Originally published by freightwaves.com on May 8, 2019.
It is almost impossible to be a decision-maker in the transportation and logistics industry today without working with data. While good data can propel a company forward, bad data can stall growth. For many leaders, differentiating between the two can be a challenge.
TCA Profitability Program (TPP) Program Manager Chris Henry, KSM Transport Advisors President David Roush and Logistics Trends & Insights Founder Cathy Morrow Roberson participated in a discussion about the value of data benchmarking at Transparency19.
The talk, dubbed “Hope is Not a Strategy: Data Benchmarking to Improve Profitability,” was moderated by Benjamin Gordon, BG Strategic Advisors founder and managing partner.
Roberson urged audience members to be cautious about how they approach data benchmarking and choosing a partner to work alongside.
“There is good data, and there is certainly bad data.When you’re looking to partner with an external data provider, you need to ask questions. You need to have a true collaborative relationship,” Roberson said. “There are a lot of indices out there. You need to be ‘data-smart,’ particularly in today’s time.”
In some ways, the difference between good and bad data is obvious because good data must be accurate and ethically reported. It is not always so clear, though. In those cases, what is good data for one company may not be good data for another company because their goals and circumstances differ.
The first step to utilizing the data that is already being produced by electronic logging devices (ELDs) is accessing and understanding that data.
“Our firm focuses on helping carriers improve their profitability,” Roush said. “The primary way we do that is by helping them understand their freight network.”
KSM pulls data from the company’s transportation management system (TMS), then validates it. Once the data is validated, it goes through the firm’s algorithms to determine which lanes are most and least profitable for the carrier and how they could benefit from changing its workflow.
Having access to that kind of information can be a game-changer for companies.
“We have a group of 20 carriers within the program we call the Top Performers Index,” Henry said. “The common factor is that they can access and do a lot with their data.”
TPP is one data benchmarking option that allows truckload carriers to share financial and operational data on both anonymous and known capacities. At its base level, participants can contribute anonymous data and compare their company to peer companies that reported the same anonymous data, allowing them to see where they stand.
Companies that want to go one step farther can participate in Best Practice Groups. Members of these groups share their data with each other without anonymity. The groups meet periodically to discuss their wins and losses, and knowing where each company stands allows for a certain peer mentorship, where the companies can learn from each other’s strengths.
The TPP Best Practice Groups allow carriers to go between the answering the “what” question. It allows them to answer the “how” question by engaging other companies that are succeeding where they are struggling. The added layer of information that comes from being known in a trusted setting is something that can propel carriers to the next layer, according to Henry.
All the speakers agreed that the best way for companies to get the most from their data is to take control of their information and implement tools that allow them to gain more insight into their place in the market.