Essentially, the core logic of transport logistics is to obtain economy of scale, meanwhile service fulfils market requirements in the distribution channels (supply chains). In brief this means to deliver; the right goods, at the right time, in the right place, in the right condition, at the right price (cost).
The consequence of this basic logic is a general desire to meet customer service demand; meanwhile cargo flows are consolidated at an economic optimum. Over the years this has led to increasingly larger modes of traffic in large scale transport solutions. The introduction of larger traffic modes however, gives a second order effect as they reduce flexibility. This leads to market risks if transport demands decreases.
In order to fully describe transport and corridor performance, there is furthermore a need to include key performance indicators (KPI’s) for both operational aspects, as well as enabling aspects i.e.:
- Operational aspects such as corridors geographical relevance, transport techniques and business models
- Enabling and conditional aspects such as infrastructure, legal requirements, standards, ICT, organisation etc.
The relation of operational aspects to enabling aspects is described in the figure below:
The different criteria’s that drives green corridors performance
Principles on KPI’s
In order to describe the specific relevant KPI’s for green transport corridors there is a need to define “green” in relation to the TEN-T corridors. The full ranging approach of sustainable transport logistics is used, however without an existing and commonly accepted definition that covers “profit, planet and people”. Therefore, the below presented simple visualisation, is used to describe this concept.
The sustainable transport logistics mix
The aim of key performance indicators is to simplify and thereby enable management of operation. If the indicators themselves are too academic, not measuring the right conditions or being too complex to update they will not be used. Therefore our approach is to present a gross list (see Appendix 2) of relevant sustainability performance indicators and in different case studies illuminate how they can be selected and used by a specific stakeholder. In essence the KPI´s should support the following requirements:
- Present situation – KPI’s should enable assessment of the present situation through relevant measurements, as this is necessary for further development and improvement priorities.
- Support progress towards a desired situation – The desired situation can be described in a vision, mission or as an overall or long-term objective, goal or target. In order to monitor progress towards this desired situation requires relevant measurements. Visions are normally less tangible i.e. more difficult to define and link to adequate accomplishing measures. The desired situation can be achieved through various relevant intermediary short-term objectives, goals or targets.
- Indicators – Refers to a specified and relevant indicator expressed in a defined unit e.g. (€) describing present status. Key performance indicators emphasize the importance or selection of a few specific indicators. The selected indicator can be expressed as
- Absolute, e.g. 100 [€], describing effects
- Relative, e.g. 10 [€/km], describing efficiency.
In addition to absolute and relative indicators, there are enabling and related conditional indicators:
- Enabling indicators; e.g. increasing road weight capacity (ton/axis), often linked to bottlenecks in infrastructure or transport systems.
- Conditional indicators; e.g. allowed noise levels (dB(A)) for a geographical area, port or road stretch.
Finally, measurements can also use activity based indicators for follow-up such as:
- Staff competence monitored through number of staff being educated (n)
Follow-up on activity indicators normally simplifies measurement but offers an uncertain correlation to actual effects i.e. understanding education may not be 100 % or knowing what should be done is not by default 100 % commitment in doing right. In the gross list of KPI’s, activity based indicators are excluded for these reasons.
- Measures – Refers to required and relevant activities or actions that can accomplish a desired future situation.
Implementation of KPI’s
Operational control of goods flows through KPI’s has always been a common way of managing performance in transport logistics services. This experience needs to be included when implementing indicators. The most critical part for all performance indicators is the availability of required data that forms the indicator. If data capturing with sufficient accuracy is difficult or costly, the indicator will not become a useful indicator. In addition, if supporting data is uncertain the relevance of an indicator diminishes. Thus, data capturing aspects may in the end fully define which indicators can be used in reality.
The system boundary of captured data must also be well defined and constant over time when measuring improvements or relations to other corridors. This is indeed a challenge for transport corridors.
It should in addition be stressed that performance indicators may change behaviour of organisations and people being managed by KPI’s. Reward systems may amplify this potential but also add a potential risk of sub-optimization. Hence, key performance indicators have a risk of becoming counterproductive in relation to the original objective, due to not adapting to new conditions. Relevant KPI’s that initially serve the purpose well, but may over time become outdated. Thus, there is a need to continuously evaluate their functionality.
Finally, KPI’s must be manageable in practice and not over ruled by legislation or other external factors hence eliminating their credibility.
To sum up: Assessing KPI’s should be based on a minimum of input, relying on easy accessible and accurate data, in order to present robust relevant key performance indicators. The KPI’s should ideally enable follow up on long term trends as well as supporting corrective and preventive actions.
The selection of relevant performance indicators is strongly related to the user´s need. The project has identified the below primary key stakeholders:
- Corridor coordinators Appointed European Coordinators and their staffs
- Policy makers Regional (EU), national and local policy makers
- Infrastructure holder The operator of road, rail and sea traffic infrastructure
- Shippers Includes manufacturing and trading companies
- Logistic service providers Includes operators and intermediary companies for all modes of traffic
The concluding success factors for KPI’s are equal for all stakeholders and based on the following parameters:
- Identifying and determine stakeholders
- Analyse, understand and define stakeholders’ needs for follow up
- Evaluate possibilities to capture accurate and relevant required data at a reasonable effort
- Select a minimum of relevant KPI’s (less is more) from gross lost (see Appendix 2) or other source
- Implement and make operational use of the KPI in control and feedback (walk the talk)
- Evaluate the effects of the selected KPI. If inefficient alter to a more relevant KPI
Overall, the suggested recommendation is to use fewer KPI´s. This approach will have a larger potential to become implemented and useful for specific stakeholders rather than trying to cover all aspects for all stakeholders. Furthermore, there is a need to clearly define the corridor boundaries for data capturing as this may distort comparability of the KPI´s used.The study and selection on KPI’s are made using existing data of previous work in the field e.g., Supergreen and similar projects but some minor adjustments have been made corresponding to later standards being implemented e.g. EN 16 258.