Ask any seasoned executive, and they will tell you that metrics are critical in tracking company performance. We wrote about important KPIs to track in a terminal, but when it comes to operational performance evaluation, management should also be tracking proxy metrics.
A proxy metric or variable is an indirect measure or sign that approximates a measurement in the absence of direct measurement. For example, the number of male students in one school district is a proxy metric for the number of male students statewide.
KPIs, on the other hand, are indicators of long-term growth and take some time to measure. But certain problems that need to be fixed in the short-term go unnoticed. This is where proxy metrics can help.
Proxy metrics can make it easier to measure customer service in real-time, which tends to be tough but invaluable. Terminals can fix any errors and adjust any necessary aspects without delay armed with these numbers. Operations leaders cannot meet one-on-one with everyone at the terminal each day and ask how they feel about their experience.
Instead, we came up with certain proxy metrics that can evaluate customer service in real-time. These metrics will give your terminal an advantage over competitors, who may not be tracking these items.
3 Proxy Metrics to Track in Port Terminals
Depending on your terminal operations, these three proxy metrics can help evaluate and improve customer service in real-time. 86% of consumers are willing to pay more for an upgraded experience, which is why knowing customer satisfaction in real-time can help your terminal.
1. Measuring Queue Completion Time = Proxy Metric for Average Truck Turnaround
Truck turnaround time refers to the amount of time truckers are spending at your terminal when they come to pick up and drop off containers. This is an important KPI to measure because it significantly affects a terminal’s bottom-line. The lower the turnaround time, the higher rate in which boxes can be moved and freed from the container yard for new business – and new revenue.
However, there are a couple of issues when only relying on the average truck turnaround time. For example, you will need a lot of visits to obtain an accurate average. Another problem is that truck visits could also be affected by uncontrollable circumstances such as custom holds. Depending on how you are tracking this time, you will need to wait until the truck leaves to know how long the visit took.
It would be great to know before the truck driver leaves if things are operating smoothly. Therefore, measuring how quickly your team is moving containers around is a great proxy metric that will indicate whether or not you are going to meet the standard average truck turnaround time.
Work queue completion also measures how quickly and efficiently your team is working. For example, you can measure how fast your team is grabbing containers and how quickly work orders turn around. How quickly employees work goes into the overall truck turnaround time measurement, so it’s important to track efficiency. Management can observe employee efficiency, identify employees that may need more training, coaching, and even monitor new employee onboarding.
2. Predicted Completion Time of a Voyage = Proxy Metric for Vessel Operations Productivity.
Terminal operators often measure the productivity of their vessel operations in moves per hour. It is a KPI that tracks how quickly the gangs are unloading and loading containers from the vessels. However, most terminal operators obtain that information after the vessel departs. A first improvement would be to track a ship's productivity KPI in real-time while the ship is at the port. The next step would be to use that information, along with other data about the number of containers left to be loaded/unloaded, to be able to predict the completion time of a vessel.
Terminals that efficiently and consistently predict the completion time of a ship and relay that information to the customer gain the opportunity to make their customers happy. A vessel that is completed on time, or slightly ahead of schedule, allows shipping lines to conserve fuel, reign in terminal expenses, and allows consignees to receive their goods quicker.
Predicting the completion time of the voyage allows terminal operators to be proactive when it comes to keeping stakeholders happy. If management can detect that the operation is going to take longer than expected, he or she might be able to adjust resources to improve the completion time (i.e. turning on a new crane or top loader). This is a much better scenario than realizing too late that the voyage is not going to leave on time.
3. Incoming Phone Calls = Proxy Metric for Customer Satisfaction
Tracking how many inbound phone calls you receive per day from your clients is another great measurement of how the terminal is handling customer relations. Most organizations aim to minimize the amount of time spent on customer support calls. If you see that the number of calls is increasing, it is often in the organization’s best interest to conduct an analysis as to why. Is there something that can be done to reduce these calls?
Stakeholders generally move their business to where they’re treated in a timely fashion with courtesy and respect. Documenting the number of complaints within this metric should also be emphasized. Customer calls help shed light on issues that we may not be aware of and give terminals the opportunity to improve more troubled aspects of the operation. A lower number of customer calls signifies that operations are on track and running smoothly.
Tracking for Better Customer Service
Tracking proxy metrics along with KPIs is essential for management. It can help paint an overall picture for how your terminal is operating and where to focus your strategic efforts. Additionally, it helps with operational decisions to improve performance and customer experience in real-time. While most port terminals measure specific goals, and of course all measure revenue, not all ports look at proxy metrics to improve their customer service.
If your terminal wants a competitive edge, it’s time to invest in proper technology and services, measure more, and evaluate the progress of your operations.
About Author: Guille Carlos
Guille is the founder of Octopi: a modern, web-based Terminal Operating System (TOS). He is constantly trying to simplify processes and uses data to truly understand customer needs.