HOW TO GUIDE


Calculate the ROI of a Logistics Solutions


Prioritizing projects with high ROI is the best way to deliver maximum value to your organization. According to experts at  CIO.com, you should always estimate ROI before buying enterprise software. This rings especially true throughout the construction industry. Should you prioritize purchasing and implementing a logistics solution?

 

Header-Graphic_3

 

What is ROI and How is it Calculated?

A logistics solution should be treated like any other investment. You need to know the upfront costs, the time it will take to get your team on board and using it, and the long-term benefits you stand to gain. Those may be hard benefits like dollars saved or they could be soft benefits, like time savings for your team.

If you decide to make a logistics solution a priority you should expect that the initial cost, over time, will yield a return. Return on investment (ROI) is a way to measure the performance of your investment over time.

ROI Calculation

When it comes to logistics solutions you need to understand the costs involved, the potential benefits, and the areas of your business that should gain the most from adopting new technology. 


COSTS & BENEFITS OF LOGISTICS PLATFORMS

The 5 Data Points You Need to Know to Calculate Your ROI


To see where your business will benefit the most from a logistics solution, you need to know a few key pieces of information. We’ve listed the five numbers you'll need to get started.

Understanding Why These Data Points Matter

This may be the first time you've thought about these five data points. Maybe you're questioning why they are important to understanding the ROI of a logistics solution. In the following section, we break down why each of these key data points is relevant to your ROI results.

 

Artboard 10 copy 4

Average Number of Dump Trucks You Use, Per Day

This isn't always an easy value to calculate, especially when you factor in seasonality. However, identifying an average number gives you the baseline for achieving an optimal number of trucks per day.

- A sub-optimal number of trucks being used for the given work is common.
- Knowing this number allows you to optimize your usage of dump trucks.
- This is key to determine the impact that a logistics platform could deliver to your business.

 

Artboard 10

Average Daily Pay Per Truck, Per Day

Any logistics solutions you bring on should aim to help you improve unit economics. This could be detrimental to the hauler if you aren’t aware of take-home pay from the beginning. However, including this data point in your ROI calculation allows a logistics solution to ensure haulers still benefit - while improving unit economics.

- This number provides a baseline for how you currently work with your drivers today.
- The goal is to improve your unit economics.
- At the same time, increasing the hauler's daily take-home pay.

 

Artboard 10 copy

Loads Per Truck, Per Day

This number will fluctuate based on the location of the jobsite, type of material, plant layout, and many other factors. There are many reasons why this is critical to determine your ROI...the most important being increasing the efficiency of loads per day.

- Establishing the baseline number of loads per day allows you to measure success over time. 
- Enabling your drivers to deliver more loads in a given period of time has a great impact on ROI.
- It's critical to understand what your typical load lengths and truck-a-days are. 

 

Artboard 10 copy 2

Total Hours Per Day, Per Driver

We know this number may be hard to calculate, which honestly just reinforces the need for a logistics solution. However, in general, are you getting your haulers a full day of work? Think back over the last few weeks and try to find an approximate number. Why?

- Fully utilized haulers get the maximum loads per day and are at peak efficiency.
- Improving the hours worked by each driver per day helps create a win-win scenario for you - and your haulers.
 

Artboard 10 copy 3

Payment Type Do You Pay by the Ton - or - By the Hour?

There is no wrong answer here, but the way you pay haulers will have an impact on the value you receive from a logistics platform.

- The way logistics solutions impact unit economics will differ for drivers working hourly vs by the ton.
- This helps determine incentives for haulers based on work type.
- Beyond pure efficiency, logistics solutions also deliver value in different ways for hourly jobs surrounding tracking and general visibility into operations, which may represent cost savings vs. unit economic savings.

Which Profile Best Matches Your Business Objectives?


We've created a few sample profiles below using example metrics. Select the profile that best matches your business goals to see how the ROI breaks down using YOUR GOALS and our SAMPLE METRICS.

 

Profiles_3

 

Looking for A Customized ROI Report?

ROI Benefits Based On Your Goal

PROFILE 1: My Operations Could Be More Efficient


If your business goals are most closely aligned with profile 1, the largest area of value a logistics solution can offer your business is increasing load efficiency. What does that mean? Delivering more material within the same number of hours and with the same number of trucks in a day.

The “Soft” Benefits of A Logistics Solution:

  • Increased End Customer Satisfaction
  • More Efficient Dispatching
  • 133 Hours Per Month of Time-Savings for Dispatchers

The “Hard” Benefits of A Logistics Solution:

  • Improved Number of Loads Per Hour
  • $20K per month in savings through increased load efficiency
  • 2.82x ROI

 

PROFILE 2: My Drivers Could Work Longer Days


If your business goals look like profile 2, the largest area of value a logistics solution can offer your business is achieving full driver days. Maximizing the number of hours per day each hauler is working for your company reduces the number of haulers needed to get the job done. And it increases the satisfaction of haulers working with you on a given day.

The “Soft” Benefits of A Logistics Solution:

  • Better Relationship with Your Haulers
  • Improved Margin

The “Hard” Benefits of A Logistics Solution:

  • $22K per month in savings, through achieving full driver days
  • 3.01x ROI

 

PROFILE 3: My Business iS Too Reliant on A Single Source For Trucking


If your business goals align with profile 3, the largest area of value a logistics solution can offer your business is decreasing your reliance on a single source for your hauling needs. A logistics solution that also offers a marketplace has multiple benefits: access to a more diverse hauling pool, reduction in broker fees, flexibility with last-minute work, and the ability to scale your fleet according to the volume of work - not scale your volume of work to the number of haulers you have access to.

The “Soft” Benefits of A Logistics Solution:

  • Direct Access to a Network of Reliable Haulers
  • Flexibility and adaptability
  • Digital Chain of Custody

The “Hard” Benefits of A Logistics Solution:

  • $16K per month in savings through decreased reliance on a single source of trucking
  • 3.09x ROI

 

PROFILE 4: Manual Processes Are Slowing My Business Down


If your business goals closely resemble profile 4, the largest area of value a logistics solution can offer your business is improving your current manual processes. Digitizing dispatching and invoicing reduces the burden of manual processes on your team, allowing them to shift focus to more impactful work.

The “Soft” Benefits of A Logistics Solution:

  • 133 Hours Per Month of Time-Savings for Dispatchers
  • 43 Hours Per Month of Time-Savings for the Back-Office

The “Hard” Benefits of A Logistics Solution:

  • $7K per month in savings through improving manual processes
  • 1x ROI

Want to Customize Your Results?

Most of the time, your business goals aren't going to fall neatly into one specific profile. If that's the case for you, the potential value of a logistics solution increases exponentially. Typical customers with needs in all four areas outlined here can expect to see 6x ROI - or more.

Want to learn more about improving your operations with a logistics platform?

We offer custom ROI calculations using your exact data points and a full report detailing the monthly value you can expect by using a construction logistics solution like Trux.

Connect With the Team For Your Custom Report