The Rule of 90/90/30 – Is Your Routing Guide Healthy?
One of the biggest benefits of a transportation management system (TMS) like Convoy Connect is that it captures all of the activity of managing freight, such as picking carriers and receiving bids, and turns it into metrics for shippers to understand the performance of their routing guide.
When shippers learn about this, their response is often “this is incredible” immediately followed by “but are my numbers good?” By analyzing data across thousands of shipments in Convoy Connect we have come up with a simple 90/90/30 rule to help shippers understand if their routing guide is performing properly.
The Metrics That Matter
Three of the most important metrics for measuring the health of your routing guide are:
- Response rate – when you offer carriers a load, do they even respond with a yes/no? Low response rates are an indication that you are not a valued shipper.
- Acceptance rate – when a carrier responds to a tender, how often do they say “yes” vs. “no”? Low acceptance rates are an indication that a carrier may be cherry-picking your best freight.
- Average response time – how long does it take for a carrier to respond to your shipment? Lower response times give you more confidence that your freight is covered.
Identifying Which Carriers to Reward
Looking at a year’s worth of shipments in Connect, we see certain trends in these metrics and can quantify what a healthy routing guide looks like. We do this by dividing carriers into two groups: those who are allocated more or less freight by shippers. Shippers reward their best carriers with repeated freight and the carriers with repeated freight had these characteristics:
- Response rate: 90% or above consistently, with rates never below 75%
- Acceptance rate: 91-92%
- Median response time: 33 minutes
Conversely, shippers with access to these metrics often remove freight from their worst carriers. Carriers who lost volume look like the following:
- Response rate: 25% at the low end and very inconsistent
- Acceptance rate: 82% on average, with a high level of variability
- Median response time: 58 minutes
To put this in context: poor carriers are 3x more likely to not respond, 2x as likely to refuse your freight and take 2x as long to do so as the best carriers.
The Rule of 90/90/30
This leads us to a simple rule to help you baseline your routing guide. We call it 90/90/30. You should expect your carriers to respond to 90% of your freight requests, accept 90% of the tenders you send them and do all of this in 30 minutes or less. If they do this, reward them with more freight. If they can’t meet this bar then you should have a conversation around performance improvement.
Also, your top carriers should sustain these levels over time. The chart below shows median response rates of the top vs. bottom performers. On the chart a lower value is better – and the top performers consistently maintain better performance.
Baseline Your Routing Guide
You can get these metrics for your freight, for free. Convoy Connect automatically generates a carrier scorecard for every carrier you work with. Just click to the carrier network tab and you’ll see the following for each carrier:
Want to know if your carriers are meeting the 90/90/30 standard? Schedule a demo of Convoy Connect, the free, easy-to-use TMS and get access to routing guide metrics that help you better understand which carriers have earned your freight.