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The Importance of Service Level Agreements

Service Level Agreements (SLA’s) are essential to the management of services provided to customers. In logistics and transportation, SLA’s outline provisions the service provider must meet, the services a customer can come to expect, and provide both parties with the ability to see if those services are, in fact, delivered upon. For example, if a retailer makes a promise to deliver within 24 hours, this is a provision that has been agreed upon and must be met by the carriers. Key Performance Indicators (KPI’s) are the core to managing SLA’s. These are metrics that provide a sense of a carrier’s performance. In transportation, common KPI’s used to measure performance include; shortages, on-time deliveries, damages, etc.

The problem organizations are facing is that they have trouble capturing the right data and effectively translating that data to make effective business decisions. ShipTrack provides solutions to better manage various service types an organization offers by providing users with the ability to view which shipments are urgent, view pick/up and delivery windows, and provide effective reporting for measurement.

Service Type Identification

ShipTrack identifies various service types in different colors. This provides dispatchers and drivers with visibility over which deliveries are rush, same day, next day, etc. This visibility over different service types has provided both drivers and dispatchers with an overview of what is most urgent and allows them to prioritize their deliveries more effectively. Being able to identify which orders are of higher priority than others, affords each user with the ability to make key business decisions in the field and increases the number of on-time deliveries.


ShipTrack also has the ability to set pickup and delivery thresholds for each service type. For example, rush deliveries may need to be picked up within an hour of creation and delivered within 24 hours of creation. It is imperative that this SLA is met by the service provider. ShipTrack provides notifications to both the dispatcher and driver notifying both parties of a certain deadline for pickup, as well as a deadline for delivery. As a pickup or delivery nears the threshold time, drivers and dispatchers are notified by a change in ETA colour from the colour green, to yellow, to red.

Driver/Carrier Performance Measurement

Having the ability to capture data/KPI’s for each shipment and their status updates provides organizations with the ability to make key business decisions. ShipTrack’s logistics management platform captures time, date, and GPS location of each update. This data is used to generate customized reports for comparison of multiple carriers and drivers. Users of ShipTrack have the ability to view these reports on a daily, weekly, monthly, and annual basis. This data provides valuable insight into which carriers or drivers are delivering on-time with fewer shortages.

Many logistics providers rely heavily on written SLA’s so that services for their customers can be measured, justified, and compared with those of outsourcing network providers. Having the ability to capture data on different service types, ETA’s and on-time deliveries helps organizations make key business decisions and improve overall performance.

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