
process, the operating costs of running a unit,
which include maintenance and fuel, can be
analysed separately to the main motive power
unit of the vehicle. Hence, accurate specification
of equipment will, over time, result in greater
operational efficiencies, which can save
significant amounts of money.
The capital cost of refrigerated transport
equipment may account for less than 50% of its
whole-life cost when maintenance, fuel and other
operating expenses are taken into account.
Double-deck Trailers
Many businesses suffer from inefficiencies in
their deliveries due to variable product sizes,
meaning that efficient vehicle fill is difficult to
achieve. Innovative vehicle specification can help
to improve vehicle fill and increase productivity.
Performance measuring can help to verify that
the introduction of double-deck trailers has had
29
successful operational benefits, such as enabling
a reduction in the size of the fleet
See the Freight Best Practice Case
Study Focus on Double Decks for more
information and the Focus (DIY) Ltd Case
Study below.
Buyers Guide to Refrigerated Transport
Equipment.
Focus (DIY) Ltd
Focus (DIY) Ltd found that cubing out before
weighing out is a particular problem with
their range of products being delivered on
a fleet of single-deck and fixed double-deck
trailers. A nine-month feasibility study with
a prototype moving a double-deck semi
trailer demonstrated its potential to improve
operational efficiency, with the benefits being
the potential to reduce the fleet size. Other
benefits included reduced overall mileage,
lower fuel costs and shorter waiting times at
loading docks. Using the double-deck trailer
compared to two single-deck trailers gave the
following benefits:
• Mileage reduced by 257 miles (413 km),
saving £378 in operating costs (based on
an operational cost of £1.17 per mile)
• Fuel costs reduced by £108 (based on
a fuel price of £0.70 per litre) and lower
CO2 emissions
• Halving working time, as only one driver
is required to deliver the same load
• Improved average utilisation (only one
vehicle required)
 Padding Block

Christian Salvesen The operation also avoids the need to tranship

the tyres from a large lorry to a small vehicle. The
company has 120 boxes and regularly uses more
Christian Salvesen delivers tyres for Dunlop on a than 80 each night. The idea has been copied by
national contract from Birmingham. The company other companies in the food, parcel delivery, retail
chose a system of ‘swap-body’ technology to help and tyre industries.
it trunk tyres efficiently around the motorway
network whilst being able to use small, urban-
The main benefits are:
friendly rigid vehicles for the actual delivery of the
tyres. The company sends at night several draw-
bar lorries from the National Distribution Depot to
• Reduced driver waiting time while
loading takes place
eight regional locations, each with three full
• Facilitating the use of unmanned
4.7-metre demountable boxes. The prime mover drop-off sites
has one box and the trailer two boxes. The night
driver arrives at the regional centre, drops the legs • Fewer transfers of stock
on the full boxes and collects the three empty
boxes for return to Birmingham. Then next day • Minimised storage requirements
small delivery vehicles take just one box each
around the local urban area, visiting the tyre
distributors and returning to the regional yard
at the end of the day in time for the night trunk.

Demountable Bodies
Demountable bodies offer another approach to improving operational efficiency through vehicle
specification. Demountable bodies enable drivers and vehicles to be used more intensively owing to
quicker turnaround times at the depot. Essentially, drivers do not have to wait for the vehicles to be
re-loaded.

In terms of KPIs, a company can measure demountable efficiencies by analysing the loading times which
would cause a standard vehicle to be standing in non-working activity. Efficiency gains can also be
made with regard to reduced damage to products. If high-value, awkward-to-handle products are being
transported between depots and transhipping is required, then looking at the statistics on damages can
show whether it would be worth introducing a demountable operation to reduce the cost of damage.

30
Condition of Vehicle Fleet Correctly fitted aerodynamics equipment can
improve performance significantly
Other factors influence vehicle performance,
such as age and general condition of the
vehicle, especially in terms of engine, axles and Tip
tyres. Ensuring the most appropriate vehicle
specification for the tasks that are expected A truck specified or fitted with the correct
to be performed will improve both fuel and aerodynamic styling can use 6-12% less fuel
operational efficiency. There is often a financial compared to a vehicle with little, or badly
trade-off between the initial investment required adjusted, aerodynamic equipment. You do not
to buy a higher specification vehicle and the cost even have to replace your vehicles – there is
of operating the vehicle over a long period. a range of add-on features available that can
significantly improve the aerodynamics of
For example, the effects of using a vehicle that many vehicles on the road today.
makes loading and unloading of the product
difficult, or poor manoeuvrability of the vehicle The Freight Best Practice programme offers a
in an urban environment may increase delivery comprehensive and pocket-sized guide which:
time. By collecting data on vehicle maintenance
costs, fuel used and average loading and • Provides a brief introduction to
unloading times, a fleet manager can begin to aerodynamic styling and its benefits
work out the operational costs of running the
vehicles in the fleet. This can then be set against • Helps you to work out which
the cost of the vehicle lease or purchase. aerodynamic features are suited to your
operations
Aerodynamic Styling
• Shows you how to maximise the fuel
Aerodynamic styling fitted to goods vehicles savings from any features fitted to
can significantly reduce fuel consumption, but your vehicles
this saving has to be weighed against the cost of
fitting aerodynamic styling products. However, • Points you to further information
it may be possible to test the benefits by
benchmarking two similar vehicles, one of which
has good aerodynamics and one which does
not. It is then possible to see the effectiveness
of the aerodynamics for the particular transport See the Freight Case Study Smoothing the
operation. Maintenance costs should also be Flow at TNT Express and Somerfield using
taken into account. In-fleet trials provide a basis Truck Aerodynamic for more information.
for understanding these costs.
Tyres
Most operators know that improving the
aerodynamic performance of their vehicles can
reduce fuel consumption. However, did you
know that the rolling resistance of the vehicle’s
tyres can also have a significant impact on the
amount of fuel used? Suppliers claim that fitting
tyres with a 25% reduction in rolling resistance
on all axles of a vehicle could improve its fuel
consumption by at least 5%. Monitoring and
maintaining the correct tyre pressure is essential
and the potential for contributing to maintaining
and improving standards is too important to
ignore. (See the Moy park mini case study on
page 23.)

31

In-fleet Trials
Many suppliers test their own products
and give estimates of potential savings, but
these are likely to be variable in different
applications. Therefore, it is recommended that
operators consider conducting an in-fleet trial
to ensure the suitability of vehicles, equipment
or systems before embarking on a potentially
expensive acquisition programme. An in-fleet
trial is the testing of a vehicle, equipment
or systems in normal service as part of the
day-to-day transport operation to see if it is
suitable for the intended application and able
to produce noticeable benefits to the operator.
This is the concept behind manufacturers
offering demonstration vehicles/units to
operators for a period of time.
In-fleet trials can be used to measure any
intervention from physical changes to
vehicles, such as changes to the gearbox, tyres
or aerodynamic design, or changes to the
way the vehicles are driven through drivers
undergoing driver training. Tests can be carried
out relatively easily and can provide valuable
information, helping to influence future
decisions on the purchasing of equipment
and systems, or analysing the effectiveness of
training approaches.
Efficient People through While league tables can be very useful, it is
Developing Skills
Your employees are your main asset and play
a vital role in delivering services. Investing in
training and development can help you adapt to
technological changes and improve efficiency.
Training and development can also help you
improve employee retention, which has been a
significant problem in the transport and logistics
sector.
Selecting the right KPIs can help you identify
the areas within your business that are under
performing, and as a result identify training that
could help your staff. Training and development
should not be restricted to drivers and other
operational staff, but should be aimed at people
across all levels of your organisation. The sections
below provide an overview of how training can
32
help you improve performance.
Drivers and Operational Staff
• In general, there are 3 key skill areas for
drivers and operations staff:
• Technical Skills - Safe and Fuel Efficient
Driving, Telematics and Computer skills,
driver checklists and maintenance skills
• Personal Skills - Customer Care,
Communication and Team work
• Knowledge - Knowledge of the vehicle, EU
Driver Legislation and hazardous goods
Driver and operational training is vital to the
successful performance of any operation.
By establishing KPIs you can set a company
standard and identify any problems that occur.
A good method of achieving this for drivers
and operational staff is to create league tables.
League tables can measure performance in
several different areas such as fuel efficiency,
number of accidents, product damage, on-time
deliveries and communication errors. They can
also create a healthy competitive atmosphere
within the organisation. Effectively, this method
of performance measuring allows you to
efficiently allocate your resources where training
is actually needed.
important that drivers do not become
de-motivated as a result of performance being
measured. Instead, performance measuring
needs to take on a positive and proactive nature,
where training is given to improve overall
performance and enhance the employee’s skills.
Once weaknesses in employees’ skills have
been identified, you can set about rectifying
the problems. Designated driver instructors can
help to improve fuel efficiency by introducing
simple driving techniques. Driver training is not
just restricted to fuel efficiency, and KPIs can
also illustrate deficiencies in safe driving. The
Safe and Fuel Efficient Driving (SAFED) training
programme was designed as a single scheme
aimed at improving the driving techniques of
heavy goods vehicle drivers

Moy Park Ltd
Derbyshire-based Moy Park Ltd operates a fleet
of 42 commercial vehicles. Comprised mainly of
tractor units, together with a number of rigids,
the fleet is used for supplying poultry products
to customers nationwide. The company has
been using Michelin tyres for over 10 years,
managed by local dealer, TyreMiles.
In May 2003, the company took delivery of four
new Mercedes Axor 18.40 4x2 units and, for the
purpose of a three-month trial, specified two
with Michelin 295/80 R 22.5 energy low rolling
resistance tyres and two with competitor’s
tyres.
All vehicles had similar working patterns
during the trial and operated at 38 tonnes.
The trucks running on energy efficient
tyres recorded a fuel saving of 8% over the
competitor tyre fitted on the other vehicles.
Running 20 vehicles on the energy tyres led to
an annual fuel saving of nearly £7,600. Garage
Manager Nigel Nash explained “Despite the
cost of tyres being 3% of running costs for
commercial vehicles, specifying the right tyre
can have a significant impact on reducing one
of our main expenditures - diesel”.
Administration and Management
Administration and managerial staff also need
technical, personal skills and knowledge, but
the specific skills they use from day to day are
different to those of drivers:
• Technical Skills - Computer literacy,
Performance & Financial Management, and
Telematics skills
• Personal Skills - Commercial awareness,
communication, team-building and
customer service
• Knowledge - Transport policy, health and
safety legislation and customer priorities
Understanding new technology can maximise
efficiency and performance, and it is important
that managers and administration staff are
computer literate. It is also important that all
33
administration staff and managers understand
the concept of performance management so
that they can correctly collect information that
can help you improve your operation. If the
information is collected correctly, then problems
can be identified and tackled quickly.
Communication is a key skill in the success
performance of any logistics company. Managers
should be able to effectively communicate
instructions to team members and likewise
administration staff should be able to
communicate vital information to the drivers and
operational staff. Once again KPIs can be set to
identify shortfalls in this area.
How Does Performance
Management Encourage Staff?
Everyone should have continual professional
development in your organisation. If carried
out appropriately, performance management
can encourage staff to become efficient in their
everyday activities. This process will identify
weaknesses that can then be improved, but also
raise the standard of your employees. This will
not only benefit your business as a whole but
employees will feel more fulfilled and be more
likely to stay longer and work harder.
There is a large range of professional training
courses available for drivers, administration
and managerial staff including SAFED, General
National Vocational Qualifications, Certificates of
Professional Competence and other accredited
courses. The following organisations will help you
identify relevant development courses for your
staff;
• SAFED (www.safed.org.uk)
• Skills for Logistics (www.skillsforlogistics.
org)
• The Chartered Institute of Logistics and
Transport (www.ciltuk.org.uk/)
It is imperative that every part of the business is
involved to ensure full participation and ‘buy in’ to
performance management
Safe and Fuel Efficient The DfT SAFED driving scheme has benefited
many companies, with considerable fuel savings
Driving (SAFED) achieved.

The Safe and Fuel Efficient Driving (SAFED) Clugston Distribution Services
training scheme has been specifically developed
to enable both vehicle operators and training Benefits highlighted:
providers to implement driver training within the
road freight industry. • Average fuel consumption improvement of
7.3% for 23 drivers
The training covers all of the following areas on
which drivers can have focused training: • One driver trainer improved fuel
consumption by 13.5% on the day
• Adjustable aerodynamics
• Useful refresher on safety
• Braking
Winfield Transport (Cannock) Ltd
• Clutch control
Benefits highlighted:
• Cruise control
• Exhaust brake • Average fuel savings of 3.2%

• Forward planning • Projected fuel cost savings of £6,500/year

• Gear selection • One driver’s gear changes reduced from 109

to 70 over the same route
• Hazards • One driver’s fuel consumption improved by
• Height of load over 12% in the four weeks after training

• Positioning of load • Driving in a more relaxed way

• Speeding
• Low revs, low noise and low emissions
• Planning of route
• Tyres
• Weather conditions

34
For more information on SAFED, see the following publications

SAFED for HGVs: A Guide to Safe and Fuel Efficient Driving for HGVs,
Companies and Drivers Benefit from SAFED for HGVs: A Selection of Case Studies,
SAFED for Vans: A Guide to Safe and Fuel Efficient Driving for Vans.

SAFED in the Aggregates Sector

Website: www.safed.org.uk

SAFED for Vans

Website: www.safed.org.uk and click on the SAFED for Vans logo

A full list of the FREE Freight Best Practice publications can be obtained from the
Hotline 0300 123 1250 or by visiting the website at
www.businesslink.gov.uk/freightbestpractice

35
A Checklist for Measuring and
Improving Performance
Understanding and monitoring performance can be challenging. This guide has aimed to give you,
the decision-maker, an understanding of the performance management concepts, advice on putting a
performance management process in place and a range of initiatives you can introduce to improve your
operation’s performance. Measuring current performance is a fundamental first step you need to take
before you can put measures in place to improve operational efficiency and reduce costs.

The table below shows some important questions you can ask to help set up a performance
measurement system in your organisation.

Performance Management Checklist or X

Have you reviewed your existing KPIs or looked at those that might be appropriate for your type
of operation? Are they specific, measurable, achievable, realistic and to timescale
Have you set targets for these KPIs? Do you know how well your operation is performing against
your targets? Do you need to raise or lower them
Have you considered external benchmarking to compare your operation’s performance with
that of others?
Have you reviewed or set up a data collection system to give you the information you need?
Do you have a good system in place for analysing and reporting your KPIs? Do you use
information technology systems to help you?
Have you considered actions that can be taken to improve your operation’s performance and
meet new, higher targets in the future?

36
KPIs Used in the Freight Best Practice
Fleet Performance Management Tool
and Information Needed to Calculate
them
Area KPI Data Required
Rent cost/depreciation, road fund licence cost,
O Licence cost, no own driver costs, agency
Average cost per driver costs, fuel costs, tyre maintenance costs,
unit delivered (£) maintenance cost planned/unplanned, number of
trips, units carried, distance travelled/number of
trips
Rent cost/depreciation, RFL, O Licence costs,
Total whole vehicle annual insurance costs, own driver costs, agency
cost driver costs, fuel costs, tyre maintenance costs,
(p per mile) maintenance costs planned/unplanned, distance
travelled/number of trips
Average running Own driver costs, agency driver costs, fuel costs,
Cost cost tyre maintenance costs, maintenance cost planned/
(p per mile) unplanned, distance travelled/number of trips
Rent cost/depreciation, road fund licence cost, O
Average standing
Licence cost, annual insurance cost, number of A/C
cost (p per mile)
periods, distance travelled/number of trips
Average driver cost Own driver cost, agency driver cost, distance
(p per mile) travelled/number of trips
Total maintenance
Maintenance cost planned/unplanned, distance
cost
travelled/number of trips
(p per mile)
Total maintenance Maintenance cost planned/unplanned distance
cost (£’000) travelled/number of trips
Average miles per
Fuel litres, distance travelled/number of trips
gallon
Total miles run
Odometer opening, odometer closing
(‘000s)
Total empty miles Number of empty miles, distance travelled/number
run (‘000s) of trips
Operational
Percentage empty Number of empty miles, distance travelled/number
running total of trips
Capacity, distance travelled/number of trips, units
Average vehicle fill
carried
Average time Time vehicle available, time vehicle used, distance
utilisation travelled/number of trips

37
 Area KPI Data Required
Number of deliveries, number of collections,
Percentage of late
number of late deliveries, distance travelled/
deliveries total
number of trips
Number of deliveries, number of collections,
Percentage of
Service number of damages, distance travelled/number of
damages total
trips
Number of deliveries, number of collections,
Percentage of
number of complaints, distance travelled/number
complaints total
of trips
Total number of Number of overloads, distance travelled/number of
overloads trips
Total number
Number of traffic infringements, distance travelled/
of vehicle traffic
number of trips
infringements
Compliance Total number
Number of driver infringements, distance travelled/
of drivers’ hours
number of trips
infringements
Number of blameworthy accidents, number of non-
Total number of
blameworthy accidents, distance travelled/number
traffic accidents
of trips
Percentage of failed Number of inspections due, number of inspections
inspections total overdue/failed, distance travelled/number of trips
Maintenance Percentage of
Number of defects, number of defects rectified in
defects rectified in
last 24 hours, distance travelled/number of trips
24 hours total

38
39
 Freight Best Practice publications, including those listed below, can be obtained
FREE of charge by calling the Hotline on 0300 123 1250 or by downloading
them from the website www.businesslink.gov.uk/freightbestpractice
Saving FUEL
Monitoring and Understanding CO2
Emissions from Road Freight
Operations
This guide provides step by step advice for
creating a comprehensive CO2 inventory and the
benefits this can bring. It provides templates to
enable the reader to monitor the amount of CO2
produced by its Trucks, Vans, Warehouses, MHE
and Company Cars.
Developing - SKILLS
Safe Driving Tips
Written especially for commercial vehicle drivers,
this pocket-sized guide provides essential safety
hints and tips on all aspects of driving safely.
Equipment & SYSTEMS
Truck Aerodynamic Styling
This guide offers practical information on
aerodynamically effective styling for trucks
including appropriate add-on features.
February 2010.
Printed in the UK on paper containing 100% recycled fibre.
FBP1047© Queens Printer and Controller of HMSO 2010.
Performance MANAGEMENT
Fuel Efficiency Trials Guide
This guide describes a 12-step standardised
process for transport operators to use when
considering the trial for a fuel efficiency
intervention – an important starting point in
understanding the operational efficiency
savings that could be possible for your fleet.
Transport Operators’ Pack - TOP
TOP provides practical ‘every day’ support
material to help operators implement best
practice in the workplace and acts in direct
support of tasks essential to running a successful
fuel management programme
Case STUDIES
Engine Idling – Costs You Money and
Gets You Nowhere!
This case study provides evidence from 4
operators that by implementing anti-idling
strategies an operator can save money by
reducing fuel consumption and at the same
time decrease CO2 emissions.