Shipping Metrics and KPIs: What E-commerce Businesses Should Track

What gets measured gets managed. Tracking the right shipping metrics helps you identify problems, optimize operations, and improve customer satisfaction. This guide covers the essential KPIs every e-commerce business should monitor.

Why Shipping Metrics Matter

The Impact of Measurement

Benefits of tracking:

• Identify operational bottlenecks
• Reduce shipping costs
• Improve delivery performance
• Enhance customer satisfaction
• Make data-driven decisions
• Benchmark against competitors

Without metrics:

• Flying blind on performance
• Reactive problem-solving
• Missed optimization opportunities
• Inconsistent customer experience
• Difficulty scaling operations

Core Shipping Metrics

Order Processing Time

Definition: Time from order placement to shipping label creation.

How to calculate: Order Processing Time = Ship Date/Time - Order Date/Time

Benchmarks:

• Excellent: < 4 hours
• Good: 4-24 hours
• Needs improvement: 24-48 hours
• Poor: > 48 hours

Improvement strategies:

• Streamline pick/pack process
• Automate order routing
• Optimize warehouse layout
• Ensure adequate staffing

Transit Time

Definition: Time from carrier pickup to delivery.

How to calculate: Transit Time = Delivery Date - Ship Date

Benchmarks by service:

• Overnight: 1 day
• 2-Day: 2 days
• Ground: 3-7 days (zone-dependent)
• Economy: 5-10 days

Factors affecting transit:

• Carrier performance
• Distance/zones
• Weather/events
• Peak season volume

Total Delivery Time

Definition: Complete time from order to delivery.

How to calculate: Total Delivery Time = Processing Time + Transit Time

Why it matters most:

• Customer perception metric
• Competitive differentiator
• Satisfaction driver
• Expectation management

On-Time Delivery Rate

Definition: Percentage of orders delivered within promised timeframe.

How to calculate: (Orders Delivered On Time / Total Orders Shipped) x 100

Benchmarks:

• Excellent: > 98%
• Good: 95-98%
• Average: 90-95%
• Poor: < 90%

Tracking considerations:

• Define "on-time" clearly
• Account for customer expectations
• Separate by carrier/service
• Track trends over time

Cost Metrics

Shipping Cost per Order

Definition: Average cost to ship one order.

How to calculate: Total Shipping Costs / Number of Orders Shipped

Include in calculation:

• Postage/carrier charges
• Packaging materials
• Labor (packing time)
• Insurance
• Return shipping reserve

Benchmarks:

• Varies significantly by product type
• Track trend over time
• Compare to revenue percentage

Shipping Cost as Percentage of Revenue

Definition: What portion of revenue goes to shipping.

How to calculate: (Total Shipping Costs / Total Revenue) x 100

Benchmarks by category:

• Heavy/bulky items: 15-25%
• Standard e-commerce: 8-15%
• Small/light items: 5-10%
• Digital-heavy: < 5%

Cost per Package Weight/Size

Definition: Shipping cost normalized by package characteristics.

Calculations:

• Cost per pound: Shipping Cost / Weight
• Cost per cubic inch: Shipping Cost / DIM Weight

Use cases:

• Product profitability analysis
• Packaging optimization
• Carrier comparison

Return Shipping Cost

Definition: Average cost of processing returns.

Components:

• Return label cost
• Processing labor
• Restocking costs
• Packaging waste

Benchmark: 2-4% of shipping budget

Performance Metrics

First Attempt Delivery Rate

Definition: Percentage delivered on first attempt.

How to calculate: (First Attempt Deliveries / Total Deliveries) x 100

Benchmark: > 95% is good

Improvement tactics:

• Address validation
• Delivery notifications
• Alternative delivery options
• Signature management

Exception Rate

Definition: Percentage of shipments with issues.

Types of exceptions:

• Address issues
• Damaged packages
• Lost packages
• Delivery attempts failed
• Customs holds (international)

How to calculate: (Shipments with Exceptions / Total Shipments) x 100

Target: < 2%

Package Damage Rate

Definition: Percentage of packages arriving damaged.

How to calculate: (Damaged Package Reports / Total Packages Shipped) x 100

Benchmark: < 1%

Improvement areas:

• Packaging quality
• Product protection
• Carrier selection
• Handling instructions

Lost Package Rate

Definition: Percentage of packages never delivered.

How to calculate: (Lost Packages / Total Packages Shipped) x 100

Benchmark: < 0.5%

Reduction strategies:

• Carrier performance monitoring
• Insurance for high-value
• Tracking vigilance
• Address verification

Customer Experience Metrics

Delivery Satisfaction Score

Definition: Customer rating of delivery experience.

Collection methods:

• Post-delivery surveys
• Star ratings
• NPS questions
• Review analysis

Benchmark: > 4.5/5.0

Shipping-Related Support Tickets

Definition: Customer service contacts about shipping.

Track by category:

• Where is my order (WISMO)
• Delivery issues
• Damage claims
• Wrong address
• Return questions

Calculate rate: (Shipping Tickets / Total Orders) x 100

Target: < 5% of orders

WISMO (Where Is My Order) Rate

Definition: Percentage of orders generating tracking inquiries.

How to calculate: (WISMO Inquiries / Total Orders) x 100

Benchmark: < 10%

Reduction strategies:

• Proactive tracking updates
• Branded tracking pages
• SMS/email notifications
• Clear delivery estimates

Carrier Performance Metrics

Carrier On-Time Performance

Definition: Each carrier's delivery performance.

Track for each carrier:

• On-time rate by service
• Transit time consistency
• Exception frequency
• Damage rate

Use for:

• Carrier selection
• Rate negotiations
• Service level decisions
• Problem identification

Carrier Cost Comparison

Definition: Relative cost efficiency of carriers.

Compare:

• Average cost per shipment
• Cost by zone/weight
• Surcharge frequency
• Insurance rates

Carrier Claim Success Rate

Definition: Success in recovering claim payments.

How to calculate: (Successful Claims / Total Claims Filed) x 100

Track:

• Claim approval rate
• Average claim amount
• Processing time
• Denial reasons

Operational Efficiency Metrics

Orders Shipped per Hour

Definition: Fulfillment throughput rate.

How to calculate: Orders Shipped / Labor Hours

Benchmarks:

• Manual operation: 10-20/hour
• Semi-automated: 30-50/hour
• Highly automated: 100+/hour

Pick Accuracy Rate

Definition: Percentage of orders picked correctly.

How to calculate: (Correct Picks / Total Picks) x 100

Benchmark: > 99.5%

Label Reprint Rate

Definition: Percentage of labels that need reprinting.

Causes:

• Address errors
• Wrong service selected
• System issues
• Printer problems

Target: < 1%

Financial Metrics

Free Shipping Threshold Conversion

Definition: Orders that reach free shipping threshold.

How to calculate: (Orders Meeting Threshold / Total Orders) x 100

Use for:

• Threshold optimization
• Marketing impact
• Revenue analysis

Shipping Revenue vs. Cost

Definition: Gap between what customers pay and actual cost.

Calculate: Customer Shipping Payments - Actual Shipping Costs

Considerations:

• Positive = profit contribution
• Negative = subsidizing shipping
• Balance with conversion impact

Return Rate Impact

Definition: Financial impact of returns on shipping.

Calculate: Return Shipping Costs / Total Shipping Costs

Track:

• Return shipping as % of outbound
• Net shipping cost after returns
• Return reason analysis

Building Your Dashboard

Essential Dashboard Elements

Daily tracking:

• Orders shipped
• Processing time
• Exceptions flagged
• WISMO inquiries

Weekly tracking:

• On-time delivery rate
• Cost per order
• Carrier performance
• Customer satisfaction

Monthly tracking:

• Trend analysis
• Cost benchmarking
• Carrier comparison
• Process improvements

Setting Up Tracking

Data sources:

• Shipping software exports
• Carrier reports
• Customer service system
• Survey tools
• E-commerce platform

Tools for dashboards:

• Google Data Studio
• Tableau
• Excel/Google Sheets
• Built-in shipping software reports
• Custom solutions

Benchmarking and Goals

Industry Benchmarks

Setting Improvement Goals

SMART goals approach:

• Specific metric targeted
• Measurable improvement
• Achievable stretch
• Relevant to business
• Time-bound deadline

Example goals:

• Reduce WISMO by 25% in Q1
• Improve on-time to 97% by Q2
• Lower cost per order by 10% this year
• Achieve 99% pick accuracy monthly

Acting on Metrics

Identifying Issues

Red flag patterns:

• Sudden metric drops
• Consistent underperformance
• Carrier-specific problems
• Seasonal degradation
• Cost spikes

Root Cause Analysis

Investigation steps:

Identify the metric decline

Isolate timeframe

Check for external factors

Analyze by segment

Test hypotheses

Implement fixes

Monitor results

Continuous Improvement

Process:

Measure current state

Set improvement target

Implement changes

Measure results

Adjust and repeat

Key Takeaways

Start with basics: On-time, cost per order, WISMO rate

Track trends, not just snapshots: Direction matters more than point-in-time

Segment your data: By carrier, product, region, customer type

Act on insights: Metrics without action are useless

Benchmark against yourself first: Improve your own performance

Customer metrics matter most: Their perception is reality

Automate data collection: Manual tracking doesn't scale

Review regularly: Weekly at minimum, daily for key metrics

The right metrics provide visibility into your shipping operations and guide improvement efforts. Start with the fundamentals, build your dashboard, and use data to drive decisions. As your operation matures, add more sophisticated metrics to optimize further.